U.S. Treasury Withdraws Proposed Crypto Wallet Reporting Rules
Regulation & Gov ·
The agency has pulled back proposed requirements that would have forced reporting on self-custody wallet transactions and crypto mixing services.
The U.S. Treasury has withdrawn proposed rules that would have imposed new reporting obligations on transactions involving self-hosted wallets and crypto mixers, according to a report shared on Twitter. The proposed framework had been designed to extend travel-rule style reporting requirements beyond regulated intermediaries to cover unhosted wallets and privacy-focused mixing tools directly.
The now-withdrawn rules would have required reporting on transactions tied to self-hosted wallets, effectively pulling individuals who hold their own crypto outside exchanges or custodians into a surveillance framework previously reserved for licensed financial institutions. Crypto mixing services, which are used to obscure the trail of on-chain transactions, were also named as a target of the proposed reporting regime.
Four distinct sources have corroborated the withdrawal, with descriptions varying slightly between characterizing the rules as "travel rules" and as "surveillance rules," though all describe the same underlying action: Treasury stepping back from reporting mandates aimed at unhosted wallets and mixing services.
The withdrawal removes a regulatory proposal that had drawn concern from parts of the crypto industry over its implications for self-custody and transaction privacy. By rescinding the rules rather than finalizing or revising them, Treasury leaves the prior reporting framework in place without the additional obligations the proposal would have introduced.
What remains unclear is whether Treasury plans to reintroduce a modified version of the reporting requirements in the future, or whether the withdrawal reflects a broader shift away from targeting self-custody and mixing activity altogether. No timeline or replacement proposal has been detailed in the available reporting, leaving the next regulatory step for self-hosted wallets and mixing services unresolved.