[{"data":1,"prerenderedAt":493},["ShallowReactive",2],{"tag-fincen":3},[4],{"_path":5,"_dir":6,"_draft":7,"_partial":7,"_locale":8,"title":9,"description":10,"slug":11,"date":12,"lastUpdated":12,"author":13,"readingTime":14,"category":15,"tags":16,"ogImage":21,"featured":7,"body":22,"_type":487,"_id":488,"_source":489,"_file":490,"_stem":491,"_extension":492},"\u002Farticles\u002F45-fincen-crypto-reporting-proposals-withdrawal-records","articles",false,"","FinCEN withdrew two crypto proposals: what records remain","FinCEN withdrew rules for unhosted wallets and crypto mixing. Counsel still needs records created by existing BSA duties and platform systems.","fincen-crypto-reporting-proposals-withdrawal-records","2026-11-02","Nick Kampe",10,"Legal Reference",[17,18,19,20],"fincen","crypto-records","self-custody","transaction-monitoring","\u002Fog\u002Ffincen-crypto-reporting-proposals-withdrawal-records.png",{"type":23,"children":24,"toc":471},"root",[25,33,38,43,50,66,71,85,90,104,109,115,129,143,157,162,185,199,205,210,224,229,235,248,253,293,314,319,325,330,335,340,345,351,356,369,374,380,385,390,396,402,413,419,428,434,443,449,458],{"type":26,"tag":27,"props":28,"children":29},"element","p",{},[30],{"type":31,"value":32},"text","On October 5, 2026, the Financial Crimes Enforcement Network announced that it was withdrawing two proposed rules concerning convertible virtual currency. One addressed transactions with unhosted wallets. The other addressed transactions involving international crypto mixing. The withdrawals took effect when the notices were published on October 6.",{"type":26,"tag":27,"props":34,"children":35},{},[36],{"type":31,"value":37},"Neither proposal had become a final rule. Banks and money services businesses therefore never owed the proposed reports merely because those notices existed. The practical correction for litigation is narrow but important: counsel should not write discovery, pleadings, or expert opinions as though the proposed reports were mandatory records that an exchange must possess.",{"type":26,"tag":27,"props":39,"children":40},{},[41],{"type":31,"value":42},"That does not leave an evidentiary void. Existing Bank Secrecy Act rules still produce account, transaction, compliance, and supporting records when they apply. Exchanges may also hold operational records beyond what federal law requires. The public blockchain remains available, subject to its limits. The work is to identify which record came from which authority or system, then reconcile them without turning a proposed rule into an obligation that never took effect.",{"type":26,"tag":44,"props":45,"children":47},"h3",{"id":46},"fincen-withdrew-two-proposals-not-two-final-rules",[48],{"type":31,"value":49},"FinCEN withdrew two proposals, not two final rules",{"type":26,"tag":27,"props":51,"children":52},{},[53,55,64],{"type":31,"value":54},"FinCEN's ",{"type":26,"tag":56,"props":57,"children":61},"a",{"href":58,"rel":59},"https:\u002F\u002Fwww.fincen.gov\u002Fnews\u002Fnews-releases\u002Ffincen-announces-withdrawals-proposed-digital-asset-related-rules",[60],"nofollow",[62],{"type":31,"value":63},"October 5 announcement",{"type":31,"value":65}," described both actions as withdrawals of proposed rules. The agency said it had considered public comments and was withdrawing the proposals as part of the administration's deregulatory agenda and an effort to make digital asset regulation fit for purpose. The announcement date was October 5. The Federal Register notices made both withdrawals effective October 6.",{"type":26,"tag":27,"props":67,"children":68},{},[69],{"type":31,"value":70},"The first proposal began in December 2020. It would have applied to certain deposits, withdrawals, exchanges, payments, or transfers involving convertible virtual currency or digital assets with legal tender status when a bank or money services business transacted with an unhosted wallet or another covered wallet. The proposal used \"unhosted wallet\" for a wallet from which a financial institution was not required to conduct transactions.",{"type":26,"tag":27,"props":72,"children":73},{},[74,76,83],{"type":31,"value":75},"The ",{"type":26,"tag":56,"props":77,"children":80},{"href":78,"rel":79},"https:\u002F\u002Fwww.govinfo.gov\u002Fcontent\u002Fpkg\u002FFR-2026-10-06\u002Fpdf\u002F2026-20430.pdf",[60],[81],{"type":31,"value":82},"official withdrawal notice",{"type":31,"value":84}," states that the 2020 proposal would have required a report when the relevant transaction exceeded $10,000, or when covered transactions aggregated above $10,000 within 24 hours. It also would have required records for a covered transaction above $3,000. The proposal contemplated customer identity verification and information about the transaction and counterparty. FinCEN withdrew it and said it would take no further action on that notice of proposed rulemaking.",{"type":26,"tag":27,"props":86,"children":87},{},[88],{"type":31,"value":89},"The second proposal began in October 2023 under section 311 of the USA PATRIOT Act. FinCEN proposed treating international convertible virtual currency mixing as a class of transactions of primary money laundering concern and imposing special measure one. Covered financial institutions would have reported specified information when they knew, suspected, or had reason to suspect that a transaction involved mixing within or involving a jurisdiction outside the United States.",{"type":26,"tag":27,"props":91,"children":92},{},[93,95,102],{"type":31,"value":94},"The proposed report would have included transaction amounts, asset types, wallet addresses, transaction hashes, dates, information about the suspected mixer, and customer information. The ",{"type":26,"tag":56,"props":96,"children":99},{"href":97,"rel":98},"https:\u002F\u002Fwww.govinfo.gov\u002Fcontent\u002Fpkg\u002FFR-2026-10-06\u002Fpdf\u002F2026-20429.pdf",[60],[100],{"type":31,"value":101},"official mixing withdrawal",{"type":31,"value":103}," rescinded both the proposed special measure and the predicate finding. It cited the July 2025 President's Working Group report, which recognized both illicit use of mixers and lawful use for financial privacy. FinCEN also said it would continue monitoring mixer activity for signs of money laundering, terrorist financing, or other illicit finance.",{"type":26,"tag":27,"props":105,"children":106},{},[107],{"type":31,"value":108},"A withdrawal is not a finding that mixing is lawful in every circumstance, nor is it a finding that an institution complied with duties imposed elsewhere. It means the two proposed reporting systems did not become law through those proceedings.",{"type":26,"tag":44,"props":110,"children":112},{"id":111},"existing-bsa-duties-did-not-disappear",[113],{"type":31,"value":114},"Existing BSA duties did not disappear",{"type":26,"tag":27,"props":116,"children":117},{},[118,120,127],{"type":31,"value":119},"FinCEN's 2019 ",{"type":26,"tag":56,"props":121,"children":124},{"href":122,"rel":123},"https:\u002F\u002Fwww.fincen.gov\u002Fresources\u002Fstatutes-regulations\u002Fguidance\u002Fapplication-fincens-regulations-certain-business-models",[60],[125],{"type":31,"value":126},"CVC business-model guidance",{"type":31,"value":128}," applies existing money-transmission rules according to what a person does, not the label attached to the product. The guidance states that a person who accepts and transmits value as a business may be a money transmitter, depending on the facts. It also distinguishes an anonymizing service provider that accepts and retransmits value from a software provider that supplies a tool without accepting and transmitting value.",{"type":26,"tag":27,"props":130,"children":131},{},[132,134,141],{"type":31,"value":133},"For a covered money services business, ",{"type":26,"tag":56,"props":135,"children":138},{"href":136,"rel":137},"https:\u002F\u002Fwww.ecfr.gov\u002Fcurrent\u002Ftitle-31\u002Fsubtitle-B\u002Fchapter-X\u002Fpart-1022\u002Fsection-1022.210",[60],[139],{"type":31,"value":140},"31 C.F.R. § 1022.210",{"type":31,"value":142}," requires a written BSA\u002FAML program suited to the business's risks. The program must address applicable reporting, record creation and retention, customer identification, and responses to law enforcement requests.",{"type":26,"tag":27,"props":144,"children":145},{},[146,148,155],{"type":31,"value":147},"The separate suspicious-activity rule also remains. Under ",{"type":26,"tag":56,"props":149,"children":152},{"href":150,"rel":151},"https:\u002F\u002Fwww.ecfr.gov\u002Fcurrent\u002Ftitle-31\u002Fsubtitle-B\u002Fchapter-X\u002Fpart-1022\u002Fsection-1022.320",[60],[153],{"type":31,"value":154},"31 C.F.R. § 1022.320",{"type":31,"value":156},", specified money services businesses must report a transaction conducted or attempted through the business when it involves or aggregates at least $2,000 and the business knows, suspects, or has reason to suspect one of the listed conditions. Those conditions include illegal proceeds, concealment, evasion of BSA requirements, lack of an apparent lawful purpose after reviewing available facts, or use of the business to facilitate crime.",{"type":26,"tag":27,"props":158,"children":159},{},[160],{"type":31,"value":161},"The $2,000 threshold does not make every transaction above that amount suspicious. A transfer to a privacy tool also does not prove that a SAR was filed. The regulation ties reporting to the institution's knowledge or suspicion and the listed conditions, not to amount alone.",{"type":26,"tag":27,"props":163,"children":164},{},[165,167,174,176,183],{"type":31,"value":166},"Recordkeeping and funds-transmission rules may create another set of records. FinCEN's ",{"type":26,"tag":56,"props":168,"children":171},{"href":169,"rel":170},"https:\u002F\u002Fwww.fincen.gov\u002Fresources\u002Fstatutes-regulations\u002Fguidance\u002Ffunds-travel-regulations-questions-answers",[60],[172],{"type":31,"value":173},"Funds Travel Rule guidance",{"type":31,"value":175}," states that covered transmittals of funds of $3,000 or more must carry specified sender, institution, amount, execution-date, and available recipient information. ",{"type":26,"tag":56,"props":177,"children":180},{"href":178,"rel":179},"https:\u002F\u002Fwww.ecfr.gov\u002Fcurrent\u002Ftitle-31\u002Fsubtitle-B\u002Fchapter-X\u002Fpart-1010\u002Fsection-1010.410",[60],[181],{"type":31,"value":182},"31 C.F.R. § 1010.410",{"type":31,"value":184}," defines the record fields and responsibilities. Whether a particular crypto transaction is a covered transmittal depends on the transaction structure and the role of each institution.",{"type":26,"tag":27,"props":186,"children":187},{},[188,190,197],{"type":31,"value":189},"Records required by Chapter X generally have a five-year retention period under ",{"type":26,"tag":56,"props":191,"children":194},{"href":192,"rel":193},"https:\u002F\u002Fwww.ecfr.gov\u002Fcurrent\u002Ftitle-31\u002Fsubtitle-B\u002Fchapter-X\u002Fpart-1010\u002Fsubpart-D\u002Fsection-1010.430",[60],[195],{"type":31,"value":196},"31 C.F.R. § 1010.430",{"type":31,"value":198},". That period does not promise that every platform record will exist for five years. It applies to records the chapter requires. Contract terms, state law, litigation holds, internal retention schedules, and other federal rules can produce different periods for other records.",{"type":26,"tag":44,"props":200,"children":202},{"id":201},"sar-confidentiality-changes-the-discovery-plan",[203],{"type":31,"value":204},"SAR confidentiality changes the discovery plan",{"type":26,"tag":27,"props":206,"children":207},{},[208],{"type":31,"value":209},"A civil subpoena to a money services business covered by section 1022.320 should not demand its SARs or ask it to identify whether it filed one. Section 1022.320 prohibits the business from disclosing a SAR or information that would reveal its existence, subject to the rule's stated exceptions. If subpoenaed for that material, the business must decline production and notify FinCEN.",{"type":26,"tag":27,"props":211,"children":212},{},[213,215,222],{"type":31,"value":214},"The protection does not convert every transaction record reviewed by a compliance team into a SAR. FinCEN's ",{"type":26,"tag":56,"props":216,"children":219},{"href":217,"rel":218},"https:\u002F\u002Fwww.federalregister.gov\u002Fdocuments\u002F2010\u002F12\u002F03\u002F2010-29869\u002Ffinancial-crimes-enforcement-network-confidentiality-of-suspicious-activity-reports",[60],[220],{"type":31,"value":221},"2010 SAR confidentiality rule",{"type":31,"value":223}," distinguishes a SAR and information revealing its existence from the underlying facts, transactions, and documents on which a SAR may be based. That distinction supports a better request: seek the ordinary business records and underlying transaction data without asking the institution to disclose whether it reported the activity to FinCEN.",{"type":26,"tag":27,"props":225,"children":226},{},[227],{"type":31,"value":228},"The line turns on what the requested record would reveal. Section 1022.320 protects information that would reveal a SAR's existence, while its rule of construction permits disclosure of the underlying facts, transactions, and documents, provided no person involved is told that the transaction was reported. Counsel should tailor requests to the governing court, applicable law, protective-order terms, and the institution's production objections. The safe drafting choice is to request source records by category and date, not a compliance conclusion.",{"type":26,"tag":44,"props":230,"children":232},{"id":231},"build-the-evidence-packet-from-ordinary-records",[233],{"type":31,"value":234},"Build the evidence packet from ordinary records",{"type":26,"tag":27,"props":236,"children":237},{},[238,240,246],{"type":31,"value":239},"Start with the chain record. Preserve the network, transaction hash, block number and hash, timestamp, transaction status, sending and receiving addresses, asset identity, amount, and receipt or event logs. If a token transfer is involved, preserve the token contract and decimal scale. A browser screenshot is useful as an orientation aid, but the collection should include raw responses and query details. The ",{"type":26,"tag":56,"props":241,"children":243},{"href":242},"\u002Fresources\u002Freproducible-blockchain-evidence",[244],{"type":31,"value":245},"reproducible blockchain evidence protocol",{"type":31,"value":247}," explains the provenance fields needed to rerun the collection.",{"type":26,"tag":27,"props":249,"children":250},{},[251],{"type":31,"value":252},"Then request the platform records that may connect the public transaction to a customer account:",{"type":26,"tag":254,"props":255,"children":256},"ul",{},[257,263,268,273,278,283,288],{"type":26,"tag":258,"props":259,"children":260},"li",{},[261],{"type":31,"value":262},"native account, deposit, withdrawal, transfer, and trade ledgers, with field definitions and time-zone information;",{"type":26,"tag":258,"props":264,"children":265},{},[266],{"type":31,"value":267},"the destination address, network, tag or memo, address-book entry, and any saved beneficiary information;",{"type":26,"tag":258,"props":269,"children":270},{},[271],{"type":31,"value":272},"account-opening and identity-verification records, linked payment methods, and account identifiers;",{"type":26,"tag":258,"props":274,"children":275},{},[276],{"type":31,"value":277},"login, session, device, and IP records for the relevant period;",{"type":26,"tag":258,"props":279,"children":280},{},[281],{"type":31,"value":282},"withdrawal requests, confirmations, approvals, holds, reversals, and support communications;",{"type":26,"tag":258,"props":284,"children":285},{},[286],{"type":31,"value":287},"sanctions or transaction-monitoring alerts, including the vendor, rule version, input addresses, timestamps, and disposition records, to the extent producible without revealing a SAR; and",{"type":26,"tag":258,"props":289,"children":290},{},[291],{"type":31,"value":292},"policies and retention schedules in effect on the transaction date.",{"type":26,"tag":27,"props":294,"children":295},{},[296,298,304,306,312],{"type":31,"value":297},"Do not assume every platform captures every field. Ask for data dictionaries and native exports so an expert can distinguish a null field from an omitted column. The existing guide on ",{"type":26,"tag":56,"props":299,"children":301},{"href":300},"\u002Fresources\u002Fsubpoenaing-cryptocurrency-exchange-records",[302],{"type":31,"value":303},"subpoenaing cryptocurrency exchange records",{"type":31,"value":305}," covers account identifiers and production scope. ConsensusIntel's ",{"type":26,"tag":56,"props":307,"children":309},{"href":308},"\u002Fservices#exchange-custody",[310],{"type":31,"value":311},"exchange and custody analysis service",{"type":31,"value":313}," addresses the reconciliation of those records with on-chain activity.",{"type":26,"tag":27,"props":315,"children":316},{},[317],{"type":31,"value":318},"A vendor's mixer label should remain separate from the protocol facts. Preserve the label, provider, score or category, rule version, and capture date. Then test the underlying path independently. A label can support an investigative lead. It does not, by itself, establish who controlled the destination, why the transaction occurred, or whether the conduct was unlawful.",{"type":26,"tag":44,"props":320,"children":322},{"id":321},"hypothetical-a-withdrawal-reaches-a-suspected-mixer",[323],{"type":31,"value":324},"Hypothetical: a withdrawal reaches a suspected mixer",{"type":26,"tag":27,"props":326,"children":327},{},[328],{"type":31,"value":329},"Hypothetical example: A customer withdraws $8,000 in bitcoin from a U.S. exchange to Address A. Two days later, Address A sends several outputs that an analytics vendor labels as connected to a mixing service. One party argues that the exchange must have violated a federal reporting rule because the withdrawal involved an unhosted wallet and later reached a mixer.",{"type":26,"tag":27,"props":331,"children":332},{},[333],{"type":31,"value":334},"The two withdrawn proposals do not support that conclusion. The 2020 proposal's special unhosted-wallet records never became mandatory. Its proposed $10,000 report also would not be triggered by the stated $8,000 withdrawal in isolation. The 2023 special measure never required a mixing report. Those are legal-history facts, not proof that the exchange had no other duty.",{"type":26,"tag":27,"props":336,"children":337},{},[338],{"type":31,"value":339},"The analysis should instead ask which rules applied to the exchange on the transaction date, what the exchange knew at the time, what monitoring occurred, and what records remain. The exchange ledger may tie the customer account to the withdrawal request and Address A. The later on-chain path may show where bitcoin moved from Address A. It does not establish continued customer control, intent, or knowledge without more evidence.",{"type":26,"tag":27,"props":341,"children":342},{},[343],{"type":31,"value":344},"Useful corroboration could include a saved address label, device evidence, a signed message, later deposits from the same wallet cluster, customer communications, or exchange records identifying another account at the endpoint. Each item answers a different question. None should be silently substituted for identity or intent.",{"type":26,"tag":44,"props":346,"children":348},{"id":347},"preserve-before-retention-becomes-the-dispute",[349],{"type":31,"value":350},"Preserve before retention becomes the dispute",{"type":26,"tag":27,"props":352,"children":353},{},[354],{"type":31,"value":355},"Send a preservation request early enough to cover account records, logs, support communications, address-screening results, vendor outputs, and policy versions. Identify the customer, wallet addresses, transaction hashes, chains, and date range. A name alone may miss accounts created with a different email address or phone number.",{"type":26,"tag":27,"props":357,"children":358},{},[359,361,367],{"type":31,"value":360},"Preserve the production in native form. Record who collected it, when, from which system, and whether any fields were transformed. Hash the received files before analysis and keep the raw copy separate from working files. The ",{"type":26,"tag":56,"props":362,"children":364},{"href":363},"\u002Fmethodology",[365],{"type":31,"value":366},"ConsensusIntel methodology",{"type":31,"value":368}," treats source preservation and reproducibility as part of the analysis, not an appendix added after opinions are written.",{"type":26,"tag":27,"props":370,"children":371},{},[372],{"type":31,"value":373},"For private-wallet evidence, coordinate device collection with a qualified examiner and counsel. Wallet databases, application records, browser artifacts, and transaction-signing evidence may help establish control. Seed phrases and private keys should not be placed in an ordinary production set. They can transfer control of assets and require a separate handling protocol.",{"type":26,"tag":44,"props":375,"children":377},{"id":376},"jurisdiction-and-limits",[378],{"type":31,"value":379},"Jurisdiction and limits",{"type":26,"tag":27,"props":381,"children":382},{},[383],{"type":31,"value":384},"These withdrawals concern federal FinCEN proceedings under the Bank Secrecy Act and section 311 authorities. They do not resolve duties under state money-transmitter law, sanctions rules, securities or commodities law, criminal statutes, foreign law, or a platform's contractual policies. They also do not decide whether any specific transfer was suspicious, lawful, or attributable to a named person.",{"type":26,"tag":27,"props":386,"children":387},{},[388],{"type":31,"value":389},"On-chain analysis cannot establish a natural person's identity from an address alone. Exchange records can provide an identity nexus, but that nexus still must be tested against account access, device evidence, transaction timing, and other corroboration. A complete opinion should separate what the ledger records, what the platform records, what a vendor inferred, and what the analyst concludes.",{"type":26,"tag":44,"props":391,"children":393},{"id":392},"frequently-asked-questions",[394],{"type":31,"value":395},"Frequently Asked Questions",{"type":26,"tag":44,"props":397,"children":399},{"id":398},"q-did-fincen-legalize-crypto-mixers-by-withdrawing-the-proposal",[400],{"type":31,"value":401},"Q: Did FinCEN legalize crypto mixers by withdrawing the proposal?",{"type":26,"tag":27,"props":403,"children":404},{},[405,411],{"type":26,"tag":406,"props":407,"children":408},"strong",{},[409],{"type":31,"value":410},"A:",{"type":31,"value":412}," No. FinCEN withdrew a proposed section 311 finding and special reporting measure. The withdrawal did not approve every mixer, immunize transactions, or displace other laws. FinCEN said it would continue monitoring mixer activity for illicit-finance indicators.",{"type":26,"tag":44,"props":414,"children":416},{"id":415},"q-must-an-exchange-still-collect-information-about-a-self-hosted-wallet",[417],{"type":31,"value":418},"Q: Must an exchange still collect information about a self-hosted wallet?",{"type":26,"tag":27,"props":420,"children":421},{},[422,426],{"type":26,"tag":406,"props":423,"children":424},{},[425],{"type":31,"value":410},{"type":31,"value":427}," There is no general duty created by the withdrawn 2020 proposal. A platform may still collect information because another BSA rule applies, because its risk program or contract requires it, or because it needs the data to process the transaction. The answer depends on the institution, transaction, date, and governing rule.",{"type":26,"tag":44,"props":429,"children":431},{"id":430},"q-can-civil-discovery-obtain-an-exchanges-sar",[432],{"type":31,"value":433},"Q: Can civil discovery obtain an exchange's SAR?",{"type":26,"tag":27,"props":435,"children":436},{},[437,441],{"type":26,"tag":406,"props":438,"children":439},{},[440],{"type":31,"value":410},{"type":31,"value":442}," Generally, no. SARs and information revealing their existence are protected by federal law and regulation. Counsel can request the underlying account, transaction, communication, and monitoring-input records without asking whether a SAR was filed. The court and applicable law govern disputed production questions.",{"type":26,"tag":44,"props":444,"children":446},{"id":445},"q-does-a-transaction-path-into-a-mixer-prove-money-laundering",[447],{"type":31,"value":448},"Q: Does a transaction path into a mixer prove money laundering?",{"type":26,"tag":27,"props":450,"children":451},{},[452,456],{"type":26,"tag":406,"props":453,"children":454},{},[455],{"type":31,"value":410},{"type":31,"value":457}," No. It proves the path supported by the chain data. Identity, control, knowledge, and intent require separate evidence. A mixer attribution should be preserved with its source and date, then tested against the underlying transactions.",{"type":26,"tag":27,"props":459,"children":460},{},[461,463,469],{"type":31,"value":462},"If a dispute turns on a withdrawal to a self-hosted wallet or a suspected mixer, ",{"type":26,"tag":56,"props":464,"children":466},{"href":465},"\u002Fcontact",[467],{"type":31,"value":468},"contact ConsensusIntel",{"type":31,"value":470}," to compare the public chain record with exchange and device evidence.",{"title":8,"searchDepth":472,"depth":472,"links":473},2,[474,476,477,478,479,480,481,482,483,484,485,486],{"id":46,"depth":475,"text":49},3,{"id":111,"depth":475,"text":114},{"id":201,"depth":475,"text":204},{"id":231,"depth":475,"text":234},{"id":321,"depth":475,"text":324},{"id":347,"depth":475,"text":350},{"id":376,"depth":475,"text":379},{"id":392,"depth":475,"text":395},{"id":398,"depth":475,"text":401},{"id":415,"depth":475,"text":418},{"id":430,"depth":475,"text":433},{"id":445,"depth":475,"text":448},"markdown","content:articles:45-fincen-crypto-reporting-proposals-withdrawal-records.md","content","articles\u002F45-fincen-crypto-reporting-proposals-withdrawal-records.md","articles\u002F45-fincen-crypto-reporting-proposals-withdrawal-records","md",1793677414500]