The US Financial Crimes Enforcement Network has withdrawn two proposed rules that would have imposed significant new reporting obligations on crypto transactions, a decision that sharpens the contrast with the European Union's approach just as Brussels' own reporting regime comes into force.
FinCEN confirmed it is discontinuing two planned regulatory frameworks for the crypto sector: a 2023 proposal targeting transactions involving crypto mixers, and a self-hosted wallet rule first floated in December 2020. Neither proposal had ever been finalised, meaning existing obligations for banks and other financial institutions remain unchanged. FinCEN said pursuing the rules further "could discourage legitimate activities," and pointed to a July 2025 report from the President's Working Group on Digital Asset Markets as part of the rationale behind the retreat.
The 2023 mixer rule would have required banks and other covered institutions to report detailed transaction data whenever crypto mixing services were involved, including wallet addresses, transaction hashes and IP addresses. The proposal defined mixing activity broadly, covering the pooling of funds, the splitting of transactions, or the use of one-time wallets designed to obscure the trail of a transaction.
The self-hosted wallet proposal, older and more far-reaching, would have forced banks and financial service providers to verify the identity of customers transacting with non-custodial wallets above a $3,000 threshold, with a separate reporting requirement to FinCEN kicking in at $10,000, or for multiple transactions totalling more than $10,000 within a 24-hour window. FinCEN stated plainly it will not continue pursuing that proposal.
A different route in Brussels
The American retreat lands at a moment when the European Union has moved in the opposite direction. DAC8, the bloc's directive extending tax reporting obligations to crypto, has applied since 1 January 2026. It requires crypto service providers such as exchanges and custody wallet providers to report customer identity data and transaction details, including purchases, sales, swaps, deposits, withdrawals and annual balances, to national tax authorities.
Self-hosted wallets, however, sit outside the direct scope of DAC8 reporting unless a regulated platform is used to move funds in or out of them. An earlier idea discussed during the drafting of EU anti-money laundering rules, a €1,000 cap on transactions involving self-hosted wallets, was not carried into the final legislation.
The first automatic exchange of DAC8 data between EU member states is scheduled for September 2027, covering the 2026 reporting year. That timeline means European exchanges and custody providers are already collecting the data that will feed into that first transmission, even as their American counterparts have been spared the mixer and wallet reporting regimes FinCEN has now set aside.
For European users of crypto platforms, the practical effect is limited in the near term: DAC8's obligations fall on regulated service providers rather than on individuals holding assets in self-custody. But the diverging trajectories, Washington narrowing its reporting ambitions, Brussels implementing a broad tax-focused framework, underline how far apart the two jurisdictions now sit on crypto oversight.
