FinCEN has withdrawn two proposed crypto rules covering unhosted-wallet reporting and crypto-mixing, while the CFTC opens a public-comment process for a broader retail crypto framework. Existing anti-money-laundering requirements stay in place, but platforms offering leverage could face a new federal registration path.
The Financial Crimes Enforcement Network has withdrawn two proposed cryptocurrency regulations. According to FinCEN, the withdrawal is part of an ongoing process to develop better rules in light of public comment.
FinCEN drops wallet and mixing proposals
One of the withdrawn proposals targeted transactions involving a customer's non-hosted wallet worth $10,000 or more, which would have potentially required financial institutions to report them. Institutions would also have had to keep records of transactions of $3,000 or more. The second withdrawn proposal addressed crypto-mixing.
Neither proposal had become a final rule, so the withdrawal does not reduce current compliance obligations. Instead, it stops these proposed requirements from developing into future rules. As a result, uncertainty around self-custody regulation eases while existing anti-money laundering sanctions requirements remain intact.
CFTC opens the door to a national framework
The CFTC is moving toward clearer rules for crypto markets, building on FinCEN's effort to ease compliance friction. The agency has opened a public-comment period for retail crypto transactions under Section 2(C)(2)(D), a first step toward a national framework rather than rules for individual products.
The framework would define a new market category for cryptocurrencies and other digital assets while setting minimum compliance requirements to prevent abusive practices. Proposed rules could require customer-asset segregation, capital safeguards, anti-money-laundering controls, and proof of reserves. The CFTC also intends to accept external wallet deliveries within 28 days as evidence of "actual" delivery. Public comments on the framework are due within 60 days.
Leverage platforms face a dedicated registration track
Under the proposed framework, platforms offering margin, leverage, or financing could enter a dedicated federal registration pathway, with stronger controls around customer assets, proof of reserves, and market conduct. Registered futures commission merchants could become the main intermediaries for covered retail transactions.
Pure spot markets would remain outside this category, preserving a separate regulatory path. The divide could give regulators closer oversight where leveraged activity raises customer exposure, while leaving ordinary spot trading on its existing track.
Source: AMBCrypto
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