US Treasury Scraps Two Crypto Surveillance Rules in Privacy Win

The U.S. Treasury Department (the government body that manages the country's money and finances) just made a big decision that cheers up crypto users who care about privacy. It is canceling two proposed rules that would have required much heavier tracking of cryptocurrency (digital money like Bitcoin) transactions.

The rules came from FinCEN (the Financial Crimes Enforcement Network, a Treasury agency that fights money laundering — the act of hiding where illegally earned money comes from). Here's what the two dropped proposals would have done:

• The 2020 "unhosted wallet" rule: An unhosted wallet is a personal crypto wallet you control yourself, without a company holding your coins for you. This rule would have forced banks and exchanges to report certain transactions above $3,000 and $10,000 involving these wallets.
• The 2023 "mixing" rule: Mixing means pooling together crypto from many people to hide who sent what. This rule defined mixing so broadly that it would have swept in ordinary privacy techniques used by regular users, not just criminals.

Privacy group Coin Center called the news "a significant victory for financial privacy." They warned that the mixing rule was so broad that cautious banks would have reported even normal transactions, possibly leading to frozen or closed accounts for innocent people.

The canceled mixing rule would have required institutions to hand over lots of sensitive data, including:

• Wallet addresses
• Transaction records (digital receipts)
• IP addresses (which can reveal your location)
• Customer identity details

This move lines up with White House policy. A July 2025 government report said the Trump Administration supports the right of lawful users to transact privately on public blockchains (the shared digital record-keeping systems behind crypto).

However, FinCEN isn't going soft on criminals. The agency noted that bad actors still use mixers to launder money and said it will keep watching for money laundering and terrorist financing — and may introduce new rules in the future.

Bottom line: Everyday crypto users win more privacy for now, but regulators are still keeping an eye on illegal activity.

This is an AI-generated summary. Read the original article at: https://bitcoinmagazine.com/news/treasury-drops-crypto-surveillance