Crypto Market Update: Treasury Scraps Crypto Mixer and Self-Hosted Wallet Rules

The US Treasury Department's anti-money laundering arm has pulled back two long-pending cryptocurrency rulemakings, according to a market roundup published by the Investing News Network. The Financial Crimes Enforcement Network, known as FinCEN, said on Monday that it is withdrawing two cryptocurrency proposals that were never finalized.

The two measures had been among the most closely watched unfinished items in US crypto policy. One concerned transaction mixing services, the tools used to obscure the trail of funds moving across public blockchains. The other involved reporting obligations tied to transfers between regulated institutions and self-hosted wallets, meaning wallets held directly by individuals rather than by an exchange or custodian. CoinDesk, reporting on the same development, described the withdrawal as the United States scrapping a proposed 10,000 dollar reporting rule for crypto sent to private wallets.

Because neither proposal was ever completed, their withdrawal does not change any rule currently in force. It does, however, remove the possibility that the specific drafts on the table would be finalized as written, and it narrows the set of pending federal obligations that exchanges, custodians and wallet providers had been preparing for. Industry groups had argued the self-hosted wallet proposal would have imposed significant data collection requirements on routine transfers, while privacy advocates had raised concerns about the mixer-related measure. Those arguments are not resolved by the withdrawal, and nothing prevents FinCEN or Congress from revisiting either topic in a different form later.

The move landed on the same day that a separate US regulator took a step in the opposite direction, toward building new crypto rules rather than retiring them. The Commodity Futures Trading Commission said it is beginning work on federal rules for leveraged and margin crypto trading by retail investors, which is trading with borrowed money that magnifies both gains and losses. The agency asked the public for feedback on two planned regulations, referred to as Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets. The plan would create a new category of federally registered crypto exchange as an alternative to today's state-licensed platforms, though no rules have actually been proposed yet. CFTC Chair Michael Selig said the agency cannot require crypto trading to move onto these exchanges without action from Congress, where the CLARITY Act, a broader market structure bill, stalled in September.

Other items in the same roundup included a Securities and Exchange Commission order clearing 3x leveraged Bitcoin and Ether funds from Volatility Shares, although the order does not set a launch date and the firm still needs its registration approved before the funds can begin trading. The roundup also noted that Strategy posted a 21 billion dollar third-quarter Bitcoin gain and purchased roughly 29 million dollars more, that Kraken parent Payward launched 24/7 dollar settlement, and that OKX and ICE moved ahead with 24/7 tokenized stock trading.

Prices were little changed as the news circulated. The same report listed Bitcoin at about 85,394 dollars, up 0.1 percent over 24 hours, Ethereum at about 2,705 dollars, down 0.1 percent, XRP at about 1.50 dollars, down 0.9 percent, and Solana at about 120 dollars, down 1.6 percent. The outlet attributed recent price support primarily to shifting expectations around Federal Reserve policy, noting that after a softer-than-expected US employment report, market participants scaled back expectations for an October interest rate increase.

Readers should treat regulatory withdrawals as procedural steps rather than settled outcomes. Rulemaking agendas can change with agency leadership and legislative action, and none of the developments above should be read as a signal about future market direction. This article is informational and is not investment, legal or tax advice.

This is a news summary for general information only — not financial advice, and nothing here is a recommendation to buy, sell, or hold any asset. Always verify against the original source and do your own research before making a financial decision.