Proposal of Special Measure Regarding Convertible Virtual Currency Mixing, as a Class of Transactions of Primary Money Laundering Concern; Withdrawal

Issuing agencies

Abstract

FinCEN is withdrawing its finding and proposed rulemaking, pursuant to section 311 of the USA PATRIOT Act, that international Convertible Virtual Currency (CVC) mixing is a class of transactions of primary money laundering concern and that a special measure requiring enhanced recordkeeping and reporting requirements should be imposed regarding this class of transactions.

Full Text

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<title>Federal Register, Volume 91 Issue 192 (Tuesday, October 6, 2026)</title>
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[Federal Register Volume 91, Number 192 (Tuesday, October 6, 2026)]
[Proposed Rules]
[Pages 63513-63514]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-20429]


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DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network

31 CFR Part 1010

RIN 1506-AB47


Proposal of Special Measure Regarding Convertible Virtual 
Currency Mixing, as a Class of Transactions of Primary Money Laundering 
Concern; Withdrawal

AGENCY: Financial Crimes Enforcement Network (FinCEN).

ACTION: Withdrawal of finding and notice of proposed rulemaking.

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SUMMARY: FinCEN is withdrawing its finding and proposed rulemaking, 
pursuant to section 311 of the USA PATRIOT Act, that international 
Convertible Virtual Currency (CVC) mixing is a class of transactions of 
primary money laundering concern and that a special measure requiring 
enhanced recordkeeping and reporting requirements should be imposed 
regarding this class of transactions.

DATES: FinCEN is withdrawing the proposed rulemaking published at 88 FR 
72701 (October 23, 2023), as of October 6, 2026.

FOR FURTHER INFORMATION CONTACT: The FinCEN Regulatory Support Section 
by submitting an inquiry at <a href="http://www.fincen.gov/contact">www.fincen.gov/contact</a>.

SUPPLEMENTARY INFORMATION:

I. Statutory Provisions

    Section 311 of the USA PATRIOT Act \1\ (section 311), codified at 
31 U.S.C. 5318A, grants the Secretary of the Treasury (Secretary) the 
authority to make a finding that ``reasonable grounds exist for 
concluding'' that any of the following ``is of primary money laundering 
concern'':
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    \1\ Uniting and Strengthening America by Providing Appropriate 
Tools Required to Intercept and Obstruct Terrorism Act of 2001, 
Public Law 107-56, 115 Stat. 272 (Oct. 26, 2001) (USA PATRIOT Act).

    (i) A jurisdiction outside of the United States;
    (ii) One or more financial institutions operating outside of the 
United States;
    (iii) One or more classes of transactions within, or involving, 
a jurisdiction outside of the United States; or
    (iv) One or more types of accounts.\2\
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    \2\ 31 U.S.C. 5318A(a)(1).

    Upon making such a finding, the Secretary is authorized to require 
domestic financial institutions and domestic financial agencies--
collectively, ``covered financial institutions''--to take certain 
``special measures.'' Specifically, pursuant to section 311, the 
Secretary may impose one or more of five possible special measures as 
safeguards to defend the U.S. financial system from money laundering 
and terrorist financing risks. Through special measures one through 
four, the Secretary may impose additional recordkeeping, information 
collection, and reporting requirements on covered financial 
institutions.\3\ Through special measure five, the Secretary may 
``prohibit, or impose conditions upon, the opening or maintaining in 
the United States of a correspondent account or payable-through 
account'' for or on behalf of a foreign banking institution, if such 
correspondent account or payable-through account involves the financial 
institution operating outside of the United States found to be of 
primary money laundering concern.\4\
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    \3\ 31 U.S.C. 5318A(b)(1)-(4).
    \4\ 31 U.S.C. 5318A(b)(5).
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    The authority of the Secretary to administer the Bank Secrecy Act 
(BSA) \5\

[[Page 63514]]

and its implementing regulations, including the authority under section 
311 to make such a finding and to impose special measures, has been 
delegated to FinCEN.\6\
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    \5\ The BSA, as amended, is the popular name for a collection of 
statutory authorities that FinCEN administers that is codified at 12 
U.S.C. 1829b, 1951-1960 and 31 U.S.C. 5311-5314, 5316-5336, and 
includes other authorities reflected in notes thereto. Regulations 
implementing the BSA appear at 31 CFR Chapter X.
    \6\ See Treasury Order 180-01 (Jan. 14, 2020).
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II. Finding and Notice of Proposed Rulemaking

    On October 23, 2023, FinCEN published a proposed rule that, if 
finalized, would impose recordkeeping and reporting obligations on 
covered financial institutions to report certain information when they 
know, suspect, or have reason to suspect a CVC transaction involves the 
use of CVC mixing within or involving a jurisdiction outside of the 
United States.\7\ Under the proposed rule, FinCEN defined the term 
``CVC Mixing'' as activity that entailed the facilitation of CVC 
transactions in a manner that obfuscates the source, destination, or 
amount involved in one or more transactions regardless of the type of 
protocol or service used, such as: (1) pooling or aggregating CVC from 
multiple persons, wallets, addresses, or accounts; (2) using 
programmatic or algorithmic code to coordinate, manage, or manipulate 
the structure of a transaction; (3) splitting CVC for transmittal and 
transmitting the CVC through a series of independent transactions; (4) 
creating and using single-use wallets, addresses, or accounts, and 
sending CVC through such wallets, addresses, or accounts through a 
series of independent transactions; (5) exchanging between types of CVC 
or other digital assets; or (6) facilitating user-initiated delays in 
transactional activity.\8\ Additionally, FinCEN proposed a definition 
for services called ``CVC Mixers'' as ``any person, group, service, 
code, tool, or function that facilitates CVC mixing.'' \9\ The proposed 
rule would have required covered financial institutions to file a 
report with FinCEN containing certain information related to CVC Mixing 
transactions, such as the amount of CVC transferred, CVC type, CVC 
mixer used, CVC wallet address associated with customers, relevant 
transaction hashes, date of transactions, IP addresses, and a 
description of activity through a narrative. The proposed rule would 
have also required covered financial institutions to keep records of 
customers associated with covered transactions to include the 
customer's full identity, date of birth, address, email address, or 
unique identifying numbers.
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    \7\ FinCEN, Proposal of Special Measure Regarding Convertible 
Virtual Currency Mixing, as a Class of Transactions of Primary Money 
Laundering Concern, 88 FR 72701 (Oct. 23, 2023).
    \8\ Id.
    \9\ Id.
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    As stated in the July 2025 report by the President's Working Group 
on Digital Asset Markets established by Executive Order 14178 (E.O. 
14178), Strengthening American Leadership in Digital Financial 
Technology, ``the Trump Administration supports the ability of lawful 
users of digital assets to privately transact on a public blockchain.'' 
\10\ The report also acknowledged that although illicit actors ``use 
mixers to obfuscate and launder funds . . . lawful users of digital 
assets may leverage mixers to enable financial privacy when transacting 
through public blockchains.'' \11\ The report recommended that Treasury 
should consider next steps regarding its proposed rulemaking concerning 
CVC mixing.\12\
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    \10\ See White House, Strengthening American Leadership in 
Digital Financial Technology, p. 100 (July 2025), <a href="https://www.whitehouse.gov/wp-content/uploads/2025/07/Digital-Assets-Report-EO14178.pdf">https://www.whitehouse.gov/wp-content/uploads/2025/07/Digital-Assets-Report-EO14178.pdf</a>; see also Executive Order 14178, 90 FR 8647 (Jan. 31, 
2025).
    \11\ Id. at p. 107.
    \12\ Id.
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    FinCEN is withdrawing its finding that international CVC Mixing is 
a class of transactions of primary laundering concern, and the proposed 
rule, published on October 23, 2023, seeking to impose special measure 
one regarding international CVC Mixing. While FinCEN maintains that 
illicit actors continue to use mixers and other tools and methods to 
hinder law enforcement investigations, this withdrawal is informed by 
the concerns from commentors that the expansive definition of CVC 
mixing in the proposed rule could have a chilling effect on legitimate 
activity and place a large reporting burden on covered financial 
institutions. However, FinCEN will continue to monitor activity 
involving CVC mixers for indicia of money laundering, terrorist 
financing, or other illicit finance activity, and may take appropriate 
steps in the future to mitigate any such activity.

Jimmy L. Kirby,
Deputy Director, Financial Crimes Enforcement Network.
[FR Doc. 2026-20429 Filed 10-5-26; 8:45 am]
BILLING CODE 4810-02-P


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