According to The Block, the U.S. Treasury Department has withdrawn a proposal that would have classified cryptocurrency mixing as a “primary money laundering concern” under the PATRIOT Act. The decision follows internal review and feedback regarding potential impacts on legitimate use cases involving self-hosted wallets. FinCEN announced the withdrawal in a regulatory update, stating it was made after considering concerns that the rule could create a chilling effect on lawful activities related to wallet management and privacy features. The proposal had sought to assign mixing services a heightened regulatory focus within the framework of anti-money laundering obligations. No enforcement action or final regulation resulted from the withdrawn measure. The Treasury did not provide a timeline for future guidance on crypto mixing practices. The withdrawal reflects an ongoing evaluation of how existing rules apply to emerging blockchain tools while protecting financial integrity.
