The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) has withdrawn its 2020 proposal to impose reporting and recordkeeping requirements on transactions involving unhosted cryptocurrency wallets, according to a Federal Register notice filed on October 5. The regulator said it will take no further action on the proposed rule.

The decision ends a five-year push to require banks and money services businesses (MSBs) to collect identity and transaction data whenever customers move digital assets to or from self-custody wallets, a framework that never took effect but drew sustained criticism from the crypto industry.

What the 2020 proposal would have required

Published on December 23, 2020, the notice of proposed rulemaking (RIN…