Crypto Law Profile
Withdrawn FinCEN NPRM that would have required banks and MSBs to report certain CVC/LTDA transactions over $10,000 and keep records/verify customers for certain transactions over $3,000 involving unhosted or covered wallets.
Requirements for Certain Transactions Involving Convertible Virtual Currency or Digital Assets was a U.S. Financial Crimes Enforcement Network (FinCEN) notice of proposed rulemaking for 31 CFR Parts 1010, 1020, and 1022. As of June 4, 2026, the rulemaking is not in force: Treasury’s 2024 regulatory agenda listed RIN 1506-AB47 as withdrawn on April 12, 2024. The proposal remains relevant as a reference point for U.S. AML/CFT policy toward unhosted wallets, but it should not be presented as an active compliance regime.
FinCEN issued the NPRM in December 2020 under the Bank Secrecy Act. It would have applied to banks and money services businesses when they processed deposits, withdrawals, exchanges, payments, or transfers of convertible virtual currency (CVC) or digital assets with legal tender status (LTDA) involving an unhosted wallet or an otherwise covered wallet. FinCEN described otherwise covered wallets as wallets held at non-BSA financial institutions in foreign jurisdictions identified by FinCEN; the proposal initially identified Burma, Iran, and North Korea.
The reporting element would have required a FinCEN filing when a customer transaction involved an unhosted or otherwise covered wallet and exceeded $10,000, or when multiple CVC/LTDA transactions involving the same customer and covered counterparty wallets aggregated to more than $10,000 within a 24-hour period. The proposed report would have included information about the financial institution, transaction, hosted-wallet customer, and counterparties.
A separate recordkeeping provision would have applied at a lower threshold. For covered CVC/LTDA transactions over $3,000, banks and MSBs would have been required to keep records and verify the identity of hosted-wallet customers. FinCEN also proposed that banks and MSBs collect, at minimum, each counterparty’s name and physical address, with any additional information handled under risk-based procedures consistent with AML/CFT programs.
The proposal distinguished between hosted wallets, unhosted wallets, and otherwise covered wallets. It also proposed an exemption for transactions between hosted wallets, except where a wallet was otherwise covered. FinCEN further proposed to treat CVC and LTDA as monetary instruments for the specific statutory reporting provision, while stating that this determination was not intended to alter the general regulatory definition of monetary instruments elsewhere in FinCEN rules.
The rulemaking moved through several comment-period notices but did not become a final rule. The original December 2020 NPRM set a short comment period. FinCEN reopened the comment period in January 2021, citing additional statutory authority under the Anti-Money Laundering Act of 2020 and providing more information about a proposed reporting form. Later in January 2021, FinCEN extended the reopened comment period for all aspects of the NPRM to March 29, 2021.
The January 2021 reopening notice indicated that, if adopted, the reporting requirement could have taken effect 30 days after publication of a final rule, while counterparty-reporting and recordkeeping obligations could have taken effect 60 days after publication. Those phase-in periods were never triggered because Treasury later listed the rulemaking as withdrawn.
This profile is federal and jurisdiction-specific to the United States. It does not describe a state virtual-currency licensing law or a final federal rule. Its main relevance is to U.S. Bank Secrecy Act policy debates involving self-custody, hosted-wallet services, MSBs, crypto transaction monitoring, and cross-border wallet-risk controls. It may also help compare later wallet-reporting proposals with earlier FinCEN approaches.
For CryptoSlate readers, the central takeaway is status-based: the proposal would have created transaction reporting, recordkeeping, identity-verification, and counterparty-data obligations for certain CVC/LTDA activity, but it was withdrawn before finalization. Any current U.S. obligations should be evaluated against separate, operative BSA rules, FinCEN guidance, sanctions requirements, and other applicable federal or state regimes.
Would have required banks and MSBs to file FinCEN reports for certain CVC/LTDA transfers over $10,000, including 24-hour aggregation.
Would have required records and customer identity verification for covered CVC/LTDA transfers over $3,000 involving unhosted or covered wallets.
Covered unhosted wallets and wallets hosted by non-BSA financial institutions in FinCEN-identified jurisdictions.
Would have required collection or reporting of counterparty names, physical addresses, and transaction data for reportable transactions.
Proposed treating CVC and LTDA as monetary instruments for the specific BSA reporting provision, without changing the general definition.
FinCEN published the NPRM in the Federal Register at 85 FR 83840.
FinCEN reopened comments and supplied additional AML Act authority and form details.
FinCEN extended the reopened comment period and set Mar. 29, 2021 as the single deadline.
Treasury listed the rulemaking as withdrawn in completed actions.
FinCEN, U.S. Department of the Treasury
Convertible virtual currency, Digital assets with legal tender status
This profile covers a withdrawn federal NPRM, not an operative rule. It should not be presented as imposing current compliance obligations.
