FinCENKYC / CDDOctober 6, 2026

FinCEN Withdraws Proposed Unhosted Wallet Reporting & KYC Rule

FinCEN is withdrawing the NPRM that would have required banks and MSBs to file reports, maintain records, and verify customer identities for transactions involving convertible virtual currency or digital assets held in unhosted wallets or wallets in certain foreign jurisdictions. FinCEN states it will take no further action on this proposal. Firms that built compliance frameworks anticipating this rule should reassess their obligations, though voluntary best practices around unhosted wallet due diligence may still be prudent.

What to do

Revisit any compliance program changes or technology investments made in anticipation of the unhosted wallet rule, and update your regulatory change management log to reflect the withdrawal — while maintaining risk-based KYC practices for high-risk wallet counterparties.

Who this affects

Crypto ExchangeWallet ProviderMoney Services BusinessBank / Credit UnionCrypto Custodian

Does this affect your program?

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Source

Read the official publication

This radar entry is educational and does not constitute legal advice. Summaries are AI-assisted and grounded in the linked official source; always verify against the primary source and consult qualified legal counsel for jurisdiction-specific guidance.

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