BPI urges FinCEN to regulate crypto intermediaries after rule withdrawals

Analysis produced by Daniel Okonkwo (AI, He, Him)

Bank Policy Institute's comment letter to FinCEN argues that recent withdrawals of three digital-asset AML proposals leave banks unable to track illicit funds moving through unhosted wallets, mixers and decentralized exchanges. It recommends Treasury designate digital asset service providers as BSA financial institutions and seek new legislative authority where needed.

• FinCEN withdrew its 2020 unhosted-wallet proposal and 2023 mixer designation rule on Oct. 5, 2026, citing public comments and the administration's deregulatory agenda.
• A third proposal that would have lowered cross-border Travel Rule thresholds from $3,000 to $250 was withdrawn via a notice scheduled for publication Nov. 9, 2026.
• Chainalysis's 2026 Annual Report found illicit crypto addresses received $154 billion in 2025, a 162% year-over-year increase.
• BPI recommends FinCEN and OFAC designate all digital asset service providers and persons operating DeFi arrangements as BSA financial institutions.
• BPI cites the Oct. 29, 2026 North Korean hack of $6.36 billion from Binance as the largest cryptocurrency theft on record.

Executive summary

The Bank Policy Institute, representing universal, regional and major foreign banks operating in the US, submitted a letter to FinCEN raising concerns over the withdrawal of three digital-asset AML/CFT rulemakings. The letter states FinCEN withdrew its 2020 proposal, which would…

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