Are there special FinCEN reporting or recordkeeping rules for transactions with unhosted wallets?
Not under the 2020 proposal: FinCEN withdrew its proposed unhosted-wallet rule, so those proposed requirements will not take effect. CVC transfers can still be transmittals of funds, so the general funds transfer recordkeeping and Travel Rule requirements may apply to a covered financial institution for transfers of $3,000 or more, unless an exception applies.
What the sources say:
- FinCEN withdrew the proposal it published on December 23, 2020, as of October 6, 2026, and will take no further action on it (91 FR 63514). The proposal would have required reports on transactions over $10,000 (or multiple transactions aggregating over $10,000 in 24 hours), and records and customer verification for transactions over $3,000, where a counterparty used an unhosted or otherwise covered wallet.
- Transactions involving CVC qualify as transmittals of funds and may fall within the Funds Travel Rule (FIN-2019-G001).
- A financial institution other than a bank, such as an MSB, is subject to the transmittal recordkeeping rules for transmittals of $3,000 or more, whether it acts as transmittor's, intermediary or recipient's institution (31 CFR 1010.410(e)).
- A transmittor's or intermediary financial institution located in the United States must include the required information in the transmittal order for transmittals of $3,000 or more (31 CFR 1010.410(f)). Paragraph (f) puts no such duty on the recipient's institution.
- A person who uses an unhosted wallet to buy goods or services on their own behalf is not a money transmitter (FIN-2019-G001, section 4.2.1).
Facts that matter:
- Whether you are a money transmitter, and whether the CVC transfer is $3,000 or more or its CVC equivalent.
- Your position in the chain: transmittor's, intermediary or recipient's institution.
- Whether the transfer falls within an exception, for example where both parties are banks or government entities (31 CFR 1010.410(e)(6); 31 CFR 1010.410(f)(4)).
Banks keep funds transfer records under 31 CFR 1020.410(a) instead. Before relying on this, check whether FinCEN has issued any newer unhosted-wallet rule or guidance since October 2026.
Sources
- FinCEN FIN-2019-G001: https://www.fincen.gov/sites/default/files/2019-05/FinCEN%20Guidance%20CVC%20FINAL%20508.pdf
- Federal Register document 2026-20430: https://www.federalregister.gov/documents/2026/10/06/2026-20430/requirements-for-certain-transactions-involving-convertible-virtual-currency-or-digital-assets
- https://www.fincen.gov/news/news-releases/fincen-announces-withdrawals-proposed-digital-asset-related-rules: https://www.fincen.gov/news/news-releases/fincen-announces-withdrawals-proposed-digital-asset-related-rules
This answer is general information, not legal advice. Forteris is not a law firm.
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