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In Today’s Edition:
**Headline:FinCEN Drops Crypto Mixing RuleGlobal Legal Roundup****Case Study:**DWF Labs Takes BitGo to Court
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HEADLINE
**State of play: **FinCEN has withdrawn its 2023 crypto mixing proposal and a 2020 self-hosted wallet rule, Washington’s clearest admission yet that onchain privacy can be legitimate, even as Treasury separately asks Congress for a “hold law” to freeze suspicious assets.
The mixing rule would have required institutions to report wallet addresses, transaction hashes, and IP addresses, with no dollar threshold.
FinCEN cited commenter concerns that its expansive definition of mixing would chill legitimate activity and impose heavy reporting burdens.
The wallet rule would have mandated identity checks above $3,000 and FinCEN reports above $10,000 for transactions involving unhosted wallets.
Neither proposal was finalized, so financial institutions’ existing obligations remain unchanged.
FinCEN still believes illicit actors use mixers to evade investigators and says it will keep monitoring for future action.
**What’s Next: **Expect targeted, case-by-case action against specific mixers, since FinCEN has explicitly reserved the right to act later.
**Why it Matters: **Banks and crypto firms no longer face blanket surveillance mandates for touching privacy tools or self-custodied wallets.
Our Take: This is a policy reprieve, not a legal right, and onchain privacy now survives only at the discretion of whoever runs Treasury next.
GLOBAL LEGAL ROUNDUP
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Treasurywithdrawscrypto mixing rule.🇺🇸
ConduitsuesTether over $2.76M freeze.🇺🇸
Kalshiis investigatingbets on Trump’s press secretary.🇺🇸
NYAGsecuresup to $35M from former Celsius CEO Alex Mashinsky.🇺🇸
DWF Labs subsidiariessueBitGo for $141M over token lock-up breach.🇺🇸
NFLtellsSupreme Court prediction market sports contracts are gambling.🇺🇸
CFTCproposesnew federal framework for leveraged retail crypto trading.🇺🇸
Rep. Davisintroducesbill to stop fed candidates trading prediction market.🇺🇸
CFTCmovesto fold event contracts into swaps regulations as legal fight rages.
🇬🇷
Greecepreparesto levy 10% capital gains tax on cryptocurrency.🇬🇧
UKslapssanctions on three crypto exchanges over alleged Russia links.
🇹🇭
Thailand SECissuesbitcoin and ether ETF rules set to take effect Oct. 16.
CASE STUDY
State of play: DWF Labs subsidiaries are suing custodian BitGo in London’s High Court for $114M over alleged lock-up breaches, a case that will test whether the restrictions underpinning private token sales are enforceable at all.
DWF Maas and Falcon Digital say they sold FF and ESPORTS tokens to BitGo at a discount conditional on a three-month lock-up.
DWF claims the tokens reached exchanges roughly two months before the first unlock, with BitGo offering no undertaking after complaints in April and May.
FF slid from 8 cents to about 7 cents by late April, while ESPORTS collapsed from about 28 cents to 7 cents by early June.
DWF’s $25M WLFI purchase last year drew concern from US lawmakers over founder Andrei Grachev’s alleged Russia links.
Grachev ran Huobi’s Russian arm from 2018 to 2019, an exchange since sanctioned for helping Russia evade Western sanctions.
Our Take: A custodian allegedly failing to hold its own tokens exposes most private-sale lock-ups as handshake deals that only onchain enforcement can fix.
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