Banking and Finance Law Daily Wrap Up, BANK SECRECY ACT—BPI urges broader AML rules for digital asset intermediaries, (Nov 10, 2026)

By Patricia K. Ruiz, J.D.

Treasury should extend anti-money laundering obligations across the digital asset payment chain, the banking trade group said.

The Bank Policy Institute (BPI) urged the Financial Crimes Enforcement Network (FinCEN) and the Treasury Department to expand anti-money laundering and countering the financing of terrorism (AML/CFT) requirements to digital asset intermediaries, particularly in secondary-market transactions. In a letter, the group said existing reporting frameworks leave information gaps that can limit visibility into illicit activity involving cryptocurrencies and other digital assets. BPI said Treasury should move quickly to establish a framework covering digital asset service providers and persons operating or controlling decentralized finance arrangements.

The request follows FinCEN's recent withdrawal of several digital-asset-related proposals, including a 2020 proposal addressing certain transactions involving unhosted wallets, a 2023 proposal targeting international convertible virtual currency mixing, and a joint FinCEN-Federal Reserve proposal that would have lowered certain international-transfer information thresholds and clarified coverage of convertible virtual currency transactions (see Banking and Finance Law Daily, Nov. 6, 2026, and Oct. 5, 2026). BPI said the withdrawals raise questions about how regulators intend to address existing information gaps in the digital asset ecosystem.

According to the letter, banks can observe fiat currency transfers to and from digital asset platforms but generally lack visibility into activity occurring between those transactions, including transfers involving self-hosted wallets, secondary-market transactions, mixers, and cross-chain bridges. As a result, banks may be unable to reconstruct complete transaction chains or identify all activity associated with potentially illicit funds, the group said.

Requested framework. BPI called on FinCEN and the Office of Foreign Assets Control (OFAC) to designate digital asset service providers, including entities that custody, transfer, exchange, or facilitate customer transactions, as financial institutions under the Bank Secrecy Act. The group also urged regulators to apply Bank Secrecy Act obligations to persons operating or controlling decentralized finance arrangements, with requirements calibrated to the activities and risks involved. Where existing authority is insufficient, Treasury should identify specific regulatory gaps and seek targeted legislation from Congress, BPI said. The group also urged Treasury to pursue legislation providing explicit authority to sanction mixers, tumblers, and other blockchain applications used to facilitate illicit finance.

BPI further recommended that Treasury convene law enforcement agencies, financial institutions, stablecoin issuers, digital asset service providers, blockchain analytics firms, and other participants in the digital asset ecosystem to improve information sharing across the payment chain. According to the letter, effective AML/CFT controls and innovation in digital assets can coexist within a regulatory framework designed to address illicit-finance risks.

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