A U.S. judge has struck down a Treasury Department rule that required disclosure of the beneficial owners of companies making all-cash real estate purchases, dealing a setback to a Biden-era effort to curb money laundering through the property market, Reuters reported.

The rule, implemented by the Treasury’s Financial Crimes Enforcement Network (FinCEN) in 2024, was designed to prevent criminals from using anonymous companies to park illicit funds in U.S. real estate. It effectively expanded nationwide a disclosure regime that FinCEN had previously applied only in certain cities through geographic targeting orders, Reuters said.

U.S. District Judge Jeremy Kernodle in Tyler, Texas, ruled late Thursday in favor of the libertarian Pacific Legal Foundation, which had challenged the measure on the grounds that FinCEN exceeded its statutory authority, the news agency said. In his ruling, Kernodle said the agency had failed to show that non-financed residential real estate transactions were inherently suspicious.

The FACT Coalition, an advocacy group that backs the rule, said it expected the government to win on appeal. Its executive director, Ian Gary, said the Texas court had sided with “cartels, money launderers, and U.S. adversaries,” Reuters reported.

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