Bitcoin Magazine

U.S. Regulators Drop $250 Travel Rule Plan, Crypto Language Too

FinCEN and the Federal Reserve have formally withdrawn a 2020 proposal that would have cut the Bank Secrecy Act threshold for cross-border funds transfers from $3,000 to $250 and spelled out that the rules cover crypto, leaving the existing $3,000 line in place.

The notice, published Monday in the Federal Register, says the Financial Crimes Enforcement Network and the Fed’s Board of Governors “will not take further action” on a proposal they first issued on Oct. 27, 2020.

That plan would have lowered the recordkeeping and Travel Rule thresholds to $250 for transfers that begin or end outside the United States. Those rules require banks and nonbank financial institutions to collect, retain and pass along customer information on transfers of $3,000 or more.

It also would have clarified the meaning of “money” in both rules so they apply to transactions involving convertible virtual currency, along with digital assets that have legal tender status to a recipient.

Per the notcie, FinCEN and the Fed received nearly 3,000 comments on the proposal, most of them substantially similar form letters. Commenters generally opposed the lower threshold, arguing that it would burden smaller institutions and could push consumers sending remittances toward less regulated channels.

Many also noted that potentially illicit transfers below $3,000 were already being flagged to FinCEN through suspicious activity reports. Several said the threshold should rise instead, citing inflation since 1995.

Sentiment on the crypto language was mixed. Companies that provide crypto services and their trade groups opposed it, citing technical limits and the lack of an international messaging standard for crypto transfers, while some banks and money services businesses supported it.

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