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FinCEN and the Federal Reserve have formally withdrawn a 2020 proposal that would have cut the Bank Secrecy Act threshold for cross-border funds transfers from $3,000 to $250 and spelled out that the rules cover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

Why the agencies backed off

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.