The Financial Crimes Enforcement Network (FinCEN) and the US Federal Reserve have joined to withdraw an aspect of the crypto travel rule that would have lowered the threshold for funds transfers and transmittals of digital assets. The joint notice of proposed rulemaking (NPRM) was published on October 27, 2020, and sought to reduce the threshold from $3,000 to $250 for funds transfers and transmittals of funds that begin or end outside the United States.
The agencies received nearly 3,000 comments on the proposal, with many noting that SARs already flagged potentially illicit transactions.
Some viewed the rule as invasive and an abuse of privacy.
The NPRM would also have clarified the meaning of “money.”
The statement indicated there would be no further action on the rule. The rule requires financial firms to maintain records and information.
While the $3,000 transfer threshold remains in place, a currency transaction report has been required for decades for amounts deposited or transferred over $10,000 in a single day. This rule has not been adjusted for inflation. Originally put in place in 1972 and not adjusted for inflation, the amount would be around $75,000 today, indicating significant privacy creep for monetary or value transfers and a possible abuse of government authority.
