The U.S. Federal Reserve and the U.S. Treasury's Financial Crimes Enforcement Network (FinCEN) have proposed lowering the Travel Rule threshold from $3,000 to $250. The Travel Rule currently requires all financial institutions to transmit the following information alongside any international money transfer with a value exceeding USD$3,000:
- Name, account, and address of the transmittor,
- Identity of the transmittor's financial institution,
- Amount and date of the transmittal,
- Identity of the recipient's financial institution.
Far-reaching implications:
- According to Chainalysis, 74% of exchange-to-exchange bitcoin transfers were cross-border, and users send a staggering 88% of U.S. bitcoin ATM purchases offshore.
- On Friday, the Fed and FinCEN simultaneously unveiled the proposal that would lower the Travel Rule's reporting threshold to $250.
- It would continue to require financial institutions, including banks and cryptocurrency exchanges, to collect, store, and transmit information regarding international payments.
- The proposed rule change expressly identifies cryptocurrency transfers as subject to Travel Rule requirements.
- The document acknowledges that, although some cryptocurrencies can technically be transferred across U.S. borders without the involvement of financial institutions, the vast majority of users rely on hosted wallets, exchanges, and banking institutions to assist their transfers.
- The proposal is FinCEN's most stern warning to cryptocurrency companies that transmit tokens across U.S. borders, insisting that Anti-Money Laundering (AML) rules apply to both fiat and cryptocurrencies.
This story continues in part 2, below.
FinCEN Currency Transaction Report Form 104
