The US Treasury’s Financial Crimes Enforcement Network and the Federal Reserve Board of Governors jointly withdrew a proposed rule that would have sharply lowered the threshold for collecting transfer information, FinCEN said in a release dated November 6. The 2020 proposal would have cut the threshold for funds transfers that begin or end outside the United States from $3,000 to $250 and clarified that the requirements cover convertible virtual currencies and digital assets.
The Block reported that FinCEN gave three reasons: more than five years had passed since the proposal, the crypto industry had changed, and more public input would help. FinCEN said future amendments should be “fit for purpose,” according to The Block. The FinCEN release itself does not state the reasons. When it made the proposal, FinCEN argued that bad actors increasingly use smaller transactions to move illicit funds.
Bitcoin.com reported that the withdrawal notice is set to be published in the Federal Register on November 9, that the existing $3,000 threshold remains in place, and that any future rule would require a new comment period. It also cited nearly 3,000 comments, many opposing the plan over costs and privacy risks.
Industry groups welcomed the move. Coin Center had warned the lower threshold would bring ordinary transactions under “warrantless financial surveillance,” The Block said, while Crypto Council for Innovation CEO Ji Hun Kim called the withdrawal the “right call.”
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Sources:
The Block: US Treasury walks back crypto surveillance travel rule proposal
Bitcoin.com: US Treasury and Fed Abandon Plan to Track Smaller Bitcoin, Crypto Transfers
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