Threshold for the Requirement To Collect, Retain, and Transmit Information on Funds Transfers and Transmittals of Funds That Begin or End Outside the United States, and Clarification of the Requirement To Collect, Retain, and Transmit Information on Transactions Involving Convertible Virtual Currencies and Digital Assets With Legal Tender Status; Withdrawal
Key claim: FinCEN and the Federal Reserve have withdrawn a proposed rule that would have lowered the transaction reporting threshold from $3,000 to $250 for international funds transfers and explicitly applied Bank Secrecy Act requirements to digital asset and cryptocurrency transactions.
Abstract
(Proposed Rule · Treasury Department, Financial Crimes Enforcement Network) FinCEN and the Board (collectively, the “Agencies”) are withdrawing the joint notice of proposed rulemaking (NPRM) published on October 27, 2020, that proposed modifying the threshold in the Agencies’ rules implementing the Bank Secrecy Act (BSA) requiring financial institutions to collect and retain information on certain funds transfers and transmittals of funds. The NPRM would have reduced this threshold from $3,000 to $250 for funds transfers and transmittals of funds that begin or end outside the United States. FinCEN additionally proposed reducing from $3,000 to $250 the threshold in FinCEN’s rule requiring financial institutions to transmit to other financial institutions in the payment chain information on funds transfers and transmittals of funds that begin or end outside the United States. The NPRM also would have clarified the meaning of “money” as used in the Agencies’ rules to specify that the rules apply to domestic and cross-border transactions involving convertible virtual currency (CVC) and digital assets that have legal tender status to a recipient. The Agencies will not take further action on this NPRM.
Why this matters
Banks and covered money transmitters will not face the proposed expansion of funds-transfer information collection, retention, and transmission to international transfers as small as $250 through this rulemaking. This is withdrawal of a proposal, not repeal of an operative rule or removal of existing crypto-related BSA obligations; the thresholds concern recordkeeping and information accompanying transfers, rather than a general transaction-reporting requirement.