US anti-money laundering agency wants information on international crypto transactions over US$250

The proposed change would reduce FinCEN’s long-standing $3,000 limit.

The US Financial Crimes Enforcement Network (FinCEN) and the Federal Reserve are seeking more information on small-currency transactions.

According to a proposed regulation notice published Friday, the agencies want to reduce the $3,000 limit set in 1995 to $250 for international transactions, meaning that financial institutions would need to exchange customer information along with all transactions over $250 that begin or end outside the United States. This means that the Travel Rule, as it is known, would apply to small amounts of money changing hands.

The proposed change specifically calls „virtual exchangeable currencies“, saying that they would also fall into the category of money for the purposes of this rule.

The information that financial institutions need to exchange according to the travel rule is:

„(a) the name and address of the originator or transferor; (b) the value of the payment or transfer order; (c) the date of execution of the payment or transfer order; (d) any payment instructions received from the originator or transferor with the payment or transfer order; and (e) the identity of the beneficiary’s bank or the recipient’s financial institution. „

In other words, a lot of personal information that exchanges would need to store along with a user’s account, posing a major threat to data security. In addition, it is implicit in this change that financial institutions are responsible for knowing the geographical origin of each transaction above the US$ 250 limit.

FinCen is working to apply a similar rule around the world, which has proved highly controversial in the crypto world. The mandate to collect and exchange client information seems diametrically opposed to the „peer-to-peer ATM system“ presented by the Bitcoin Lifestyle white paper.

For now, updating the travel rule remains just a proposal. FinCEN and the Fed are inviting public comments from all interested parties for the next 30 days.