FinCEN and the Federal Reserve are withdrawing a 2020 proposal that would have cut the dollar threshold for collecting and sharing information on many cross-border transfers from $3,000 to $250. The existing Bank Secrecy Act rules stay in place, including for cryptocurrency businesses already covered as money transmitters. The agencies said they will not finish that rulemaking without a fresh public comment process.
What the 2020 proposal would have changed
In an October 27, 2020 joint notice, FinCEN and the Board of Governors of the Federal Reserve System proposed lowering the Recordkeeping Rule threshold from $3,000 to $250 for funds transfers and transmittals that begin or end outside the United States. FinCEN also proposed the same cut for its Travel Rule, which requires covered institutions to pass originator and beneficiary information along the payment chain. The notice would have clarified that those rules apply to convertible virtual currency and to digital assets with legal tender status.
Banks and nonbank financial institutions, including many crypto exchanges and custodians registered as money services businesses, would have had to collect, retain and transmit identifying data on a much larger set of international transfers. Domestic transfers were not the focus of the $250 cut. The agencies later summarized that nearly 3,000 comments arrived, with most of the opposition aimed at the lower threshold rather than at crypto itself.
Why FinCEN and the Fed are pulling it now
The withdrawal notice, scheduled for Federal Register publication on November 9, gives two main reasons. First, more than five years have passed since the notice of proposed rulemaking, and the agencies want another round of public feedback before amending the Recordkeeping Rule or Travel Rule in a similar way. Second, they say the convertible virtual currency market and related legal frameworks have changed enough that any future crypto-related amendments should be redesigned to fit that setting.
Among the developments they cite is the Guiding and Establishing National Innovation for U.S. Stablecoins Act, enacted on July 18, 2025, which created a federal framework for payment stablecoins. They also point to White House digital-asset policy work tied to Executive Order 14178. The notice states plainly that the agencies “will not take further action” on the 2020 proposal and that the NPRM published at 85 FR 68005 is withdrawn as of the Federal Register publication date.
Commenters had argued that a $250 cross-border threshold would pile compliance costs onto smaller institutions, complicate remittances, expand the store of personally identifiable information those firms must keep, and raise privacy and Fourth Amendment objections. Some said illicit activity below $3,000 was already surfaced through Suspicious Activity Reports. Views on writing convertible virtual currency into the definitions were mixed, with crypto firms generally opposed and some banks and money transmitters supportive.
What stays the same for crypto firms
Withdrawal ends the planned $250 cut. It does not repeal the Travel Rule or the Recordkeeping Rule. Covered institutions still must collect, retain and transmit information on qualifying transfers of $3,000 or more under the existing regulations. FinCEN’s earlier guidance on how those rules interact with convertible virtual currency also remains part of the compliance picture for money transmitters.
The step lands in the same week FinCEN used a different tool against a major offshore exchange. On Friday the bureau ordered covered U.S. institutions to cut off transfers with MEXC over alleged illicit flows. That Section 311-style action and this rulemaking withdrawal are separate tracks: one is a targeted order against a named platform; the other drops a six-year-old attempt to rewrite thresholds for everyone.
Industry groups that fought the 2020 package welcomed the close-out. Coin Center said the agencies were withdrawing another long-pending rulemaking that would have expanded financial surveillance of cryptocurrency users, and that any similar future proposal would need a new comment period. The group tied the move to Treasury’s withdrawal last month of proposed unhosted-wallet and cryptocurrency-mixing rules. Separately, the American Bankers Association highlighted commenter concerns that the $250 cut would have hit smaller banks especially hard.
What to watch next
FinCEN and the Fed left the door open to rewrite the Recordkeeping Rule and Travel Rule again, but only after a new proposal and another comment window. Stablecoin supervision under the GENIUS Act, and whatever market-structure bills Congress takes up next, are the most likely hooks for a successor package. Until then, U.S. covered institutions keep working under the $3,000 international threshold, while other jurisdictions continue to set their own Travel Rule floors.
FAQ
Did FinCEN repeal the Travel Rule?
No. The agencies withdrew a 2020 proposal to lower the cross-border threshold to $250 and to rewrite definitions for convertible virtual currency. The existing Travel Rule and Recordkeeping Rule remain in force at the current $3,000 level for covered transfers.
Does this change obligations for crypto exchanges?
Not immediately. Firms already covered as money transmitters still face the same $3,000 thresholds. They will not have to prepare for the broader $250 cross-border collection the 2020 notice contemplated unless a new proposal is issued and finalized later.
When does the withdrawal take effect?
The notice is scheduled to be published in the Federal Register on November 9, and the agencies are withdrawing the October 2020 NPRM as of that publication date.
Disclaimer: This article is for informational purposes only and does not constitute financial advice.
