Last week, the Financial Crimes Enforcement Network (FinCEN) and the Federal Reserve invited comments on the proposed rule that would change the recordkeeping and travel rule regulations under the Bank Secrecy Act.
Under the current rules, financial situations must collect information related to funds transfers and transmittals of funds over $3,000. The information to be collected includes the name and address of the transmitter, the amount of the payment, its execution date, any payment instructions from the originator, and the beneficiary’s bank or recipient’s financial institution’s identity.
But as per the amendment, this limit is lowered to $250 for international transactions while the threshold for domestic transactions remains unchanged. This applies to transactions involving “convertible virtual currencies” (CVC) and “digital assets with legal tender status.” It further proposes to clarify the meaning of “money.”
The official report notices that “public use of CVCs has grown significantly in recent years.” Estimated transactions in Bitcoin alone were about $366 billion in 2019 and $312 billion in 2020 through August.
It further stated that malign actors have been using them for all sorts of illegal activities.
The proposed modifications will help them gain information in criminal, tax, or regulatory investigations and protect against international terrorism.
“FinCEN is aware that the CVC industry is working on developing systems and processes to achieve full compliance with the Travel Rule as applied to virtual currency transactions as a result of the distinctive characteristics of CVCs.”
They “welcome” comments on these efforts that will be accepted only for 30 days.