The Financial Crime Network (FinCEN) and the Federal Reserve are looking for more information on smaller transactions than ever before.
According to a notice issued on Friday about the proposed rule-making, the agency wants to lower the $ 3,000 international transaction threshold set in 1995 to $ 250. It means that financial institutions must exchange customer information on all transactions over $ 250 in or outside the United States.
In other words, The Travel Rule would apply to the relatively small number of money that changes hands.
Crypto Exchanges’ Need to Reveal User Information
The proposed amendment explicitly mentions that convertible virtual currency is in the money category for this rule.
The information that financial institutions must share under the travel arrangements is the name and address of the sender or sender, by order of payment or transfer, and the identity of the receiving bank or financial institution of the recipient.
It means that a lot of personal information that cryptocurrencies have to store and user accounts pose a considerable threat to data security. Besides, this change implies a mandate for financial institutions to know any transaction’s geographic origin above the USD 250 threshold.
The Financial Action Task Force works to enforce similar rules worldwide that have proven too controversial in the crypto world. The mandate to collect and share customer information appears to be opposed to the “peer-to-peer system for electronic cash flow” introduced with the Bitcoin white document.
Fed and FinCEN Invite Public Comments on New Travel Rule
The travel rules update remains only a suggestion for now. The Financial Crimes Network (FinCEN) and the Federal Reserve Board asked for comment on the rule over the next 30 days. The law could change recordkeeping and travel rules under the Banking Secrecy Act.
FinCEN and the Board of Directors jointly proposed changes to the listing rules following their joint powers, while FinCEN, in its sole discretion, proposed changes to the travel rules.
Applicable accounting and travel regulations require financial institutions to collect, store, and transmit information about money transfers and money transfers of more than $ 3,000. The proposed rule reduces the threshold applicable for international transactions from USD 3000 to USD 250. The internal transaction threshold remains unchanged at $ 3,000.
The proposed rule also clarifies that this provision applies to transactions above the applicable virtual currency convertible threshold and transactions in digital assets with legal tender status by explaining the meaning of “money” used in specific specified terms.
