The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) and the Federal Reserve have formally withdrawn a long‑running proposal to tighten the so‑called Travel Rule for cross‑border transfers — a change that would have slashed the reporting threshold from $3,000 to $250. The agencies’ joint withdrawal notice takes effect Nov. 9, leaving current requirements intact and ending a rulemaking effort that began in October 2020. What was proposed - The October 2020 proposal would have required banks and other covered financial institutions — including crypto exchanges and custodians regulated as money transmitters — to collect and retain sender and recipient identification for qualifying international transfers of $250 or more. Domestic transfer thresholds would have stayed at $3,000. - The draft also sought to clarify that convertible virtual currencies and digital assets with legal‑tender characteristics fall explicitly under the Bank Secrecy Act’s recordkeeping and information‑sharing rules, removing ambiguity about their treatment. Why the agencies pulled it FinCEN and the Fed said the regulatory landscape and the digital‑asset industry have shifted significantly since 2020, and that the amount of time elapsed warranted stepping back. The agencies left the door open to revisit these issues in future rulemaking — particularly as Congress and regulators consider stablecoin legislation and broader digital‑asset policy changes. Any new proposal would require fresh public comment. Reaction from industry and privacy advocates The proposal drew nearly 3,000 public comments. Critics argued the benefits to anti‑money‑laundering enforcement were not clearly demonstrated and raised financial‑privacy and Fourth Amendment concerns. Smaller crypto firms and trade groups warned of high compliance costs and practical difficulties — for example, determining whether a counterparty is foreign could be hard, potentially forcing the lower threshold to apply in ambiguous cases. Gavin Zavatone, policy lead at the DeFi Education Fund and executive director at Defend DeFi, welcomed the withdrawal, saying the rule would have burdened ordinary users and developers with “needless data collection.” The Blockchain Association also flagged the potential compliance hit to smaller virtual asset service providers. What it means now - For U.S. exchanges, custodians and other covered crypto businesses: no immediate change. The $3,000 threshold for qualifying international transfers remains in force, and the Travel Rule’s existing obligations continue to apply. - For users: smaller cross‑border crypto transfers will not suddenly require the additional personal data collection that a $250 threshold would have triggered. - For international compliance: other jurisdictions are taking different tacks — for example, South Korea removed its domestic threshold in August and now requires identifying information for transfers regardless of amount — so firms operating across borders still face divergent rules. Broader context This withdrawal follows other recent FinCEN moves rolling back or pausing proposals tied to unhosted wallets and mixing services. Regulators appear to be recalibrating as digital‑asset policy evolves at both the federal and international levels. Bottom line The U.S. won’t be lowering the Travel Rule threshold to $250 — for now. The decision buys more time for industry participants and regulators to shape a framework that balances AML goals with privacy, costs, and technical practicality. But the agencies have not closed the door: new rulemaking around crypto information sharing could reemerge as stablecoin and broader digital‑asset rules develop. Read more AI-generated news on: https://app.chaingpt.org/news