The Financial Crimes Enforcement Network (FinCEN) and the Federal Reserve Board (FRB) issued proposed rules that would amend the recordkeeping and travel rule regulations under the Bank Secrecy Act. FinCEN and the Board, pursuant to their shared authority, are proposing amendments to the recordkeeping rule jointly, while FinCEN, pursuant to its sole authority, is proposing amendments to the travel rule.

Under the current recordkeeping and travel rule regulations, financial institutions must collect, retain, and transmit certain information related to funds transfers and transmittals of funds over $3,000. The proposed rule lowers the applicable threshold from $3,000 to $250 for funds transfers and transmittals of funds that begin or end outside the United States. The threshold for domestic transactions re- mains unchanged at $3,000.

The proposed rule would revise the definitions of “payment order” and “transmittal order” under the BSA regulations so that the recordkeeping and travel rules apply to transactions involving convertible virtual currency (CVC) and digital assets having legal tender status (LTDA). The agencies emphasize that public use of CVCs andLTDAs have grown significantly in recent years, and have been used to facilitate international terrorist financing, weapons proliferation, sanctions evasion, and transnational money laundering.

 

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