US agencies withdraw $250 transfer-data proposal, but EU crypto checks remain

FinCEN, the U.S. financial-crime regulator, and the Federal Reserve announced on Nov. 6 that the agencies were withdrawing proposed transfer-data requirements for certain cross-border payments starting at $250. The Federal Register published the joint withdrawal notice on Nov. 9, and the withdrawal became effective that day. The proposed $250 threshold never became operative through this rulemaking.

The October 2020 proposal would have reduced the threshold for specified recordkeeping and information-transmission obligations from $3,000 to $250 for transfers originating or ending outside the United States. The Recordkeeping Rule obliges covered institutions to gather and retain transfer details. The Travel Rule obliges institutions to transmit information along the payment chain. The joint notice identifies $3,000 or more as the existing threshold. The withdrawal prevents those duties from extending to the lower-value transfers covered by the proposal.

The agencies cited the elapsed period of more than five years, changes in virtual-currency markets and legal frameworks, and the benefit of additional public comment. The agencies said any comparable future amendments should account for those developments. FinCEN's 2019 guidance says qualifying convertible-virtual-currency transfers worth at least $3,000 can activate Travel Rule obligations. Covered money transmitters remain subject to applicable anti-money-laundering programs, customer-identification controls, recordkeeping, monitoring and reporting duties.

A hypothetical customer payment of $500 from a U.S. exchange to an EU exchange illustrates why the withdrawal does not eliminate information checks. The payment falls below the U.S. Travel Rule threshold, but EU requirements can prevent the recipient from accessing the assets until required details are provided. The EU crypto-transfer regulation has applied since Dec. 30, 2024, to customer transfers involving a crypto-asset service provider registered in the EU. The regulation provides no general small-transfer exemption from information requirements. The regulation says the same requirements should cover crypto transfers of any amount, whether domestic or cross-border. In the hypothetical payment, the receiving exchange is assumed to be an EU-registered provider serving a customer. The receiving provider bears the relevant EU duties, while separate rules govern the U.S. exchange's obligations.

Article 14 requires names for senders and recipients, relevant blockchain addresses and applicable crypto-account identifiers. Required sender details also comprise an address and country, official document number and customer identification number, or alternatively birth date and birthplace. Requirements for additional legal-entity identifiers depend on specified conditions. Providers may communicate the details through secure messages outside the blockchain transaction. The EU receiving provider must identify missing information and verify recipient details before allowing access to the assets. Previous identity verification can fulfill the recipient-verification requirement when the verification qualifies.

Article 17 requires receiving providers to handle absent or incomplete required details according to risk and without undue delay. The receiving provider must reject or return the payment, or seek the required details before allowing access to the assets. The receiving provider's procedures may include suspending transfers. Assets can therefore reach an exchange on the blockchain before the exchange has enough information to release the assets to the customer.

Transfers above €1,000 involving self-hosted addresses require an additional assessment of ownership or control. Transfers below that amount remain subject to applicable information duties. The hypothetical exchange-to-exchange payment is governed by the general requirements, not the self-hosted-address assessment. The regulation excludes person-to-person transfers without a service provider and transfers in which both providers act for themselves. Ordinary customer payments between exchanges remain covered by the provider-based rules. Applicable European Banking Authority guidelines cover identifying missing information and handling transfers with information gaps.