17 Dec, 2020

ICYMI – The Federal Reserve and FinCEN Issued a Joint Press Release Proposing a Change to the Currency Reporting Threshold in Cross Border transactions from $3,000 to $250

Category: Insight

TLDR – The proposal as written would significantly increase the level of AML financial surveillance available to US Federal authorities with significant downstream effects to smaller financial institutions and immigrant communities and those engaged in cryptoasset transactions.

On 23 October 2020, the Board of Governors of the Federal Reserve and the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a joint notice of proposed rulemaking to lower the Bank Secrecy Act (BSA) reporting requirement for cross border transactions from the current level of $3,000 to $250 with the aim of deterring money laundering and terrorism financing and other illicit transactions. Along the way, the notice essentially redefines Convertible Virtual Currencies (CVC) as “money” for the first time.

The full notice can be found here:


As of the second week of December 2020, only 45 public records are visible on the proposal’s comments section. The 25 individual comments tend to the inflammatory and generally lack substance but the remaining comments from non-profits, financial institution associations and industry raise a number of good points as well as indicating surprise at the less than robust analysis that one would expect from such a radical rule change.

Comments can be found here:


In particular, banking and credit union associations note the likely negative effect to smaller deposit accounts that could result in increased financial exclusion for lower income and immigrant communities.

Industry noted that the cross-border nature and global reach of virtual assets and lack of identifying on chain data would make compliance difficult for Virtual Asset Service Providers (VASPs) and would increase compliance costs in a field where solutions to existing rules are still very much nascent.

An additional point raised by the team behind Fight the Future notes that certain exchanges would most likely eschew servicing self-hosted wallets as too risky, given the lack of attributable information, thus increasing financial exclusion.


It’ll be interesting to see whether the Federal Reserve and FinCEN take any of the comments to heart and make changes to the existing proposal.



Related Articles