by Jamie L. Boucher, Eytan J. Fisch, Khalil N. Maalouf, Ernst-Wesley Laine, Malika Moore, Greg Seidner, and Javier A. Urbina
On October 27, 2020, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and the Board of Governors of the Federal Reserve System (Federal Reserve, together with FinCEN, “the Agencies”) published a joint notice of proposed rulemaking to amend the Recordkeeping Rule[1] and Travel Rule[2] regulations under the Bank Secrecy Act (BSA). The proposed amendments would reduce the applicable threshold for international funds transfers from $3,000 to $250 and, consistent with FinCEN’s existing guidance, formally extend these rules to cover convertible virtual currencies (CVCs) and digital assets used as legal tender. The threshold for domestic funds transfers would remain unchanged at $3,000.
The threshold in the proposed rules is significantly lower than the minimum threshold of $1,000 or €1,000 recommended by the Financial Action Task Force (FATF), an intergovernmental body that develops anti-money laundering and counter-terrorism financing standards and promotes their effective implementation.[3] FATF’s recommended threshold has been adopted by the European Union and by a vast number of jurisdictions around the world.