US withdraws proposal to cut crypto transfer threshold to $250

The proposal would have required covered financial institutions to collect and retain identifying information for qualifying cross-border transfers of $250 or more. Domestic transfers would have remained subject to the $3,000 threshold. The agencies had also proposed explicitly including convertible virtual currencies and digital assets with legal tender characteristics in the rules.

FinCEN and the Fed said the time elapsed since the proposal and changes in the digital asset industry and regulatory environment informed their decision. Nearly 3,000 comments were submitted, with respondents raising concerns about financial privacy, compliance costs and whether the extra data collection would improve anti-money-laundering enforcement. Some also questioned the proposal’s implications under the Fourth Amendment.

Gavin Zavatone, policy lead at the DeFi Education Fund and executive director at Defend DeFi, welcomed the withdrawal. “Americans shouldn’t have to hand over their names, addresses, and account details just because they chose to move value on a blockchain,” he wrote on X. The Blockchain Association had also warned in a November 2020 comment letter that the proposal could burden smaller crypto businesses and make it difficult to determine whether a transfer involved a foreign counterparty.

For US exchanges, custodians and other covered providers, the withdrawal means no new preparations for the proposed $250 threshold are required. The Travel Rule remains in force, and existing obligations—including the $3,000 threshold for qualifying transfers—are unchanged. FinCEN and the Fed may pursue separate rulemaking in the future; any new proposal would be open to public comment. Requirements in other jurisdictions vary, and South Korea removed its domestic threshold in August, requiring registered virtual asset service providers to share identifying information regardless of transfer amount.