The proposed change would lower the former threshold of USD 3,000 established in 1995.
The Financial Crimes Enforcement Network (FinCEN) and the Federal Reserve are looking more than ever for information on smaller transactions.
According to a proposed regulatory notice released Friday, the agencies want to lower the threshold from $3,000 in 1995 to $250 for international transactions, which means financial institutions would have to exchange customer information along with all transactions over $250 that begin or end outside the United States. In other words, the Travel Rule, as it is known, would apply to very small amounts of money that change hands.
The proposed change specifically cites „virtual convertible currencies“, saying that they would also fall into the money category for the purposes of this rule.
The information that financial institutions must exchange under the Travel Rule is
„(a) the name and address of the originator or transmitter; (b) the amount of the payment or transmission order; (c) the date of execution of the payment or transmission order; (d) any payment instruction received from the originator or transmitter with the payment or transmission order; and (e) the identity of the recipient’s bank or financial institution“.
In other words, a lot of personal information that an exchange of crypto-currencies would have to store next to a user’s account, which poses a major threat to data security. Furthermore, in this exchange it is mandatory for financial institutions to know the geographical origin of each transaction above the USD 250 threshold.
The Financial Action Task Force (FATF) is working to apply a similar rule worldwide, which has proved to be highly controversial within the cryptomoney world. The obligation to collect and exchange customer information seems to be diametrically opposed to the „peer-to-peer e-money system“ presented to us in the Bitcoin White Paper.
For now, updating the Travel Rule remains only a proposal. FinCEN and the EDF are inviting all interested parties to comment publicly over the next 30 days.