The Financial Crimes Enforcement Network and the Federal Reserve Board have withdrawn a long-pending proposal that sought to lower the reporting threshold for certain cross-border funds transfers from $3,000 to $250. The joint decision, announced on November 6, 2026, leaves the current Bank Secrecy Act requirements unchanged for banks and other covered financial institutions, including cryptocurrency businesses.

The withdrawal takes effect on November 9, 2026, upon publication in the Federal Register. Agencies said more than five years had passed since the original notice of proposed rulemaking, during which the digital asset sector and related legal frameworks had evolved substantially. They indicated that any future adjustments would benefit from fresh public comment and should account for recent developments.

Background of the 2020 Proposal

Published in October 2020, the joint notice of proposed rulemaking aimed to amend recordkeeping and Travel Rule obligations under the Bank Secrecy Act. It would have required covered institutions to collect and retain identifying information on international transfers of $250 or more that begin or end outside the United States. Domestic transfers would have kept the higher threshold.

The proposal also sought to clarify that the rules apply to convertible virtual currencies and certain digital assets with legal tender status. For cryptocurrency exchanges, custodians and money transmitters, this would have expanded data-collection duties to a far larger volume of smaller cross-border payments that currently fall below the $3,000 line.

When the rule was first floated, regulators argued that illicit actors had shifted toward smaller transactions in part to avoid existing reporting thresholds. The measure drew nearly 3,000 public comments. Many respondents raised concerns about financial privacy, potential Fourth Amendment issues, elevated compliance costs for smaller firms, and the practical difficulty of determining whether a cryptocurrency transfer involved a foreign counterparty.

Reasons for Withdrawal

In their joint notice, FinCEN and the Federal Reserve cited the elapsed time since 2020 and significant changes in the convertible virtual currency industry and its regulatory environment. They referenced updated legal frameworks, including the GENIUS Act of 2025 addressing payment stablecoins, as factors that made the original proposal outdated.

The agencies stated that any potential future amendments related to convertible virtual currencies should be considered in light of these developments to ensure they remain fit for purpose. They left open the possibility of introducing separate rulemaking after further public consultation but provided no timetable.

The move follows the October 2026 withdrawal of two other Bank Secrecy Act proposals concerning unhosted wallets and cryptocurrency mixing services. Together, the actions leave the longstanding $3,000 threshold as the operative standard for qualifying transfers.

Industry Response

Cryptocurrency advocacy groups welcomed the decision. Gavin Zavatone, policy lead at the DeFi Education Fund and executive director at Defend DeFi, argued that the lower threshold would have imposed unnecessary data-collection burdens on users and businesses.

Ji Hun Kim, chief executive of the Crypto Council for Innovation, said lowering the threshold from $3,000 to $250 for cross-border transfers would have placed an undue burden on institutions. Coin Center and the Blockchain Association had previously warned that the proposal risked subjecting ordinary transactions to expanded surveillance and could force firms to apply the stricter standard even when a transfer’s international status could not be clearly established.

Current Requirements Remain Unchanged

The withdrawal does not alter existing obligations. Covered financial institutions, including regulated cryptocurrency service providers, must still collect and transmit originator and beneficiary information for qualifying transfers of $3,000 or more. Suspicious activity reporting and other anti-money-laundering duties continue in full force.

For companies operating across borders, compliance standards will still vary by jurisdiction. Some countries have adopted different thresholds or eliminated them entirely for virtual asset service providers. U.S. firms remain subject to the domestic $3,000 line for covered activity.

FinCEN and the Federal Reserve emphasized that the decision ends action on the 2020 proposal without creating replacement rules at this time. Any subsequent changes would require a new notice of proposed rulemaking and another opportunity for public input.