US drops a proposed crypto rule. Europe can still hold up your $500 transfer

FinCEN, the U.S. financial-crime regulator, and the Federal Reserve announced Nov. 6 that they are withdrawing a plan to expand transfer-data duties to cross-border payments as small as $250. Existing U.S. requirements remain, alongside EU information checks that can affect even a $500 crypto payment.

An illustrative $500 customer transfer from a U.S. exchange to an EU exchange shows the limit of the retreat. It is below the U.S. Travel Rule's $3,000 threshold, but the receiving exchange's EU obligations can still prevent the recipient from accessing the assets until required information is supplied.

The joint withdrawal notice was published in the Federal Register on Nov. 9, with withdrawal effective that day. FinCEN's Nov. 6 announcement confirmed the decision. The proposed $250 threshold never took effect through this rulemaking.

The October 2020 proposal would have lowered the threshold for specified recordkeeping and information-transmission duties from $3,000 to $250 for transfers beginning or ending outside the United States.

The existing Recordkeeping Rule requires covered institutions to collect and retain transfer information, while the Travel Rule requires information to pass to other institutions in the payment chain. The joint notice describes the current threshold as $3,000 or more. Withdrawing the proposal avoids extending those duties into the lower-value band.

The agencies cite the passage of more than five years, the value of further public feedback and changes in virtual-currency markets and legal frameworks. They say any future similar amendments should reflect those developments.

Existing crypto compliance duties continue. FinCEN's 2019 virtual-currency guidance says qualifying convertible-virtual-currency transfers of $3,000 or more can trigger Travel Rule requirements. Covered money transmitters also retain applicable anti-money-laundering programs, customer-identification controls, recordkeeping, monitoring and reporting obligations.

The EU's crypto-transfer regulation, applicable since Dec. 30, 2024, covers customer transfers involving a crypto-asset service provider with its registered office in the EU. Its information requirements have no general exemption for small crypto transfers. The regulation explains that crypto transfers should face the same requirements regardless of amount or whether they are domestic or cross-border.

For the hypothetical $500 payment, assume the receiving exchange is an EU-registered provider serving a customer. The relevant duties here belong to the EU receiving provider; the U.S. exchange's own obligations are governed separately.