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FinCEN and Fed scrap 2020 plan to drop crypto Travel Rule threshold to $250

FinCEN and the Federal Reserve jointly withdrew on Nov 6 the 2020 NPRM that would have cut the Travel Rule threshold from $3,000 to $250 and named CVC in the rule.

by 4 min read
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FinCEN and the Federal Reserve Board of Governors jointly withdrew on November 6, 2026 the 2020 notice of proposed rulemaking that would have lowered the Bank Secrecy Act's Recordkeeping and Travel Rule threshold for cross-border funds transfers from $3,000 to $250 — and explicitly extended the rules to convertible virtual currency (CVC) and digital assets with legal-tender status. Primary source: the FinCEN news release. Reporting by The Block.

What was withdrawn

The 2020 joint NPRM was the one piece of outstanding U.S. rulemaking that would have directly extended BSA recordkeeping obligations into crypto. It proposed two changes at once:

  • Lower the cross-border Travel Rule threshold from $3,000 to $250 for transactions that begin or end outside the United States.
  • Clarify that CVC and digital assets with legal-tender status fall within the Recordkeeping Rule and Travel Rule's "money" definition.

With today's action, both proposals are off the books. The domestic Travel Rule threshold stays at $3,000, and crypto is not written into the rule text through this vehicle.

Formal citation: the Federal Register withdrawal is scheduled for publication on November 9, 2026 as document 2026-22809.

Why FinCEN says it withdrew

FinCEN's stated rationale, verbatim:

  • More than five years have passed since the proposal was issued.
  • The CVC industry has changed materially in that time.
  • Additional public input would help shape any future rulemaking, which should be "fit for purpose" for the current industry.

FinCEN adds that any future amendments to the Recordkeeping Rule and Travel Rule "should be considered" in light of those developments — a signal that a replacement proposal is on the table, not a closure.

Industry reactions

  • Crypto Council for Innovation CEO Ji Hun Kim called the withdrawal the "right call", telling The Block the $250 threshold would have imposed compliance burdens on institutions without proportional AML value.
  • Coin Center, which had opposed the 2020 proposal as "warrantless financial surveillance," flagged its removal as a win for payment privacy.
  • No major opposition statement in the industry record so far.

What this does and does not change

  • Does not change anything operational today. The 2020 NPRM was never finalized; exchanges and banks already operate against the $3,000 threshold and existing FinCEN crypto guidance.
  • Does change the regulatory overhang: the single most-cited pending rule in crypto AML compliance roadmaps since 2020 is gone.
  • Does not address the separate "unhosted wallet" NPRM from the same window — FinCEN withdrew that one earlier, effective October 6, 2026 (Federal Register document 2026-20430).

What to watch

  1. A replacement NPRM. FinCEN's language — "considered in light of these recent developments" — reads like a hold-and-reissue, not a kill. Any new version likely lands with the Fed again.
  2. The timing relative to CLARITY and related market-structure legislation. A fresh Travel Rule proposal that moves with legislative definitions of CVC and stablecoins is more coherent than the 2020 draft was.
  3. State-level action. New York's NYDFS and California's DFPI already enforce Travel Rule parallels; withdrawal at the federal level doesn't cascade.
  4. FATF pressure. The international FATF Travel Rule standard uses a lower threshold ($1,000 or €1,000). Non-U.S. venues that onboard U.S. counterparties will still see cross-border compliance friction.
  5. The unhosted-wallet rule follow-up. FinCEN pulled that NPRM in October; the question is whether any replacement is on the agency's agenda.

Context

The 2020 NPRM was the second half of a late-Mnuchin-Treasury crypto AML push. Its first half — the unhosted-wallet reporting rule — was withdrawn in October without a replacement. Today's withdrawal clears the second half. The practical effect: for the first time since late 2020, there is no pending federal rule that would expand BSA obligations specifically to CVC. Treasury's current crypto-AML energy is instead concentrated on exchange-level designations under Section 311 and the new Section 9714 Russia authority — see today's MEXC order.

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