- New US travel rule for crypto poses news questions.
- Fed and Treasury departments seek public opinion on the new rule.
- $312 Billion transactions lead to the new US travel rule for crypto.
The United States of America is in serious political turmoil as the elections approach, while the Department of Justice and other regulators are busy curbing the illegal use of cryptocurrencies by all measures. A recent department of justice report came rather hard on the cryptocurrency sphere stirring unrest, while on the other hand, blockchain has made its way into the US elections.
Now, the Federal Reserve and the Finance Crimes Enforcement Agency (FinCEN) have come up with a new US travel rule for crypto. The new rule is to ensure that the amounts transferred are traceable to curb money laundering in the country.
What is the new US travel rule for crypto?
With $312 billion Bitcoin transactions reported through August this year and $366 billion in 2019, The Federal Reserve and US agency Financial Crimes Enforcement Agency (FinCEN) have proposed including digital assets convertible virtual currencies (CVC) within the definition of money.
The proposal seeks to lower the value gateway to $250 (previously $3000) for monetary transactions outside the country. Commonly referred to as the “travel rule,” the Bank Secrecy Act (BSA) aims to include cryptocurrency dealings within the reporting jurisdiction.
The new US travel rule for crypto is an extension to include cryptocurrencies to the current travel rule will increase transparency and diminish regulatory uncertainties around digital dealings, said Jamison Sites, Blockchain, and Digital Asset Tax Lead at one of the largest US-based tax and auditing firms, RSM. He further demonstrated and applauded FinCEN for being open to considering sector groups’ opinions and taking inputs from them.
The interested shareholders will be given 30 days from the date of publication in the federal register (most likely on Oct 27, Tuesday) to respond with their feedback before the final decision is made.
Financial Action Task Force (FATF), a recognized global body dedicated to curbing money laundering, financial frauds, and scams has pushing agencies since 2019 through a variety of recommendations and proposals. The FATF wants agencies to apply strict regulations on digital trade, such as mandating specifics of sender and receiver information within every transaction to facilitate tracking, etc.
Complying to this guidance, FinCen and Federal Reserve’s draft proposal includes clear and concise definitions and mandatory requirements for Convertible Virtual Currency (CVC) transactions specifically initiated by non-financial banking institutions.
Commenting on the new US travel rule for crypto, chief executive officer at CoolBitX, Michael Ou, also explained that the Bank Secrecy Act (BSA) adherence and tracking cybercrimes are two different aspects in this situation.