Treasury Drops Proposal to Lower Crypto Travel Rule Threshold From $3,000 to $250

Federal regulators have pulled back a long-stalled plan that would have widened reporting duties on crypto transfers. On Friday, the Treasury’s financial crimes unit, FinCEN, together with the Federal Reserve Board of Governors, formally rescinded the Travel Rule proposal first floated in 2020. It would have forced financial institutions to collect details on transfers of $250 or more, down from the current $3,000 line. The agencies said more than five years had passed, the digital asset industry had changed a great deal, and fresh public input would help shape any future version.

Why the Crypto Travel Rule Was Controversial

Regulators’ Original Concern

When the idea was introduced, FinCEN argued that criminals were increasingly splitting illicit money into smaller payments to avoid attention. The agencies now say any later changes to the recordkeeping and travel rules should reflect recent developments so they are fit for purpose.

Industry Pushback on Surveillance

Crypto advocacy groups fought the plan from the start. Coin Center warned that a $250 threshold would drag ordinary payments into what it called warrantless financial surveillance. After the announcement, the group welcomed the decision and noted that it follows last month’s withdrawal of the unhosted wallet and crypto mixing proposals, saying the three moves together close the books on several long-pending efforts to expand the Bank Secrecy Act.

Reaction From the Crypto Industry

Ji Hun Kim, CEO of the Crypto Council for Innovation, called the withdrawal the right call. He said the proposal had stalled for good reason, since cutting the cross-border threshold from $3,000 to $250 would have placed an undue burden on institutions.