New proposal FinCEN: registration of Bitcoin purchases over $250

The US Financial Crimes Enforcement Network (FinCEN) and the Federal Reserve have focused on Bitcoin. In a new publication, they say they want more information about smaller cryptotransactions than ever before.

Payments to and from America

Yesterday (Friday, ed.) the two bodies came out with a new press release. They state that they want to lower the threshold for international transactions to $250.

The US services want to change the $3,000 threshold set in 1995. This means that financial institutions will have to share customer information if the payment both exceeds $250 and is a non-domestic transfer.

Do you make a payment of $300 from a US stock exchange to China? Then this is now reported. Do you make a payment of $500 to the US from the Netherlands? Then this will also be registered. And yes, these are (also) payments with which you want to buy Bitcoin.

In other words, the regulations of the FATF, also known as the ‚Travel Rule‘, will apply to ever lower payments. As it comes out of the hat of The Financial Crimes Enforcement Network, all this has to do with the prevention of money laundering.

The information that financial institutions are required to exchange under the Travel Rule is the name and address of the sender plus the amount the Wealth Matrix and date of the payment.

„Under the current recordkeeping and travel rule regulations, financial institutions must collect, retain, and transmit certain information related to funds transfers and transmittals of funds over $3,000. The proposed rule lowers the applicable threshold from $3,000 to $250 for international transactions. The threshold for domestic transactions remains unchanged at $3,000.

They also call for the meaning of ‚money‘ to be clarified so that the rules also apply to international transactions involving ‚virtual currency‘. As they themselves say, it now serves as a means of exchange, but it is not yet legal tender.

Bitcoin exchanges

Coinnounce reports that crypto exchanges should also report this information. Buying $500 of Bitcoin at the American stock exchange Kraken? Then now you know for sure that this will be listed somewhere.

In addition to the personal data that you already provide as a customer in the Know Your Customer (KYC) processes, the deposits and withdrawals will now also end up in a large register.

For the time being, the update of the Travel Rule remains only a proposal. FinCEN and the Fed invite all stakeholders to comment within the next 30 days.

The mandate to collect customer information is diametrically opposed to the „peer-to-peer electronic money“ written by Satoshi in the white paper. Bitcoin gives the possibility to step out of the traditional surveillance system. This opt-out can give you back your financial privacy.

There are many ways to improve your privacy with Bitcoin payments. We have already listed a number of tools for this.