On October 23, 2020, the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and the Federal Reserve Board published a joint notice of proposed rulemaking inviting comments on proposed modifications to regulations implementing the Bank Secrecy Act (BSA). First, the agencies propose to lower the monetary threshold contained in the so-called “recordkeeping rule” and “travel rule” pursuant to which financial institutions are required to collect and retain information on certain funds transfers and transmittals of funds and provide such information to other financial institutions in the payment chain. Second, the proposed rule would amend the definition of “money,” as used in those rules, to clarify that it includes convertible virtual currency (CVC) and digital assets with legal tender status.
Under the current version of the recordkeeping rule, banks and nonbank financial institutions are required to collect and retain information that relates to funds transfers and transmittals of funds of $3,000 or more. The travel rule then requires banks and nonbank financial institutions to send collected information on funds transfers and transmittals of funds to other banks or nonbank financial institutions participating in the transfer or transmittal. The purpose of retaining an information trail in this manner is to help prevent money laundering and other financial crimes.