The Treasury Department has abandoned a contentious initiative that aimed to broaden reporting mandates for cryptocurrency transactions.
On Friday, the Federal Reserve Board of Governors alongside the Treasury’s Financial Crimes Enforcement Network pulled back the “Travel Rule,” initially introduced in 2020 to mandate that financial entities gather data on transfers valued at $250 or higher, dropping the limit down from $3,000.
Within a filing, FinCEN explained that the regulation was being dropped due to more than half a decade elapsing, the transformation of the convertible virtual currency sector, and the necessity for fresh public feedback.
“The Agencies believe that any future, potential amendments to the Recordkeeping Rule and Travel Rule related to CVC should be considered in light of these recent developments to ensure that such amendments are fit for purpose,” FinCEN stated.
Upon introducing the rule initially, FinCEN asserted that malicious actors were progressively leveraging lower-value transfers to transfer criminal capital. Nonetheless, blockchain advocacy associations like Coin Center cautioned that reducing the limit from $3,000 to $250 would expose a greater volume of standard transactions to “warrantless financial surveillance.”
In a Friday post, Coin Center expressed satisfaction regarding the cancellation of the regulatory draft, paired with another regulatory draft pulled the prior month which would have enforced reporting and recordkeeping mandates on transfers connected to self-hosted wallets.
“This follows Treasury’s withdrawal last month of the proposed ‘unhosted wallet’ and cryptocurrency mixing rules, both of which Coin Center had also opposed,” the group noted. “Taken together, these withdrawals close the books on several long-pending proposals that would have expanded the Bank Secrecy Act’s already extensive financial surveillance regime.”
Crypto Council for Innovation CEO Ji Hun Kim mentioned in a statement that dropping the travel rule represented the “correct decision.”
“It had not moved forward over the past several years for good reason,” he remarked. “Lowering the threshold from $3,000 to $250 for cross-border transfers would have placed undue burden on institutions.”
Originally published at https://www.theblock.co/news/regulation/2026-11-06-us-treasury-walks-back-crypto-surveillance-travel-rule-proposal-435951.
