Anti-Financial Crime & Financial Crime Compliance
Regulatory Intelligence Leadership | Insight | Network

Compliance News, Crypto, North America

US authorities seek to tighten their grip on transaction monitoring with new laws for thresholds and cryptos

By Dan Byrne for AMLi

THE US financial crimes watchdog is proposing to broaden the criteria for fund transfers that require monitoring, while at the same time ensuring that the new rules apply just as strictly to virtual assets.

Under the proposals, financial institutions must collect and retain information on any international fund transfers of $250 or more.

Previously, this figure was set at $3,000, representing a threshold decrease of nearly 92% – at least on those going or coming from abroad. Fund transfers within the US would remain bound by the $3,000 mark.

The proposals come as a joint effort from the board of the US Federal Reserve (the US Central banking system) and the Financial Crimes Enforcement Network (FinCEN).

If approved, they will amend the US Bank Secrecy Act – one of the principle pieces of legislation governing money laundering and financial crime in the United States.

Separately, the proposed rule will also clarify that the term ‘money’ refers also to any type of cryptocurrency, whether it has any form of legal tender status or not.

The move would serve to at least partially close a commonly criticised crypto-loophole which allows traders to excuse themselves from some regulations around traditional currency trading.

These regulations have often been put in place before the massive surge in cryptocurrency popularity. The last major US development – known as the ‘Recordkeeping rule’ came into force in 1995.

If the current proposed changes are implemented in full, cryptocurrency transactions would be subject to the exact same revised threshold of $250 – dramatically increasing the number of transactions that would need to be monitored on a daily basis.

Information required under the Recordkeeping Rule includes name and address, transaction amount, date of payment, and any financial institutions processing payment on either end of the transaction.

The move comes as one of several actions aimed at narrowing legal focus on cryptocurrencies – often considered a grey area in international finance, and one which standard regulations may not have automatically applied to.

For this reason, cryptocurrencies have long been seen as a ‘haven channel’ for financial criminals. 

Share this on:

Follow us on:

AML Intelligence
We hope you enjoyed reading this article

If you would like unlimited access to AML Intelligence premium articles, newsletter delivered twice a week, access to our Global Bank Fines and Penalties database, free access to Boardroom Series events and much more, select one of our subscription options and become a subscriber!