Treasury to Wrap Crypto Anti-Money Laundering Rules by Fall

The Treasury Department’s financial crime watchdog intends to finish rules requiring anti-money laundering reporting for cryptocurrencies by the fall.

Final rules for banks and money service businesses such as crypto exchanges to collect, retain, and report customers’ domestic and international Bitcoin and other crypto transactions will be completed by September, according to a regulatory agenda released Friday.

Treasury’s Financial Crimes Enforcement Network proposed the rules jointly with the Federal Reserve during the final days of the Trump administration. The rules would clarify that the definition of “money” under the Bank Secrecy Act applies to virtual currencies that can convert into legal tender or act as a substitute for fiat currency.

The regulations also would update FinCEN’s so-called “travel rule,” which mandates reporting of transactions involving multiple financial institutions. The proposed regulations would mandate travel rule reporting requirements for domestic virtual currency transactions of at least $3,000. International transactions as low as $250 would fall under the amended travel rule.

FinCEN is working on a second set of rules, expected to be finalized in November, that would require crypto exchanges and others to file reports when when a customer moves at least $10,000-worth of virtual currency into a wallet not hosted at an exchange. Those so-called unhosted wallets can be kept offline and are hard to track.

Those rules also would require recordkeeping for unhosted wallet transactions of $3,000 or more.

Along with crytpo rules, FinCEN has started work on a regulationthat would apply the Bank Secrecy Act and other anti-money laundering requirements to financial institutions and individuals dealing in antiquities sales. The proposed rule would apply to any advisors, consultants, or other individuals involved in the sale of antiquities.

FinCEN said it expects to release an advanced notice of proposed rulemaking related to antiquities transactions by the end of 2021.