US Regulators to Monitor Bitcoin, Ethereum & XRP Dealings Over $250

A suggested amendment to the US Bank Secrecy Act indicates that cryptocurrency related regulations are going to become stringent. In this regard, a media announcement made by the Financial Crimes Enforcement Network (FinCEN) and the Federal Reserve Board (FSB) indicate that these institutions will accept public comments on the suggestion starting October 23.

The draft intends to amend the laws related to record keeping and travel rule. If cleared, financial institutions would have a need to report data associated with global transfers involving a value higher than $250.

Presently, the rule is applicable to dealings greater than $3,000, indicating a considerable reduction in threshold value of transaction in the draft rule. Comments are invited from public until November 23rd of the calendar year.

The regulatory institutions explain that the revision is applicable only for dealings that originate or carried out outside the country’s frontiers. Furthermore, the agencies point out that dealing with “virtual currencies and digital assets” such as Ethereum, Bitcoin and XRP also come under the rule:

“The proposed rule also further clarifies that those regulations apply to transactions above the applicable threshold involving convertible virtual currencies, as well as transactions involving digital assets with legal tender status, by clarifying the meaning of “money” as used in certain defined terms.”

Nevertheless, as far as the aforesaid assets are concerned, the criteria shall apply to “domestic and cross-border transactions.” Agencies assess that Bitcoin transactions along have risen from $366 billion in 2019 to $312 billion “through 2020 and through August,” as illustrated in the image underneath. They also point out a growth in market cap of Bitcoin. In this regard, the agencies underline:

“(…) malign actors have used CVCs (cryptocurrencies) to facilitate international terrorist financing, weapons proliferation, sanctions evasion, and transnational money laundering, as well as to buy and sell controlled substances, stolen and fraudulent identification documents and access devices, counterfeit goods, malware and other computer hacking tools, firearms, and toxic chemicals.”

Even though the update to the Bank Secrecy Act will not impact local transactions, the US residents will need to offer data about their crypto assets. As per the latest Internal Revenue Service’s form, which should be compulsorily filled by the US residents, the US citizens must give a reply to the following query:

“(you) engaged in a transaction involving virtual currency, you will need to answer the question on page 1 of Form 1040 or 1040-SR.”

So, the US resident must provide relevant details on their purchase, sale or any other trading activity involving any crypto currency. If the citizen had not transacted but held only Bitcoins, they can select the “No” option. If not, a detailed answer needs to be provided.