US Crypto Travel Rule: A Brief History and Regulatory Timeline
The United States (US) has taken a different approach to the Travel Rule. Rather than introducing a separate crypto-specific Travel Rule, the US applies its existing Bank Secrecy Act (BSA) framework to qualifying cryptocurrency transactions.
For crypto businesses, the most important development came in 2019, when the Financial Crimes Enforcement Network (FinCEN) clarified how its existing regulations apply to businesses dealing in convertible virtual currency (CVC). However, the US Travel Rule itself predates cryptocurrency by more than two decades.
As the US continues to develop its broader digital-asset regulatory framework, understanding this history is important for crypto businesses operating in or interacting with the US market
The US Travel Rule Timeline
1995–1996: The US Travel Rule Is Introduced
The US Travel Rule was not originally designed for cryptocurrency.
FinCEN promulgated the Travel Rule in 1995 as part of the Bank Secrecy Act's funds-transfer framework. The rule requires financial institutions to include certain information in transmittal orders for covered transfers and to pass that information to the next financial institution in the payment chain.
The rule became effective on May 28, 1996. It applied to transmittals of funds of USD 3000 or more.
The purpose was to preserve an information trail that could help law enforcement detect, investigate and prosecute money laundering and other financial crimes.
This is important when considering cryptocurrency today: the US did not create a new Travel Rule specifically for digital assets. Instead, FinCEN subsequently clarified how this existing framework applies to certain virtual-currency transactions.
2010: FinCEN Reaffirms the USD 3000 Threshold
In 2010, FinCEN updated its guidance on the Funds Travel Rule.
The guidance confirmed that covered transmittals of funds of USD 3000 or more are subject to the Travel Rule, regardless of whether the transaction involves physical currency. It also clarified the information that must accompany a covered transmittal and the responsibilities of intermediary financial institutions.
The required information includes details about the transmittor, the transmittor's financial institution, the amount and execution date of the transaction, and, where received, information about the recipient.
This framework would later become relevant to cryptocurrency when FinCEN determined that certain CVC transactions can constitute transmittals of funds.
2019: FinCEN Applies the Existing Framework to Cryptocurrency
On May 9, 2019 FinCEN published its guidance on the application of its regulations to certain business models involving convertible virtual currencies.
The guidance clarified that a person or business that accepts and transmits CVC, or buys or sells CVC as a business, may be a money transmitter and therefore a Money Services Business (MSB) subject to the BSA.
Importantly, FinCEN stated that where a money transmitter's CVC transactions constitute a "transmittal of funds," the business must also comply with the Funds Transfer Rule and Funds Travel Rule. For covered transmittals of USD 3000 or more, the Travel Rule requirements may therefore apply to the CVC transaction.
The guidance addressed a range of business models, including peer-to-peer exchanges, CVC wallet providers, CVC kiosks, payment processors and certain decentralised applications.
However, FinCEN did not state that every company operating in the crypto sector is automatically an MSB. Whether a business qualifies as a money transmitter depends on its actual activities and the facts and circumstances of its business model.
This distinction remains fundamental to understanding the US Travel Rule.
2020–2021: FinCEN Considers Expanding Crypto Transaction Requirements
In December 2020, FinCEN proposed additional requirements relating to certain transactions involving convertible virtual currency or digital assets.
The proposal sought to address AML/CFT risks associated with transactions involving CVC and digital assets and included proposed requirements concerning transactions involving self-hosted wallets. FinCEN subsequently extended and reopened the comment period in January 2021.
The proposal generated significant discussion within the crypto industry because it could have expanded information-collection, recordkeeping and reporting requirements for transactions involving self-hosted wallets. However, these requirements did not become part of the operative US Travel Rule framework. FinCEN ultimately withdrew the proposed rule on April 12, 2024.
The operative framework remains the existing BSA rules and FinCEN's interpretation of how those rules apply to qualifying CVC transactions.
2024: FIT21 Passes the House but Does Not Become Law
In May 2024, the Financial Innovation and Technology for the 21st Century Act (FIT21) passed the US House of Representatives.
The legislation sought to establish a clearer federal regulatory framework for digital assets and divide regulatory responsibilities between the SEC and CFTC.
However, FIT21 did not become law. It therefore did not replace the existing BSA and FinCEN framework governing Travel Rule obligations.
2025: A New Direction for the US Digital-Asset Policy
The regulatory environment changed significantly following the return of the Trump Administration.
In January 2025, President Trump issued an Executive Order focused on strengthening US leadership in digital financial technology. The order established the President's Working Group on Digital Asset Markets and directed the group to propose a federal regulatory framework for digital assets, including stablecoins. It also revoked Executive Order 14067 and established a policy against federal agencies creating, issuing or promoting central bank digital currencies.
In March 2025, President Trump issued a further Executive Order establishing the Strategic Bitcoin Reserve and United States Digital Asset Stockpile.
These measures did not change the underlying Travel Rule. Instead, they formed part of a broader shift in US digital-asset policy toward regulatory clarity, innovation and increased integration of digital assets into the financial system.
2025: The GENIUS Act Establishes a Federal Stablecoin Framework
Another significant development came in July 2025, when the GENIUS Act became law as Public Law 119-27.
The Act established a federal framework for payment stablecoins and requires permitted payment stablecoin issuers to comply with the BSA and applicable AML/CFT requirements.
The GENIUS Act does not replace the existing Travel Rule framework for qualifying transmittals of funds (USD 3000). Instead, it adds a dedicated federal framework for payment stablecoin issuers alongside the existing BSA requirements.
This distinction is important because the US digital-asset regulatory framework is becoming broader without necessarily consolidating every crypto-related requirement into one piece of legislation.
2026: US Regulators Continue Building the Digital-Asset Framework
In 2026, US regulators continued developing the federal framework for digital assets. In March, the SEC issued an interpretation clarifying how federal securities laws apply to different types of crypto assets, with the CFTC joining the interpretation to clarify the application of the Commodity Exchange Act.
For AML/CFT compliance, FinCEN and OFAC proposed rules in April 2026 to implement the GENIUS Act's requirements for permitted payment stablecoin issuers, including AML/CFT and sanctions-compliance obligations. In June, FinCEN and federal banking agencies proposed additional rules concerning customer-identification requirements for permitted payment stablecoin issuers.
These developments expand the U.S. digital-asset regulatory framework but do not replace the existing Funds Transfer and Travel Rule requirements applicable to qualifying transmittals of funds.
What Is Next for the US Crypto Travel Rule?
As the US digital-asset framework expands, crypto businesses may need to navigate overlapping requirements covering AML/CFT, stablecoins, sanctions, customer identification and market regulation.
For Travel Rule compliance, however, the underlying federal framework remains the BSA and FinCEN's regulations governing qualifying transmittals of funds
Learn More about the US Travel Rule
Sources and Further Reading
Electronic Code of Federal Regulations. (2026). 31 CFR § 1010.410: Records to be made and information to be obtained in connection with transmittals of funds. U.S. Government Publishing Office. https://unblock.federalregister.gov/
Financial Crimes Enforcement Network. (1996). Amendments to the funds transfer rules. U.S. Department of the Treasury. https://www.fincen.gov/news/news-releases/fincen-issues-amendments-funds-transfer-rules
Financial Crimes Enforcement Network. (2010). Funds “travel” regulations: Questions & answers. U.S. Department of the Treasury. https://www.fincen.gov/news/news-releases/fincen-issues-amendments-funds-transfer-rules
Financial Crimes Enforcement Network. (2019, May 9). Application of FinCEN’s regulations to certain business models involving convertible virtual currencies (FIN-2019-G001). U.S. Department of the Treasury. https://www.fincen.gov/resources/statutes-regulations/guidance/application-fincens-regulations-certain-business-models
Financial Crimes Enforcement Network. (2020, December 23). Requirements for certain transactions involving convertible virtual currency or digital assets. Federal Register, 85, 83840–83861. https://www.federalregister.gov/documents/2020/12/23/2020-28437/requirements-for-certain-transactions-involving-convertible-virtual-currency-or-digital-assets
Financial Crimes Enforcement Network. (2021). Requirements for certain transactions involving convertible virtual currency or digital assets: Reopening of comment period. U.S. Department of the Treasury. https://www.fincen.gov/resources/statutes-regulations/federal-register-notices/requirements-certain-transactions-0
Financial Crimes Enforcement Network. (2021). FinCEN extends reopened comment period for proposed rulemaking on certain CVC and LTDA transactions. U.S. Department of the Treasury. https://www.fincen.gov/news/news-releases/fincen-extends-reopened-comment-period-proposed-rulemaking-certain-convertible
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Disclaimer
This material is provided for educational and informational purposes only and is not intended to be a substitute for professional advice or detailed research.
