FinCEN, Fed withdraw crypto Travel Rule proposal for new public input

FinCEN and the Federal Reserve have withdrawn their joint crypto Travel Rule proposal, sending it back for fresh public comment. The rule would have required banks and money services businesses to collect and transmit customer information on crypto transfers, extending Bank Secrecy Act obligations more explicitly to digital assets. The withdrawal signals a possible regulatory softening that could reduce compliance pressure on crypto intermediaries and, by extension, on market sentiment. It matters because the Travel Rule is a core piece of U.S. AML infrastructure for crypto, and its delay leaves banks and exchanges without finalized guidance on cross-institution data sharing. What to watch next is the reopened comment period and whether the agencies re-propose a narrower rule or align with the EU's Transfer of Funds Regulation.