- Treasury Department’s new surveillance order targets money services businesses in border towns, requiring reporting of cash transactions over $200, down from $10,000.
- Cryptocurrency transactions are not directly affected by the order, which primarily targets Western Union-style businesses.
- Critics warn the order represents significant financial privacy intrusion and could push users toward cryptocurrency alternatives.
The U.S. Treasury Department has intensified financial surveillance along the southwest border, issuing an order that dramatically lowers reporting thresholds for money services businesses to $200 from the standard $10,000. While this has raised concerns in the cryptocurrency community, industry experts clarify that digital asset transactions remain outside the order’s scope.
The directive, announced last Friday by FinCEN, targets 30 specific zip codes across California and Texas, encompassing over one million residents. Money services businesses in these areas must now collect and report detailed information on transactions exceeding $200, including names, addresses, social security numbers, and the purpose of transactions.
“There are crypto firms that are licensed and treated as money services businesses,” Coin Center Communications Director Neeraj Agrawal explained to Decrypt. However, “the order starts with cash, [so] it looks like this [only] targets Western Union-type businesses.”
Treasury Secretary Scott Bessent said in a March 11 statement that the measure addresses the “significant risk to the U.S. financial system of the cartels, drug traffickers, and other criminal actors along the Southwest border.” The temporary order could later be extended.
While cryptocurrency platforms such as Coinbase don’t fall under the directive, privacy advocates warn that the order represents a troubling expansion of financial surveillance. Nick Anthony, policy analyst at the Cato Institute, told Decrypt this initiative will disproportionately affect lower-income individuals who rely on alternative financial services.
“This is going to affect folks on the lower end of the income spectrum who frequently use these kinds of alternative financial services,” Anthony said. “People who thought they had a sense of financial privacy are going to quickly find out that the government can actually conduct sweeping surveillance at a moment’s notice.”
The reporting requirements extend beyond the $200 threshold. Money services businesses must flag suspected “structuring”—the practice of breaking larger transactions into smaller ones to avoid reporting requirements. This effectively pushes the reporting threshold even lower.
“That opens up a whole separate problem where the $200 threshold really effectively becomes a $0 threshold,” Anthony explained.
Industry observers suggest the strict surveillance measures could inadvertently drive adoption of cryptocurrency alternatives. “This announcement will push people to look into alternatives, whether that be cryptocurrency or something else,” Anthony noted, while adding that such migration should occur “not because the other options are being effectively crushed.”
The directive highlights the tension between government efforts to combat illicit finance and maintaining financial privacy for law-abiding citizens. While crypto transactions aren’t directly affected, the broader implications of expanded financial surveillance remain a concern for digital asset advocates who value financial autonomy.
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