Financial Technology Protection Act of 2023

IIB 118TH CONGRESS 2D SESSION H. R. 2969 IN THE SENATE OF THE UNITED STATES JULY 23, 2024 Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs AN ACT To establish an Independent Financial Technology Working Group to Combat Terrorism and Illicit Financing, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 05:31 Jul 24, 2024 Jkt 049200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2969.RFS H2969 kjohnson on DSK7ZCZBW3PROD with $$_JOB 2 HR 2969 RFS SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Financial Technology 2 Protection Act of 2023’’. 3 SEC. 2. INDEPENDENT FINANCIAL TECHNOLOGY WORKING 4 GROUP TO COMBAT TERRORISM AND ILLICIT 5 FINANCING. 6 (a) ESTABLISHMENT.—There is established the Inde- 7 pendent Financial Technology Working Group to Combat 8 Terrorism and Illicit Financing (in this section referred 9 to as the ‘‘Working Group’’), which shall consist of the 10 following: 11 (1) The Secretary of the Treasury, acting 12 through the Under Secretary for Terrorism and Fi- 13 nancial Intelligence, who shall serve as the chair of 14 the Working Group. 15 (2) A senior-level representative from each of 16 the following: 17 (A) Each of the following components of 18 the Department of the Treasury: 19 (i) The Financial Crimes Enforcement 20 Network. 21 (ii) The Internal Revenue Service. 22 (iii) The Office of Foreign Assets 23 Control. 24 (B) The Department of Justice and each 25 of the following components of the Department: 26 VerDate Sep 11 2014 05:31 Jul 24, 2024 Jkt 049200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2969.RFS H2969 kjohnson on DSK7ZCZBW3PROD with $$_JOB 3 HR 2969 RFS (i) The Federal Bureau of Investiga- 1 tion. 2 (ii) The Drug Enforcement Adminis- 3 tration. 4 (C) The Department of Homeland Security 5 and the United States Secret Service. 6 (D) The Department of State. 7 (E) The Central Intelligence Agency. 8 (3) Five individuals appointed by the Under 9 Secretary for Terrorism and Financial Intelligence 10 to represent the following: 11 (A) Financial technology companies. 12 (B) Blockchain intelligence companies. 13 (C) Financial institutions. 14 (D) Institutions or organizations engaged 15 in research. 16 (E) Institutions or organizations focused 17 on individual privacy and civil liberties. 18 (b) DUTIES.—The Working Group shall— 19 (1) conduct research on terrorist and illicit use 20 of new financial technologies, including digital as- 21 sets; and 22 (2) develop legislative and regulatory proposals 23 to improve anti-money laundering, counter-terrorist, 24 VerDate Sep 11 2014 05:31 Jul 24, 2024 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2969.RFS H2969 kjohnson on DSK7ZCZBW3PROD with $$_JOB 4 HR 2969 RFS and other counter-illicit financing efforts in the 1 United States. 2 (c) REPORTS.— 3 (1) IN GENERAL.—Not later than one year 4 after the date of the enactment of this Act, and an- 5 nually for the 3 years thereafter, the Working Group 6 shall submit to the Secretary of the Treasury, the 7 heads of each agency represented in the Working 8 Group pursuant to subsection (a)(2), and the appro- 9 priate congressional committees a report containing 10 the findings and determinations made by the Work- 11 ing Group in the previous year and any legislative 12 and regulatory proposals developed by the Working 13 Group. 14 (2) FINAL REPORT.—Before the date on which 15 the Working Group terminates under subsection 16 (d)(1), the Working Group shall submit to the ap- 17 propriate congressional committees a final report de- 18 tailing the findings, recommendations, and activities 19 of the Working Group. 20 (d) SUNSET.— 21 (1) IN GENERAL.—The Working Group shall, 22 subject to paragraph (3), terminate on the date that 23 is 4 years after the date of the enactment of this 24 Act. 25 VerDate Sep 11 2014 05:31 Jul 24, 2024 Jkt 049200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2969.RFS H2969 kjohnson on DSK7ZCZBW3PROD with $$_JOB 5 HR 2969 RFS (2) EXPIRATION AND RETURN OF APPRO- 1 PRIATED FUNDS.—On the date on which the Work- 2 ing Group terminates under paragraph (1)— 3 (A) all authorities granted to the Working 4 Group under this section shall expire, subject to 5 paragraph (3); and 6 (B) any funds appropriated for the Work- 7 ing Group that are available for obligation as of 8 that date shall be returned to the Treasury. 9 (3) AUTHORITY TO WIND UP ACTIVITIES.—The 10 termination of the Working Group under paragraph 11 (1) and the expiration of authorities under para- 12 graph (2) shall not affect any research, proposals, or 13 other related activities of the Working Group ongo- 14 ing as of the date on which the Working Group ter- 15 minates under paragraph (1). Such research, pro- 16 posals, and other related activities may continue 17 until their completion. 18 SEC. 3. PREVENTING ROGUE AND FOREIGN ACTORS FROM 19 EVADING SANCTIONS. 20 (a) REPORT AND STRATEGY WITH RESPECT TO DIG- 21 ITAL ASSETS AND OTHER RELATED EMERGING TECH- 22 NOLOGIES.— 23 (1) IN GENERAL.—Not later than 180 days 24 after the date of the enactment of this Act, the 25 VerDate Sep 11 2014 05:31 Jul 24, 2024 Jkt 049200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2969.RFS H2969 kjohnson on DSK7ZCZBW3PROD with $$_JOB 6 HR 2969 RFS President, acting through the Secretary of the 1 Treasury and in consultation with the head of each 2 agency represented on the Independent Financial 3 Technology Working Group to Combat Terrorism 4 and Illicit Financing pursuant to section 2(a)(2), 5 shall submit to the appropriate congressional com- 6 mittees a report that describes— 7 (A) the potential uses of digital assets and 8 other related emerging technologies by States, 9 non-State actors, foreign terrorist organiza- 10 tions, and other terrorist groups to evade sanc- 11 tions, finance terrorism, or launder monetary 12 instruments, and threaten the national security 13 of the United States; and 14 (B) a strategy how the United States will 15 mitigate and prevent the illicit use of digital as- 16 sets and other related emerging technologies. 17 (2) FORM OF REPORT; PUBLIC AVAILABILITY.— 18 (A) IN GENERAL.—The report required by 19 paragraph (1) shall be submitted in unclassified 20 form, but may include a classified annex. 21 (B) PUBLIC AVAILABILITY.—The unclassi- 22 fied portion of each report required by para- 23 graph (1) shall be made available to the public 24 VerDate Sep 11 2014 05:31 Jul 24, 2024 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2969.RFS H2969 kjohnson on DSK7ZCZBW3PROD with $$_JOB 7 HR 2969 RFS and posted on a publicly accessible website of 1 the Department of Treasury— 2 (i) in precompressed, easily 3 downloadable versions, in all appropriate 4 formats; and 5 (ii) in machine-readable format, if ap- 6 plicable. 7 (3) SOURCES OF INFORMATION.—In preparing 8 the reports required by paragraph (1), the President 9 may utilize any credible publication, database, or 10 web-based resource, and any credible information 11 compiled by any government agency, nongovern- 12 mental organization, or other entity that is made 13 available to the President. 14 (b) BRIEFING.—Not later than 2 years after the date 15 of the enactment of this Act, the Secretary of the Treasury 16 shall brief the appropriate congressional committees on 17 the implementation of the strategy required by subsection 18 (a)(2). 19 SEC. 4. DEFINITIONS. 20 In this Act: 21 (1) APPROPRIATE CONGRESSIONAL COMMIT- 22 TEES.—The term ‘‘appropriate congressional com- 23 mittees’’ means— 24 VerDate Sep 11 2014 05:31 Jul 24, 2024 Jkt 049200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2969.RFS H2969 kjohnson on DSK7ZCZBW3PROD with $$_JOB 8 HR 2969 RFS (A) the Committee on Banking, Housing, 1 and Urban Affairs, the Committee on Finance, 2 the Committee on Foreign Relations, the Com- 3 mittee on Homeland Security and Govern- 4 mental Affairs, the Committee on the Judiciary, 5 and the Select Committee on Intelligence of the 6 Senate; and 7 (B) the Committee on Financial Services, 8 the Committee on Foreign Affairs, the Com- 9 mittee on Homeland Security, the Committee 10 on the Judiciary, the Committee on Way and 11 Means, and the Permanent Select Committee 12 on Intelligence of the House of Representatives. 13 (2) BLOCKCHAIN INTELLIGENCE COMPANY.— 14 The term ‘‘blockchain intelligence company’’ means 15 any business providing software, research, or other 16 services (such as blockchain tracing tools, 17 geofencing, transaction screening, the collection of 18 business data, and sanctions screening) that— 19 (A) support private and public sector in- 20 vestigations and risk management activities; 21 and 22 (B) involve cryptographically secured dis- 23 tributed ledgers or any similar technology or 24 implementation. 25 VerDate Sep 11 2014 05:31 Jul 24, 2024 Jkt 049200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2969.RFS H2969 kjohnson on DSK7ZCZBW3PROD with $$_JOB 9 HR 2969 RFS (3) DIGITAL ASSET.—The term ‘‘digital asset’’ 1 means any digital representation of value that is re- 2 corded on a cryptographically secured digital ledger 3 or any similar technology. 4 (4) FOREIGN TERRORIST ORGANIZATION.—The 5 term ‘‘foreign terrorist organization’’ means an or- 6 ganization that is designated as a foreign terrorist 7 organization under section 219 of the Immigration 8 and Nationality Act (8 U.S.C. 1189). 9 (5) ILLICIT USE.—The term ‘‘illicit use’’ in- 10 cludes fraud, darknet marketplace transactions, 11 money laundering, the purchase and sale of illicit 12 goods, sanctions evasion, theft of funds, funding of 13 illegal activities, transactions related to child sexual 14 abuse material, and any other financial transaction 15 involving the proceeds of specified unlawful activity 16 (as defined in section 1956(c) of title 18, United 17 States Code). 18 (6) TERRORIST.—The term ‘‘terrorist’’ includes 19 a person carrying out domestic terrorism or inter- 20 national terrorism (as such terms are defined, re- 21 VerDate Sep 11 2014 05:31 Jul 24, 2024 Jkt 049200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2969.RFS H2969 kjohnson on DSK7ZCZBW3PROD with $$_JOB 10 HR 2969 RFS spectively, under section 2331 of title 18, United 1 States Code). 2 Passed the House of Representatives July 22, 2024. Attest: KEVIN F. MCCUMBER, Clerk. VerDate Sep 11 2014 05:31 Jul 24, 2024 Jkt 049200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2969.RFS H2969 kjohnson on DSK7ZCZBW3PROD with $$_JOB