[Congressional Record Volume 164, Number 159 (Wednesday, September 26, 2018)]
[House]
[Pages H9060-H9063]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FINANCIAL TECHNOLOGY PROTECTION ACT
Mr. TIPTON. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 5036) to establish an Independent Financial Technology Task
Force, to provide rewards for information leading to convictions
related to terrorist use of digital currencies, to establish a FinTech
Leadership in Innovation Program to encourage the development of tools
and programs to combat terrorist and illicit use of digital currencies,
and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 5036
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Financial Technology
Protection Act''.
SEC. 2. SENSE OF CONGRESS.
It is the sense of Congress that the Federal Government
should prioritize the investigation of terrorist and illicit
use of new financial technology, including digital
currencies.
SEC. 3. INDEPENDENT FINANCIAL TECHNOLOGY TASK FORCE.
(a) Establishment.--There is established the Independent
Financial Technology Task Force (the ``Task Force''), which
shall consist of--
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(1) the Secretary of the Treasury, who shall serve as the
head of the Task Force;
(2) the Attorney General;
(3) the Director of the Central Intelligence Agency;
(4) the Director of the Financial Crimes Enforcement
Network;
(5) the Director of the Secret Service;
(6) the Director of the Federal Bureau of Investigation;
and
(7) 6 individuals appointed by the Secretary of the
Treasury to represent the private sector (including the
banking industry, nonprofit groups, and think tanks), with at
least 1 of such individuals having experience in the Fintech
industry.
(b) Duties.--The Task Force shall--
(1) conduct independent research on terrorist and illicit
use of new financial technologies, including digital
currencies; and
(2) develop legislative and regulatory proposals to improve
counter-terrorist and counter-illicit financing efforts.
(c) Annual Congressional Report.--Not later than 1 year
after the date of the enactment of this Act, and annually
thereafter, the Task Force shall issue a report to the
Congress containing the findings and determinations made by
the Task Force in the previous year and any legislative and
regulatory proposals developed by the Task Force.
SEC. 4. REWARDS FOR INFORMATION RELATED TO TERRORIST USE OF
DIGITAL CURRENCIES.
(a) In General.--The Secretary of the Treasury, in
consultation with the Attorney General, shall establish a
fund to pay a reward, not to exceed $450,000, to any person
who provides information leading to the conviction of an
individual involved with terrorist use of digital currencies.
(b) Use of Fines and Forfeitures.--With respect to fines
and forfeitures related to the conviction of an individual
involved with terrorist use of digital currencies, the
Secretary of the Treasury shall, subject to the availability
of appropriations made in advance--
(1) use such amounts to pay rewards under this section
related to such conviction; and
(2) with respect to any such amounts remaining after
payments are made under paragraphs (1) and (2), deposit such
amounts in the FinTech Leadership in Innovation Program.
SEC. 5. FINTECH LEADERSHIP IN INNOVATION PROGRAM.
(a) Establishment.--There is established a program to be
known as the ``FinTech Leadership in Innovation Program'',
which shall be funded as provided under section 4(b)(2).
(b) Innovation Grants.--
(1) In general.--The Secretary of the Treasury shall make
grants for the development of tools and programs to detect
terrorist and illicit use of digital currencies.
(2) Eligible recipients.--The Secretary may make grants
under this subsection to entities located in the United
States, including academic institutions, companies, nonprofit
institutions, individuals, and any other entities locating in
the United States that the Secretary determines appropriate.
(3) Eligible projects.--With respect to tools and programs
described under paragraph (1), in addition to grants for the
development of such tools and programs, the Secretary may
make grants under this subsection to carry out pilot programs
using such tools, the development of test cases using such
tools, and research related to such tools.
(4) Preferences.--In making grants under this subsection,
the Secretary shall give preference to--
(A) technology that is nonproprietary or that is community
commons-based;
(B) computer code that is developed and released on an open
source basis;
(C) tools that are proactive (such as meeting regulatory
requirements under ``know your customer'' and anti-money
laundering requirements for any entity that has to comply
with U.S. Government regulations) vs. reactive (such as
aiding law enforcement organizations in catching illegal
activity after the fact); and
(D) tools and incentives that are on decentralized
platforms.
(5) Other requirements.--
(A) Use of existing global standards.--Any new technology
developed with a grant made under this subsection shall be
based on existing global standards, such as those developed
by the Internet Engineering Task Force (IETF) and the World
Wide Web Consortium (W3C).
(B) Supporting existing laws or regulations.--Tools and
programs developed with a grant made under this subsection
shall be in support of existing laws or regulations,
including the Bank Secrecy Act, and make efforts to balance
privacy and anti-money laundering concerns.
(C) Open access requirement.--Tools and programs developed
with a grant made under this subsection shall be freely
accessible and usable by the public. This requirement may be
fulfilled by publicly availing application programming
interfaces or software development kits.
SEC. 6. DEFINITIONS.
For purposes of this Act:
(1) Bank secrecy act.--The term ``Bank Secrecy Act''
means--
(A) section 21 of the Federal Deposit Insurance Act;
(B) chapter 2 of title I of Public Law 91-508; and
(C) subchapter II of chapter 53 of title 31, United States
Code.
(2) Digital currency.--The term ``digital currency''--
(A) means a digital representation of value that--
(i) is used as a medium of exchange, unit of account, or
store of value; and
(ii) is not established legal tender, whether or not
denominated in established legal tender; and
(B) does not include--
(i) a transaction in which a merchant grants, as part of an
affinity or rewards program, value that cannot be taken from
or exchanged with the merchant for legal tender, bank credit,
or digital currency; or
(ii) a digital representation of value issued by or on
behalf of a publisher and used solely within an online game,
game platform, or family of games sold by the same publisher
or offered on the same game platform.
(3) Terrorist.--The term ``terrorist'' includes a person
carrying out domestic terrorism or international terrorism
(as such terms are defined, respectively, under section 2331
of title 18, United States Code).
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Colorado (Mr. Tipton) and the gentleman from Nevada (Mr. Kihuen) each
will control 20 minutes.
The Chair recognizes the gentleman from Colorado.
General Leave
Mr. TIPTON. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days in which to revise and extend their remarks and
include extraneous material on this bill.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Colorado?
There was no objection.
Mr. TIPTON. Mr. Speaker, I yield 5 minutes to the gentleman from
North Carolina (Mr. Budd).
Mr. BUDD. Mr. Speaker, I thank the gentleman from Colorado for
yielding. I also want to thank Chairman Hensarling for his dedicated
leadership of his committee. I appreciate all he did to bring my
legislation, H.R. 5036, to the floor. I also want to thank the
gentleman from Massachusetts (Mr. Lynch), my co-lead on the bill, for
his efforts, his experience, and his knowledge. It only made the bill
better, so I appreciated working with him.
Mr. Speaker, I rise today in strong support of my bipartisan
legislation, the Financial Technology Protection Act.
We all know that illicit financing networks are the lynchpin of any
terrorist group's, criminal organization's, or rogue state's
operations. As we move into an increasingly digital world, criminals
and terrorists will start to use these new technologies that are
available to them. That presents a problem.
That problem is that we know that criminals use digital currencies
through dark net markets to criminalize and to monetize cyber attacks.
There is documented evidence that terrorists are increasingly using
these currencies.
{time} 1800
The RAND Corporation has some good supporting evidence on this. The
bottom line is that the Federal Government has to be one step ahead of
the illicit actors in this new space without threatening technological
innovation, and that is what H.R. 5036 will do.
Specifically, my legislation will do the following things to help
make sure the United States stays ahead of this problem: First, it
establishes the Independent Financial Technology Task Force to Combat
Terrorism and Illicit Financing, whose goal is to improve coordination
between private and public sectors on digital currency terror strategy
and to combat illicit use. From my perspective, industry and the
Federal Government should be coming together to find best practices and
solutions to stop this new terrorist funding threat.
Secondly, H.R. 5036 includes language from H.R. 5227, the Preventing
Rogue and Foreign Actors From Evading Sanctions Act, which was
introduced by my friend Mark Meadows of North Carolina. This language
directs the Treasury Department to develop a strategy that identifies
and describes the potential uses of virtual currencies and other
emerging technologies by states, nonstate actors, and terrorist
organizations to evade sanctions, finance terrorism, or launder
monetary instruments and threaten the United States' national security.
Again, the development of a national strategy to combat illicit use
strikes me as common sense; therefore, we are
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excited to have it included in the bill and to have Mr. Meadows'
support as well.
Also, the Budd-Lynch legislation establishes a targeted rewards
program for information leading to the capture of terrorists or illicit
actors involved with terror digital currency networks. The government
should be encouraging individuals with knowledge of illicit use of
virtual currencies to come forward through the offerings of rewards for
successful convictions.
Finally, and perhaps most importantly, H.R. 5036 establishes the
Fintech Leadership in Innovation and Financial Intelligence Program,
which will be used for grants and rewards in the Fintech space for
ideas and programs to combat terrorist use of digital currencies.
These technologies would be open access and open source. Experts in
the private sector can track illicit use of these currencies and
perhaps do a better job of leveraging their talent to create tools and
programs through the Fintech Leadership and Financial Intelligence
Program. We need to give them the ability to try, and that is what this
bill does.
Here is the bottom line, Mr. Speaker. H.R. 5036 is legislation that
sparks private-sector innovation to deal with terror and illicit
financing when it comes to virtual currencies. I think that Congress
should be promoting programs and technologies that give industry the
tools they need to save their technology and industry from illicit use
and, hopefully, save them from further regulation down the road.
Mr. Speaker, I urge adoption of the bill.
Mr. KIHUEN. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, H.R. 5036, the Financial Technology Protection Act,
would strengthen our efforts to deter terrorist and illicit uses of
financial technology. Although financial technology has potential
benefits to the economy, there are pressing concerns about the digital
currencies facilitating terrorist financing and money laundering.
For example, in August 2015, a Virginia man was sentenced to prison
for providing material to support terrorists and admitted to using
Twitter to advise others on how to use bitcoin to mask terror
financing. Also, in July 2018, Special Counsel Robert Mueller indicted
12 Russian intelligence officers for hacking into the Democratic
National Committee during the 2016 presidential election. The hackers
used cryptocurrency to purchase the servers and other equipment
necessary for the email breaches and used bitcoin to help fund their
activities.
This bill would establish a public-private sector task force, a grant
program, and a reward program to counter such terrorist or illicit uses
of digital currencies. Also, it would require the government to
identify how state and nonstate actors and foreign terrorist
organizations evade sanctions, finance terrorism, or launder money
using these currencies.
Mr. Speaker, I thank Congressman Budd and Congressman Lynch for
introducing this bipartisan legislation. I urge my colleagues to
support it, and I reserve the balance of my time.
Mr. TIPTON. Mr. Speaker, I reserve the balance of my time.
Mr. KIHUEN. Mr. Speaker, I yield 3 minutes to the gentleman from
Massachusetts (Mr. Lynch).
Mr. LYNCH. Mr. Speaker, I rise in support of H.R. 5036, the Financial
Technology Protection Act. Before I begin, I would like to thank the
Financial Services Committee Chair Hensarling and Ranking Member Waters
for their support in helping to guide this bill through the committee
process. I am very pleased that this legislation was passed through the
committee unanimously when it was marked up back in July.
I would also like to thank my colleague from North Carolina, Mr.
Budd, for his good work on this important legislation. This has truly
been a bipartisan effort.
Mr. Speaker, by a strange coincidence, I was actually elected in the
Democratic primary in Massachusetts on September 11, 2001, the day of
the attacks on the United States in New York, the Pentagon, and in
western Pennsylvania. Since my arrival here in Washington and
throughout my time in Congress, I have taken an active interest in
cutting off the flow of funding to terrorists and other illicit actors.
I am very pleased to say that many of my colleagues, Democratic and
Republican, have likewise approached this work with the deliberate and
relentless sense of purpose that has lifted us above the petty
squabbling that sometimes causes us to fall short of the high
expectations of the American people.
Over the years, this work has taken me dozens of times to many
countries in the Middle East, to Amman, Jordan, a major banking center,
where members of our committee urged and assisted that nation to
establish its first financial intelligence unit. It must, of course, be
noted that we had the robust and earnest cooperation of King Abdullah
of Jordan in that effort. He is someone who, I believe, has, over the
years, been the greatest friend that freedom-loving people have in the
Arab world.
Members of this committee also worked to expand geographic targeting
orders to help the Financial Crimes Enforcement Network crack down on
money laundering as part of the Countering America's Adversaries
Through Sanctions Act.
Similarly, in Afghanistan, Morocco, Tunisia, and throughout the
Persian Gulf, our committee has coaxed and guided our international
neighbors to adopt methods that secure the legitimate banking system
from terrorists and criminal exploitation.
From this work it has recently become clear to Mr. Budd and myself
that terrorists and criminal actors are increasingly relying on digital
currencies, including bitcoin, to fund their illicit activities.
For example, in August of 2015, a Virginia man was sentenced to 11
years in prison for providing material support to ISIS. He admitted to
using Twitter to provide instructions on how to use bitcoin to mask the
transfer of funds to that terrorist group. Also, in December of 2017, a
woman in New York was indicted for bank fraud and money laundering for
supporting terrorists. She is alleged to have spent about $62,000 in
digital currency to engage in a pattern of financial activity designed
to ultimately benefit ISIS.
I am very pleased that the legislation before us today helps address
this emerging threat in multiple ways.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. KIHUEN. Mr. Speaker, I yield the gentleman from Massachusetts
such time as he may consume.
Mr. LYNCH. As my friend, Mr. Budd, has noted, this bill establishes a
public-private sector task force to research terrorist and criminal
uses of new financial technologies, including digital currencies, and
then develops countermeasures to thwart such terrorist and illicit
uses.
The bill also establishes a fund to pay rewards to people who provide
information leading to the conviction of an individual involved with
terrorist use of digital currencies.
Finally, the bill creates a grant program for the development of
tools and pilot programs to detect terrorist and illicit use of digital
currencies.
Mr. Speaker, in closing, I thank the chairman and ranking member, as
well as my Republican cosponsor, the gentleman from North Carolina (Mr.
Budd) and urge my colleagues on both sides of the aisle to support this
important legislation.
Mr. TIPTON. Mr. Speaker, I have no further requests for time on this
legislation, and I reserve the balance of my time.
Mr. KIHUEN. Mr. Speaker, I support the bill; I urge my colleagues to
support it as well; and I yield back the balance of my time.
Mr. TIPTON. Mr. Speaker, I yield myself the balance of my time.
I thank my colleagues from both sides of the aisle for bringing
forward this legislation to better protect our consumers and our
neighbors from illicit financial activity and I urge passage, and I
yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Colorado (Mr. Tipton) that the House suspend the rules
and pass the bill, H.R. 5036, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
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