[House Report 119-93]
[From the U.S. Government Publishing Office]
119th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 119-93
======================================================================
FINANCIAL TECHNOLOGY PROTECTION ACT OF 2025
_______
May 6, 2025.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Hill of Arkansas, from the Committee on Financial Services,
submitted the following
R E P O R T
[To accompany H.R. 2384]
The Committee on Financial Services, to whom was referred
the bill (H.R. 2384) to establish an Independent Financial
Technology Working Group to Combat Terrorism and Illicit
Financing, and for other purposes, having considered the same,
reports favorably thereon with an amendment and recommends that
the bill as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 4
Background and Need for Legislation.............................. 4
Committee Consideration.......................................... 4
Related Hearings................................................. 5
Committee Votes.................................................. 6
Committee Oversight Findings..................................... 8
Performance Goals and Objectives................................. 8
Committee Cost Estimate.......................................... 8
New Budget Authority and CBO Cost Estimate....................... 8
Unfunded Mandates Statement...................................... 8
Earmark Statement................................................ 8
Federal Advisory Committee Act Statement......................... 9
Applicability to the Legislative Branch.......................... 9
Duplication of Federal Programs.................................. 9
Section-by-Section Analysis of the Legislation................... 9
Changes in Existing Law Made by the Bill, as Reported............ 10
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Financial Technology Protection Act of
2025''.
SEC. 2. INDEPENDENT FINANCIAL TECHNOLOGY WORKING GROUP TO COMBAT
TERRORISM AND ILLICIT FINANCING.
(a) Establishment.--There is established the Independent Financial
Technology Working Group to Combat Terrorism and Illicit Financing (in
this section referred to as the ``Working Group''), which shall consist
of the following:
(1) The Secretary of the Treasury, acting through the Under
Secretary for Terrorism and Financial Crimes, who shall serve
as the chair of the Working Group.
(2) A senior-level representative from each of the following:
(A) The Department of the Treasury.
(B) The Office of Terrorism and Financial
Intelligence.
(C) The Internal Revenue Service.
(D) The Department of Justice.
(E) The Federal Bureau of Investigation.
(F) The Drug Enforcement Administration.
(G) The Department of Homeland Security.
(H) The United States Secret Service.
(I) The Department of State.
(J) The Office of the Director of National
Intelligence.
(3) At least five individuals appointed by the Under
Secretary for Terrorism and Financial Crimes to represent the
following:
(A) Financial technology companies.
(B) Blockchain intelligence companies.
(C) Financial institutions.
(D) Institutions or organizations engaged in
research.
(E) Institutions or organizations focused on
individual privacy and civil liberties.
(4) Such additional individuals as the Secretary of the
Treasury may appoint as necessary to accomplish the duties
described under subsection (b).
(b) Duties.--The Working Group shall--
(1) conduct research on terrorist and illicit use of digital
assets and other related emerging technologies; and
(2) develop legislative and regulatory proposals to improve
anti-money laundering, counter-terrorist, and other counter-
illicit financing efforts in the United States.
(c) Reports.--
(1) In general.--Not later than one year after the date of
the enactment of this Act, and annually for the 3 years
thereafter, the Working Group shall submit to the Secretary of
the Treasury, the heads of each agency represented in the
Working Group pursuant to subsection (a)(2), and the
appropriate congressional committees a report containing the
findings and determinations made by the Working Group in the
previous year and any legislative and regulatory proposals
developed by the Working Group.
(2) Final report.--Before the date on which the Working Group
terminates under subsection (d)(1), the Working Group shall
submit to the appropriate congressional committees a final
report detailing the findings, recommendations, and activities
of the Working Group, including any final results from the
research conducted by the Working Group.
(d) Sunset.--
(1) In general.--The Working Group shall terminate on the
later of--
(A) the date that is 4 years after the date of the
enactment of this Act; or
(B) the date on which the Working Group completes any
wind-up activities described under paragraph (2).
(2) Authority to wind up activities.--If there are ongoing
research, proposals, or other related activities of the Working
Group ongoing as of the date that is 4 years after the date of
the enactment of this Act, the Working Group may temporarily
continue working in order to wind-up such activities.
(3) Return of appropriated funds.--On the date on which the
Working Group terminates under paragraph (1), any unobligated
funds appropriated to carry out this section shall be
transferred to the Treasury.
SEC. 3. PREVENTING ROGUE AND FOREIGN ACTORS FROM EVADING SANCTIONS.
(a) Report and Strategy With Respect to Digital Assets and Other
Related Emerging Technologies.--
(1) In general.--Not later than 180 days after the date of
the enactment of this Act, the President, acting through the
Secretary of the Treasury and in consultation with the head of
each agency represented on the Independent Financial Technology
Working Group to Combat Terrorism and Illicit Financing
pursuant to section 2(a)(2), shall submit to the appropriate
congressional committees a report that describes--
(A) the potential uses of digital assets and other
related emerging technologies by States, non-State
actors, foreign terrorist organizations, and other
terrorist groups to evade sanctions, finance terrorism,
or launder monetary instruments, and threaten the
national security of the United States; and
(B) a strategy for the United States to mitigate and
prevent the illicit use of digital assets and other
related emerging technologies.
(2) Form of report; public availability.--
(A) In general.--The report required by paragraph (1)
shall be submitted in unclassified form, but may
include a classified annex.
(B) Public availability.--The unclassified portion of
each report required by paragraph (1) shall be made
available to the public and posted on a publicly
accessible website of the Department of the Treasury--
(i) in precompressed, easily downloadable
versions, in all appropriate formats; and
(ii) in machine-readable format, if
applicable.
(3) Sources of information.--In preparing the reports
required by paragraph (1), the President may utilize any
credible publication, database, or web-based resource, and any
credible information compiled by any government agency,
nongovernmental organization, or other entity that is made
available to the President.
(b) Briefing.--Not later than 2 years after the date of the enactment
of this Act, the Secretary of the Treasury shall brief the appropriate
congressional committees on the implementation of the strategy required
by subsection (a)(1)(B).
SEC. 4. DEFINITIONS.
In this Act:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on Banking, Housing, and Urban
Affairs, the Committee on Finance, the Committee on
Foreign Relations, the Committee on Homeland Security
and Governmental Affairs, the Committee on the
Judiciary, and the Select Committee on Intelligence of
the Senate; and
(B) the Committee on Financial Services, the
Committee on Foreign Affairs, the Committee on Homeland
Security, the Committee on the Judiciary, the Committee
on Ways and Means, and the Permanent Select Committee
on Intelligence of the House of Representatives.
(2) Blockchain intelligence company.--The term ``blockchain
intelligence company'' means any business providing software,
research, or other services (such as blockchain tracing tools,
geofencing, transaction screening, the collection of business
data, and sanctions screening) that--
(A) support private and public sector investigations
and risk management activities; and
(B) involve cryptographically secured distributed
ledgers or any similar technology or implementation.
(3) Digital asset.--The term ``digital asset'' means any
digital representation of value that is recorded on a
cryptographically secured digital ledger or any similar
technology.
(4) Emerging technologies.--The term ``emerging
technologies'' means the critical and emerging technology areas
listed in the Critical and Emerging Technologies List developed
by the Fast Track Action Subcommittee on Critical and Emerging
Technologies of the National Science and Technology Council,
including any updates to such list.
(5) Foreign terrorist organization.--The term ``foreign
terrorist organization'' means an organization that is
designated as a foreign terrorist organization under section
219 of the Immigration and Nationality Act (8 U.S.C. 1189).
(6) Illicit use.--The term ``illicit use'' includes fraud,
darknet marketplace transactions, money laundering, the
purchase and sale of illicit goods, sanctions evasion, theft of
funds, funding of illegal activities, transactions related to
child sexual abuse material, and any other financial
transaction involving the proceeds of specified unlawful
activity (as defined in section 1956(c) of title 18, United
States Code).
(7) 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).
PURPOSE AND SUMMARY
Introduced on March 26, 2025, by Representative Nunn, H.R.
2384, the Financial Technology Protection Act, establishes the
Independent Financial Technology Working Group to Combat
Terrorism and Illicit Financing to study and report on
terrorist and illicit use of emerging technologies, including
digital assets, and provide recommendations to improve anti-
money laundering and counterterrorist financing efforts.
BACKGROUND AND NEED FOR LEGISLATION
The Financial Technology Protection Act was first
introduced by former Representative Ted Budd (R-NC) and
Representative Stephen Lynch (D-MA) in the 115th Congress,
where it passed on the House floor by a voice vote. This
legislation was re-introduced in both the 116th and the 117th
Congresses. In the 118th Congress, the Financial Technology
Protection Act passed the House by voice vote. Senators Ted
Budd (R-NC) and Kirsten Gillibrand (D-NY) also introduced a
Senate companion during the 118th Congress.
Although rates of illicit activity remain low in the
digital asset ecosystem, the ease by which digital asset
transactions can be carried out and settled has proven to be
used by bad actors. Additionally, because digital assets are a
nascent and ever-evolving technology, law enforcement bodies
around the world have struggled to keep pace with emerging
trends and types of crime in the ecosystem. At the same time,
however, the immutability and transparency of blockchain
networks means that law enforcement has unique insight into the
movement of illicit funds. Indeed, several high-profile cases
have been solved because law enforcement was able to leverage
the unique features of a blockchain network to track down and
ultimately reclaim ill-gotten gains.
There has been considerable focus by U.S. regulators and
Congress to curb nefarious activity with digital assets. In the
Treasury Department's 2024 National Strategy for Combating
Terrorist and Other Illicit Financing, Treasury identified
``improv[ing] and expand[ing] on public-private information-
sharing efforts'' as one of its priority action items.\1\ H.R.
2384 would provide a forum for such engagement and make
significant progress in helping the United States ensure that
Americans can interact with digital assets in a safe and secure
manner.
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\1\U.S. Dep't of The Treasury, 2024 National Strategy for
Combatting Terrorist and Other Illicit Financing (2024).
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COMMITTEE CONSIDERATION
115TH CONGRESS
The Subcommittee on Terrorism and Illicit Finance of the
Committee on Financial Services held a hearing on June 8, 2017,
``Virtual Currency: Financial Innovation and National Security
Implications.''
The Subcommittee on Terrorism and Illicit Finance of the
Committee on Financial Services held a hearing on June 20,
2018, ``Illicit Use of Virtual Currency and the Law Enforcement
Response.''
117TH CONGRESS
The Subcommittee on National Security, International
Development, and Monetary Policy of the Committee on Financial
Services held a hearing on June 16, 2021, ``Schemes and
Subversion: How Bad Actors and Foreign Governments Undermine
and Evade Sanctions Regimes.''
The Committee on Financial Services held a hearing on
February 8, 2022, ``Digital Assets and the Future of Finance:
Understanding the Challenges and Benefits of Financial
Innovation in the United States.''
The Subcommittee on National Security, International
Development, and Monetary Policy of the Committee on Financial
Services held a hearing on September 20, 2022, ``Under the
Radar: Alternative Payment Systems and the National Security
Impacts of Their Growth.''
118TH CONGRESS
The Subcommittee on Digital Assets, Financial Technology
and Inclusion of the Committee on Financial Services held a
hearing on March 9, 2023, ``Coincidence or Coordinated? The
Administration's Attack on the Digital Asset Ecosystem.''
The Subcommittee on National Security, Illicit Finance, and
International Financial Institutions of the Committee on
Financial Services held a hearing on April 27, 2023,
``Oversight of the Financial Crimes Enforcement Network
(FinCEN) and the Office of Terrorism and Financial Intelligence
(TFI).''
The Subcommittee on Digital Assets, Financial Technology,
and Inclusion of the Committee on Financial Services held a
hearing on November 15, 2023, ``Crypto Crime in Context:
Breaking Down the Illicit Activity in Digital Assets.''
The Subcommittee on Digital Assets, Financial Technology,
and Inclusion of the Committee on Financial Services held a
hearing on February 15, 2024, ``Crypto Crime in Context Part
II: Examining Approaches to Combat Illicit Activity.''
The Subcommittee on National Security, Illicit Finance, and
International Financial Institutions of the Committee on
Financial Services held a hearing on April 16, 2024, ``Held for
Ransom: How Ransomware Endangers Our Financial System.''
119TH CONGRESS
On March 26, 2025, Representative Zach Nunn (R-IA)
introduced H.R. 2384, the Financial Technology Protection Act,
with Representative Jim Himes (D-CT) as original cosponsor.
Representatives Warren Davidson (R-OH), Mike Lawler (R-NY), and
Josh Gottheimer (D-NJ) were added subsequently as cosponsors.
The bill was referred solely to the Committee on Financial
Services.
RELATED HEARINGS
Pursuant to clause 3(c)(6) of rule XIII of the Rules of the
House of Representatives, the following hearing was used to
develop H.R. 2384:
The Full Committee held a hearing on February 25, 2025,
entitled ``Examining Policies to Counter China.'' A discussion
draft version of the bill was considered in this hearing. The
following witnesses testified: John Miller, Senior Vice
President of Policy, Trust, Data, and Technology, and General
Counsel, Information Technology Industry Council; Nicholas
McMurray, Managing Director of International and Nuclear
Policy, ClearPath; John Cassara, retired United States Treasury
Department Special Agent; Martin Muhleisen, Nonresident Senior
Fellow at the GAO Economic Center at the Atlantic Council; and
Dr. Rush Doshi, C.V. Starr Senior Fellow for Asian Studies, and
Director of the China Strategy Initiative at the Council on
Foreign Relations, and an assistant professor at Georgetown
University.
The Committee on Financial Services met in open session on
April 2, 2025, to consider, among others, H.R. 2384.
COMMITTEE VOTES
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee Report to include for
each record vote on a motion to report the measure or matter
and on any amendments offered to the measure or matter the
total number of votes for and against and the names of the
Members voting for and against.
On April 2, 2025, H.R. 2384, as amended, was ordered to be
reported favorably to the House by a recorded vote of 49 ayes
and 0 nays, a quorum being present. (Record Vote No. FC-059).
Before the question to report was called, the Committee adopted
an amendment in the nature of a substitute, which made minor
edits and technical changes, offered by Representative Nunn.
The amendment was adopted by voice vote, a quorum being
present.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
COMMITTEE OVERSIGHT FINDINGS
Pursuant to clause 3(c) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee, based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives,
are incorporated in the descriptive portions of this report.
PERFORMANCE GOALS AND OBJECTIVES
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the goal of H.R. 2384 is to establish
the Independent Financial Technology Working Group to Combat
Terrorism and Illicit Financing to study and report on
terrorist and illicit use of emerging technologies, including
digital assets, and provide recommendations to improve anti-
money laundering and counterterrorist financing efforts.
COMMITTEE COST ESTIMATE
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 2384. The
Committee has requested but not received a cost estimate from
the Director of the Congressional Budget Office. However,
pursuant to clause 3(d)(1) of House rule XIII, the Committee
will adopt as its own the cost estimate by the Director of the
Congressional Budget Office once it has been prepared.
NEW BUDGET AUTHORITY AND CBO COST ESTIMATE
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, a cost estimate was not made
available to the Committee in time for the filing of this
report. The Chairman of the Committee shall cause such estimate
to be printed in the Congressional Record upon its receipt by
the Committee.
UNFUNDED MANDATES STATEMENT
The Committee has requested but not received from the
Director of the Congressional Budget Office an estimate of the
Federal mandates pursuant to section 423 of the Unfunded
Mandates Reform Act. The Committee will adopt the estimate once
it has been prepared by the Director.
EARMARK STATEMENT
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the resolution and states that the provisions
of the bill do not contain any congressional earmarks, limited
tax benefits, or limited tariff benefits within the meaning of
the rule.
FEDERAL ADVISORY COMMITTEE ACT STATEMENT
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
APPLICABILITY TO THE LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
DUPLICATION OF FEDERAL PROGRAMS
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes a program of
the Federal Government known to be duplicative of another
Federal program, including any program that was included in a
report to Congress pursuant to section 21 of the Public Law
111-139 or the most recent Catalog of Federal Domestic
Assistance.
SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION
Section 1. Short title
Section 1 provides the short title is the ``Financial
Technology Protection Act of 2025.''
Section 2. Independent Financial Technology Working Group to Combat
Terrorism and Illicit Financing
This section creates the Independent Financial Technology
Working Group to Combat Terrorism and Illicit Financing and
establishes the Under Secretary for Terrorism and Financial
Intelligence as the chair. The Working Group will have
representatives from the Department of Treasury, the Department
of Justice, the Department of Homeland Security, the Department
of State, the Office of the Director of National Intelligence,
and at least five individuals from the private sector with
equities in emerging technologies. The Working Group will
conduct research on the illicit use of emerging technologies
and develop legislative and regulatory proposals to mitigate
this activity. The Working Group will be required to submit
annual reports on its findings and determinations and sunset
after four years.
Section 2 also sunsets the Working Group.
Section 3. Preventing rogue and foreign actors from evading sanctions
Section 3 requires the Working Group to submit a report
that describes (1) the potential uses of digital assets by
States, non-State actors, foreign terrorist organizations, and
other terrorist groups to evade sanctions, finance terrorism,
or launder monetary instruments, and threaten the national
security of the United States; and (2) a strategy for the
United States to mitigate and prevent the illicit use of
digital assets.
Section 4. Definitions
This section defines various terms, including digital
asset, foreign terrorist organization, illicit use, and
emerging technologies.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
H.R. 2384 does not repeal or amend any section of a
statute. Therefore, the Office of Legislative Counsel did not
prepare the report required under clause 3(e) of rule XIII of
the House of Representatives.
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