The Financial Technology Protection Act, which passed the House unanimously, introduces a formal policymaking role for private-sector blockchain intelligence and fintech firms.
The US House of Representatives has passed the Financial Technology Protection Act, by voice vote. The bipartisan bill, sponsored by Rep. Zach Nunn, would establish an Independent Financial Technology Working Group to combat terrorism and illicit financing.
The working group is tasked with researching the use of digital assets by terrorists and other illicit actors, and developing legislative and regulatory proposals to strengthen anti-money laundering (AML) and counter-terrorist financing efforts in the US.
Among its members, the group must include at least five individuals appointed by the Under Secretary for Terrorism and Financial Crimes to represent the following:
- Financial technology companies
- Blockchain intelligence companies
- Financial institutions
- Institutions or organisations engaged in research
- (Institutions or organisations focused on individual privacy and civil liberties
The Secretary of the Treasury may also appoint additional individuals “as necessary to accomplish the duties described under subsection (b).”
According to the legislative text, the working group must submit an annual report to Congress for three years, including “the findings and determinations made by the Working Group in the previous year and any legislative and regulatory proposals developed by the Working Group.”
A final report is also required before the group is disbanded.
The inclusion of private-sector firms, particularly blockchain analytics providers, in a policymaking role represents a shift in how the federal government approaches crypto regulation. Firms engaged in blockchain tracing, sanctions screening, geofencing, and other compliance tools may now contribute directly to the legislative process through this structure.
The bill defines a blockchain intelligence company as a business “providing software, research, or other services (such as blockchain tracing tools, geofencing, transaction screening, the collection of business data, and sanctions screening)” that “support private and public sector investigations and risk management activities” and involve “cryptographically secured distributed ledgers or any similar technology or implementation.”
The working group will be chaired by the Secretary of the Treasury, acting through the Under Secretary for Terrorism and Financial Crimes. It includes senior-level representatives from ten federal agencies, including the Department of Justice, Federal Bureau of Investigation, Department of Homeland Security, and the Office of the Director of National Intelligence.
“More Iowans than ever are using digital payments and cryptocurrency to invest, send money, or run a small business,” said Nunn in a statement issued following the bill’s passage
“These tools create opportunity — but they’re also being exploited by terrorists and human traffickers to move money in the shadows.”
He noted that there are currently more than 15 federal agencies that oversee digital asset security. “They have overlapping rules, no shared plan, and zero direct coordination with the tech industry,” he said.
Under Section 3 of the bill, the President, acting through the Secretary of the Treasury and in consultation with the agencies represented in the working group, is required to submit a public report within 180 days of enactment.
This report must describe “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 must propose “a strategy for the United States to mitigate and prevent the illicit use of digital assets and other related emerging technologies.”
The report is to be made available in an unclassified and machine-readable format, posted publicly on the website of the Department of the Treasury.
The legislation defines “digital asset” as “any digital representation of value that is recorded on a cryptographically secured digital ledger or any similar technology.”
The working group will terminate four years after the date of enactment, unless ongoing activities require additional time to complete. In such cases, the group may temporarily continue for wind-up purposes. Any unused funds will be returned to the Treasury upon termination.
The bill now awaits consideration in the Senate.
