Lawmakers Introduce Bill to Tackle Criminal and Terrorist Crypto Activities

Lawmakers introduced companion bills in the House and Senate to rein in financial technologies like cryptocurrencies from being used to illegally finance terrorism, according to an announcement late last week.

Reps. Zach Nunn, R-Iowa, and Jim Himes, D-Conn. introduced the House bill and Sens. Kirsten Gillibrand, D-N.Y., and Ted Budd, R-N.C., introduced a companion bill in the Senate.

The bipartisan Financial Technology Protection Act of 2023, would create the Independent Financial Technology Working Group to Combat Terrorism and Illicit Financing. It would research transactions related to terrorism and financial technology like cryptocurrency and make proposals to improve anti-money laundering and counter-terrorist financing efforts. 

“Digital assets are quickly emerging as a major way in which we spend money,” Nunn said. “This bipartisan bill will help ensure the United States is prepared to address security risks and prevent illicit money laundering while also protecting freedom for all Americans. We must do both simultaneously to ensure the long-term integrity of digital assets.”

The group will submit annual reports to Congress on its findings and recommendations. Additionally, the president must submit a report to Congress via the Treasury secretary outlining foreign actors’ potential uses of digital assets to evade sanctions and finance terrorism, as well as a  strategy to combat such uses. 

“As innovation in traditional finance continues, we must ensure that our financial systems are equipped to combat the utilization of these new technologies to evade sanctions, finance terrorism and launder money,” Gillibrand said.

The group will have one senior representative from 11 agencies: the Departments of Treasury, Justice, State and Homeland Security, as well as the Secret Service, Financial Crimes Enforcement Network, FBI, Drug Enforcement Administration, IRS, Office of Foreign Assets Control and the CIA. It will also have five members appointed by Treasury’s Under Secretary for Terrorism and Financial Intelligence and representing fintech companies, financial institutions, research institutions or organizations and blockchain intelligence companies.

The working group will last for four years from when the law is enacted.

“Unfortunately, criminals and terrorists are increasingly able to use new financial technologies to wreak havoc on our fellow citizens,” Budd said. “Our government needs to take this threat seriously, and that’s why this bill is so important. It takes meaningful strides to help stop the illicit use of new financial technologies.”

The bill unanimously passed the House in 2018 and 2019, but has not previously passed the Senate. 

“The rapid evolution of our financial systems demands increased attention to reduce risk and combat abuse by terrorist organizations,” Himes said.