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The United States House of Representatives passed the bipartisan Financial Technology Protection Act unanimously, which, if made law, would establish a working group made up of key federal government departments, intelligence agencies, and private sector experts to help combat terrorism and illicit financing on digital platforms.
The bill, introduced in April 2023 by Representatives Zach Nunn (R-IA) and Jim Himes (D-CT), aims to protect the emerging digital assets space by establishing the “Independent Financial Technology Working Group to Combat Terrorism and Illicit Financing” under the Department of Treasury.
Specifically, the group would include “senior level representation” from the Department of Justice (DoJ), U.S. Secret Service, Financial Crimes Enforcement Network (FinCEN), Federal Bureau of Investigation (FBI), Department of State, Drug Enforcement Administration (DEA), Internal Revenue Service (IRS), Department of Homeland Security (DHS), Office of Foreign Assets Control and Central Intelligence Agency (OFAC).
However, the working group wouldn’t just include government agencies; it would also include five digital asset industry leaders from financial technology companies, financial institutions, organizations engaged in research, and blockchain intelligence companies.
Once formed, the group would research transactions related to terrorism and illicit financial technology and, where possible, propose legislation to help prevent money laundering, improve counter-terrorist activity, and combat illicit financing in the United States.
“This bipartisan bill will help ensure the United States is prepared to address security risks and prevent illicit money laundering while also protecting consumer choice for all Americans,” said Rep. Nunn. “We must do both simultaneously to ensure the long-term integrity of digital assets.”
According to Nunn, the ultimate goal of the group is to encourage public-private sector partnerships in examining and tackling issues surrounding illicit finance in the digital asset ecosystem.
Despite resoundingly passing its full house vote, it’s not a done deal for the bill. It will now head to the Senate Committee on Banking, Housing, and Urban Affairs before eventually ending up on the desk of the President for final approval.
This will take some time, and it’s uncertain who this President may be. However, in terms of digital asset bills, the Financial Technology Protection Act is fairly uncontroversial, as it does not create any new laws, restrictions, or classifications, so there is a good chance the working group will eventually become a reality.
The only other digital asset bill that has made substantial progress in recent months is the Financial Innovation and Technology for the 21st Century (FIT21) Act, which also progressed out of committee and was approved by a full House vote in May.
The FIT21 Act would make more significant changes to digital asset oversight by boosting the oversight role of the Commodity Futures Trading Commission (CFTC) while substantially hamstringing the Securities and Exchange Commission (SEC).
However, FIT21 is still awaiting debate in the Senate, and with a momentous election looming in November, its future remains very uncertain.
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