[House Report 115-984]
[From the U.S. Government Publishing Office]
115th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 115-984
======================================================================
FINANCIAL TECHNOLOGY PROTECTION ACT
_______
September 26, 2018.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Hensarling, from the Committee on Financial Services, submitted the
following
R E P O R T
[To accompany H.R. 5036]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred
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, having considered the same, report favorably
thereon with amendments and recommend that the bill as amended
do pass.
The amendments are 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''.
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 TO COMBAT TERRORISM
AND ILLICIT FINANCING.
(a) Establishment.--There is established the Independent Financial
Technology Task Force to Combat Terrorism and Illicit Financing (the
``Task Force''), which shall consist of--
(1) the Secretary of the Treasury, who shall serve as the
head of the Task Force;
(2) the Attorney General;
(3) the Director of National Intelligence;
(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,
in consultation with the members of the Task Force described
under paragraphs (2) through (6), to represent the private
sector (including the banking industry, nonprofit groups, and
think tanks), with at least 2 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, without further appropriation or fiscal year limitation--
(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 and Financial Intelligence
Program.
SEC. 5. FINTECH LEADERSHIP IN INNOVATION AND FINANCIAL INTELLIGENCE
PROGRAM.
(a) Establishment.--There is established a program to be known as the
``Fintech Leadership in Innovation and Financial Intelligence
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. PREVENTING ROGUE AND FOREIGN ACTORS FROM EVADING SANCTIONS.
(a) Report and Strategy With Respect to Digital Currencies 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 Treasury and in consultation with the Attorney
General, the Secretary of State, the Secretary of Homeland
Security, the Director of National Intelligence, the Director
of the Office of Management and Budget, and the appropriate
Federal banking agencies and Federal functional regulators,
shall--
(A) submit to the appropriate congressional
committees a report that identifies and describes the
potential uses of digital currencies and other related
emerging technologies by states, non-state actors, and
foreign terrorist organizations to evade sanctions,
finance terrorism, or launder monetary instruments, and
threaten United States national security; and
(B) develop and submit to the appropriate
congressional committees a strategy to mitigate and
prevent such illicit use of digital currencies and
other related emerging technologies.
(2) Form; public availability.--
(A) Form.--The report and strategy required under
paragraph (1) shall be submitted in unclassified form,
but may contain a classified annex.
(B) Public availability.--The unclassified portion of
such report and strategy shall be made available to the
public and posted on the internet website of the
Department of Treasury--
(i) in pre-compressed, easily downloadable
versions that are made available in all
appropriate formats; and
(ii) in machine-readable format, if
applicable.
(3) Sources of information.--In preparing the report and
strategy required under paragraph (1), the President may
utilize any credible publication, database, 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
under subsection (a).
SEC. 7. DEFINITIONS.
For purposes of this Act:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on Financial Services, the
Committee on the Judiciary, the Permanent Select
Committee on Intelligence, and the Committee on Foreign
Affairs of the House of Representatives; and
(B) the Committee on Banking, Housing, and Urban
Affairs, the Committee on Homeland Security and
Governmental Affairs, the Committee on the Judiciary,
the Select Committee on Intelligence, and the Committee
on Foreign Relations of the Senate.
(2) Appropriate federal banking agencies.--The term
``appropriate Federal banking agencies'' has the meaning given
the term in section 3 of the Federal Deposit Insurance Act (12
U.S.C. 1813).
(3) 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.
(4) 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.
(5) Federal functional regulator.--The term ``Federal
functional regulator'' has the meaning given that term in
section 509 of the Gramm-Leach-Bliley Act (15 U.S.C. 6809).
(6) 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).
(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).
Amend the title so as to read:
A bill to establish an Independent Financial Technology
Task Force to Combat Terrorism and Illicit Financing, to
provide rewards for information leading to convictions related
to terrorist use of digital currencies, to establish a Fintech
Leadership in Innovation and Financial Intelligence Program to
encourage the development of tools and programs to combat
terrorist and illicit use of digital currencies, and for other
purposes.
PURPOSE AND SUMMARY
On February 15, 2018 Representative Ted Budd introduced
H.R. 5036, the ``Financial Technology Protection Act''. The
legislation would establish an Independent Financial Technology
Task Force to improve coordination between the private and
public sectors to research and develop legislative and
regulatory proposals to decrease terrorist and illicit use of
new financial technologies, including digital currencies. This
bill includes a Sense of Congress that, ``the Federal
Government should prioritize the investigation of terrorist and
illicit use of new financial technology, including digital
currencies.'' The bill would also require the Secretary of the
Treasury, in consultation with the Attorney General, to
establish a fund, not to exceed $450,000, to pay a reward to
any person who provides information leading to the conviction
of an individual involved with terrorist use of digital
currencies; and a ``FinTech'' Leadership in Innovation Program
to provide grants for the development of the tools and programs
to detect terrorist and illicit use of digital currencies.
BACKGROUND AND NEED FOR LEGISLATION
The goal of H.R. 5036 is to enable experts in the private
sector and the government to research and report to Congress on
how best to counter the illicit use of digital currencies.
Advances in technology and the widespread use of the
Internet and mobile communication devices have helped fuel the
growth in financial technology products and services. Digital
currencies in particular can make for speedier, more secure,
more cost-efficient, disintermediated, cross-border settlements
of transactions. However, the national security implications of
digital currency technology have increasingly been the subject
of much debate. The rise of digital currency in the financial
technology space has prompted expansive discussion about the
nexus between the use of these systems and financial crime. The
legislation is timely and as one witness noted in their June 7,
2017 testimony before the Subcommittee on Terrorism and Illicit
Finance, ``Unfortunately, this also means that, like the
internet, it is open to bad actors who take advantage of it.
Criminals certainly use it today, and we have begun to see some
nascent interest from terrorist groups.''\1\
---------------------------------------------------------------------------
\1\Testimony of Jerry Brito, Executive Director of Coin Center,
before the Committee on Financial Services, Subcommittee on Terrorism
and Illicit Finance on ``Financial Innovation and National Security
Implications'', June 8, 2017, available at https://
financialservices.house.gov/uploadedfiles/hhrg-115-ba01-wstate-jbrito-
20170608.pdf.
---------------------------------------------------------------------------
There have been a handful of instances in which terrorists
have used digital currencies to raise funds, such as through
solicited online donations using digital currencies. Criminal
organizations are exploiting the pseudo-anonymity of some
digital currencies through ransomware attacks and payment
facilitation via online dark web forums like Alpha Bay and Silk
Road. According to a report on the potential of terrorist use
of digital currencies by the Center for a New American
Security, however, ``Currently there is no more than anecdotal
evidence that terrorist groups have used virtual currencies to
support themselves.''\2\
---------------------------------------------------------------------------
\2\Zachary K. Goldman et al., Terrorist Use of Virtual Currencies:
Containing the Potential Threat, Center for a New American Security,
May 2017, at page 2, available at https://www.cnas.org/publications/
reports/terrorist-use-of-virtual-currencies.
---------------------------------------------------------------------------
The Royal United Services Institute (RUSI), the United
Kingdom's leading defense and security think tank, released a
paper in March 2017 about the nexus between digital currencies
and financial crime following the European Union's 5th Anti-
Money Laundering (AML) Directive. RUSI outlines that anonymity/
pseudonymity; rapid international transaction settlement; and
decentralization and contained environments are the main
factors providing a number of financial crime risks from
digital currencies. The Center for a New American Security
(CNAS) also released a similar paper in May 2017 putting
context around anecdotal evidence that terrorist groups have
used digital currencies. The use of digital currencies by
``lone wolf'' terrorists is a ``much bigger potential threat''
according to CNAS because of the small scales of funding needed
to execute attacks.
According to the RAND Corporation, ``there is ample
evidence that organized non-state actors--especially
cybercriminals--use existing digital currencies.'' One of the
most common criminal uses of digital currencies, particularly
with Bitcoin, is in cases of ransomware, ``where cybercriminals
encrypt a victim's data and only release it upon payment in a
VC [virtual currency].'' The WannaCry ransomware attack on May
15, 2017, where over 200,000 computers across 150 countries
were affected, reportedly only netted the hackers $50,000 in
Bitcoin due to the rapid intervention of a security researcher
in the United Kingdom. Had every victim met the hackers'
initial demands, the losses could have exceeded $60,000,000.
Another common criminal use of digital currencies is for the
purchase of illicit goods and drugs via online services on so-
called ``dark net'' forums including Silk Road and AlphaBay.
Taken down in 2013, the Silk Road facilitated Bitcoin
transactions, primarily for drugs, but also for stolen goods,
forged documents, and hacking services. When a larger dark net
marketplace, AlphaBay, was shut down in July 2017, the site had
transactions exceeding $1 billion in Bitcoin and other virtual
currencies.
As new financial products and technologies, including
digital currency, continue to change, legislation is necessary
so that those currencies are not used by illicit actors and
terrorist organizations to escape a money trail. H.R. 5036
achieves this important objective.
HEARINGS
The Committee on Financial Services Subcommittee on
Terrorism and Illicit Finance held a hearing examining matters
relating to H.R. 5036 on June 8, 2017 and June 20, 2018.
COMMITTEE CONSIDERATION
The Committee on Financial Services met in open session on
July 24, 2018 and ordered H.R. 5036 to be reported favorably to
the House as amended by a recorded vote of 57 yeas to 0 nays
(recorded vote no. FC-197), a quorum being present. [Before the
motion to report was offered, the Committee adopted an
amendment in the nature of a substitute offered by Mr. Budd by
voice vote.]
COMMITTEE VOTES
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. The
sole recorded vote was on a motion by Chairman Hensarling to
report the bill favorably to the House as amended. The motion
was agreed to by a recorded vote of 57 yeas to 0 nays (Record
vote no. FC-197), a quorum being present.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
COMMITTEE OVERSIGHT FINDINGS
Pursuant to clause 3(c)(1) 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 Committee states that H.R. 5036
will protect the use of digital currencies by providing for an
Independent Financial Technology Task Force to Combat Terrorism
and Illicit Financing, Rewards for Innovation Related to
Terrorist Use of Digital Currencies, a FinTech Leadership in
Innovation and Financial Intelligence Program, and a Report and
Strategy with Respect to Digital Currencies and Other Related
Emerging Technologies.
NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.
CONGRESSIONAL BUDGET OFFICE ESTIMATES
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, September 6, 2018.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 5036, the
Financial Technology Protection Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matthew
Pickford.
Sincerely,
Keith Hall,
Director.
Enclosure.
H.R. 5036--Financial Technology Protection Act
H.R. 5036 would establish within the Department of the
Treasury an Independent Financial Technology Task Force. The
task force members would include six representatives from
federal agencies, and six from the private sector with
experience in financial technology. The task force would
research and develop legislative and regulatory proposals to
reduce the illicit use of financial technologies. The bill also
would fund a whistle blower rewards program and a grant program
aimed at curbing the use of digital currencies by terrorists.
Based on the cost of similar task forces, CBO estimates
that implementing H.R. 5036 would require four employees
annually at a total average annual cost of $300,000, plus
additional expenses for overhead, supplies, and the expenses of
nonfederal task force members. In total, CBO estimates that the
task force would cost about $700,000 annually, or about $4
million over the 2018-2023 period.
Individuals using digital currencies for terrorist purposes
are subject to fines and the forfeiture of property or assets.
Those proceeds are recorded on the budget as revenues and can
be spent without further appropriation. Under the bill, those
revenues could be used by the task force to reward any person
who provides information leading to the conviction of an
individual involved with the terrorist use of digital
currencies and to fund a grant program to develop tools and
programs to detect the illicit use of digital currencies.
Because those funds can already be spent under current law, CBO
estimates that there would be no significant effect on direct
spending.
Because enacting the bill would affect direct spending,
pay-as-you-go procedures apply. Enacting the bill would not
affect revenues.
CBO estimates that enacting H.R. 5036 would not increase
net direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2029.
H.R. 5036 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act.
The CBO staff contact for this estimate is Matthew
Pickford. The estimate was reviewed by H. Samuel Papenfuss,
Deputy Assistant Director for Budget Analysis.
FEDERAL MANDATES STATEMENT
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995.
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
ADVISORY COMMITTEE STATEMENT
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
APPLICABILITY TO 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 the section
102(b)(3) of the Congressional Accountability Act.
EARMARK IDENTIFICATION
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 bill 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.
DUPLICATION OF FEDERAL PROGRAMS
In compliance with 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: (1) a
program of the Federal Government known to be duplicative of
another Federal program; (2) a program included in any report
from the Government Accountability Office to Congress pursuant
to section 21 of Public Law 111-139; or (3) a program related
to a program identified in the most recent Catalog of Federal
Domestic Assistance, published pursuant to the Federal Program
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No.
98-169).
DISCLOSURE OF DIRECTED RULEMAKING
Pursuant to section 3(i) of H. Res. 5, (115th Congress),
the following statement is made concerning directed rule
makings: The Committee estimates that the bill requires no
directed rule makings within the meaning of such section.
SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION
Section 1. Short title
This Section cites H.R. 5036 as the ``Financial Technology
Protection Act.''
Section 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.
Section 3. Independent financial technology task force to combat
terrorism and illicit financing
The Task Force has the goal of improving coordination
between the private and public sectors to research and develop
legislative and regulatory proposals to decrease terrorist and
illicit use of new financial technologies, including digital
currencies. The Task Force is required to report to Congress
its findings and determinations not later than one year after
the enactment date of this Act.
The Task Force is comprised of the Secretary of the
Treasury, the Attorney General, the Director of National
Intelligence, the Director of the Financial Crimes Enforcement
Network (FinCEN), the Director of the Secret Service, the
Director of the Federal Bureau of Investigation (FBI), and six
individuals from the private sector appointed by the Secretary
of the Treasury, in consultation with members of the Task
Force, at least two of which must have experience in the
financial technology industry.
The Task Force shall conduct independent research on
terrorist and illicit use of new financial technologies,
including digital currencies, and develop legislative and
regulatory proposals to improve counter-terrorist and counter-
illicit financing efforts.
Section 4. Rewards for information related to terrorist use of digital
currencies
The Secretary of the Treasury, in consultation with the
Attorney General, to establish a fund, not to exceed $450,000,
to pay a reward to any person who provides information leading
to the conviction of an individual involved with terrorist use
of digital currencies. 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, without further appropriation or fiscal year
limitation--use such amounts to pay rewards under this section
related to such conviction; and with respect to any such
amounts remaining after payments are made, deposit such amounts
in the FinTech Leadership in Innovation and Financial
Intelligence Program.
Section 5. FinTech leadership in innovation and financial intelligence
program
The Secretary of the Treasury shall make grants for the
development of tools and programs to detect terrorist and
illicit use of digital currencies. 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.
The Secretary may make grants to carry out pilot programs
using such tools, the development of test cases using such
tools, and research related to such tools. In making grants,
the Secretary shall give preference to technology that is
nonproprietary or that is community commons-based; computer
code that is developed and released on an open source basis;
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 tools and incentives that are on decentralized
platforms.
Any new technology developed with a grant 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). Tools and programs developed with a grant
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. Tools and programs developed
with a grant shall be freely accessible and usable by the
public. This requirement may be fulfilled by publicly availing
application programming interfaces or software development
kits.
Section 6. Preventing rogue and foreign actors from evading sanctions
Not later than 180 days after the date of the enactment of
this Act, the President, acting through the Secretary of
Treasury and in consultation with the Attorney General, the
Secretary of State, the Secretary of Homeland Security, the
Director of National Intelligence, the Director of the Office
of Management and Budget, and the appropriate Federal banking
agencies and Federal functional regulators, shall submit to the
appropriate congressional committees a report that identifies
and describes the potential uses of digital currencies and
other related emerging technologies by states, non-state
actors, and foreign terrorist organizations to evade sanctions,
finance terrorism, or launder monetary instruments, and
threaten United States national security; and develop and
submit to the appropriate congressional committees a strategy
to mitigate and prevent such illicit use of digital currencies
and other related emerging technologies. The report and
strategy shall be submitted in unclassified form, but may
contain a classified annex. The unclassified portion of such
report and strategy shall be made available to the public and
posted on the internet website of the Department of Treasury.
Not later than two 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.
Section 6. Definitions
The term ``appropriate congressional committees'' means the
Committee on Financial Services, the Committee on the
Judiciary, the Permanent Select Committee on Intelligence, and
the Committee on Foreign Affairs of the House of
Representatives; and the Committee on Banking, Housing, and
Urban Affairs, the Committee on Homeland Security and
Governmental Affairs, the Committee on the Judiciary, the
Select Committee on Intelligence, and the Committee on Foreign
Relations of the Senate.
The term ``appropriate Federal banking agencies'' has the
meaning given the term in section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813). The term ``Bank Secrecy Act''
means section 21 of the Federal Deposit Insurance Act; chapter
2 of title I of Public Law 91-508; and subchapter II of chapter
53 of title 31, United States Code. The term ``digital
currency'' means a digital representation of value that is used
as a medium of exchange, unit of account, or store of value;
and is not established legal tender, whether or not denominated
in established legal tender; and does not include 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
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.
The term ``Federal functional regulator'' has the meaning
given that term in section 509 of the Gramm-Leach-Bliley Act
(15 U.S.C. 6809). 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). 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).
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
H.R. 5036 does not repeal or amend any section of a
statute. Therefore, the Office of Legislative Counsel did not
prepare the report contemplated by Clause 3(e)(1)(B) of rule
XIII of the House of Representatives.
[all]