Overview
Title
To establish an Independent Financial Technology Working Group to Combat Terrorism and Illicit Financing, and for other purposes.
ELI5 AI
H.R. 2384 wants to create a special team of people from different jobs to figure out ways to stop bad guys from using digital money to do illegal things like funding terrorism or hiding stolen money. This team will also help the President come up with plans to keep everyone safe from these bad guys.
Summary AI
H.R. 2384 proposes the creation of an Independent Financial Technology Working Group aimed at addressing terrorism and illegal financial activities. This group will be made up of representatives from various government departments and private sectors like financial technology companies and blockchain intelligence firms. Their tasks will include researching the misuse of digital assets and suggesting improvements to laws and regulations to combat money laundering and other financial crimes. Additionally, the bill requires the President to provide a report and strategy on how to handle the misuse of digital assets by antagonistic players like foreign terrorists and rogue states.
Published
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AnalysisAI
General Summary of the Bill
The Financial Technology Protection Act of 2025 aims to establish an Independent Financial Technology Working Group designed to combat terrorism and illicit financing. This working group will be composed of representatives from key government departments, financial institutions, and research entities. The group is tasked with researching the misuse of digital assets, proposing legislative changes to enhance anti-money laundering efforts, and providing annual reports on its findings. Additionally, the bill calls for a strategy to deter rogue actors from leveraging digital technologies to evade sanctions and finance terrorism.
Summary of Significant Issues
One of the primary issues with the bill is the lack of detail regarding the budget and funding for the working group's operations. Identifying the source and amount of funding is crucial to avoid financial ambiguity and ensure effective oversight. Furthermore, the broad definition of what constitutes a "blockchain intelligence company" may create regulatory challenges, as it is not clear which entities fall under this category.
The timeline for the report on digital assets and evading sanctions is another point of concern. It potentially delays necessary actions to protect national security. Additionally, the bill does not specify clear metrics or goals for the proposed strategies, which could lead to ambiguous and potentially ineffective outcomes.
Impact on the Public
The establishment of this working group and the strategies it develops could significantly impact the public by enhancing national security and reducing the risk of digital assets being used for illicit purposes. By focusing on preventing the misuse of technological innovations, the bill seeks to protect citizens from the threats posed by terrorism and illicit financial activities.
However, the lack of clarity in funding and objectives might affect the group's effectiveness, potentially leading to the inefficient use of resources. Furthermore, if the strategies and reports do not have clear, measurable goals, the public may not see the intended benefits.
Impact on Specific Stakeholders
For government agencies and financial institutions involved, this bill represents a call to action, requiring them to collaborate and contribute resources to research and policy development. While this could lead to a more robust response to financial crimes, it may also impose additional burdens without clear funding provisions.
Stakeholders in the financial technology and blockchain industries might face increased scrutiny and regulation. On the one hand, this could lead to tighter security and reduced instances of financial crimes. On the other hand, the broad definitions in the bill might lead to compliance challenges and uncertainty within these sectors.
Overall, while the Financial Technology Protection Act of 2025 aims to bolster the fight against terrorism and financial crimes, the issues identified suggest revisions are needed to ensure transparency, clear objectives, and appropriate funding, which would ultimately enhance its impact and effectiveness.
Issues
The section on the establishment and duties of the Independent Financial Technology Working Group (Section 2) lacks specificity regarding the budget and funding sources, which could lead to financial ambiguity and oversight issues.
Section 3's timeline for submitting the report (180 days after enactment) regarding the prevention of rogue actors from using digital assets is lengthy, potentially delaying necessary action against national security threats.
The definition of 'blockchain intelligence company' in Section 4 is broad, which may create ambiguity regarding what entities are included or excluded, leading to potential regulatory challenges.
The strategy outlined in Section 3 lacks clear and measurable goals or metrics, which may result in ambiguous outcomes and ineffective mitigation of illicit digital asset use.
The absence of specific selection criteria for additional individuals appointed by the Secretary of the Treasury to the Working Group in Section 2 may lead to favoritism or lack of transparency.
The numerous committees listed under 'appropriate congressional committees' in Section 4 could complicate oversight and accountability processes due to potential bureaucratic complexities.
The requirement to make the reports in Section 3 publicly available in an unclassified format could compromise sensitive national security information.
The vague language concerning termination and wind-up activities in Section 2 may lead to procedural ambiguity, especially in defining 'ongoing research, proposals, or other related activities'.
The absence of clear accountability measures or follow-up practices in Section 3 beyond the initial report and subsequent briefing could result in ineffective oversight.
The definition of 'illicit use' in Section 4 could be expanded or clarified, particularly transactions related to child sexual abuse material, to ensure comprehensive coverage.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
The first section of the act states its name, which is the “Financial Technology Protection Act of 2025”.
2. Independent financial technology working group to combat terrorism and illicit financing Read Opens in new tab
Summary AI
The Independent Financial Technology Working Group is established to fight terrorism and illegal money activities by researching the misuse of digital assets and recommending policy changes to improve anti-money laundering efforts. This group consists of government representatives, financial tech and research entity representatives, and reports its findings yearly, with plans to conclude its activities four years after the law's enactment, unless extensions are needed for ongoing work.
3. Preventing rogue and foreign actors from evading sanctions Read Opens in new tab
Summary AI
The section outlines that the President must report on how digital assets could be used to evade sanctions or finance terrorism, and create a strategy to prevent such misuse. This report must be public, and the strategy should be reviewed by Congress within two years.
4. Definitions Read Opens in new tab
Summary AI
This section provides definitions for terms used in the Act, such as "appropriate congressional committees", which refers to specific committees in the Senate and House of Representatives. It also defines terms like "blockchain intelligence company", which are businesses offering services related to blockchain technology; "digital asset", which is any digital form of value recorded on a secured digital ledger; and "emerging technologies", which are areas listed by a National Science and Technology Council subcommittee. Other terms include a "foreign terrorist organization", as defined under U.S. law; "illicit use", which encompasses activities like fraud and money laundering; and "terrorist", including individuals engaging in domestic or international terrorism.