Digital Asset Market Clarity Act

(a) Short title. This section may be cited as the Financial Technology Protection Act.

(b) Definitions. In this section:

(1) Appropriate congressional committees. The term appropriate congressional committees means—

(A) the Committee on Banking, Housing, and Urban Affairs of the Senate;

(B) the Committee on Agriculture, Nutrition, and Forestry of the Senate;

(C) the Committee on Financial Services of the House of Representatives; and

(D) the Committee on Agriculture of the House of Representatives.

(2) Distributed ledger analytics company. The term distributed ledger analytics company means any business providing software, research, or other services (such as tracing tools, geofencing, transaction screening, the collection of business data, and sanctions screening) that—

(A) support private and public sector investigations and risk management activities; and

(B) involve cryptographically secured distributed ledgers or any similar technology or implementation.

(3) Emerging technologies. The term emerging technologies means the critical and emerging technology areas listed in the Critical and Emerging Technologies List developed by the Fast Track Action Subcommittee on Critical and Emerging Technologies of the National Science and Technology Council, including any updates to such list.

(4) 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).

(5) Illicit use. The term illicit use includes fraud, money laundering, terrorist financing, the purchase and sale of illicit goods, trafficking of fentanyl (including fentanyl precursors and trade in other illicit drugs), sanctions evasion, theft of funds, funding of illegal activities, transactions related to child sexual abuse material or elder fraud abuse, and any other financial transaction involving the proceeds of specified unlawful activity (as defined in section 1956(c) of title 18, United States Code).

(6) State sponsor of terrorism. The term state sponsor of terrorism means a country determined by the Secretary of State to have repeatedly provided support for acts of international terrorism under section 40 of the Arms Export Control Act (22 U.S.C. 2780) or section 620A of the Foreign Assistance Act of 1961 (22 U.S.C. 2371).

(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).

(8) Transnational organized crime. The term transnational organized crime has the meaning given the term in section 284 of title 10, United States Code.

(c) Independent financial technology working group to combat terrorism, narcotics trafficking, and illicit financing

(1) Establishment. There is established the Independent Financial Technology Working Group to Combat Terrorism, Narcotics Trafficking, and Illicit Financing (in this section referred to as the Working Group ), which shall consist of the following:

(A) The Secretary of the Treasury or their designee, who shall serve as the chair of the Working Group.

(B) A senior-level representative from each of the following:

(i) The Department of the Treasury.

(ii) The Office of Terrorism and Financial Intelligence.

(iii) The Internal Revenue Service.

(iv) The Department of Justice.

(v) The Federal Bureau of Investigation.

(vi) The Drug Enforcement Administration.

(vii) The Department of Homeland Security.

(viii) The United States Secret Service.

(ix) The Department of State.

(x) The Office of the Director of National Intelligence.

(C) At least 5 individuals appointed by the Secretary of the Treasury to represent the following:

(i) Digital asset companies.

(ii) Distributed ledger analytics companies.

(iii) Financial institutions.

(iv) Institutions or organizations engaged in research.

(v) Institutions or organizations focused on individual privacy and civil liberties.

(D) Such additional individuals as the Secretary of the Treasury may appoint as necessary to accomplish the duties described in paragraph (2).

(2) Duties. The Working Group shall—

(A) conduct research on the illicit use of digital assets and other related emerging technologies, including by terrorists, foreign terrorist organizations, state sponsors of terrorism, and transnational organized crime groups; and

(B) develop legislative and regulatory proposals to improve anti-money laundering, counter-terrorist, and other counter-illicit financing efforts in the United States.

(3) Reports

(A) In general. Not later than 1 year after the date of enactment of this Act, and annually for the 3 years thereafter, the Working Group shall submit to the Secretary of the Treasury, the heads of each agency represented in the Working Group pursuant to paragraph (1)(B), and the appropriate congressional committees a report containing the findings and determinations made by the Working Group in the previous year and any legislative and regulatory proposals developed by the Working Group.

(B) Final report. Before the date on which the Working Group terminates under paragraph (4)(A), the Working Group shall submit to the appropriate congressional committees a final report detailing the findings, recommendations, and activities of the Working Group, including any final results from the research conducted by the Working Group.

(4) Sunset

(A) In general. The Working Group shall terminate on the later of—

(i) the date that is 4 years after the date of enactment of this Act; or

(ii) the date on which the Working Group completes any wind-up activities described in subparagraph (B).

(B) Authority to wind up activities. If there are research, proposals, or other related activities of the Working Group ongoing as of the date that is 4 years after the date of enactment of this Act, the Working Group may temporarily continue working in order to wind up such activities.

(C) Return of appropriated funds. On the date on which the Working Group terminates under subparagraph (A), any unobligated funds appropriated to carry out this subsection shall be transferred to the Treasury.