Financial Technology Innovation and Defense Act

Summary: Financial Technology Innovation and Defense Act  This bill provides for the investigation of new financial technologies (e.g., digital currencies) and their use in terrorism and other illicit activities. Specifically, the bill:   establishes the Independent Financial Technology Task Force, which must report annually on such matters;  establishes the FinTech Leadership in Innovation Fund to support the development of tools and programs to detect such activity; and  directs the Department of the Treasury to provide a reward for a person who provides information regarding terrorist use of digital currencies.  

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Financial Technology Innovation and 
Defense 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.

    (a) Establishment.--There is established the Independent Financial 
Technology Task Force (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 the Central Intelligence Agency;
            (4) the Director of the Financial Crimes Enforcement 
        Network;
            (5) the Director of the Secret Service;
            (6) the Director of the Federal Bureau of Investigations; 
        and
            (7) 4 individuals appointed by the Secretary of the 
        Treasury to represent the private sector (including the banking 
        industry, non-profit groups, and think tanks).
    (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 program to pay a reward to 
any person who provides information leading to the conviction of an 
individual involved with terrorist use of digital currencies.
    (b) Use of Appropriated Funds.--To the extent provided in advance 
by appropriation Acts, the Secretary may use appropriated funds to pay 
a reward under this section with respect to information leading to a 
conviction described under subsection (a) if the amount of fines and 
forfeitures related to such conviction are not sufficient to pay such 
reward.
    (c) 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;
            (2) with respect to any such amounts remaining after 
        payments are made under paragraph (1), repay to the general 
        fund of the Treasury--
                    (A) any reward amounts paid using appropriated 
                funds under subsection (b); and
                    (B) the amount of any funds appropriated to the 
                FinTech Leadership in Innovation Fund established under 
                section 5; and
            (3) with respect to any such amounts remaining after 
        payments are made under paragraphs (2) and (3), deposit such 
        amounts in the FinTech Leadership in Innovation Fund.

SEC. 5. FINTECH LEADERSHIP IN INNOVATION FUND.

    (a) Establishment.--There is established a fund to be known as the 
``FinTech Leadership in Innovation Fund'', which shall be available to 
the Secretary of the Treasury, without further appropriation or fiscal 
year limitation, to carry out this section.
    (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, non-profit 
        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 non-proprietary or that is 
                community commons-based;
                    (B) computer code that is developed and released on 
                an open source basis; and
                    (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).
            (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.
                    (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. DEFINITIONS.

    For purposes of this Act:
            (1) 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.
            (2) 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 legal tender, whether or not 
                        denominated in 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.
            (3) 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).