I 

115TH CONGRESS 

2D SESSION H. R. 5664 

To require a report on the possible exploitation of virtual currencies by 

terrorist actors, to authorize a competition program to identify regulatory 

solutions and develop technology with respect to counter terror threat 

financing, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 27, 2018 

Miss RICE of New York (for herself and Mr. KING of New York) introduced 

the following bill; which was referred to the Committee on Financial Services, and in addition to the Permanent Select Committee on Intelligence 

(Permanent Select), for a period to be subsequently determined by the 

Speaker, in each case for consideration of such provisions as fall within 

the jurisdiction of the committee concerned 

A BILL 

To require a report on the possible exploitation of virtual 

currencies by terrorist actors, to authorize a competition 

program to identify regulatory solutions and develop 

technology with respect to counter terror threat financing, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Stop Terrorist Use 

5 of Virtual Currencies Act’’. 


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1 SEC. 2. FINDINGS. 

2 The Congress finds the following: 

3 (1) Virtual currencies (VC) provide low-cost, 

4 high-speed means for verified transactions. 

5 (2) When used positively, VCs unite disparate 

6 financial markets and provide a convenient means 

7 for a number of constituencies, including the eco8 nomically marginalized, to conduct transactions 

9 cheaply across large geographic expanses. 

10 (3) Simultaneously, to the extent regulatory 

11 frameworks are premised on institution-based trans12 actions, VCs could be exploited by terrorists and 

13 cybercriminals to fund untraceable operations. 

14 (4) According to the Center for New American 

15 Security (CNAS), if VCs become sufficiently liquid 

16 and easily convertible, and terrorist groups acquire 

17 technical infrastructure needed to support VC activ18 ity at a significant scale, VCs could pose a highly 

19 dangerous threat to the United States and its part20 ners. 

21 (5) The Committee on Financial Services issued 

22 a report entitled, ‘‘Stopping Terror Finance: Secur23 ing the U.S. Financial Sector’’ in December, 2016, 

24 which includes numerous recommendations to en25 hance a whole-of-government approach towards 

26 counter terrorist financing. 


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1 SEC. 3. SENSE OF CONGRESS. 

2 It is the Sense of Congress that— 

3 (1) to the extent current statutes require finan4 cial institutions to serve as the first line of defense 

5 against illicit activity in the global financial system, 

6 and that VCs specifically bypass such institutions, 

7 the United States needs to adapt its financial regu8 latory framework to ensure adequate supervision of 

9 financial activity; 

10 (2) the President should develop principles to 

11 prioritize counter terrorist financing among other 

12 forms of illicit financial activity and provide rec13 ommendations to Congress to address this threat; 

14 (3) such principles should include a focus on in15 novation and public-private partnership; and 

16 (4) the Financial Crimes Enforcement Network 

17 (FinCEN) should consider issuing more guidance 

18 and facilitating the establishment of institutions pur19 suant to sections 314(a) and 314(b) of the USA PA20 TRIOT Act to facilitate greater information flow 

21 within and among global banks. 

22 SEC. 4. REPORT. 

23 The President, acting through the Secretary of the 

24 Treasury and the Director of National Intelligence, shall 

25 report on the possible exploitation of virtual currencies by 


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1 terrorist actors. Such report shall include the following 

2 elements: 

3 (1) Recommendations to update the regulatory 

4 oversight structure regarding virtual currencies to 

5 address transactions that bypass financial institu6 tions, including banks, Money Services Businesses 

7 (MSB), and other financial institutions subject to 

8 regulation. 

9 (2) Assessment of current efforts by Federal 

10 departments and agencies to study and collect intel11 ligence against the terror finance threat and money 

12 laundering methodologies. 

13 (3) Identification of gaps between Federal and 

14 State regulations which could be exploited for illicit 

15 funding. 

16 SEC. 5. INNOVATION COMPETITION. 

17 (a) AUTHORIZATION.—In order to facilitate public18 private partnership to develop and enhance illicit finance 

19 prevention systems, the Secretary of the Treasury may es20 tablish a program (referred to in this section as ‘‘the com21 petition’’) to be known as the ‘‘Competition for Innovation 

22 in Combating Illicit Terrorist Financing’’. 

23 (b) ACTIVITIES SUPPORTED.—The Competition may 

24 carry out, through the provision of grants or an annual 

25 reward, the following activities: 


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1 (1) COLLABORATIVE RESEARCH.—Provide 

2 grants, for not more than two years, to engage stu3 dents, entrepreneurs, and financial experts to iden4 tify regulatory solutions with respect to the exploi5 tation of VCs by terrorists and other criminals. 

6 (2) COMPETITION.—Establish an annual com7 petition for a reward of not more than $500,000 to 

8 any individual, team, or nongovernmental entity that 

9 develops technologies to facilitate counter terror 

10 threat financing, particularly that addresses the use 

11 of VCs or emerging financial technology. 

12 (c) MANAGEMENT.— 

13 (1) IN GENERAL.—The Secretary of Treasury, 

14 in consultation with the Director of National Intel15 ligence, shall promulgate guidelines for review of 

16 grant applications to the Competition. 

17 (2) REQUIREMENTS.—The guidelines required 

18 under this subsection shall address, at a minimum, 

19 the following: 

20 (A) Criteria by which grants shall be se21 lected. 

22 (B) Policies to ensure that grants are in 

23 furtherance of United States security objectives. 

24 (d) ACCEPTANCE OF FUNDS FROM OUTSIDE

25 SOURCES.—The Competition may accept funds from outVerDate Sep 11 2014 22:10 May 09, 2018 Jkt 079200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5664.IH H5664

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1 side sources, including foreign governments, nongovern2 mental organizations, and private business entities and, 

3 without further appropriation, use such funds to carry out 

4 the purpose of the Competition. 

5 (e) RULE OF CONSTRUCTION.—Nothing in this Act 

6 may be construed to make any grant recipient an agent 

7 or establishment of the United States Government. 

Æ 


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