Financial Technology Innovation and Defense Act

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 Fund to encourage the development of tools and programs to combat terrorist and illicit use of digital currencies, and for other purposes. 1. Short title This Act may be cited as the Financial Technology Innovation and Defense Act 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. 3. Independent Financial Technology Task Force (a) Establishment There is established the Independent Financial Technology Task Force (the Task Force (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. 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. 5. FinTech Leadership in Innovation Fund (a) Establishment There is established a fund to be known as the FinTech Leadership in Innovation Fund (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 (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. 6. Definitions For purposes of this Act: (1) Bank Secrecy Act The term Bank Secrecy Act (A) section 21 of the Federal Deposit Insurance Act; (B) chapter 2 of title I of Public Law 91–508 (C) subchapter II of chapter 53 (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

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.