Title: Stop Terrorist Use of Virtual Currencies Act
Policy area: Finance and Financial Sector

Summary:
Stop Terrorist Use of Virtual Currencies Act
This bill directs the Department of the Treasury and the Office of the Director of National Intelligence to report on the use of virtual currencies by terrorists. Treasury may establish a grant program to develop and enhance illicit-finance prevention systems.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5664 Introduced in House (IH)]

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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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Stop Terrorist Use of Virtual 
Currencies Act''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) Virtual currencies (VC) provide low-cost, high-speed 
        means for verified transactions.
            (2) When used positively, VCs unite disparate financial 
        markets and provide a convenient means for a number of 
        constituencies, including the economically marginalized, to 
        conduct transactions cheaply across large geographic expanses.
            (3) Simultaneously, to the extent regulatory frameworks are 
        premised on institution-based transactions, VCs could be 
        exploited by terrorists and cybercriminals to fund untraceable 
        operations.
            (4) According to the Center for New American Security 
        (CNAS), if VCs become sufficiently liquid and easily 
        convertible, and terrorist groups acquire technical 
        infrastructure needed to support VC activity at a significant 
        scale, VCs could pose a highly dangerous threat to the United 
        States and its partners.
            (5) The Committee on Financial Services issued a report 
        entitled, ``Stopping Terror Finance: Securing the U.S. 
        Financial Sector'' in December, 2016, which includes numerous 
        recommendations to enhance a whole-of-government approach 
        towards counter terrorist financing.

SEC. 3. SENSE OF CONGRESS.

    It is the Sense of Congress that--
            (1) to the extent current statutes require financial 
        institutions to serve as the first line of defense against 
        illicit activity in the global financial system, and that VCs 
        specifically bypass such institutions, the United States needs 
        to adapt its financial regulatory framework to ensure adequate 
        supervision of financial activity;
            (2) the President should develop principles to prioritize 
        counter terrorist financing among other forms of illicit 
        financial activity and provide recommendations to Congress to 
        address this threat;
            (3) such principles should include a focus on innovation 
        and public-private partnership; and
            (4) the Financial Crimes Enforcement Network (FinCEN) 
        should consider issuing more guidance and facilitating the 
        establishment of institutions pursuant to sections 314(a) and 
        314(b) of the USA PATRIOT Act to facilitate greater information 
        flow within and among global banks.

SEC. 4. REPORT.

    The President, acting through the Secretary of the Treasury and the 
Director of National Intelligence, shall report on the possible 
exploitation of virtual currencies by terrorist actors. Such report 
shall include the following elements:
            (1) Recommendations to update the regulatory oversight 
        structure regarding virtual currencies to address transactions 
        that bypass financial institutions, including banks, Money 
        Services Businesses (MSB), and other financial institutions 
        subject to regulation.
            (2) Assessment of current efforts by Federal departments 
        and agencies to study and collect intelligence against the 
        terror finance threat and money laundering methodologies.
            (3) Identification of gaps between Federal and State 
        regulations which could be exploited for illicit funding.

SEC. 5. INNOVATION COMPETITION.

    (a) Authorization.--In order to facilitate public-private 
partnership to develop and enhance illicit finance prevention systems, 
the Secretary of the Treasury may establish a program (referred to in 
this section as ``the competition'') to be known as the ``Competition 
for Innovation in Combating Illicit Terrorist Financing''.
    (b) Activities Supported.--The Competition may carry out, through 
the provision of grants or an annual reward, the following activities:
            (1) Collaborative research.--Provide grants, for not more 
        than two years, to engage students, entrepreneurs, and 
        financial experts to identify regulatory solutions with respect 
        to the exploitation of VCs by terrorists and other criminals.
            (2) Competition.--Establish an annual competition for a 
        reward of not more than $500,000 to any individual, team, or 
        nongovernmental entity that develops technologies to facilitate 
        counter terror threat financing, particularly that addresses 
        the use of VCs or emerging financial technology.
    (c) Management.--
            (1) In general.--The Secretary of Treasury, in consultation 
        with the Director of National Intelligence, shall promulgate 
        guidelines for review of grant applications to the Competition.
            (2) Requirements.--The guidelines required under this 
        subsection shall address, at a minimum, the following:
                    (A) Criteria by which grants shall be selected.
                    (B) Policies to ensure that grants are in 
                furtherance of United States security objectives.
    (d) Acceptance of Funds From Outside Sources.--The Competition may 
accept funds from outside sources, including foreign governments, 
nongovernmental organizations, and private business entities and, 
without further appropriation, use such funds to carry out the purpose 
of the Competition.
    (e) Rule of Construction.--Nothing in this Act may be construed to 
make any grant recipient an agent or establishment of the United States 
Government.
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