House of Representatives Passes Financial Technology Protection Act

The House of Representatives has passed by a voice vote the “Financial Technology Protection Act.”

Sponsored by Representative Ted Budd, the bill (HR 5036) would establish a Fintech task force that ostensibly would improve coordination between public and private sectors which may benefit from innovations in finance. The task force would also advocate on behalf of legislative and regulatory proposals to “decrease terrorist and illicit use of new financial technologies, including digital currencies.”

The following public officials would participate in the task force:

  • The Secretary of the Treasury (who will chair the Task Force)
  • US Attorney General
  • Director of the CIA
  • Director of FINCEN
  • Director of the Secret Service
  • Director of the FBI
  • along with six other appointed individuals ostensibly selected from the banking and Fintech sector.

Additionally, the legislation “provides for the investigation of new financial technologies (e.g., digital currencies) and their use in terrorism and other illicit activities” including:

  • Establishes the FinTech Leadership in Innovation Program to support the development of tools and programs to detect such activities; and
  • Directs the Department of the Treasury to provide a reward (not to exceed $450,000) for a person who provides information regarding terrorist use of digital currencies.
  • Establish the Fintech Leadership in Innovation Program to support the development of tools and programs to detect such activities; and
  • Directs the Department of the Treasury to provide a reward for a person who provides information regarding terrorist use of digital currencies.

The language of the bill appears slanted towards enforcement against illicit activities as opposed to encouraging the beneficial aspects of Fintech innovation.

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