The Financial Technology Protection Act of 2025 would create the Independent Financial Technology Working Group to Combat Terrorism and Illicit Financing, chaired by the Secretary of the Treasury. The group includes senior representatives from a broad set of agencies and at least five appointees representing fintechs, blockchain intelligence firms, financial institutions, researchers, and privacy-focused organizations.
Its mandate is to research how digital assets and related emerging technologies are used for illicit purposes and to develop legislative and regulatory proposals to strengthen anti-money laundering and counter-terrorist financing efforts.
The act also requires annual reports for the first three years and a final report detailing findings, proposals, and activities. A separate 180‑day report and strategy on mitigating illicit use of digital assets must be submitted to Congress, with unclassified portions publicly accessible.
The Working Group sunsets four years after enactment (with a wind-down option) and any unobligated funds are returned to the Treasury.
At a Glance
What It Does
Establishes a chaired Working Group with agency representation and five+ industry/academic appointees to study digital assets and emerging tech and to draft AML/CTF proposals.
Who It Affects
Federal agencies, licensed financial institutions, fintechs, blockchain firms, researchers, and privacy/civil liberties groups that interact with digital assets and enforcement policies.
Why It Matters
Sets a formal, cross‑agency mechanism to understand evolving digital asset risks and to generate policy proposals, while incorporating public reporting and privacy safeguards.
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What This Bill Actually Does
The bill creates a new Independent Financial Technology Working Group to study the use of digital assets by terrorists and illicit actors and to develop policy proposals aimed at improving anti-money laundering and counter‑terrorist financing efforts in the United States. The Working Group is chaired by the Treasury Secretary and includes senior representatives from a set list of federal agencies.
It also appoints at least five individuals representing fintechs, blockchain intelligence firms, financial institutions, researchers, and privacy‑focused organizations to ensure diverse input.
The Working Group’s duties are twofold: conduct research on how digital assets and related emerging technologies are used for illicit purposes, and develop legislative and regulatory proposals to strengthen AML/CTF efforts. It must produce annual reports for three years and a final report detailing findings and policy recommendations.
A separate 180‑day report on sanctions evasions and a mitigation strategy is due to Congress, with the public portions posted online. The group will terminate four years after enactment, unless wind‑up activities extend the period, and unobligated funds must be returned to Treasury.
The bill also defines key terms related to digital assets, emerging technologies, and illicit finance to ground the policy in clear concepts.
The Five Things You Need to Know
The Working Group is chaired by the Secretary of the Treasury and includes senior agency representatives from 11 departments/offices.
At least five appointees must represent fintechs, blockchain intelligence firms, financial institutions, researchers, and privacy/civil liberties organizations, with room for more as needed.
The Group must research illicit uses of digital assets and emerging tech and draft AML/CTF proposals for consideration by Congress and agencies.
The Group must deliver annual reports for three years and a final report detailing findings and activities, plus an unclassified public‑facing description of the strategy.
The Act sunsets after four years (with a wind‑up option) and returns unobligated funds to Treasury.
Section-by-Section Breakdown
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Short Title
The bill may be cited as the Financial Technology Protection Act of 2025.
Independent Financial Technology Working Group—Establishment and Composition
There is established the Independent Financial Technology Working Group to Combat Terrorism and Illicit Financing (the Working Group). The Secretary of the Treasury, acting through the Under Secretary for Terrorism and Financial Crimes, serves as chair. Senior-level representatives are drawn from the Department of the Treasury, the Office of Terrorism and Financial Intelligence, the IRS, the Department of Justice, the FBI, the Drug Enforcement Administration, the Department of Homeland Security, the United States Secret Service, the Department of State, and the Office of the Director of National Intelligence. The Under Secretary must appoint at least five members representing financial technology companies, blockchain intelligence firms, financial institutions, research institutions, and privacy/civil liberties organizations, with additional appointments as needed to fulfill duties.
Preventing Sanctions Evasion—For Digital Assets and Emerging Technologies
Within 180 days of enactment, the President, through the Secretary of the Treasury and in consultation with the agency heads represented on the Working Group, must submit to Congress a report describing how digital assets and related technologies might be used to evade sanctions, finance terrorism, or launder funds, and a strategy to mitigate these risks. The report should be unclassified with a possible classified annex and released publicly in machine‑readable formats. The President may use credible public sources and information from government and non‑government entities. Not later than two years after enactment, the Secretary must brief Congress on the implementation of the strategy.
Definitions
Key terms include: appropriate congressional committees, blockchain intelligence company, digital asset, emerging technologies (as listed by the National Science and Technology Council), foreign terrorist organization, illicit use, terrorist, and related terms. These definitions anchor the policy in widely understood concepts and ensure consistent application across agencies.
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Explore Finance in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Financial technology companies gain a formal seat at the Working Group, shaping how AML/CTF measures apply to innovative platforms.
- Blockchain intelligence companies gain a role in advising on tracing tools, geofencing, and sanctions screening used by both private and public sectors.
- Banks and other financial institutions have representation and a pathway to influence future AML/CTF standards and enforcement expectations.
- Academic and research institutions can contribute to the evidence base and policy options through participation and data sharing.
- Privacy and civil liberties organizations gain formal input to balance security goals with rights protections in proposed policies.
Who Bears the Cost
- Small and mid‑size fintechs may incur costs to align with new AML/CTF proposals developed through the Working Group.
- Financial institutions could face costs to implement enhanced controls and reporting as policy options are adopted.
- Federal agencies represented on the Working Group must allocate staff time and budget to research and report findings.
- Privacy‑focused organizations may need resources to participate in policy discussions and monitor civil liberties implications.
Key Issues
The Core Tension
The central policy dilemma is balancing rapid, evidence‑based strengthening of AML/CTF measures for digital assets with the protection of civil liberties and privacy. The four‑year sunset creates a time‑boxed window for analysis and policy development, which may pressure rapid decision‑making while risking premature or incomplete policy outcomes.
The Act creates a formal, cross‑agency Working Group tasked with researching illicit uses of digital assets and emerging technologies and drafting legislative and regulatory proposals to strengthen AML/CTF efforts. It requires annual reporting for three years and a final report, plus an unclassified public‑facing strategy.
A 180‑day report and strategy are due to Congress, with implementation briefings required within two years. The Working Group terminates four years after enactment unless wind‑up activities extend that period, and unobligated funds are returned to the Treasury.
The definitions section anchors terms like digital asset, blockchain intelligence company, and illicit use to ensure consistent interpretation across agencies.
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