House Passes Financial Technology Protection Act to Tackle Illicit Use of Crypto

The Financial Technology Protection Act has successfully passed the House of Representatives through a voice vote, approximately a year after being moved out of committee. This bipartisan legislation, spearheaded by Representatives Zach Nunn and Jim Himes, aims to tackle the misuse of digital assets by establishing a dedicated working group.

On July 22, the House showed overwhelming support for the bill, which was introduced in April 2023. The primary focus of this act is to address how digital currencies might be used by rogue states and foreign entities to bypass economic sanctions. The bill proposes a coordinated effort among various federal agencies, including the Justice Department, Internal Revenue Service, and Office of Foreign Assets Control, alongside five leaders from the crypto industry.

“This bipartisan bill will help ensure the United States is prepared to address security risks and prevent illicit money laundering while also protecting consumer choice for all Americans,” said Representative Nunn. He emphasized the importance of balancing security with consumer rights to maintain the integrity of digital assets.

The Financial Technology Protection Act is one of the few cryptocurrency-related bills that made it through the House Financial Services Committee in July 2023. Another significant piece of legislation, the Financial Innovation and Technology for the 21st Century (FIT21) Act, was approved by the House in May and is now awaiting Senate approval.

However, the political climate, especially with the upcoming US election, might influence the legislative approach to crypto regulation. Notably, President Joe Biden, before announcing he would not seek reelection, vetoed a resolution aimed at reversing a Securities and Exchange Commission rule that classified crypto as a liability on bank balance sheets. The future of crypto legislation remains uncertain as election dynamics unfold.