US Lawmakers Reintroduce Crypto Crime Bill to Combat 'Terrorist Use'

Rep. Ted Budd, who serves North Carolina’s 13th congressional district, has reintroduced his Financial Technology Protection Act, aimed at reducing crypto-financed criminal activity.

Two versions of the bill were introduced twice before, in February 2018 and January 2019. Both passed the House before languishing in the Senate.

The full text of the newest bill isn’t available just yet, but we do have the title, which is somewhat expository:

“To establish an Independent Financial Technology Task Force to Combat Terrorism and Illicit Financing, to provide rewards for information leading to convictions related to terrorist use of digital currencies, to establish a Fintech Leadership in Innovation and Financial Intelligence Program to encourage the development of tools and programs to combat terrorist and illicit use of digital currencies, and for other purposes.”

Reps. Stephen Lynch (D-MA), Byron Donalds (R-FL), Warren Davidson (R-OH), and Darren Soto (D-FL) have all co-sponsored the new legislation.

Though data from Chainalysis suggests that illicit transactions make up just over 1% of all crypto activity, crypto-financed crimes remain an issue: yesterday, Chainalysis released research linking a half-million dollar Bitcoin payment to members of the alt-right, some of whom were involved in the Trump-incited capitol riot earlier this month.

On the day of the riot, which resulted in the deaths of five people, Davidson wrote on Twitter that “it was encouraging to see (hundreds of thousands?) of people from all across America who came to have their voices heard.”

Budd’s office also released a statement about the bill's reintroduction: “As we move into an increasingly digital and technology centered world, criminals and terrorists are using new technologies to wreak havoc on our fellow Americans. My bill will help put a stop to it.”

Budd, Lynch, Davidson, and Soto are all members of the Congressional Blockchain Caucus, and have been vocal about crypto-related legislation and regulatory action in the past. 

In December, Budd, Davidson, and Soto signed a letter to the SEC asking for more clarity around which businesses can hold crypto.

And while a pocket of vocal lawmakers continues to propose new laws centered around cryptocurrencies, most of the bills don’t make it very far. Davidson’s Token Taxonomy Act, which was first introduced in 2018 and then reintroduced in 2019, went nowhere, as did last year’s Virtual Currency Tax Fairness Act.