Financial Technology Protection Act of 2025
The Financial Technology Protection Act of 2025 would create an Independent Financial Technology Working Group (IFTWG) tasked with studying how digital assets and emerging technologies are used for terrorism financing and illicit activity, and with developing legislative and regulatory proposals to strengthen anti-money laundering and counter-illicit-financing efforts in the United States. The group is chaired by the Treasury Secretary (via the Under Secretary for Terrorism and Financial Crimes) and includes senior representatives from a broad set of federal agencies, plus at least five private-sector and civil-liberties representatives appointed by the Under Secretary. The act also requires a proactive 180-day report to address how digital assets could be used to evade sanctions and a broader strategy, plus an ongoing reporting cadence for four years and a final wind-down report, with unobligated funds returned to the Treasury at termination. In short, the bill formalizes a cross-agency, cross-sector body to study digital-assets-related terrorism and illicit-financing risks, publish annual (and final) findings and policy proposals, and produce a public strategy to prevent sanctions evasion related to digital assets. Sponsor note: The bill was introduced in the Senate on July 31, 2025 by Sen. Budd (with Sen. Lummis and Sen. Gillibrand as co-sponsors).
Key Points
- 1Establishment and membership of the Independent Financial Technology Working Group (IFTWG): chaired by the Under Secretary for Terrorism and Financial Crimes (Treasury), with senior representatives from Treasury, OFTI, IRS, DOJ, FBI, DEA, DHS, Secret Service, State, and ODNI; plus at least five privately appointed members representing fintech, blockchain intelligence, financial institutions, researchers, and privacy/civil-liberties groups; additional necessary appointees may be added.
- 2Core duties: conduct research on how digital assets and related emerging technologies are used by terrorists or for illicit financing, and develop legislative and regulatory proposals to strengthen anti-money laundering, counter-terrorism financing, and other counter-illicit-financing measures.
- 3Reporting requirements:
- 4- Initial annual reports starting within one year of enactment, and annually for three more years (covering findings and proposals).
- 5- A final report detailing findings, recommendations, and activities before termination.
- 6Sunset and wind-down: The Working Group automatically terminates four years after enactment (or earlier if wind-down is completed); if wind-down is necessary, the group may continue temporarily to finish ongoing activities; unobligated funds are returned to the Treasury at termination.
- 7Section 3 on sanctions evasion: Within 180 days, the President (through Treasury and in consultation with the Working Group) must deliver a report on how digital assets and related technologies could be used to evade sanctions and a strategy to mitigate such illicit use; the report must be primarily unclassified with an option for a classified annex and must be publicly released in accessible formats.
- 8Briefing requirement: Within two years, the Treasury Secretary must briefing congressional committees on the implementation of the sanctions-evasion strategy.
- 9Definitions: The bill provides definitions for terms used, including “digital asset,” “blockchain intelligence company,” “emerging technologies” (aligned with the NSTC Critical and Emerging Technologies list), “foreign terrorist organization,” “illicit use,” and “terrorist” (including domestic and international terrorism).