,i #aaeth ,,congress #b;d ,session ,h4 ,r4 #effd ,,in ,,the ,,house ,,of ,,representatives ,april #bg1 #bjah,miss ,rice of ,new ,york 7for herself and ,mr4 ,king of ,new ,york7 introduced the following bill2 which was referred to the ,committee on ,financial ,services1 and in addition to the ,permanent ,select ,committee on ,intelligence 7,permanent ,select71 for a period to be subsequently determined by the ,speaker1 in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned ,a ,,bill ,to require a report on the possible exploitation of virtual currencies by terrorist actors1 to authorize a competition program to identify regulatory solutions and develop technology with respect to counter terror threat financing1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,stop ,terrorist ,use of ,virtual ,currencies ,act4 #b4 ,findings ,the ,congress finds the following3 7#a7 ,virtual currencies 7,,vc7 provide low-cost1 high-speed means for verified transactions4 7#b7 ,when used positively1 ,v,cs unite disparate financial markets and provide a convenient means for a number of constituencies1 including the economically marginalized1 to conduct transactions cheaply across large geographic expanses4 7#c7 ,simultaneously1 to the extent regulatory frameworks are premised on institution-based transactions1 ,v,cs could be exploited by terrorists and cybercriminals to fund untraceable operations4 7#d7 ,according to the ,center for ,new ,american ,security 7,,cnas71 if ,v,cs become sufficiently liquid and easily convertible1 and terrorist groups acquire technical infrastructure needed to support ,,vc activity at a significant scale1 ,v,cs could pose a highly dangerous threat to the ,united ,states and its partners4 7#e7 ,the ,committee on ,financial ,services issued a report entitled1 ,stopping ,terror ,finance3 ,securing the ,u4,s4 ,financial ,sector in ,december1 #bjaf1 which includes numerous recommendations to enhance a whole-of-government approach towards counter terrorist financing4 #c4 ,sense of ,congress ,it is the ,sense of ,congress that-- 7#a7 to the extent current statutes require financial institutions to serve as the first line of defense against illicit activity in the global financial system1 and that ,v,cs specifically bypass such institutions1 the ,united ,states needs to adapt its financial regulatory framework to ensure adequate supervision of financial activity2 7#b7 the ,president should develop principles to prioritize counter terrorist financing among other forms of illicit financial activity and provide recommendations to ,congress to address this threat2 7#c7 such principles should include a focus on innovation and public-private partnership2 and 7#d7 the ,financial ,crimes ,enforcement ,network 7,fin,c,e,n7 should consider issuing more guidance and facilitating the establishment of institutions pursuant to sections #cad7;a7 and #cad7;b7 of the ,,usa ,,patriot ,act to facilitate greater information flow within and among global banks4 #d4 ,report ,the ,president1 acting through the ,secretary of the ,treasury and the ,director of ,national ,intelligence1 shall report on the possible exploitation of virtual currencies by terrorist actors4 ,such report shall include the following elements3 7#a7 ,recommendations to update the regulatory oversight structure regarding virtual currencies to address transactions that bypass financial institutions1 including banks1 ,money ,services ,businesses 7,,msb71 and other financial institutions subject to regulation4 7#b7 ,assessment of current efforts by ,federal departments and agencies to study and collect intelligence against the terror finance threat and money laundering methodologies4 7#c7 ,identification of gaps between ,federal and ,state regulations which could be exploited for illicit funding4 #e4 ,innovation competition 7a7 ,authorization ,in order to facilitate public-private partnership to develop and enhance illicit finance prevention systems1 the ,secretary of the ,treasury may establish a program 7referred to in this section as the competition7 to be known as the ,competition for ,innovation in ,combating ,illicit ,terrorist ,financing4 7b7 ,activities supported ,the ,competition may carry out1 through the provision of grants or an annual reward1 the following activities3 7#a7 ,collaborative research ,provide grants1 for not more than two years1 to engage students1 entrepreneurs1 and financial experts to identify regulatory solutions with respect to the exploitation of ,v,cs by terrorists and other criminals4 7#b7 ,competition ,establish an annual competition for a reward of not more than #ejj1jjj to any individual1 team1 or nongovernmental entity that develops technologies to facilitate counter terror threat financing1 particularly that addresses the use of ,v,cs or emerging financial technology4 7c7 ,management 7#a7 ,in general ,the ,secretary of ,treasury1 in consultation with the ,director of ,national ,intelligence1 shall promulgate guidelines for review of grant applications to the ,competition4 7#b7 ,requirements ,the guidelines required under this subsection shall address1 at a minimum1 the following3 7,a7 ,criteria by which grants shall be selected4 7,b7 ,policies to ensure that grants are in furtherance of ,united ,states security objectives4 7d7 ,acceptance of funds from outside sources ,the ,competition may accept funds from outside sources1 including foreign governments1 nongovernmental organizations1 and private business entities and1 without further appropriation1 use such funds to carry out the purpose of the ,competition4 7e7 ,rule of construction ,nothing in this ,act may be construed to make any grant recipient an agent or establishment of the ,united ,states ,government4