New Law Creates Treasury Task Force to Track Terrorist Use of Digital Assets, Mandates Public Report on Sanctions Evasion

The Financial Technology Protection Act of 2025 is essentially a major government effort to catch up with how bad actors—think terrorists and organized crime—are using digital assets and new technology to move money around. The bill’s main function is to create a new, high-level task force within the Treasury Department, called the Independent Financial Technology Working Group to Combat Terrorism and Illicit Financing (SEC. 2).

This Working Group isn't just another committee. It’s led by the Treasury’s Under Secretary for Terrorism and Financial Crimes and brings together senior staff from the IRS, FBI, DEA, Homeland Security, and the State Department. Crucially, it must also include at least five outside experts representing blockchain intelligence companies, traditional banks, research organizations, and—this is key—groups focused on protecting individual privacy and civil liberties. Their mission is straightforward: research how criminals use digital assets and then draft concrete proposals for new laws and regulations to stop them. They have four years to get this done, submitting annual reports to Congress (SEC. 2).

The Digital Asset Evasion Strategy

For regular folks, the most immediate impact of this bill might be a new public report. Within 180 days of the law passing, the President must issue a report detailing exactly how countries and terrorist groups are using digital assets to dodge U.S. sanctions and fund illegal activities. Even better, this report must lay out a national strategy to stop it. While part of the report can be classified, the main findings and the strategy must be made public and posted on the Treasury’s website (SEC. 3).

Think of it this way: If you’re a small business owner who uses crypto for international transactions, or just someone who follows the digital asset space, this public report will provide the clearest government assessment yet of the risks and the regulatory direction the U.S. is heading. It’s basically the government showing its homework on how it plans to keep the digital financial system clean.

What It Means for the Industry and You

This bill signals that the federal government is serious about regulating the intersection of technology and finance, but it’s starting with research rather than immediate, heavy-handed rules. The bill defines key terms like 'Digital Asset' (any digital representation of value on a secure ledger) and 'Blockchain Intelligence Company' (SEC. 4). It also uses a very broad definition of 'Illicit Use,' covering everything from fraud and money laundering to dodging sanctions and buying illegal goods. This broad scope gives the Working Group wide latitude for its research, which could eventually lead to new compliance requirements for fintech companies and banks.

While the primary target is illicit actors, the real-world impact is that any recommendations coming out of this Working Group will eventually shape the rules for everyone using digital finance. The inclusion of privacy and civil liberties experts is a good sign, suggesting the analysis won't just be a law enforcement wish list. However, given the focus on national security and crime fighting, companies in the fintech space should prepare for increased scrutiny and potentially stricter Know Your Customer (KYC) requirements down the road, based on the findings of this four-year study.