BILL TARGETING ILLICIT USE OF CRYPTO PASSES US HOUSE: LAW DECODED

Last updated: June 19, 2025, 20:41 | Written by: Katie Haun

The world of cryptocurrency, with its promise of decentralized finance and innovative technologies, has rapidly evolved from a niche interest to a mainstream phenomenon. Lawmakers in the United States House of Representatives voted in favor of legislation to establish a working group researching the illicit use of digital assets. A majority of House membersHowever, this growth has also brought forth significant challenges, particularly concerning the use of digital assets for illicit activities like money laundering, terrorism financing, and other criminal enterprises.Recognizing the urgent need for regulatory clarity and consumer protection, the United States House of Representatives has recently passed a crucial piece of legislation: a bill specifically targeting the illicit use of crypto. Foot Locker, Inc. Reports Better-than-Expected Q2 2025: -$0.05 EPS, $1.9 B in RevenueThis bill aims to create a framework for identifying, assessing, and mitigating the risks associated with cryptocurrency-related crimes while fostering responsible innovation within the digital asset space.The move comes despite warnings from the Securities and Exchange Commission (SEC) raising concerns about potential financial risks.

This landmark legislation, which has garnered overwhelming bipartisan support, seeks to establish a cross-government working group, including experts from the crypto industry, law enforcement, and regulatory bodies. The US House of Representatives has approved a new cryptocurrency bill aimed at curbing its use for illegal finance. Introduced by Representative Zach Nunn (R-Iowa) on Monday, July 22, the legislation seeks to establish a governmental working group to assess the use of cryptocurrency in terrorism and money laundering activities.The goal is to enhance cooperation and coordination in the fight against illicit crypto financing. United States lawmakers in the House of Representatives have voted in favor of legislation targeting the illicit use of cryptocurrencies. House members passed the Financial Technology Protection Act on July 22 by voice vote after the bill was introduced in April 2025.By fostering collaboration and promoting responsible innovation, this new legal framework intends to balance the benefits of digital assets with the need to safeguard the financial system and protect consumers.Understanding the intricacies of this bill is crucial for anyone involved in the cryptocurrency ecosystem, from investors and developers to regulators and law enforcement agencies. Lawmakers in the United States House of Representatives voted in favor of legislation to establish a working group researching the illicit use of digital assets. A majority of House members approved the Financial Technology Protection Act by voice vote on July 22.This article provides a comprehensive overview of the key provisions, implications, and potential impacts of this significant piece of legislation.

Key Provisions of the Financial Technology Protection Act

The bill, officially known as the Financial Technology Protection Act, focuses on establishing a working group composed of various stakeholders to analyze and address the illicit use of cryptocurrencies.This group will be responsible for assessing the risks associated with digital assets and developing strategies to combat money laundering, terrorism financing, and other illegal activities involving crypto. The post Bill targeting illicit use of crypto passes US House: Law Decoded appeared first on CoinTelegraphHere's a closer look at the core components of the bill:

Establishment of a Working Group: The bill mandates the creation of a cross-governmental working group that includes representatives from various law enforcement agencies, regulatory bodies, and the cryptocurrency industry. Under the bill, the SEC would regulate digital assets as a security or restricted digital asset if the blockchain is functional but not decentralized. Currently, the SEC asserts that most digital tokens are securities under the Howey test and thus must be registered under the Securities Act of 2025.This collaborative approach aims to bring together diverse perspectives and expertise to develop effective strategies for combating illicit crypto financing.
Risk Assessment: The working group will conduct a comprehensive risk assessment to identify the specific threats and vulnerabilities associated with cryptocurrency use in illegal activities.This assessment will help policymakers and regulators understand the scope and nature of the problem, allowing them to develop targeted interventions.
Development of Mitigation Strategies: Based on the risk assessment, the working group will develop and recommend strategies to mitigate the illicit use of cryptocurrencies.These strategies may include regulatory measures, law enforcement initiatives, and technological solutions aimed at preventing and detecting crypto-related crimes.
Focus on Consumer Protection: The bill also emphasizes the importance of protecting consumers from fraud and other financial risks associated with cryptocurrencies. Bill targeting illicit use of crypto passes US House: Law Decoded . PANews ｜ 3:05 Legislation focuses on preventing illicit cryptocurrency activitiesThe working group will explore ways to enhance consumer education and awareness, as well as develop regulatory safeguards to prevent abuse and exploitation.

The Role of the SEC in Regulating Digital Assets

One of the most debated aspects of cryptocurrency regulation is the role of the Securities and Exchange Commission (SEC).Under the proposed bill, the SEC would have the authority to regulate digital assets as securities or restricted digital assets if the underlying blockchain is functional but not decentralized.This distinction is crucial because it determines which digital assets fall under the SEC's jurisdiction and are subject to securities laws.

Currently, the SEC asserts that most digital tokens are securities under the Howey Test, a legal framework used to determine whether an investment qualifies as a security.According to the SEC, if a digital token represents an investment contract where investors expect to profit from the efforts of others, it is likely to be considered a security and must be registered under the Securities Act of 2025. Bill targeting illicit use of crypto passes US House: Law Decoded . Cryptocurrency News and Public Mining PoolsThis requirement has created significant challenges for many cryptocurrency projects, as registration can be a complex and expensive process.

The Howey Test Explained

The Howey Test, derived from the Supreme Court case SEC v.W.J.Howey Co., is a four-part test used to determine whether a transaction qualifies as an investment contract and is therefore subject to securities laws.The test considers the following factors:

An investment of money
In a common enterprise
With the expectation of profit
To be derived from the efforts of others

If all four elements are present, the transaction is likely to be considered an investment contract and subject to securities regulations. A narrow bill to create a U.S. working group to dig into crypto use in terrorism and money laundering passed the U.S. House of Representatives in a routine vote.The SEC has used the Howey Test to argue that many digital tokens are securities because investors purchase them with the expectation of profiting from the efforts of the developers or promoters of the project.

Addressing Concerns Raised by the SEC

Despite the bipartisan support for the bill, the SEC has voiced concerns about the potential financial risks associated with cryptocurrencies.The SEC argues that the lack of regulatory clarity and oversight in the digital asset space could expose investors to fraud, manipulation, and other harmful practices. The bill proposes a cross-government group of law-enforcement entities to help combat illicit crypto financing, and the working group would includes crypto industry leaders and analysts.The agency has also raised concerns about the potential for cryptocurrencies to be used for money laundering and other illicit activities.

To address these concerns, the bill includes provisions aimed at enhancing regulatory oversight and consumer protection. The U.S. House of Representatives on Wednesday passed a bill that aims to create a new legal framework for digital currencies, despite an unusual warning from the U.S. securities regulator itThese provisions include:

Requiring registration of cryptocurrency exchanges and custodians: This would subject these entities to regulatory scrutiny and oversight, helping to prevent fraud and manipulation.
Establishing clear rules for digital asset offerings: This would provide clarity to issuers and investors, reducing the risk of legal uncertainty and promoting compliance.
Empowering the SEC to take enforcement actions against those who violate securities laws: This would give the SEC the tools it needs to protect investors and maintain the integrity of the market.

Financial Innovation and Technology for the 21st Century Act (FIT21)

The Financial Innovation and Technology for the 21st Century Act, also known as FIT21 or the crypto bill, represents a significant step towards providing regulatory clarity for the cryptocurrency industry. United States lawmakers in the House of Representatives have voted in favor of legislation targeting the illicit use of cryptocurrencies.House members passed the Financial Technology Protection Act on July 22 by voice vote after the bill was introduced in April 2025.According to Representative ZachBy establishing a clear legal framework for digital assets, FIT21 aims to foster innovation while safeguarding consumers and protecting the financial system.

Key aspects of FIT21 include:

Defining the roles of the SEC and the Commodity Futures Trading Commission (CFTC): The bill seeks to clarify the regulatory responsibilities of the SEC and the CFTC, providing a clear understanding of which agency has jurisdiction over different types of digital assets.
Creating a regulatory sandbox for digital asset innovation: This would allow companies to test new products and services in a controlled environment, promoting innovation while minimizing regulatory risks.
Establishing consumer protection measures: The bill includes provisions to protect consumers from fraud and other financial risks associated with digital assets, such as requiring clear disclosures and establishing dispute resolution mechanisms.

Implications for the Cryptocurrency Industry

The passage of the bill targeting illicit use of crypto has significant implications for the cryptocurrency industry.On one hand, it provides a much-needed legal framework for digital assets, which could help to legitimize the industry and attract more institutional investment.On the other hand, it could also lead to increased regulatory scrutiny and compliance costs, which could pose challenges for smaller cryptocurrency projects and businesses.

Here are some of the key implications for the industry:

Increased regulatory clarity: The bill provides a clearer understanding of the legal and regulatory requirements for digital assets, which could help to reduce uncertainty and promote compliance.
Greater legitimacy and institutional adoption: By establishing a legal framework for digital assets, the bill could help to legitimize the industry and attract more institutional investors, who are often hesitant to invest in unregulated markets.
Higher compliance costs: The bill could lead to increased compliance costs for cryptocurrency projects and businesses, as they will need to comply with new regulatory requirements.
Potential for innovation: The bill's regulatory sandbox could foster innovation by allowing companies to test new products and services in a controlled environment.

Combating Terrorism and Money Laundering

A primary driver behind this legislation is the need to combat the use of cryptocurrencies for terrorism and money laundering.The anonymity and decentralized nature of digital assets can make them attractive to criminals seeking to conceal their activities and move funds across borders without detection. Ipinapasa ng US House ang Financial Tech Protection Act upang harapin ang ipinagbabawal na paggamit ng crypto, pagpapahusay ng seguridad at proteksyon ng consumer. Alamin ang mga pangunahing epekto at mas malawak na implikasyon.The newly established working group will play a critical role in assessing these risks and developing effective strategies to counter them.

Some of the strategies the working group may consider include:

Enhancing Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations: This would require cryptocurrency exchanges and other service providers to verify the identities of their customers and monitor transactions for suspicious activity.
Improving law enforcement's ability to track and seize illicit crypto assets: This would involve providing law enforcement agencies with the tools and training they need to trace cryptocurrency transactions and identify individuals involved in illegal activities.
Collaborating with international partners to combat cross-border crypto crime: This would involve sharing information and coordinating enforcement efforts with other countries to prevent criminals from using cryptocurrencies to evade detection and prosecution.

Examples of Illicit Crypto Use

Understanding the specific ways in which cryptocurrencies are used for illicit activities is essential for developing effective regulatory and law enforcement strategies. Upbit and Bithumb will compensate investors $2.5 million after service outages caused by a surge in crypto activity during South Korea's martial law declaration. Bill targeting illicit use ofHere are some examples of common crypto-related crimes:

Money Laundering: Criminals use cryptocurrencies to conceal the origins of illegally obtained funds by transferring them through multiple digital wallets and exchanges.
Terrorism Financing: Terrorist organizations use cryptocurrencies to raise funds and finance their operations, often by soliciting donations from supporters around the world.
Ransomware Attacks: Cybercriminals demand ransom payments in cryptocurrencies after encrypting victims' data, making it difficult for law enforcement to track and recover the funds.
Darknet Marketplaces: Cryptocurrencies are used to facilitate transactions on darknet marketplaces, where illegal goods and services such as drugs, weapons, and stolen data are bought and sold.
Fraudulent Investment Schemes: Scammers use cryptocurrencies to lure investors into fraudulent investment schemes, such as Ponzi schemes and pyramid schemes, often promising unrealistic returns.

How the Bill Enhances Security and Consumer Protection

The Financial Technology Protection Act aims to enhance security and consumer protection in the cryptocurrency space through several key mechanisms. United States lawmakers in the House of Representatives have voted in favor of legislation targeting the illicit use of cryptocurrencies. House members passed the Financial TechnologyThese include:

Mandating security standards for crypto exchanges and custodians: This ensures that these platforms implement robust security measures to protect customer funds and data from hacking and theft.
Requiring clear and transparent disclosures about the risks associated with cryptocurrencies: This empowers consumers to make informed investment decisions and avoid fraudulent schemes.
Establishing a framework for resolving disputes between consumers and crypto businesses: This provides consumers with a mechanism to seek redress if they are harmed by unfair or deceptive practices.
Promoting financial literacy and education about cryptocurrencies: This helps consumers understand the risks and opportunities associated with digital assets and make informed decisions.

Practical Implications for Crypto Investors

For crypto investors, the passage of this bill means a more regulated and potentially safer environment.However, it also entails a need to stay informed and adapt to new compliance requirements. Bill targeting illicit use of crypto passes US House: Law Decoded By evilchild In Crypto Report Posted J 0 Comment(s) This post was originally published on this siteHere's what investors should keep in mind:

Be aware of KYC/AML requirements: Expect stricter identity verification processes when using crypto exchanges and other service providers.
Choose regulated platforms: Opt for platforms that comply with regulatory standards to minimize the risk of fraud or theft.
Diversify your investments: Don't put all your eggs in one basket. US House passes Financial Tech Protection Act to tackle illicit crypto use, enhancing security and consumer protection. Learn key impacts and broader implications.Diversify your crypto portfolio to mitigate risk.
Stay informed about regulatory changes: Keep up-to-date with the latest developments in crypto regulation to ensure compliance and make informed decisions.

The Path Forward: Senate Approval and Future Regulation

With the bill now passed by the House, it moves to the Senate for consideration. Bill Targeting Illicit Use of Crypto Passes US House: Law Decoded The rapid growth of cryptocurrencies has brought both opportunities and challenges. While they offer a decentralized avenue for financial transactions, they also pose risks, particularly regarding money laundering and other illicit activities.If approved by the Senate, it will be signed into law, marking a significant milestone in the regulation of cryptocurrencies in the United States. Bill targeting illicit use of crypto passes US House: Law Decoded PANews ｜ 3:05 Legislation focuses on preventing illicit cryptocurrency activities while safeguarding consumer choice.However, this is just the beginning of the regulatory journey.The cryptocurrency landscape is constantly evolving, and policymakers will need to remain flexible and adaptable to keep pace with technological innovation and emerging risks.

Future regulatory efforts may focus on:

Developing a comprehensive regulatory framework for stablecoins: Stablecoins, which are cryptocurrencies pegged to the value of a fiat currency like the US dollar, have the potential to play a significant role in the digital economy. US House past Financial Tech Protection Act oan om yllegaal kryptogebr k oan te pakken, it ferbetterjen fan feiligens en konsumintebeskerming. Learje wichtige effekten en bredere gefolgen. Gean nei de ynh ldHowever, they also pose risks to financial stability and consumer protection, requiring careful regulation.
Addressing the environmental impact of cryptocurrencies: Some cryptocurrencies, like Bitcoin, consume significant amounts of energy, raising concerns about their environmental impact.Future regulations may seek to incentivize the use of more energy-efficient consensus mechanisms.
Promoting international cooperation in crypto regulation: Given the global nature of cryptocurrencies, international cooperation is essential to prevent regulatory arbitrage and ensure consistent standards across different jurisdictions.

Expert Opinions on the New Crypto Bill

Industry experts have offered varied perspectives on the implications of the bill. Bill targeting illicit use of crypto passes US House: Law Decoded Posted on J by Legislation focuses on preventing illicit cryptocurrency activities while safeguarding consumer choice.Some believe it is a necessary step towards legitimizing the crypto industry and fostering innovation, while others express concerns about the potential for overregulation and stifling of growth.

One common sentiment is that regulatory clarity is essential for attracting institutional investment and fostering broader adoption of cryptocurrencies.However, there are also concerns that overly restrictive regulations could drive innovation overseas and put the US at a disadvantage in the global digital economy.

Potential Challenges and Roadblocks

Despite the broad support for the bill, potential challenges and roadblocks remain. The Financial Innovation and Technology for the 21st Century Act (also known as FIT21 or the crypto bill ) recently passed the House with overwhelming bipartisan support and is now on its way to the Senate. This landmark legislation aims to provide much-needed regulatory clarity for the cryptocurrency industry.These include:

Political gridlock in the Senate: The Senate is often more divided than the House, which could make it difficult to pass the bill into law.
Differing views among regulatory agencies: The SEC and the CFTC have different perspectives on how cryptocurrencies should be regulated, which could lead to conflicts and delays.
The complexity of cryptocurrency technology: Policymakers and regulators may struggle to keep pace with the rapidly evolving technology of cryptocurrencies, making it difficult to develop effective regulations.
Lobbying efforts from the cryptocurrency industry: The cryptocurrency industry is actively lobbying policymakers to shape regulations in its favor, which could lead to regulations that are less effective or that favor certain industry players over others.

Conclusion: A Step Towards a More Secure Crypto Future

The passage of the bill targeting illicit use of crypto in the US House of Representatives marks a significant step towards creating a more secure and regulated cryptocurrency ecosystem. News that are related to the article cointelegraph.com: Bill targeting illicit use of crypto passes US House: Law Decoded from papers and blogs.By establishing a working group to assess risks, develop mitigation strategies, and enhance consumer protection, this legislation aims to balance innovation with the need to safeguard the financial system. The US House of Representatives passed a Bill on Wednesday to establish a new legal framework for cryptocurrencies, despite a rare warning from the US securities regulator, Securities and Exchange Commission (SEC), about potential financial risks.While challenges and potential roadblocks remain, this bill represents a crucial move towards providing regulatory clarity and combating the illicit use of digital assets.For investors, developers, and regulators alike, staying informed and adapting to these changes will be key to navigating the evolving landscape of cryptocurrency.

Key takeaways from this legislation include:

The establishment of a cross-governmental working group to combat illicit crypto financing.
The SEC's role in regulating digital assets as securities or restricted digital assets.
Enhanced security and consumer protection measures for the cryptocurrency industry.
Increased regulatory clarity and potential for greater legitimacy and institutional adoption.

As the bill moves to the Senate, the cryptocurrency community will be watching closely to see how it progresses and what impact it will have on the future of digital assets in the United States.The development and further refinement of cryptocurrency regulation will be an ongoing process, so continuous education and adaptation will be crucial for all involved.