Summary

Directs the Treasury Department and FinCEN to work with private DeFi developers and risk experts to test and build anti‑money‑laundering, sanctions, identity, and cybersecurity controls into decentralized finance services and smart contracts. Requires FinCEN guidance and a Treasury rule that defines "decentralized finance service" and mandates risk‑based AML and sanctions compliance programs for DeFi services, with specific deadlines for the program, advisory, and rulemaking.

• Requires Treasury to run a public‑private program (within 6 months) to test embedding AML, sanctions, identity, and cybersecurity controls into DeFi services and smart contracts.
• FinCEN must publish a public advisory on responsible DeFi development and Bank Secrecy Act compliance within 18 months.
• Treasury must issue a rule within 30 months defining "decentralized finance service" and "decentralized smart contract" and requiring risk‑based AML and sanctions compliance programs for DeFi services.
• Program must exclude DeFi services owned or controlled by a "covered person" (including senior officials and close family) and terminates 18 months after enactment.
• Agency recommendations from the program must be shared across agencies and considered in future rulemaking and supervision, but agencies retain existing enforcement authority.
• Focuses on both smart‑contract level controls and front‑end user interfaces, and considers regulatory gateways for verifiable external data inputs/outputs.
• No specific funding or appropriations are provided; the bill sets deadlines and regulatory requirements instead of allocating money.
• Adds statutory definitions for key terms and clarifies that the Bank Secrecy Act framework applies to DeFi services subject to the rule.