II 

117TH CONGRESS 

2D SESSION S. 5286 

To provide for the strengthening of the supervision of digital asset markets 

by self-regulatory organizations, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 15, 2022 

Ms. LUMMIS introduced the following bill; which was read twice and referred 

to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To provide for the strengthening of the supervision of digital 

asset markets by self-regulatory organizations, and for 

other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Responsible Self-Regu5 lation Act of 2022’’. 

6 SEC. 2. DEFINITIONS. 

7 (a) IN GENERAL.—Subtitle VI of title 31, United 

8 States Code, is amended by adding after chapter 97 the 

9 following: 


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1 ‘‘CHAPTER 98—DIGITAL ASSETS 

‘‘Sec. 

‘‘9801. Definitions. 

2 ‘‘§ 9801. Definitions 

3 ‘‘In this chapter: 

4 ‘‘(1) ANCILLARY ASSET.— 

5 ‘‘(A) IN GENERAL.—The term ‘ancillary 

6 asset’ means an intangible, fungible asset that 

7 is offered, sold, or otherwise provided to a per8 son in connection with the purchase and sale of 

9 a security through an arrangement or scheme 

10 that constitutes an investment contract, as that 

11 term is used in section 2(a)(1) of the Securities 

12 Act of 1933 (15 U.S.C. 77b(a)(1)). 

13 ‘‘(B) EXCLUSION.—The term ‘ancillary 

14 asset’ does not include an asset that provides 

15 the holder of the asset with any of the following 

16 rights in a business entity: 

17 ‘‘(i) A debt or equity interest in that 

18 entity. 

19 ‘‘(ii) Liquidation rights with respect 

20 to that entity. 

21 ‘‘(iii) An entitlement to an interest or 

22 dividend payment from that entity. 


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1 ‘‘(iv) A profit or revenue share in that 

2 entity solely from the entrepreneurial or 

3 managerial efforts of others. 

4 ‘‘(v) Any other financial interest in 

5 that entity. 

6 ‘‘(2) APPROPRIATE COMMISSION.—The term 

7 ‘appropriate commission’ means the Commodity Fu8 tures Trading Commission or the Securities and Ex9 change Commission, or both, as applicable, based on 

10 the commission that has statutory jurisdiction over 

11 a digital asset intermediary and acts as the primary 

12 registration or licensing authority, consistent with 

13 paragraph (4). 

14 ‘‘(3) DIGITAL ASSET.—The term ‘digital 

15 asset’— 

16 ‘‘(A) means a natively electronic asset 

17 that— 

18 ‘‘(i) confers economic, proprietary, or 

19 access rights or powers; and 

20 ‘‘(ii) is recorded using cryptographi21 cally secured distributed ledger technology, 

22 or any similar analogue; and 

23 ‘‘(B) includes— 

24 ‘‘(i) virtual currency and ancillary as25 sets; 


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1 ‘‘(ii) payment stablecoins; and 

2 ‘‘(iii) any other security or commodity 

3 that meets the requirements of subpara4 graph (A). 

5 ‘‘(4) DIGITAL ASSET INTERMEDIARY.—The 

6 term ‘digital asset intermediary’— 

7 ‘‘(A) means— 

8 ‘‘(i) a person that— 

9 ‘‘(I) holds a license, registration, 

10 or other similar authorization, as 

11 specified by this chapter, the Com12 modity Exchange Act (7 U.S.C. 1 et 

13 seq.), the Securities Act of 1933 (15 

14 U.S.C. 77a et seq.), the Corporation 

15 of Foreign Bondholders Act, 1933 (15 

16 U.S.C. 77bb et seq.), the Trust Inden17 ture Act of 1939 (15 U.S.C. 77aaa et 

18 seq.), the Securities Exchange Act of 

19 1934 (15 U.S.C. 78a et seq.), the Se20 curities Investor Protection Act of 

21 1970 (15 U.S.C. 78aaa et seq.), the 

22 Investment Company Act of 1940 (15 

23 U.S.C. 80a–1 et seq.), the Investment 

24 Advisers Act of 1940 (15 U.S.C. 80b– 

25 1), and the Omnibus Small Business 


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1 Capital Formation Act of 1980 (15 

2 U.S.C. 80c); and 

3 ‘‘(II) may conduct market activi4 ties relating in digital assets; or 

5 ‘‘(ii) a person that is required by law 

6 to hold a license, registration, or other 

7 similar authorization described in clause 

8 (i); 

9 ‘‘(B) includes— 

10 ‘‘(i) a person that holds a license, reg11 istration, or other similar authorization 

12 under State or Federal law and issues a 

13 payment stablecoin; and 

14 ‘‘(ii) a person that is required by law 

15 to hold a license, registration, or other 

16 similar authorization described in clause 

17 (i); and 

18 ‘‘(C) does not include a depository institu19 tion. 

20 ‘‘(5) REGISTERED DIGITAL ASSET ASSOCIA21 TION.—The term ‘registered digital asset associa22 tion’ means an organization jointly registered by the 

23 Securities and Exchange Commission and Com24 modity Futures Trading Commission under section 


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1 9802 for the supervision of digital asset inter2 mediaries. 

3 ‘‘(6) SECURITY.—The term ‘security’ has the 

4 meaning given the term in section 3(a) of the Secu5 rities Exchange Act of 1934 (15 U.S.C. 78c(a)). 

6 ‘‘(7) VIRTUAL CURRENCY.—The term ‘virtual 

7 currency’— 

8 ‘‘(A) means a digital asset that— 

9 ‘‘(i) is used primarily as a medium of 

10 exchange, unit of account, store of value, 

11 or any combination of such functions; 

12 ‘‘(ii) is not legal tender, as described 

13 in section 5103; and 

14 ‘‘(iii) does not derive value from, or is 

15 not backed by, an underlying financial 

16 asset (except other digital assets); and 

17 ‘‘(B) includes a digital asset, consistent 

18 with subparagraph (A), that is accompanied by 

19 a statement from the issuer that a denominated 

20 or pegged value will be maintained and be avail21 able upon redemption from the issuer or other 

22 identified person, based solely on computer code 

23 deployed to a distributed ledger technology net24 work that executes an instruction based on the 


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1 occurrence or non-occurrence of a specified con2 dition, or any similar analogue.’’. 

3 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

4 The table of contents for subtitle VI of title 31, United 

5 States Code, is amended by adding at the end the fol6 lowing: 

‘‘98. Digital assets ............................................................................. 9801’’. 

7 SEC. 3. REGISTERED DIGITAL ASSET ASSOCIATIONS. 

8 (a) IN GENERAL.—Chapter 98 of title 31, United 

9 States Code, as amended by section 2, is amended by add10 ing at the end the following: 

11 ‘‘§ 9802. Registered digital asset associations 

12 ‘‘(a) DEFINITIONS.—In this section: 

13 ‘‘(1) NONMEMBER PROFESSIONAL.—The term 

14 ‘nonmember professional’ means any person that— 

15 ‘‘(A) is a digital asset intermediary; and 

16 ‘‘(B) is a not a member of a registered dig17 ital asset association or affiliated organization. 

18 ‘‘(2) REGISTRATION INFORMATION.—The term 

19 ‘registration information’ means the information re20 ported in connection with the licensing, registration, 

21 or other authorization of digital asset intermediaries 

22 and their associated persons, including— 

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1 formation required by law or digital asset asso2 ciation rule; and 

3 ‘‘(B) the source and status of the informa4 tion described in subparagraph (A). 

5 ‘‘(b) REGISTRATION; APPLICATION.—An association 

6 of digital asset intermediaries may be registered as a dig7 ital asset association, under the terms and conditions pro8 vided in this section, and in accordance with the provisions 

9 of this section and section 9803, by jointly filing with the 

10 Securities and Exchange Commission and the Commodity 

11 Futures Trading Commission an application for registra12 tion, in such form as the commissions may require, con13 taining the rules of the association and such other infor14 mation and documents that may be prescribed as nec15 essary or appropriate in the public interest or for customer 

16 protection. 

17 ‘‘(c) DETERMINATIONS BY COMMISSIONS REQUISITE

18 TO REGISTRATION.—An association of digital asset inter19 mediaries may not be registered as a registered digital 

20 asset association under subsection (b) unless a majority 

21 of the members of each of the Securities and Exchange 

22 Commission and the Commodity Futures Trading Com23 mission, voting separately, determine that— 


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1 ‘‘(1) by reason of the number and the scope of 

2 the transactions of the association, the association 

3 will be able to carry out the purposes of this section; 

4 ‘‘(2) the association is so organized, and has 

5 the capacity, to— 

6 ‘‘(A) be able to carry out the purposes of 

7 this section and other applicable State and Fed8 eral laws; and 

9 ‘‘(B) subject to any rule or order of the 

10 appropriate commission, enforce compliance by 

11 members of the association (and persons associ12 ated with those members) with the provisions of 

13 applicable law, the rules under those provisions, 

14 and the rules of the association; 

15 ‘‘(3) the rules of the association provide that 

16 any digital asset intermediary may become a mem17 ber of the association and any person may become 

18 associated with a member of the association; 

19 ‘‘(4) the rules of the association ensure a fair 

20 representation of the members of the association, in21 cluding emerging growth companies (as defined in 

22 section 2(a) of the Securities Act of 1933 (15 U.S.C. 

23 77b(a))), in the selection of the directors of the asso24 ciation and administration of the affairs of the asso25 ciation; 


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1 ‘‘(5) the rules of the association provide for the 

2 equitable allocation of reasonable dues, fees, and 

3 other charges among members of the association and 

4 other persons using any facility or system that the 

5 association operates or controls; 

6 ‘‘(6) the rules of the association— 

7 ‘‘(A) are designed to— 

8 ‘‘(i) prevent fraudulent and manipula9 tive acts and practices in order to promote 

10 just and equitable principles of trade; 

11 ‘‘(ii) foster cooperation and coordina12 tion with persons engaged in regulating, 

13 clearing, settling, processing information 

14 with respect to, and facilitating trans15 actions in digital assets; 

16 ‘‘(iii) remove impediments to, and per17 fect the mechanism of, a free and open 

18 market; and 

19 ‘‘(iv) protect customers and the public 

20 interest; and 

21 ‘‘(B) are not designed to— 

22 ‘‘(i) permit unfair discrimination be23 tween customers and digital asset inter24 mediaries; 

25 ‘‘(ii) fix minimum profits; 


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1 ‘‘(iii) impose any schedule or fix rates 

2 of commissions, allowances, discounts, or 

3 other fees to be charged by the members of 

4 the association; or 

5 ‘‘(iv) regulate by virtue of any author6 ity conferred by law matters not related to 

7 the purposes of this section or the adminis8 tration of the association; 

9 ‘‘(7) the rules of the association provide that, 

10 subject to any rule or order of the appropriate com11 mission, the members of the association (and per12 sons associated with those members) shall be appro13 priately disciplined for a violation of any provision of 

14 applicable law, the rules under such a provision, or 

15 the rules of the association by expulsion, suspension, 

16 limitation of activities, functions, and operations, 

17 fine, censure, a suspension or bar from being associ18 ated with a member, or any other fitting sanction; 

19 ‘‘(8) the rules of the association are consistent 

20 with the provisions of subsection (h) and, in general, 

21 provide a fair procedure for— 

22 ‘‘(A) the disciplining of members and per23 sons associated with members; 

24 ‘‘(B) the denial of membership to any per25 son seeking membership in the association; 


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1 ‘‘(C) the barring of any person from be2 coming associated with a member of the asso3 ciation; and 

4 ‘‘(D) the prohibition or limitation by the 

5 association of any person with respect to access 

6 to services offered by the association or a mem7 ber of the association; 

8 ‘‘(9) the rules of the association do not impose 

9 any burden on competition not necessary or appro10 priate in furtherance of the purposes of this section; 

11 ‘‘(10) the requirements of subsection (d), as ap12 plicable, are satisfied; and 

13 ‘‘(11) the rules of the association include provi14 sions governing the form and content of quotations 

15 relating to digital assets, which shall be designed 

16 to— 

17 ‘‘(A) produce fair and informative 

18 quotations; 

19 ‘‘(B) prevent fictitious or misleading 

20 quotations; and 

21 ‘‘(C) promote orderly procedures for col22 lecting, distributing, and publishing quotations. 

23 ‘‘(d) RULES; PROVISION FOR REGISTRATION OF AF24 FILIATED ORGANIZATION.— 


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1 ‘‘(1) IN GENERAL.—The Securities and Ex2 change Commission and the Commodity Futures 

3 Trading Commission may permit or require the rules 

4 of an association applying for registration under 

5 subsection (b) to provide for the admission of an or6 ganization registered as an affiliated organization 

7 pursuant to subsection (e), to participate in the ap8 plicant association as an affiliate of the applicant as9 sociation, under terms permitting powers and re10 sponsibilities to the affiliate, and under such other 

11 appropriate terms and conditions, as may be pro12 vided by the rules of the applicant association, if 

13 those rules appear to the commissions jointly to be 

14 necessary or appropriate in the public interest or for 

15 customer protection and to carry out the purposes of 

16 this section. 

17 ‘‘(2) DUTIES AND POWERS OF THE COMMIS18 SIONS.—The duties and powers of the Securities and 

19 Exchange Commission and the Commodity Futures 

20 Trading Commission with respect to any association 

21 or affiliate organization shall in no way be limited 

22 by reason of any such affiliation. 

23 ‘‘(e) REGISTRATION AS AFFILIATED ORGANIZATION; 

24 PREREQUISITES; ASSOCIATION RULES.— 


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1 ‘‘(1) IN GENERAL.—An applicant organization 

2 shall not be registered as an affiliated organization, 

3 unless— 

4 ‘‘(A) the organization, notwithstanding 

5 that the organization does not satisfy the re6 quirements under subsection (c)(1), will, upon 

7 the registration of the organization under this 

8 subsection, be admitted to affiliation with an 

9 organization registered as a digital asset asso10 ciation pursuant to subsection (c), in the man11 ner and under the terms and conditions pro12 vided by the rules of the registered digital asset 

13 association in accordance with subsection (d); 

14 and 

15 ‘‘(B) the organization and the rules of the 

16 organization satisfy the requirements under 

17 paragraphs (2) through (11) of subsection (c). 

18 ‘‘(2) EXCEPTION.—Any restrictions upon mem19 bership of an applicant organization shall not be less 

20 stringent than in the case of the registered digital 

21 asset association with which the organization is to be 

22 affiliated. 

23 ‘‘(f) DEALINGS WITH NONMEMBER PROFES24 SIONALS.— 


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1 ‘‘(1) IN GENERAL.—The rules of a digital asset 

2 association may provide that no member of the asso3 ciation may deal with any nonmember professional 

4 except at the same prices, for the same commissions 

5 or fees, and on the same terms and conditions the 

6 member accords to the general public. 

7 ‘‘(2) RULE OF CONSTRUCTION.—Nothing in 

8 this subsection may be construed to prevent any 

9 member of a registered digital asset association from 

10 granting to any other member of any other reg11 istered digital asset association any discount, allow12 ance, commission, or special terms in connection 

13 with a digital asset transaction. 

14 ‘‘(g) DENIAL OF MEMBERSHIP.— 

15 ‘‘(1) IN GENERAL.—Membership in a registered 

16 digital asset association under this section shall be 

17 limited to digital asset intermediaries. 

18 ‘‘(2) DENIAL FOR PUBLIC INTEREST OR CON19 SUMER PROTECTION.— 

20 ‘‘(A) IN GENERAL.—A registered digital 

21 asset association may, and the appropriate com22 mission, by order, may direct such an associa23 tion to, as necessary or appropriate in the pub24 lic interest or for customer protection, deny 

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1 coming associated with a member any person, 

2 that is subject to a statutory disqualification 

3 within the laws under the jurisdiction of that 

4 commission. 

5 ‘‘(B) NOTICE.—A registered digital asset 

6 association shall file notice with the appropriate 

7 commission, in such form and containing such 

8 information as the appropriate commission shall 

9 require, not less than 30 days before admitting 

10 any person to membership or permitting any 

11 person to become associated with a member, if 

12 the association knew, or in the exercise of rea13 sonable care should have known, that such per14 son was subject to a statutory disqualification. 

15 ‘‘(3) PROCEDURE.— 

16 ‘‘(A) IN GENERAL.—A registered digital 

17 asset association may— 

18 ‘‘(i) deny membership to, or condition 

19 the membership of, a digital asset inter20 mediary, if— 

21 ‘‘(I) the intermediary does not 

22 meet such standards of financial re23 sponsibility or operational capability, 

24 or such intermediary or any individual 

25 associated with the intermediary does 


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1 not meet such standards of training, 

2 experience, and competence, as are 

3 prescribed by the rules of the associa4 tion; or 

5 ‘‘(II) the intermediary or person 

6 associated with the intermediary has 

7 engaged, and there is a reasonable 

8 likelihood the intermediary or person 

9 will again engage, in acts or practices 

10 inconsistent with just and equitable 

11 principles of trade; and 

12 ‘‘(ii) examine and verify the qualifica13 tions of an applicant to become a member 

14 and the individuals associated with the ap15 plicant in accordance with procedures es16 tablished by the rules of the association. 

17 ‘‘(B) ASSOCIATION.—A registered digital 

18 asset association may— 

19 ‘‘(i) bar an individual from becoming 

20 associated with a member, or condition the 

21 association of an individual with a mem22 ber, if that individual— 

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1 petence as are prescribed by the rules 

2 of the association; or 

3 ‘‘(II) has engaged, and there is a 

4 reasonable likelihood the individual 

5 will again engage, in acts or practices 

6 inconsistent with just and equitable 

7 principles of trade; 

8 ‘‘(ii) examine and verify the qualifica9 tions of an applicant to become a person 

10 associated with a member in accordance 

11 with procedures established by the rules of 

12 the association; and 

13 ‘‘(iii) require an individual associated 

14 with a member, or any class of such indi15 viduals, to be registered with the associa16 tion in accordance with procedures so es17 tablished. 

18 ‘‘(C) BAR ON ASSOCIATION.—A registered 

19 digital asset association may bar any person 

20 from becoming associated with a member if 

21 that person does not agree— 

22 ‘‘(i) to supply the association with 

23 such information with respect to the rela24 tionship and dealings of the person with 


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1 the member as may be specified in the 

2 rules of the association; and 

3 ‘‘(ii) to permit examination of the 

4 records of the person to verify the accuracy 

5 of any information supplied by the person 

6 under clause (i). 

7 ‘‘(4) DENIAL FOR TYPE OF BUSINESS.— 

8 ‘‘(A) IN GENERAL.—Subject to subpara9 graph (B), a registered digital asset association 

10 may deny membership to a digital asset inter11 mediary not engaged in a type of business in 

12 which the rules of the association require mem13 bers to be engaged. 

14 ‘‘(B) CONDITION.—No digital asset asso15 ciation may deny membership to a digital asset 

16 intermediary by reason of the amount of such 

17 type of business done by such intermediary or 

18 the other types of business in which the inter19 mediary is engaged. 

20 ‘‘(h) DISCIPLINE OF REGISTERED DIGITAL ASSET

21 ASSOCIATION MEMBERS AND PERSONS ASSOCIATED

22 WITH MEMBERS; SUMMARY PROCEEDINGS.— 

23 ‘‘(1) DISCIPLINE.— 

24 ‘‘(A) NOTIFICATION.—In any proceeding 

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1 termine whether a member, or a person associ2 ated with a member, should be disciplined 

3 (other than a summary proceeding pursuant to 

4 paragraph (3)), the association shall bring spe5 cific charges, notify such member or person of 

6 (and give the person an opportunity to defend 

7 against) those charges, and keep a record. 

8 ‘‘(B) STATEMENT.—A determination by a 

9 registered digital asset association to impose 

10 discipline in a proceeding under subparagraph 

11 (A) shall be supported by a statement setting 

12 forth— 

13 ‘‘(i) any act or practice in which the 

14 member, or person associated with a mem15 ber, has been found to have engaged, or 

16 that such member or person has been 

17 found to have omitted; 

18 ‘‘(ii) the specific provision of law, the 

19 rules under such a provision, or the rules 

20 of the association that an act or practice 

21 described in clause (i), or omission to act, 

22 is charged with violating; and 

23 ‘‘(iii) the sanction imposed and a jus24 tification for the sanction. 

25 ‘‘(2) DENIAL OF MEMBERSHIP OR SERVICES.— 


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1 ‘‘(A) NOTIFICATION.—In any proceeding 

2 by a registered digital asset association to de3 termine whether a person shall be denied mem4 bership, barred from becoming associated with 

5 a member, or prohibited or limited with respect 

6 to access to services offered by the association 

7 or a member of the association (other than a 

8 summary proceeding pursuant to paragraph 

9 (3)), the association shall— 

10 ‘‘(i) notify that person and give the 

11 person an opportunity to be heard; 

12 ‘‘(ii) provide the person the specific 

13 grounds for denial, bar, or prohibition or 

14 limitation under consideration; and 

15 ‘‘(iii) maintain a record. 

16 ‘‘(B) STATEMENT.—A determination by a 

17 registered digital asset association to deny 

18 membership, bar a person from becoming asso19 ciated with a member, or prohibit or limit a 

20 person with respect to access to services offered 

21 by the association or a member under subpara22 graph (A) shall be supported by a statement 

23 setting forth the specific grounds on which the 

24 denial, bar, or prohibition or limitation is based. 

25 ‘‘(3) SUMMARY PROCEEDING.— 


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1 ‘‘(A) IN GENERAL.—A registered digital 

2 asset association may summarily— 

3 ‘‘(i) suspend a member of the associa4 tion, or a person associated with such a 

5 member, that is— 

6 ‘‘(I) expelled or suspended from 

7 any other digital asset association; or 

8 ‘‘(II) barred or suspended from 

9 being associated with a member of an10 other digital asset association; 

11 ‘‘(ii) suspend a member of the asso12 ciation that is in such financial or oper13 ating difficulty that the association deter14 mines (and so notifies the appropriate 

15 commission) that the member cannot be 

16 permitted to continue to do business as a 

17 member, in order to protect customers, 

18 creditors, other members, or the associa19 tion; or 

20 ‘‘(iii) limit or prohibit any person 

21 from accessing services offered by the asso22 ciation if clause (i) or (ii) is applicable to 

23 that person, or, in the case of a person 

24 that is not a member of the association, if 


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1 the association determines that the per2 son— 

3 ‘‘(I) does not meet the qualifica4 tion requirements or other pre5 requisites for that access; and 

6 ‘‘(II) cannot be permitted to con7 tinue to have such access with safety, 

8 in order to protect customers, credi9 tors, members, or the association. 

10 ‘‘(B) OPPORTUNITY FOR HEARING.—Any 

11 person aggrieved by a summary action under 

12 subparagraph (A) shall be promptly afforded an 

13 opportunity for a hearing by the applicable dig14 ital asset association in accordance with the 

15 provisions of paragraph (1) or (2). 

16 ‘‘(C) STAY.—The appropriate commission, 

17 by order, may stay a summary action described 

18 in subparagraph (A) on the motion of the com19 mission or upon application by any person ag20 grieved by the summary action, if the commis21 sion determines summarily or after notice and 

22 opportunity for hearing (which may consist 

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1 sistent with the public interest and customer 

2 protection. 

3 ‘‘(i) OBLIGATION TO MAINTAIN REGISTRATION, DIS4 CIPLINARY, AND OTHER DATA.— 

5 ‘‘(1) MAINTENANCE OF SYSTEM TO RESPOND

6 TO INQUIRIES.—A registered digital asset associa7 tion shall establish and maintain— 

8 ‘‘(A) a system for collecting and retaining 

9 registration information; and 

10 ‘‘(B) a website, including an application 

11 programming interface, to receive and promptly 

12 respond to inquiries regarding registration in13 formation on the members of the association 

14 and associated persons with respect to those 

15 members. 

16 ‘‘(2) RECOVERY OF COSTS.—A registered dig17 ital asset association may charge persons making in18 quiries described in paragraph (1)(B), other than in19 dividual customers of digital asset intermediaries, 

20 reasonable fees for responses. 

21 ‘‘(3) PROCESS FOR DISPUTED INFORMATION.— 

22 Each registered digital asset association shall adopt 

23 rules establishing a process for disputing the accu24 racy of information provided in response to inquiries 

25 under this subsection. 


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1 ‘‘(4) LIMITATION ON LIABILITY.—A registered 

2 digital asset association, or any digital asset inter3 mediary reporting information to such an associa4 tion, shall not have any liability to any person for 

5 any actions taken or omitted in good faith under 

6 this subsection. 

7 ‘‘(j) AVOIDANCE OF DUPLICATIVE RULES.— 

8 ‘‘(1) IN GENERAL.—Each digital asset associa9 tion registered under subsection (b) shall issue rules 

10 as necessary to avoid duplicative or conflicting rules 

11 applicable to any digital asset intermediary that is a 

12 member of a national securities exchange, board of 

13 trade, contract market, registered securities associa14 tion, registered futures association, or similar digital 

15 asset association. 

16 ‘‘(2) OTHER MEMBERSHIP.—A digital asset 

17 intermediary shall not be required to become a mem18 ber of another digital asset association unless the 

19 intermediary performs activities with financial assets 

20 other than digital assets. 

21 ‘‘(3) NON-DIGITAL ASSET ACTIVITIES.— 

22 ‘‘(A) RULES BY COMMISSIONS.—The Secu23 rities and Exchange Commission and the Com24 modity Futures Trading Commission shall 

25 jointly prescribe rules under which a digital 


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1 asset intermediary that is a member or affiliate 

2 of a digital asset association registered under 

3 this section may perform activities with finan4 cial assets other than digital assets, if those ac5 tivities are not a majority of the business of an 

6 intermediary and are conducted in a responsible 

7 manner, without membership in another digital 

8 asset association. 

9 ‘‘(B) RULES BY DIGITAL ASSET ASSOCIA10 TIONS.—A registered digital asset association 

11 under this section shall adopt rules governing 

12 activities with financial assets other than digital 

13 assets, which shall be consistent with existing 

14 law, rule, guidance or industry best practices or 

15 the rules of other digital asset associations.’’. 

16 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

17 The table of sections for chapter 98 of title 31, United 

18 States Code, as added by section 2, is amended by adding 

19 at the end the following: 

‘‘9802. Registered digital asset associations.’’. 

20 SEC. 4. REGISTRATION, RULEMAKING, AND SUPERVISION 

21 OF DIGITAL ASSET ASSOCIATIONS. 

22 (a) IN GENERAL.—Chapter 98 of title 31, United 

23 States Code, as amended by section 3, is amended by add24 ing at the end the following: 


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1 ‘‘§ 9803. Registration, rulemaking, and supervision of 

2 digital asset associations 

3 ‘‘(a) REGISTRATION PROCEDURES; NOTICE OF FIL4 ING; OTHER REGULATORY AGENCIES.— 

5 ‘‘(1) PUBLICATION OF NOTICE.— 

6 ‘‘(A) IN GENERAL.—The Securities and 

7 Exchange Commission and Commodity Futures 

8 Trading Commission shall, upon the filing of an 

9 application for registration as a digital asset as10 sociation under section 9802, publish notice of 

11 that filing and afford interested persons an op12 portunity to submit written data, views, and ar13 guments concerning the application. 

14 ‘‘(B) REQUIREMENTS.—Not later than 90 

15 days after the date on which notice is published 

16 under subparagraph (A), or within a longer pe17 riod to which the applicable applicant consents, 

18 the Securities and Exchange Commission and 

19 Commodity Futures Trading Commission 

20 shall— 

21 ‘‘(i) by joint order, grant registration 

22 of the digital asset association; or 

23 ‘‘(ii) institute proceedings to deter24 mine whether registration should be de25 nied. 

26 ‘‘(C) PROCEEDINGS.— 


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1 ‘‘(i) IN GENERAL.—Proceedings insti2 tuted under subparagraph (B)(ii) shall in3 clude notice of the grounds for denial 

4 under consideration and opportunity for 

5 hearing before the joint commissions. 

6 ‘‘(ii) HEARING.—A hearing described 

7 in clause (i) shall be concluded not later 

8 than 180 days after the date on which no9 tice of the filing of the application for reg10 istration is published under subparagraph 

11 (A). 

12 ‘‘(iii) FURTHER PROCEEDINGS.— 

13 ‘‘(I) SEPARATE VOTES.—At the 

14 conclusion of a hearing conducted 

15 under this subparagraph, and not 

16 later than the end of the 180-day pe17 riod described in clause (ii), the Secu18 rities and Exchange Commission and 

19 Commodity Futures Trading Commis20 sion, voting separately, shall act to 

21 grant or deny the applicable registra22 tion. 

23 ‘‘(II) EFFECT OF FAILURE TO

24 ISSUE JOINT ORDER.—The failure of 

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1 sion and Commodity Futures Trading 

2 Commission to issue a joint order dur3 ing the period described in subclause 

4 (I) shall be deemed to be a denial of 

5 the applicable registration. 

6 ‘‘(D) CONSIDERATIONS.—With respect to 

7 an application for registration described in this 

8 paragraph, the Securities and Exchange Com9 mission and Commodity Futures Trading Com10 mission shall— 

11 ‘‘(i) grant registration if all statutory 

12 requirements have been met and the rules 

13 under those statutory provisions with re14 spect to the applicant are satisfied; and 

15 ‘‘(ii) deny such registration if the 

16 commissions do not make the findings de17 scribed in clause (i). 

18 ‘‘(2) WITHDRAWAL FROM REGISTRATION.— 

19 ‘‘(A) IN GENERAL.—A digital asset asso20 ciation may, upon such terms and conditions as 

21 the Securities and Exchange Commission and 

22 Commodity Futures Trading Commission, by 

23 rule, determine necessary or appropriate in the 

24 public interest or for the protection of cus25 tomers, withdraw from registration described in 


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1 paragraph (1) by filing a written notice of with2 drawal with the commissions. 

3 ‘‘(B) CONSIDERATIONS.— 

4 ‘‘(i) IN GENERAL.—If the Securities 

5 and Exchange Commission and Commodity 

6 Futures Trading Commission, voting sepa7 rately, each finds that a digital asset asso8 ciation is no longer in existence or has 

9 ceased to do business in the capacity speci10 fied in the application for registration sub11 mitted by the association, the commissions 

12 may cancel the registration of the associa13 tion. 

14 ‘‘(ii) EFFECT OF FAILURE TO VOTE.— 

15 The failure to issue a joint order described 

16 in clause (i) shall be deemed to maintain 

17 the registration of the applicable digital 

18 asset association. 

19 ‘‘(C) EFFECT OF WITHDRAWAL, CAN20 CELLATION, SUSPENSION, OR REVOCATION.— 

21 Upon withdrawal by registration or the can22 cellation, suspension, or revocation of the reg23 istration of a digital asset association, the reg24 istration of any association affiliated with the 

25 association shall automatically terminate. 


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1 ‘‘(b) PROPOSED RULE CHANGES; NOTICE; PRO2 CEEDINGS.— 

3 ‘‘(1) IN GENERAL.—Except as otherwise pro4 vided in paragraph (2)— 

5 ‘‘(A) a digital asset association shall file 

6 with the appropriate commission, in accordance 

7 with the rules of that commission, copies of any 

8 proposed rule or any proposed change in, addi9 tion to, or deletion from the rules of such dig10 ital asset association accompanied by a concise 

11 general statement of the basis and purpose of 

12 such proposed rule change; 

13 ‘‘(B) the appropriate commission shall— 

14 ‘‘(i) as soon as practicable after the 

15 date on which a proposed rule change is 

16 filed under subparagraph (A), publish no17 tice of that filing together with the terms 

18 of substance of the proposed rule change 

19 or a description of the subjects and issues 

20 involved; and 

21 ‘‘(ii) give interested persons an oppor22 tunity to submit written data, views, and 

23 arguments concerning that proposed rule 

24 change; 


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1 ‘‘(C) no proposed rule change described in 

2 subparagraph (A) shall take effect unless ap3 proved by the appropriate commission or other4 wise permitted in accordance with the provi5 sions of this subsection; and 

6 ‘‘(D) no proposed rule change described in 

7 subparagraph (A) relating to a matter under 

8 the jurisdiction of more than 1 commission may 

9 be filed. 

10 ‘‘(2) APPROVAL PROCESS.— 

11 ‘‘(A) APPROVAL PROCESS ESTABLISHED.— 

12 ‘‘(i) IN GENERAL.—Except as pro13 vided in clause (ii), not later than 30 days 

14 after the date on which notice of a pro15 posed rule change is published under para16 graph (1), the appropriate commission 

17 shall— 

18 ‘‘(I) by order, approve or dis19 approve the proposed rule change; or 

20 ‘‘(II) institute proceedings under 

21 subparagraph (B) to determine wheth22 er the proposed rule change should be 

23 disapproved. 

24 ‘‘(ii) EXTENSION OF TIME PERIOD.— 

25 The appropriate commission may extend 


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1 the period established under clause (i) by 

2 not more than an additional 30 days, if— 

3 ‘‘(I) the commission determines 

4 that a longer period is appropriate 

5 and publishes the reasons for that de6 termination; or 

7 ‘‘(II) the digital asset association 

8 that filed the proposed rule change 

9 consents to a longer period. 

10 ‘‘(B) PROCEEDINGS.— 

11 ‘‘(i) NOTICE AND HEARING.—If the 

12 appropriate commission does not approve 

13 or disapprove a proposed rule change 

14 under subparagraph (A), the commission 

15 shall provide to the digital asset associa16 tion that filed the proposed rule change— 

17 ‘‘(I) notice of the grounds for 

18 disapproval under consideration; and 

19 ‘‘(II) opportunity for hearing, to 

20 be concluded not later than 180 days 

21 after the date of publication of notice 

22 of the filing of the proposed rule 

23 change. 

24 ‘‘(ii) ORDER OF APPROVAL OR DIS25 APPROVAL.— 


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1 ‘‘(I) IN GENERAL.—Except as 

2 provided in subclause (II), not later 

3 than 180 days after the date on which 

4 notice is published under paragraph 

5 (1), the appropriate commission shall 

6 issue an order approving or dis7 approving the proposed rule change 

8 that is the subject of the notice. 

9 ‘‘(II) EXTENSION OF TIME PE10 RIOD.—The appropriate commission 

11 may extend the period for issuance 

12 under clause (I) by not more than 60 

13 days, if— 

14 ‘‘(aa) the commission deter15 mines that a longer period is ap16 propriate and publishes the rea17 sons for such determination; or 

18 ‘‘(bb) the digital asset asso19 ciation that filed the proposed 

20 rule change consents to the 

21 longer period. 

22 ‘‘(C) STANDARDS FOR APPROVAL AND DIS23 APPROVAL.— 

24 ‘‘(i) APPROVAL.—The appropriate 

25 commission shall approve a proposed rule 


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•S 5286 IS

1 change of a digital asset association if the 

2 commission finds that the proposed rule 

3 change is consistent with law. 

4 ‘‘(ii) TIME FOR APPROVAL.—The ap5 propriate commission may not approve a 

6 proposed rule change earlier than 30 days 

7 after the date of publication of notice with 

8 respect to the proposed rule change under 

9 paragraph (1), unless the commission finds 

10 good cause for so doing and publishes the 

11 reason for the finding. 

12 ‘‘(D) RESULT OF FAILURE TO INSTITUTE

13 OR CONCLUDE PROCEEDINGS.—A proposed rule 

14 change shall be deemed to have been approved 

15 by the appropriate commission, if— 

16 ‘‘(i) the commission does not approve 

17 or disapprove the proposed rule change, or 

18 begin proceedings under subparagraph (B), 

19 within the period described in subpara20 graph (A); or 

21 ‘‘(ii) the commission does not issue an 

22 order approving or disapproving the pro23 posed rule change under subparagraph (B) 

24 within the period described in subpara25 graph (B)(ii). 


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1 ‘‘(E) PUBLICATION DATE BASED ON FED2 ERAL REGISTER PUBLISHING.— 

3 ‘‘(i) IN GENERAL.—For purposes of 

4 this paragraph, if, after filing a proposed 

5 rule change with the appropriate commis6 sion under paragraph (1), a digital asset 

7 association publishes a notice of the filing 

8 of that proposed rule change, together with 

9 the substantive terms of that proposed rule 

10 change, on a publicly accessible website, 

11 the commission shall send the notice to the 

12 Federal Register for publication of the pro13 posed rule change under paragraph (1) not 

14 later than 5 days after the date on which 

15 that website publication is made. 

16 ‘‘(ii) EFFECT OF FAILING TO SEND.— 

17 If the appropriate commission fails to send 

18 notice under clause (i) during the 5-day 

19 period described in that clause, the date of 

20 publication shall be deemed to be the date 

21 on which the applicable website publication 

22 is made. 

23 ‘‘(3) INTERNAL GOVERNANCE.—With respect to 

24 a proposed rule relating to the internal operation, 

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1 ciation, or a proposed rule relating to the determina2 tion of the legal character of a digital asset— 

3 ‘‘(A) the proposed rule shall be— 

4 ‘‘(i) subject to approval by the Securi5 ties and Exchange Commission and the 

6 Commodity Futures Trading Commission; 

7 and 

8 ‘‘(ii) deemed to be approved on the 

9 date that is 5 days after the date on which 

10 the proposed rule is submitted, unless ei11 ther commission objects to the proposed 

12 rule change; and 

13 ‘‘(B) if a commission objects to the pro14 posed rule change under subparagraph (A)(ii)— 

15 ‘‘(i) the commission shall, in a public 

16 format, provide to the digital asset associa17 tion and the non-objecting commission the 

18 reasons for the objection; 

19 ‘‘(ii) the digital asset association, and 

20 interested members of the public, may pro21 vide written comments to the commissions 

22 during the 20-day period beginning on the 

23 date on which the objection is noted; and 

24 ‘‘(iii) the Securities and Exchange 

25 Commission and the Commodity Futures 


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•S 5286 IS

1 Trading Commission, voting separately, 

2 shall jointly issue an order approving or 

3 disapproving the proposed rule, with the 

4 failure to issue such a joint order being 

5 deemed to be approval of the proposed 

6 rule. 

7 ‘‘(4) EXCEPTION.— 

8 ‘‘(A) IN GENERAL.—Notwithstanding 

9 paragraphs (2) and (3), a proposed rule change 

10 shall take effect upon filing if self-certified by 

11 a digital asset association as— 

12 ‘‘(i) constituting a stated policy, prac13 tice, or interpretation with respect to the 

14 meaning, administration, or enforcement of 

15 an existing rule of the digital asset associa16 tion; 

17 ‘‘(ii) establishing or changing a due, 

18 fee, or other charge imposed by the digital 

19 asset association on any person, whether or 

20 not the person is a member of the digital 

21 asset association; or 

22 ‘‘(iii) notwithstanding any other provi23 sion of this subsection, necessary for cus24 tomer protection, the maintenance of fair 

25 and orderly markets, or the safeguarding 


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•S 5286 IS

1 of digital assets, customer funds, or other 

2 property, in which case the proposed rule 

3 change under shall be filed promptly there4 after in accordance with paragraph (1). 

5 ‘‘(B) ENFORCEMENT.— 

6 ‘‘(i) IN GENERAL.—Any proposed rule 

7 change of a digital asset association that 

8 has taken effect under subparagraph (A) 

9 may be enforced by the association to the 

10 extent the rule change is not inconsistent 

11 with applicable law. 

12 ‘‘(ii) SUSPENSION.— 

13 ‘‘(I) IN GENERAL.—At any time 

14 during the 60-day period beginning on 

15 the date on which a proposed rule 

16 change is filed under paragraph (1), 

17 the appropriate commission may tem18 porarily and summarily suspend the 

19 change in the rules of the applicable 

20 digital asset association on a tem21 porary basis, if the commission deter22 mines that such action is necessary or 

23 appropriate in the public interest, for 

24 customer protection, or to otherwise 

25 comply with applicable law. 


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1 ‘‘(II) REQUIREMENTS.—If a 

2 commission takes action under sub3 clause (I), the commission shall insti4 tute proceedings under paragraph 

5 (2)(B) to determine whether the ap6 plicable proposed rule should be ap7 proved or disapproved. 

8 ‘‘(iii) RULE OF CONSTRUCTION.—Ac9 tion under this subparagraph shall not af10 fect the validity or force of a proposed rule 

11 change during the period the rule change 

12 was in effect and shall not be reviewable in 

13 a judicial proceeding, nor deemed to be 

14 final agency action for purposes of section 

15 704 of title 5. 

16 ‘‘(5) RULE OF CONSTRUCTION RELATING TO

17 FILING DATE OF PROPOSED RULE CHANGES.— 

18 ‘‘(A) IN GENERAL.—For purposes of this 

19 subsection, the date of filing of a proposed rule 

20 change shall be deemed to be the date on which 

21 the applicable commission receives the proposed 

22 rule change. 

23 ‘‘(B) EXCEPTION.— 

24 ‘‘(i) IN GENERAL.—Subject to clause 

25 (ii), a proposed rule has not been received 


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•S 5286 IS

1 by the applicable commission for purposes 

2 of subparagraph (A), if, not later than 7 

3 business days after the date on which the 

4 commission receives the rule, the commis5 sion notifies the applicable digital asset as6 sociation that the proposed rule change 

7 does not comply with the rules of the com8 mission relating to the required form of a 

9 proposed rule change. 

10 ‘‘(ii) LENGTHY AND COMPLEX PRO11 POSED RULE CHANGES.— 

12 ‘‘(I) IN GENERAL.—If the appli13 cable commission determines that a 

14 proposed rule change is unusually 

15 lengthy, and is complex or raises novel 

16 regulatory issues, the commission 

17 shall inform the applicable digital 

18 asset association of that determina19 tion not later than 7 business days 

20 after the date on which the commis21 sion receives the rule. 

22 ‘‘(II) DEADLINE.—For the pur23 poses of subparagraph (A), a pro24 posed rule change described in sub25 clause (I) has not been received by the 


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•S 5286 IS

1 applicable commission, if, not later 

2 than 21 days after the date on which 

3 the commission receives the rule, the 

4 commission notifies the applicable dig5 ital asset association that the pro6 posed rule change does not comply 

7 with the rules of the commission relat8 ing to the required form of a proposed 

9 rule change. 

10 ‘‘(C) APPLICABILITY.—This paragraph 

11 shall not apply to a rule relating to the internal 

12 operations, governance, and procedure of a dig13 ital asset association. 

14 ‘‘(c) AMENDMENT OF RULES OF DIGITAL ASSET AS15 SOCIATIONS.— 

16 ‘‘(1) IN GENERAL.—The appropriate commis17 sion may, by rule, abrogate, add to, and delete from 

18 the rules of a digital asset association as the com19 mission determines necessary or appropriate to en20 sure the fair administration of the digital asset asso21 ciation or to conform the rules of the association to 

22 law or applicable rule, in the following manner: 

23 ‘‘(A) The appropriate commission shall no24 tify the digital asset association and publish no25 tice of the proposed rulemaking in the Federal 


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•S 5286 IS

1 Register, which shall include the text of the 

2 proposed amendment to the rules of the digital 

3 asset association and a statement of the reasons 

4 of the commission, including any pertinent 

5 facts, for commencing the proposed rulemaking. 

6 ‘‘(B)(i) The appropriate commission shall 

7 give interested persons an opportunity for the 

8 oral presentation of data, views, and arguments, 

9 in addition to an opportunity to make written 

10 submissions. 

11 ‘‘(ii) A transcript shall be kept of any oral 

12 presentation under clause (i). 

13 ‘‘(C) A rule adopted pursuant to this para14 graph shall incorporate the text of the amend15 ment to the rules of the digital asset association 

16 and a statement of the appropriate commission 

17 regarding the basis for amendment of the rule, 

18 which shall include an identification of any 

19 facts on which the determination of the com20 mission to amend the rules of the digital asset 

21 association is based, including the reasons for 

22 the conclusions of the commission relating to 

23 any facts that were disputed in the rulemaking. 

24 ‘‘(2) RULE OF CONSTRUCTION.—Nothing in 

25 this subsection may be construed to impair or limit 


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•S 5286 IS

1 the authority of the appropriate commission to 

2 make, or to modify or alter the procedures the com3 mission may follow in making, rules pursuant to any 

4 other authority granted by law that is consistent 

5 with this subsection. 

6 ‘‘(3) EFFECT OF RULES.—Any amendment to 

7 the rules of a digital asset association made by the 

8 appropriate commission under this subsection shall 

9 be considered for all purposes to be part of the rules 

10 of that digital asset association and shall not be con11 sidered to be a rule of the commission. 

12 ‘‘(4) CONSULTATIONS.—With respect to rules 

13 described in subsection (b)(4)(A)(iii), the appro14 priate commission shall consult with and consider 

15 the views of the other commission and the Secretary 

16 of the Treasury before abrogating, adding to, and 

17 deleting from those rules, except where the commis18 sion determines that an emergency exists requiring 

19 expeditious or summary action and publishes the 

20 reasons of the commission for taking that action. 

21 ‘‘(d) NOTICE OF DISCIPLINARY ACTION TAKEN BY

22 DIGITAL ASSET ASSOCIATION AGAINST A MEMBER OR

23 PARTICIPANT; REVIEW OF ACTION BY APPROPRIATE

24 COMMISSION; PROCEDURE.— 


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1 ‘‘(1) IN GENERAL.—If a digital asset associa2 tion imposes any final disciplinary sanction on any 

3 member of the association, or any participant with 

4 respect to the association, denies membership or 

5 participation to any applicant, prohibits or limits 

6 any person from accessing services offered by the as7 sociation or a member of the association, imposes 

8 any final disciplinary sanction on any person associ9 ated with a member, or bars any person from be10 coming associated with a member, the digital asset 

11 association shall promptly file notice of that action 

12 with the appropriate commission. 

13 ‘‘(2) REVIEW.— 

14 ‘‘(A) IN GENERAL.—Any action with re15 spect to which a digital asset association is re16 quired to file notice under paragraph (1) shall 

17 be subject to review by the appropriate commis18 sion for the applicable member, participant, ap19 plicant, or other person, on its own motion, or 

20 upon application by any person aggrieved by 

21 that action if filed not later than 30 days after 

22 the date on which the notice was filed with the 

23 appropriate commission and received by the ag24 grieved person, or within such longer period as 

25 the appropriate commission may determine. 


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1 ‘‘(B) APPLICATION.—Application to the 

2 appropriate commission for review, or the insti3 tution of review by the commission on its own 

4 motion, shall not operate as a stay of an action 

5 described in subparagraph (A) unless the ap6 propriate commission otherwise orders, sum7 marily or after notice and opportunity for hear8 ing on the question of a stay, which may consist 

9 solely of the submission of affidavits or presen10 tation of oral arguments. 

11 ‘‘(C) STAYS.—For the purposes of this 

12 paragraph, each of the appropriate commissions 

13 shall establish for appropriate cases an expe14 dited procedure for consideration and deter15 mination of the question of a stay. 

16 ‘‘(3) APPLICABILITY.—This subsection shall 

17 apply only to the extent that a digital asset associa18 tion imposes any final disciplinary sanction for— 

19 ‘‘(A) a violation of Federal law or the rules 

20 issued under Federal law; or 

21 ‘‘(B) a violation of a rule of the digital 

22 asset association, as to which a proposed 

23 change would be required to be filed under this 

24 section. 


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1 ‘‘(e) DISPOSITION OF REVIEW; CANCELLATION, RE2 DUCTION, OR REMISSION OF SANCTION.— 

3 ‘‘(1) IN GENERAL.—In any proceeding to review 

4 a final disciplinary sanction imposed by a digital 

5 asset association on a member of the association, a 

6 participant with respect to the association, or a per7 son associated with such a member, after notice and 

8 opportunity for hearing, which may consist solely of 

9 consideration of the record before the digital asset 

10 association and opportunity for the presentation of 

11 supporting reasons to affirm, modify, or set aside 

12 the sanction— 

13 ‘‘(A) if the appropriate commission finds 

14 that such member, participant, or person asso15 ciated with a member has engaged in such acts 

16 or practices, or has omitted such acts, as the 

17 digital asset association has found that person 

18 to have engaged in or omitted, that such acts 

19 or practices, or omissions to act, are in violation 

20 of law, the rules thereunder, or the rules of the 

21 digital asset association, and that such provi22 sions are, and were applied in a manner, con23 sistent with law, the commission, by order, 

24 shall— 


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•S 5286 IS

1 ‘‘(i) make a declaration regarding that 

2 finding; and 

3 ‘‘(ii) as appropriate— 

4 ‘‘(I) affirm the sanction imposed 

5 by the digital asset association; 

6 ‘‘(II) modify the sanction in ac7 cordance with paragraph (2); or 

8 ‘‘(III) remand to the digital asset 

9 association for further proceedings; or 

10 ‘‘(B) if the appropriate commission does 

11 not make a finding described in subparagraph 

12 (A), the commission shall, by order— 

13 ‘‘(i) set aside the sanction imposed by 

14 the digital asset association; and 

15 ‘‘(ii) if appropriate, remand to the 

16 digital asset association for further pro17 ceedings. 

18 ‘‘(2) MODIFICATION.—If the appropriate com19 mission for a member, participant, or person associ20 ated with a member, having due regard for the pub21 lic interest and customer protection, finds, after a 

22 proceeding under paragraph (1), that a sanction im23 posed by a digital asset association upon that mem24 ber, participant, or person associated with a member 

25 imposes any burden on competition not necessary or 


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•S 5286 IS

1 appropriate or is excessive or oppressive, the com2 mission may cancel, reduce, or require the remission 

3 of that sanction. 

4 ‘‘(f) DISMISSAL OF REVIEW PROCEEDING.— 

5 ‘‘(1) IN GENERAL.—In any proceeding to review 

6 the denial of membership or participation in a dig7 ital asset association to any applicant, the barring of 

8 any person from becoming associated with a member 

9 of a digital asset association, or the prohibition or 

10 limitation by a digital asset association of any per11 son from accessing services offered by the digital 

12 asset association or any member of the association, 

13 if the appropriate commission, after notice and op14 portunity for hearing, which may consist solely of 

15 consideration of the record before the digital asset 

16 association and opportunity for the presentation of 

17 supporting reasons to dismiss the proceeding or set 

18 aside the action of the digital asset association, finds 

19 that the specific grounds on which that denial, bar, 

20 or prohibition or limitation is based exist in fact, 

21 that such denial, bar, or prohibition or limitation is 

22 in accordance with the rules of the digital asset as23 sociation, and that such rules are, and were applied 

24 in a manner, consistent with law, the appropriate 

25 commission, by order, shall dismiss the proceeding. 


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1 ‘‘(2) FAILURE TO MAKE FINDING.—If the ap2 propriate commission does not make a finding de3 scribed in paragraph (1), or if the commission finds 

4 that the applicable denial, bar, prohibition, or limita5 tion imposes any burden on competition not nec6 essary or appropriate, the commission, by order, 

7 shall set aside the action of the digital asset associa8 tion and require the association to admit the appli9 cable applicant to membership or participation, per10 mit that person to become associated with a mem11 ber, or grant that person access to services offered 

12 by the digital asset association or a member of the 

13 association. 

14 ‘‘(g) SUSPENSION OR REVOCATION OF DIGITAL

15 ASSET ASSOCIATION REGISTRATION; OTHER SANC16 TIONS.— 

17 ‘‘(1) IN GENERAL.—If necessary or appropriate 

18 in the public interest, for customer protection, or 

19 otherwise in furtherance of the purposes of this sec20 tion, the appropriate commissions, voting separately, 

21 may issue a joint order suspending for a period not 

22 exceeding 1 year or revoking the registration of a 

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1 sions find, on the record after notice and oppor2 tunity for hearing, that the digital asset associa3 tion— 

4 ‘‘(A) has violated or is unable to comply 

5 with any provision of law, rule, or the rules of 

6 the association without reasonable justification 

7 or excuse; or 

8 ‘‘(B) has failed to enforce compliance with 

9 any provision by a member of the association or 

10 a person associated with a member of the asso11 ciation. 

12 ‘‘(2) EXPULSION.—The appropriate commission 

13 may, by order, if necessary or appropriate in the 

14 public interest, for customer protection, or otherwise 

15 in furtherance of the purposes of this section, to sus16 pend for a period not exceeding 1 year or expel from 

17 a digital asset association, any member of a digital 

18 asset association, or participant with respect to a 

19 digital asset association, if such member or partici20 pant is subject to an order of the commission or if 

21 the commission, on the record after notice and op22 portunity for hearing, determines that the member 

23 or participant has willfully violated, or has effected 

24 any transaction for any other person who the mem25 ber or participant had reason to believe was vioVerDate Sep 11 2014 01:06 Dec 30, 2022 Jkt 039200 PO 00000 Frm 00051 Fmt 6652 Sfmt 6201 E:\BILLS\S5286.IS S5286

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1 lating, with respect to such transaction any applica2 ble provision of law under the jurisdiction of the 

3 commission. 

4 ‘‘(3) BAR ON ASSOCIATION.—The applicable 

5 commission may, by order, if necessary or appro6 priate in the public interest, for customer protection, 

7 or otherwise in furtherance of the purposes of this 

8 section, to suspend for a period not exceeding 1 year 

9 or to bar any person from being associated with a 

10 member of such digital asset association, if the per11 son is subject to an order of the appropriate com12 mission or if the appropriate commission finds, on 

13 the record after notice and opportunity for hearing, 

14 that the person has willfully violated, or has effected 

15 any transaction for any other person who the person 

16 associated with a member had reason to believe was 

17 violating, with respect to the transaction any appli18 cable provision of law under the jurisdiction of the 

19 commission. 

20 ‘‘(4) REMOVAL FROM OFFICE.—If necessary or 

21 appropriate in the public interest, for customer pro22 tection, or otherwise in furtherance of the purposes 

23 of this section, the Securities and Exchange Com24 mission and the Commodity Futures Trading Com25 mission, voting separately, may, by joint order, reVerDate Sep 11 2014 01:06 Dec 30, 2022 Jkt 039200 PO 00000 Frm 00052 Fmt 6652 Sfmt 6201 E:\BILLS\S5286.IS S5286

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1 move from office or censure any person who is, or 

2 at the time of the alleged misconduct was, an officer 

3 or director of a digital asset association, if the com4 missions find, on the record after notice and oppor5 tunity for a hearing before an impartial hearing offi6 cer, that such person has willfully violated any provi7 sion of law, the rules thereunder, or the rules of 

8 such digital asset association, willfully abused the 

9 authority of the person, or without reasonable jus10 tification or excuse has failed to enforce compliance 

11 with any provision of law by any member or person 

12 associated with a member. 

13 ‘‘(h) INTERAGENCY WORKING GROUP.—The Securi14 ties and Exchange Commission and the Commodity Fu15 tures Trading Commission shall each appoint an equal 

16 number of employees, under the supervision of the Chair17 man of the respective commissions, to an interagency 

18 working group, which shall coordinate and facilitate the 

19 responsibilities and powers of the respective commissions 

20 under this chapter.’’. 

21 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

22 The table of sections for chapter 98 of title 31, United 

23 States Code, as amended by section 3, is amended by add24 ing at the end the following: 

‘‘9803. Registration, rulemaking, and supervision of digital asset associations.’’. 


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1 SEC. 5. RECORDS AND REPORTS; DUTIES AND POWERS OF 

2 REGISTERED DIGITAL ASSET ASSOCIATIONS. 

3 (a) IN GENERAL.—Chapter 98 of title 31, United 

4 States Code, as amended by section 4, is amended by add5 ing at the end the following: 

6 ‘‘§ 9804. Records and reports; duties and powers of 

7 registered digital asset associations 

8 ‘‘(a) IN GENERAL.—Each member of a registered 

9 digital asset association shall make, and keep for pre10 scribed periods, such electronic records and disseminate 

11 reports as the registered digital asset association, by rule, 

12 prescribes as necessary or appropriate in the public inter13 est. 

14 ‘‘(b) RECORDS SUBJECT TO EXAMINATION.— 

15 ‘‘(1) PROCEDURES FOR COOPERATION WITH

16 OTHER AGENCIES.— 

17 ‘‘(A) IN GENERAL.—All records of a mem18 ber described in subsection (a) are subject at 

19 any time, or from time to time, to reasonable 

20 periodic, special, or other examinations by the 

21 registered digital asset association of the mem22 ber. 

23 ‘‘(B) NOTICE.—Before conducting an ex24 amination under subparagraph (A), the exam25 ining authority shall— 


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1 ‘‘(i) inform all other relevant regu2 latory agencies and digital asset associa3 tions with jurisdiction over the member re4 garding the proposed examination; and 

5 ‘‘(ii) consult concerning the feasibility 

6 and desirability of coordinating such exam7 ination with examinations conducted by 

8 other entities with a view to avoiding un9 necessary duplication and undue regulatory 

10 burden. 

11 ‘‘(C) EXAMINATIONS OF MEMBERS.—Upon 

12 a showing of good cause, the Securities and Ex13 change Commission or the Commodity Futures 

14 Trading Commission, as applicable, may con15 duct a special examination of a registered dig16 ital asset association or a member of such an 

17 association. 

18 ‘‘(D) REPORT.—With respect to an exam19 ination under this paragraph, the examining au20 thority shall share such information, including 

21 reports of the examination, customer complaint 

22 information, and other nonpublic regulatory in23 formation, as may be appropriate to foster a co24 ordinated approach to regulatory oversight for 


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1 members that are subject to examination by 

2 more than 1 examining authority. 

3 ‘‘(E) REQUIREMENTS WHEN EXAMINATION

4 NOT ONGOING.—A registered digital asset asso5 ciation, at all times when an examination under 

6 this paragraph is not in progress, shall conduct 

7 ongoing supervision of members of the associa8 tion, as may be provided by the rules of the as9 sociation. 

10 ‘‘(2) CLARIFICATION.—Notwithstanding any 

11 other provision of this subsection, the records of a 

12 member of a registered digital asset association shall 

13 not be subject to routine periodic examinations by 

14 the Securities and Exchange Commission or the 

15 Commodity Futures Trading Commission. 

16 ‘‘(3) EXAMINATION STANDARDS.—Each reg17 istered digital asset association shall— 

18 ‘‘(A) adopt tailored supervision and exam19 ination standards commensurate with the size 

20 and complexity of the association and risks 

21 faced by members of the association; 

22 ‘‘(B) to the extent reasonably possible, re23 duce the regulatory burden for emerging growth 

24 companies, as defined in section 2(a) of the Se25 curities Act of 1933 (15 U.S.C. 77b(a)), includVerDate Sep 11 2014 01:06 Dec 30, 2022 Jkt 039200 PO 00000 Frm 00056 Fmt 6652 Sfmt 6201 E:\BILLS\S5286.IS S5286

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1 ing through the use of self-certification and ex2 pedited or automated examinations; and 

3 ‘‘(C) in consultation with other registered 

4 digital asset associations, develop standard form 

5 customer agreements for the execution of dig6 ital asset transactions. 

7 ‘‘(c) REGISTERED DIGITAL ASSET ASSOCIATIONS.— 

8 ‘‘(1) IN GENERAL.—The Securities and Ex9 change Commission and Commodity Futures Trad10 ing Commission, shall, by rule or order, in order to 

11 foster cooperation and coordination among reg12 istered digital asset associations— 

13 ‘‘(A) with respect to any person that is a 

14 member of or participant in more than 1 reg15 istered digital asset association, relieve any reg16 istered digital asset association of any responsi17 bility— 

18 ‘‘(i) to receive regulatory reports from 

19 the person; 

20 ‘‘(ii) to examine the person for compli21 ance; or 

22 ‘‘(iii) to carry out other specified reg23 ulatory functions with respect to the per24 son; and 


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1 ‘‘(B) allocate among registered digital 

2 asset associations the authority to adopt rules 

3 with respect to matters as to which, in the ab4 sence of the allocation, such registered digital 

5 asset associations share authority. 

6 ‘‘(2) CONSIDERATIONS.— 

7 ‘‘(A) IN GENERAL.—In making a rule, or 

8 entering an order, under paragraph (1), the ap9 propriate commission shall take into consider10 ation the regulatory capabilities and procedures 

11 of the applicable registered digital asset associa12 tions, availability of staff, convenience of loca13 tion, unnecessary regulatory duplication, and all 

14 other factors applicable to customer protection, 

15 cooperation and coordination among registered 

16 digital asset associations, and the development 

17 of a healthy digital asset market, which may in18 clude providing for the acceptance of examina19 tion reports prepared by a registered digital 

20 asset association under this chapter with re21 spect to a digital asset intermediary for which 

22 digital asset activities constitute a majority of 

23 business, in lieu of examinations conducted by 

24 other registered digital asset associations. 


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1 ‘‘(B) NOTIFICATION REQUIREMENT.—The 

2 Securities and Exchange Commission or Com3 modity Futures Trading Commission, by rule or 

4 order, may require that a registered digital 

5 asset association relieved of any responsibility 

6 under this paragraph, and any person with re7 spect to which that responsibility relates, to 

8 take such steps as are specified in any rule or 

9 order to notify customers of, and persons doing 

10 business with, the person of the limited nature 

11 of the responsibility of that registered digital 

12 asset association for the acts, practices, and 

13 course of business of the person. 

14 ‘‘(d) MISSING AND STOLEN DIGITAL ASSETS.—Each 

15 member of a registered digital asset association or other 

16 financial institution conducting digital asset transactions 

17 shall report to the Financial Crimes Enforcement Network 

18 of the Department of the Treasury such information as 

19 may be required by rule relating to digital asset theft or 

20 missing private keys for the possession or control of digital 

21 assets. 

22 ‘‘(e) CONFIDENTIALITY.— 

23 ‘‘(1) SHARING OF INFORMATION.— 

24 ‘‘(A) IN GENERAL.—Section 24 of the Se25 curities Exchange Act of 1934 (15 U.S.C. 78x) 


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1 shall apply to the sharing of information by the 

2 Securities and Exchange Commission and Com3 modity Futures Trading Commission in accord4 ance with this subsection. 

5 ‘‘(B) PROTECTION FROM INAPPROPRIATE

6 DISCLOSURE.—The commissions and a reg7 istered digital asset association shall ensure 

8 that all confidential information is not inappro9 priately disclosed pursuant to subparagraph 

10 (A). 

11 ‘‘(2) APPROPRIATE DISCLOSURE NOT PROHIB12 ITED.—Nothing in this subsection may be construed 

13 to authorize the Securities and Exchange Commis14 sion and Commodity Futures Trading Commission 

15 or a registered digital asset association to— 

16 ‘‘(A) withhold information from Congress; 

17 or 

18 ‘‘(B) prevent the commissions or an asso19 ciation from complying with— 

20 ‘‘(i) a request for information from 

21 any Federal or State department or agency 

22 requesting the information for purposes 

23 within the scope of the jurisdiction of that 

24 department or agency; or 


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1 ‘‘(ii) an order of a court of the United 

2 States in an action brought by the United 

3 States or the commissions. 

4 ‘‘(f) BEST EXECUTION.—A registered digital asset 

5 association, in consultation with members of the associa6 tion, the Securities and Exchange Commission, and the 

7 Commodity Futures Trading Commission, shall develop 

8 rules governing the best execution of digital asset trans9 actions. 

10 ‘‘(g) INITIAL DETERMINATION OF LEGAL CHAR11 ACTER.— 

12 ‘‘(1) IN GENERAL.— 

13 ‘‘(A) INITIAL DETERMINATION.—A reg14 istered digital asset association may make an 

15 initial determination of the legal character of a 

16 digital asset as a security, an ancillary asset, a 

17 commodity (as defined in section 1a of the 

18 Commodity Exchange Act (7 U.S.C. 1a)), or as 

19 otherwise provided by law, upon the written re20 quest of a member of the association. 

21 ‘‘(B) CONSULTATION; HEARINGS.—Upon 

22 receipt of a request under subparagraph (A), a 

23 registered digital asset association— 

24 ‘‘(i) shall consult with the commis25 sions and make an initial determination reVerDate Sep 11 2014 01:06 Dec 30, 2022 Jkt 039200 PO 00000 Frm 00061 Fmt 6652 Sfmt 6201 E:\BILLS\S5286.IS S5286

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1 garding the request, after public notice and 

2 comment, not later than 45 days after the 

3 date on which the association receives the 

4 request; and 

5 ‘‘(ii) may hold a public hearing with 

6 respect to an initial determination de7 scribed in clause (i), if— 

8 ‘‘(I) the matter is of significant 

9 precedential value or complex; or 

10 ‘‘(II) holding such a hearing is 

11 otherwise in the public interest. 

12 ‘‘(2) PUBLICATION.—A registered digital asset 

13 association shall publish all determinations made 

14 under paragraph (1) on the website of the associa15 tion. 

16 ‘‘(h) OBJECTION TO INITIAL DETERMINATION.— 

17 ‘‘(1) IN GENERAL.— 

18 ‘‘(A) DEADLINE FOR OBJECTION.—Not 

19 later than 30 days after the date on which an 

20 initial determination is made under subsection 

21 (g), the Securities and Exchange Commission 

22 or Commodity Futures Trading Commission 

23 may object to the initial determination of the 

24 registered digital asset association by issuing an 


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1 order, after public notice, comment, and a hear2 ing. 

3 ‘‘(B) EFFECT OF OBJECTION.—Upon an 

4 objection under subparagraph (A), the initial 

5 determination to which the objection applies 

6 shall be held in abeyance. 

7 ‘‘(2) ORDER.— 

8 ‘‘(A) IN GENERAL.—Not later than 60 

9 days after the date on which a commission ob10 jects under paragraph (1), the commissions 

11 shall, after public notice and comment of not 

12 less than 30 days, issue an order resolving the 

13 objection and the status of the digital asset, as 

14 described in subsection (g)(1)(A), which may 

15 include joint responsibility of the commissions. 

16 ‘‘(B) FAILURE TO ISSUE.—If the Securi17 ties and Exchange Commission and the Com18 modity Futures Trading Commission fail to 

19 issue a joint order under subparagraph (A), the 

20 determination of the registered digital asset as21 sociation under subsection (g) shall become 

22 final, unless an action is brought in an appro23 priate district court of the United States of 

24 competent jurisdiction.’’. 


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1 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

2 The table of sections for chapter 98 of title 31, United 

3 States Code, as amended by section 4, is amended by add4 ing at the end the following: 

‘‘9804. Records and reports; duties and powers of registered digital asset associations.’’. 

Æ 


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