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[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 5286 Introduced in Senate (IS)]

<DOC>

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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Responsible Self-Regulation Act of 
2022''.

SEC. 2. DEFINITIONS.

    (a) In General.--Subtitle VI of title 31, United States Code, is 
amended by adding after chapter 97 the following:

                      ``CHAPTER 98--DIGITAL ASSETS

``Sec.
``9801. Definitions.
``Sec. 9801. Definitions
    ``In this chapter:
            ``(1) Ancillary asset.--
                    ``(A) In general.--The term `ancillary asset' means 
                an intangible, fungible asset that is offered, sold, or 
                otherwise provided to a person in connection with the 
                purchase and sale of a security through an arrangement 
                or scheme that constitutes an investment contract, as 
                that term is used in section 2(a)(1) of the Securities 
                Act of 1933 (15 U.S.C. 77b(a)(1)).
                    ``(B) Exclusion.--The term `ancillary asset' does 
                not include an asset that provides the holder of the 
                asset with any of the following rights in a business 
                entity:
                            ``(i) A debt or equity interest in that 
                        entity.
                            ``(ii) Liquidation rights with respect to 
                        that entity.
                            ``(iii) An entitlement to an interest or 
                        dividend payment from that entity.
                            ``(iv) A profit or revenue share in that 
                        entity solely from the entrepreneurial or 
                        managerial efforts of others.
                            ``(v) Any other financial interest in that 
                        entity.
            ``(2) Appropriate commission.--The term `appropriate 
        commission' means the Commodity Futures Trading Commission or 
        the Securities and Exchange Commission, or both, as applicable, 
        based on the commission that has statutory jurisdiction over a 
        digital asset intermediary and acts as the primary registration 
        or licensing authority, consistent with paragraph (4).
            ``(3) Digital asset.--The term `digital asset'--
                    ``(A) means a natively electronic asset that--
                            ``(i) confers economic, proprietary, or 
                        access rights or powers; and
                            ``(ii) is recorded using cryptographically 
                        secured distributed ledger technology, or any 
                        similar analogue; and
                    ``(B) includes--
                            ``(i) virtual currency and ancillary 
                        assets;
                            ``(ii) payment stablecoins; and
                            ``(iii) any other security or commodity 
                        that meets the requirements of subparagraph 
                        (A).
            ``(4) Digital asset intermediary.--The term `digital asset 
        intermediary'--
                    ``(A) means--
                            ``(i) a person that--
                                    ``(I) holds a license, 
                                registration, or other similar 
                                authorization, as specified by this 
                                chapter, the Commodity Exchange Act (7 
                                U.S.C. 1 et seq.), the Securities Act 
                                of 1933 (15 U.S.C. 77a et seq.), the 
                                Corporation of Foreign Bondholders Act, 
                                1933 (15 U.S.C. 77bb et seq.), the 
                                Trust Indenture Act of 1939 (15 U.S.C. 
                                77aaa et seq.), the Securities Exchange 
                                Act of 1934 (15 U.S.C. 78a et seq.), 
                                the Securities Investor Protection Act 
                                of 1970 (15 U.S.C. 78aaa et seq.), the 
                                Investment Company Act of 1940 (15 
                                U.S.C. 80a-1 et seq.), the Investment 
                                Advisers Act of 1940 (15 U.S.C. 80b-1), 
                                and the Omnibus Small Business Capital 
                                Formation Act of 1980 (15 U.S.C. 80c); 
                                and
                                    ``(II) may conduct market 
                                activities relating in digital assets; 
                                or
                            ``(ii) a person that is required by law to 
                        hold a license, registration, or other similar 
                        authorization described in clause (i);
                    ``(B) includes--
                            ``(i) a person that holds a license, 
                        registration, or other similar authorization 
                        under State or Federal law and issues a payment 
                        stablecoin; and
                            ``(ii) a person that is required by law to 
                        hold a license, registration, or other similar 
                        authorization described in clause (i); and
                    ``(C) does not include a depository institution.
            ``(5) Registered digital asset association.--The term 
        `registered digital asset association' means an organization 
        jointly registered by the Securities and Exchange Commission 
        and Commodity Futures Trading Commission under section 9802 for 
        the supervision of digital asset intermediaries.
            ``(6) Security.--The term `security' has the meaning given 
        the term in section 3(a) of the Securities Exchange Act of 1934 
        (15 U.S.C. 78c(a)).
            ``(7) Virtual currency.--The term `virtual currency'--
                    ``(A) means a digital asset that--
                            ``(i) is used primarily as a medium of 
                        exchange, unit of account, store of value, or 
                        any combination of such functions;
                            ``(ii) is not legal tender, as described in 
                        section 5103; and
                            ``(iii) does not derive value from, or is 
                        not backed by, an underlying financial asset 
                        (except other digital assets); and
                    ``(B) includes a digital asset, consistent with 
                subparagraph (A), that is accompanied by a statement 
                from the issuer that a denominated or pegged value will 
                be maintained and be available upon redemption from the 
                issuer or other identified person, based solely on 
                computer code deployed to a distributed ledger 
                technology network that executes an instruction based 
                on the occurrence or non-occurrence of a specified 
                condition, or any similar analogue.''.
    (b) Technical and Conforming Amendment.--The table of contents for 
subtitle VI of title 31, United States Code, is amended by adding at 
the end the following:

``98. Digital assets........................................    9801''.

SEC. 3. REGISTERED DIGITAL ASSET ASSOCIATIONS.

    (a) In General.--Chapter 98 of title 31, United States Code, as 
amended by section 2, is amended by adding at the end the following:
``Sec. 9802. Registered digital asset associations
    ``(a) Definitions.--In this section:
            ``(1) Nonmember professional.--The term `nonmember 
        professional' means any person that--
                    ``(A) is a digital asset intermediary; and
                    ``(B) is a not a member of a registered digital 
                asset association or affiliated organization.
            ``(2) Registration information.--The term `registration 
        information' means the information reported in connection with 
        the licensing, registration, or other authorization of digital 
        asset intermediaries and their associated persons, including--
                    ``(A) disciplinary actions, regulatory, judicial, 
                and arbitration proceedings, and other information 
                required by law or digital asset association rule; and
                    ``(B) the source and status of the information 
                described in subparagraph (A).
    ``(b) Registration; Application.--An association of digital asset 
intermediaries may be registered as a digital asset association, under 
the terms and conditions provided in this section, and in accordance 
with the provisions of this section and section 9803, by jointly filing 
with the Securities and Exchange Commission and the Commodity Futures 
Trading Commission an application for registration, in such form as the 
commissions may require, containing the rules of the association and 
such other information and documents that may be prescribed as 
necessary or appropriate in the public interest or for customer 
protection.
    ``(c) Determinations by Commissions Requisite to Registration.--An 
association of digital asset intermediaries may not be registered as a 
registered digital asset association under subsection (b) unless a 
majority of the members of each of the Securities and Exchange 
Commission and the Commodity Futures Trading Commission, voting 
separately, determine that--
            ``(1) by reason of the number and the scope of the 
        transactions of the association, the association will be able 
        to carry out the purposes of this section;
            ``(2) the association is so organized, and has the 
        capacity, to--
                    ``(A) be able to carry out the purposes of this 
                section and other applicable State and Federal laws; 
                and
                    ``(B) subject to any rule or order of the 
                appropriate commission, enforce compliance by members 
                of the association (and persons associated with those 
                members) with the provisions of applicable law, the 
                rules under those provisions, and the rules of the 
                association;
            ``(3) the rules of the association provide that any digital 
        asset intermediary may become a member of the association and 
        any person may become associated with a member of the 
        association;
            ``(4) the rules of the association ensure a fair 
        representation of the members of the association, including 
        emerging growth companies (as defined in section 2(a) of the 
        Securities Act of 1933 (15 U.S.C. 77b(a))), in the selection of 
        the directors of the association and administration of the 
        affairs of the association;
            ``(5) the rules of the association provide for the 
        equitable allocation of reasonable dues, fees, and other 
        charges among members of the association and other persons 
        using any facility or system that the association operates or 
        controls;
            ``(6) the rules of the association--
                    ``(A) are designed to--
                            ``(i) prevent fraudulent and manipulative 
                        acts and practices in order to promote just and 
                        equitable principles of trade;
                            ``(ii) foster cooperation and coordination 
                        with persons engaged in regulating, clearing, 
                        settling, processing information with respect 
                        to, and facilitating transactions in digital 
                        assets;
                            ``(iii) remove impediments to, and perfect 
                        the mechanism of, a free and open market; and
                            ``(iv) protect customers and the public 
                        interest; and
                    ``(B) are not designed to--
                            ``(i) permit unfair discrimination between 
                        customers and digital asset intermediaries;
                            ``(ii) fix minimum profits;
                            ``(iii) impose any schedule or fix rates of 
                        commissions, allowances, discounts, or other 
                        fees to be charged by the members of the 
                        association; or
                            ``(iv) regulate by virtue of any authority 
                        conferred by law matters not related to the 
                        purposes of this section or the administration 
                        of the association;
            ``(7) the rules of the association provide that, subject to 
        any rule or order of the appropriate commission, the members of 
        the association (and persons associated with those members) 
        shall be appropriately disciplined for a violation of any 
        provision of applicable law, the rules under such a provision, 
        or the rules of the association by expulsion, suspension, 
        limitation of activities, functions, and operations, fine, 
        censure, a suspension or bar from being associated with a 
        member, or any other fitting sanction;
            ``(8) the rules of the association are consistent with the 
        provisions of subsection (h) and, in general, provide a fair 
        procedure for--
                    ``(A) the disciplining of members and persons 
                associated with members;
                    ``(B) the denial of membership to any person 
                seeking membership in the association;
                    ``(C) the barring of any person from becoming 
                associated with a member of the association; and
                    ``(D) the prohibition or limitation by the 
                association of any person with respect to access to 
                services offered by the association or a member of the 
                association;
            ``(9) the rules of the association do not impose any burden 
        on competition not necessary or appropriate in furtherance of 
        the purposes of this section;
            ``(10) the requirements of subsection (d), as applicable, 
        are satisfied; and
            ``(11) the rules of the association include provisions 
        governing the form and content of quotations relating to 
        digital assets, which shall be designed to--
                    ``(A) produce fair and informative quotations;
                    ``(B) prevent fictitious or misleading quotations; 
                and
                    ``(C) promote orderly procedures for collecting, 
                distributing, and publishing quotations.
    ``(d) Rules; Provision for Registration of Affiliated 
Organization.--
            ``(1) In general.--The Securities and Exchange Commission 
        and the Commodity Futures Trading Commission may permit or 
        require the rules of an association applying for registration 
        under subsection (b) to provide for the admission of an 
        organization registered as an affiliated organization pursuant 
        to subsection (e), to participate in the applicant association 
        as an affiliate of the applicant association, under terms 
        permitting powers and responsibilities to the affiliate, and 
        under such other appropriate terms and conditions, as may be 
        provided by the rules of the applicant association, if those 
        rules appear to the commissions jointly to be necessary or 
        appropriate in the public interest or for customer protection 
        and to carry out the purposes of this section.
            ``(2) Duties and powers of the commissions.--The duties and 
        powers of the Securities and Exchange Commission and the 
        Commodity Futures Trading Commission with respect to any 
        association or affiliate organization shall in no way be 
        limited by reason of any such affiliation.
    ``(e) Registration as Affiliated Organization; Prerequisites; 
Association Rules.--
            ``(1) In general.--An applicant organization shall not be 
        registered as an affiliated organization, unless--
                    ``(A) the organization, notwithstanding that the 
                organization does not satisfy the requirements under 
                subsection (c)(1), will, upon the registration of the 
                organization under this subsection, be admitted to 
                affiliation with an organization registered as a 
                digital asset association pursuant to subsection (c), 
                in the manner and under the terms and conditions 
                provided by the rules of the registered digital asset 
                association in accordance with subsection (d); and
                    ``(B) the organization and the rules of the 
                organization satisfy the requirements under paragraphs 
                (2) through (11) of subsection (c).
            ``(2) Exception.--Any restrictions upon membership of an 
        applicant organization shall not be less stringent than in the 
        case of the registered digital asset association with which the 
        organization is to be affiliated.
    ``(f) Dealings With Nonmember Professionals.--
            ``(1) In general.--The rules of a digital asset association 
        may provide that no member of the association may deal with any 
        nonmember professional except at the same prices, for the same 
        commissions or fees, and on the same terms and conditions the 
        member accords to the general public.
            ``(2) Rule of construction.--Nothing in this subsection may 
        be construed to prevent any member of a registered digital 
        asset association from granting to any other member of any 
        other registered digital asset association any discount, 
        allowance, commission, or special terms in connection with a 
        digital asset transaction.
    ``(g) Denial of Membership.--
            ``(1) In general.--Membership in a registered digital asset 
        association under this section shall be limited to digital 
        asset intermediaries.
            ``(2) Denial for public interest or consumer protection.--
                    ``(A) In general.--A registered digital asset 
                association may, and the appropriate commission, by 
                order, may direct such an association to, as necessary 
                or appropriate in the public interest or for customer 
                protection, deny membership to any person, and bar from 
                becoming associated with a member any person, that is 
                subject to a statutory disqualification within the laws 
                under the jurisdiction of that commission.
                    ``(B) Notice.--A registered digital asset 
                association shall file notice with the appropriate 
                commission, in such form and containing such 
                information as the appropriate commission shall 
                require, not less than 30 days before admitting any 
                person to membership or permitting any person to become 
                associated with a member, if the association knew, or 
                in the exercise of reasonable care should have known, 
                that such person was subject to a statutory 
                disqualification.
            ``(3) Procedure.--
                    ``(A) In general.--A registered digital asset 
                association may--
                            ``(i) deny membership to, or condition the 
                        membership of, a digital asset intermediary, 
                        if--
                                    ``(I) the intermediary does not 
                                meet such standards of financial 
                                responsibility or operational 
                                capability, or such intermediary or any 
                                individual associated with the 
                                intermediary does not meet such 
                                standards of training, experience, and 
                                competence, as are prescribed by the 
                                rules of the association; or
                                    ``(II) the intermediary or person 
                                associated with the intermediary has 
                                engaged, and there is a reasonable 
                                likelihood the intermediary or person 
                                will again engage, in acts or practices 
                                inconsistent with just and equitable 
                                principles of trade; and
                            ``(ii) examine and verify the 
                        qualifications of an applicant to become a 
                        member and the individuals associated with the 
                        applicant in accordance with procedures 
                        established by the rules of the association.
                    ``(B) Association.--A registered digital asset 
                association may--
                            ``(i) bar an individual from becoming 
                        associated with a member, or condition the 
                        association of an individual with a member, if 
                        that individual--
                                    ``(I) does not meet such standards 
                                of training, experience, and competence 
                                as are prescribed by the rules of the 
                                association; or
                                    ``(II) has engaged, and there is a 
                                reasonable likelihood the individual 
                                will again engage, in acts or practices 
                                inconsistent with just and equitable 
                                principles of trade;
                            ``(ii) examine and verify the 
                        qualifications of an applicant to become a 
                        person associated with a member in accordance 
                        with procedures established by the rules of the 
                        association; and
                            ``(iii) require an individual associated 
                        with a member, or any class of such 
                        individuals, to be registered with the 
                        association in accordance with procedures so 
                        established.
                    ``(C) Bar on association.--A registered digital 
                asset association may bar any person from becoming 
                associated with a member if that person does not 
                agree--
                            ``(i) to supply the association with such 
                        information with respect to the relationship 
                        and dealings of the person with the member as 
                        may be specified in the rules of the 
                        association; and
                            ``(ii) to permit examination of the records 
                        of the person to verify the accuracy of any 
                        information supplied by the person under clause 
                        (i).
            ``(4) Denial for type of business.--
                    ``(A) In general.--Subject to subparagraph (B), a 
                registered digital asset association may deny 
                membership to a digital asset intermediary not engaged 
                in a type of business in which the rules of the 
                association require members to be engaged.
                    ``(B) Condition.--No digital asset association may 
                deny membership to a digital asset intermediary by 
                reason of the amount of such type of business done by 
                such intermediary or the other types of business in 
                which the intermediary is engaged.
    ``(h) Discipline of Registered Digital Asset Association Members 
and Persons Associated With Members; Summary Proceedings.--
            ``(1) Discipline.--
                    ``(A) Notification.--In any proceeding by a 
                registered digital asset association to determine 
                whether a member, or a person associated with a member, 
                should be disciplined (other than a summary proceeding 
                pursuant to paragraph (3)), the association shall bring 
                specific charges, notify such member or person of (and 
                give the person an opportunity to defend against) those 
                charges, and keep a record.
                    ``(B) Statement.--A determination by a registered 
                digital asset association to impose discipline in a 
                proceeding under subparagraph (A) shall be supported by 
                a statement setting forth--
                            ``(i) any act or practice in which the 
                        member, or person associated with a member, has 
                        been found to have engaged, or that such member 
                        or person has been found to have omitted;
                            ``(ii) the specific provision of law, the 
                        rules under such a provision, or the rules of 
                        the association that an act or practice 
                        described in clause (i), or omission to act, is 
                        charged with violating; and
                            ``(iii) the sanction imposed and a 
                        justification for the sanction.
            ``(2) Denial of membership or services.--
                    ``(A) Notification.--In any proceeding by a 
                registered digital asset association to determine 
                whether a person shall be denied membership, barred 
                from becoming associated with a member, or prohibited 
                or limited with respect to access to services offered 
                by the association or a member of the association 
                (other than a summary proceeding pursuant to paragraph 
                (3)), the association shall--
                            ``(i) notify that person and give the 
                        person an opportunity to be heard;
                            ``(ii) provide the person the specific 
                        grounds for denial, bar, or prohibition or 
                        limitation under consideration; and
                            ``(iii) maintain a record.
                    ``(B) Statement.--A determination by a registered 
                digital asset association to deny membership, bar a 
                person from becoming associated with a member, or 
                prohibit or limit a person with respect to access to 
                services offered by the association or a member under 
                subparagraph (A) shall be supported by a statement 
                setting forth the specific grounds on which the denial, 
                bar, or prohibition or limitation is based.
            ``(3) Summary proceeding.--
                    ``(A) In general.--A registered digital asset 
                association may summarily--
                            ``(i) suspend a member of the association, 
                        or a person associated with such a member, that 
                        is--
                                    ``(I) expelled or suspended from 
                                any other digital asset association; or
                                    ``(II) barred or suspended from 
                                being associated with a member of 
                                another digital asset association;
                            ``(ii) suspend a member of the association 
                        that is in such financial or operating 
                        difficulty that the association determines (and 
                        so notifies the appropriate commission) that 
                        the member cannot be permitted to continue to 
                        do business as a member, in order to protect 
                        customers, creditors, other members, or the 
                        association; or
                            ``(iii) limit or prohibit any person from 
                        accessing services offered by the association 
                        if clause (i) or (ii) is applicable to that 
                        person, or, in the case of a person that is not 
                        a member of the association, if the association 
                        determines that the person--
                                    ``(I) does not meet the 
                                qualification requirements or other 
                                prerequisites for that access; and
                                    ``(II) cannot be permitted to 
                                continue to have such access with 
                                safety, in order to protect customers, 
                                creditors, members, or the association.
                    ``(B) Opportunity for hearing.--Any person 
                aggrieved by a summary action under subparagraph (A) 
                shall be promptly afforded an opportunity for a hearing 
                by the applicable digital asset association in 
                accordance with the provisions of paragraph (1) or (2).
                    ``(C) Stay.--The appropriate commission, by order, 
                may stay a summary action described in subparagraph (A) 
                on the motion of the commission or upon application by 
                any person aggrieved by the summary action, if the 
                commission determines summarily or after notice and 
                opportunity for hearing (which may consist solely of 
                the submission of affidavits or presentation of oral 
                arguments) that the stay is consistent with the public 
                interest and customer protection.
    ``(i) Obligation To Maintain Registration, Disciplinary, and Other 
Data.--
            ``(1) Maintenance of system to respond to inquiries.--A 
        registered digital asset association shall establish and 
        maintain--
                    ``(A) a system for collecting and retaining 
                registration information; and
                    ``(B) a website, including an application 
                programming interface, to receive and promptly respond 
                to inquiries regarding registration information on the 
                members of the association and associated persons with 
                respect to those members.
            ``(2) Recovery of costs.--A registered digital asset 
        association may charge persons making inquiries described in 
        paragraph (1)(B), other than individual customers of digital 
        asset intermediaries, reasonable fees for responses.
            ``(3) Process for disputed information.--Each registered 
        digital asset association shall adopt rules establishing a 
        process for disputing the accuracy of information provided in 
        response to inquiries under this subsection.
            ``(4) Limitation on liability.--A registered digital asset 
        association, or any digital asset intermediary reporting 
        information to such an association, shall not have any 
        liability to any person for any actions taken or omitted in 
        good faith under this subsection.
    ``(j) Avoidance of Duplicative Rules.--
            ``(1) In general.--Each digital asset association 
        registered under subsection (b) shall issue rules as necessary 
        to avoid duplicative or conflicting rules applicable to any 
        digital asset intermediary that is a member of a national 
        securities exchange, board of trade, contract market, 
        registered securities association, registered futures 
        association, or similar digital asset association.
            ``(2) Other membership.--A digital asset intermediary shall 
        not be required to become a member of another digital asset 
        association unless the intermediary performs activities with 
        financial assets other than digital assets.
            ``(3) Non-digital asset activities.--
                    ``(A) Rules by commissions.--The Securities and 
                Exchange Commission and the Commodity Futures Trading 
                Commission shall jointly prescribe rules under which a 
                digital asset intermediary that is a member or 
                affiliate of a digital asset association registered 
                under this section may perform activities with 
                financial assets other than digital assets, if those 
                activities are not a majority of the business of an 
                intermediary and are conducted in a responsible manner, 
                without membership in another digital asset 
                association.
                    ``(B) Rules by digital asset associations.--A 
                registered digital asset association under this section 
                shall adopt rules governing activities with financial 
                assets other than digital assets, which shall be 
                consistent with existing law, rule, guidance or 
                industry best practices or the rules of other digital 
                asset associations.''.
    (b) Technical and Conforming Amendment.--The table of sections for 
chapter 98 of title 31, United States Code, as added by section 2, is 
amended by adding at the end the following:

``9802. Registered digital asset associations.''.

SEC. 4. REGISTRATION, RULEMAKING, AND SUPERVISION OF DIGITAL ASSET 
              ASSOCIATIONS.

    (a) In General.--Chapter 98 of title 31, United States Code, as 
amended by section 3, is amended by adding at the end the following:
``Sec. 9803. Registration, rulemaking, and supervision of digital asset 
              associations
    ``(a) Registration Procedures; Notice of Filing; Other Regulatory 
Agencies.--
            ``(1) Publication of notice.--
                    ``(A) In general.--The Securities and Exchange 
                Commission and Commodity Futures Trading Commission 
                shall, upon the filing of an application for 
                registration as a digital asset association under 
                section 9802, publish notice of that filing and afford 
                interested persons an opportunity to submit written 
                data, views, and arguments concerning the application.
                    ``(B) Requirements.--Not later than 90 days after 
                the date on which notice is published under 
                subparagraph (A), or within a longer period to which 
                the applicable applicant consents, the Securities and 
                Exchange Commission and Commodity Futures Trading 
                Commission shall--
                            ``(i) by joint order, grant registration of 
                        the digital asset association; or
                            ``(ii) institute proceedings to determine 
                        whether registration should be denied.
                    ``(C) Proceedings.--
                            ``(i) In general.--Proceedings instituted 
                        under subparagraph (B)(ii) shall include notice 
                        of the grounds for denial under consideration 
                        and opportunity for hearing before the joint 
                        commissions.
                            ``(ii) Hearing.--A hearing described in 
                        clause (i) shall be concluded not later than 
                        180 days after the date on which notice of the 
                        filing of the application for registration is 
                        published under subparagraph (A).
                            ``(iii) Further proceedings.--
                                    ``(I) Separate votes.--At the 
                                conclusion of a hearing conducted under 
                                this subparagraph, and not later than 
                                the end of the 180-day period described 
                                in clause (ii), the Securities and 
                                Exchange Commission and Commodity 
                                Futures Trading Commission, voting 
                                separately, shall act to grant or deny 
                                the applicable registration.
                                    ``(II) Effect of failure to issue 
                                joint order.--The failure of the 
                                Securities and Exchange Commission and 
                                Commodity Futures Trading Commission to 
                                issue a joint order during the period 
                                described in subclause (I) shall be 
                                deemed to be a denial of the applicable 
                                registration.
                    ``(D) Considerations.--With respect to an 
                application for registration described in this 
                paragraph, the Securities and Exchange Commission and 
                Commodity Futures Trading Commission shall--
                            ``(i) grant registration if all statutory 
                        requirements have been met and the rules under 
                        those statutory provisions with respect to the 
                        applicant are satisfied; and
                            ``(ii) deny such registration if the 
                        commissions do not make the findings described 
                        in clause (i).
            ``(2) Withdrawal from registration.--
                    ``(A) In general.--A digital asset association may, 
                upon such terms and conditions as the Securities and 
                Exchange Commission and Commodity Futures Trading 
                Commission, by rule, determine necessary or appropriate 
                in the public interest or for the protection of 
                customers, withdraw from registration described in 
                paragraph (1) by filing a written notice of withdrawal 
                with the commissions.
                    ``(B) Considerations.--
                            ``(i) In general.--If the Securities and 
                        Exchange Commission and Commodity Futures 
                        Trading Commission, voting separately, each 
                        finds that a digital asset association is no 
                        longer in existence or has ceased to do 
                        business in the capacity specified in the 
                        application for registration submitted by the 
                        association, the commissions may cancel the 
                        registration of the association.
                            ``(ii) Effect of failure to vote.--The 
                        failure to issue a joint order described in 
                        clause (i) shall be deemed to maintain the 
                        registration of the applicable digital asset 
                        association.
                    ``(C) Effect of withdrawal, cancellation, 
                suspension, or revocation.--Upon withdrawal by 
                registration or the cancellation, suspension, or 
                revocation of the registration of a digital asset 
                association, the registration of any association 
                affiliated with the association shall automatically 
                terminate.
    ``(b) Proposed Rule Changes; Notice; Proceedings.--
            ``(1) In general.--Except as otherwise provided in 
        paragraph (2)--
                    ``(A) a digital asset association shall file with 
                the appropriate commission, in accordance with the 
                rules of that commission, copies of any proposed rule 
                or any proposed change in, addition to, or deletion 
                from the rules of such digital asset association 
                accompanied by a concise general statement of the basis 
                and purpose of such proposed rule change;
                    ``(B) the appropriate commission shall--
                            ``(i) as soon as practicable after the date 
                        on which a proposed rule change is filed under 
                        subparagraph (A), publish notice of that filing 
                        together with the terms of substance of the 
                        proposed rule change or a description of the 
                        subjects and issues involved; and
                            ``(ii) give interested persons an 
                        opportunity to submit written data, views, and 
                        arguments concerning that proposed rule change;
                    ``(C) no proposed rule change described in 
                subparagraph (A) shall take effect unless approved by 
                the appropriate commission or otherwise permitted in 
                accordance with the provisions of this subsection; and
                    ``(D) no proposed rule change described in 
                subparagraph (A) relating to a matter under the 
                jurisdiction of more than 1 commission may be filed.
            ``(2) Approval process.--
                    ``(A) Approval process established.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), not later than 30 days after the 
                        date on which notice of a proposed rule change 
                        is published under paragraph (1), the 
                        appropriate commission shall--
                                    ``(I) by order, approve or 
                                disapprove the proposed rule change; or
                                    ``(II) institute proceedings under 
                                subparagraph (B) to determine whether 
                                the proposed rule change should be 
                                disapproved.
                            ``(ii) Extension of time period.--The 
                        appropriate commission may extend the period 
                        established under clause (i) by not more than 
                        an additional 30 days, if--
                                    ``(I) the commission determines 
                                that a longer period is appropriate and 
                                publishes the reasons for that 
                                determination; or
                                    ``(II) the digital asset 
                                association that filed the proposed 
                                rule change consents to a longer 
                                period.
                    ``(B) Proceedings.--
                            ``(i) Notice and hearing.--If the 
                        appropriate commission does not approve or 
                        disapprove a proposed rule change under 
                        subparagraph (A), the commission shall provide 
                        to the digital asset association that filed the 
                        proposed rule change--
                                    ``(I) notice of the grounds for 
                                disapproval under consideration; and
                                    ``(II) opportunity for hearing, to 
                                be concluded not later than 180 days 
                                after the date of publication of notice 
                                of the filing of the proposed rule 
                                change.
                            ``(ii) Order of approval or disapproval.--
                                    ``(I) In general.--Except as 
                                provided in subclause (II), not later 
                                than 180 days after the date on which 
                                notice is published under paragraph 
                                (1), the appropriate commission shall 
                                issue an order approving or 
                                disapproving the proposed rule change 
                                that is the subject of the notice.
                                    ``(II) Extension of time period.--
                                The appropriate commission may extend 
                                the period for issuance under clause 
                                (I) by not more than 60 days, if--
                                            ``(aa) the commission 
                                        determines that a longer period 
                                        is appropriate and publishes 
                                        the reasons for such 
                                        determination; or
                                            ``(bb) the digital asset 
                                        association that filed the 
                                        proposed rule change consents 
                                        to the longer period.
                    ``(C) Standards for approval and disapproval.--
                            ``(i) Approval.--The appropriate commission 
                        shall approve a proposed rule change of a 
                        digital asset association if the commission 
                        finds that the proposed rule change is 
                        consistent with law.
                            ``(ii) Time for approval.--The appropriate 
                        commission may not approve a proposed rule 
                        change earlier than 30 days after the date of 
                        publication of notice with respect to the 
                        proposed rule change under paragraph (1), 
                        unless the commission finds good cause for so 
                        doing and publishes the reason for the finding.
                    ``(D) Result of failure to institute or conclude 
                proceedings.--A proposed rule change shall be deemed to 
                have been approved by the appropriate commission, if--
                            ``(i) the commission does not approve or 
                        disapprove the proposed rule change, or begin 
                        proceedings under subparagraph (B), within the 
                        period described in subparagraph (A); or
                            ``(ii) the commission does not issue an 
                        order approving or disapproving the proposed 
                        rule change under subparagraph (B) within the 
                        period described in subparagraph (B)(ii).
                    ``(E) Publication date based on federal register 
                publishing.--
                            ``(i) In general.--For purposes of this 
                        paragraph, if, after filing a proposed rule 
                        change with the appropriate commission under 
                        paragraph (1), a digital asset association 
                        publishes a notice of the filing of that 
                        proposed rule change, together with the 
                        substantive terms of that proposed rule change, 
                        on a publicly accessible website, the 
                        commission shall send the notice to the Federal 
                        Register for publication of the proposed rule 
                        change under paragraph (1) not later than 5 
                        days after the date on which that website 
                        publication is made.
                            ``(ii) Effect of failing to send.--If the 
                        appropriate commission fails to send notice 
                        under clause (i) during the 5-day period 
                        described in that clause, the date of 
                        publication shall be deemed to be the date on 
                        which the applicable website publication is 
                        made.
            ``(3) Internal governance.--With respect to a proposed rule 
        relating to the internal operation, governance, and procedures 
        of a digital asset association, or a proposed rule relating to 
        the determination of the legal character of a digital asset--
                    ``(A) the proposed rule shall be--
                            ``(i) subject to approval by the Securities 
                        and Exchange Commission and the Commodity 
                        Futures Trading Commission; and
                            ``(ii) deemed to be approved on the date 
                        that is 5 days after the date on which the 
                        proposed rule is submitted, unless either 
                        commission objects to the proposed rule change; 
                        and
                    ``(B) if a commission objects to the proposed rule 
                change under subparagraph (A)(ii)--
                            ``(i) the commission shall, in a public 
                        format, provide to the digital asset 
                        association and the non-objecting commission 
                        the reasons for the objection;
                            ``(ii) the digital asset association, and 
                        interested members of the public, may provide 
                        written comments to the commissions during the 
                        20-day period beginning on the date on which 
                        the objection is noted; and
                            ``(iii) the Securities and Exchange 
                        Commission and the Commodity Futures Trading 
                        Commission, voting separately, shall jointly 
                        issue an order approving or disapproving the 
                        proposed rule, with the failure to issue such a 
                        joint order being deemed to be approval of the 
                        proposed rule.
            ``(4) Exception.--
                    ``(A) In general.--Notwithstanding paragraphs (2) 
                and (3), a proposed rule change shall take effect upon 
                filing if self-certified by a digital asset association 
                as--
                            ``(i) constituting a stated policy, 
                        practice, or interpretation with respect to the 
                        meaning, administration, or enforcement of an 
                        existing rule of the digital asset association;
                            ``(ii) establishing or changing a due, fee, 
                        or other charge imposed by the digital asset 
                        association on any person, whether or not the 
                        person is a member of the digital asset 
                        association; or
                            ``(iii) notwithstanding any other provision 
                        of this subsection, necessary for customer 
                        protection, the maintenance of fair and orderly 
                        markets, or the safeguarding of digital assets, 
                        customer funds, or other property, in which 
                        case the proposed rule change under shall be 
                        filed promptly thereafter in accordance with 
                        paragraph (1).
                    ``(B) Enforcement.--
                            ``(i) In general.--Any proposed rule change 
                        of a digital asset association that has taken 
                        effect under subparagraph (A) may be enforced 
                        by the association to the extent the rule 
                        change is not inconsistent with applicable law.
                            ``(ii) Suspension.--
                                    ``(I) In general.--At any time 
                                during the 60-day period beginning on 
                                the date on which a proposed rule 
                                change is filed under paragraph (1), 
                                the appropriate commission may 
                                temporarily and summarily suspend the 
                                change in the rules of the applicable 
                                digital asset association on a 
                                temporary basis, if the commission 
                                determines that such action is 
                                necessary or appropriate in the public 
                                interest, for customer protection, or 
                                to otherwise comply with applicable 
                                law.
                                    ``(II) Requirements.--If a 
                                commission takes action under subclause 
                                (I), the commission shall institute 
                                proceedings under paragraph (2)(B) to 
                                determine whether the applicable 
                                proposed rule should be approved or 
                                disapproved.
                            ``(iii) Rule of construction.--Action under 
                        this subparagraph shall not affect the validity 
                        or force of a proposed rule change during the 
                        period the rule change was in effect and shall 
                        not be reviewable in a judicial proceeding, nor 
                        deemed to be final agency action for purposes 
                        of section 704 of title 5.
            ``(5) Rule of construction relating to filing date of 
        proposed rule changes.--
                    ``(A) In general.--For purposes of this subsection, 
                the date of filing of a proposed rule change shall be 
                deemed to be the date on which the applicable 
                commission receives the proposed rule change.
                    ``(B) Exception.--
                            ``(i) In general.--Subject to clause (ii), 
                        a proposed rule has not been received by the 
                        applicable commission for purposes of 
                        subparagraph (A), if, not later than 7 business 
                        days after the date on which the commission 
                        receives the rule, the commission notifies the 
                        applicable digital asset association that the 
                        proposed rule change does not comply with the 
                        rules of the commission relating to the 
                        required form of a proposed rule change.
                            ``(ii) Lengthy and complex proposed rule 
                        changes.--
                                    ``(I) In general.--If the 
                                applicable commission determines that a 
                                proposed rule change is unusually 
                                lengthy, and is complex or raises novel 
                                regulatory issues, the commission shall 
                                inform the applicable digital asset 
                                association of that determination not 
                                later than 7 business days after the 
                                date on which the commission receives 
                                the rule.
                                    ``(II) Deadline.--For the purposes 
                                of subparagraph (A), a proposed rule 
                                change described in subclause (I) has 
                                not been received by the applicable 
                                commission, if, not later than 21 days 
                                after the date on which the commission 
                                receives the rule, the commission 
                                notifies the applicable digital asset 
                                association that the proposed rule 
                                change does not comply with the rules 
                                of the commission relating to the 
                                required form of a proposed rule 
                                change.
                    ``(C) Applicability.--This paragraph shall not 
                apply to a rule relating to the internal operations, 
                governance, and procedure of a digital asset 
                association.
    ``(c) Amendment of Rules of Digital Asset Associations.--
            ``(1) In general.--The appropriate commission may, by rule, 
        abrogate, add to, and delete from the rules of a digital asset 
        association as the commission determines necessary or 
        appropriate to ensure the fair administration of the digital 
        asset association or to conform the rules of the association to 
        law or applicable rule, in the following manner:
                    ``(A) The appropriate commission shall notify the 
                digital asset association and publish notice of the 
                proposed rulemaking in the Federal Register, which 
                shall include the text of the proposed amendment to the 
                rules of the digital asset association and a statement 
                of the reasons of the commission, including any 
                pertinent facts, for commencing the proposed 
                rulemaking.
                    ``(B)(i) The appropriate commission shall give 
                interested persons an opportunity for the oral 
                presentation of data, views, and arguments, in addition 
                to an opportunity to make written submissions.
                    ``(ii) A transcript shall be kept of any oral 
                presentation under clause (i).
                    ``(C) A rule adopted pursuant to this paragraph 
                shall incorporate the text of the amendment to the 
                rules of the digital asset association and a statement 
                of the appropriate commission regarding the basis for 
                amendment of the rule, which shall include an 
                identification of any facts on which the determination 
                of the commission to amend the rules of the digital 
                asset association is based, including the reasons for 
                the conclusions of the commission relating to any facts 
                that were disputed in the rulemaking.
            ``(2) Rule of construction.--Nothing in this subsection may 
        be construed to impair or limit the authority of the 
        appropriate commission to make, or to modify or alter the 
        procedures the commission may follow in making, rules pursuant 
        to any other authority granted by law that is consistent with 
        this subsection.
            ``(3) Effect of rules.--Any amendment to the rules of a 
        digital asset association made by the appropriate commission 
        under this subsection shall be considered for all purposes to 
        be part of the rules of that digital asset association and 
        shall not be considered to be a rule of the commission.
            ``(4) Consultations.--With respect to rules described in 
        subsection (b)(4)(A)(iii), the appropriate commission shall 
        consult with and consider the views of the other commission and 
        the Secretary of the Treasury before abrogating, adding to, and 
        deleting from those rules, except where the commission 
        determines that an emergency exists requiring expeditious or 
        summary action and publishes the reasons of the commission for 
        taking that action.
    ``(d) Notice of Disciplinary Action Taken by Digital Asset 
Association Against a Member or Participant; Review of Action by 
Appropriate Commission; Procedure.--
            ``(1) In general.--If a digital asset association imposes 
        any final disciplinary sanction on any member of the 
        association, or any participant with respect to the 
        association, denies membership or participation to any 
        applicant, prohibits or limits any person from accessing 
        services offered by the association or a member of the 
        association, imposes any final disciplinary sanction on any 
        person associated with a member, or bars any person from 
        becoming associated with a member, the digital asset 
        association shall promptly file notice of that action with the 
        appropriate commission.
            ``(2) Review.--
                    ``(A) In general.--Any action with respect to which 
                a digital asset association is required to file notice 
                under paragraph (1) shall be subject to review by the 
                appropriate commission for the applicable member, 
                participant, applicant, or other person, on its own 
                motion, or upon application by any person aggrieved by 
                that action if filed not later than 30 days after the 
                date on which the notice was filed with the appropriate 
                commission and received by the aggrieved person, or 
                within such longer period as the appropriate commission 
                may determine.
                    ``(B) Application.--Application to the appropriate 
                commission for review, or the institution of review by 
                the commission on its own motion, shall not operate as 
                a stay of an action described in subparagraph (A) 
                unless the appropriate commission otherwise orders, 
                summarily or after notice and opportunity for hearing 
                on the question of a stay, which may consist solely of 
                the submission of affidavits or presentation of oral 
                arguments.
                    ``(C) Stays.--For the purposes of this paragraph, 
                each of the appropriate commissions shall establish for 
                appropriate cases an expedited procedure for 
                consideration and determination of the question of a 
                stay.
            ``(3) Applicability.--This subsection shall apply only to 
        the extent that a digital asset association imposes any final 
        disciplinary sanction for--
                    ``(A) a violation of Federal law or the rules 
                issued under Federal law; or
                    ``(B) a violation of a rule of the digital asset 
                association, as to which a proposed change would be 
                required to be filed under this section.
    ``(e) Disposition of Review; Cancellation, Reduction, or Remission 
of Sanction.--
            ``(1) In general.--In any proceeding to review a final 
        disciplinary sanction imposed by a digital asset association on 
        a member of the association, a participant with respect to the 
        association, or a person associated with such a member, after 
        notice and opportunity for hearing, which may consist solely of 
        consideration of the record before the digital asset 
        association and opportunity for the presentation of supporting 
        reasons to affirm, modify, or set aside the sanction--
                    ``(A) if the appropriate commission finds that such 
                member, participant, or person associated with a member 
                has engaged in such acts or practices, or has omitted 
                such acts, as the digital asset association has found 
                that person to have engaged in or omitted, that such 
                acts or practices, or omissions to act, are in 
                violation of law, the rules thereunder, or the rules of 
                the digital asset association, and that such provisions 
                are, and were applied in a manner, consistent with law, 
                the commission, by order, shall--
                            ``(i) make a declaration regarding that 
                        finding; and
                            ``(ii) as appropriate--
                                    ``(I) affirm the sanction imposed 
                                by the digital asset association;
                                    ``(II) modify the sanction in 
                                accordance with paragraph (2); or
                                    ``(III) remand to the digital asset 
                                association for further proceedings; or
                    ``(B) if the appropriate commission does not make a 
                finding described in subparagraph (A), the commission 
                shall, by order--
                            ``(i) set aside the sanction imposed by the 
                        digital asset association; and
                            ``(ii) if appropriate, remand to the 
                        digital asset association for further 
                        proceedings.
            ``(2) Modification.--If the appropriate commission for a 
        member, participant, or person associated with a member, having 
        due regard for the public interest and customer protection, 
        finds, after a proceeding under paragraph (1), that a sanction 
        imposed by a digital asset association upon that member, 
        participant, or person associated with a member imposes any 
        burden on competition not necessary or appropriate or is 
        excessive or oppressive, the commission may cancel, reduce, or 
        require the remission of that sanction.
    ``(f) Dismissal of Review Proceeding.--
            ``(1) In general.--In any proceeding to review the denial 
        of membership or participation in a digital asset association 
        to any applicant, the barring of any person from becoming 
        associated with a member of a digital asset association, or the 
        prohibition or limitation by a digital asset association of any 
        person from accessing services offered by the digital asset 
        association or any member of the association, if the 
        appropriate commission, after notice and opportunity for 
        hearing, which may consist solely of consideration of the 
        record before the digital asset association and opportunity for 
        the presentation of supporting reasons to dismiss the 
        proceeding or set aside the action of the digital asset 
        association, finds that the specific grounds on which that 
        denial, bar, or prohibition or limitation is based exist in 
        fact, that such denial, bar, or prohibition or limitation is in 
        accordance with the rules of the digital asset association, and 
        that such rules are, and were applied in a manner, consistent 
        with law, the appropriate commission, by order, shall dismiss 
        the proceeding.
            ``(2) Failure to make finding.--If the appropriate 
        commission does not make a finding described in paragraph (1), 
        or if the commission finds that the applicable denial, bar, 
        prohibition, or limitation imposes any burden on competition 
        not necessary or appropriate, the commission, by order, shall 
        set aside the action of the digital asset association and 
        require the association to admit the applicable applicant to 
        membership or participation, permit that person to become 
        associated with a member, or grant that person access to 
        services offered by the digital asset association or a member 
        of the association.
    ``(g) Suspension or Revocation of Digital Asset Association 
Registration; Other Sanctions.--
            ``(1) In general.--If necessary or appropriate in the 
        public interest, for customer protection, or otherwise in 
        furtherance of the purposes of this section, the appropriate 
        commissions, voting separately, may issue a joint order 
        suspending for a period not exceeding 1 year or revoking the 
        registration of a digital asset association, or censuring or 
        imposing limitations upon the activities, functions, and 
        operations of a digital asset association, if, the commissions 
        find, on the record after notice and opportunity for hearing, 
        that the digital asset association--
                    ``(A) has violated or is unable to comply with any 
                provision of law, rule, or the rules of the association 
                without reasonable justification or excuse; or
                    ``(B) has failed to enforce compliance with any 
                provision by a member of the association or a person 
                associated with a member of the association.
            ``(2) Expulsion.--The appropriate commission may, by order, 
        if necessary or appropriate in the public interest, for 
        customer protection, or otherwise in furtherance of the 
        purposes of this section, to suspend for a period not exceeding 
        1 year or expel from a digital asset association, any member of 
        a digital asset association, or participant with respect to a 
        digital asset association, if such member or participant is 
        subject to an order of the commission or if the commission, on 
        the record after notice and opportunity for hearing, determines 
        that the member or participant has willfully violated, or has 
        effected any transaction for any other person who the member or 
        participant had reason to believe was violating, with respect 
        to such transaction any applicable provision of law under the 
        jurisdiction of the commission.
            ``(3) Bar on association.--The applicable commission may, 
        by order, if necessary or appropriate in the public interest, 
        for customer protection, or otherwise in furtherance of the 
        purposes of this section, to suspend for a period not exceeding 
        1 year or to bar any person from being associated with a member 
        of such digital asset association, if the person is subject to 
        an order of the appropriate commission or if the appropriate 
        commission finds, on the record after notice and opportunity 
        for hearing, that the person has willfully violated, or has 
        effected any transaction for any other person who the person 
        associated with a member had reason to believe was violating, 
        with respect to the transaction any applicable provision of law 
        under the jurisdiction of the commission.
            ``(4) Removal from office.--If necessary or appropriate in 
        the public interest, for customer protection, or otherwise in 
        furtherance of the purposes of this section, the Securities and 
        Exchange Commission and the Commodity Futures Trading 
        Commission, voting separately, may, by joint order, remove from 
        office or censure any person who is, or at the time of the 
        alleged misconduct was, an officer or director of a digital 
        asset association, if the commissions find, on the record after 
        notice and opportunity for a hearing before an impartial 
        hearing officer, that such person has willfully violated any 
        provision of law, the rules thereunder, or the rules of such 
        digital asset association, willfully abused the authority of 
        the person, or without reasonable justification or excuse has 
        failed to enforce compliance with any provision of law by any 
        member or person associated with a member.
    ``(h) Interagency Working Group.--The Securities and Exchange 
Commission and the Commodity Futures Trading Commission shall each 
appoint an equal number of employees, under the supervision of the 
Chairman of the respective commissions, to an interagency working 
group, which shall coordinate and facilitate the responsibilities and 
powers of the respective commissions under this chapter.''.
    (b) Technical and Conforming Amendment.--The table of sections for 
chapter 98 of title 31, United States Code, as amended by section 3, is 
amended by adding at the end the following:

``9803. Registration, rulemaking, and supervision of digital asset 
                            associations.''.

SEC. 5. RECORDS AND REPORTS; DUTIES AND POWERS OF REGISTERED DIGITAL 
              ASSET ASSOCIATIONS.

    (a) In General.--Chapter 98 of title 31, United States Code, as 
amended by section 4, is amended by adding at the end the following:
``Sec. 9804. Records and reports; duties and powers of registered 
              digital asset associations
    ``(a) In General.--Each member of a registered digital asset 
association shall make, and keep for prescribed periods, such 
electronic records and disseminate reports as the registered digital 
asset association, by rule, prescribes as necessary or appropriate in 
the public interest.
    ``(b) Records Subject to Examination.--
            ``(1) Procedures for cooperation with other agencies.--
                    ``(A) In general.--All records of a member 
                described in subsection (a) are subject at any time, or 
                from time to time, to reasonable periodic, special, or 
                other examinations by the registered digital asset 
                association of the member.
                    ``(B) Notice.--Before conducting an examination 
                under subparagraph (A), the examining authority shall--
                            ``(i) inform all other relevant regulatory 
                        agencies and digital asset associations with 
                        jurisdiction over the member regarding the 
                        proposed examination; and
                            ``(ii) consult concerning the feasibility 
                        and desirability of coordinating such 
                        examination with examinations conducted by 
                        other entities with a view to avoiding 
                        unnecessary duplication and undue regulatory 
                        burden.
                    ``(C) Examinations of members.--Upon a showing of 
                good cause, the Securities and Exchange Commission or 
                the Commodity Futures Trading Commission, as 
                applicable, may conduct a special examination of a 
                registered digital asset association or a member of 
                such an association.
                    ``(D) Report.--With respect to an examination under 
                this paragraph, the examining authority shall share 
                such information, including reports of the examination, 
                customer complaint information, and other nonpublic 
                regulatory information, as may be appropriate to foster 
                a coordinated approach to regulatory oversight for 
                members that are subject to examination by more than 1 
                examining authority.
                    ``(E) Requirements when examination not ongoing.--A 
                registered digital asset association, at all times when 
                an examination under this paragraph is not in progress, 
                shall conduct ongoing supervision of members of the 
                association, as may be provided by the rules of the 
                association.
            ``(2) Clarification.--Notwithstanding any other provision 
        of this subsection, the records of a member of a registered 
        digital asset association shall not be subject to routine 
        periodic examinations by the Securities and Exchange Commission 
        or the Commodity Futures Trading Commission.
            ``(3) Examination standards.--Each registered digital asset 
        association shall--
                    ``(A) adopt tailored supervision and examination 
                standards commensurate with the size and complexity of 
                the association and risks faced by members of the 
                association;
                    ``(B) to the extent reasonably possible, reduce the 
                regulatory burden for emerging growth companies, as 
                defined in section 2(a) of the Securities Act of 1933 
                (15 U.S.C. 77b(a)), including through the use of self-
                certification and expedited or automated examinations; 
                and
                    ``(C) in consultation with other registered digital 
                asset associations, develop standard form customer 
                agreements for the execution of digital asset 
                transactions.
    ``(c) Registered Digital Asset Associations.--
            ``(1) In general.--The Securities and Exchange Commission 
        and Commodity Futures Trading Commission, shall, by rule or 
        order, in order to foster cooperation and coordination among 
        registered digital asset associations--
                    ``(A) with respect to any person that is a member 
                of or participant in more than 1 registered digital 
                asset association, relieve any registered digital asset 
                association of any responsibility--
                            ``(i) to receive regulatory reports from 
                        the person;
                            ``(ii) to examine the person for 
                        compliance; or
                            ``(iii) to carry out other specified 
                        regulatory functions with respect to the 
                        person; and
                    ``(B) allocate among registered digital asset 
                associations the authority to adopt rules with respect 
                to matters as to which, in the absence of the 
                allocation, such registered digital asset associations 
                share authority.
            ``(2) Considerations.--
                    ``(A) In general.--In making a rule, or entering an 
                order, under paragraph (1), the appropriate commission 
                shall take into consideration the regulatory 
                capabilities and procedures of the applicable 
                registered digital asset associations, availability of 
                staff, convenience of location, unnecessary regulatory 
                duplication, and all other factors applicable to 
                customer protection, cooperation and coordination among 
                registered digital asset associations, and the 
                development of a healthy digital asset market, which 
                may include providing for the acceptance of examination 
                reports prepared by a registered digital asset 
                association under this chapter with respect to a 
                digital asset intermediary for which digital asset 
                activities constitute a majority of business, in lieu 
                of examinations conducted by other registered digital 
                asset associations.
                    ``(B) Notification requirement.--The Securities and 
                Exchange Commission or Commodity Futures Trading 
                Commission, by rule or order, may require that a 
                registered digital asset association relieved of any 
                responsibility under this paragraph, and any person 
                with respect to which that responsibility relates, to 
                take such steps as are specified in any rule or order 
                to notify customers of, and persons doing business 
                with, the person of the limited nature of the 
                responsibility of that registered digital asset 
                association for the acts, practices, and course of 
                business of the person.
    ``(d) Missing and Stolen Digital Assets.--Each member of a 
registered digital asset association or other financial institution 
conducting digital asset transactions shall report to the Financial 
Crimes Enforcement Network of the Department of the Treasury such 
information as may be required by rule relating to digital asset theft 
or missing private keys for the possession or control of digital 
assets.
    ``(e) Confidentiality.--
            ``(1) Sharing of information.--
                    ``(A) In general.--Section 24 of the Securities 
                Exchange Act of 1934 (15 U.S.C. 78x) shall apply to the 
                sharing of information by the Securities and Exchange 
                Commission and Commodity Futures Trading Commission in 
                accordance with this subsection.
                    ``(B) Protection from inappropriate disclosure.--
                The commissions and a registered digital asset 
                association shall ensure that all confidential 
                information is not inappropriately disclosed pursuant 
                to subparagraph (A).
            ``(2) Appropriate disclosure not prohibited.--Nothing in 
        this subsection may be construed to authorize the Securities 
        and Exchange Commission and Commodity Futures Trading 
        Commission or a registered digital asset association to--
                    ``(A) withhold information from Congress; or
                    ``(B) prevent the commissions or an association 
                from complying with--
                            ``(i) a request for information from any 
                        Federal or State department or agency 
                        requesting the information for purposes within 
                        the scope of the jurisdiction of that 
                        department or agency; or
                            ``(ii) an order of a court of the United 
                        States in an action brought by the United 
                        States or the commissions.
    ``(f) Best Execution.--A registered digital asset association, in 
consultation with members of the association, the Securities and 
Exchange Commission, and the Commodity Futures Trading Commission, 
shall develop rules governing the best execution of digital asset 
transactions.
    ``(g) Initial Determination of Legal Character.--
            ``(1) In general.--
                    ``(A) Initial determination.--A registered digital 
                asset association may make an initial determination of 
                the legal character of a digital asset as a security, 
                an ancillary asset, a commodity (as defined in section 
                1a of the Commodity Exchange Act (7 U.S.C. 1a)), or as 
                otherwise provided by law, upon the written request of 
                a member of the association.
                    ``(B) Consultation; hearings.--Upon receipt of a 
                request under subparagraph (A), a registered digital 
                asset association--
                            ``(i) shall consult with the commissions 
                        and make an initial determination regarding the 
                        request, after public notice and comment, not 
                        later than 45 days after the date on which the 
                        association receives the request; and
                            ``(ii) may hold a public hearing with 
                        respect to an initial determination described 
                        in clause (i), if--
                                    ``(I) the matter is of significant 
                                precedential value or complex; or
                                    ``(II) holding such a hearing is 
                                otherwise in the public interest.
            ``(2) Publication.--A registered digital asset association 
        shall publish all determinations made under paragraph (1) on 
        the website of the association.
    ``(h) Objection to Initial Determination.--
            ``(1) In general.--
                    ``(A) Deadline for objection.--Not later than 30 
                days after the date on which an initial determination 
                is made under subsection (g), the Securities and 
                Exchange Commission or Commodity Futures Trading 
                Commission may object to the initial determination of 
                the registered digital asset association by issuing an 
                order, after public notice, comment, and a hearing.
                    ``(B) Effect of objection.--Upon an objection under 
                subparagraph (A), the initial determination to which 
                the objection applies shall be held in abeyance.
            ``(2) Order.--
                    ``(A) In general.--Not later than 60 days after the 
                date on which a commission objects under paragraph (1), 
                the commissions shall, after public notice and comment 
                of not less than 30 days, issue an order resolving the 
                objection and the status of the digital asset, as 
                described in subsection (g)(1)(A), which may include 
                joint responsibility of the commissions.
                    ``(B) Failure to issue.--If the Securities and 
                Exchange Commission and the Commodity Futures Trading 
                Commission fail to issue a joint order under 
                subparagraph (A), the determination of the registered 
                digital asset association under subsection (g) shall 
                become final, unless an action is brought in an 
                appropriate district court of the United States of 
                competent jurisdiction.''.
    (b) Technical and Conforming Amendment.--The table of sections for 
chapter 98 of title 31, United States Code, as amended by section 4, is 
amended by adding at the end the following:

``9804. Records and reports; duties and powers of registered digital 
                            asset associations.''.
                                 <all>
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