II 

118TH CONGRESS 

1ST SESSION S. 1357 

To address advertising by digital asset intermediaries, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 27, 2023 

Ms. SINEMA (for herself and Ms. LUMMIS) introduced the following bill; which 

was read twice and referred to the Committee on Banking, Housing, and 

Urban Affairs 

A BILL 

To address advertising by digital asset intermediaries, 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 Digital 

5 Asset Advertising Act of 2023’’. 

6 SEC. 2. DEFINITIONS. 

7 In this Act: 

8 (1) COMMISSIONS.—The term ‘‘Commissions’’ 

9 means the Securities and Exchange Commission and 


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1 the Commodity Futures Trading Commission, acting 

2 jointly. 

3 (2) COVERED ADVERTISEMENT.—The term 

4 ‘‘covered advertisement’’— 

5 (A) means a communication that— 

6 (i) relates to— 

7 (I) the desirability of purchasing 

8 or entering into a transaction for a 

9 digital asset; or 

10 (II) the availability of digital 

11 asset-related services; and 

12 (ii) is widely available to the general 

13 public, as specified by rule of the Commis14 sions; and 

15 (B) includes any script, slide, handout, or 

16 other written (including electronic) material 

17 used in connection with a public appearance 

18 with respect to a digital asset or the availability 

19 of digital asset-related services. 

20 (3) DIGITAL ASSET.—The term ‘‘digital asset’’ 

21 means a natively electronic asset that— 

22 (A) confers economic, proprietary, or ac23 cess rights or authorities; and 


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1 (B) is recorded using cryptographically-se2 cured distributed ledger technology, or any 

3 similar analogue. 

4 (4) DIGITAL ASSET INTERMEDIARY.—The term 

5 ‘‘digital asset intermediary’’ means a person that— 

6 (A) holds a license, registration, or other 

7 similar authorization pursuant to the Com8 modity Exchange Act (7 U.S.C. 1 et seq.), the 

9 Securities Act of 1933 (15 U.S.C. 77a et seq.), 

10 the Corporation of Foreign Bondholders Act, 

11 1933 (15 U.S.C. 77bb et seq.), the Trust In12 denture Act of 1939 (15 U.S.C. 77aaa et seq.), 

13 the Securities Exchange Act of 1934 (15 

14 U.S.C. 78a et seq.), the Securities Investor Pro15 tection Act of 1970 (15 U.S.C. 78aaa et seq.), 

16 the Investment Company Act of 1940 (15 

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

18 Act of 1940 (15 U.S.C. 80b–1 et seq.), or the 

19 Omnibus Small Business Capital Formation 

20 Act of 1980 (title V of Public Law 96–2); and 

21 (B) engages in market activities relating to 

22 digital assets. 

23 SEC. 3. ADVERTISING BY DIGITAL ASSET INTERMEDIARIES. 

24 (a) APPROVAL BY OFFICER.—Before a digital asset 

25 intermediary may make a covered advertisement available 


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1 to the public, an officer of the digital asset intermediary 

2 shall be required to approve that covered advertisement 

3 and certify compliance with the requirements of this sec4 tion. 

5 (b) PROCEDURES.— 

6 (1) IN GENERAL.—Each digital asset inter7 mediary shall establish written procedures, which are 

8 appropriate and reasonable to the business, size, 

9 structure, and customers of the digital asset inter10 mediary, for the review of covered advertisements, as 

11 required under subsection (a), which shall include— 

12 (A) provisions for the education and train13 ing of applicable employees of the digital asset 

14 intermediary regarding the procedures of the 

15 digital asset intermediary governing covered ad16 vertisements; 

17 (B) documentation of the education and 

18 training required under subparagraph (A); and 

19 (C) surveillance and follow-up measures to 

20 ensure that the digital asset intermediary im21 plements and adheres to those procedures. 

22 (2) RECORDKEEPING.— 

23 (A) PERIOD OF MAINTENANCE.—Each dig24 ital asset intermediary shall maintain the 


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1 records required under this subsection for not 

2 less than 5 years. 

3 (B) TYPES OF RECORDS.—The types of 

4 records that a digital asset intermediary is re5 quired to maintain under subparagraph (A) in6 clude, with respect to each covered advertise7 ment made by the digital asset intermediary— 

8 (i) a copy of the covered advertise9 ment; 

10 (ii) the dates of the first and, if appli11 cable, last use of the covered advertise12 ment; 

13 (iii) the name of the officer of the dig14 ital asset intermediary who approved the 

15 covered advertisement, as required under 

16 subsection (a), including the date on which 

17 the officer gave that approval; 

18 (iv) information concerning the source 

19 of all data, statistical tables, charts, 

20 graphs, or other illustrations or outside 

21 sources used in the covered advertisement; 

22 and 

23 (v) for a covered advertisement that 

24 includes or incorporates a performance 

25 ranking or comparison with another digital 


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1 asset intermediary, a copy of the ranking 

2 or performance used. 

3 (c) REQUIREMENTS FOR COVERED ADVERTISE4 MENTS.—Each covered advertisement shall adhere to the 

5 following standards: 

6 (1) The covered advertisement shall— 

7 (A) be based on principles of fair dealing 

8 and good faith; and 

9 (B) provide a sound basis for evaluating 

10 the facts with respect to any particular digital 

11 asset or type of digital asset, industry, or serv12 ice that is the subject of the covered advertise13 ment. 

14 (2) The covered advertisement may not omit 

15 any material fact or qualification if that omission, in 

16 light of the context of the material presented, would 

17 cause the covered advertisement to be misleading. 

18 (3) The covered advertisement may not make 

19 any false, exaggerated, unwarranted, promissory, or 

20 misleading statement or claim. 

21 (4) Information may be placed in a legend or 

22 footnote within the covered advertisement only if 

23 that placement would not inhibit understanding of 

24 the covered advertisement. 


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1 (5) The covered advertisement shall be con2 sistent with risks that are present with respect to 

3 the subject matter of the covered advertisement, in4 cluding volatility with respect to the value of digital 

5 assets, the amount of potential returns, and oper6 ational risks for digital asset intermediaries. 

7 (6) The covered advertisement shall— 

8 (A) consider the nature of the audience to 

9 which the covered advertisement will be di10 rected; and 

11 (B) provide details and explanations that 

12 are appropriate for the audience described in 

13 subparagraph (A). 

14 (7)(A) The covered advertisement may not pre15 dict or project performance, imply that past per16 formance will recur, or make any exaggerated or un17 warranted claim, opinion, or forecast. 

18 (B) Nothing in subparagraph (A) may be con19 strued to prohibit the use of— 

20 (i) a hypothetical illustration of mathe21 matical principles, if that illustration does not 

22 predict or project the performance of a par23 ticular strategy; 

24 (ii) an analysis tool, or a written report 

25 produced by an analysis tool; or 


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1 (iii) a price target contained in a research 

2 report, if the target has a reasonable basis, the 

3 report discloses the valuation methods used to 

4 determine the price target, and the price target 

5 is accompanied by a disclosure concerning the 

6 risks that may impede achievement of the price 

7 target. 

8 (8) Any comparison in the covered advertise9 ment between digital assets, digital asset inter10 mediaries, or digital asset-related services shall dis11 close key material differences between the applicable 

12 items, including, as applicable, differences with re13 spect to return objectives, costs and expenses, liquid14 ity, safety, guarantees or insurance, volatility, and 

15 tax features. 

16 (9) The covered advertisement shall promi17 nently disclose the following: 

18 (A) The fact that the covered advertise19 ment is governed by this section and is subject 

20 to Federal law. 

21 (B) The name of the applicable digital 

22 asset intermediary. 

23 (C) The name of the officer who made the 

24 certification with respect to the covered adver25 tisement, as required under subsection (a). 


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1 (D) Any relationship between the applica2 ble digital asset intermediary and any person 

3 that appears in the covered advertisement or 

4 any compensation offered by that digital asset 

5 intermediary to such a person. 

6 (E) Registrations, licenses, or other au7 thorizations in good standing that are held by 

8 the applicable digital asset intermediary. 

9 (10)(A) In the covered advertisement, any ref10 erence to tax-free or tax-exempt income shall indi11 cate which taxes apply, or which do not, unless in12 come is free from all applicable taxes. 

13 (B) For the purposes of subparagraph (A), the 

14 covered advertisement may not characterize income 

15 or returns as tax-free or exempt from income tax if 

16 tax liability is merely postponed or deferred, such as 

17 when taxes are payable upon redemption. 

18 (C) The Commissions may, by rule, adopt fur19 ther standards regarding tax considerations that ap20 pear in covered advertisements. 

21 (11) The covered advertisement shall disclose 

22 the amounts of the following fees with respect to the 

23 digital asset or digital asset-related services that are 

24 the subject of the covered advertisement, which shall 

25 be set forth prominently and, in any print advertiseVerDate Sep 11 2014 21:35 May 04, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1357.IS S1357

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1 ment, in a prominent text box that contains only 

2 such information: 

3 (A) Custody fees. 

4 (B) Account fees. 

5 (C) Applicable bank fees. 

6 (12) If any testimonial in the covered advertise7 ment concerns a technical aspect of purchasing or 

8 otherwise entering into a transaction for digital as9 sets— 

10 (A) the person making the testimonial 

11 shall have the knowledge and experience to 

12 form a valid opinion regarding the issue; and 

13 (B) the testimonial, if the testimonial con14 cerns the advisability of purchasing digital as15 sets or the performance of a digital asset, shall 

16 prominently disclose— 

17 (i) the fact that the testimonial may 

18 not be representative of the experience of 

19 other customers; 

20 (ii) the fact that the testimonial is no 

21 guarantee of future performance or suc22 cess; and 

23 (iii) if more than $1,000 in value is 

24 paid for the testimonial— 


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1 (I) the fact that the testimonial 

2 is a paid testimonial; and 

3 (II) the amount and type of com4 pensation paid, which shall include, if 

5 compensation was paid in digital as6 sets, an identification of each specific 

7 digital asset. 

8 (13) If the covered advertisement includes a 

9 recommendation to purchase, or otherwise transact 

10 in, a digital asset, the covered advertisement shall— 

11 (A) have a reasonable basis for the rec12 ommendation; and 

13 (B) if applicable, disclose— 

14 (i) that, at the time the covered adver15 tisement was published or distributed, the 

16 applicable digital asset intermediary was 

17 conducting trading activities in the digital 

18 asset; 

19 (ii) that the applicable digital asset 

20 intermediary— 

21 (I) is directly and materially in22 volved in the preparation of the con23 tent of the covered advertisement; and 

24 (II) has a financial interest the 

25 digital assets being recommended; and 


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1 (iii) the nature of any financial inter2 est disclosed under clause (ii), including 

3 whether that financial interest consists of 

4 any option, right, warrant, future, or long 

5 or short position, unless the extent of that 

6 financial interest is nominal. 

7 (14)(A) Except as otherwise provided by sub8 paragraph (B), the covered advertisement may not 

9 refer, directly or indirectly, to past specific rec10 ommendations made by the applicable digital asset 

11 intermediary that were or would have been profitable 

12 to any person. 

13 (B) The covered advertisement may set out or 

14 offer to furnish a list of all recommendations as to 

15 the same type of digital assets made by the applica16 ble digital asset intermediary during the 1-year pe17 riod preceding the date on which the covered adver18 tisement is released, if the communication or list— 

19 (i) states the name of each digital asset 

20 recommended, the date and nature of each such 

21 recommendation (such as whether to buy, sell, 

22 or hold the digital asset), the market price (as 

23 of the date of the recommendation), the price at 

24 which a person was meant to act upon the rec25 ommendation, and the market price of each 


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1 such digital asset, as of the most recent prac2 ticable date; and 

3 (ii) contains the following warning, which 

4 shall appear prominently within the communica5 tion or list: ‘‘it should not be assumed that rec6 ommendations made in the future will be profit7 able or will equal the performance of the digital 

8 assets in this list.’’. 

9 (d) SOURCES SUPPORTING A RECOMMENDATION.— 

10 (1) IN GENERAL.—A digital asset intermediary 

11 shall provide, or offer to provide upon request, avail12 able information or sources supporting any rec13 ommendation described in subsection (c)(13). 

14 (2) PRICE DISCLOSURE.—When a digital asset 

15 intermediary recommends a digital asset in a cov16 ered advertisement, as described in subsection 

17 (c)(13), the digital asset intermediary shall provide 

18 the price of the digital asset, as of the date on which 

19 the recommendation is made. 

20 (e) INFORMATION PROVIDED IN PUBLIC APPEAR21 ANCES.— 

22 (1) IN GENERAL.—When an officer or employee 

23 of a digital asset intermediary is sponsoring or par24 ticipating in a seminar, forum, or radio or television 

25 interview, or when such an individual is otherwise 


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1 engaged in a public appearance or speaking activity, 

2 paragraphs (1), (2), and (3) of subsection (c) shall 

3 apply to that appearance to the same extent as those 

4 provisions apply to a covered advertisement. 

5 (2) RECOMMENDATIONS.—If an officer or em6 ployee of a digital asset intermediary recommends a 

7 digital asset in a public appearance, that individual 

8 shall— 

9 (A) have a reasonable basis for the rec10 ommendation; and 

11 (B) disclose, as applicable— 

12 (i) whether the individual has a finan13 cial interest in the digital asset rec14 ommended; 

15 (ii) the nature of the financial interest 

16 disclosed under clause (i), including wheth17 er that financial interest consists of any 

18 option, right, warrant, future, or long or 

19 short position, unless the extent of that fi20 nancial interest is nominal; and 

21 (iii) any other actual, material conflict 

22 of interest of which the individual knows or 

23 has reason to know at the time of the pub24 lic appearance. 


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1 (f) PROCEDURES FOR PUBLIC APPEARANCES.—Each 

2 digital asset intermediary shall establish written proce3 dures that are appropriate and reasonable to the business, 

4 size, structure, and customers of the digital asset inter5 mediary in order to supervise the public appearances of 

6 the officers and employees of the digital asset inter7 mediary, which shall include— 

8 (1) provisions for the education and training of 

9 employees of the digital asset intermediary regarding 

10 those procedures; 

11 (2) documentation of the education and train12 ing required under paragraph (1); and 

13 (3) surveillance and follow-up measures to en14 sure that the digital asset intermediary implements 

15 and adheres to those procedures. 

16 (g) ENFORCEMENT BY COMMISSIONS.— 

17 (1) IN GENERAL.—The Securities and Ex18 change Commission, the Commodity Futures Trad19 ing Commission, or any applicable self-regulatory or20 ganization operating under delegated authority by 

21 the appropriate commission, as applicable to a dig22 ital asset intermediary, shall regularly ascertain the 

23 compliance with this section by the digital asset 

24 intermediary (and applicable individuals) at the time 


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1 of each regular examination of the intermediary by 

2 the applicable entity. 

3 (2) INVESTIGATIONS.—The appropriate com4 mission or self-regulatory organization, as applica5 ble, may conduct an investigation into a suspected 

6 violation of this section and take enforcement action 

7 outside of a regular examination of a digital asset 

8 intermediary, which shall be comprised of the fol9 lowing: 

10 (A) With respect to such a violation by 

11 that digital asset intermediary, the following: 

12 (i) For an initial violation of this sec13 tion, the imposition of a civil monetary 

14 penalty in an amount that is not more 

15 than $100,000. 

16 (ii) For any subsequent violation of 

17 this section, the imposition of a civil mone18 tary penalty in an amount that is not more 

19 than $1,000,000. 

20 (iii) The enjoinment of future viola21 tions of this section by the digital asset 

22 intermediary and the requirement that the 

23 digital asset intermediary submit to the en24 forcing entity appropriate remediation 

25 plans. 


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1 (B) For repeated, knowing violations of 

2 this section by an individual, the imposition of 

3 a temporary or permanent bar from the digital 

4 asset industry with respect to that individual. 

5 (h) APPLICABILITY TO DISCLOSURES.—A document 

6 filed with the Securities and Exchange Commission, as 

7 otherwise required by law or regulation, is not subject to 

8 the requirements of this section. 

9 (i) RULES.—The Commissions, after not less than a 

10 120-day comment period, shall adopt rules to implement 

11 this section. 

12 (j) AUTHORIZATION OF APPROPRIATIONS.—For the 

13 purposes of appointing employees to enforce the require14 ments of this section, and for other costs relating to the 

15 enforcement of this section, there is authorized to be ap16 propriated, for fiscal year 2023, to remain available until 

17 September 30, 2024— 

18 (1) $25,000,000 to the Securities and Ex19 change Commission; and 

20 (2) $25,000,000 to the Commodity Futures 

21 Trading Commission. 

22 SEC. 4. OFFSETTING THE COSTS OF DIGITAL ASSET ADVER23 TISING SUPERVISION. 

24 (a) RECOVERY OF CERTAIN COSTS OF ANNUAL AP25 PROPRIATIONS.— 


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1 (1) IN GENERAL.—Beginning October 1, 2024, 

2 the Securities and Exchange Commission and the 

3 Commodity Futures Trading Commission may, joint4 ly, by rule, collect fees— 

5 (A) to fund expenses relating to the super6 vision of advertising by digital asset inter7 mediaries; and 

8 (B) that are designed to recover the costs 

9 to the Federal Government of the annual ap10 propriation to each commission by Congress for 

11 the cost of the supervision of advertising by dig12 ital asset intermediaries. 

13 (2) REGISTERED ENTITIES.—A fee shall be im14 posed under paragraph (1) only— 

15 (A) on an entity that— 

16 (i) is licensed, registered, or similarly 

17 authorized pursuant to a provision of law 

18 described in section 2(4)(A); and 

19 (ii) is engaged in activities relating to 

20 digital assets, including a digital asset 

21 intermediary that is registered with either 

22 commission as otherwise may be provided 

23 by Federal law; and 


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1 (B) in relation to the regulation of those 

2 activities under a provision of law described in 

3 section 2(4)(A). 

4 (3) FEE RATES.—A fee imposed under para5 graph (1) shall— 

6 (A) be strictly related to the cost to the 

7 Commissions relating to the supervision of ad8 vertising by digital asset intermediaries; 

9 (B) minimize negative impacts on market 

10 liquidity; and 

11 (C) maintain the efficiency, competitive12 ness, and financial integrity of digital asset 

13 markets. 

14 (4) COLLECTION OF FEES.—The Commissions 

15 shall collect fees under this subsection in such man16 ner and within such time as may be specified by the 

17 Commissions, by rule. 

18 (b) FEE RATE ORDERS.— 

19 (1) IN GENERAL.—Each fiscal year, the Com20 missions shall jointly adopt an order setting rates 

21 for fees that are collected under subsection (a) dur22 ing that fiscal year. 

23 (2) PUBLICATION.—The Commissions shall 

24 publish in the Federal Register each order adopted 

25 under paragraph (1), which shall include— 


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1 (A) projections on which the fees are 

2 based; and 

3 (B) an explanation of the method used for 

4 calculating applicable fee rates. 

5 (c) DEPOSIT OF FEES.— 

6 (1) OFFSETTING COLLECTIONS.—Fees collected 

7 under subsection (a) for any fiscal year shall— 

8 (A) be split evenly between the Commis9 sions; 

10 (B) be deposited and credited as offsetting 

11 collections to the accounts providing appropria12 tions to each respective commission; and 

13 (C) not be collected or available for obliga14 tion for any fiscal year except to the extent pro15 vided in advance in appropriation Acts. 

16 (2) GENERAL REVENUES PROHIBITED.—No fee 

17 collected under subsection (a) may be deposited and 

18 credited as general revenue of the Treasury. 

19 (d) LAPSE OF APPROPRIATIONS.—If a regular appro20 priation to a commission has not been enacted on the first 

21 day of a fiscal year, the commission shall continue to col22 lect fees under this section at the rates in effect on Sep23 tember 30 of the preceding fiscal year until the regular 

24 appropriation for the fiscal year has been enacted and the 


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1 commission has published fees based on the appropriation 

2 under subsection (b)(2). 

3 (e) LIMITATIONS.— 

4 (1) LEVERAGED, MARGINED, OR FINANCED

5 TRANSACTIONS.—Nothing in this section may be 

6 construed to authorize the imposition of fees on a 

7 registered entity relating to leveraged, margined, or 

8 financed transactions under this Act, including those 

9 activities relating to digital assets. 

10 (2) OTHER APPROPRIATIONS.—Notwithstanding 

11 any other provision of law, a commission may use 

12 appropriations otherwise made available by law to 

13 fund expenses relating to the supervision of digital 

14 asset advertising under section 2. 

15 (f) CEILING ON FEES.—Unless otherwise provided by 

16 law, the total amount of fees collected under this section 

17 shall not exceed $50,000,000. 

Æ 


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