408 
‘‘(A) IN GENERAL.—The written cer-
tification described in paragraph (1) 
shall become effective unless the 
Commission finds that the listing of 
the digital commodity is inconsistent 
with the requirements of this Act or 
the rules and regulations prescribed 
under this Act. 
‘‘(B) 
ANALYSIS
REQUIRED.—The 
Commission shall include, with any 
findings referred to in subparagraph 
(A), a detailed analysis of the factors 
on which the decision was based. 
‘‘(C) PUBLIC
FINDINGS.—The Com-
mission shall make public any dis-
approval decision, and any related 
findings and analysis, made under 
this paragraph. 
‘‘(5) REVIEW.— 
‘‘(A) IN GENERAL.—Unless the Com-
mission makes a disapproval decision 
under paragraph (4), the written cer-
tification described in paragraph (1) 
shall become effective, pursuant to 
the certification by the eligible entity 
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and notice of the certification to the 
public (in a manner determined by 
the Commission) on the date that is— 
‘‘(i) 20 business days after the 
date the Commission receives the 
certification (or such shorter pe-
riod as determined by the Com-
mission by rule or regulation), in 
the case of a digital commodity 
that has not been certified under 
this section or for which a certifi-
cation is being modified under 
paragraph (3); or 
‘‘(ii) 1 business day after the 
date the Commission receives the 
certification (or such shorter pe-
riod as determined by the Com-
mission by rule or regulation) for 
any digital commodity that has 
been certified under this section. 
‘‘(B) EXTENSIONS.—The time for 
consideration 
under 
subparagraph 
(A) may be extended through notice 
to the eligible entity that there are 
novel or complex issues that require 
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additional time to analyze, that the 
explanation by the submitting eligible 
entity is inadequate, or of a potential 
inconsistency with this Act— 
‘‘(i) once, for 30 business days, 
through written notice to the eli-
gible entity by the Commission; 
and 
‘‘(ii) once, for an additional 30 
business days, through written 
notice to the eligible entity from 
the Commission that includes a 
description of any deficiencies 
with the certification, including 
any— 
‘‘(I) 
novel 
or 
complex 
issues which require addi-
tional time to analyze; 
‘‘(II) missing information 
or inadequate explanations; 
or 
‘‘(III) potential inconsist-
encies with this Act. 
‘‘(6) PRIOR APPROVAL BEFORE REGISTRA-
TION.— 
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‘‘(A) IN GENERAL.—A person apply-
ing for registration with the Commis-
sion for the purposes of listing or of-
fering a digital commodity for trading 
in a digital commodity cash or spot 
market may request that the Commis-
sion grant prior approval for the per-
son to list or offer the digital com-
modity on being registered with the 
Commission. 
‘‘(B) 
REQUEST
FOR
PRIOR
AP-
PROVAL.—A person seeking prior ap-
proval under subparagraph (A) shall 
furnish the Commission with a writ-
ten certification that the digital com-
modity meets the requirements of 
this Act (including the regulations 
prescribed under this Act) and the in-
formation described in paragraph (2). 
‘‘(C) DEADLINE.—The Commission 
shall take final action on a request 
for prior approval not later than 90 
business days after submission of the 
request, unless the person submitting 
the request agrees to an extension of 
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the time limitation established under 
this subparagraph. 
‘‘(D) DISAPPROVAL.— 
‘‘(i) IN GENERAL.—The Commis-
sion shall approve the listing of 
the digital commodity unless the 
Commission finds that the listing 
is inconsistent with this Act (in-
cluding any regulation prescribed 
under this Act). 
‘‘(ii) ANALYSIS
REQUIRED.—The 
Commission shall include, with 
any findings made under clause 
(i), a detailed analysis of the fac-
tors on which the decision is 
based. 
‘‘(iii) 
PUBLIC
FINDINGS.—The 
Commission shall make public 
any disapproval decision, and any 
related 
findings 
and 
analysis, 
made under this paragraph. 
‘‘(7) ELIGIBLE ENTITY DEFINED.—In this 
subsection, 
the 
term 
‘eligible 
entity’ 
means a registered entity or group of reg-
istered entities acting jointly.’’. 
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SEC. 404. REGISTRATION OF DIGITAL COMMODITY EX-
CHANGES. 
The Commodity Exchange Act (7 U.S.C. 1 
et seq.) is amended by inserting after section 
5h the following: 
‘‘SEC. 5i. REGISTRATION OF DIGITAL COMMODITY EX-
CHANGES. 
‘‘(a) IN GENERAL.— 
‘‘(1) REGISTRATION.— 
‘‘(A) IN GENERAL.—A trading facil-
ity that offers or seeks to offer a cash 
or spot market in at least 1 digital 
commodity shall register with the 
Commission as a digital commodity 
exchange. 
‘‘(B) APPLICATION.—A person desir-
ing to register as a digital commodity 
exchange shall submit to the Commis-
sion an application in such form and 
containing such information as the 
Commission may require for the pur-
pose of making the determinations re-
quired for approval. 
‘‘(C) EXEMPTIONS.—A trading facil-
ity that offers or seeks to offer a cash 
or spot market in at least 1 digital 
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commodity shall not be required to 
register under this section if the trad-
ing facility— 
‘‘(i) permits no more than a de 
minimis amount of trading activ-
ity, as the Commission may deter-
mine by rule or regulation, in a 
digital commodity; or 
‘‘(ii) serves only customers in 
a single State, territory, or posses-
sion of the United States. 
‘‘(2) ADDITIONAL REGISTRATIONS.— 
‘‘(A) WITH
THE
COMMISSION.—In 
order to foster the development of 
fair and orderly markets, protect cus-
tomers, and promote responsible in-
novation, the Commission— 
‘‘(i) shall prescribe rules to ex-
empt an entity registered with 
the Commission under more than 
1 section of this Act from duplica-
tive, conflicting, or unduly bur-
densome provisions of this Act 
and the rules under this Act; 
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‘‘(ii) shall prescribe rules to 
address conflicts of interests and 
activities of the entity; and 
‘‘(iii) may, after an analysis of 
the risks and benefits, prescribe 
rules to provide for portfolio mar-
gining. 
‘‘(B) WITH
A
REGISTERED
FUTURES 
ASSOCIATION.— 
‘‘(i) IN GENERAL.—A registered 
digital commodity exchange shall 
also be a member of a registered 
futures association and comply 
with rules related to such activ-
ity, if the registered digital com-
modity 
exchange 
accepts 
cus-
tomer funds required to be seg-
regated under subsection (d). 
‘‘(ii) RULEMAKING
REQUIRED.— 
The Commission shall require any 
registered 
futures 
association 
with a digital commodity ex-
change as a member to provide 
such rules as may be necessary to 
further 
compliance 
with 
sub-
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section (d), protect customers, 
and promote the public interest. 
‘‘(C) REGISTRATION
REQUIRED.—A 
person required to be registered as a 
digital commodity exchange under 
this section shall register with the 
Commission as such regardless of 
whether the person is registered with 
another State or Federal regulator. 
‘‘(b) TRADING.— 
‘‘(1) PROHIBITION ON CERTAIN TRADING 
PRACTICES.— 
‘‘(A) Section 4b shall apply to any 
agreement, contract, or transaction in 
a digital commodity as if the agree-
ment, contract, or transaction were a 
contract of sale of a commodity for 
future delivery. 
‘‘(B) Section 4c shall apply to any 
agreement, contract, or transaction in 
a digital commodity as if the agree-
ment, contract, or transaction were a 
transaction involving the purchase or 
sale of a commodity for future deliv-
ery. 
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‘‘(C) Section 4b–1 shall apply to 
any agreement, contract, or trans-
action in a digital commodity as if the 
agreement, contract, or transaction 
were a contract of sale of a com-
modity for future delivery. 
‘‘(2) PROHIBITION
ON
ACTING
AS
A 
COUNTERPARTY.— 
‘‘(A) IN
GENERAL.—A digital com-
modity exchange or any affiliate of 
such an exchange shall not trade on 
or subject to the rules of the digital 
commodity exchange for its own ac-
count. 
‘‘(B) 
EXCEPTIONS.—The 
Commis-
sion shall, by rule, permit a digital 
commodity exchange or any affiliate 
of a digital commodity exchange to 
engage in trading on the exchange so 
long as the trading is not solely for 
the purpose of the profit of the ex-
change, including the following: 
‘‘(i) CUSTOMER
DIRECTION.—A 
transaction for, or entered into at 
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the direction of, or for the benefit 
of, an unaffiliated customer. 
‘‘(ii) 
RISK
MANAGEMENT.—A 
transaction to manage the credit, 
market, and liquidity risks associ-
ated with the digital commodity 
business of the exchange. 
‘‘(iii) OPERATIONAL
NEEDS.—A 
transaction related to the oper-
ational needs of the business of 
the digital commodity exchange 
or its affiliate. 
‘‘(iv) 
FUNCTIONAL
USE.—A 
transaction related to the func-
tional operation of a blockchain 
system. 
‘‘(C) 
NOTICE
REQUIREMENT.—In 
order for a digital commodity ex-
change or any affiliate of a digital 
commodity exchange to engage in 
trading on the affiliated exchange 
pursuant to subsection (B), notice 
must be given to the Commission that 
shall enumerate how any proposed 
activity is consistent with the excep-
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tions in subsection (B) and the pur-
poses of this Act. 
‘‘(c) CORE PRINCIPLES
FOR DIGITAL COM-
MODITY EXCHANGES.— 
‘‘(1) COMPLIANCE
WITH
CORE
PRIN-
CIPLES.— 
‘‘(A) 
IN
GENERAL.—To 
be 
reg-
istered, and maintain registration, as 
a digital commodity exchange, a dig-
ital commodity exchange shall com-
ply with— 
‘‘(i) the core principles de-
scribed in this subsection; and 
‘‘(ii) any requirement that the 
Commission may impose by rule 
or regulation pursuant to section 
8a(5). 
‘‘(B) REASONABLE DISCRETION OF A 
DIGITAL COMMODITY EXCHANGE.—Unless 
otherwise determined by the Commis-
sion by rule or regulation, a digital 
commodity exchange described in 
subparagraph (A) shall have reason-
able discretion in establishing the 
manner in which the digital com-
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modity exchange complies with the 
core principles described in this sub-
section. 
‘‘(2) COMPLIANCE WITH RULES.—A dig-
ital commodity exchange shall— 
‘‘(A) establish and enforce compli-
ance with any rule of the digital com-
modity exchange, including— 
‘‘(i) the terms and conditions 
of the trades traded or processed 
on or through the digital com-
modity exchange; and 
‘‘(ii) any limitation on access 
to 
the 
digital 
commodity 
ex-
change; 
‘‘(B) establish and enforce trad-
ing, trade processing, and participa-
tion rules that will deter abuses and 
have the capacity to detect, inves-
tigate, and enforce those rules, in-
cluding means— 
‘‘(i) to provide market partici-
pants with impartial access to the 
market; and 
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‘‘(ii) to capture information 
that may be used in establishing 
whether rule violations have oc-
curred; and 
‘‘(C) establish rules governing the 
operation of the exchange, including 
rules specifying trading procedures 
to be used in entering and executing 
orders traded or posted on the facil-
ity. 
‘‘(3) LISTING
STANDARDS
FOR
DIGITAL 
COMMODITIES.— 
‘‘(A) IN
GENERAL.—A digital com-
modity exchange shall not permit 
trading in a digital commodity un-
less— 
‘‘(i) reports with respect to 
the digital commodity required 
under section 4B(b)(3) of the Se-
curities Act of 1933 (or, with re-
spect to a digital commodity not 
issued 
in 
reliance 
on 
section 
4(a)(8) of the Securities Act of 
1933, a comparable set of reports, 
where required by the Securities 
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and Exchange Commission) have 
been filed with the Securities and 
Exchange Commission; or 
‘‘(ii) the blockchain system to 
which the digital commodity re-
lates, together with the digital 
commodity, is certified as a ma-
ture blockchain system under sec-
tion 42 of the Securities Exchange 
Act of 1934. 
‘‘(B) PUBLIC INFORMATION REQUIRE-
MENTS.— 
‘‘(i) 
IN
GENERAL.—A 
digital 
commodity exchange shall permit 
trading only in a digital com-
modity if the information re-
quired in clause (ii) is correct, 
current, and available to the pub-
lic. 
‘‘(ii) REQUIRED INFORMATION.— 
With respect to a digital com-
modity and each blockchain sys-
tem to which the digital com-
modity relates for which the dig-
ital 
commodity 
exchange 
will 
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make the digital commodity avail-
able to the customers of the dig-
ital commodity exchange, the in-
formation required in this clause 
is as follows: 
‘‘(I) 
SOURCE
CODE.—The 
source 
code 
for 
any 
blockchain system to which 
the digital commodity relates. 
‘‘(II) 
TRANSACTION
HIS-
TORY.—A description of the 
steps necessary to independ-
ently 
access, 
search, 
and 
verify the transaction history 
of any blockchain system to 
which the digital commodity 
relates, to the extent any such 
independent access, search, 
and verification activities are 
technically feasible with re-
spect to the blockchain sys-
tem. 
‘‘(III) DIGITAL
COMMODITY 
ECONOMICS.—A narrative de-
scription of the purpose of 
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any 
blockchain 
system 
to 
which the digital commodity 
relates and the operation of 
any such blockchain system, 
including— 
‘‘(aa) information ex-
plaining the launch and 
supply process, including 
the number of digital as-
sets to be issued in an ini-
tial allocation, the total 
number of digital com-
modities to be created, the 
release schedule for the 
digital commodities, and 
the total number of digital 
commodities 
then 
out-
standing; 
‘‘(bb) information de-
tailing any applicable con-
sensus 
mechanism 
or 
process 
for 
validating 
transactions, 
method 
of 
generating or mining dig-
ital commodities, and any 
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process for burning or de-
stroying digital commod-
ities on the blockchain 
system; 
‘‘(cc) an explanation of 
governance 
mechanisms 
for implementing changes 
to the blockchain system 
or 
forming 
consensus 
among holders of the dig-
ital commodities; and 
‘‘(dd) sufficient infor-
mation for a third party to 
create a tool for verifying 
the transaction history of 
the digital asset. 
‘‘(IV) TRADING VOLUME AND 
VOLATILITY.—The trading vol-
ume and volatility of the dig-
ital commodity on the ex-
change. 
‘‘(V) ADDITIONAL
INFORMA-
TION.—Such additional infor-
mation as the Commission 
may determine by rule to be 
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necessary for a customer to 
understand the financial and 
operational risks of a digital 
commodity, and to be prac-
tically feasible to provide. 
‘‘(iii) FORMAT.—The Commis-
sion shall prescribe rules and reg-
ulations for the standardization 
and simplification of disclosures 
under clause (ii), including re-
quiring that disclosures— 
‘‘(I) be conspicuous; 
‘‘(II) use plain language 
comprehensible to customers; 
and 
‘‘(III) 
succinctly 
explain 
the information that is re-
quired to be communicated to 
the customer. 
‘‘(iv) RELIANCE
ON
PREVIOUS 
DISCLOSURES.—In complying with 
this subparagraph, a digital com-
modity exchange may rely on and 
make available to the public rel-
evant information publicly dis-
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closed to the Commission, the Se-
curities and Exchange Commis-
sion, or an appropriate Federal 
banking agency. 
‘‘(C) DIGITAL COMMODITIES HELD BY 
RELATED
AND
DIGITAL
COMMODITY
AF-
FILIATED
PERSONS.—A 
digital 
com-
modity exchange shall permit the 
trading of a unit of a digital com-
modity held by a digital commodity 
affiliated person or a digital com-
modity related person, only pursuant 
to section 4C of the Securities Act of 
1933. 
‘‘(4) TREATMENT OF CUSTOMER ASSETS.— 
A digital commodity exchange shall es-
tablish policies and procedures that are 
designed to protect and ensure the safety 
of customer money, assets, and property. 
‘‘(5) 
MONITORING
OF
TRADING
AND 
TRADE PROCESSING.— 
‘‘(A) IN
GENERAL.—A digital com-
modity exchange shall provide a com-
petitive, open, and efficient market 
and mechanism for executing trans-
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actions that protects the price dis-
covery process of trading on the ex-
change. 
‘‘(B) PROTECTION OF MARKETS AND 
MARKET PARTICIPANTS.—A digital com-
modity exchange shall establish and 
enforce rules— 
‘‘(i) to protect markets and 
market participants from abusive 
practices committed by any party, 
including abusive practices com-
mitted by a party acting as an 
agent for a participant; and 
‘‘(ii) to promote fair and equi-
table trading on the exchange. 
‘‘(C) TRADING PROCEDURES.—A dig-
ital commodity exchange shall— 
‘‘(i) 
establish 
and 
enforce 
rules or terms and conditions de-
fining, or specifications detail-
ing— 
‘‘(I) trading procedures to 
be used in entering and exe-
cuting orders traded on or 
through the facilities of the 
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429 
digital commodity exchange; 
and 
‘‘(II) procedures for trade 
processing of digital commod-
ities on or through the facili-
ties of the digital commodity 
exchange; and 
‘‘(ii) monitor trading in digital 
commodities to prevent manipula-
tion, price distortion, and disrup-
tions, through surveillance, com-
pliance, and disciplinary prac-
tices and procedures, including 
methods for conducting real-time 
monitoring of trading and com-
prehensive and accurate trade re-
constructions. 
‘‘(6) ABILITY TO OBTAIN INFORMATION.— 
A digital commodity exchange shall— 
‘‘(A) establish and enforce rules 
that will allow the facility to obtain 
any necessary information to perform 
any of the functions described in this 
section; 
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‘‘(B) provide the information to 
the Commission on request; and 
‘‘(C) have the capacity to carry 
out such international information- 
sharing agreements as the Commis-
sion may require. 
‘‘(7) EMERGENCY AUTHORITY.—A digital 
commodity exchange shall adopt rules to 
provide for the exercise of emergency au-
thority, in consultation or cooperation 
with the Commission or a registered enti-
ty, as is necessary and appropriate, in-
cluding the authority to facilitate the liq-
uidation or transfer of open positions in 
any digital commodity or to suspend or 
curtail trading in a digital commodity. 
‘‘(8) TIMELY
PUBLICATION
OF
TRADING 
INFORMATION.— 
‘‘(A) IN
GENERAL.—A digital com-
modity exchange shall make public 
timely information on price, trading 
volume, and other trading data on 
digital commodities to the extent pre-
scribed by the Commission. 
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‘‘(B) CAPACITY
OF
DIGITAL
COM-
MODITY
EXCHANGE.—A 
digital 
com-
modity exchange shall have the ca-
pacity to electronically capture and 
transmit trade information with re-
spect to transactions executed on the 
exchange. 
‘‘(9) RECORDKEEPING AND REPORTING.— 
‘‘(A) IN
GENERAL.—A digital com-
modity exchange shall— 
‘‘(i) maintain records relating 
to the operation of the exchange, 
including a complete audit trail, 
in a form and manner acceptable 
to the Commission for a period of 
5 years; 
‘‘(ii) report to the Commission, 
in a form and manner acceptable 
to the Commission, such informa-
tion as the Commission deter-
mines to be necessary or appro-
priate for the Commission to per-
form the duties of the Commis-
sion under this Act; and 
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‘‘(iii) keep any such records of 
digital commodities which relate 
to a security open to inspection 
and examination by the Securities 
and Exchange Commission. 
‘‘(B) 
INFORMATION-SHARING.—Sub-
ject to section 8, and on request, the 
Commission shall share information 
collected 
under 
subparagraph 
(A) 
with— 
‘‘(i) the Board; 
‘‘(ii) the Securities and Ex-
change Commission; 
‘‘(iii) each appropriate Fed-
eral banking agency; 
‘‘(iv) each appropriate State 
bank 
supervisor 
(within 
the 
meaning of section 3 of the Fed-
eral Deposit Insurance Act); 
‘‘(v) the Financial Stability 
Oversight Council; 
‘‘(vi) the Department of Jus-
tice; and 
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‘‘(vii) any other person that 
the Commission determines to be 
appropriate, including— 
‘‘(I) foreign financial su-
pervisors (including foreign 
futures authorities); 
‘‘(II) 
foreign 
central 
banks; and 
‘‘(III) foreign ministries. 
‘‘(C) 
CONFIDENTIALITY
AGREE-
MENT.—Before the Commission may 
share information with any entity de-
scribed in subparagraph (B), the 
Commission shall receive a written 
agreement from the entity stating 
that the entity shall abide by the con-
fidentiality requirements described 
in section 8 relating to the informa-
tion on digital commodities that is 
provided. 
‘‘(D) PROVIDING
INFORMATION.—A 
digital 
commodity 
exchange 
shall 
provide to the Commission (including 
any designee of the Commission) in-
formation under subparagraph (A) in 
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such form and at such frequency as is 
required by the Commission. 
‘‘(10) ANTITRUST CONSIDERATIONS.—Un-
less necessary or appropriate to achieve 
the purposes of this Act, a digital com-
modity exchange shall not— 
‘‘(A) adopt any rules or take any 
actions that result in any unreason-
able restraint of trade; or 
‘‘(B) impose any material anti-
competitive burden on trading. 
‘‘(11) CONFLICTS
OF
INTEREST.—The 
digital commodity exchange shall estab-
lish and enforce rules— 
‘‘(A) to minimize conflicts of inter-
est in the decision making processes 
of the contract market; and 
‘‘(B) to establish a process for re-
solving conflicts of interest referred 
to in subparagraph (A). 
‘‘(12) FINANCIAL RESOURCES.— 
‘‘(A) IN
GENERAL.—A digital com-
modity exchange shall have adequate 
financial, operational, and manage-
rial resources, as determined by the 
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Commission, to discharge each re-
sponsibility of the digital commodity 
exchange. 
‘‘(B) MINIMUM
AMOUNT
OF
FINAN-
CIAL RESOURCES.—A digital commodity 
exchange shall possess financial re-
sources that, at a minimum, exceed— 
‘‘(i) the total amount that 
would enable the digital com-
modity exchange to cover the op-
erating costs of the digital com-
modity exchange for a 1-year pe-
riod, as calculated on a rolling 
basis; and 
‘‘(ii) the total amount nec-
essary to meet the financial obli-
gations of the digital commodity 
exchange to all customers of the 
digital commodity exchange. 
‘‘(13) 
DISCIPLINARY
PROCEDURES.—A 
digital commodity exchange shall estab-
lish and enforce disciplinary procedures 
that authorize the digital commodity ex-
change to discipline, suspend, or expel 
members or market participants that vio-
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late the rules of the digital commodity ex-
change, or similar methods for per-
forming the same functions, including 
delegation of the functions to third par-
ties. 
‘‘(14) 
GOVERNANCE
FITNESS
STAND-
ARDS.— 
‘‘(A) 
GOVERNANCE
ARRANGE-
MENTS.—A 
digital 
commodity 
ex-
change shall establish governance ar-
rangements that are transparent and 
designed to permit consideration of 
the views of market participants. 
‘‘(B) FITNESS STANDARDS.—A digital 
commodity exchange shall establish 
and 
enforce 
appropriate 
fitness 
standards for— 
‘‘(i) officers and directors; and 
‘‘(ii) any individual or entity 
with direct access to, or control 
of, customer assets. 
‘‘(15) SYSTEM
SAFEGUARDS.—A digital 
commodity exchange shall— 
‘‘(A) establish and maintain a pro-
gram of risk analysis and oversight to 
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identify and minimize sources of 
operational 
and 
security 
risks, 
through the development of appro-
priate controls and procedures, and 
automated 
systems 
in 
accordance 
with industry standards, that— 
‘‘(i) are reliable and secure; 
and 
‘‘(ii) have adequate scalable 
capacity; 
‘‘(B) establish and maintain emer-
gency procedures, backup resources, 
and a plan for disaster recovery that 
allow for— 
‘‘(i) the timely recovery and 
resumption of operations; and 
‘‘(ii) the fulfillment of the re-
sponsibilities and obligations of 
the digital commodity exchange; 
and 
‘‘(C) periodically conduct tests to 
verify that the backup resources of 
the digital commodity exchange are 
sufficient to ensure continued— 
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‘‘(i) 
order 
processing 
and 
trade matching; 
‘‘(ii) price reporting; 
‘‘(iii) market surveillance; and 
‘‘(iv) maintenance of a com-
prehensive and accurate audit 
trail. 
‘‘(d) HOLDING OF CUSTOMER ASSETS.— 
‘‘(1) IN GENERAL.—A digital commodity 
exchange shall hold customer money, as-
sets, and property in a manner to mini-
mize the risk of loss to the customer or 
unreasonable delay in customer access to 
the money, assets, and property of the 
customer. 
‘‘(A) SEGREGATION OF FUNDS.— 
‘‘(i) 
IN
GENERAL.—A 
digital 
commodity exchange shall treat 
and deal with all money, assets, 
and property that is received by 
the digital commodity exchange, 
or accrues to a customer as the 
result of trading in digital com-
modities, as belonging to the cus-
tomer. 
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‘‘(ii) 
COMMINGLING
PROHIB-
ITED.—Money, assets, and prop-
erty of a customer described in 
clause (i) shall be separately ac-
counted for and shall not be com-
mingled with the funds of the dig-
ital commodity exchange or be 
used to margin, secure, or guar-
antee any trades or accounts of 
any customer or person other 
than the person for whom the 
same are held. 
‘‘(B) EXCEPTIONS.— 
‘‘(i) USE OF FUNDS.— 
‘‘(I) IN GENERAL.—Notwith-
standing 
subparagraph 
(A), 
money, assets, and property of 
customers of a digital com-
modity exchange described in 
subparagraph (A) may, for 
convenience, be commingled 
and deposited in the same ac-
count or accounts with any 
bank, trust company, deriva-
tives clearing organization, or 
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qualified digital asset custo-
dian. 
‘‘(II) 
WITHDRAWAL.—Not-
withstanding 
subparagraph 
(A), such share of the money, 
assets, 
and 
property 
de-
scribed in subclause (I) of this 
clause as in the normal course 
of business shall be necessary 
to margin, guarantee, secure, 
transfer, adjust, or settle a 
contract of sale of a digital 
commodity with a registered 
entity may be withdrawn and 
applied to such purposes, in-
cluding the payment of com-
missions, brokerage, interest, 
taxes, 
storage, 
and 
other 
charges, lawfully accruing in 
connection with the contract 
of sale of a digital commodity. 
‘‘(ii) COMMISSION ACTION.—Not-
withstanding subparagraph (A), 
in accordance with such terms 
and conditions as the Commission 
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may prescribe by rule, regulation, 
or order, any money, assets, or 
property of the customers of a 
digital commodity exchange de-
scribed in subparagraph (A) may 
be commingled and deposited in 
customer accounts with any other 
money, assets, or property re-
ceived by the digital commodity 
exchange and required by the 
Commission to be separately ac-
counted for and treated and dealt 
with as belonging to the customer 
of 
the 
digital 
commodity 
ex-
change. 
‘‘(2) PERMITTED
INVESTMENTS.—Money 
described in subparagraph (A) may be in-
vested in obligations of the United States, 
in general obligations of any State or of 
any political subdivision of a State, and 
in obligations fully guaranteed as to prin-
cipal and interest by the United States, 
or in any other investment that the Com-
mission may by rule or regulation pre-
scribe, and such investments shall be 
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made in accordance with such rules and 
regulations and subject to such condi-
tions as the Commission may prescribe. 
‘‘(3) CUSTOMER
PROTECTION
DURING 
BANKRUPTCY.— 
‘‘(A) CUSTOMER PROPERTY.—All as-
sets held on behalf of a customer by a 
digital commodity exchange, and all 
money, assets, and property of any 
customer received by a digital com-
modity exchange for trading or cus-
tody, or to facilitate, margin, guar-
antee, or secure contracts of sale of a 
digital commodity (including money, 
assets, or property accruing to the 
customer as the result of the trans-
actions), shall be considered cus-
tomer property for purposes of sec-
tion 761 of title 11, United States 
Code. 
‘‘(B) TRANSACTIONS.—A transaction 
involving the sale of a unit of a dig-
ital commodity occurring on or sub-
ject to the rules of a digital com-
modity exchange shall be considered 
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a contract for the purchase or sale of 
a commodity for future delivery, on 
or subject to the rules of, a contract 
market or board of trade for purposes 
of the definition of ‘commodity con-
tract’ in section 761 of title 11, United 
States Code. 
‘‘(C) EXCHANGES.—A digital com-
modity exchange shall be considered 
a futures commission merchant for 
purposes of section 761 of title 11, 
United States Code. 
‘‘(D) ASSETS
REMOVED
FROM
SEG-
REGATION.—Assets removed from seg-
regation due to a customer election 
under paragraph (5) shall not be con-
sidered customer property for pur-
poses of section 761 of title 11, United 
States Code. 
‘‘(4) MISUSE OF CUSTOMER PROPERTY.— 
‘‘(A) IN GENERAL.—It shall be un-
lawful— 
‘‘(i) for any digital commodity 
exchange that has received any 
customer money, assets, or prop-
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444 
erty for custody to dispose of, or 
use any such money, assets, or 
property as belonging to the dig-
ital commodity exchange or any 
person other than a customer of 
the digital commodity exchange; 
or 
‘‘(ii) for any other person, in-
cluding any depository, other dig-
ital commodity exchange, or dig-
ital asset custodian that has re-
ceived any customer money, as-
sets, or property for deposit, to 
hold, dispose of, or use any such 
money, assets, or property, or 
property, as belonging to the de-
positing digital commodity ex-
change or any person other than 
the customers of the digital com-
modity exchange. 
‘‘(B) USE
FURTHER
DEFINED.—For 
purposes of this section, ‘use’ of a dig-
ital commodity includes utilizing any 
unit of a digital asset to participate in 
a blockchain service defined in para-
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graph (5) or a decentralized govern-
ance system associated with the dig-
ital commodity or the blockchain sys-
tem to which the digital commodity 
relates in any manner other than that 
expressly directed by the customer 
from whom the unit of a digital com-
modity was received. 
‘‘(5) 
PARTICIPATION
IN
BLOCKCHAIN 
SERVICES.— 
‘‘(A) 
IN
GENERAL.—A 
customer 
shall have the right to waive the re-
strictions in paragraph (1) for any 
unit of a digital commodity to be used 
under subparagraph (B), by affirma-
tively electing, in writing to the dig-
ital commodity exchange, to waive 
the restrictions. 
‘‘(B) USE OF FUNDS.—Customer dig-
ital commodities removed from seg-
regation under subparagraph (A) may 
be pooled and used by the digital 
commodity exchange or its designee 
to provide a blockchain service for a 
blockchain system to which the unit 
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of the digital asset removed from seg-
regation in subparagraph (A) relates. 
‘‘(C) LIMITATIONS.— 
‘‘(i) IN GENERAL.—The Commis-
sion shall, by rule, establish no-
tice and disclosure requirements, 
and may, by rule, establish any 
other limitations and rules re-
lated to the waiving of any re-
strictions under this paragraph 
that are reasonably necessary to 
protect customers, including eligi-
ble contract participants, non-eli-
gible contract participants, or any 
other class of customers. 
‘‘(ii) CUSTOMER CHOICE.—A dig-
ital commodity exchange may not 
require a waiver from a customer 
described in subparagraph (A) as 
a condition of doing business on 
the exchange. 
‘‘(D) 
BLOCKCHAIN
SERVICE
DE-
FINED.—In 
this 
subparagraph, 
the 
term ‘blockchain service’ means any 
activity relating to validating trans-
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actions on a blockchain system, pro-
viding security for a blockchain sys-
tem, or other similar activity re-
quired for the ongoing operation of a 
blockchain system. 
‘‘(e) MARKET ACCESS REQUIREMENTS.—The 
Commission may, by rule, impose any addi-
tional requirements related to the operations 
and activities of the digital commodity ex-
change and an affiliated digital commodity 
broker necessary to protect market partici-
pants, promote fair and equitable trading on 
the digital commodity exchange, and promote 
responsible innovation. 
‘‘(f) DESIGNATION OF CHIEF COMPLIANCE OF-
FICER.— 
‘‘(1) IN GENERAL.—A digital commodity 
exchange shall designate an individual to 
serve as a chief compliance officer. 
‘‘(2) DUTIES.—The chief compliance of-
ficer shall— 
‘‘(A) report directly to the board 
or to the senior officer of the ex-
change; 
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‘‘(B) review compliance with the 
core principles in this subsection; 
‘‘(C) in consultation with the 
board of the exchange, a body per-
forming a function similar to that of a 
board, or the senior officer of the ex-
change, resolve any conflicts of inter-
est that may arise; 
‘‘(D) establish and administer the 
policies and procedures required to 
be established pursuant to this sec-
tion; 
‘‘(E) ensure compliance with this 
Act and the rules and regulations 
issued under this Act, including rules 
prescribed by the Commission pursu-
ant to this section; and 
‘‘(F) establish procedures for the 
remediation of noncompliance issues 
found during compliance office re-
views, look backs, internal or exter-
nal audit findings, self-reported er-
rors, 
or 
through 
validated 
com-
plaints. 
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‘‘(3) REQUIREMENTS FOR PROCEDURES.— 
In establishing procedures under para-
graph (2)(F), the chief compliance officer 
shall design the procedures to establish 
the handling, management response, re-
mediation, retesting, and closing of non-
compliance issues. 
‘‘(4) ANNUAL REPORTS.— 
‘‘(A) IN
GENERAL.—In accordance 
with rules prescribed by the Commis-
sion, the chief compliance officer 
shall annually prepare and sign a re-
port that contains a description of— 
‘‘(i) the compliance of the dig-
ital commodity exchange with 
this Act; and 
‘‘(ii) the policies and proce-
dures, including the code of eth-
ics and conflicts of interest poli-
cies, of the digital commodity ex-
change. 
‘‘(B) 
REQUIREMENTS.—The 
chief 
compliance officer shall— 
‘‘(i) submit each report de-
scribed in subparagraph (A) with 
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the appropriate financial report 
of 
the 
digital 
commodity 
ex-
change that is required to be sub-
mitted to the Commission pursu-
ant to this section; and 
‘‘(ii) include in the report a 
certification that, under penalty 
of law, the report is accurate and 
complete. 
‘‘(g) APPOINTMENT OF TRUSTEE.— 
‘‘(1) IN
GENERAL.—If a proceeding 
under section 5e results in the suspen-
sion or revocation of the registration of a 
digital commodity exchange, or if a dig-
ital commodity exchange withdraws from 
registration, the Commission, on notice 
to the digital commodity exchange, may 
apply to the appropriate United States 
district court where the digital com-
modity exchange is located for the ap-
pointment of a trustee. 
‘‘(2) ASSUMPTION
OF
JURISDICTION.—If 
the Commission applies for appointment 
of a trustee under paragraph (1)— 
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‘‘(A) the court may take exclusive 
jurisdiction over the digital com-
modity exchange and the records and 
assets of the digital commodity ex-
change, wherever located; and 
‘‘(B) if the court takes jurisdiction 
under subparagraph (A), the court 
shall appoint the Commission, or a 
person designated by the Commis-
sion, as trustee with power to take 
possession and continue to operate or 
terminate the operations of the dig-
ital commodity exchange in an or-
derly manner for the protection of 
customers subject to such terms and 
conditions as the court may pre-
scribe. 
‘‘(h) QUALIFIED
DIGITAL
ASSET
CUSTO-
DIAN.—A digital commodity exchange shall 
hold in a qualified digital asset custodian 
each unit of a digital asset that is— 
‘‘(1) the property of a customer of the 
digital commodity exchange; 
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‘‘(2) required to be held by the digital 
commodity exchange under subsection 
(c)(12) of this section; or 
‘‘(3) otherwise so required by the 
Commission to reasonably protect cus-
tomers. 
‘‘(i) EXEMPTIONS.— 
‘‘(1) In order to promote responsible 
innovation and fair competition, or pro-
tect customers, the Commission may (on 
its own initiative or on application of the 
registered digital commodity exchange) 
exempt, either unconditionally or on stat-
ed terms or conditions or for stated peri-
ods and either retroactively or prospec-
tively, or both, a registered digital com-
modity exchange from the requirements 
of this section, if the Commission deter-
mines that— 
‘‘(A) the exemption would be con-
sistent with the public interest and 
the purposes of this Act; and 
‘‘(B) the exemption will not have a 
material adverse effect on the ability 
of the Commission or the digital com-
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453 
modity exchange to discharge regu-
latory or self-regulatory duties under 
this Act. 
‘‘(2) The Commission may exempt, 
conditionally or unconditionally, a digital 
commodity exchange from registration 
under this section if the Commission 
finds that the digital commodity ex-
change is subject to comparable, com-
prehensive supervision and regulation on 
a consolidated basis by the appropriate 
governmental authorities in the home 
country of the facility. 
‘‘(j) CUSTOMER DEFINED.—In this section, 
the term ‘customer’ means any person that 
maintains an account for the trading of dig-
ital commodities directly with a digital com-
modity exchange (other than a person that is 
owned or controlled, directly or indirectly, by 
the digital commodity exchange) for its own 
behalf or on behalf of any other person. 
‘‘(k) 
FEDERAL
PREEMPTION.—Notwith-
standing any other provision of law, the Com-
mission shall have exclusive jurisdiction over 
any digital commodity exchange registered 
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454 
under this section with respect to activities 
and transactions subject to this Act.’’. 
SEC. 405. QUALIFIED DIGITAL ASSET CUSTODIANS. 
The Commodity Exchange Act (7 U.S.C. 1 
et seq.), as amended by the preceding provi-
sions of this Act, is amended by inserting after 
section 5i the following: 
‘‘SEC. 5j. QUALIFIED DIGITAL ASSET CUSTODIANS. 
‘‘(a) IN GENERAL.—A person is a qualified 
digital asset custodian for purposes of this 
Act if the person— 
‘‘(1) holds digital assets on behalf of a 
person registered under this Act or a cus-
tomer of a person registered under this 
Act; and 
‘‘(2) is in compliance with subsections 
(b) and (c). 
‘‘(b) SUPERVISION REQUIREMENT.—A person 
is in compliance with this subsection if the 
person is subject to— 
‘‘(1) supervision and examination for 
custody and safekeeping of digital assets 
by an appropriate Federal banking agen-
cy, the National Credit Union Administra-
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455 
tion, the Commission, or the Securities 
and Exchange Commission; or 
‘‘(2) adequate supervision and appro-
priate regulation for custody and safe-
keeping of digital assets by— 
‘‘(A) 
a 
State 
bank 
supervisor 
(within the meaning of section 3 of 
the Federal Deposit Insurance Act); 
‘‘(B) a State credit union super-
visor, as defined under section 6003 
of the Anti-Money Laundering Act of 
2020; or 
‘‘(C) an appropriate foreign gov-
ernmental authority in the home 
country of the digital commodity cus-
todian. 
‘‘(c) OTHER REQUIREMENTS.—A person shall 
be in compliance with this subsection if: 
‘‘(1) NOT OTHERWISE PROHIBITED.—The 
person has not been prohibited by its su-
pervisor from engaging in an activity 
with respect to the custody and safe-
keeping of digital assets. 
‘‘(2) INFORMATION SHARING.— 
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‘‘(A) 
IN
GENERAL.—The 
person 
shares information with the Commis-
sion on request and complies with 
such requirements for periodic shar-
ing of information regarding cus-
tomer accounts that the person holds 
on behalf of an entity registered with 
the Commission as the Commission 
determines by rule are reasonably 
necessary to effectuate any of the 
provisions, or to accomplish any of 
the purposes, of this Act. 
‘‘(B) PROVISION OF INFORMATION.— 
If the person is subject to regulation 
and examination by an appropriate 
Federal banking agency, the person 
may satisfy any information request 
described in subparagraph (A) by 
providing the Commission with a de-
tailed listing, in writing, of the digital 
assets of a customer in the custody of, 
or use by, the person. 
‘‘(C) RULEMAKING
FOR
CFTC
ENTI-
TIES.— 
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‘‘(i) IN GENERAL.—The Commis-
sion shall prescribe rules to per-
mit a person registered with the 
Commission to be a qualified dig-
ital asset custodian in compliance 
with this section. 
‘‘(ii) CONTENT.—In prescribing 
the rules under subparagraph (A), 
the Commission shall require a 
person registered with the Com-
mission to— 
‘‘(I) 
implement 
require-
ment consistent with the re-
quirements 
in 
subsection 
(d)(1); 
‘‘(II) 
establish 
sufficient 
system safeguards; 
‘‘(III) prevent or mitigate 
conflicts of interest, as appro-
priate; and 
‘‘(IV) 
establish 
separate 
governance arrangements for 
the custodial function of the 
entity. 
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‘‘(d) ADEQUATE SUPERVISION
AND APPRO-
PRIATE REGULATION.— 
‘‘(1) IN GENERAL.—For purposes of sub-
section (b), the terms ‘adequate super-
vision’ and ‘appropriate regulation’ mean 
such minimum standards for supervision 
and regulation as are reasonably nec-
essary to protect the digital assets held 
by a person registered under this Act, in-
cluding standards relating to the licens-
ing, examination, and supervisory proc-
esses that require the person to, at a min-
imum— 
‘‘(A) receive a review and evalua-
tion of ownership, character and fit-
ness, conflicts of interest, business 
model, financial statements, funding 
resources, and policies and proce-
dures of the person; 
‘‘(B) hold capital sufficient for the 
financial integrity of the person; 
‘‘(C) protect customer assets; 
‘‘(D) establish and maintain books 
and records regarding the business of 
the person; 
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‘‘(E) submit financial statements 
and audited financial statements to 
the applicable supervisor described 
in subsection (b); 
‘‘(F) provide disclosures to the ap-
plicable supervisor described in sub-
section (b) regarding actions, pro-
ceedings, and other items as deter-
mined by the supervisor; 
‘‘(G) maintain and enforce poli-
cies and procedures for compliance 
with applicable State and Federal 
laws, including those related to anti- 
money laundering and cybersecurity; 
‘‘(H) establish a business con-
tinuity plan to ensure functionality in 
cases of disruption; and 
‘‘(I) establish policies and proce-
dures to resolve complaints. 
‘‘(2) RULEMAKING
WITH
RESPECT
TO 
DEFINITIONS.— 
‘‘(A) IN GENERAL.—For purposes of 
this section, the Commission may, by 
rule, further define the terms ‘ade-
quate supervision’ and ‘appropriate 
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regulation’ as necessary and appro-
priate for the protection of cus-
tomers, and consistent with the pur-
poses of this Act. 
‘‘(B) CONDITIONAL
TREATMENT
OF 
CERTAIN
CUSTODIANS
BEFORE
RULE-
MAKING.—Before the effective date of 
a rulemaking under subparagraph 
(A), a trust company is deemed sub-
ject to adequate supervision and ap-
propriate regulation if— 
‘‘(i) the trust company is ex-
pressly permitted by a State bank 
supervisor to engage in the cus-
tody and safekeeping of digital as-
sets; 
‘‘(ii) the State bank supervisor 
has established licensing, exam-
ination, and supervisory proc-
esses that require the trust com-
pany to, at a minimum, meet the 
conditions described in subpara-
graphs (A) through (I) of para-
graph (1); and 
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‘‘(iii) the trust company is in 
good standing with its State bank 
supervisor. 
‘‘(C) TRANSITION PERIOD FOR CER-
TAIN
CUSTODIANS.—In 
implementing 
the rulemaking under subparagraph 
(A), the Commission shall provide a 
transition period of not less than 2 
years for any trust company that is 
deemed subject to adequate super-
vision and appropriate regulation 
under subparagraph (B) on the effec-
tive date of the rulemaking. 
‘‘(e) AUTHORITY TO TEMPORARILY SUSPEND 
STANDARDS.—The Commission may, by rule or 
order, temporarily suspend, in whole or in 
part, any requirement imposed under, or any 
standard referred to in, this section if the 
Commission determines that the suspension 
would be consistent with the public interest 
and the purposes of this Act.’’. 
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SEC. 406. REGISTRATION AND REGULATION OF DIGITAL 
COMMODITY BROKERS AND DEALERS. 
The Commodity Exchange Act (7 U.S.C. 1 
et seq.) is amended by inserting after section 
4t the following: 
‘‘SEC. 4u. REGISTRATION AND REGULATION OF DIGITAL 
COMMODITY BROKERS AND DEALERS. 
‘‘(a) REGISTRATION.— 
‘‘(1) REQUIREMENT.—It shall be unlaw-
ful for any person to act as a digital com-
modity broker or digital commodity deal-
er unless the person is registered as such 
with the Commission. 
‘‘(2) ADDITIONAL REGISTRATION.— 
‘‘(A) RULES.—In order to foster the 
development of fair and orderly mar-
kets, protect customers, and promote 
responsible innovation, the Commis-
sion— 
‘‘(i) shall prescribe rules to ex-
empt an entity registered with 
the Commission under more than 
1 section of this Act from duplica-
tive, conflicting, or unduly bur-
densome provisions of this Act 
and the rules under this Act; 
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‘‘(ii) shall prescribe rules to 
address conflicts of interests and 
the activities of the entity; and 
‘‘(iii) may after an analysis of 
the risks and benefits, prescribe 
rules to provide for portfolio mar-
gining. 
‘‘(B) WITH
MEMBERSHIP
IN
A
REG-
ISTERED
FUTURES
ASSOCIATION.—Any 
person required to be registered as a 
digital commodity broker or digital 
commodity dealer under this section 
shall be a member of a registered fu-
tures association. 
‘‘(b) REQUIREMENTS.— 
‘‘(1) IN GENERAL.—A person shall reg-
ister as a digital commodity broker or 
digital commodity dealer by filing a reg-
istration application with the Commis-
sion. 
‘‘(2) CONTENTS.— 
‘‘(A) IN GENERAL.—The application 
shall be made in such form and man-
ner as is prescribed by the Commis-
sion, and shall contain such informa-
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tion as the Commission considers 
necessary concerning the business in 
which the applicant is or will be en-
gaged. 
‘‘(B) 
CONTINUAL
REPORTING.—A 
person that is registered as a digital 
commodity broker or digital com-
modity dealer shall continue to sub-
mit to the Commission reports that 
contain such information pertaining 
to the business of the person as the 
Commission may require. 
‘‘(3) STATUTORY DISQUALIFICATION.—Ex-
cept to the extent otherwise specifically 
provided by rule, regulation, or order, it 
shall be unlawful for a digital commodity 
broker or digital commodity dealer to 
permit any person who is associated with 
a digital commodity broker or a digital 
commodity dealer and who is subject to a 
statutory disqualification to effect or be 
involved in effecting a contract of sale of 
a digital commodity on behalf of the dig-
ital commodity broker or the digital com-
modity dealer, respectively, if the digital 
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commodity broker or digital commodity 
dealer, respectively, knew, or in the exer-
cise of reasonable care should have 
known, of the statutory disqualification. 
‘‘(c) RULEMAKING.— 
‘‘(1) IN
GENERAL.—The Commission 
shall prescribe such rules applicable to 
registered digital commodity brokers and 
registered digital commodity dealers as 
are appropriate to carry out this section, 
including rules in the public interest that 
limit the activities of digital commodity 
brokers and digital commodity dealers. 
‘‘(2) FINANCING AGREEMENTS.— 
‘‘(A) IN
GENERAL.—The Commis-
sion shall prescribe rules and regula-
tions applicable to digital commodity 
brokers or digital commodity dealers 
which shall set forth minimum re-
quirements related to disclosure, rec-
ordkeeping, margin and financing ar-
rangements, rehypothecation, capital, 
reporting, business conduct, docu-
mentation, and supervision of em-
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ployees and agents, in connection 
with— 
‘‘(i) an agreement described in 
section 2(c)(2)(D)(iv); or 
‘‘(ii) any other margined, le-
veraged, or financing arrange-
ment for the purchase or sale of a 
digital commodity with an eligi-
ble contract participant. 
‘‘(B) SPECIFIC
AUTHORITY.—Except 
as prohibited in section 2(c)(2)(G)(iii), 
the Commission may also make, pro-
mulgate, and enforce such rules and 
regulations as, in the judgment of the 
Commission, 
are 
reasonably 
nec-
essary to effectuate any of the provi-
sions of, or to accomplish any of the 
purposes of, this Act in connection 
with an agreement referred to in sub-
paragraph (A) of this paragraph, 
which may include, without limita-
tion, 
requirements 
regarding 
reg-
istration with the Commission and 
membership in a registered futures 
association. 
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‘‘(d) CAPITAL REQUIREMENTS.— 
‘‘(1) IN
GENERAL.—Each digital com-
modity broker and digital commodity 
dealer shall meet such minimum capital 
requirements as the Commission may 
prescribe to address the risks associated 
with digital commodity trading and to 
ensure that the digital commodity broker 
or digital commodity dealer, respectively, 
is able, at all times, to— 
‘‘(A) meet, and continue to meet 
the obligations of such a registrant; 
and 
‘‘(B) fulfill obligations to cus-
tomers or counterparties for any mar-
gined, leveraged, or financed trans-
actions. 
‘‘(2) FUTURES
COMMISSION
MERCHANTS 
AND OTHER DEALERS.—Each futures com-
mission merchant, introducing broker, 
digital commodity broker, digital com-
modity dealer, broker, and dealer shall 
maintain sufficient capital to comply 
with the stricter of any applicable capital 
requirements to which the futures com-
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mission merchant, introducing broker, 
digital commodity broker, digital com-
modity dealer, broker, or dealer, respec-
tively, is subject under this Act or the Se-
curities Exchange Act of 1934 (15 U.S.C. 
78a et seq.). 
‘‘(e) REPORTING
AND
RECORDKEEPING.— 
Each digital commodity broker and digital 
commodity dealer— 
‘‘(1) shall make such reports as are re-
quired by the Commission by rule or reg-
ulation regarding the transactions, posi-
tions, and financial condition of the dig-
ital commodity broker or digital com-
modity dealer, respectively; 
‘‘(2) shall keep books and records in 
such form and manner and for such pe-
riod as may be prescribed by the Com-
mission by rule or regulation; and 
‘‘(3) shall keep the books and records 
open to inspection and examination by 
any representative of the Commission. 
‘‘(f) DAILY TRADING RECORDS.— 
‘‘(1) IN
GENERAL.—Each digital com-
modity broker and digital commodity 
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dealer 
shall 
maintain 
daily 
trading 
records of the transactions of the digital 
commodity broker or digital commodity 
dealer, 
respectively, 
and 
all 
related 
records (including related forward or de-
rivatives transactions) and recorded com-
munications, including electronic mail, 
instant messages, and recordings of tele-
phone calls, for such period as the Com-
mission may require by rule or regula-
tion. 
‘‘(2) INFORMATION REQUIREMENTS.—The 
daily trading records shall include such 
information as the Commission shall re-
quire by rule or regulation. 
‘‘(3) 
COUNTERPARTY
RECORDS.—Each 
digital commodity broker and digital 
commodity dealer shall maintain daily 
trading records for each customer or 
counterparty in a manner and form that 
is identifiable with each digital com-
modity transaction. 
‘‘(4) AUDIT
TRAIL.—Each digital com-
modity broker and digital commodity 
dealer shall maintain a complete audit 
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trail for conducting comprehensive and 
accurate trade reconstructions. 
‘‘(g) BUSINESS CONDUCT STANDARDS.— 
‘‘(1) IN
GENERAL.—Each digital com-
modity broker and digital commodity 
dealer shall conform with such business 
conduct standards as the Commission, by 
rule or regulation, prescribes related to— 
‘‘(A) 
fraud, 
manipulation, 
and 
other 
abusive 
practices 
involving 
spot or margined, leveraged, or fi-
nanced 
digital 
commodity 
trans-
actions (including transactions that 
are offered but not entered into); 
‘‘(B) diligent supervision of the 
business of the registered digital com-
modity broker or digital commodity 
dealer, respectively; and 
‘‘(C) such other matters as the 
Commission deems appropriate. 
‘‘(2) 
BUSINESS
CONDUCT
REQUIRE-
MENTS.—The Commission shall, by rule, 
prescribe business conduct requirements 
which— 
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‘‘(A) require disclosure by a reg-
istered digital commodity broker and 
registered digital commodity dealer 
to any counterparty to the trans-
action (other than an eligible con-
tract participant) of— 
‘‘(i) information about the ma-
terial risks and characteristics of 
the digital commodity; 
‘‘(ii) information about the 
material risks and characteristics 
of the transaction; 
‘‘(B) establish a duty for such a 
digital commodity broker and such a 
digital commodity dealer to commu-
nicate in a fair and balanced manner 
based on principles of fair dealing 
and good faith; 
‘‘(C) 
establish 
standards 
gov-
erning digital commodity broker and 
digital commodity dealer marketing 
and 
advertising, 
including 
testimonials and endorsements; and 
‘‘(D) establish such other stand-
ards and requirements as the Com-
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mission may determine are appro-
priate for the protection of cus-
tomers. 
‘‘(3) PROHIBITION ON FRAUDULENT PRAC-
TICES.—It shall be unlawful for a digital 
commodity broker or digital commodity 
dealer to— 
‘‘(A) employ any device, scheme, 
or artifice to defraud any customer or 
counterparty; 
‘‘(B) engage in any transaction, 
practice, or course of business that 
operates as a fraud or deceit on any 
customer or counterparty; or 
‘‘(C) engage in any act, practice, 
or course of business that is fraudu-
lent, deceptive, or manipulative. 
‘‘(h) DUTIES.— 
‘‘(1) RISK MANAGEMENT PROCEDURES.— 
Each digital commodity broker and dig-
ital commodity dealer shall establish ro-
bust and professional risk management 
systems adequate for managing the day- 
to-day business of the digital commodity 
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broker or digital commodity dealer, re-
spectively. 
‘‘(2) DISCLOSURE OF GENERAL INFORMA-
TION.—Each digital commodity broker 
and digital commodity dealer shall dis-
close to the Commission information con-
cerning— 
‘‘(A) the terms and conditions of 
the transactions of the digital com-
modity broker or digital commodity 
dealer, respectively; 
‘‘(B) the trading operations, mech-
anisms, and practices of the digital 
commodity broker or digital com-
modity dealer, respectively; 
‘‘(C) financial integrity protec-
tions relating to the activities of the 
digital commodity broker or digital 
commodity dealer, respectively; and 
‘‘(D) other information relevant to 
trading in digital commodities by the 
digital commodity broker or digital 
commodity dealer, respectively. 
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‘‘(3) ABILITY TO OBTAIN INFORMATION.— 
Each digital commodity broker and dig-
ital commodity dealer shall— 
‘‘(A) establish and enforce inter-
nal systems and procedures to obtain 
any necessary information to perform 
any of the functions described in this 
section; and 
‘‘(B) provide the information to 
the Commission, on request. 
‘‘(4) CONFLICTS
OF
INTEREST.—Each 
digital commodity broker and digital 
commodity dealer shall establish, main-
tain, and enforce written policies and 
procedures reasonably designed, taking 
into consideration the nature of the busi-
ness of the person, to mitigate any con-
flicts of interest in transactions or ar-
rangements with affiliates. 
‘‘(5) ANTITRUST
CONSIDERATIONS.—Un-
less necessary or appropriate to achieve 
the purposes of this Act, a digital com-
modity broker or digital commodity deal-
er shall not— 
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‘‘(A) adopt any process or take 
any action that results in any unrea-
sonable restraint of trade; or 
‘‘(B) impose any material anti-
competitive burden on trading or 
clearing. 
‘‘(i) DESIGNATION OF CHIEF COMPLIANCE OF-
FICER.— 
‘‘(1) IN
GENERAL.—Each digital com-
modity broker and digital commodity 
dealer shall designate an individual to 
serve as a chief compliance officer. 
‘‘(2) DUTIES.—The chief compliance of-
ficer shall— 
‘‘(A) report directly to the board 
or to the senior officer of the reg-
istered digital commodity broker or 
registered digital commodity dealer; 
‘‘(B) review the compliance of the 
registered digital commodity broker 
or registered digital commodity deal-
er with respect to the registered dig-
ital commodity broker and registered 
digital 
commodity 
dealer 
require-
ments described in this section; 
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‘‘(C) in consultation with the 
board of directors, a body performing 
a function similar to the board, or the 
senior officer of the organization, re-
solve any conflicts of interest that 
may arise; 
‘‘(D) be responsible for admin-
istering each policy and procedure 
that is required to be established pur-
suant to this section; 
‘‘(E) ensure compliance with this 
Act (including regulations), including 
each rule prescribed by the Commis-
sion under this section; 
‘‘(F) establish procedures for the 
remediation of noncompliance issues 
identified by the chief compliance of-
ficer through any— 
‘‘(i) compliance office review; 
‘‘(ii) look-back; 
‘‘(iii) 
internal 
or 
external 
audit finding; 
‘‘(iv) self-reported error; or 
‘‘(v) validated complaint; and 
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‘‘(G) establish and follow appro-
priate procedures for the handling, 
management response, remediation, 
retesting, and closing of noncompli-
ance issues. 
‘‘(3) ANNUAL REPORTS.— 
‘‘(A) IN
GENERAL.—In accordance 
with rules prescribed by the Commis-
sion, the chief compliance officer 
shall annually prepare and sign a re-
port that contains a description of— 
‘‘(i) the compliance of the reg-
istered digital commodity broker 
or registered digital commodity 
dealer with this Act (including 
regulations); and 
‘‘(ii) each policy and proce-
dure of the registered digital com-
modity broker or registered dig-
ital commodity dealer followed by 
the chief compliance officer (in-
cluding the code of ethics and 
conflict of interest policies). 
‘‘(B) 
REQUIREMENTS.—The 
chief 
compliance officer shall ensure that a 
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compliance report under subpara-
graph (A)— 
‘‘(i) accompanies each appro-
priate financial report of the reg-
istered digital commodity broker 
or registered digital commodity 
dealer that is required to be fur-
nished to the Commission pursu-
ant to this section; and 
‘‘(ii) includes a certification 
that, under penalty of law, the 
compliance report is accurate and 
complete. 
‘‘(j) SEGREGATION
OF
DIGITAL
COMMOD-
ITIES.— 
‘‘(1) HOLDING OF CUSTOMER ASSETS.— 
‘‘(A) IN
GENERAL.—Each digital 
commodity broker and digital com-
modity dealer shall hold customer 
money, assets, and property in a man-
ner to minimize the risk of loss to the 
customer or unreasonable delay in 
customer access to the money, assets, 
and property of the customer. 
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‘‘(B) QUALIFIED DIGITAL ASSET CUS-
TODIAN.—Each 
digital 
commodity 
broker and digital commodity dealer 
shall hold in a qualified digital asset 
custodian each unit of a digital asset 
that is— 
‘‘(i) the property of a customer 
or counterparty of the digital 
commodity broker or digital com-
modity dealer, respectively; 
‘‘(ii) required to be held by 
the digital commodity broker or 
digital commodity dealer under 
subsection (e); or 
‘‘(iii) otherwise so required by 
the Commission to reasonably 
protect customers or promote the 
public interest. 
‘‘(2) SEGREGATION OF FUNDS.— 
‘‘(A) IN
GENERAL.—Each digital 
commodity broker and digital com-
modity dealer shall treat and deal 
with all money, assets, and property 
that is received by the digital com-
modity broker or digital commodity 
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dealer, or accrues to a customer as 
the result of trading in digital com-
modities, as belonging to the cus-
tomer. 
‘‘(B) COMMINGLING PROHIBITED.— 
‘‘(i) IN
GENERAL.—Except as 
provided in clause (ii), each dig-
ital commodity broker and digital 
commodity 
dealer 
shall 
sepa-
rately account for money, assets, 
and property of a digital com-
modity customer, and shall not 
commingle any such money, as-
sets, or property with the funds of 
the digital commodity broker or 
digital commodity dealer, respec-
tively, or use any such money, as-
sets, or property to margin, se-
cure, or guarantee any trades or 
accounts of any customer or per-
son other than the person for 
whom the money, assets, or prop-
erty are held. 
‘‘(ii) EXCEPTIONS.— 
‘‘(I) USE OF FUNDS.— 
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‘‘(aa) IN
GENERAL.—A 
digital commodity broker 
or digital commodity deal-
er may, for convenience, 
commingle and deposit in 
the same account or ac-
counts 
with 
any 
bank, 
trust 
company, 
deriva-
tives 
clearing 
organiza-
tion, or qualified digital 
asset custodian money, as-
sets, and property of cus-
tomers. 
‘‘(bb) 
WITHDRAWAL.— 
The share of the money, 
assets, and property de-
scribed in item (aa) as in 
the normal course of busi-
ness shall be necessary to 
margin, guarantee, secure, 
transfer, adjust, or settle a 
contract of sale of a dig-
ital commodity with a reg-
istered 
entity 
may 
be 
withdrawn and applied to 
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482 
such purposes, including 
the payment of commis-
sions, brokerage, interest, 
taxes, storage, and other 
charges, lawfully accruing 
in connection with the 
contract. 
‘‘(II) COMMISSION ACTION.— 
In 
accordance 
with 
such 
terms and conditions as the 
Commission may prescribe by 
rule, regulation, or order, any 
money, assets, or property of 
the customers of a digital 
commodity broker or digital 
commodity 
dealer 
may 
be 
commingled and deposited in 
customer accounts with any 
other money, assets, or prop-
erty received by the digital 
commodity broker or digital 
commodity 
dealer, 
respec-
tively, and required by the 
Commission to be separately 
accounted for and treated and 
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483 
dealt with as belonging to the 
customer of the digital com-
modity broker or digital com-
modity dealer, respectively. 
‘‘(3) PERMITTED
INVESTMENTS.—Money 
described in paragraph (2) may be in-
vested in obligations of the United States, 
in general obligations of any State or of 
any political subdivision of a State, in ob-
ligations fully guaranteed as to principal 
and interest by the United States, or in 
any other investment that the Commis-
sion may by rule or regulation allow. 
‘‘(4) CUSTOMER
PROTECTION
DURING 
BANKRUPTCY.— 
‘‘(A) 
CUSTOMER
PROPERTY.—All 
money, assets, or property described 
in paragraph (2) shall be considered 
customer property for purposes of 
section 761 of title 11, United States 
Code. 
‘‘(B) TRANSACTIONS.—A transaction 
involving a unit of a digital com-
modity occurring with a digital com-
modity broker or digital commodity 
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484 
dealer shall be considered a ‘contract 
for the purchase or sale of a com-
modity for future delivery, on or sub-
ject to the rules of, a contract market 
or board of trade’ for purposes of the 
definition of a ‘commodity contract’ 
in section 761 of title 11, United 
States Code. 
‘‘(C) BROKERS
AND
DEALERS.—A 
digital commodity broker and a dig-
ital commodity dealer shall be consid-
ered a futures commission merchant 
for purposes of section 761 of title 11, 
United States Code. 
‘‘(D) ASSETS
REMOVED
FROM
SEG-
REGATION.—Assets removed from seg-
regation due to a customer election 
under paragraph (6) shall not be con-
sidered customer property for pur-
poses of section 761 of title 11, United 
States Code. 
‘‘(5) MISUSE OF CUSTOMER PROPERTY.— 
‘‘(A) IN GENERAL.—It shall be un-
lawful— 
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485 
‘‘(i) for any digital commodity 
broker or digital commodity deal-
er that has received any customer 
money, assets, or property for 
custody to dispose of, or use any 
such money, assets, or property 
as belonging to the digital com-
modity broker or digital com-
modity dealer, respectively, or 
any person other than a customer 
of the digital commodity broker 
or digital commodity dealer, re-
spectively; or 
‘‘(ii) for any other person, in-
cluding any depository, digital 
commodity exchange, other dig-
ital commodity broker, other dig-
ital commodity dealer, or digital 
commodity custodian that has re-
ceived any customer money, as-
sets, or property for deposit, to 
hold, dispose of, or use any such 
money, assets, or property, as be-
longing to the depositing digital 
commodity broker or digital com-
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486 
modity dealer or any person other 
than the customers of the digital 
commodity broker or digital com-
modity dealer, respectively. 
‘‘(B) USE
FURTHER
DEFINED.—For 
purposes of this section, ‘use’ of a dig-
ital commodity includes utilizing any 
unit of a digital asset to participate in 
a blockchain service defined in para-
graph (6) or a decentralized govern-
ance system associated with the dig-
ital commodity or the blockchain sys-
tem to which the digital commodity 
relates in any manner other than that 
expressly directed by the customer 
from whom the unit of a digital com-
modity was received. 
‘‘(6) 
PARTICIPATION
IN
BLOCKCHAIN 
SERVICES.— 
‘‘(A) 
IN
GENERAL.—A 
customer 
shall have the right to waive the re-
strictions in paragraph (2) for any 
unit of a digital commodity to be used 
under subparagraph (B) of this para-
graph, by affirmatively electing, in 
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487 
writing to the digital commodity 
broker or digital commodity dealer, 
to waive the restrictions. 
‘‘(B) USE OF FUNDS.—Customer dig-
ital commodities removed from seg-
regation under subparagraph (A) may 
be pooled and used by the digital 
commodity broker or digital com-
modity dealer, or one of their des-
ignees, to provide a blockchain serv-
ice for a blockchain system to which 
the unit of the digital asset removed 
from segregation in subparagraph (A) 
relates. 
‘‘(C) LIMITATIONS.— 
‘‘(i) IN GENERAL.—The Commis-
sion shall, by rule, establish no-
tice and disclosure requirements, 
and may, by rule, establish any 
other limitations and rules re-
lated to the waiving of any re-
strictions under this paragraph 
that are reasonably necessary to 
protect customers, including eligi-
ble contract participants, non-eli-
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488 
gible contract participants, or any 
other class of customers. 
‘‘(ii) CUSTOMER CHOICE.—A dig-
ital commodity broker or digital 
commodity dealer may not re-
quire a waiver from a customer 
described in subparagraph (A) as 
a condition of doing business 
with the broker or dealer. 
‘‘(D) 
BLOCKCHAIN
SERVICE
DE-
FINED.—In 
this 
subparagraph, 
the 
term ‘blockchain service’ means any 
activity relating to validating trans-
actions on a blockchain system, pro-
viding security for a blockchain sys-
tem, or other similar activity re-
quired for the ongoing operation of a 
blockchain system. 
‘‘(k) 
FEDERAL
PREEMPTION.—Notwith-
standing any other provision of law, the Com-
mission shall have exclusive jurisdiction over 
any digital commodity broker or digital com-
modity dealer registered under this section 
with respect to activities subject to this Act, 
except as provided in section 5k. 
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489 
‘‘(l) EXEMPTIONS.—In order to promote re-
sponsible innovation and fair competition, or 
protect customers, the Commission may (on 
its own initiative or on application of the reg-
istered digital commodity broker or reg-
istered digital commodity dealer) exempt, un-
conditionally or on stated terms or condi-
tions, or for stated periods, and retroactively 
or prospectively, or both, a registered digital 
commodity broker or registered digital com-
modity dealer from the requirements of this 
section, if the Commission determines that— 
‘‘(1)(A) the exemption would be con-
sistent with the public interest and the 
purposes of this Act; and 
‘‘(B) the exemption will not have a 
material adverse effect on the ability of 
the Commission to discharge regulatory 
duties under this Act; or 
‘‘(2) the registered digital commodity 
broker or registered digital commodity 
dealer is subject to comparable, com-
prehensive supervision and regulation by 
the appropriate government authorities 
in the home country of the registered dig-
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490 
ital commodity broker or registered dig-
ital commodity dealer, respectively.’’. 
SEC. 407. REGISTRATION OF ASSOCIATED PERSONS. 
(a) IN GENERAL.—Section 4k of the Com-
modity Exchange Act (7 U.S.C. 6k) is amend-
ed— 
(1) by redesignating subsections (4) 
through (6) as subsections (5) through (7), 
respectively; 
(2) by inserting after subsection (3) 
the following: 
‘‘(4) It shall be unlawful for any person to 
act as an associated person of a digital com-
modity broker or an associated person of a 
digital commodity dealer unless the person is 
registered with the Commission under this 
Act and such registration shall not have ex-
pired, been suspended (and the period of sus-
pension has not expired), or been revoked. It 
shall be unlawful for a digital commodity 
broker or a digital commodity dealer to per-
mit such a person to become or remain associ-
ated with the digital commodity broker or 
digital commodity dealer if the digital com-
modity broker or digital commodity dealer 
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491 
knew or should have known that the person 
was not so registered or that the registration 
had expired, been suspended (and the period 
of suspension has not expired), or been re-
voked.’’; and 
(3) in subsection (5) (as so redesig-
nated), by striking ‘‘or of a commodity 
trading advisor’’ and inserting ‘‘of a com-
modity trading advisor, of a digital com-
modity broker, or of a digital commodity 
dealer’’. 
(b) CONFORMING AMENDMENTS.—The Com-
modity Exchange Act (7 U.S.C. 1a et seq.) is 
amended by striking ‘‘section 4k(6)’’ each 
place it appears and inserting ‘‘section 4k(7)’’. 
SEC. 408. REGISTRATION OF COMMODITY POOL OPERA-
TORS AND COMMODITY TRADING ADVISORS. 
(a) IN
GENERAL.—Section 4m(3) of the 
Commodity Exchange Act (7 U.S.C. 6m(3)) is 
amended— 
(1) in subparagraph (A)— 
(A) by striking ‘‘any commodity 
trading advisor’’ and inserting ‘‘a 
commodity pool operator or com-
modity trading advisor’’; and 
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492 
(B) by striking ‘‘acting as a com-
modity trading advisor’’ and inserting 
‘‘acting as a commodity pool operator 
or commodity trading advisor’’; and 
(2) in subparagraph (C), by inserting 
‘‘digital 
commodities,’’ 
after 
‘‘physical 
commodities,’’. 
(b) EXEMPTIVE AUTHORITY.—Section 4m of 
such Act (7 U.S.C. 6m) is amended by adding 
at the end the following: 
‘‘(4) EXEMPTIVE AUTHORITY.—The Commis-
sion shall promulgate rules to provide appro-
priate exemptions for commodity pool opera-
tors and commodity trading advisors, to pro-
vide relief from duplicative, conflicting, or 
unduly burdensome requirements or to pro-
mote responsible innovation, to the extent the 
exemptions foster the development of fair and 
orderly cash or spot digital commodity mar-
kets, are necessary or appropriate in the pub-
lic interest, and are consistent with the pro-
tection of customers.’’. 
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493 
SEC. 409. EXCLUSION FOR DECENTRALIZED FINANCE AC-
TIVITIES. 
The Commodity Exchange Act (7 U.S.C. 1 
et seq.), as amended by the preceding provi-
sions of this Act, is amended by inserting after 
section 4u the following: 
‘‘SEC. 4v. DECENTRALIZED FINANCE ACTIVITIES NOT SUB-
JECT TO THIS ACT. 
‘‘(a) IN
GENERAL.—Notwithstanding any 
other provision of this Act, a person shall not 
be subject to this Act and the regulations pro-
mulgated under this Act based on the person 
directly or indirectly engaging in any of the 
following activities, whether singly or in com-
bination, in relation to the operation of a 
blockchain system or in relation to decentral-
ized finance trading protocol: 
‘‘(1) Compiling network transactions 
or relaying, searching, sequencing, vali-
dating, or acting in a similar capacity. 
‘‘(2) Providing computational work, 
operating a node or oracle service, or 
procuring, offering, or utilizing network 
bandwidth, or other similar incidental 
services. 
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‘‘(3) Providing a user-interface that 
enables a user to read, and access data 
about a blockchain system. 
‘‘(4) Developing, publishing, consti-
tuting, administering, maintaining, or 
otherwise distributing a blockchain sys-
tem or a decentralized finance trading 
protocol. 
‘‘(5) Developing, publishing, consti-
tuting, administering, maintaining, or 
otherwise distributing a decentralized fi-
nance messaging system or operating or 
participating in a liquidity pool for the 
purpose of executing a contract of sale of 
a digital commodity. 
‘‘(6) Developing, publishing, consti-
tuting, administering, maintaining, or 
otherwise distributing software or sys-
tems that create or deploy hardware or 
software, including wallets or other sys-
tems, facilitating an individual user’s 
own personal ability to keep, safeguard, 
or custody the user’s digital assets or re-
lated private keys. 
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495 
‘‘(b) EXCEPTIONS.—Subsection (a) shall not 
be interpreted to apply to the anti-fraud, anti- 
manipulation, or false reporting enforcement 
authorities of the Commission.’’. 
SEC. 410. RESOURCES FOR IMPLEMENTATION AND EN-
FORCEMENT. 
(a) COLLECTION OF FEES.— 
(1) IN GENERAL.—The Commodity Fu-
tures Trading Commission (in this sec-
tion referred to as the ‘‘Commission’’) 
shall charge and collect a filing fee from 
each person who files with the Commis-
sion a statement of provisional registra-
tion as a digital commodity exchange, 
digital commodity broker, or digital com-
modity dealer pursuant to section 106. 
(2) 
AMOUNT.—The 
fees 
authorized 
under paragraph (1) may be collected and 
available 
for 
obligation 
only 
in 
the 
amounts provided in advance in an ap-
propriation Act. 
(3) AUTHORITY TO ADJUST FEES.—Not-
withstanding the preceding provisions of 
this subsection, to promote fair competi-
tion or innovation, the Commission, in its 
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496 
sole discretion, may reduce or eliminate 
any fee otherwise required to be paid by 
a small or medium filer under this sub-
section. 
(b) FEE SCHEDULE.— 
(1) 
IN
GENERAL.—The 
Commission 
shall publish in the Federal Register a 
schedule of the fees to be charged and 
collected under this section. 
(2) CONTENT.—The fee schedule for a 
fiscal year shall include a written anal-
ysis of the estimate of the Commission of 
the total costs of carrying out the func-
tions of the Commission under this Act 
during the fiscal year. 
(3) SUBMISSION TO CONGRESS.—Before 
publishing the fee schedule for a fiscal 
year, the Commission shall submit a copy 
of the fee schedule to the Committees on 
Agriculture and on Appropriations of the 
House of Representatives and the Com-
mittees on Agriculture, Nutrition, and 
Forestry and on Appropriations of the 
Senate. 
(4) TIMING.— 
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497 
(A) 1ST
FISCAL
YEAR.—The Com-
mission shall publish the fee schedule 
for the fiscal year in which this Act is 
enacted, within 30 days after the date 
of the enactment of this Act. 
(B) SUBSEQUENT
FISCAL
YEARS.— 
The Commission shall publish the fee 
schedule for each subsequent fiscal 
year, not less than 90 days before the 
due date prescribed by the Commis-
sion for payment of the annual fee for 
the fiscal year. 
(c) LATE PAYMENT PENALTY.— 
(1) IN GENERAL.—The Commission may 
impose a penalty against a person that 
fails to pay an annual fee charged under 
this section, within 30 days after the due 
date prescribed by the Commission for 
payment of the fee. 
(2) AMOUNT.—The amount of the pen-
alty shall be— 
(A) 5 percent of the amount of the 
fee due, multiplied by 
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498 
(B) the whole number of consecu-
tive 30-day periods that have elapsed 
since the due date. 
(d) REIMBURSEMENT OF EXCESS FEES.—To 
the extent that the total amount of fees col-
lected under this section during a fiscal year 
that begins after the date of the enactment of 
this Act exceeds the amount provided under 
subsection (a)(2) with respect to the fiscal 
year, the Commission shall reimburse the ex-
cess amount to the persons who have timely 
paid their annual fees, on a pro-rata basis 
that excludes penalties, and shall do so within 
60 days after the end of the fiscal year. 
(e) DEPOSIT OF FEES INTO THE TREASURY.— 
All amounts collected under this section shall 
be credited to the currently applicable appro-
priation, account, or fund of the Commission 
as discretionary offsetting collections, and 
shall be available for the purposes authorized 
in subsection (f) only to the extent and in the 
amounts provided in advance in appropria-
tions Acts. 
(f) AUTHORIZATION OF APPROPRIATIONS.—In 
addition to amounts otherwise authorized to 
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499 
be appropriated to the Commission, there is 
authorized to be appropriated to the Commis-
sion amounts collected under this section to 
cover the costs the costs of carrying out the 
functions of the Commission under this Act. 
(g) EXPEDITED HIRING AUTHORITY.— 
(1) 
APPOINTMENT
AUTHORITY.—The 
Chairman, pursuant to section 6(a), may 
appoint individuals to a position de-
scribed in paragraph (2) of this sub-
section— 
(A) in accordance with the stat-
utes, rules, and regulations governing 
appointments to positions in the ex-
cepted service (as defined in section 
2103 of title 5, United States Code); 
and 
(B) without regard to any statute, 
rule, or regulation governing appoint-
ments to positions in the competitive 
service (as defined in section 2102 of 
such title). 
(2) POSITION
DESCRIBED.—A position 
referred to in subparagraph (1) is a posi-
tion at the Commission that— 
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500 
(A) is in the competitive service 
(as defined in section 2102 of such 
title); and 
(B) requires specialized knowl-
edge of digital commodities markets, 
financial and capital market forma-
tion or regulation, financial market 
structures or surveillance, data col-
lection or analysis, or information 
technology, cybersecurity, or system 
safeguards. 
(3) RULE
OF
CONSTRUCTION.—The ap-
pointment of a candidate to a position 
under this subsection shall not be consid-
ered to cause the position to be con-
verted from the competitive service to 
the excepted service. 
(h) SUNSET.—The authorities provided by 
this section shall expire at the end of the 4th 
fiscal year that begins after the date of the en-
actment of this Act. 
SEC. 411. DIGITAL COMMODITY ACTIVITIES BY SEC-REG-
ISTERED ENTITIES. 
The Commodity Exchange Act (7 U.S.C. 1 
et seq.), as amended by the preceding provi-
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501 
sions of this Act, is amended by inserting after 
section 5j the following: 
‘‘SEC. 5k. EXEMPTION FOR CERTAIN REGISTERED ENTITIES 
ENGAGED IN DIGITAL COMMODITY ACTIVI-
TIES. 
‘‘(a) BY ALTERNATIVE TRADING SYSTEMS.— 
‘‘(1) IN
GENERAL.—On receipt by the 
Commission from an alternative trading 
system of a written or electronic notice 
that contains such information as the 
Commission, by rule, may prescribe as 
necessary or appropriate in the public in-
terest or for the protection of investors, 
the alternative trading system shall be 
exempt from registration as a digital 
commodity exchange pursuant to section 
5i if— 
‘‘(A) the alternative trading sys-
tem does not list any retail com-
modity transactions pursuant to sec-
tion 2(c)(2)(D); 
‘‘(B) the provider, or an affiliate 
person of the provider, of the alter-
native trading system is not other-
wise registered under this Act; 
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‘‘(C) the alternative trading sys-
tem lists or trades no other contracts 
of sale of commodities, except for dig-
ital commodities, currencies, and se-
curities; and 
‘‘(D) the registration of the alter-
native trading system is not sus-
pended pursuant to an order by the 
Securities and Exchange Commission. 
‘‘(2) FURTHER
REQUIREMENTS.—An al-
ternative trading system that provides 
notice to the Commission pursuant to 
paragraph (1) of this subsection shall be 
exempt from the requirements of section 
5i to the extent that the alternative trad-
ing system— 
‘‘(A) is in compliance with re-
quirements consistent with the re-
quirements of section 5i and imposed 
on the alternative trading system by 
the Securities and Exchange Commis-
sion; 
‘‘(B) annually files with the Com-
mission, in a form and manner ac-
ceptable to the Commission, a notice 
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503 
that demonstrates compliance with 
this paragraph and contains any 
other information the Commission de-
termines to be necessary or appro-
priate to perform the duties of the 
Commission under this Act; and 
‘‘(C) has total trading volume in 
digital commodities during any cal-
endar quarter in either of its 2 most 
recently completed fiscal years that 
does not exceed the lesser of— 
‘‘(i) 25 percent of the total 
trading 
volume 
for 
all 
trans-
actions over the same period; or 
‘‘(ii) $50,000,000,000. 
‘‘(3) ENFORCEMENT.—This subsection 
shall not be construed to limit any juris-
diction that the Commission may other-
wise have under any other provision of 
this Act with respect to a contract of sale 
of a digital commodity or persons effect-
ing contracts of sale of digital commod-
ities. 
‘‘(b) BY REGISTERED INTERMEDIARIES.— 
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504 
‘‘(1) IN
GENERAL.—On receipt by the 
Commission, from a broker or dealer that 
is registered with the Securities and Ex-
change Commission, of a written or elec-
tronic notice that contains such informa-
tion as the Commission, by rule, may pre-
scribe as necessary or appropriate in the 
public interest or for the protection of in-
vestors, the broker or dealer shall be ex-
empt from registration as a digital com-
modity broker or digital commodity deal-
er pursuant to section 4u of this Act if— 
‘‘(A) the broker or dealer does not 
offer or engage in any retail com-
modity transactions pursuant to sec-
tion 2(c)(2)(D) of this Act or other 
contracts of sale of commodities, ex-
cept for digital commodities, cur-
rencies, and securities; 
‘‘(B) the broker or dealer is not 
otherwise registered under this Act; 
‘‘(C) the broker or dealer is not 
subject to a statutory disqualifica-
tion, as defined under section 3(a) of 
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the Securities Exchange Act of 1934 
(15 U.S.C. 78c(a)); and 
‘‘(D) the broker or dealer is a 
member of a national securities asso-
ciation registered pursuant to section 
15A of the Securities Exchange Act of 
1934. 
‘‘(2) 
FURTHER
REQUIREMENTS.—A 
broker or dealer that provides notice to 
the Commission pursuant to paragraph 
(1) shall be exempt from the require-
ments of section 4u to the extent that the 
broker or dealer— 
‘‘(A) is in compliance with re-
quirements consistent with the re-
quirements of section 4u and imposed 
on the broker or dealer by the Securi-
ties and Exchange Commission; 
‘‘(B) annually files with the Com-
mission, in a form and manner ac-
ceptable to the Commission, a notice 
that demonstrates compliance with 
this subsection and contains any 
other information the Commission de-
termines to be necessary or appro-
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priate to perform the duties of the 
Commission under this Act; and 
‘‘(C) 
has 
consolidated 
annual 
gross financial revenues in either of 
its 2 most recently completed fiscal 
years from sales, commissions or 
other activities in digital commod-
ities that do not exceed the lesser of— 
‘‘(i) 10 percent of the total an-
nual gross revenues during the 
same period; or 
‘‘(ii) $100,000,000. 
‘‘(3) ENFORCEMENT.—This subsection 
shall not be construed to limit any juris-
diction that the Commission may other-
wise have under any other provision of 
this Act with respect to a contract of sale 
of a digital commodity and persons ef-
fecting contracts of sale of digital com-
modities.’’. 
SEC. 412. REQUIREMENTS RELATED TO CONTROL PER-
SONS. 
The Commodity Exchange Act (7 U.S.C. 1 
et seq.), as amended the preceding provisions 
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of this Act, is amended by inserting after sec-
tion 4v the following: 
‘‘SEC. 4w. LIMITATION ON TRANSACTIONS BY BLOCKCHAIN 
CONTROL PERSONS. 
‘‘(a) LIMITATION.—It shall be unlawful for 
a blockchain control person with respect to a 
blockchain system certified as a mature 
blockchain system in accordance with section 
42 of the Securities Exchange Act of 1934 to 
sell a unit of a digital commodity related to 
the blockchain system unless the person files 
notice with the Commission, in a form and 
manner determined by the Commission, that 
the person has or intends to obtain an author-
ity described in subsection (b)(1) with respect 
to the blockchain system, and complies with 
rules adopted by the Commission that re-
quire— 
‘‘(1) disclosure of information to the 
Commission and the public about the ma-
terial activities, as determined by the 
Commission, of the blockchain control 
person; and 
‘‘(2)(A) the use of a digital commodity 
broker to effect the sale; or 
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‘‘(B) such other sales restrictions ap-
plicable to blockchain control person, or 
any of its digital commodity affiliated 
persons, to prevent manipulation and dis-
tortion of the value of the digital com-
modity and promote further maturity of 
the blockchain system to which the dig-
ital commodity relates. 
‘‘(b) DEFINITIONS.—In this section: 
‘‘(1) BLOCKCHAIN
CONTROL
PERSON.— 
The term ‘blockchain control person’ 
means, with respect to a blockchain sys-
tem, any person or group of persons 
under common control who— 
‘‘(A) has the unilateral authority, 
directly or indirectly, through any 
contract, 
arrangement, 
under-
standing, relationship, or otherwise, 
to control or materially alter the 
functionality, operation, or rules of 
consensus 
or 
agreement 
of 
the 
blockchain system or its related dig-
ital commodity; or 
‘‘(B) has the unilateral authority 
to direct the voting, in the aggregate, 
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of 20 percent or more of the out-
standing 
voting 
power 
of 
the 
blockchain system by means of a re-
lated digital commodity, nodes or 
validators, a decentralized govern-
ance 
system, 
or 
otherwise, 
in 
a 
blockchain system which can be al-
tered by a voting system. 
‘‘(2) DIGITAL
COMMODITY
AFFILIATED 
PERSON.—The term ‘digital commodity af-
filiated person’ means any person di-
rectly 
or 
indirectly 
controlling, 
con-
trolled by, or under common control with 
a blockchain control person, as the Com-
mission by rule or regulation, may deter-
mine will effectuate the purposes of this 
section.’’. 
SEC. 413. EFFECTIVE DATE. 
Unless otherwise provided in this title, 
this title and the amendments made by this 
title shall take effect 360 days after the date 
of the enactment of this Act, except that, to 
the extent a provision of this title requires a 
rulemaking, the provision shall take effect on 
the later of— 
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(1) 360 days after the date of the en-
actment of this Act; or 
(2) 60 days after the publication in 
the Federal Register of the final rule im-
plementing the provision. 
SEC. 414. SENSE OF CONGRESS. 
It is the sense of Congress that nothing in 
this Act or any amendment made by this Act 
should be interpreted to authorize any entity 
to regulate any commodity, other than a dig-
ital commodity, on any spot market. 
TITLE V—INNOVATION AND 
TECHNOLOGY IMPROVEMENTS 
SEC. 501. FINDINGS; SENSE OF CONGRESS. 
(a) FINDINGS.—Congress finds the fol-
lowing: 
(1) Entrepreneurs and innovators are 
building and deploying this next genera-
tion of the internet. 
(2) Digital commodity networks rep-
resent a new way for people to join to-
gether and cooperate with one another to 
undertake certain activities. 
(3) Digital commodities have the po-
tential to be the foundational building 
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blocks of these systems, aligning the eco-
nomic incentive for individuals to cooper-
ate with one another to achieve a com-
mon purpose. 
(4) The digital commodity ecosystem 
has the potential to grow our economy 
and improve everyday lives of Americans 
by facilitating collaboration through the 
use of technology to manage activities, al-
locate resources, and facilitate decision 
making. 
(5) Blockchain systems and the digital 
commodities they empower provide con-
trol, enhance transparency, reduce trans-
action costs, and increase efficiency if 
proper protections are put in place for 
investors, consumers, our financial sys-
tem, and our national security. 
(6) Blockchain technology facilitates 
new 
types 
of 
network 
participation 
which businesses in the United States 
may utilize in innovative ways. 
(7) Other digital commodity compa-
nies are setting up their operations out-
side of the United States, where countries 
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are establishing frameworks to embrace 
the potential of blockchain technology 
and digital commodities and provide 
safeguards for consumers. 
(8) Digital commodities, despite the 
purported anonymity, provide law en-
forcement with an exceptional tracing 
tool to identify illicit activity and bring 
criminals to justice. 
(9) The Financial Services Committee 
of the House of Representatives has held 
multiple hearings highlighting various 
risks that digital commodities can pose to 
the financial markets, consumers, and in-
vestors that must be addressed as we 
seek to harness the benefits of these in-
novations. 
(b) SENSE OF CONGRESS.—It is the sense of 
Congress that— 
(1) the United States should seek to 
prioritize understanding the potential op-
portunities of the next generation of the 
internet; 
(2) the United States should seek to 
foster advances in technology that have 
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robust evidence indicating they can im-
prove our financial system and create 
more fair and equitable access to finan-
cial services for everyday Americans 
while protecting our financial system, in-
vestors, and consumers; 
(3) the United States must support 
the responsible development of digital 
commodities and the underlying tech-
nology in the United States or risk the 
shifting of the development of such assets 
and technology outside of the United 
States, to less regulated countries; 
(4) Congress should consult with pub-
lic and private sector stakeholders to un-
derstand how to enact a functional 
framework tailored to the specific risks 
and unique benefits of different digital 
commodity-related activities, distributed 
ledger technology, distributed networks, 
and mature blockchain systems; 
(5) Congress should enact a func-
tional framework tailored to the specific 
risks of different digital commodity-re-
lated activities and unique benefits of 
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distributed ledger technology, distributed 
networks, and mature blockchain sys-
tems; and 
(6) consumers and market partici-
pants will benefit from a framework for 
digital commodities consistent with long-
standing investor protections in securi-
ties and commodities markets, yet tai-
lored to the unique benefits and risks of 
the digital commodity ecosystem. 
SEC. 502. MODERNIZATION OF THE SECURITIES AND EX-
CHANGE COMMISSION MISSION. 
(a) SECURITIES ACT OF 1933.—Section 2(b) 
of the Securities Act of 1933 (15 U.S.C. 77(b)) 
is amended— 
(1) in the heading, by inserting ‘‘INNO-
VATION,’’ after ‘‘EFFICIENCY,’’; and 
(2) by inserting ‘‘innovation,’’ after 
‘‘efficiency,’’. 
(b) SECURITIES EXCHANGE ACT OF 1934.— 
Section 3(f) of the Securities Exchange Act of 
1934 (15 U.S.C. 78(c)) is amended— 
(1) in the heading, by inserting ‘‘INNO-
VATION,’’ after ‘‘EFFICIENCY,’’; and 
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(2) by inserting ‘‘innovation,’’ after 
‘‘efficiency,’’. 
(c) INVESTMENT ADVISERS ACT OF 1940.— 
Section 202(c) of the Investment Advisers Act 
of 1940 (15 U.S.C. 80b–2) is amended— 
(1) in the heading, by inserting ‘‘INNO-
VATION,’’ after ‘‘EFFICIENCY,’’; and 
(2) by inserting ‘‘innovation,’’ after 
‘‘efficiency,’’. 
(d) INVESTMENT COMPANY ACT OF 1940.— 
Section 2(c) of the Investment Company Act of 
1940 (15 U.S.C. 80a–2) is amended— 
(1) in the heading, by inserting ‘‘INNO-
VATION,’’ after ‘‘EFFICIENCY,’’; and 
(2) by inserting ‘‘innovation,’’ after 
‘‘efficiency,’’. 
SEC. 503. STRATEGIC HUB FOR INNOVATION AND FINAN-
CIAL TECHNOLOGY. 
Section 4 of the Securities Exchange Act 
of 1934 (15 U.S.C. 78d) is amended by adding 
at the end the following: 
‘‘(l) STRATEGIC HUB FOR INNOVATION AND FI-
NANCIAL TECHNOLOGY.— 
‘‘(1) ESTABLISHMENT.—Not later than 
180 days after the date of the enactment 
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of this subsection, the Securities and Ex-
change Commission shall establish a com-
mittee to be known as the Strategic Hub 
for Innovation and Financial Technology 
(referred to in this subsection as the 
‘FinHub’) 
to 
support 
engagement 
on 
emerging technologies in the financial 
sector. 
‘‘(2) MEMBERS.—The composition of 
FinHub shall be determined by the Com-
mission, drawing from relevant divisions 
as appropriate, including the Division of 
Trading and Markets, Division of Cor-
porate Finance, and Division of Invest-
ment Management. 
‘‘(3) 
RESPONSIBILITIES.—FinHub 
shall— 
‘‘(A) serve as a resource for the 
Commission on emerging financial 
technology advancements; 
‘‘(B) engage with market partici-
pants working on emerging financial 
technologies; and 
‘‘(C) facilitate communication be-
tween the Commission and businesses 
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working in emerging financial tech-
nology fields with information on the 
Commission, its rules, and regula-
tions. 
‘‘(4) REPORT TO THE COMMISSION.— 
‘‘(A) IN GENERAL.—Not later than 
October 31 of each year after 2025, 
FinHub shall provide an annual sum-
mary of its engagement activities to 
the Commission, which shall be in-
cluded in the Commission’s annual 
report to Congress. 
‘‘(B) CONFIDENTIALITY.—Each re-
port submitted under this paragraph 
shall not contain confidential infor-
mation.’’. 
SEC. 504. CODIFICATION OF LABCFTC. 
(a) IN GENERAL.—Section 18 of the Com-
modity Exchange Act (7 U.S.C. 22) is amended 
by adding at the end the following: 
‘‘(c) LABCFTC.— 
‘‘(1) ESTABLISHMENT.—There is estab-
lished in the Commission LabCFTC. 
‘‘(2) 
PURPOSE.—The 
purposes 
of 
LabCFTC are to— 
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‘‘(A) promote responsible finan-
cial technology innovation and fair 
competition for the benefit of the 
American public; 
‘‘(B) serve as an information plat-
form to inform the Commission about 
new financial technology innovation; 
and 
‘‘(C) provide outreach to financial 
technology 
innovators 
to 
discuss 
their innovations and the regulatory 
framework established by this Act 
and 
the 
regulations 
promulgated 
thereunder. 
‘‘(3) DIRECTOR.—LabCFTC shall have a 
Director, who shall be appointed by the 
Commission and serve at the pleasure of 
the Commission. Notwithstanding section 
2(a)(6)(A), the Director shall report di-
rectly to the Commission and perform 
such functions and duties as the Commis-
sion may prescribe. 
‘‘(4) DUTIES.—LabCFTC shall— 
‘‘(A) advise the Commission with 
respect to rulemakings or other agen-
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cy or staff action regarding financial 
technology; 
‘‘(B) provide internal education 
and training to the Commission re-
garding financial technology; 
‘‘(C) advise the Commission re-
garding 
financial 
technology 
that 
would bolster the Commission’s over-
sight functions; 
‘‘(D) engage with academia, stu-
dents, and professionals on financial 
technology issues, ideas, and tech-
nology relevant to activities under 
this Act; 
‘‘(E) provide persons working in 
emerging technology fields with in-
formation on the Commission, its 
rules and regulations, and the role of 
a registered futures association; and 
‘‘(F) encourage persons working 
in emerging technology fields to en-
gage with the Commission and obtain 
feedback from the Commission on po-
tential regulatory issues. 
‘‘(5) REPORT TO CONGRESS.— 
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‘‘(A) IN GENERAL.—Not later than 
October 31 of each year after 2025, 
LabCFTC shall submit to the Com-
mittee on Agriculture of the House of 
Representatives and the Committee 
on Agriculture, Nutrition, and For-
estry of the Senate a report on its ac-
tivities. 
‘‘(B) CONTENTS.—Each report re-
quired under paragraph (1) shall in-
clude— 
‘‘(i) the total number of per-
sons that met with LabCFTC; 
‘‘(ii) a summary of general 
issues discussed during meetings 
with the person; 
‘‘(iii) 
information 
on 
steps 
LabCFTC has taken to improve 
Commission 
services, 
including 
responsiveness to the concerns of 
persons; 
‘‘(iv) recommendations made 
to the Commission with respect to 
the regulations, guidance, and or-
ders of the Commission and such 
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legislative actions as may be ap-
propriate; and 
‘‘(v) any other information de-
termined appropriate by the Di-
rector of LabCFTC. 
‘‘(C) CONFIDENTIALITY.—A report 
under paragraph (A) shall abide by 
the confidentiality requirements in 
section 8. 
‘‘(6) RECORDS
AND
ENGAGEMENT.—The 
Commission shall— 
‘‘(A) maintain systems of records 
to track engagements with the public 
through LabCFTC; 
‘‘(B) store communications and 
materials received in connection with 
any such engagement in accordance 
with Commission policies and proce-
dures on data retention and confiden-
tiality; and 
‘‘(C) take reasonable steps to pro-
tect any confidential or proprietary 
information 
received 
through 
LabCFTC engagement.’’. 
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(b) 
CONFORMING
AMENDMENTS.—Section 
2(a)(6)(A) of such Act (7 U.S.C. 2(a)(6)(A)) is 
amended— 
(1) by striking ‘‘paragraph and in’’ 
and inserting ‘‘paragraph,’’; and 
(2) by inserting ‘‘and section 18(c)(3),’’ 
before ‘‘the executive’’. 
(c) EFFECTIVE DATE.—The Commodity Fu-
tures Trading Commission shall implement 
the amendments made by this section (includ-
ing complying with section 18(c)(7) of the 
Commodity Exchange Act) within 180 days 
after the date of the enactment of this Act. 
SEC. 505. STUDY ON DECENTRALIZED FINANCE. 
(a) IN GENERAL.—The Commodity Futures 
Trading Commission, the Securities and Ex-
change Commission, and the Secretary of the 
Treasury shall jointly carry out a study on de-
centralized finance that analyzes— 
(1) the nature, size, role, and use of 
decentralized finance blockchain applica-
tions; 
(2) the operation of blockchain appli-
cations that comprise decentralized fi-
nance; 
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(3) the interoperability of blockchain 
applications and other blockchain sys-
tems; 
(4) the interoperability of blockchain 
applications and software-based systems, 
including websites and wallets; 
(5) the decentralized governance sys-
tems through which blockchain applica-
tions may be developed, published, con-
stituted, administered, maintained, or 
otherwise distributed, including— 
(A) whether the systems enhance 
or detract from— 
(i) the decentralization of the 
decentralized finance; and 
(ii) the inherent benefits and 
risks of the decentralized govern-
ance system; and 
(B) any procedures, requirements, 
or best practices that would mitigate 
the risks identified in subparagraph 
(A)(ii); 
(6) the benefits of decentralized fi-
nance, including— 
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(A) 
operational 
resilience 
and 
availability of blockchain systems; 
(B) interoperability of blockchain 
systems; 
(C) market competition and inno-
vation; 
(D) transaction efficiency; 
(E) transparency and traceability 
of transactions; and 
(F) disintermediation; 
(7) the risks of decentralized finance, 
including— 
(A) pseudonymity of users and 
transactions; 
(B) disintermediation; and 
(C) cybersecurity vulnerabilities; 
(8) the extent to which decentralized 
finance has integrated with the tradi-
tional financial markets and any poten-
tial risks or improvements to the stability 
of the markets; 
(9) how the levels of illicit activity in 
decentralized finance compare with the 
levels of illicit activity in traditional fi-
nancial markets; 
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(10) methods for addressing illicit ac-
tivity in decentralized finance and tradi-
tional markets that are tailored to the 
unique attributes of each; 
(11) how decentralized finance may 
increase the accessibility of cross-border 
transactions; and 
(12) the feasibility of embedding self- 
executing compliance and risk controls 
into decentralized finance. 
(b) CONSULTATION.—In carrying out the 
study required under subsection (a), the Com-
modity Futures Trading Commission and the 
Securities and Exchange Commission shall 
consult with the Secretary of the Treasury on 
the factors described under paragraphs (7) 
through (10) of subsection (a). 
(c) REPORT.—Not later than 1 year after 
the date of enactment of this Act, the Com-
modity Futures Trading Commission and the 
Securities and Exchange Commission shall 
jointly submit to the relevant congressional 
committees a report that includes the results 
of the study required by subsection (a). 
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(d) GAO STUDY.—The Comptroller General 
of the United States shall— 
(1) carry out a study on decentralized 
finance that analyzes the information de-
scribed under paragraphs (1) through 
(12) of subsection (a); and 
(2) not later than 1 year after the date 
of enactment of this Act, submit to the 
relevant congressional committees a re-
port that includes the results of the study 
required by paragraph (1). 
(e) DEFINITIONS.—In this section: 
(1) DECENTRALIZED FINANCE.— 
(A) IN GENERAL.—The term ‘‘decen-
tralized finance’’ means blockchain 
applications (including decentralized 
finance trading protocols and related 
decentralized finance messaging sys-
tems) that allow users to engage in fi-
nancial transactions in a self-directed 
manner so that a third-party inter-
mediary does not effectuate the trans-
actions or take custody of digital 
commodities of a user during any 
part of the transactions. 
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