111 
ing to the mixed digital asset transaction, subject 
to the confidentiality and disclosure require-
ments of section 8. 
‘‘(G) AGREEMENTS, CONTRACTS, AND TRANSACTIONS 
IN STABLECOINS.— 
‘‘(i) 
TREATMENT
OF
PERMITTED
PAYMENT 
STABLECOINS
ON
COMMISSION-REGISTERED
ENTI-
TIES.—Subject to clauses (ii) and (iii), the Commis-
sion shall have jurisdiction over a cash or spot agree-
ment, contract, or transaction in a permitted pay-
ment stablecoin that is offered, offered to enter into, 
entered into, executed, confirmed the execution of, so-
licited, or accepted— 
‘‘(I) on or subject to the rules of a registered 
entity; or 
‘‘(II) by any other entity registered with the 
Commission. 
‘‘(ii) PERMITTED PAYMENT STABLECOIN TRANS-
ACTION RULES.—This Act shall apply to a trans-
action described in clause (i) only for the purpose of 
regulating the offer, execution, solicitation, or accept-
ance of a cash or spot permitted payment stablecoin 
transaction on a registered entity or by any other en-
tity registered with the Commission, as if the per-
mitted payment stablecoin were a digital commodity. 
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‘‘(iii) NO AUTHORITY OVER PERMITTED PAYMENT 
STABLECOINS.—Notwithstanding clause (ii), the Com-
mission shall not make a rule or regulation, impose 
a requirement or obligation on a registered entity or 
other entity registered with the Commission, or im-
pose a requirement or obligation on a permitted pay-
ment stablecoin issuer, regarding the operation of a 
permitted payment stablecoin issuer or a permitted 
payment stablecoin, including any aspect of such an 
operation or such a stablecoin.’’. 
(d) CONFORMING AMENDMENT.—Section 2(a)(1)(A) of 
such Act (7 U.S.C. 2(a)(1)(A)) is amended in the 1st sen-
tence by inserting ‘‘subparagraphs (F) and (G) of sub-
section (c)(2) of this section or’’ before ‘‘section 19’’. 
SEC. 402. REQUIRING FUTURES COMMISSION MERCHANTS 
TO USE QUALIFIED DIGITAL COMMODITY 
CUSTODIANS. 
Section 4d of the Commodity Exchange Act (7 U.S.C. 
6d) is amended— 
(1) in subsection (a)(2)— 
(A) in the 1st proviso, by striking ‘‘any 
bank or trust company’’ and inserting ‘‘any 
bank, trust company, or qualified digital com-
modity custodian’’; and 
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(B) by inserting ‘‘: Provided further, That 
any such property that is a digital commodity 
shall be held in a qualified digital commodity 
custodian’’ before the period at the end; and 
(2) in subsection (f)(3)(A)(i), by striking ‘‘any 
bank or trust company’’ and inserting ‘‘any bank, 
trust company, or qualified digital commodity custo-
dian’’. 
SEC. 403. TRADING CERTIFICATION AND APPROVAL FOR 
DIGITAL COMMODITIES. 
Section 5c of the Commodity Exchange Act (7 U.S.C. 
7a–2) is amended— 
(1) in subsection (a), by striking ‘‘5(d) and 
5b(c)(2)’’ and inserting ‘‘5(d), 5b(c)(2), and 5i(c)’’; 
(2) in subsection (b)— 
(A) in each of paragraphs (1) and (2), by 
inserting ‘‘digital commodity exchange,’’ before 
‘‘derivatives’’; and 
(B) in paragraph (3), by inserting ‘‘digital 
commodity exchange,’’ before ‘‘derivatives’’ each 
place it appears; 
(3) in subsection (c)— 
(A) in paragraph (2), by inserting ‘‘or par-
ticipants’’ before ‘‘(in a’’; 
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114 
(B) in paragraph (4)(B), by striking 
‘‘1a(10)’’ and inserting ‘‘1a(9)’’; and 
(C) in paragraph (5), by adding at the end 
the following: 
‘‘(D) SPECIAL
RULES
FOR
DIGITAL
COM-
MODITY CONTRACTS.—In certifying any new rule 
or rule amendment, or listing any new contract 
or instrument, in connection with a contract of 
sale of a commodity for future delivery, option, 
swap, or other agreement, contract, or trans-
action, that is based on or references a digital 
commodity, a registered entity shall make or rely 
on a certification under subsection (d) for the 
digital commodity.’’; and 
(4) by inserting after subsection (c) the fol-
lowing: 
‘‘(d) CERTIFICATIONS
FOR
DIGITAL
COMMODITY 
TRADING.— 
‘‘(1) IN GENERAL.—Notwithstanding subsection 
(c), for the purposes of listing or offering a digital 
commodity for trading in a digital commodity cash 
or spot market, an eligible entity shall issue a written 
certification that the digital commodity meets the re-
quirements of this Act (including regulations there-
under). 
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115 
‘‘(2) CONTENTS OF THE CERTIFICATION.— 
‘‘(A) IN GENERAL.—In making a written 
certification under this paragraph, the eligible 
entity shall furnish to the Commission— 
‘‘(i) an analysis of how the digital 
commodity meets the requirements of section 
5i(c)(3); 
‘‘(ii) information about the digital 
commodity regarding— 
‘‘(I) its purpose and use; 
‘‘(II) its unit creation or release 
process; 
‘‘(III) its consensus mechanism; 
‘‘(IV) its governance structure; 
‘‘(V) its participation and dis-
tribution; and 
‘‘(VI) its current and proposed 
functionality; and 
‘‘(iii) any other information, analysis, 
or documentation the Commission may, by 
rule, require. 
‘‘(B) RELIANCE ON PRIOR DISCLOSURES.— 
In making a certification under this subsection, 
an eligible entity may rely on the records and 
disclosures of any relevant person registered with 
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116 
the Securities and Exchange Commission or 
other State or Federal agency. 
‘‘(3) MODIFICATIONS.— 
‘‘(A) IN GENERAL.—An eligible entity shall 
modify a certification made under paragraph 
(1) to— 
‘‘(i) account for significant changes in 
any information provided to the Commis-
sion under paragraph (2)(A)(ii); or 
‘‘(ii) permit or restrict trading in 
units of a digital commodity asset held by 
a related person or an affiliated person. 
‘‘(B) RECERTIFICATION.—Modifications re-
quired by this subsection shall be subject to the 
same disapproval and review process as a new 
certification under paragraphs (4) and (5). 
‘‘(4) DISAPPROVAL.— 
‘‘(A) IN
GENERAL.—The written certifi-
cation described in paragraph (1) shall become 
effective unless the Commission finds that the 
digital asset does not meet the requirements of 
this Act or the rules and regulations thereunder. 
‘‘(B) ANALYSIS REQUIRED.—The Commis-
sion shall include, with any findings referred to 
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118 
such shorter period as determined by the 
Commission by rule or regulation) for any 
digital commodity that has been certified 
under this section. 
‘‘(B) EXTENSIONS.—The time for consider-
ation under subparagraph (A) may be extended 
through notice to the eligible entity that there are 
novel or complex issues that require additional 
time to analyze, that the explanation by the sub-
mitting eligible entity is inadequate, or of a po-
tential inconsistency with this Act— 
‘‘(i) once, for 30 business days, through 
written notice to the eligible entity by the 
Chairman; and 
‘‘(ii) once, for an additional 30 busi-
ness days, through written notice to the dig-
ital commodity exchange from the Commis-
sion that includes a description of any defi-
ciencies with the certification, including 
any— 
‘‘(I) novel or complex issues which 
require additional time to analyze; 
‘‘(II) missing information or in-
adequate explanations; or 
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119 
‘‘(III) 
potential 
inconsistencies 
with this Act. 
‘‘(6) 
CERTIFICATION
REQUIRED.—Notwith-
standing any other provision of this Act, a registered 
entity or other entity registered with the Commission 
shall not list for trading, accept for clearing, offer to 
enter into, enter into, execute, confirm the execution 
of, or conduct any office or business anywhere in the 
United States, its territories or possessions, for the 
purpose of soliciting, or accepting any order for, or 
otherwise dealing in, any transaction in, or in con-
nection with, a digital commodity, unless a certifi-
cation has been made under this section for the dig-
ital commodity. 
‘‘(7) PRIOR APPROVAL.— 
‘‘(A) NEW REGISTRANTS.—A digital com-
modity exchange may only list, as of the effective 
date of approval of the registration of the digital 
commodity exchange, the digital commodity for 
which the digital commodity exchange has re-
ceived prior approval under this subsection. 
‘‘(B) 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 
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120 
request agrees to an extension of the time limita-
tion established under this subparagraph. 
‘‘(C) DISAPPROVAL.—The Commission may 
disapprove a request for prior approval under 
subparagraph (B) in accordance with criteria 
applicable to disapproval in paragraph (4). 
‘‘(8) ELIGIBLE ENTITY DEFINED.—In this sub-
section, the term ‘eligible entity’ means a registered 
entity or group of registered entities acting jointly.’’. 
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 facility 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 ex-
change. 
‘‘(B) APPLICATION.—A person desiring to 
register as a digital commodity exchange shall 
submit to the Commission an application in 
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121 
such form and containing such information as 
the Commission may require for the purpose of 
making the determinations required for ap-
proval. 
‘‘(C) EXEMPTIONS.—A trading facility that 
offers or seeks to offer a cash or spot market in 
at least 1 digital commodity shall not be re-
quired to register under this section if the trad-
ing facility— 
‘‘(i) permits no more than a de mini-
mis amount of trading activity; or 
‘‘(ii) serves only customers in a single 
State or territory. 
‘‘(2) ADDITIONAL REGISTRATIONS.— 
‘‘(A) WITH THE COMMISSION.— 
‘‘(i) IN GENERAL.—A registered digital 
commodity exchange may also register as— 
‘‘(I) a designated contract market; 
or 
‘‘(II) a swap execution facility. 
‘‘(ii) RULES.—For an entity with mul-
tiple registrations under clause (i), the 
Commission— 
‘‘(I) shall prescribe rules to ex-
empt the entity from duplicative, con-
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122 
flicting, or unduly burdensome provi-
sions of this Act and the rules under 
this Act, to the extent such an exemp-
tion would foster the development of 
fair and orderly cash or spot markets 
in digital commodities, be necessary or 
appropriate in the public interest, and 
be consistent with the protection of cus-
tomers; and 
‘‘(II) may, after an analysis of 
the risks and benefits, prescribe rules to 
provide for portfolio margining, as 
may be necessary to protect market 
participants, promote fair and equi-
table trading in digital commodity 
markets, and promote responsible eco-
nomic or financial innovation. 
‘‘(B) WITH
THE
SECURITIES
AND
EX-
CHANGE COMMISSION.—A registered digital com-
modity exchange may register with the Securities 
and Exchange Commission as a digital asset 
trading system to list or trade contracts of sale 
for digital assets deemed securities. 
‘‘(C) WITH A REGISTERED FUTURES ASSO-
CIATION.— 
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123 
‘‘(i) IN GENERAL.—A registered digital 
commodity exchange shall also be a member 
of a registered futures association and com-
ply with rules related to such activity, if the 
registered digital commodity exchange ac-
cepts customer funds required to be seg-
regated under subsection (d). 
‘‘(ii) RULEMAKING
REQUIRED.—The 
Commission shall require any registered fu-
tures association with a digital commodity 
exchange as a member to provide such rules 
as may be necessary to further compliance 
with subsection (d), protect customers, and 
promote the public interest. 
‘‘(D) 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 Fed-
eral regulator. 
‘‘(b) TRADING.— 
‘‘(1) PROHIBITION ON CERTAIN TRADING PRAC-
TICES.— 
‘‘(A) Section 4b shall apply to any agree-
ment, contract, or transaction in a digital com-
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125 
‘‘(ii) RISK
MANAGEMENT.—A trans-
action to manage the risks associated with 
the digital commodity business of the ex-
change. 
‘‘(iii) FUNCTIONAL
USE.—A trans-
action related to the functional operation of 
a blockchain network. 
‘‘(C) NOTICE REQUIREMENT.—In order for 
a digital commodity exchange or any affiliate of 
a digital commodity exchange to engage in trad-
ing on the affiliated exchange pursuant to sub-
section (B), notice must be given to the Commis-
sion that shall enumerate how any proposed ac-
tivity is consistent with the exceptions in sub-
section (B) and the principles of the Act. 
‘‘(D) DELEGATION.—The Commission may, 
by rule, delegate authority to the Director of the 
Division of Market Oversight, or such other em-
ployee or employees as the Director of the Divi-
sion of Market Oversight may designate from 
time to time, to carry out these provisions. 
‘‘(3) TRADING SECURITIES.—A registered digital 
commodity exchange that is also registered with the 
Securities and Exchange Commission may offer a 
contract of sale of a digital asset deemed a security. 
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126 
‘‘(4) RULES
FOR
CERTAIN
DIGITAL
ASSET 
SALES.—The digital commodity exchange shall have 
in place such rules as may be necessary to reasonably 
ensure the orderly sale of any unit of a digital com-
modity sold by a related person or an affiliated per-
son. 
‘‘(c) CORE PRINCIPLES FOR DIGITAL COMMODITY EX-
CHANGES.— 
‘‘(1) COMPLIANCE WITH CORE PRINCIPLES.— 
‘‘(A) IN GENERAL.—To be registered, and 
maintain registration, as a digital commodity 
exchange, a digital commodity exchange shall 
comply with— 
‘‘(i) the core principles described in 
this subsection; and 
‘‘(ii) any requirement that the Com-
mission may impose by rule or regulation 
pursuant to section 8a(5). 
‘‘(B) REASONABLE DISCRETION OF A DIG-
ITAL COMMODITY EXCHANGE.—Unless otherwise 
determined by the Commission by rule or regula-
tion, a digital commodity exchange described in 
subparagraph (A) shall have reasonable discre-
tion in establishing the manner in which the 
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127 
digital commodity exchange complies with the 
core principles described in this subsection. 
‘‘(2) COMPLIANCE WITH RULES.—A digital com-
modity exchange shall— 
‘‘(A) establish and enforce compliance with 
any rule of the digital commodity exchange, in-
cluding— 
‘‘(i) the terms and conditions of the 
trades traded or processed on or through the 
digital commodity exchange; and 
‘‘(ii) any limitation on access to the 
digital commodity exchange; 
‘‘(B) establish and enforce trading, trade 
processing, and participation rules that will 
deter abuses and have the capacity to detect, in-
vestigate, and enforce those rules, including 
means— 
‘‘(i) to provide market participants 
with impartial access to the market; and 
‘‘(ii) to capture information that may 
be used in establishing whether rule viola-
tions have occurred; and 
‘‘(C) establish rules governing the operation 
of the exchange, including rules specifying trad-
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128 
ing procedures to be used in entering and exe-
cuting orders traded or posted on the facility. 
‘‘(3) LISTING STANDARDS FOR DIGITAL COMMOD-
ITIES.— 
‘‘(A) IN
GENERAL.—A digital commodity 
exchange shall permit trading only in a digital 
commodity that is not readily susceptible to ma-
nipulation. 
‘‘(B) 
PUBLIC
INFORMATION
REQUIRE-
MENTS.— 
‘‘(i) IN
GENERAL.—A digital com-
modity exchange shall permit trading only 
in a digital commodity if the information 
required in clause (ii) is correct, current, 
and available to the public. 
‘‘(ii) REQUIRED INFORMATION.— With 
respect to a digital commodity and each 
blockchain system to which the digital com-
modity relates for which the digital com-
modity exchange will make the digital com-
modity available to the customers of the dig-
ital commodity exchange, the information 
required in this clause is as follows: 
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‘‘(I) SOURCE CODE.—The source 
code for any blockchain system to 
which the digital commodity relates. 
‘‘(II) TRANSACTION HISTORY.—A 
narrative description of the steps nec-
essary to independently access, search, 
and verify the transaction history of 
any blockchain system to which the 
digital commodity relates. 
‘‘(III) DIGITAL
ASSET
ECONOM-
ICS.—A narrative description of the 
purpose of any blockchain system to 
which the digital asset relates and the 
operation of any such blockchain sys-
tem, including— 
‘‘(aa) information explaining 
the launch and supply process, in-
cluding the number of digital as-
sets to be issued in an initial allo-
cation, the total number of digital 
assets to be created, the release 
schedule for the digital assets, and 
the total number of digital assets 
then outstanding; 
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130 
‘‘(bb) information detailing 
any applicable consensus mecha-
nism or process for validating 
transactions, method of generating 
or mining digital assets, and any 
process for burning or destroying 
digital assets on the blockchain 
system; 
‘‘(cc) an explanation of gov-
ernance mechanisms for imple-
menting changes to the blockchain 
system 
or 
forming 
consensus 
among holders of the digital as-
sets; and 
‘‘(dd) sufficient information 
for a third party to create a tool 
for verifying the transaction his-
tory of the digital asset. 
‘‘(IV) TRADING VOLUME AND VOL-
ATILITY.—The trading volume and vol-
atility of the digital commodity. 
‘‘(V) 
ADDITIONAL
INFORMA-
TION.—Such additional information as 
the Commission may, by rule, deter-
mine to be necessary for a customer to 
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131 
understand the financial and oper-
ational risks of a digital commodity, 
and to be in the public interest or in 
furtherance of the requirements of this 
Act. 
‘‘(iii) FORMAT.—The Commission shall 
prescribe rules and regulations for the 
standardization and simplification of dis-
closures under clause (ii), including requir-
ing that disclosures— 
‘‘(I) be conspicuous; 
‘‘(II) use plain language com-
prehensible to customers; and 
‘‘(III) succinctly explain the in-
formation that is required to be com-
municated to the customer. 
‘‘(C) 
ADDITIONAL
LISTING
CONSIDER-
ATIONS.—In addition to the requirements of sub-
paragraphs (A) and (B), a digital commodity 
exchange shall consider— 
‘‘(i) if a sufficient percentage of the 
units of the digital asset are units of a dig-
ital commodity to permit robust price dis-
covery; 
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‘‘(ii) if it is reasonably unlikely that 
the transaction history can be fraudulently 
altered by any person or group of persons 
acting collectively; 
‘‘(iii) if the operating structure and 
system of the digital commodity is secure 
from cybersecurity threats; 
‘‘(iv) if the functionality of the digital 
commodity will protect holders from oper-
ational failures; 
‘‘(v) if sufficient public information 
about the operation, functionality, and use 
of the digital commodity is available; and 
‘‘(vi) any other factor which the Com-
mission has, by rule, determined to be in 
the public interest or in furtherance of the 
requirements of this Act. 
‘‘(D) RESTRICTED DIGITAL ASSETS.—A dig-
ital commodity exchange shall not permit the 
trading of a unit of a digital asset that is a re-
stricted digital asset. 
‘‘(4) TREATMENT OF CUSTOMER ASSETS.—A dig-
ital commodity exchange shall establish standards 
and procedures that are designed to protect and en-
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133 
sure the safety of customer money, assets, and prop-
erty. 
‘‘(5) MONITORING OF TRADING AND TRADE PROC-
ESSING.— 
‘‘(A) IN
GENERAL.—A digital commodity 
exchange shall provide a competitive, open, and 
efficient market and mechanism for executing 
transactions that protects the price discovery 
process of trading on the exchange. 
‘‘(B) PROTECTION OF MARKETS AND MAR-
KET
PARTICIPANTS.—A digital commodity ex-
change shall establish and enforce rules— 
‘‘(i) to protect markets and market 
participants from abusive practices com-
mitted by any party, including abusive 
practices committed by a party acting as 
an agent for a participant; and 
‘‘(ii) to promote fair and equitable 
trading on the exchange. 
‘‘(C) TRADING
PROCEDURES.—A digital 
commodity exchange shall— 
‘‘(i) establish and enforce rules or 
terms and conditions defining, or specifica-
tions detailing— 
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‘‘(I) trading procedures to be used 
in entering and executing orders trad-
ed on or through the facilities of the 
digital commodity exchange; and 
‘‘(II) procedures for trade proc-
essing of digital commodities on or 
through the facilities of the digital 
commodity exchange; and 
‘‘(ii) monitor trading in digital com-
modities to prevent manipulation, price dis-
tortion, and disruptions of the delivery or 
cash settlement process through surveillance, 
compliance, and disciplinary practices and 
procedures, including methods for con-
ducting real-time monitoring of trading 
and comprehensive and accurate trade re-
constructions. 
‘‘(6) ABILITY TO OBTAIN INFORMATION.—A dig-
ital commodity exchange shall— 
‘‘(A) establish and enforce rules that will 
allow the facility to obtain any necessary infor-
mation to perform any of the functions described 
in this section; 
‘‘(B) provide the information to the Com-
mission on request; and 
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‘‘(C) have the capacity to carry out such 
international information-sharing agreements as 
the Commission may require. 
‘‘(7) EMERGENCY AUTHORITY.—A digital com-
modity exchange shall adopt rules to provide for the 
exercise of emergency authority, in consultation or co-
operation with the Commission or a registered entity, 
as is necessary and appropriate, including the au-
thority to facilitate the liquidation or transfer of open 
positions in any digital commodity or to suspend or 
curtail trading in a digital commodity. 
‘‘(8) TIMELY PUBLICATION OF TRADING INFOR-
MATION.— 
‘‘(A) IN
GENERAL.—A digital commodity 
exchange shall make public timely information 
on price, trading volume, and other trading data 
on digital commodities to the extent prescribed 
by the Commission. 
‘‘(B) CAPACITY OF DIGITAL COMMODITY EX-
CHANGE.—A digital commodity exchange shall 
have the capacity to electronically capture and 
transmit trade information with respect to 
transactions executed on the exchange. 
‘‘(9) RECORDKEEPING AND REPORTING.— 
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‘‘(A) IN
GENERAL.—A digital commodity 
exchange shall— 
‘‘(i) maintain records of all activities 
relating to the business of the facility, in-
cluding 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 Commis-
sion, such information as the Commission 
determines to be necessary or appropriate 
for the Commission to perform the duties of 
the Commission under this Act; and 
‘‘(iii) keep any such records of digital 
commodities which relate to a security open 
to inspection and examination by the Secu-
rities and Exchange Commission. 
‘‘(B) INFORMATION-SHARING.—Subject to 
section 8, and on request, the Commission shall 
share information collected under subparagraph 
(A) with— 
‘‘(i) the Board; 
‘‘(ii) the Securities and Exchange 
Commission; 
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‘‘(iii) each appropriate Federal bank-
ing agency; 
‘‘(iv) each appropriate State bank su-
pervisor (within the meaning of section 3 of 
the Federal Deposit Insurance Act); 
‘‘(v) the Financial Stability Oversight 
Council; 
‘‘(vi) the Department of Justice; and 
‘‘(vii) any other person that the Com-
mission determines to be appropriate, in-
cluding— 
‘‘(I) foreign financial supervisors 
(including foreign futures authorities); 
‘‘(II) foreign central banks; and 
‘‘(III) foreign ministries. 
‘‘(C) CONFIDENTIALITY
AGREEMENT.—Be-
fore the Commission may share information with 
any entity described in subparagraph (B), the 
Commission shall receive a written agreement 
from the entity stating that the entity shall abide 
by the confidentiality requirements described in 
section 8 relating to the information on digital 
commodities that is provided. 
‘‘(D) PROVIDING INFORMATION.—A digital 
commodity exchange shall provide to the Com-
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138 
mission (including any designee of the Commis-
sion) information under subparagraph (A) in 
such form and at such frequency as is required 
by the Commission. 
‘‘(10) ANTITRUST CONSIDERATIONS.—Unless nec-
essary or appropriate to achieve the purposes of this 
Act, a digital commodity exchange shall not— 
‘‘(A) adopt any rules or take any actions 
that result in any unreasonable restraint of 
trade; or 
‘‘(B) impose any material anticompetitive 
burden on trading. 
‘‘(11) CONFLICTS
OF
INTEREST.—A registered 
digital commodity exchange shall implement conflict- 
of-interest systems and procedures that— 
‘‘(A) establish structural and institutional 
safeguards— 
‘‘(i) to minimize conflicts of interest 
that might potentially bias the judgment or 
supervision of the digital commodity ex-
change and contravene the principles of fair 
and equitable trading and the business con-
duct standards described in this Act, includ-
ing conflicts arising out of transactions or 
arrangements with affiliates (including af-
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139 
filiates engaging in digital commodity ac-
tivities) which may include information 
partitions and the legal separation of dif-
ferent persons or entities involved in digital 
commodity activities; and 
‘‘(ii) to ensure that the activities of 
any person within the digital commodity 
exchange or any affiliated entity relating to 
research or analysis of the price or market 
for any digital commodity or acting in a 
role of providing dealing, brokering, or ad-
vising activities are separated by appro-
priate informational partitions within the 
digital commodity exchange or any affili-
ated entity from the review, pressure, or 
oversight of persons whose involvement in 
pricing, trading, exchange, or clearing ac-
tivities might potentially bias their judg-
ment or supervision and contravene the core 
principles of open access and the business 
conduct standards described in this Act; 
and 
‘‘(B) address such other issues as the Com-
mission determines to be appropriate. 
‘‘(12) FINANCIAL RESOURCES.— 
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‘‘(A) IN
GENERAL.—A digital commodity 
exchange shall have adequate financial, oper-
ational, and managerial resources, as determined 
by the Commission, to discharge each responsi-
bility of the digital commodity exchange. 
‘‘(B) MINIMUM AMOUNT OF FINANCIAL RE-
SOURCES.—A digital commodity exchange shall 
possess financial resources that, at a minimum, 
exceed the total amount that would enable the 
digital commodity exchange to conduct an or-
derly wind-down of its activities. 
‘‘(13) DISCIPLINARY
PROCEDURES.—A digital 
commodity exchange shall establish and enforce dis-
ciplinary procedures that authorize the digital com-
modity exchange to discipline, suspend, or expel mem-
bers or market participants that violate the rules of 
the digital commodity exchange, or similar methods 
for performing the same functions, including delega-
tion of the functions to third parties. 
‘‘(14) GOVERNANCE FITNESS STANDARDS.— 
‘‘(A) 
GOVERNANCE
ARRANGEMENTS.—A 
digital commodity exchange shall establish gov-
ernance arrangements that are transparent to 
fulfill public interest requirements. 
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‘‘(B) FITNESS STANDARDS.—A digital com-
modity exchange shall establish and enforce ap-
propriate fitness standards for— 
‘‘(i) directors; and 
‘‘(ii) any individual or entity with di-
rect access to, or control of, customer assets. 
‘‘(15) SYSTEM
SAFEGUARDS.—A digital com-
modity exchange shall— 
‘‘(A) establish and maintain a program of 
risk analysis and oversight to identify and mini-
mize sources of operational and security risks, 
through the development of appropriate controls 
and procedures, and automated systems, that— 
‘‘(i) are reliable and secure; and 
‘‘(ii) have adequate scalable capacity; 
‘‘(B) establish and maintain emergency pro-
cedures, backup facilities, and a plan for disaster 
recovery that allow for— 
‘‘(i) the timely recovery and resump-
tion of operations; and 
‘‘(ii) the fulfillment of the responsibil-
ities and obligations of the digital com-
modity exchange; and 
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‘‘(C) periodically conduct tests to verify that 
the backup resources of the digital commodity ex-
change are sufficient to ensure continued— 
‘‘(i) order processing and trade match-
ing; 
‘‘(ii) price reporting; 
‘‘(iii) market surveillance; and 
‘‘(iv) maintenance of a comprehensive 
and accurate audit trail. 
‘‘(d) HOLDING OF CUSTOMER ASSETS.— 
‘‘(1) IN
GENERAL.—A digital commodity ex-
change shall hold customer money, assets, and prop-
erty in a manner to minimize the risk of loss to the 
customer or unreasonable delay in the access to the 
money, assets, and property of the customer. 
‘‘(A) SEGREGATION OF FUNDS.— 
‘‘(i) IN
GENERAL.—A digital com-
modity exchange shall treat and deal with 
all money, assets, and property that is re-
ceived by the digital commodity exchange, 
or accrues to a customer as the result of 
trading in digital commodities, as belonging 
to the customer. 
‘‘(ii) 
COMMINGLING
PROHIBITED.— 
Money, assets, and property of a customer 
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143 
described in clause (i) shall be separately 
accounted for and shall not be commingled 
with the funds of the digital commodity ex-
change or be used to margin, secure, or 
guarantee 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, as-
sets, and property of customers of a 
digital commodity exchange described 
in subparagraph (A) may, for conven-
ience, be commingled and deposited in 
the same account or accounts with any 
bank, trust company, derivatives clear-
ing organization, or qualified digital 
commodity custodian. 
‘‘(II) 
WITHDRAWAL.—Notwith-
standing subparagraph (A), such share 
of the money, assets, and property de-
scribed in item (aa) as in the normal 
course of business shall be necessary to 
margin, guarantee, secure, transfer, 
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144 
adjust, or settle a contract of sale of a 
digital commodity with a registered 
entity may be withdrawn and applied 
to such purposes, including the pay-
ment of commissions, brokerage, inter-
est, taxes, storage, and other charges, 
lawfully accruing in connection with 
the contract of sale of a digital com-
modity. 
‘‘(ii) COMMISSION
ACTION.—Notwith-
standing subparagraph (A), in accordance 
with such terms and conditions as the Com-
mission may prescribe by rule, regulation, 
or order, any money, assets, or property of 
the customers of a digital commodity ex-
change described in subparagraph (A) may 
be commingled and deposited in customer 
accounts with any other money, assets, or 
property received by the digital commodity 
exchange and required by the Commission 
to be separately accounted for and treated 
and dealt with as belonging to the customer 
of the digital commodity exchange. 
‘‘(2) PERMITTED
INVESTMENTS.—Money de-
scribed in subparagraph (A) may be invested in obli-
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145 
gations 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 principal 
and interest by the United States, or in any other in-
vestment that the Commission may by rule or regula-
tion prescribe, and such investments shall be made in 
accordance with such rules and regulations and sub-
ject to such conditions as the Commission may pre-
scribe. 
‘‘(3) CUSTOMER
PROTECTION
DURING
BANK-
RUPTCY.— 
‘‘(A) CUSTOMER PROPERTY.—All assets held 
on behalf of a customer by a digital commodity 
exchange, and all money, assets, and property of 
any customer received by a digital commodity 
exchange for trading or custody, or to facilitate, 
margin, guarantee, or secure contracts of sale of 
a digital commodity (including money, assets, or 
property accruing to the customer as the result 
of the transactions), shall be considered customer 
property for purposes of section 761 of title 11, 
United States Code. 
‘‘(B) TRANSACTIONS.—A transaction in-
volving a unit of a digital commodity occurring 
on or subject to the rules of a digital commodity 
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146 
exchange shall be considered a ‘contract for the 
purchase or sale of a commodity for future deliv-
ery, on or subject to the rules of, a contract mar-
ket or board of trade’ for the purposes of the defi-
nition of a ‘commodity contract’ in section 761 
of title 11, United States Code. 
‘‘(C) EXCHANGES.—A digital commodity 
exchange shall be considered a futures commis-
sion merchant for purposes of section 761 of title 
11, United States Code. 
‘‘(4) MISUSE OF CUSTOMER PROPERTY.— 
‘‘(A) IN GENERAL.—It shall be unlawful— 
‘‘(i) for any digital commodity ex-
change 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 exchange; or 
‘‘(ii) for any other person, including 
any depository, other digital commodity ex-
change, or digital commodity custodian that 
has received any customer money, assets, or 
property for deposit, to hold, dispose of, or 
use any such money, assets, or property, or 
property, as belonging to the depositing dig-
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147 
ital commodity exchange or any person 
other than the customers of the digital com-
modity exchange. 
‘‘(B) USE
FURTHER
DEFINED.—For pur-
poses of this section, ‘use’ of a digital commodity 
includes utilizing any unit of a digital asset to 
participate in a blockchain service defined in 
paragraph (5) or a decentralized governance sys-
tem associated with the digital commodity or the 
blockchain system to which the digital com-
modity relates in any manner other than that 
expressly directed by the customer from whom 
the unit of a digital commodity was received. 
‘‘(5) PARTICIPATION
IN
BLOCKCHAIN
SERV-
ICES.— 
‘‘(A) IN GENERAL.—A customer shall have 
the right to waive the restrictions in paragraph 
(1) for any unit of a digital commodity to be 
used under subparagraph (B), by affirmatively 
electing, in writing to the digital commodity ex-
change, to waive the restrictions. 
‘‘(B) USE
OF
FUNDS.—Customer digital 
commodities removed from segregation under 
subparagraph (A) may be pooled and used by the 
digital commodity exchange or its designee to 
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provide a blockchain service for a blockchain sys-
tem to which the unit of the digital asset re-
moved from segregation in subparagraph (A) re-
lates. 
‘‘(C) LIMITATIONS.— 
‘‘(i) IN
GENERAL.—The Commission 
may, by rule, establish notice and disclosure 
requirements, and any other limitations 
and rules related to the waiving of any re-
strictions under this paragraph that are 
reasonably necessary to protect customers, 
including eligible contract participants, 
non-eligible contract participants, or any 
other class of customers. 
‘‘(ii) CUSTOMER
CHOICE.—A digital 
commodity exchange may not require a 
waiver from a customer described in sub-
paragraph (A) as a condition of doing busi-
ness on the exchange. 
‘‘(D) BLOCKCHAIN SERVICE DEFINED.—In 
this subparagraph, the term ‘blockchain service’ 
means any activity relating to validating trans-
actions on a blockchain system, providing secu-
rity for a blockchain system, or other similar ac-
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tivity required for the ongoing operation of a 
blockchain system. 
‘‘(e) MARKET ACCESS REQUIREMENTS.— 
‘‘(1) IN
GENERAL.—A digital commodity ex-
change shall require any person who is not an eligible 
contract participant to access trading on the exchange 
through a digital commodity broker. 
‘‘(2) AFFILIATED COMMODITY BROKERS.—A reg-
istered digital commodity exchange may allow an af-
filiated digital commodity broker to facilitate access 
to the digital commodity exchange, if— 
‘‘(A) no other digital commodity brokers fa-
cilitate access to the exchange; 
‘‘(B) the affiliated digital commodity can-
not provide customer access to another digital 
commodity exchange; and 
‘‘(C) the affiliated digital commodity broker 
is not also registered as a digital commodity 
dealer. 
‘‘(3) DIRECT ACCESS FOR ELIGIBLE CONTRACT 
PARTICIPANTS.—Nothing in this section shall prohibit 
a digital commodity exchange in compliance with this 
section from permitting direct access for eligible con-
tract participants. 
‘‘(4) ADDITIONAL REQUIREMENTS.— 
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‘‘(A) IN GENERAL.—The Commission may, 
by rule, impose any additional requirements re-
lated to the operations and activities of the dig-
ital commodity exchange and the affiliated dig-
ital commodity broker necessary to protect mar-
ket participants, promote fair and equitable 
trading on the digital commodity exchange, and 
promote responsible economic or financial inno-
vation. 
‘‘(B) DELEGATION
OF
AUTHORITY.—The 
Commission may delegate to a registered futures 
association such oversight and regulatory re-
quirements as the Commission determines are 
necessary to— 
‘‘(i) supervise the activities of the dig-
ital commodity exchange and an affiliated 
digital commodity broker; and 
‘‘(ii) protect market participants, pro-
mote fair and equitable trading on the dig-
ital commodity exchange, and promote re-
sponsible economic or financial innovation. 
‘‘(C) COMPETITIVE
ACCESS
RULE.—Not-
withstanding paragraph (2)(A), the Commission 
shall, by rule, adopt standards that permit a 
digital commodity exchange to allow both affili-
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ated and unaffiliated digital commodity brokers 
to facilitate access to the digital commodity ex-
change. The Commission rule shall address— 
‘‘(i) additional requirements for inde-
pendent governance arrangements and fit-
ness standards of affiliated entities; 
‘‘(ii) open access; 
‘‘(iii) conflicts of interest; 
‘‘(iv) antitrust considerations; and 
‘‘(v) any other factor that the Commis-
sion determines is necessary or appropriate 
to foster an open and competitive market 
and is in the public interest. 
‘‘(f) DESIGNATION OF CHIEF COMPLIANCE OFFICER.— 
‘‘(1) IN
GENERAL.—A digital commodity ex-
change shall designate an individual to serve as a 
chief compliance officer. 
‘‘(2) DUTIES.—The chief compliance officer 
shall— 
‘‘(A) report directly to the board or to the 
senior officer of the exchange; 
‘‘(B) review compliance with the core prin-
ciples in this subsection; 
‘‘(C) in consultation with the board of the 
exchange, a body performing a function similar 
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to that of a board, or the senior officer of the ex-
change, resolve any conflicts of interest that may 
arise; 
‘‘(D) establish and administer the policies 
and procedures required to be established pursu-
ant to this section; 
‘‘(E) ensure compliance with this Act and 
the rules and regulations issued under this Act, 
including rules prescribed by the Commission 
pursuant to this section; and 
‘‘(F) establish procedures for the remedi-
ation of noncompliance issues found during com-
pliance office reviews, look backs, internal or ex-
ternal audit findings, self-reported errors, or 
through validated complaints. 
‘‘(3) REQUIREMENTS FOR PROCEDURES.—In es-
tablishing procedures under paragraph (2)(F), the 
chief compliance officer shall design the procedures to 
establish the handling, management response, remedi-
ation, retesting, and closing of noncompliance issues. 
‘‘(4) ANNUAL REPORTS.— 
‘‘(A) IN
GENERAL.—In accordance with 
rules prescribed by the Commission, the chief 
compliance officer shall annually prepare and 
sign a report that contains a description of— 
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‘‘(i) the compliance of the digital com-
modity exchange with this Act; and 
‘‘(ii) the policies and procedures, in-
cluding the code of ethics and conflict of in-
terest policies, of the digital commodity ex-
change. 
‘‘(B) REQUIREMENTS.—The chief compli-
ance officer shall— 
‘‘(i) submit each report described in 
subparagraph (A) with the appropriate fi-
nancial report of the digital commodity ex-
change that is required to be submitted to 
the Commission pursuant to this section; 
and 
‘‘(ii) include in the report a certifi-
cation 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 suspension or revocation of the reg-
istration 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 
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States district court where the digital commodity ex-
change is located for the appointment of a trustee. 
‘‘(2) ASSUMPTION
OF
JURISDICTION.—If the 
Commission applies for appointment of a trustee 
under paragraph (1)— 
‘‘(A) the court may take exclusive jurisdic-
tion over the digital commodity exchange and 
the records and assets of the digital commodity 
exchange, wherever located; and 
‘‘(B) if the court takes jurisdiction under 
subparagraph (A), the court shall appoint the 
Commission, or a person designated by the Com-
mission, as trustee with power to take possession 
and continue to operate or terminate the oper-
ations of the digital commodity exchange in an 
orderly manner for the protection of customers 
subject to such terms and conditions as the court 
may prescribe. 
‘‘(h) QUALIFIED DIGITAL COMMODITY CUSTODIAN.— 
A digital commodity exchange shall hold in a qualified dig-
ital commodity custodian each unit of a digital commodity 
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 customers or promote the public 
interest. 
‘‘(i) EXEMPTIONS.— 
‘‘(1) In order to promote responsible economic or 
financial innovation and fair competition, or protect 
customers, the Commission may (on its own initiative 
or on application of the registered digital commodity 
exchange) exempt, either unconditionally or on stated 
terms or conditions or for stated periods and either 
retroactively or prospectively, or both, a registered 
digital commodity exchange from the requirements of 
this section, if the Commission determines that— 
‘‘(A) the exemption would be consistent 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 commodity exchange to discharge reg-
ulatory 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 Commis-
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sion finds that the digital commodity exchange is sub-
ject to comparable, comprehensive 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 digital commodities directly with a digital 
commodity 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 per-
son. 
‘‘(k) FEDERAL PREEMPTION.—Notwithstanding any 
other provision of law, the Commission shall have exclusive 
jurisdiction over any digital commodity exchange registered 
under this section. 
‘‘(l) TREATMENT UNDER THE BANK SECRECY ACT.— 
A registered digital commodity exchange shall be treated as 
a financial institution for purposes of the Bank Secrecy 
Act. 
‘‘(m) 
WITHDRAWAL
OF
CERTIFICATION
OF
A 
BLOCKCHAIN SYSTEM.— 
‘‘(1) IN GENERAL.— 
‘‘(A) DETERMINATION BY A DIGITAL COM-
MODITY EXCHANGE.—With respect to a certifi-
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cation of a blockchain system that becomes effec-
tive pursuant to section 44(f) of the Securities 
Exchange Act of 1934, if a digital commodity ex-
change determines that the blockchain system 
may not be a decentralized network, the digital 
commodity exchange shall notify the Commission 
of such determination. 
‘‘(B) WITHDRAWAL PROCESS.—With respect 
to each notification received under subparagraph 
(A), the Commission shall initiate a withdrawal 
process under which the Commission shall— 
‘‘(i) publish a notice announcing the 
proposed withdrawal; 
‘‘(ii) provide a 30 day comment period 
with respect to the proposed withdrawal; 
and 
‘‘(iii) after the end of the 30-day com-
ment required under clause (ii), publish ei-
ther— 
‘‘(I) a notification of withdrawal 
of the applicable certification; or 
‘‘(II) a notice that the Commis-
sion is not withdrawing the certifi-
cation. 
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‘‘(C) DETAILED ANALYSIS REQUIRED.—The 
Commission shall include, with each publication 
of a notification of withdrawal described under 
subparagraph (B)(iii)(I), a detailed analysis of 
the factors on which the decision was based. 
‘‘(2) RECERTIFICATION.—With respect to a 
blockchain system for which a certification has been 
withdrawn under this subsection, no person may 
make a certification under section 44(a) of the Secu-
rities Exchange Act of 1934 with respect to such 
blockchain system during the 90-day period beginning 
on the date of such withdrawal. 
‘‘(3) APPEAL OF WITHDRAWAL.— 
‘‘(A) IN
GENERAL.—If a certification is 
withdrawn under this subsection, a person mak-
ing may appeal the decision to the United States 
Court of Appeals for the District of Columbia, 
not later than 60 days after the notice of with-
drawal is made. 
‘‘(B) REVIEW.—In an appeal under sub-
paragraph (A), the court shall have de novo re-
view of the determination to withdraw the cer-
tification.’’. 
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SEC. 405. QUALIFIED DIGITAL COMMODITY CUSTODIANS. 
The Commodity Exchange Act (7 U.S.C. 1 et seq.), as 
amended by the preceding provisions of this Act, is amended 
by inserting after section 5i the following: 
‘‘SEC. 5j. QUALIFIED DIGITAL COMMODITY CUSTODIANS. 
‘‘(a) IN GENERAL.—For purposes of this Act, a quali-
fied digital commodity custodian is a digital commodity 
custodian who meets the following conditions: 
‘‘(1) SUPERVISION.—The digital commodity cus-
todian is subject to adequate supervision and appro-
priate regulation. 
‘‘(2) NO PROHIBITION.—The digital commodity 
custodian is— 
‘‘(A) subject to the supervision of— 
‘‘(i) an appropriate Federal banking 
agency; 
‘‘(ii) a State bank supervisor (within 
the meaning of section 3 of the Federal De-
posit Insurance Act); 
‘‘(iii) the Commission or the Securities 
and Exchange Commission; or 
‘‘(iv) an appropriate foreign govern-
mental authority in the home country of the 
digital commodity custodian; and 
‘‘(B) not prohibited by the applicable super-
visor referred to in subparagraph (A) from en-
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gaging in any activity with respect to the hold-
ing of digital commodities. 
‘‘(3) INFORMATION-SHARING.— 
‘‘(A) IN GENERAL.—The digital commodity 
custodian agrees to such periodic sharing of in-
formation regarding customer accounts the dig-
ital commodity custodian holds on behalf of an 
entity registered with the Commission, as the 
Commission determines by rule shall be reason-
ably necessary to effectuate any of the provisions, 
or to accomplish any of the purposes, of this Act. 
‘‘(B) PROVISION
OF
INFORMATION.—Any 
person that is subject to regulation and examina-
tion by an appropriate Federal banking agency 
may satisfy any information request described in 
subparagraph (A), by providing the Commission 
with a detailed listing, in writing, of the digital 
commodities of a customer within the custody or 
use of the person. 
‘‘(b) ADEQUATE
SUPERVISION
AND
APPROPRIATE 
REGULATION FURTHER DEFINED.— 
‘‘(1) IN GENERAL.—In subsection (a), the terms 
‘adequate supervision’ and ‘appropriate regulation’ 
mean such minimum standards for supervision and 
regulation as are reasonably necessary to protect the 
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digital commodities of customers of an entity reg-
istered with the Commission, including minimum 
standards relating to— 
‘‘(A) accessibility of customer assets; 
‘‘(B) financial resources; 
‘‘(C) risk management requirements; 
‘‘(D) governance arrangements; 
‘‘(E) fitness standards for officers and direc-
tors; 
‘‘(F) recordkeeping; 
‘‘(G) information-sharing; and 
‘‘(H) conflicts of interest. 
‘‘(2) DEEMED
COMPLIANCE.—For purposes of 
subsection (a), a digital commodity custodian is 
deemed to be subject to adequate supervision and ap-
propriate regulation, if the digital commodity custo-
dian is— 
‘‘(A) subject to the supervision of the Com-
mission; or 
‘‘(B) a bank subject to the supervision of an 
appropriate Federal banking agency or a State 
bank supervisor (within the meaning of section 
3 of the Federal Deposit Insurance Act). 
‘‘(3) RULEMAKING AUTHORITY.—For purposes of 
subsection (a), the Commission may, by rule, further 
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define the terms ‘adequate supervision’ and ‘appro-
priate regulation’ as necessary in the public interest, 
as appropriate for the protection of customers, and 
consistent with the purposes of this Act. 
‘‘(c) AUTHORITY TO TEMPORARILY SUSPEND STAND-
ARDS.—The Commission may, by rule or order, tempo-
rarily suspend, in whole or in part, any requirement im-
posed 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.’’. 
SEC. 406. REGISTRATION AND REGULATION OF DIGITAL 
COMMODITY BROKERS AND DEALERS. 
The Commodity Exchange Act (7 U.S.C. 1 et seq.), as 
amended by the preceding provisions of this Act, is amended 
by inserting after section 4t the following: 
‘‘SEC. 4u. REGISTRATION AND REGULATION OF DIGITAL 
COMMODITY BROKERS AND DEALERS. 
‘‘(a) REGISTRATION.—It shall be unlawful for any per-
son to act as a digital commodity broker or digital com-
modity dealer unless the person is registered as such with 
the Commission. 
‘‘(b) REQUIREMENTS.— 
‘‘(1) IN GENERAL.—A person shall register as a 
digital commodity broker or digital commodity dealer 
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by filing a registration application with the Commis-
sion. 
‘‘(2) CONTENTS.— 
‘‘(A) IN GENERAL.—The application shall 
be made in such form and manner as is pre-
scribed by the Commission, and shall contain 
such information as the Commission considers 
necessary concerning the business in which the 
applicant is or will be engaged. 
‘‘(B) CONTINUAL
REPORTING.—A person 
that is registered as a digital commodity broker 
or digital commodity dealer shall continue to 
submit to the Commission reports that contain 
such information pertaining to the business of 
the person as the Commission may require. 
‘‘(3) TRANSITION.—Within 180 days after the 
date of the enactment of this section, the Commission 
shall prescribe rules providing for the registration of 
digital commodity brokers and digital commodity 
dealers under this section. 
‘‘(4) STATUTORY DISQUALIFICATION.—Except to 
the extent otherwise specifically provided by rule, reg-
ulation, or order, it shall be unlawful for a digital 
commodity broker or digital commodity dealer to per-
mit any person who is associated with a digital com-
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164 
modity 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 digital commodity broker 
or the digital commodity dealer, respectively, if the 
digital commodity broker or digital commodity deal-
er, respectively, knew, or in the exercise of reasonable 
care should have known, of the statutory disqualifica-
tion. 
‘‘(5) LIMITATIONS ON CERTAIN ASSETS.—A dig-
ital commodity broker or digital commodity dealer 
shall not offer, offer to enter into, enter into, or facili-
tate any contract of sale of a digital commodity that 
has not been certified under section 5c(d). 
‘‘(c) ADDITIONAL REGISTRATIONS.— 
‘‘(1) WITH THE COMMISSION.—Any person re-
quired to be registered as a digital commodity broker 
or digital commodity dealer may also be registered as 
a futures commission merchant, introducing broker, 
or swap dealer. 
‘‘(2) WITH
THE
SECURITIES
AND
EXCHANGE 
COMMISSION.—Any person required to be registered as 
a digital commodity broker or digital commodity 
dealer under this section may register with the Secu-
rities and Exchange Commission as a digital asset 
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broker or digital asset dealer, pursuant to section 
15(b) of the Securities Exchange Act of 1934, as ap-
plicable, if the digital asset broker or digital asset 
dealer limits its solicitation of orders, acceptance of 
orders, or execution of orders, or placing of orders on 
behalf of others involving any contract of sale of dig-
ital assets. 
‘‘(3) WITH MEMBERSHIP IN A REGISTERED FU-
TURES ASSOCIATION.—Any person required to be reg-
istered as a digital commodity broker or digital com-
modity dealer under this section shall be a member of 
a registered futures association. 
‘‘(4) REGISTRATION REQUIRED.—Any person re-
quired to be registered as a digital commodity broker 
or digital commodity dealer under this section shall 
register with the Commission as such regardless of 
whether the person is registered with another State or 
Federal regulator. 
‘‘(d) RULEMAKING.— 
‘‘(1) IN GENERAL.—The Commission shall pre-
scribe such rules applicable to registered digital com-
modity brokers and registered digital commodity deal-
ers as are appropriate to carry out this section, in-
cluding rules in the public interest that limit the ac-
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166 
tivities of digital commodity brokers and digital com-
modity dealers. 
‘‘(2) MULTIPLE REGISTRANTS.—The Commission 
shall prescribe rules or regulations permitting, or 
may otherwise authorize, exemptions or additional re-
quirements applicable to persons with multiple reg-
istrations under this Act, including as futures com-
mission merchants, introducing brokers, digital com-
modity brokers, digital commodity dealers, or swap 
dealers, as may be in the public interest to reduce 
compliance costs and promote customer protection. 
‘‘(e) CAPITAL REQUIREMENTS.— 
‘‘(1) IN
GENERAL.—Each digital commodity 
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 dig-
ital commodity broker or digital commodity dealer, 
respectively, is able to— 
‘‘(A) meet, and continue to meet, at all 
times, the obligations of such registrant; and 
‘‘(B) in the case of a digital commodity 
dealer, fulfill the counterparty obligations of the 
digital commodity dealer for any margined, le-
veraged, or financed transactions. 
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167 
‘‘(2) RULE OF CONSTRUCTION.—Nothing in this 
section shall limit, or be construed to limit, the au-
thority of the Securities and Exchange Commission to 
set financial responsibility rules for a broker or dealer 
registered pursuant to section 15(b) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78o(b)) (except for 
section 15(b)(11) of such Act (15 U.S.C. 78o(b)(11)) 
in accordance with section 15(c)(3) of such Act (15 
U.S.C. 78o(c)(3)). 
‘‘(3) FUTURES
COMMISSION
MERCHANTS
AND 
OTHER DEALERS.— 
‘‘(A) IN GENERAL.—Each futures commis-
sion merchant, introducing broker, digital com-
modity broker, digital commodity dealer, broker, 
and dealer shall maintain sufficient capital to 
comply with the stricter of any applicable cap-
ital requirements to which the futures commis-
sion merchant, introducing broker, digital com-
modity broker, digital commodity dealer, broker, 
or dealer, respectively, is subject under this Act 
or the Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.). 
‘‘(B) COORDINATION OF CAPITAL REQUIRE-
MENTS.— 
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168 
‘‘(i) COMMISSION RULE.—The Commis-
sion shall, by rule, provide appropriate off-
sets to any applicable capital requirement 
for a person with multiple registrations as 
a digital commodity dealer, digital com-
modity broker, futures commission mer-
chant, or introducing broker. 
‘‘(ii) JOINT
RULE.—The Commission 
and the Securities and Exchange Commis-
sion shall jointly, by rule, provide appro-
priate offsets to any applicable capital re-
quirement for a person with multiple reg-
istrations as a digital commodity dealer, 
digital commodity broker, futures commis-
sion merchant, introducing broker, broker, 
or dealer. 
‘‘(f) REPORTING AND RECORDKEEPING.—Each digital 
commodity broker and digital commodity dealer— 
‘‘(1) shall make such reports as are required by 
the Commission by rule or regulation regarding the 
transactions, positions, and financial condition of the 
digital commodity broker or digital commodity deal-
er, respectively; 
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‘‘(2) shall keep books and records in such form 
and manner and for such period as may be prescribed 
by the Commission by rule or regulation; and 
‘‘(3) shall keep the books and records open to in-
spection and examination by any representative of 
the Commission. 
‘‘(g) DAILY TRADING RECORDS.— 
‘‘(1) IN
GENERAL.—Each digital commodity 
broker and digital commodity dealer shall maintain 
daily trading records of the transactions of the digital 
commodity broker or digital commodity dealer, re-
spectively, and all related records (including related 
forward or derivatives transactions) and recorded 
communications, including electronic mail, instant 
messages, and recordings of telephone calls, for such 
period as the Commission may require by rule or reg-
ulation. 
‘‘(2) INFORMATION REQUIREMENTS.—The daily 
trading records shall include such information as the 
Commission shall require 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 identifi-
able with each digital commodity transaction. 
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‘‘(4) AUDIT
TRAIL.—Each digital commodity 
broker and digital commodity dealer shall maintain 
a complete audit trail for conducting comprehensive 
and accurate trade reconstructions. 
‘‘(h) BUSINESS CONDUCT STANDARDS.— 
‘‘(1) IN
GENERAL.—Each digital commodity 
broker and digital commodity dealer shall conform 
with such business conduct standards as the Commis-
sion, by rule or regulation, prescribes related to— 
‘‘(A) fraud, manipulation, and other abu-
sive practices involving spot or margined, lever-
aged, or financed digital commodity transactions 
(including transactions that are offered but not 
entered into); 
‘‘(B) diligent supervision of the business of 
the registered digital commodity broker or dig-
ital commodity dealer, respectively; and 
‘‘(C) such other matters as the Commission 
deems appropriate. 
‘‘(2) BUSINESS CONDUCT REQUIREMENTS.—The 
Commission shall, by rule, prescribe business conduct 
requirements which— 
‘‘(A) require disclosure by a registered dig-
ital commodity broker and registered digital 
commodity dealer to any counterparty to the 
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transaction (other than an eligible contract par-
ticipant) of— 
‘‘(i) information about the material 
risks and characteristics of the digital com-
modity; 
‘‘(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 communicate in a fair and balanced 
manner based on principles of fair dealing and 
good faith; 
‘‘(C) establish standards governing digital 
commodity broker and digital commodity dealer 
marketing 
and 
advertising, 
including 
testimonials and endorsements; and 
‘‘(D) establish such other standards and re-
quirements as the Commission may determine 
are— 
‘‘(i) in the public interest; 
‘‘(ii) appropriate for the protection of 
customers; or 
‘‘(iii) otherwise in furtherance of the 
purposes of this Act. 
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‘‘(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 de-
ceit on any customer or counterparty; or 
‘‘(C) engage in any act, practice, or course 
of business that is fraudulent, deceptive, or ma-
nipulative. 
‘‘(i) DUTIES.— 
‘‘(1) RISK
MANAGEMENT
PROCEDURES.—Each 
digital commodity broker and digital commodity 
dealer shall establish robust and professional risk 
management systems adequate for managing the day- 
to-day business of the digital commodity broker or 
digital commodity dealer, respectively. 
‘‘(2) DISCLOSURE OF GENERAL INFORMATION.— 
Each digital commodity broker and digital com-
modity dealer shall disclose to the Commission infor-
mation concerning— 
‘‘(A) the terms and conditions of the trans-
actions of the digital commodity broker or dig-
ital commodity dealer, respectively; 
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‘‘(B) the trading operations, mechanisms, 
and practices of the digital commodity broker or 
digital commodity dealer, respectively; 
‘‘(C) financial integrity protections 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. 
‘‘(3) ABILITY TO OBTAIN INFORMATION.—Each 
digital commodity broker and digital commodity 
dealer shall— 
‘‘(A) establish and enforce internal systems 
and procedures to obtain any necessary informa-
tion to perform any of the functions described in 
this section; and 
‘‘(B) provide the information to the Com-
mission, on request. 
‘‘(4) CONFLICTS
OF
INTEREST.—Each digital 
commodity broker and digital commodity dealer shall 
implement conflict-of-interest systems and procedures 
that— 
‘‘(A) establish structural and institutional 
safeguards— 
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‘‘(i) to minimize conflicts of interest 
that might potentially bias the judgment or 
supervision of the digital commodity broker 
or digital commodity dealer, respectively, 
and contravene the principles of fair and 
equitable trading and the business conduct 
standards described in this Act, including 
conflicts arising out of transactions or ar-
rangements with affiliates (including affili-
ates acting as digital asset issuers, digital 
commodity dealers, or qualified digital com-
modity custodians), which may include in-
formation partitions and the legal separa-
tion of different persons involved in digital 
commodity activities; and 
‘‘(ii) to ensure that the activities of 
any person within the digital commodity 
broker or digital commodity dealer relating 
to research or analysis of the price or mar-
ket for any digital commodity or acting in 
a role of providing exchange activities or 
making determinations as to accepting ex-
change customers are separated by appro-
priate informational partitions within the 
digital commodity broker or digital com-
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modity dealer from the review, pressure, or 
oversight of persons whose involvement in 
pricing, trading, exchange, or clearing ac-
tivities might potentially bias their judg-
ment or supervision and contravene the core 
principles of open access and the business 
conduct standards described in this Act; 
and 
‘‘(B) address such other issues as the Com-
mission determines to be appropriate. 
‘‘(5) ANTITRUST CONSIDERATIONS.—Unless nec-
essary or appropriate to achieve the purposes of this 
Act, a digital commodity broker or digital commodity 
dealer shall not— 
‘‘(A) adopt any process or take any action 
that results in any unreasonable restraint of 
trade; or 
‘‘(B) impose any material anticompetitive 
burden on trading or clearing. 
‘‘(j) DESIGNATION OF CHIEF COMPLIANCE OFFICER.— 
‘‘(1) IN
GENERAL.—Each digital commodity 
broker and digital commodity dealer shall designate 
an individual to serve as a chief compliance officer. 
‘‘(2) DUTIES.—The chief compliance officer 
shall— 
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‘‘(A) report directly to the board or to the 
senior officer of the registered digital commodity 
broker or registered digital commodity dealer; 
‘‘(B) review the compliance of the registered 
digital commodity broker or registered digital 
commodity dealer with respect to the registered 
digital commodity broker and registered digital 
commodity dealer requirements described in this 
section; 
‘‘(C) in consultation with the board of di-
rectors, a body performing a function similar to 
the board, or the senior officer of the organiza-
tion, resolve any conflicts of interest that may 
arise; 
‘‘(D) be responsible for administering each 
policy and procedure that is required to be estab-
lished pursuant to this section; 
‘‘(E) ensure compliance with this Act (in-
cluding regulations), including each rule pre-
scribed by the Commission under this section; 
‘‘(F) establish procedures for the remedi-
ation of noncompliance issues identified by the 
chief compliance officer through any— 
‘‘(i) compliance office review; 
‘‘(ii) look-back; 
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‘‘(iii) internal or external audit find-
ing; 
‘‘(iv) self-reported error; or 
‘‘(v) validated complaint; and 
‘‘(G) establish and follow appropriate proce-
dures for the handling, management response, re-
mediation, retesting, and closing of noncompli-
ance issues. 
‘‘(3) ANNUAL REPORTS.— 
‘‘(A) IN
GENERAL.—In accordance with 
rules prescribed by the Commission, the chief 
compliance officer shall annually prepare and 
sign a report that contains a description of— 
‘‘(i) the compliance of the registered 
digital commodity broker or registered dig-
ital commodity dealer with respect to this 
Act (including regulations); and 
‘‘(ii) each policy and procedure of the 
registered digital commodity broker or reg-
istered digital commodity dealer of the chief 
compliance officer (including the code of 
ethics and conflict of interest policies). 
‘‘(B) REQUIREMENTS.—The chief compli-
ance officer shall ensure that a compliance report 
under subparagraph (A)— 
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‘‘(i) accompanies each appropriate fi-
nancial report of the registered digital com-
modity broker or registered digital com-
modity dealer that is required to be fur-
nished to the Commission pursuant to this 
section; and 
‘‘(ii) includes a certification that, 
under penalty of law, the compliance report 
is accurate and complete. 
‘‘(k) SEGREGATION OF DIGITAL COMMODITIES.— 
‘‘(1) HOLDING OF CUSTOMER ASSETS.— 
‘‘(A) IN
GENERAL.—Each digital com-
modity broker and digital commodity dealer 
shall hold customer money, assets, and property 
in a manner to minimize the risk of loss to the 
customer or unreasonable delay in customer ac-
cess to the money, assets, and property of the 
customer. 
‘‘(B) QUALIFIED DIGITAL COMMODITY CUS-
TODIAN.—Each digital commodity broker and 
digital commodity dealer shall hold in a quali-
fied digital commodity custodian each unit of a 
digital commodity that is— 
‘‘(i) the property of a customer or 
counterparty of the digital commodity 
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179 
broker or digital commodity dealer, respec-
tively; 
‘‘(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 com-
modity broker and digital commodity dealer 
shall treat and deal with all money, assets, and 
property that is received by the registered digital 
commodity broker or registered digital com-
modity dealer, or accrues to a customer as the 
result of trading in digital commodities, as be-
longing to the customer. 
‘‘(B) COMMINGLING PROHIBITED.— 
‘‘(i) IN GENERAL.—Except as provided 
in clause (ii), each digital commodity 
broker and digital commodity dealer shall 
separately account for money, assets, and 
property of a digital commodity customer, 
and shall not commingle any such money, 
assets, or property with the funds of the dig-
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ital commodity broker or digital commodity 
dealer, respectively, or use any such money, 
assets, or property to margin, secure, or 
guarantee any trades or accounts of any 
customer or person other than the person for 
whom the money, assets, or property are 
held. 
‘‘(ii) EXCEPTIONS.— 
‘‘(I) USE OF FUNDS.— 
‘‘(aa) IN GENERAL.—A dig-
ital commodity broker or digital 
commodity dealer may, for con-
venience, commingle and deposit 
in the same account or accounts 
with any bank, trust company, 
derivatives clearing organization, 
or qualified digital commodity 
custodian 
money, 
assets, 
and 
property of customers. 
‘‘(bb) 
WITHDRAWAL.—The 
share of the money, assets, and 
property described in item (aa) as 
in the normal course of business 
shall be necessary to margin, 
guarantee, secure, transfer, adjust, 
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or settle a contract of sale of a 
digital commodity with a reg-
istered entity may be withdrawn 
and applied to such purposes, in-
cluding the payment of commis-
sions, brokerage, interest, taxes, 
storage, and other charges, law-
fully accruing in connection with 
the contract. 
‘‘(II) COMMISSION
ACTION.—In 
accordance with such terms and condi-
tions as the Commission may prescribe 
by rule, regulation, or order, any 
money, assets, or property of the cus-
tomers of a digital commodity broker 
or digital commodity dealer may be 
commingled and deposited in customer 
accounts with any other money, assets, 
or property received by the digital 
commodity broker or digital com-
modity dealer, respectively, and re-
quired by the Commission to be sepa-
rately accounted for and treated and 
dealt with as belonging to the customer 
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182 
of the digital commodity broker or dig-
ital commodity dealer, respectively. 
‘‘(3) PERMITTED
INVESTMENTS.—Money de-
scribed in paragraph (2) may be invested in obliga-
tions of the United States, in general obligations of 
any State or of any political subdivision of a State, 
in obligations fully guaranteed as to principal and 
interest by the United States, or in any other invest-
ment that the Commission may by rule or regulation 
allow. 
‘‘(4) CUSTOMER
PROTECTION
DURING
BANK-
RUPTCY.— 
‘‘(A) CUSTOMER
PROPERTY.—All money, 
assets, or property described in paragraph (2) 
shall be considered customer property for pur-
poses of section 761 of title 11, United States 
Code. 
‘‘(B) TRANSACTIONS.—A transaction in-
volving a unit of a digital commodity occurring 
with a digital commodity dealer shall be consid-
ered 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 a ‘commodity 
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contract’ in section 761 of title 11, United States 
Code. 
‘‘(C) BROKERS
AND
DEALERS.—A digital 
commodity dealer and a digital commodity 
broker shall be considered a futures commission 
merchant for purposes of section 761 of title 11, 
United States Code. 
‘‘(D) ASSETS
REMOVED
FROM
SEGREGA-
TION.—Assets removed from segregation due to a 
customer election under paragraph (5) shall not 
be considered customer property for purposes of 
section 761 of title 11, United States Code. 
‘‘(5) MISUSE OF CUSTOMER PROPERTY.— 
‘‘(A) IN GENERAL.—It shall be unlawful— 
‘‘(i) for any digital commodity broker 
or digital commodity dealer that has re-
ceived any customer money, assets, or prop-
erty for custody to dispose of, or use any 
such money, assets, or property as belonging 
to the digital commodity broker or digital 
commodity dealer, respectively; or 
‘‘(ii) for any other person, including 
any depository, digital commodity ex-
change, other digital commodity broker, 
other digital commodity dealer, or digital 
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184 
commodity custodian that has received any 
customer money, assets, or property for de-
posit, to hold, dispose of, or use any such 
money, assets, or property, as belonging to 
the depositing digital commodity broker or 
digital commodity dealer or any person 
other than the customers of the digital com-
modity broker or digital commodity dealer, 
respectively. 
‘‘(B) USE
FURTHER
DEFINED.—For pur-
poses of this section, ‘use’ of a digital commodity 
includes utilizing any unit of a digital asset to 
participate in a blockchain service defined in 
paragraph (6) or a decentralized governance sys-
tem associated with the digital commodity or the 
blockchain system to which the digital com-
modity relates in any manner other than that 
expressly directed by the customer from whom 
the unit of a digital commodity was received. 
‘‘(6) PARTICIPATION
IN
BLOCKCHAIN
SERV-
ICES.— 
‘‘(A) IN GENERAL.—A customer shall have 
the right to waive the restrictions in paragraph 
(1) for any unit of a digital commodity to be 
used under subparagraph (B), by affirmatively 
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electing, in writing to the digital commodity 
broker or digital commodity dealer, to waive the 
restrictions. 
‘‘(B) USE
OF
FUNDS.—Customer digital 
commodities removed from segregation under 
subparagraph (A) may be pooled and used by the 
digital commodity broker or digital commodity 
dealer, or one of their designees, to provide a 
blockchain service 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 Commission 
may, by rule, establish notice and disclosure 
requirements, and any other limitations 
and rules related to the waiving of any re-
strictions under this paragraph that are 
reasonably necessary to protect customers, 
including eligible contract participants, 
non-eligible contract participants, or any 
other class of customers. 
‘‘(ii) CUSTOMER
CHOICE.—A digital 
commodity broker or digital commodity 
dealer may not require a waiver from a 
customer described in subparagraph (A) as 
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a condition of doing business with the 
broker or dealer. 
‘‘(D) BLOCKCHAIN SERVICE DEFINED.—In 
this subparagraph, the term ‘blockchain service’ 
means any activity relating to validating trans-
actions on a blockchain system, providing secu-
rity for a blockchain system, or other similar ac-
tivity required for the ongoing operation of a 
blockchain system. 
‘‘(l) FEDERAL PREEMPTION.—Notwithstanding any 
other provision of law, the Commission shall have exclusive 
jurisdiction over any digital commodity broker or digital 
commodity dealer registered under this section. 
‘‘(m) EXEMPTIONS.—In order to promote responsible 
economic or financial innovation and fair competition, or 
protect customers, the Commission may (on its own initia-
tive or on application of the registered digital commodity 
broker or registered digital commodity dealer) exempt, un-
conditionally or on stated terms or conditions, or for stated 
periods, and retroactively or prospectively, or both, a reg-
istered 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 consistent with 
the public interest and the purposes of this Act; and 
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‘‘(B) the exemption will not have a material ad-
verse effect on the ability of the Commission to dis-
charge regulatory duties under this Act; or 
‘‘(2) the registered digital commodity broker or 
registered digital commodity dealer is subject to com-
parable, comprehensive supervision and regulation by 
the appropriate government authorities in the home 
country of the registered digital commodity broker or 
registered digital commodity dealer, respectively. 
‘‘(n) TREATMENT UNDER THE BANK SECRECY ACT.— 
A registered digital commodity broker and a registered dig-
ital commodity dealer shall be treated as a financial insti-
tution for purposes of the Bank Secrecy Act.’’. 
SEC. 407. REGISTRATION OF ASSOCIATED PERSONS. 
(a) IN GENERAL.—Section 4k of the Commodity Ex-
change Act (7 U.S.C. 6k) is amended— 
(1) by redesignating subsections (4) through (6) 
as subsections (5) through (7), respectively; and 
(2) by inserting after subsection (3) the fol-
lowing: 
‘‘(4) It shall be unlawful for any person to act as an 
associated person of a digital commodity broker or an asso-
ciated person of a digital commodity dealer unless the per-
son is registered with the Commission under this Act and 
such registration shall not have expired, been suspended 
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188 
(and the period of suspension has not expired), or been re-
voked. It shall be unlawful for a digital commodity broker 
or a digital commodity dealer to permit such a person to 
become or remain associated with the digital commodity 
broker or digital commodity dealer if the digital commodity 
broker or digital commodity dealer knew or should have 
known that the person was not so registered or that the reg-
istration had expired, been suspended (and the period of 
suspension has not expired), or been revoked.’’; and 
(3) in subsection (5) (as so redesignated), by 
striking ‘‘or of a commodity trading advisor’’ and in-
serting ‘‘of a commodity trading advisor, of a digital 
commodity broker, or of a digital commodity dealer’’. 
(b) CONFORMING AMENDMENTS.—The Commodity Ex-
change 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 OPERATORS 
AND COMMODITY TRADING ADVISORS. 
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 oper-
ator or commodity trading advisor’’; and 
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(B) by striking ‘‘acting as a commodity 
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,’’. 
SEC. 409. EXCLUSION FOR ANCILLARY ACTIVITIES. 
The Commodity Exchange Act (7 U.S.C. 1 et seq.), as 
amended by the preceding provisions of this Act, is amended 
by inserting after section 4u the following: 
‘‘SEC. 4v. EXCLUSION FOR ANCILLARY ACTIVITIES. 
‘‘(a) IN GENERAL.—Notwithstanding any other provi-
sion of this Act, a person shall not be subject to this Act 
and the regulations promulgated under this Act solely based 
on the person undertaking any ancillary activities. 
‘‘(b) EXCEPTIONS.—Subsection (a) shall not be con-
strued to apply to the anti-fraud, anti-manipulation, or 
false reporting enforcement authorities of the Commission. 
‘‘(c) ANCILLARY ACTIVITIES DEFINED.—In this sec-
tion, the term ‘ancillary activities’ means any of the fol-
lowing activities related to the operation of a blockchain 
system: 
‘‘(1) Compiling network transactions, operating 
or participating in a pool, relaying, searching, se-
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190 
quencing, validating, or acting in a similar capacity 
with respect to contract of sale of a digital asset. 
‘‘(2) Providing computational work, operating a 
node, or procuring, offering, or utilizing network 
bandwidth, or other similar incidental services with 
respect to a contract of sale of a digital asset. 
‘‘(3) Providing a user-interface that enables a 
user to read, and access data about a blockchain sys-
tem, send messages, or otherwise interact with a 
blockchain system. 
‘‘(4) Developing, publishing, constituting, ad-
ministering, maintaining, or otherwise distributing a 
blockchain system. 
‘‘(5) Developing, publishing, constituting, ad-
ministering, maintaining, or otherwise distributing 
software or systems that create or deploy hardware or 
software, including wallets or other systems, facili-
tating an individual user’s own personal ability to 
keep, safeguard, or custody a user’s digital commod-
ities or related private keys.’’. 
SEC. 410. FUNDING FOR IMPLEMENTATION, ADMINISTRA-
TION, AND ENFORCEMENT. 
Out of any money in the Treasury of the United States 
not otherwise appropriated, there are appropriated 
$120,000,000 to the Commodity Futures Trading Commis-
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191 
sion for the implementation, administration, and enforce-
ment of the provisions of this Act to be administered by 
the Commodity Futures Trading Commission, which 
amounts shall remain available through the 5-year period 
that begins with the date of the enactment of this Act. 
SEC. 411. 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 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— 
(1) 360 days after the date of enactment of this 
Act; or 
(2) 60 days after the publication in the Federal 
Register of the final rule implementing the provision. 
TITLE V.—INNOVATION AND 
TECHNOLOGY IMPROVEMENTS 
SEC. 501. CODIFICATION OF THE SEC STRATEGIC HUB FOR 
INNOVATION AND FINANCIAL 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 FINANCIAL 
TECHNOLOGY.— 
‘‘(1) OFFICE ESTABLISHED.—There is established 
within the Commission the Strategic Hub for Innova-
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tion and Financial Technology (referred to in this 
section as the ‘FinHub’). 
‘‘(2) PURPOSES.—The purposes of FinHub are 
as follows: 
‘‘(A) To assist in shaping the approach of 
the Commission to technological advancements in 
the financial industry. 
‘‘(B) To examine financial technology inno-
vations within capital markets, market partici-
pants, and investors. 
‘‘(C) To coordinate the response of the Com-
mission to emerging technologies in financial, 
regulatory, and supervisory systems. 
‘‘(3) DIRECTOR OF FINHUB.—FinHub shall have 
a Director who shall be appointed by the Commission, 
from among individuals having experience in both 
emerging technologies and Federal securities law and 
serve at the pleasure of the Commission. The Director 
shall report directly to the Commission and perform 
such functions and duties as the Commission may 
prescribe. 
‘‘(4) RESPONSIBILITIES.—FinHub shall— 
‘‘(A) foster responsible technological innova-
tion and fair competition within the Commis-
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sion, including around financial technology, reg-
ulatory technology, and supervisory technology; 
‘‘(B) provide internal education and train-
ing to the Commission regarding financial tech-
nology; 
‘‘(C) advise the Commission regarding fi-
nancial technology that would serve the Commis-
sion’s oversight functions; 
‘‘(D) analyze technological advancements 
and the impact of regulatory requirements on fi-
nancial technology companies; 
‘‘(E) advise the Commission with respect to 
rulemakings or other agency or staff action re-
garding financial technology; 
‘‘(F) provide businesses working in emerg-
ing financial technology fields with information 
on the Commission, its rules and regulations; 
and 
‘‘(G) encourage firms working in emerging 
technology fields to engage with the Commission 
and obtain feedback from the Commission on po-
tential regulatory issues. 
‘‘(5) ACCESS TO DOCUMENTS.—The Commission 
shall ensure that FinHub has full access to the docu-
ments and information of the Commission and any 
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self-regulatory organization, as necessary to carry out 
the functions of FinHub. 
‘‘(6) REPORT TO CONGRESS.— 
‘‘(A) IN GENERAL.—Not later than October 
31 of each year after 2024, FinHub shall submit 
to the Committee on Banking, Housing, and 
Urban Affairs of the Senate and the Committee 
on Financial Services of the House of Represent-
atives a report on the activities of FinHub dur-
ing the immediately preceding fiscal year. 
‘‘(B) CONTENTS.—Each report required 
under subparagraph (A) shall include— 
‘‘(i) the total number of persons that 
met with FinHub; 
‘‘(ii) the total number of market par-
ticipants FinHub met with, including the 
classification of those participants; 
‘‘(iii) a summary of general issues dis-
cussed during meetings with persons; 
‘‘(iv) information on steps FinHub has 
taken to improve Commission services, in-
cluding responsiveness to the concerns of 
persons; 
‘‘(v) recommendations— 
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‘‘(I) with respect to the regula-
tions of the Commission and the guid-
ance and orders of the Commission; 
and 
‘‘(II) for such legislative actions 
as the FinHub determines appropriate; 
and 
‘‘(vi) any other information, as deter-
mined appropriate by the Director of 
FinHub. 
‘‘(C) CONFIDENTIALITY.—A report under 
subparagraph (A) may not contain confidential 
information. 
‘‘(7) SYSTEMS OF RECORDS.— 
‘‘(A) IN GENERAL.—The Commission shall 
establish a detailed system of records (as defined 
under section 552a of title 5, United States 
Code) to assist FinHub in communicating with 
interested parties. 
‘‘(B) ENTITIES
COVERED
BY
THE
SYS-
TEM.—Entities covered by the system required 
under subparagraph (A) include entities or per-
sons submitting requests or inquiries and other 
information to Commission through FinHub. 
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‘‘(C) 
SECURITY
AND
STORAGE
OF 
RECORDS.—FinHub shall store— 
‘‘(i) electronic records— 
‘‘(I) in the system required under 
subparagraph (A); or 
‘‘(II) on the secure network or 
other 
electronic 
medium, 
such 
as 
encrypted hard drives or back-up 
media, of the Commission; and 
‘‘(ii) paper records in secure facilities. 
‘‘(8) EFFECTIVE
DATE.—This subsection shall 
take effect on the date that is 180 days after the date 
of the enactment of this subsection.’’. 
SEC. 502. CODIFICATION OF LABCFTC. 
(a) IN GENERAL.—Section 18 of the Commodity Ex-
change Act (7 U.S.C. 22) is amended by adding at the end 
the following: 
‘‘(c) LABCFTC.— 
‘‘(1) ESTABLISHMENT.—There is established in 
the Commission LabCFTC. 
‘‘(2) PURPOSE.—The purposes of LabCFTC are 
to— 
‘‘(A) promote responsible financial tech-
nology innovation and fair competition for the 
benefit of the American public; 
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‘‘(B) serve as an information platform to 
inform the Commission about new financial 
technology innovation; and 
‘‘(C) provide outreach to financial tech-
nology innovators to discuss their innovations 
and the regulatory framework established by this 
Act and the regulations promulgated thereunder. 
‘‘(3) DIRECTOR.—LabCFTC shall have a Direc-
tor, who shall be appointed by the Commission and 
serve at the pleasure of the Commission. Notwith-
standing section 2(a)(6)(A), the Director shall report 
directly to the Commission and perform such func-
tions and duties as the Commission may prescribe. 
‘‘(4) DUTIES.—LabCFTC shall— 
‘‘(A) advise the Commission with respect to 
rulemakings or other agency or staff action re-
garding financial technology; 
‘‘(B) provide internal education and train-
ing to the Commission regarding financial tech-
nology; 
‘‘(C) advise the Commission regarding fi-
nancial technology that would bolster the Com-
mission’s oversight functions; 
‘‘(D) engage with academia, students, and 
professionals on financial technology issues, 
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ideas, and technology relevant to activities under 
this Act; 
‘‘(E) provide persons working in emerging 
technology fields with information on the Com-
mission, its rules and regulations, and the role 
of a registered futures association; and 
‘‘(F) encourage persons working in emerg-
ing technology fields to engage with the Commis-
sion and obtain feedback from the Commission 
on potential regulatory issues. 
‘‘(5) ACCESS TO DOCUMENTS.—The Commission 
shall ensure that LabCFTC has full access to the doc-
uments and information of the Commission and any 
self-regulatory organization or registered futures asso-
ciation, as necessary to carry out the functions of 
LabCFTC. 
‘‘(6) REPORT TO CONGRESS.— 
‘‘(A) IN GENERAL.—Not later than October 
31 of each year after 2024, LabCFTC shall sub-
mit to the Committee on Agriculture of the 
House of Representatives and the Committee on 
Agriculture, Nutrition, and Forestry of the Sen-
ate a report on its activities. 
‘‘(B) CONTENTS.—Each report required 
under paragraph (1) shall include— 
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‘‘(i) the total number of persons that 
met with LabCFTC; 
‘‘(ii) a summary of general issues dis-
cussed 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 orders of the Commission 
and such legislative actions as may be ap-
propriate; and 
‘‘(v) any other information determined 
appropriate by the Director of LabCFTC. 
‘‘(C) CONFIDENTIALITY.—A report under 
paragraph (A) shall abide by the confidentiality 
requirements in section 8. 
‘‘(7) SYSTEMS OF RECORDS.— 
‘‘(A) IN GENERAL.—The Commission shall 
establish a detailed system of records (as defined 
in section 552a of title 5, United States Code) to 
assist LabCFTC in communicating with inter-
ested parties. 
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‘‘(B) PERSONS COVERED BY THE SYSTEM.— 
The persons covered by the system of records 
shall include persons submitting requests or in-
quiries and other information to the Commission 
through LabCFTC. 
‘‘(C) 
SECURITY
AND
STORAGE
OF 
RECORDS.—The system of records shall store 
records electronically or on paper in secure fa-
cilities, and shall store electronic records on the 
secure network of the Commission and on other 
electronic media, such as encrypted hard drives 
and back-up media, as needed.’’. 
(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 insert-
ing ‘‘paragraph,’’; and 
(2) by inserting ‘‘and section 18(c)(3),’’ before 
‘‘the executive’’. 
(c) EFFECTIVE DATE.—The Commodity Futures Trad-
ing Commission shall implement the amendments made by 
this section (including complying with section 18(c)(7) of 
the Commodity Exchange Act) within 180 days after the 
date of the enactment of this Act. 
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SEC. 503. CFTC-SEC JOINT ADVISORY COMMITTEE ON DIG-
ITAL ASSETS. 
(a) ESTABLISHMENT.—The Commodity Futures Trad-
ing Commission and the Securities and Exchange Commis-
sion (in this section referred to as the ‘‘Commissions’’) shall 
jointly establish the Joint Advisory Committee on Digital 
Assets (in this section referred to as the ‘‘Committee’’). 
(b) PURPOSE.— 
(1) IN GENERAL.—The Committee shall— 
(A) provide the Commissions with advice on 
the rules, regulations, and policies of the Com-
missions related to digital assets; 
(B) further the regulatory harmonization of 
digital asset policy between the Commissions; 
(C) examine and disseminate methods for 
describing, measuring, and quantifying digital 
asset— 
(i) decentralization; 
(ii) functionality; 
(iii) information asymmetries; and 
(iv) transaction and network security; 
(D) examine the potential for digital assets, 
blockchain systems, and distributed ledger tech-
nology to improve efficiency in the operation of 
financial market infrastructure and better pro-
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tect financial market participants, including 
services and systems which provide— 
(i) improved customer protections; 
(ii) public availability of information; 
(iii) greater transparency regarding 
customer funds; 
(iv) reduced transaction cost; and 
(v) increased access to financial mar-
ket services; and 
(E) discuss the implementation by the Com-
missions of this Act and the amendments made 
by this Act. 
(2) REVIEW BY AGENCIES.—Each Commission 
shall— 
(A) review the findings and recommenda-
tions of the Committee; 
(B) each time the Committee submits a 
finding or recommendation to a Commission, 
promptly issue a public statement— 
(i) assessing the finding or rec-
ommendation of the Committee; 
(ii) disclosing the action or decision 
not to take action made by the Commission 
in response to a finding or recommendation; 
and 
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(iii) the reasons for the action or deci-
sion not to take action; and 
(C) each time the Committee submits a 
finding or recommendation to a Commission, 
provide the Committee with a formal response to 
the finding or recommendation not later than 3 
months after the date of the submission of the 
finding or recommendation. 
(c) MEMBERSHIP AND LEADERSHIP.— 
(1) NON-FEDERAL MEMBERS.— 
(A) IN GENERAL.—The Commissions shall 
appoint at least 20 nongovernmental stake-
holders with a wide diversity of opinion and who 
represent a broad spectrum of interests rep-
resenting the digital asset ecosystem, equally di-
vided between the Commissions, to serve as mem-
bers of the Committee. The appointees shall in-
clude— 
(i) digital asset issuers; 
(ii) persons registered with the Com-
missions and engaged in digital asset re-
lated activities; 
(iii) individuals engaged in academic 
research relating to digital assets; and 
(iv) digital asset users. 
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204 
(B) MEMBERS
NOT
COMMISSION
EMPLOY-
EES.—Members appointed under subparagraph 
(A) shall not be deemed to be employees or agents 
of a Commission solely by reason of membership 
on the Committee. 
(2) CO-DESIGNATED FEDERAL OFFICERS.— 
(A) NUMBER; APPOINTMENT.—There shall 
be 2 co-designated Federal officers of the Com-
mittee, as follows: 
(i) The Director of LabCFTC of the 
Commodity Futures Trading Commission. 
(ii) The Director of the Strategic Hub 
for Innovation and Financial Technology of 
the Securities and Exchange Commission. 
(B) DUTIES.—The duties required by chap-
ter 10 of title 5, United States Code, to be car-
ried out by a designated Federal officer with re-
spect to the Committee shall be shared by the co- 
designated Federal officers of the Committee. 
(3) COMMITTEE LEADERSHIP.— 
(A) COMPOSITION; ELECTION.—The Com-
mittee members shall elect, from among the Com-
mittee members— 
(i) a chair; 
(ii) a vice chair; 
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(iii) a secretary; and 
(iv) an assistant secretary. 
(B) TERM OF OFFICE.—Each member elect-
ed under subparagraph (A) in a 2-year period 
referred to in section 1013(b)(2) of title 5, 
United States Code, shall serve in the capacity 
for which the member was so elected, until the 
end of the 2-year period. 
(d) NO COMPENSATION FOR COMMITTEE MEMBERS.— 
(1) NON-FEDERAL
MEMBERS.—All Committee 
members appointed under subsection (d)(1) shall— 
(A) serve without compensation; and 
(B) while away from the home or regular 
place of business of the member in the perform-
ance of services for the Committee, be allowed 
travel expenses, including per diem in lieu of 
subsistence, in the same manner as persons em-
ployed intermittently in the Government service 
are allowed expenses under section 5703(b) of 
title 5, United States Code. 
(2) NO
COMPENSATION
FOR
CO-DESIGNATED 
FEDERAL OFFICERS.—The co-designated Federal offi-
cers shall serve without compensation in addition to 
that received for their services as officers or employees 
of the United States. 
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(e) FREQUENCY OF MEETINGS.—The Committee shall 
meet— 
(1) not less frequently than twice annually; and 
(2) at such other times as either Commission 
may request. 
(f) DURATION.—Section 1013(a)(2) of title 5, United 
States Code, shall not apply to the Committee. 
(g) TIME LIMITS.—The Commissions shall— 
(1) adopt a joint charter for the Committee with-
in 90 days after the date of the enactment of this sec-
tion; 
(2) appoint members to the Committee within 
120 days after such date of enactment; and 
(3) hold the initial meeting of the Committee 
within 180 days after such date of enactment. 
(h) FUNDING.—The Commissions shall jointly fund the 
Committee. 
SEC. 504. MODERNIZATION OF THE SECURITIES AND EX-
CHANGE COMMISSION MISSION. 
(a) SECURITIES ACT OF 1933.—Section 2(b) of the Se-
curities Act of 1933 (15 U.S.C. 77(b)) is amended— 
(1) in the heading, by inserting ‘‘INNOVATION,’’ 
after ‘‘EFFICIENCY,’’; and 
(2) by inserting ‘‘innovation,’’ after ‘‘efficiency,’’. 
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207 
(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 ‘‘INNOVATION,’’ 
after ‘‘EFFICIENCY,’’; and 
(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 ‘‘INNOVATION,’’ 
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 ‘‘INNOVATION,’’ 
after ‘‘EFFICIENCY,’’; and 
(2) by inserting ‘‘innovation,’’ after ‘‘efficiency,’’. 
SEC. 505. STUDY ON DECENTRALIZED FINANCE. 
(a) IN GENERAL.—The Commodity Futures Trading 
Commission and the Securities and Exchange Commission 
shall jointly carry out a study on decentralized finance that 
analyzes— 
(1) the nature, size, role, and use of decentralized 
finance blockchain protocols; 
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(C) transaction efficiency; 
(D) transparency and traceability of trans-
actions; and 
(E) disintermediation; and 
(7) the risks of decentralized finance, includ-
ing— 
(A) pseudonymity of users and transactions; 
(B) disintermediation; and 
(C) cybersecurity vulnerabilities; 
(8) the extent to which decentralized finance has 
integrated with the traditional financial markets and 
any potential risks to stability of the markets; 
(9) how the levels of illicit activity in decentral-
ized finance compare with the levels of illicit activity 
in traditional financial markets; 
(10) how decentralized finance may increase the 
accessibility of cross-border transactions; and 
(11) the feasibility of embedding self-executing 
compliance and risk controls into decentralized fi-
nance. 
(b) REPORT.—Not later than 1 year after the date of 
enactment of this Act, the Commodity Futures Trading 
Commission and the Securities and Exchange Commission 
shall jointly submit to the relevant congressional committees 
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a report that includes the results of the study required by 
subsection (a). 
(c) GAO STUDY.—The Comptroller General of the 
United States shall— 
(1) carry out a study on decentralized finance 
that analyzes the information described under para-
graphs (1) through (11) of subsection (a); and 
(2) not later than 1 year after the date of enact-
ment of this Act, submit to the relevant congressional 
committees a report that includes the results of the 
study required by paragraph (1). 
(d) DEFINITIONS.—In this section: 
(1) DECENTRALIZED FINANCE.— 
(A) IN GENERAL.—The term ‘‘decentralized 
finance’’ means blockchain protocols that allow 
users to engage in financial transactions in a 
self-directed manner so that a third-party inter-
mediary does not effectuate the transactions or 
take custody of digital assets of a user during 
any part of the transactions. 
(B) RELATIONSHIP TO ANCILLARY ACTIVI-
TIES.—The term ‘‘decentralized finance’’ shall 
not be interpreted to limit or exclude any activ-
ity from the meaning of ‘‘ancillary activities’’, 
as defined in section 15H(c) of the Securities Ex-
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change Act of 1934 or section 4v(c) of the Com-
modity Exchange Act. 
(2) RELEVANT CONGRESSIONAL COMMITTEES.— 
The 
term 
‘‘relevant 
congressional 
committees’’ 
means— 
(A) the Committees on Financial Services 
and Agriculture of the House of Representatives; 
and 
(B) the Committees on Banking, Housing, 
and Urban Affairs and Agriculture, Nutrition, 
and Forestry of the Senate. 
SEC. 506. STUDY ON NON-FUNGIBLE DIGITAL ASSETS. 
(a) The Comptroller General of the United States shall 
carry out a study of non-fungible digital assets that ana-
lyzes— 
(1) the nature, size, role, purpose, and use of 
non-fungible digital assets; 
(2) the similarities and differences between non- 
fungible digital assets and other digital assets, includ-
ing digital commodities and payments stablecoins, 
and how the markets for those digital assets intersect 
with each other; 
(3) how non-fungible digital assets are minted by 
issuers and subsequently administered to purchasers; 
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(4) how non-fungible digital assets are stored 
after being purchased by a consumer; 
(5) the interoperability of non-fungible digital 
assets between different blockchain systems; 
(6) the scalability of different non-fungible dig-
ital asset marketplaces; 
(7) the benefits of non-fungible digital assets, in-
cluding verifiable digital ownership; 
(8) the risks of non-fungible tokens, including— 
(A) intellectual property rights; 
(B) cybersecurity risks; and 
(C) market risks; 
(9) whether and how non-fungible digital assets 
have integrated with traditional marketplaces, includ-
ing those for music, real estate, gaming, events, and 
travel; 
(10) whether non-fungible tokens can be used to 
facilitate commerce or other activities through the 
representation of documents, identification, contracts, 
licenses, and other commercial, government, or per-
sonal records; 
(11) any potential risks to traditional markets 
from such integration; and 
(12) the levels and types of illicit activity in 
non-fungible digital asset markets. 
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(b) REPORT.—Not later than 1 year after the date of 
the enactment of this Act, the Secretary of Commerce, shall 
make publicly available a report that includes the results 
of the study required by subsection (a). 
SEC. 507. STUDY ON FINANCIAL MARKET INFRASTRUCTURE 
IMPROVEMENTS. 
(a) IN GENERAL.—The Commodity Futures Trading 
Commission and the Securities and Exchange Commission 
shall jointly conduct a study to assess whether additional 
guidance or rules are necessary to facilitate the development 
of tokenized securities and derivatives products, and to the 
extent such guidance or rules would foster the development 
of fair and orderly financial markets, be necessary or ap-
propriate in the public interest, and be consistent with the 
protection of investors and customers. 
(b) REPORT.— 
(1) TIME LIMIT.—Not later than 1 year after the 
date of enactment of this Act, the Commodity Futures 
Trading Commission and the Securities and Ex-
change Commission shall jointly submit to the rel-
evant congressional committees a report that includes 
the results of the study required by subsection (a). 
(2) RELEVANT CONGRESSIONAL COMMITTEES DE-
FINED.—In this section, the term ‘‘relevant congres-
sional committees’’ means— 
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(A) the Committees on Financial Services 
and on Agriculture of the House of Representa-
tives; and 
(B) the Committees on Banking, Housing, 
and Urban Affairs and on Agriculture, Nutri-
tion, and Forestry of the Senate. 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as 
the ‘‘Financial Innovation and Technology for 
the 21st Century Act’’. 
(b) TABLE OF CONTENTS.—The table of con-
tents for this Act is as follows: 
Sec. 1. Short title; table of contents. 
TITLE I—DEFINITIONS; RULEMAKING; NOTICE OF INTENT 
TO REGISTER 
Sec. 101. Definitions under the Securities Act of 1933. 
Sec. 102. Definitions under the Securities Exchange Act of 
1934. 
Sec. 103. Definitions under the Commodity Exchange Act. 
Sec. 104. Definitions under this Act. 
Sec. 105. Joint rulemakings. 
Sec. 106. Notice of intent to register for digital commodity ex-
changes, brokers, and dealers. 
Sec. 107. Notice of intent to register for digital asset brokers, 
dealers, and trading systems. 
Sec. 108. Commodity Exchange Act savings provisions. 
Sec. 109. International harmonization. 
Sec. 110. Implementation. 
TITLE II— OFFERS AND SALES OF DIGITAL ASSETS 
Sec. 201. Exempted transactions in digital assets. 
Sec. 202. Requirements for offers and sales of certain digital 
assets. 
Sec. 203. Enhanced disclosure requirements. 
Sec. 204. Certification of certain digital assets. 
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Sec. 205. Effective date. 
TITLE III—REGISTRATION FOR DIGITAL ASSET INTER-
MEDIARIES AT THE SECURITIES AND EXCHANGE COM-
MISSION 
Sec. 301. Treatment of digital commodities and other digital 
assets. 
Sec. 302. Anti-fraud 
authority 
over 
permitted 
payment 
stablecoins. 
Sec. 303. Registration of digital asset trading systems. 
Sec. 304. Requirements for digital asset trading systems. 
Sec. 305. Registration of digital asset brokers and digital asset 
dealers. 
Sec. 306. Requirements of digital asset brokers and digital 
asset dealers. 
Sec. 307. Rules related to conflicts of interest. 
Sec. 308. Treatment of certain digital assets in connection with 
federally regulated intermediaries. 
Sec. 309. Exclusion for ancillary activities. 
Sec. 310. Registration and requirements for notice-registered 
digital asset clearing agencies. 
Sec. 311. Treatment of custody activities by banking institu-
tions. 
Sec. 312.
Effective date; administration. 
TITLE IV—REGISTRATION FOR DIGITAL ASSET INTER-
MEDIARIES AT THE COMMODITY FUTURES TRADING 
COMMISSION 
Sec. 401. Commission 
jurisdiction 
over 
digital 
commodity 
transactions. 
Sec. 402. Requiring futures commission merchants to use 
qualified digital commodity custodians. 
Sec. 403. Trading certification and approval for digital com-
modities. 
Sec. 404. Registration of digital commodity exchanges. 
Sec. 405. Qualified digital commodity custodians. 
Sec. 406. Registration and regulation of digital commodity bro-
kers and dealers. 
Sec. 407. Registration of associated persons. 
Sec. 408. Registration of commodity pool operators and com-
modity trading advisors. 
Sec. 409. Exclusion for ancillary activities. 
Sec. 410. Effective date. 
TITLE V—INNOVATION AND TECHNOLOGY 
IMPROVEMENTS 
Sec. 501. Codification of the SEC Strategic Hub for Innovation 
and Financial Technology. 
Sec. 502. Codification of LabCFTC. 
Sec. 503. CFTC-SEC Joint Advisory Committee on Digital As-
sets. 
Sec. 504. Study on decentralized finance. 
Sec. 505. Study on non-fungible digital assets. 
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Sec. 506. Study on expanding financial literacy amongst digital 
asset holders. 
Sec. 507. Study on financial market infrastructure improve-
ments. 
TITLE VI—MISCELLANEOUS 
Sec. 601. Findings; sense of Congress. 
TITLE 
I—DEFINITIONS; 
RULE-
MAKING; NOTICE OF INTENT 
TO REGISTER 
SEC. 101. DEFINITIONS UNDER THE SECURITIES ACT OF 
1933. 
Section 2(a) of the Securities Act of 1933 
(15 U.S.C. 77b(a)) is amended by adding at the 
end the following: 
‘‘(20) AFFILIATED
PERSON.—The term 
‘affiliated person’ means a person (includ-
ing a related person) that— 
‘‘(A) with respect to a digital asset 
issuer— 
‘‘(i) 
directly, 
or 
indirectly 
through 
one 
or 
more 
inter-
mediaries, controls, or is con-
trolled by, or is under common 
control with, such digital asset 
issuer; and 
‘‘(ii) 
was 
described 
under 
clause (i) at any point in the pre-
vious 3-month period; or 
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‘‘(B) with respect to any digital 
asset— 
‘‘(i) beneficially owns 5 per-
cent or more of the units of such 
digital asset that are then out-
standing; and 
‘‘(ii) 
was 
described 
under 
clause (i) at any point in the pre-
vious 3-month period. 
‘‘(21) 
BLOCKCHAIN.—The 
term 
‘blockchain’ means any technology— 
‘‘(A) where data is— 
‘‘(i) shared across a network 
to 
create 
a 
public 
ledger 
of 
verified transactions or informa-
tion among network participants; 
‘‘(ii) 
linked 
using 
cryptog-
raphy to maintain the integrity of 
the public ledger and to execute 
other functions; and 
‘‘(iii) distributed among net-
work participants in an auto-
mated fashion to concurrently up-
date network participants on the 
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state of the public ledger and any 
other functions; and 
‘‘(B) composed of source code that 
is publicly available. 
‘‘(22) 
BLOCKCHAIN
PROTOCOL.—The 
term ‘blockchain protocol’ means any 
executable 
software 
deployed 
to 
a 
blockchain composed of source code that 
is publicly available and accessible, in-
cluding a smart contract or any network 
of smart contracts. 
‘‘(23) BLOCKCHAIN
SYSTEM.—The term 
‘blockchain 
system’ 
means 
any 
blockchain or blockchain protocol. 
‘‘(24) DECENTRALIZED
NETWORK.—With 
respect to a blockchain system to which a 
digital asset relates, the term ‘decentral-
ized network’ means the following condi-
tions are met: 
‘‘(A) 
During 
the 
previous 
12- 
month period, no person— 
‘‘(i) had the unilateral author-
ity, directly or indirectly, through 
any contract, arrangement, un-
derstanding, relationship, or oth-
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erwise, to control or materially 
alter the functionality or oper-
ation of the blockchain system; or 
‘‘(ii) had the unilateral au-
thority to restrict or prohibit any 
person who is not a digital asset 
issuer, related person, or an affili-
ated person from— 
‘‘(I) 
using, 
earning, 
or 
transmitting the digital asset; 
‘‘(II) 
deploying 
software 
that uses or integrates with 
the blockchain system; 
‘‘(III) participating in a 
decentralized governance sys-
tem 
with 
respect 
to 
the 
blockchain system; or 
‘‘(IV) operating a node, 
validator, or other form of 
computational infrastructure 
with respect to the blockchain 
system. 
‘‘(B) 
During 
the 
previous 
12- 
month period— 
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‘‘(i) no digital asset issuer or 
affiliated 
person 
beneficially 
owned, in the aggregate, 20 per-
cent or more of the total amount 
of units of such digital asset 
that— 
‘‘(I) can be created, issued, 
or 
distributed 
in 
such 
blockchain system; and 
‘‘(II) 
were 
freely 
transferrable 
or 
otherwise 
used or available to be used 
for 
the 
purposes 
of 
such 
blockchain system; 
‘‘(ii) no digital asset issuer or 
affiliated person had the unilat-
eral authority to direct the vot-
ing, in the aggregate, of 20 per-
cent or more of the outstanding 
voting power of such digital asset 
or related decentralized govern-
ance system; or 
‘‘(iii) the digital asset did not 
include voting power with respect 
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to any decentralized governance 
system of the blockchain system. 
‘‘(C) During the previous 3-month 
period, the digital asset issuer, any 
affiliated person, or any related per-
son has not implemented or contrib-
uted any intellectual property to the 
source code of the blockchain system 
that 
materially 
alters 
the 
functionality or operation of the 
blockchain system, unless such imple-
mentation or contribution to the 
source code— 
‘‘(i) addressed vulnerabilities, 
errors, regular maintenance, cy-
bersecurity risks, or other tech-
nical changes to the blockchain 
system; or 
‘‘(ii) were adopted through 
the consensus or agreement of a 
decentralized governance system. 
‘‘(D) During the previous 3-month 
period, 
neither 
any 
digital 
asset 
issuer nor any affiliated person de-
scribed under paragraph (20)(A) has 
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marketed to the public the digital as-
sets as an investment. 
‘‘(E) 
During 
the 
previous 
12- 
month period, all issuances of units of 
such digital asset through the pro-
grammatic 
functioning 
of 
the 
blockchain system were end user dis-
tributions. 
‘‘(25) DECENTRALIZED GOVERNANCE SYS-
TEM.— 
‘‘(A) IN
GENERAL.—The term ‘de-
centralized 
governance 
system’ 
means, with respect to a blockchain 
system, any rules-based system per-
mitting persons using the blockchain 
system or the digital assets related to 
such blockchain system to form con-
sensus or reach agreement in the de-
velopment, 
provision, 
publication, 
management, or administration of 
such blockchain system. 
‘‘(B) RELATIONSHIP OF PERSONS TO 
DECENTRALIZED
GOVERNANCE
SYS-
TEMS.—Persons acting through a de-
centralized governance system shall 
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223 
be treated as separate persons unless 
such persons are under common con-
trol. 
‘‘(C) EXCLUSION.—The term ‘decen-
tralized governance system’ does not 
include a system in which— 
‘‘(i) a person or group of per-
sons under common control have 
the ability to— 
‘‘(I) unilaterally alter the 
rules of consensus or agree-
ment for the blockchain sys-
tem; or 
‘‘(II) determine the final 
outcome of decisions related 
to the development, provision, 
publication, management, or 
administration 
of 
such 
blockchain system; 
‘‘(ii) a person or group of per-
sons is directly engaging in an ac-
tivity that requires registration 
with the Commission or the Com-
modity Futures Trading Commis-
sion other than— 
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224 
‘‘(I) developing, providing, 
publishing, managing, or ad-
ministering a blockchain sys-
tem; or 
‘‘(II) an activity with re-
spect to which the organiza-
tion is exempt from such reg-
istration; or 
‘‘(iii) a person or group of per-
sons seeking to knowingly evade 
the requirements imposed on a 
digital asset issuer, a related per-
son, an affiliated person, or any 
other person registered (or re-
quired to be registered) under the 
securities laws, the Financial In-
novation and Technology for the 
21st Century Act, or the Com-
modity Exchange Act. 
‘‘(26) DIGITAL ASSET.— 
‘‘(A) IN
GENERAL.—The term ‘dig-
ital asset’ means any fungible digital 
representation of value that can be 
exclusively 
possessed 
and 
trans-
ferred, person to person, without nec-
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225 
essary reliance on an intermediary, 
and is recorded on a cryptographi-
cally secured public distributed ledg-
er. 
‘‘(B) EXCLUSIONS.—The term ‘dig-
ital asset’ does not include— 
‘‘(i) any note, stock, treasury 
stock, security future, security- 
based swap, bond, debenture, evi-
dence of indebtedness, certificate 
of interest or participation in any 
profit-sharing agreement, collat-
eral-trust 
certificate, 
preorganization 
certificate 
or 
subscription, 
or 
transferable 
share; or 
‘‘(ii) any asset, which based on 
its terms and other characteris-
tics, is, represents, or is function-
ally equivalent to an agreement, 
contract, or transaction that is— 
‘‘(I) a contract of sale of a 
commodity (as defined under 
section 1a of the Commodity 
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226 
Exchange Act) for future de-
livery or an option thereon; 
‘‘(II) a security futures 
product; 
‘‘(III) a swap; 
‘‘(IV) an agreement, con-
tract, 
or 
transaction 
de-
scribed in section 2(c)(2)(C)(i) 
or 2(c)(2)(D)(i) of the Com-
modity Exchange Act; 
‘‘(V) a commodity option 
authorized under section 4c of 
the Commodity Exchange Act; 
or 
‘‘(VI) 
a 
leverage 
trans-
action authorized under sec-
tion 19 of the Commodity Ex-
change Act. 
‘‘(C) 
RULE
OF
CONSTRUCTION.— 
Nothing in this paragraph shall be 
construed to create a presumption 
that a digital asset is a representation 
of any type of security not excluded 
from the definition of digital asset. 
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227 
‘‘(D) 
RELATIONSHIP
TO
A 
BLOCKCHAIN SYSTEM.—A digital asset is 
considered to relate to a blockchain 
system if the digital asset is intrinsi-
cally linked to the blockchain system, 
including— 
‘‘(i) where the digital asset’s 
value is reasonably expected to be 
generated by the programmatic 
functioning of the blockchain sys-
tem; 
‘‘(ii) where the digital asset 
has voting rights with respect to 
the decentralized governance sys-
tem of the blockchain system; or 
‘‘(iii) where the digital asset is 
issued through the programmatic 
functioning of the blockchain sys-
tem. 
‘‘(E) TREATMENT
OF
CERTAIN
DIG-
ITAL ASSETS SOLD PURSUANT TO AN IN-
VESTMENT
CONTRACT.—A digital asset 
offered or sold or intended to be of-
fered or sold pursuant to an invest-
ment contract is not and does not be-
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228 
come a security as a result of being 
sold or otherwise transferred pursu-
ant to that investment contract. 
‘‘(27) DIGITAL ASSET ISSUER.— 
‘‘(A) IN GENERAL.—With respect to 
a digital asset, the term ‘digital asset 
issuer’ means any person that, in ex-
change for any consideration— 
‘‘(i) issues or causes to be 
issued a unit of such digital asset 
to a person; or 
‘‘(ii) offers or sells a right to a 
future issuance of a unit of such 
digital asset to a person. 
‘‘(B) EXCLUSION.—The term ‘digital 
asset issuer’ does not include any per-
son solely because such person de-
ploys source code that creates or 
issues units of a digital asset that are 
only distributed in end user distribu-
tions. 
‘‘(C) PROHIBITION
ON
EVASION.—It 
shall be unlawful for any person to 
knowingly evade classification as a 
‘digital asset issuer’ and facilitate an 
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229 
arrangement for the primary purpose 
of effecting a sale, distribution, or 
other issuance of a digital asset. 
‘‘(28) DIGITAL ASSET MATURITY DATE.— 
The term ‘digital asset maturity date’ 
means, with respect to any digital asset, 
the first date on which 20 percent or 
more of the total units of such digital 
asset that are then outstanding as of such 
date are— 
‘‘(A) digital commodities; or 
‘‘(B) digital assets that have been 
registered with the Commission. 
‘‘(29) DIGITAL
COMMODITY.—The term 
‘digital 
commodity’ 
has 
the 
meaning 
given that term under section 1a of the 
Commodity Exchange Act (7 U.S.C. 1a). 
‘‘(30) END USER DISTRIBUTION.— 
‘‘(A) IN
GENERAL.—The term ‘end 
user distribution’ means an issuance 
of a unit of a digital asset that— 
‘‘(i) does not involve an ex-
change of more than a nominal 
value of cash, property, or other 
assets; and 
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230 
‘‘(ii) is distributed in a broad, 
equitable, and non-discretionary 
manner based on conditions capa-
ble of being satisfied by any par-
ticipant in the blockchain system, 
including as incentive-based re-
wards— 
‘‘(I) to users of the digital 
asset or any blockchain sys-
tem to which the digital asset 
relates; 
‘‘(II) for activities directly 
related to the operation of the 
blockchain system, such as 
mining, validating, staking, or 
other activity directly tied to 
the 
operation 
of 
the 
blockchain system; or 
‘‘(III) to the existing hold-
ers of another digital asset, in 
proportion to the total units 
of such other digital asset as 
are held by each person. 
‘‘(B) PROHIBITION
ON
EVASION.—It 
shall be unlawful for any person to 
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231 
facilitate an end user distribution to 
knowingly evade classification as a 
digital asset issuer, related person, or 
an affiliated person, or the require-
ments 
related 
to 
a 
digital 
asset 
issuance. 
‘‘(31) FUNCTIONAL NETWORK.—With re-
spect to a blockchain system to which a 
digital asset relates, the term ‘functional 
network’ means the network allows net-
work participants to use such digital 
asset for— 
‘‘(A) the transmission and storage 
of value on the blockchain system; 
‘‘(B) the participation in services 
provided by or an application run-
ning on the blockchain system; or 
‘‘(C) the participation in the de-
centralized governance system of the 
blockchain system. 
‘‘(32) 
PERMITTED
PAYMENT 
STABLECOIN.—The term ‘permitted pay-
ment stablecoin’— 
‘‘(A) means a digital asset— 
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232 
‘‘(i) that is or is designed to be 
used as a means of payment or 
settlement; 
‘‘(ii) the issuer of which— 
‘‘(I) is obligated to con-
vert, redeem, or repurchase 
for a fixed amount of mone-
tary value; or 
‘‘(II) represents will main-
tain or creates the reasonable 
expectation that it will main-
tain a stable value relative to 
the value of a fixed amount of 
monetary value; and 
‘‘(iii) that is subject to regula-
tion by a Federal or State regu-
lator with authority over entities 
that issue payment stablecoins; 
and 
‘‘(B) that is not— 
‘‘(i) a national currency; or 
‘‘(ii) a security issued by an 
investment company registered 
under section 8(a) of the Invest-
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233 
ment Company Act of 1940 (15 
U.S.C. 80a–8(a)). 
‘‘(33) RELATED PERSON.—With respect 
to a digital asset issuer, the term ‘related 
person’ means— 
‘‘(A) a founder, promoter, em-
ployee, consultant, advisor, or person 
serving in a similar capacity; 
‘‘(B) any person that is or was in 
the previous 6-month period an exec-
utive officer, director, trustee, gen-
eral partner, advisory board member, 
or person serving in a similar capac-
ity; 
‘‘(C) any equity holder or other se-
curity holder; or 
‘‘(D) any other person that re-
ceived a unit of digital asset from 
such digital asset issuer through— 
‘‘(i) an exempt offering, other 
than an offering made in reliance 
on section 4(a)(8); or 
‘‘(ii) a distribution that is not 
an 
end 
user 
distribution 
de-
scribed under section 42(d)(1) of 
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234 
the Securities Exchange Act of 
1934. 
‘‘(34) RESTRICTED DIGITAL ASSET.— 
‘‘(A) IN
GENERAL.—The term ‘re-
stricted digital asset’ means— 
‘‘(i) any unit of a digital asset 
held by a person, other than the 
digital asset issuer, a related per-
son, or an affiliated person, prior 
to the first date on which each 
blockchain system to which the 
digital asset relates is a func-
tional network and certified to be 
a decentralized network under 
section 44 of the Securities Ex-
change Act of 1934, that was— 
‘‘(I) issued to such person 
through a distribution, other 
than an end user distribution 
described 
under 
section 
42(d)(1) of the Securities Ex-
change Act of 1934; or 
‘‘(II) acquired by such per-
son in a transaction that was 
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235 
not executed on a digital com-
modity exchange; 
‘‘(ii) any digital asset held by 
a related person or an affiliated 
person during any period when 
any blockchain system to which 
the digital asset relates is not a 
functional network or not cer-
tified to be a decentralized net-
work under section 44 of the Se-
curities Exchange Act of 1934; or 
‘‘(iii) any unit of a digital 
asset held by the digital asset 
issuer. 
‘‘(B) EXCLUSION.—The term ‘re-
stricted digital asset’ does not include 
a permitted payment stablecoin. 
‘‘(35) SECURITIES LAWS.—The term ‘se-
curities laws’ has the meaning given that 
term under section 3(a) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78c(a)). 
‘‘(36) SOURCE CODE.—With respect to a 
blockchain system, the term ‘source code’ 
means a listing of commands to be com-
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236 
piled or assembled into an executable 
computer program.’’. 
SEC. 102. DEFINITIONS UNDER THE SECURITIES EX-
CHANGE ACT OF 1934. 
Section 3(a) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78c(a)) is amended— 
(8) by redesignating the second para-
graph (80) (relating to funding portals) as 
paragraph (81); and 
(9) by adding at the end the fol-
lowing: 
‘‘(82) BANK
SECRECY
ACT.—The term 
‘Bank Secrecy Act’ means— 
‘‘(A) section 21 of the Federal De-
posit Insurance Act (12 U.S.C. 1829b); 
‘‘(B) chapter 2 of title I of Public 
Law 91–508 (12 U.S.C. 1951 et seq.); 
and 
‘‘(C) subchapter II of chapter 53 of 
title 31, United States Code. 
‘‘(83) 
DIGITAL
ASSET
BROKER.—The 
term ‘digital asset broker’— 
‘‘(A) means any person engaged in 
the business of effecting transactions 
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237 
in restricted digital assets for the ac-
count of others; and 
‘‘(B) does not include a blockchain 
protocol or a person or group of per-
sons solely because of their develop-
ment of a blockchain protocol. 
‘‘(84) DIGITAL
ASSET
CUSTODIAN.—The 
term ‘digital asset custodian’ means an 
entity in the business of providing custo-
dial or safekeeping services for restricted 
digital assets. 
‘‘(85) 
DIGITAL
ASSET
DEALER.—The 
term ‘digital asset dealer’— 
‘‘(A) means any person engaged in 
the business of buying and selling re-
stricted digital assets for such per-
son’s own account through a broker 
or otherwise; and 
‘‘(B) does not include— 
‘‘(i) a person that buys or sells 
restricted digital assets for such 
person’s own account, either indi-
vidually or in a fiduciary capac-
ity, but not as a part of a regular 
business; or 
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238 
‘‘(ii) a blockchain protocol or 
a person or group of persons sole-
ly because of their development 
of a blockchain protocol. 
‘‘(86) DIGITAL ASSET TRADING SYSTEM.— 
The term ‘digital asset trading system’— 
‘‘(A) means any organization, as-
sociation, person, or group of per-
sons, whether incorporated or unin-
corporated, that constitutes, main-
tains, or provides a market place or 
facilities for bringing together pur-
chasers and sellers of restricted dig-
ital assets or for otherwise per-
forming with respect to digital assets 
the functions commonly performed 
by a stock exchange within the mean-
ing of section 240.3b–16 of title 17, 
Code of Federal Regulations, as in ef-
fect on the date of enactment of this 
paragraph; and 
‘‘(B) does not include a blockchain 
protocol or a person or group of per-
sons solely because of their develop-
ment of a blockchain protocol. 
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239 
‘‘(87) 
MIXED
DIGITAL
ASSET
TRANS-
ACTION.—The term ‘mixed digital asset 
transaction’ means an agreement, con-
tract, or transaction involving a re-
stricted digital asset and a digital com-
modity. 
‘‘(88) NOTICE-REGISTERED DIGITAL ASSET 
CLEARING
AGENCY.—The term ‘notice-reg-
istered digital asset clearing agency’ 
means a clearing agency that has reg-
istered with the Commission pursuant to 
section 17A(b)(9). 
‘‘(89) ADDITIONAL
DIGITAL
ASSET-RE-
LATED TERMS.— 
‘‘(A) SECURITIES ACT OF 1933.—The 
terms ‘affiliated person’, ‘blockchain 
system’, 
‘decentralized 
governance 
system’, ‘decentralized network’, ‘dig-
ital asset’, ‘digital asset issuer’, ‘dig-
ital asset maturity date’, ‘end user 
distribution’, 
‘functional 
network’, 
‘mixed digital asset transaction’, ‘per-
mitted payment stablecoin’, ‘related 
person’, ‘restricted digital asset’, and 
‘source code’ have the meaning given 
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240 
those terms, respectively, under sec-
tion 2(a) of the Securities Act of 1933 
(15 U.S.C. 77b(a)). 
‘‘(B) COMMODITY
EXCHANGE
ACT.— 
The terms ‘digital commodity’, ‘digital 
commodity 
broker’, 
‘digital 
com-
modity 
dealer’, 
and 
‘digital 
com-
modity exchange’ have the meaning 
given those terms, respectively, under 
section 1a of the Commodity Ex-
change Act (7 U.S.C. 1a).’’. 
SEC. 103. DEFINITIONS UNDER THE COMMODITY EX-
CHANGE ACT. 
Section 1a of the Commodity Exchange 
Act (7 U.S.C. 1a) is amended— 
(1) in paragraph (10)(A)— 
(A) by redesignating clauses (iii) 
and (iv) as clauses (iv) and (v), re-
spectively; and 
(B) by inserting after clause (ii) 
the following: 
‘‘(iii) digital commodity;’’; 
(2) in paragraph (11)— 
(A) in subparagraph (A)(i)— 
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241 
(i) 
by 
redesignating 
sub-
clauses (III) and (IV) as sub-
clauses (IV) and (V), respectively; 
and 
(ii) by inserting after sub-
clause (II) the following: 
‘‘(III) digital commodity;’’; 
and 
(B) 
by 
redesignating 
subpara-
graph (B) as subparagraph (C) and in-
serting after subparagraph (A) the 
following: 
‘‘(B) EXCLUSION.—The term ‘com-
modity pool operator’ does not in-
clude— 
‘‘(i) a decentralized govern-
ance system; or 
‘‘(ii) ancillary activities, as de-
fined in section 4v.’’; 
(3) in paragraph (12)(A)(i)— 
(A) in subclause (II), by adding at 
the end a semicolon; 
(B) by redesignating subclauses 
(III) and (IV) as subclauses (IV) and 
(V), respectively; and 
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242 
(C) by inserting after subclause 
(II) the following: 
‘‘(III) 
a 
digital 
com-
modity;’’; 
(4) in paragraph (40)— 
(A) by striking ‘‘and’’ at the end of 
subparagraph (E); 
(B) by striking the period at the 
end of subparagraph (F) and insert-
ing ‘‘; and’’; and 
(C) by adding at the end the fol-
lowing: 
‘‘(G) 
a 
digital 
commodity 
ex-
change registered under section 5i.’’; 
and 
(5) by adding at the end the fol-
lowing: 
‘‘(52) ASSOCIATED PERSON OF A DIGITAL 
COMMODITY BROKER.— 
‘‘(A) IN GENERAL.—Except as pro-
vided in subparagraph (B), the term 
‘associated person of a digital com-
modity broker’ means a person who is 
associated with a digital commodity 
broker as a partner, officer, em-
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243 
ployee, or agent (or any person occu-
pying a similar status or performing 
similar functions) in any capacity 
that involves— 
‘‘(i) the solicitation or accept-
ance of a contract for sale of a 
digital commodity; or 
‘‘(ii) the supervision of any 
person engaged in the solicitation 
or acceptance of a contract for 
sale of a digital commodity. 
‘‘(B) EXCLUSION.—The term ‘associ-
ated person of a digital commodity 
broker’ does not include any person 
associated with a digital commodity 
broker the functions of which are 
solely clerical or ministerial. 
‘‘(53) ASSOCIATED PERSON OF A DIGITAL 
COMMODITY DEALER.— 
‘‘(A) IN GENERAL.—Except as pro-
vided in subparagraph (B), the term 
‘associated person of a digital com-
modity dealer’ means a person who is 
associated with a digital commodity 
dealer as a partner, officer, employee, 
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244 
or agent (or any person occupying a 
similar status or performing similar 
functions) in any capacity that in-
volves— 
‘‘(i) the solicitation or accept-
ance of a contract for sale of a 
digital commodity; or 
‘‘(ii) the supervision of any 
person engaged in the solicitation 
or acceptance of a contract for 
sale of a digital commodity. 
‘‘(B) EXCLUSION.—The term ‘associ-
ated person of a digital commodity 
dealer’ does not include any person 
associated with a digital commodity 
dealer the functions of which are 
solely clerical or ministerial. 
‘‘(54) BANK
SECRECY
ACT.—The term 
‘Bank Secrecy Act’ means— 
‘‘(A) section 21 of the Federal De-
posit Insurance Act (12 U.S.C. 1829b); 
‘‘(B) chapter 2 of title I of Public 
Law 91–508 (12 U.S.C. 1951 et seq.); 
and 
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245 
‘‘(C) subchapter II of chapter 53 of 
title 31, United States Code. 
‘‘(55) DIGITAL COMMODITY.— 
‘‘(A) IN
GENERAL.—The term ‘dig-
ital commodity’ means— 
‘‘(i) any unit of a digital asset 
held by a person, other than a 
digital asset issuer, a related per-
son, or an affiliated person, be-
fore the first date on which each 
blockchain system to which the 
digital asset relates is a func-
tional network and certified to be 
a decentralized network under 
section 44 of the Securities Ex-
change Act of 1934, that was— 
‘‘(I) issued to the person 
through an end user distribu-
tion described under section 
42(d)(1) of the Securities Ex-
change Act of 1934; or 
‘‘(II) acquired by such per-
son in a transaction that was 
executed on a digital com-
modity exchange; or 
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246 
‘‘(ii) any unit of a digital asset 
held by a person, other than a 
digital asset issuer, a related per-
son, or an affiliated person, after 
the first date on which each 
blockchain system to which the 
digital asset relates is a func-
tional network and certified to be 
a decentralized network under 
section 44 of the Securities Ex-
change Act of 1934; and 
‘‘(iii) any unit of a digital 
asset held by a related person or 
an affiliated person during any 
period when any blockchain sys-
tem to which the digital asset re-
lates is a functional network and 
certified to be a decentralized 
network under section 44 of the 
Securities Exchange Act of 1934. 
‘‘(B) EXCLUSION.—The term ‘digital 
commodity’ does not include a per-
mitted payment stablecoin. 
‘‘(56) DIGITAL COMMODITY BROKER.— 
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‘‘(A) IN
GENERAL.—The term ‘dig-
ital commodity broker’ means any 
person who, in a digital commodity 
cash or spot market, is— 
‘‘(i) engaged in soliciting or 
accepting orders for the purchase 
or sale of a unit of a digital com-
modity from a customer that is 
not an eligible contract partici-
pant; 
‘‘(ii) engaged in soliciting or 
accepting orders for the purchase 
or sale of a unit of a digital com-
modity from a customer on or 
subject to the rules of a reg-
istered entity; or 
‘‘(iii) registered with the Com-
mission as a digital commodity 
broker. 
‘‘(B) EXCEPTIONS.—The term ‘dig-
ital commodity broker’ does not in-
clude a person solely because the per-
son— 
‘‘(i) enters into a digital com-
modity transaction the primary 
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248 
purpose of which is to make, 
send, receive, or facilitate pay-
ments, whether involving a pay-
ment service provider or on a 
peer-to-peer basis; or 
‘‘(ii) validates a digital com-
modity transaction, operates a 
node, or engages in similar activ-
ity to participate in facilitating, 
operating, 
or 
securing 
a 
blockchain system. 
‘‘(57) DIGITAL COMMODITY CUSTODIAN.— 
The term ‘digital commodity custodian’ 
means a bank or trust company in the 
business of holding, maintaining, or safe-
guarding digital commodities. 
‘‘(58) DIGITAL COMMODITY DEALER.— 
‘‘(A) IN
GENERAL.—The term ‘dig-
ital commodity dealer’ means any 
person who— 
‘‘(i) in digital commodity cash 
or spot markets— 
‘‘(I) holds itself out as a 
dealer in a digital commodity; 
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249 
‘‘(II) makes a market in a 
digital commodity; 
‘‘(III) regularly enters into 
digital 
commodity 
trans-
actions with counterparties as 
an ordinary course of busi-
ness for its own account; or 
‘‘(IV) engages in any activ-
ity causing the person to be 
commonly known in the trade 
as a dealer or market maker 
in a digital commodity; 
‘‘(ii) regularly enters into any 
agreement, 
contract, 
or 
trans-
action described in subsection 
(c)(2)(D)(i) 
involving 
a 
digital 
commodity; or 
‘‘(iii) is registered with the 
Commission as a digital com-
modity dealer. 
‘‘(B) EXCEPTION.—The term ‘digital 
commodity dealer’ does not include a 
person solely because the person— 
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250 
‘‘(i) enters into a digital com-
modity transaction with an eligi-
ble contract participant; 
‘‘(ii) enters into a digital com-
modity transaction on or through 
a registered digital commodity ex-
change; 
‘‘(iii) enters into a digital com-
modity transaction for the per-
son’s own account, either individ-
ually or in a fiduciary capacity, 
but not as a part of a regular 
business; 
‘‘(iv) enters into a digital com-
modity transaction the primary 
purpose of which is to make, 
send, receive, or facilitate pay-
ments, whether involving a pay-
ment service provider or on a 
peer-to-peer basis; or 
‘‘(v) validates a digital com-
modity transaction, operates a 
node, or engages in similar activ-
ity to participate in facilitating, 
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251 
operating, 
or 
securing 
a 
blockchain system. 
‘‘(59) DIGITAL COMMODITY EXCHANGE.— 
The term ‘digital commodity exchange’ 
means a trading facility that offers or 
seeks to offer a cash or spot market in at 
least 1 digital commodity. 
‘‘(60) DIGITAL
ASSET-RELATED
DEFINI-
TIONS.— 
‘‘(A) SECURITIES ACT OF 1933.—The 
terms ‘affiliated person’, ‘blockchain 
system’, 
‘decentralized 
governance 
system’, ‘decentralized network’, ‘dig-
ital asset’, ‘digital asset issuer’, ‘end 
user 
distribution’, 
‘functional 
net-
work’, 
‘permitted 
payment 
stablecoin’, ‘related person’, and ‘re-
stricted digital asset’ have the mean-
ing given the terms, respectively, 
under section 2(a) of the Securities 
Act of 1933 (15 U.S.C. 77b(a)). 
‘‘(B) SECURITIES EXCHANGE ACT OF 
1934.—The terms ‘digital asset broker’ 
and ‘digital asset dealer’ have the 
meaning given those terms, respec-
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252 
tively, under section 3(a) of the Secu-
rities Exchange Act of 1934 (15 U.S.C. 
78c(a)). 
‘‘(61) 
MIXED
DIGITAL
ASSET
TRANS-
ACTION.—The term ‘mixed digital asset 
transaction’ has the meaning given that 
term under section 3(a) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78c(a)).’’. 
SEC. 104. DEFINITIONS UNDER THIS ACT. 
In this Act: 
(1) DEFINITIONS UNDER THE COMMODITY 
EXCHANGE
ACT.—The terms ‘‘digital com-
modity’’, 
‘‘digital 
commodity 
broker’’, 
‘‘digital commodity dealer’’, and ‘‘digital 
commodity exchange’’ have the meaning 
given those terms, respectively, under 
section 1a of the Commodity Exchange 
Act (7 U.S.C. 1a). 
(2) DEFINITIONS UNDER THE SECURITIES 
ACT
OF
1933.—The terms ‘‘affiliated per-
son’’, ‘‘blockchain’’, ‘‘blockchain system’’, 
‘‘blockchain protocol’’, ‘‘decentralized net-
work’’, 
‘‘digital 
asset’’, 
‘‘digital 
asset 
issuer’’, ‘‘digital asset maturity date’’, 
‘‘digital asset trading system’’, ‘‘end user 
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253 
distribution’’, ‘‘functional network’’, ‘‘per-
mitted payment stablecoin’’, ‘‘restricted 
digital 
asset’’, 
‘‘securities 
laws’’, 
and 
‘‘source code’’ have the meaning given 
those terms, respectively, under section 
2(a) of the Securities Act of 1933 (15 
U.S.C. 77b(a)). 
(3) DEFINITIONS UNDER THE SECURITIES 
EXCHANGE ACT OF 1934.—The terms ‘‘Bank 
Secrecy Act’’, ‘‘digital asset broker’’, ‘‘dig-
ital asset dealer’’, ‘‘digital asset trading 
system’’, 
‘‘mixed 
digital 
asset 
trans-
action’’, and ‘‘self-regulatory organiza-
tion’’ have the meaning given those 
terms, respectively, under section 3(a) of 
the Securities Exchange Act of 1934 (15 
U.S.C. 78c(a)). 
SEC. 105. JOINT RULEMAKINGS. 
(a) DEFINITIONS.—The Commodity Futures 
Trading Commission and the Securities and 
Exchange Commission shall jointly issue rules 
to further define the following terms: 
(1) The terms ‘‘affiliated person’’, 
‘‘blockchain’’, 
‘‘blockchain 
system’’, 
‘‘blockchain protocol’’, ‘‘decentralized net-
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254 
work’’, ‘‘decentralized governance sys-
tem’’, 
‘‘digital 
asset’’, 
‘‘digital 
asset 
issuer’’, ‘‘digital asset maturity date’’, 
‘‘end user distribution’’, ‘‘functional net-
work’’, ‘‘related person’’, ‘‘restricted dig-
ital asset’’, and ‘‘source code’’, as defined 
under section 2(a) of the Securities Act of 
1933. 
(2) The term ‘‘mixed digital asset 
transaction’’, as defined under section 
3(a) of the Securities Exchange Act of 
1934. 
(3) The term ‘‘digital commodity’’, as 
defined under section 1a of the Com-
modity Exchange Act. 
(b) JOINT RULEMAKING FOR EXCHANGES.— 
The Commodity Futures Trading Commission 
and the Securities and Exchange Commission 
shall jointly issue rules to exempt persons du-
ally registered with the Commodity Futures 
Trading Commission as a digital commodity 
exchange and with the Securities and Ex-
change Commission as a digital asset trading 
system from duplicative, conflicting, or un-
duly burdensome provisions of this Act, the 
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255 
securities laws, and the Commodity Exchange 
Act and the rules thereunder, to the extent 
such exemption would foster the development 
of fair and orderly markets in digital assets, 
be necessary or appropriate in the public in-
terest, and be consistent with the protection 
of investors. 
(c) JOINT RULEMAKING FOR MIXED DIGITAL 
ASSET
TRANSACTIONS.—The Commodity Fu-
tures Trading Commission and the Securities 
and Exchange Commission shall jointly issue 
rules applicable to mixed digital asset trans-
actions under this Act and the amendments 
made by this Act. 
(d) PROTECTION OF SELF-CUSTODY.— 
(1) 
IN
GENERAL.—The 
Financial 
Crimes Enforcement Network may not 
issue any rule or order that would pro-
hibit a U.S. individual from— 
(A) maintaining a hardware wal-
let, software wallet, or other means to 
facilitate such individual’s own cus-
tody of digital assets; or 
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256 
(B) conducting transactions and 
self-custody digital assets for any law-
ful purpose. 
(2) 
RULE
OF
CONSTRUCTION.—Para-
graph (1) may not be construed to limit 
the ability of Financial Crimes Enforce-
ment Network to carry out any enforce-
ment authority. 
(e) JOINT RULEMAKING, PROCEDURES, OR 
GUIDANCE FOR DELISTING.—Not later than 30 
days after the date of the enactment of this 
Act, the Commodity Futures Trading Commis-
sion and the Securities and Exchange Com-
mission shall jointly issue rules, procedures, 
or guidance (as determined appropriate by 
the Commissions) regarding the process to 
delist an asset for trading under sections 106 
and 107 of this Act if the Commissions deter-
mine that the listing is inconsistent with the 
Commodity Exchange Act, the securities laws 
(including regulations under those laws), or 
this Act. 
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257 
SEC. 106. NOTICE OF INTENT TO REGISTER FOR DIGITAL 
COMMODITY 
EXCHANGES, 
BROKERS, 
AND 
DEALERS. 
(a) IN GENERAL.— 
(1) NOTICE OF INTENT TO REGISTER.— 
Any person may file a notice of intent to 
register with the Commodity Futures 
Trading Commission (in this subsection 
referred to as the ‘‘Commission’’) as a— 
(A) digital commodity exchange, 
for a person intending to register as a 
digital commodity exchange under 
section 5i of the Commodity Ex-
change Act; 
(B) digital commodity broker, for 
a person intending to register as a 
digital commodity broker under sec-
tion 4u of such Act; or 
(C) digital commodity dealer, for 
a person intending to register as a 
digital commodity dealer under sec-
tion 4u of such Act. 
(2) FILING.—A person desiring to file a 
notice of intent to register under para-
graph (1) shall be in compliance with this 
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258 
section if the person submits to the Com-
mission— 
(A) a statement of the nature of 
the registrations the filer intends to 
pursue; 
(B) the information required by 
subsections (b) and (c). 
(b) DISCLOSURE
OF
GENERAL
INFORMA-
TION.—A person filing a notice of intent to reg-
ister under subsection (a) shall disclose to the 
Commission the following: 
(1) Information concerning the man-
agement of the person, including infor-
mation describing— 
(A) the ownership and manage-
ment of the person; 
(B) the financial condition of the 
person; 
(C) affiliated entities; and 
(D) potential conflicts of interest. 
(2) Information concerning the oper-
ations of the person, including— 
(A) any rulebook or other cus-
tomer order fulfilment rules; 
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(B) risk management procedures; 
and 
(C) a description of the product 
listing process. 
(c) LISTING INFORMATION.—A person filing 
a notice of intent to register under subsection 
(a) shall provide to the Commission and the 
Securities and Exchange Commission a de-
tailed description of the product listing deter-
mination made by the person for each asset 
listed or offered for trading by the person. 
(d) REQUIREMENTS.—A person filing a no-
tice of intent to register under subsection (a) 
shall comply with the following requirements: 
(1) BOOKS AND RECORDS.—The person 
shall keep their books and records open 
to inspection and examination by the 
Commission. 
(2) CUSTOMER DISCLOSURES.—The per-
son shall disclose to consumers— 
(A) information about the mate-
rial risks and characteristics of the 
assets listed for trading on the per-
son; and 
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260 
(B) information about the mate-
rial risks and characteristics of the 
transactions facilitated by the person. 
(3) CUSTOMER ASSETS.— 
(A) 
IN
GENERAL.—The 
person 
shall— 
(i) hold customer money, as-
sets, and property in a manner to 
minimize the risk of loss to the 
customer or unreasonable delay 
in customer access to money, as-
sets, and property of the cus-
tomer; 
(ii) treat and deal with all 
money, assets, and property, in-
cluding 
any 
rights 
associated 
with any such money, assets, or 
property, of any customer re-
ceived as belonging to the cus-
tomer; 
(iii) segregate all money, as-
sets, and property received from 
any customer of the person from 
the funds of the person, except 
that— 
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(I) the money, assets, and 
property of any customer may 
be commingled with that of 
any other customer, if sepa-
rately accounted for; and 
(II) 
the 
share 
of 
the 
money, assets, and property, 
as in the normal course of 
business 
are 
necessary 
to 
margin, 
guarantee, 
secure, 
transfer, adjust, or settle a 
contract of sale of a com-
modity asset, may be with-
drawn and applied to do so, 
including 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. 
(B) ADDITIONAL RESOURCES.— 
(i) IN
GENERAL.—This section 
shall not prevent or be construed 
to prevent the person from add-
ing to the customer money, assets, 
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and property required to be seg-
regated under subparagraph (A), 
additional amounts of money, as-
sets, or property from the account 
of the person as the person deter-
mines necessary to prevent the 
account of a customer from be-
coming under-segregated. 
(ii) TREATMENT
AS
CUSTOMER 
FUNDS.—Any 
money, 
assets, 
or 
property deposited pursuant to 
clause (i) shall be considered cus-
tomer property within the mean-
ing of this subsection. 
(e) COMPLIANCE AND ENFORCEMENT.— 
(1) IN
GENERAL.—A person who has 
filed a notice of intent to register under 
this section and is in compliance with 
this section shall not be subject to an en-
forcement action by the Securities and 
Exchange Commission for— 
(A) listing or offering a digital 
asset deemed a security; or 
(B) failing to register as a na-
tional securities exchange, broker, 
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263 
dealer, or clearing agency, for activi-
ties related to digital assets deemed a 
security. 
(2) NONCOMPLIANCE.—Paragraph (1) 
shall not apply if, after notice from the 
Commission and a reasonable oppor-
tunity to correct the deficiency, a person 
who has submitted a notice of intent to 
register is not in compliance with this 
section. 
(3) ANTI-FRAUD
AND
ANTI-MANIPULA-
TION.—Paragraph (1) shall not be con-
strued to limit any anti-manipulation, 
anti-fraud, or false reporting enforcement 
authority of the Commission or the Secu-
rities and Exchange Commission. 
(4) DELISTING.—Paragraph (1) shall 
not be construed to limit the authority of 
the Commission or the Securities and Ex-
change Commission to require a person 
to delist an asset for trading if the Com-
mission or the Securities and Exchange 
Commission determines that the listing is 
inconsistent with the Commodity Ex-
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264 
change Act, the securities laws (including 
regulations under those laws), or this Act. 
(f) FINAL REGISTRATION.— 
(1) IN
GENERAL.—A person may not 
file a notice of intent to register with the 
Commission after the Commission has fi-
nalized its rules for the registration of 
digital 
commodity 
exchanges, 
digital 
commodity brokers, or digital commodity 
dealers, as appropriate. 
(2) TRANSITION
TO
FINAL
REGISTRA-
TION.— 
(A) ONGOING
DEFERRAL
FOR
ENTI-
TIES
REGISTERED
WITH
THE
COMMIS-
SION.—Subsection 
(e)(1) 
shall 
con-
tinue to apply to a person who has 
submitted a notice of intent to reg-
ister while the person is registered 
with the Commission as a digital com-
modity exchange, a digital commodity 
broker, or a digital commodity dealer, 
as appropriate. 
(B) END OF DEFERRAL.—Subsection 
(e)(1) shall not apply to a person who 
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265 
has submitted a notice of intent to 
register if— 
(i) the Commission— 
(I) determines that the 
person has failed to comply 
with the requirements of this 
section; or 
(II) denies the application 
of the person to register; or 
(ii) the digital commodity ex-
change, digital commodity broker, 
or digital commodity dealer that 
filed a notice of intent to register 
failed to register as such with the 
Commission within 180 days after 
the 
Commission 
finalized 
the 
rules of the Commission for the 
registration of digital commodity 
exchanges, digital commodity bro-
kers, or digital commodity deal-
ers, as appropriate. 
(g) LIABILITY OF THE FILER.—It shall be un-
lawful for any person to provide false infor-
mation in support of a filing under this sec-
tion if the person knowingly or reasonably 
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266 
should have known that the information was 
false. 
SEC. 107. NOTICE OF INTENT TO REGISTER FOR DIGITAL 
ASSET BROKERS, DEALERS, AND TRADING 
SYSTEMS. 
(a) IN GENERAL.— 
(1) NOTICE OF INTENT TO REGISTER.— 
Any person may file a notice of intent to 
register with the Securities and Ex-
change Commission (in this section re-
ferred to as the ‘‘Commission’’) as— 
(A) a digital asset trading system, 
for a person intending to register as a 
digital asset trading system under 
section 6(m) of the Securities Ex-
change Act of 1934; 
(B) a digital asset broker, for a 
person intending to register as a dig-
ital asset broker under section 15H of 
the Securities Exchange Act of 1934; 
or 
(C) a digital asset dealer, for a 
person intending to register as a dig-
ital asset dealer under section 15H of 
the Securities Exchange Act of 1934. 
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(2) FILING.—A person desiring to file a 
notice of intent to register under para-
graph (1) shall be in compliance with this 
section if the person submits to the Com-
mission— 
(A) a statement of the nature of 
the registrations the filer intends to 
pursue; and 
(B) the information required by 
subsections (b) and (c). 
(b) DISCLOSURE
OF
GENERAL
INFORMA-
TION.—A person filing a notice of intent to reg-
ister under subsection (a) shall disclose to the 
Commission the following: 
(1) Information concerning the man-
agement of the person, including infor-
mation describing— 
(A) the ownership and manage-
ment of the person; 
(B) the financial condition of the 
person; 
(C) affiliated entities; and 
(D) potential conflicts of interest. 
(2) Information concerning the oper-
ations of the person, including— 
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268 
(A) any rulebook or other cus-
tomer order fulfilment rules; 
(B) risk management procedures; 
and 
(C) a description of the product 
listing process. 
(c) LISTING INFORMATION.—A person filing 
a notice of intent to register under subsection 
(a) shall provide to the Commission and the 
Commodity Futures Trading Commission a 
detailed description of the product listing de-
termination made by the person for each 
asset listed or offered for trading by the per-
son. 
(d) REQUIREMENTS.—A person filing a no-
tice of intent to register under subsection (a) 
shall comply with the following requirements: 
(1) 
NATIONAL
SECURITIES
ASSOCIA-
TION.—The person shall be a member of a 
national securities association registered 
under section 15A of the Securities Ex-
change Act of 1934 (15 U.S.C. 78o–3), and 
shall comply with the rules of the asso-
ciation, including the rules of the associa-
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269 
tion pertaining to customer disclosures 
and protection of customer assets. 
(2) BOOKS AND RECORDS.—The person 
shall keep their books and records open 
to inspection and examination by the 
Commission. 
(3) CUSTOMER DISCLOSURES.—The per-
son shall disclose to customers— 
(A) information about the mate-
rial risks and characteristics of the 
assets listed for trading on the per-
son; 
(B) information about the mate-
rial risks and characteristics of the 
transactions facilitated by the person; 
and 
(C) in their disclosure documents, 
offering documents, and promotional 
material, in a prominent manner, that 
they are not registered with or regu-
lated by the Commission. 
(4) CUSTOMER ASSETS.— 
(A) 
IN
GENERAL.—The 
person 
shall— 
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(i) hold customer money, as-
sets, and property in a manner to 
minimize the risk of loss to the 
customer or unreasonable delay 
in customer access to money, as-
sets, and property of the cus-
tomer; 
(ii) treat and deal with all 
money, assets, and property, in-
cluding 
any 
rights 
associated 
with any such money, assets, or 
property, of any customer re-
ceived as belonging to the cus-
tomer; 
(iii) segregate all money, as-
sets, and property received from 
any customer of the person from 
the funds of the person, except 
that— 
(I) the money, assets, and 
property of any customer may 
be commingled with that of 
any other customer, if sepa-
rately accounted for; and 
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(II) 
the 
share 
of 
the 
money, assets, and property, 
as in the normal course of 
business 
are 
necessary 
to 
margin, 
guarantee, 
secure, 
transfer, adjust, or settle a 
contract of sale of a digital 
asset, may be withdrawn and 
applied to do so, including the 
payment of commissions, bro-
kerage, interest, taxes, stor-
age, and other charges law-
fully accruing in connection 
with the contract of sale of a 
digital asset. 
(B) ADDITIONAL RESOURCES.— 
(i) IN
GENERAL.—This section 
shall not prevent or be construed 
to prevent the person from add-
ing to the customer money, assets, 
and property required to be seg-
regated under subparagraph (A) 
additional amounts of money, as-
sets, or property from the account 
of the person as the person deter-
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272 
mines necessary to hold money, 
assets, or property equal to or in 
excess of the total digital asset 
obligation of the person. 
(ii) TREATMENT
AS
CUSTOMER 
FUNDS.—Any 
money, 
assets, 
or 
property deposited pursuant to 
clause (i) shall be considered cus-
tomer property within the mean-
ing of this subsection. 
(e) COMPLIANCE.— 
(1) IN
GENERAL.—A person who has 
filed a notice of intent to register under 
this section and is in compliance with 
this section shall be exempt from Com-
mission rules and regulations pertaining 
to registering as a national securities ex-
change, broker, dealer, or clearing agen-
cy, for activities related to a digital asset 
deemed a security. 
(2) NONCOMPLIANCE.—Paragraph (1) 
shall not apply if, after notice from the 
Commission and a reasonable oppor-
tunity to correct the deficiency, a person 
who has submitted a notice of intent to 
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register is not in compliance with this 
section. 
(3) ANTI-FRAUD
AND
ANTI-MANIPULA-
TION.—Paragraph (1) shall not be con-
strued to limit any fraud, anti-manipula-
tion, or false reporting enforcement au-
thority of the Commission or the Com-
modity Futures Trading Commission. 
(4) DELISTING.—Paragraph (1) shall 
not be construed to limit the authority of 
the Commission and the Commodity Fu-
tures Trading Commission to jointly re-
quire a person to delist an asset for trad-
ing if the Commission and the Com-
modity Futures Trading Commission de-
termines that the listing is inconsistent 
with the Commodity Exchange Act, the 
securities 
laws 
(including 
regulations 
under those laws), or this Act. 
(f) FINAL REGISTRATION.— 
(1) IN
GENERAL.—A person may not 
file a notice of intent to register with the 
Commission after the Commission has fi-
nalized its rules for the registration of 
digital asset brokers, digital asset deal-
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ers, digital asset trading systems, and no-
tice-registered clearing agencies, as ap-
propriate. 
(2) TRANSITION
TO
FINAL
REGISTRA-
TION.—Subsection (e)(1) shall not apply to 
a person who has submitted a notice of 
intent to register if— 
(A) the Commission— 
(i) determines that the person 
has failed to comply with the re-
quirements of this section; or 
(ii) denies the application of 
the person to register; or 
(B) the digital asset broker, dig-
ital asset dealer, or digital asset trad-
ing system that filed a notice of in-
tent to register failed to apply for 
registration as such with the Commis-
sion within 180 days after the effec-
tive date of the Commission’s final 
rules for the registration of digital 
asset brokers, digital asset dealers, 
and digital asset trading systems, as 
appropriate. 
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(g) LIABILITY OF THE FILER.—It shall be un-
lawful for any person to provide false infor-
mation in support of a filing under this sec-
tion if the person knew or reasonably should 
have known that the information was false. 
(h) NATIONAL SECURITIES ASSOCIATION.—A 
national securities association shall adopt 
rules for membership with such association 
for persons required to be members of such 
association under subsection (d)(1) within 180 
days after the date of enactment of this Act. 
SEC. 108. COMMODITY EXCHANGE ACT SAVINGS PROVI-
SIONS. 
(a) IN GENERAL.—Nothing in this Act shall 
affect or apply to, or be interpreted to affect 
or apply to— 
(1) any agreement, contract, or trans-
action that is subject to regulation under 
the Commodity Exchange Act as— 
(A) a contract of sale of a com-
modity for future delivery or an op-
tion on such a contract; 
(B) a swap; 
(C) a security futures product; 
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(D) an option authorized under 
section 4c of such Act; 
(E) an agreement, contract, or 
transaction 
described 
in 
section 
2(c)(2)(C)(i) of such Act; or 
(F) a leverage transaction author-
ized under section 19 of such Act; or 
(2) the activities of any person with 
respect to any such agreement, contract, 
or transaction. 
(b) PROHIBITIONS
ON SPOT DIGITAL COM-
MODITY ENTITIES.—Nothing in this Act author-
izes, or shall be interpreted to authorize, a 
digital commodity exchange, digital com-
modity broker, or digital commodity dealer to 
engage in any activities involving any trans-
action, contract, or agreement described in 
subsection (a)(1), solely by virtue of being reg-
istered or filing notice of intent to register as 
a digital commodity exchange, digital com-
modity broker, or digital commodity dealer. 
(c) DEFINITIONS.—In this section, each 
term shall have the meaning provided in the 
Commodity Exchange Act or the regulations 
prescribed under such Act. 
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SEC. 109. INTERNATIONAL HARMONIZATION. 
In order to promote effective and con-
sistent global regulation of digital assets, the 
Commodity Futures Trading Commission and 
the Securities and Exchange Commission, as 
appropriate— 
(1) shall consult and coordinate with 
foreign regulatory authorities on the es-
tablishment of consistent international 
standards with respect to the regulation 
of digital assets, restricted digital assets, 
and digital commodities; and 
(2) may agree to such information- 
sharing arrangements as may be deemed 
to be necessary or appropriate in the 
public interest or for the protection of in-
vestors, customers, and users of digital 
assets. 
SEC. 110. IMPLEMENTATION. 
(a) GLOBAL RULEMAKING TIMEFRAME.—Un-
less otherwise provided in this Act or an 
amendment made by this Act, the Commodity 
Futures Trading Commission and the Securi-
ties and Exchange Commission, or both, shall 
individually, and jointly where required, pro-
mulgate rules and regulations required of 
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278 
each Commission under this Act or an amend-
ment made by this Act not later than 360 days 
after the date of enactment of this Act. 
(b) RULES AND REGISTRATION BEFORE FINAL 
EFFECTIVE DATES.— 
(1) IN GENERAL.—In order to prepare 
for the implementation of this Act, the 
Commodity Futures Trading Commission 
and the Securities and Exchange Com-
mission may, before any effective date 
provided in this Act— 
(A) promulgate rules, regulations, 
or orders permitted or required by 
this Act; 
(B) conduct studies and prepare 
reports 
and 
recommendations 
re-
quired by this Act; 
(C) register persons under this 
Act; and 
(D) exempt persons, agreements, 
contracts, or transactions from provi-
sions of this Act, under the terms con-
tained in this Act. 
(2) LIMITATION ON EFFECTIVENESS.—An 
action by the Commodity Futures Trad-
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279 
ing Commission or the Securities and Ex-
change Commission under paragraph (1) 
shall not become effective before the ef-
fective date otherwise applicable to the 
action under this Act. 
TITLE II— OFFERS AND SALES 
OF DIGITAL ASSETS 
SEC. 201. EXEMPTED TRANSACTIONS IN DIGITAL ASSETS. 
(a) IN GENERAL.—The Securities Act of 
1933 (15 U.S.C. 77a et seq.) is amended— 
(1) in section 4(a), by adding at the 
end the following: 
‘‘(8) transactions involving the offer 
or sale of units of a digital asset by a dig-
ital asset issuer, if— 
‘‘(A) the aggregate amount of 
units of the digital asset sold by the 
digital asset issuer in reliance on the 
exemption provided under this para-
graph, during the 12-month period 
preceding the date of such trans-
action, including the amount sold in 
such transaction, is not more than 
$75,000,000 (as such amount is annu-
ally adjusted by the Commission to 
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280 
reflect the change in the Consumer 
Price Index for All Urban Consumers 
published by the Bureau of Labor 
Statistics 
of 
the 
Department 
of 
Labor); 
‘‘(B) with respect to a transaction 
involving the purchase of units of a 
digital asset by a person who is not 
an accredited investor, the aggregate 
amount of all units of digital assets 
purchased by such person during the 
12-month period preceding the date 
of such transaction, including the 
unit of a digital asset purchased in 
such transaction, does not exceed the 
greater of— 
‘‘(i) 10 percent of the person’s 
annual income or joint income 
with 
that 
person’s 
spouse 
or 
spousal equivalent; or 
‘‘(ii) 10 percent of the person’s 
net worth or joint net worth with 
the person’s spouse or spousal 
equivalent; 
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281 
‘‘(C) after the completion of the 
transaction, the purchaser does not 
own more than 10 percent of the total 
amount of the units of the digital 
asset sold in reliance on the exemp-
tion under this paragraph; 
‘‘(D) the transaction does not in-
volve the offer or sale of any digital 
asset not offered as part of an invest-
ment contract; 
‘‘(E) the transaction does not in-
volve the offer or sale of a unit of a 
digital asset by a digital asset issuer 
that— 
‘‘(i) is not organized under the 
laws of a State, a territory of the 
United States, or the District of 
Columbia; 
‘‘(ii) is a development stage 
company that either— 
‘‘(I) has no specific busi-
ness plan or purpose; or 
‘‘(II) has indicated that 
the business plan of the com-
pany is to merge with or ac-
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282 
quire an unidentified com-
pany; 
‘‘(iii) is an investment com-
pany, as defined in section 3 of 
the Investment Company Act of 
1940 (15 U.S.C. 80a-3), or is ex-
cluded from the definition of in-
vestment company by section 3(b) 
or section 3(c) of that Act (15 
U.S.C. 80a–3(b) or 80a–3(c)); 
‘‘(iv) is issuing fractional un-
divided interests in oil or gas 
rights, or a similar interest in 
other mineral rights; 
‘‘(v) is, or has been, subject to 
any order of the Commission en-
tered pursuant to section 12(j) of 
the Securities Exchange Act of 
1934 during the 5-year period be-
fore the filing of the offering 
statement; or 
‘‘(vi) is disqualified pursuant 
to section 230.262 of title 17, Code 
of Federal Regulations; and 
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‘‘(F) the issuer meets the require-
ments of section 4B(a).’’; and 
(2) by inserting after section 4A the 
following: 
‘‘SEC. 4B. REQUIREMENTS WITH RESPECT TO CERTAIN DIG-
ITAL ASSET TRANSACTIONS. 
‘‘(a) REQUIREMENTS
FOR
DIGITAL
ASSET 
ISSUERS.— 
‘‘(1) INFORMATION REQUIRED IN STATE-
MENT.—A digital asset issuer offering or 
selling a unit of digital asset in reliance 
on section 4(a)(8) shall file with the Com-
mission a statement containing the fol-
lowing information: 
‘‘(A) The name, legal status (in-
cluding the jurisdiction in which the 
issuer is organized and the date of or-
ganization), and website of the digital 
asset issuer. 
‘‘(B) The address and telephone 
number of the issuer or a legal rep-
resentative of the issuer. 
‘‘(C) A certification that the dig-
ital asset issuer meets the relevant re-
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284 
quirements described under section 
4(a)(8). 
‘‘(D) An overview of the material 
aspects of the offering. 
‘‘(E) A description of the purpose 
and intended use of the offering pro-
ceeds. 
‘‘(F) A description of the plan of 
distribution of any unit of a digital 
asset that is to be offered. 
‘‘(G) A description of the material 
risks surrounding ownership of a 
unit of a digital asset. 
‘‘(H) A description of the material 
aspects of the digital asset issuer’s 
business. 
‘‘(I) A description of exempt offer-
ings conducted within the past three 
years by the digital asset issuer. 
‘‘(J) A description of the digital 
asset issuer and the current number 
of employees of the digital asset 
issuer. 
‘‘(K) A description of any material 
transactions or relationships between 
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285 
the digital asset issuer and affiliated 
persons. 
‘‘(L) A description of exempt offer-
ings conducted within the past three 
years. 
‘‘(2) INFORMATION REQUIRED FOR PUR-
CHASERS.—A digital asset issuer shall dis-
close the information described under 
section 43 of the Securities Exchange Act 
of 1934 on a freely accessible public 
website. 
‘‘(3) ONGOING
DISCLOSURE
REQUIRE-
MENTS.—A digital asset issuer that has 
filed a statement under paragraph (1) to 
offer and sell a unit of a digital asset in 
reliance on section 4(a)(8) shall file the 
following with the Commission: 
‘‘(A) ANNUAL REPORTS.—An annual 
report that includes any material 
changes to the information described 
under paragraph (2) for the current 
fiscal year and for any fiscal year 
thereafter, unless the issuer is no 
longer obligated to file such annual 
report pursuant to paragraph (4). 
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‘‘(B) SEMIANNUAL REPORTS.—Along 
with each annual report required 
under subparagraph (A), and sepa-
rately six months thereafter, a report 
containing— 
‘‘(i) an updated description of 
the current state and timeline for 
the 
development 
of 
the 
blockchain system to which the 
digital asset relates, showing how 
and when the blockchain system 
intends or intended to be consid-
ered a functional network and a 
decentralized network; 
‘‘(ii) the amount of money 
raised by the digital asset issuer 
in reliance on section 4(a)(8), how 
much of that money has been 
spent, and the general categories 
and 
amounts 
on 
which 
that 
money has been spent; and 
‘‘(iii) any material changes to 
the information in the most re-
cent annual report. 
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287 
‘‘(C) CURRENT REPORTS.—A current 
report shall be filed with the Commis-
sion reflecting any material changes 
to the information previously re-
ported to the Commission by the dig-
ital asset issuer. 
‘‘(4) TERMINATION
OF
REPORTING
RE-
QUIREMENTS.— 
‘‘(A) IN GENERAL.—The ongoing re-
porting requirements under para-
graph (3) shall not apply to a digital 
asset issuer 180 days after the end of 
the covered fiscal year. 
‘‘(B) COVERED
FISCAL
YEAR
DE-
FINED.—In this paragraph, the term 
‘covered fiscal year’ means the first 
fiscal year of an issuer in which the 
blockchain system to which the dig-
ital asset relates is a functional net-
work and certified to be a decentral-
ized network under section 44 of the 
Securities Exchange Act of 1934. 
‘‘(b) REQUIREMENTS FOR INTERMEDIARIES.— 
‘‘(1) IN GENERAL.—A person acting as 
an intermediary in a transaction involv-
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288 
ing the offer or sale of a unit of a digital 
asset in reliance on section 4(a)(8) shall— 
‘‘(A) register with the Commission 
as a digital asset broker; and 
‘‘(B) be a member of a national se-
curities association registered under 
section 15A of the Securities Ex-
change Act of 1934 (15 U.S.C. 78o–3). 
‘‘(2) PURCHASER QUALIFICATION.— 
‘‘(A) IN GENERAL.—Each time, be-
fore accepting any commitment (in-
cluding any additional commitment 
from the same person), an inter-
mediary or digital asset issuer shall 
have a reasonable basis for believing 
that the purchaser satisfies the re-
quirements of section 4(a)(8). 
‘‘(B) 
RELIANCE
ON
PURCHASER’S 
REPRESENTATIONS.—For 
purposes 
of 
subparagraph (A), an intermediary or 
digital asset issuer may rely on a pur-
chaser’s representations concerning 
the purchaser’s annual income and 
net worth and the amount of the pur-
chaser’s other investments made, un-
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289 
less the intermediary or digital asset 
issuer has reason to question the reli-
ability of the representation. 
‘‘(C) RELIANCE ON INTERMEDIARY.— 
For purposes of determining whether 
a transaction meets the requirements 
described under subparagraph (A) 
through (C) of section 4(a)(8), a dig-
ital asset issuer may rely on the ef-
forts of an intermediary. 
‘‘(c) ADDITIONAL PROVISIONS.— 
‘‘(1) ACCEPTANCE OF WRITTEN OFFERS; 
SALES.—After an issuer files a statement 
under paragraph (1) to offer and sell a 
digital 
asset 
in 
reliance 
on 
section 
4(a)(8)— 
‘‘(A) written offers of the digital 
asset may be made; and 
‘‘(B) the issuer may sell the digital 
assets in reliance on section 4(a)(8), if 
such sales meet all other require-
ments. 
‘‘(2) SOLICITATION OF INTEREST.— 
‘‘(A) IN GENERAL.—At any time be-
fore the filing of a statement under 
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290 
paragraph (1), a digital asset issuer 
may communicate orally or in writing 
to determine whether there is any in-
terest in a contemplated offering. 
Such communications are deemed to 
be an offer of a unit of a digital asset 
for sale for purposes of the anti-fraud 
provisions of the Federal securities 
laws. No solicitation or acceptance of 
money or other consideration, nor of 
any commitment, binding or other-
wise, from any person is permitted 
until the statement is filed. 
‘‘(B) CONDITIONS.—In any commu-
nication described under subpara-
graph (A), the digital asset issuer 
shall— 
‘‘(i) state that no money or 
other consideration is being solic-
ited, and if sent in response, will 
not be accepted; 
‘‘(ii) state that no offer to buy 
a unit of a digital asset can be ac-
cepted and no part of the pur-
chase price can be received until 
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291 
the statement is filed and then 
only through an intermediary; 
and 
‘‘(iii) state that a person’s in-
dication of interest involves no 
obligation or commitment of any 
kind. 
‘‘(C) INDICATIONS
OF
INTEREST.— 
Any 
written 
communication 
de-
scribed under subparagraph (A) may 
include a means by which a person 
may indicate to the digital asset 
issuer that such person is interested 
in a potential offering. A digital asset 
issuer may require a name, address, 
telephone number, or email address 
in any response form included with a 
communication described under sub-
paragraph (A). 
‘‘(3) 
DISQUALIFICATION
PROVISIONS.— 
The Commission shall issue rules to 
apply 
the 
disqualification 
provisions 
under section 230.262 of title 17, Code of 
Federal Regulations, to the exemption 
provided under section 4(a)(8). 
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292 
‘‘(4) 
DIGITAL
ASSETS
DEEMED
RE-
STRICTED DIGITAL ASSET.—A unit of a dig-
ital asset acquired directly or indirectly 
from the digital asset issuer in reliance 
on the exemption provided under section 
4(a)(8) is deemed a restricted digital 
asset.’’. 
(b) ADDITIONAL EXEMPTIONS.— 
(1) CERTAIN
REGISTRATION
REQUIRE-
MENTS.—Section 12(g)(6) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78l(g)(6)) 
is amended by striking ‘‘under section 
4(6)’’ and inserting ‘‘under section 4(a)(6) 
or 4(a)(8)’’. 
(2) EXEMPTION
FROM
STATE
REGULA-
TION.—Section 18(b)(4) of the Securities 
Act of 1933 (15 U.S.C. 77r(b)(4)) is amend-
ed— 
(A) in section (B), by striking ‘‘sec-
tion 
4(4)’’ 
and 
inserting 
‘‘section 
4(a)(4)’’; 
(B) in section (C), by striking ‘‘sec-
tion 
4(6)’’ 
and 
inserting 
‘‘section 
4(a)(6)’’; 
(C) in subparagraph (F)— 
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293 
(i) by striking ‘‘section 4(2)’’ 
each place such term appears and 
inserting ‘‘section 4(a)(2)’’; 
(ii) by striking ‘‘or’’ at the end; 
(D) in subparagraph (G), by strik-
ing the period and inserting ‘‘; or’’; 
and 
(E) by adding at the end the fol-
lowing: 
‘‘(H) section 4(a)(8).’’. 
SEC. 202. REQUIREMENTS FOR OFFERS AND SALES OF CER-
TAIN DIGITAL ASSETS. 
Title I of the Securities Exchange Act of 
1934 (15 U.S.C. 78a et seq.) is amended by add-
ing at the end the following: 
‘‘SEC. 42. REQUIREMENTS FOR OFFERS AND SALES OF CER-
TAIN DIGITAL ASSETS. 
‘‘(a) OFFERS
AND SALES
OF CERTAIN RE-
STRICTED DIGITAL ASSETS.— 
‘‘(1) 
IN
GENERAL.—Notwithstanding 
any other provision of law, subject to 
paragraph (2), a restricted digital asset 
may be offered and sold on a digital asset 
trading system by any person other than 
a digital asset issuer if, at the time of 
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294 
such offer or sale, any blockchain system 
to which the restricted digital asset re-
lates is a functional network and the in-
formation described in section 43 has 
been certified and made publicly avail-
able for any blockchain system to which 
the restricted digital asset relates. 
‘‘(2) ADDITIONAL
RULES
FOR
RELATED 
PERSONS AND AFFILIATED PERSONS.—Except 
as provided under subsection (c), a re-
stricted digital asset owned by a related 
person or an affiliated person may only 
be offered or sold after 12 months after 
the later of— 
‘‘(A) the date on which such re-
stricted digital asset was acquired; or 
‘‘(B) the digital asset maturity 
date. 
‘‘(b) OFFERS AND SALES OF CERTAIN DIGITAL 
COMMODITIES.— 
‘‘(1) IN
GENERAL.—Subject to para-
graph (2), a digital commodity may be of-
fered and sold by any person. 
‘‘(2) RULES
FOR
RELATED
AND
AFFILI-
ATED PERSONS.—Except as provided under 
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295 
subsection (c), a digital commodity may 
only be offered or sold by a related per-
son or an affiliated person if— 
‘‘(A) the holder of the digital com-
modity owned the digital commodity 
while it was a restricted digital asset 
for 12 months after the later of— 
‘‘(i) the date on which such re-
stricted 
digital 
asset 
was 
ac-
quired; or 
‘‘(ii) the digital asset maturity 
date; 
‘‘(B) any blockchain system to 
which the digital commodity relates 
is certified to be a decentralized net-
work under section 44; and 
‘‘(C) the digital commodity is of-
fered or sold on or subject to the 
rules of a digital commodity exchange 
registered under section 5i of the 
Commodity Exchange Act. 
‘‘(3) NOT
AN
INVESTMENT
CONTRACT.— 
For purposes of the securities laws, an 
offer or sale of a digital commodity that 
does not violate paragraph (2) shall not 
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