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SEC. 304. CERTIFICATION OF CERTAIN DIGITAL ASSETS. 
Title I of the Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.), as amended by section 303, is further 
amended by adding at the end the following: 
‘‘SEC. 44. CERTIFICATION OF CERTAIN DIGITAL ASSETS. 
‘‘(a) CERTIFICATION.—Any person may certify to the 
Securities and Exchange Commission that the blockchain 
system to which a digital asset relates is a decentralized 
system. 
‘‘(b) FILING REQUIREMENTS.—A certification de-
scribed under subsection (a) shall be filed with the Com-
mission, and include— 
‘‘(1) information regarding the person making 
the certification; 
‘‘(2) a description of the blockchain system and 
the digital asset which relates to such blockchain 
system, including— 
‘‘(A) the operation of the blockchain sys-
tem; 
‘‘(B) the functionality of the related digital 
asset; 
‘‘(C) any decentralized governance system 
which relates to the blockchain system; and 
‘‘(D) the process to develop consensus or 
agreement within such decentralized governance 
system; 
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‘‘(3) a description of the development of the 
blockchain system and the digital asset which relates 
to the blockchain system, including— 
‘‘(A) a history of the development of the 
blockchain system and the digital asset which 
relates to such blockchain system; 
‘‘(B) a description of the issuance process 
for the digital asset which relates to the 
blockchain system; 
‘‘(C) information identifying the digital 
asset issuer of the digital asset which relates to 
the blockchain system; and 
‘‘(D) a list of any affiliated person related 
to the digital asset issuer; 
‘‘(4) an analysis of the factors on which such 
person based the certification that the blockchain 
system is a decentralized system, including— 
‘‘(A) an explanation of the protections and 
prohibitions available during the previous 12 
months against any one person being able to— 
‘‘(i) control or materially alter the 
blockchain system; 
‘‘(ii) exclude any other person from 
using or participating on the blockchain 
system; and 
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‘‘(iii) exclude any other person from 
participating in a decentralized governance 
system; 
‘‘(B) information regarding the beneficial 
ownership of the digital asset which relates to 
such blockchain system and the distribution of 
voting power in any decentralized governance 
system during the previous 12 months; 
‘‘(C) information regarding the history of 
upgrades to the source code for such blockchain 
system during the previous 3 months, includ-
ing— 
‘‘(i) a description of any consensus or 
agreement process utilized to process or 
approve changes to the source code; 
‘‘(ii) a list of any material changes to 
the source code, the purpose and effect of 
the changes, and the contributor of the 
changes, if known; and 
‘‘(iii) any changes to the source code 
made by the digital asset issuer, a related 
person, or an affiliated person; 
‘‘(D) information regarding any activities 
conducted to market the digital asset which re-
lates to the blockchain system during the pre-
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vious 3 months by the digital asset issuer or an 
affiliated person of the digital asset issuer; and 
‘‘(E) information regarding any issuance of 
a unit of the digital asset which relates to such 
blockchain system during the previous 12 
months; and 
‘‘(5) with respect to a blockchain system for 
which a certification has previously been rebutted 
under this section or withdrawn under section 5i(m) 
of the Commodity Exchange Act, specific informa-
tion relating to the analysis provided in subsection 
(f)(2) in connection with such rebuttal or such sec-
tion 5i(m)(1)(C) in connection with such withdrawal. 
‘‘(c) REBUTTABLE PRESUMPTION.—The Commission 
may rebut a certification described under subsection (a) 
with respect to a blockchain system if the Commission, 
within 60 days of receiving such certification, determines 
that the blockchain system is not a decentralized system. 
‘‘(d) CERTIFICATION REVIEW.— 
‘‘(1) IN GENERAL.—Any blockchain system that 
relates to a digital asset for which a certification has 
been made under subsection (a) shall be considered 
a decentralized system 60 days after the date on 
which the Commission receives a certification under 
subsection (a), unless the Commission notifies the 
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person who made the certification within such time 
that the Commission is staying the certification due 
to— 
‘‘(A) an inadequate explanation by the per-
son making the certification; or 
‘‘(B) any novel or complex issues which re-
quire additional time to consider. 
‘‘(2) PUBLIC NOTICE.—The Commission shall 
make the following available to the public and pro-
vide a copy to the Commodity Futures Trading 
Commission: 
‘‘(A) Each certification received under sub-
section (a). 
‘‘(B) Each stay of the Commission under 
this section, and the reasons therefore. 
‘‘(C) Any response from a person making 
a certification under subsection (a) to a stay of 
the certification by the Commission. 
‘‘(3) CONSOLIDATION.—The Commission may 
consolidate and treat as one submission multiple cer-
tifications made under subsection (a) for the same 
blockchain system which relates to a digital asset 
which are received during the review period provided 
under this subsection. 
‘‘(e) STAY OF CERTIFICATION.— 
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‘‘(1) IN GENERAL.—A notification by the Com-
mission pursuant to subsection (d)(1) shall stay the 
certification once for up to an additional 120 days 
from the date of the notification. 
‘‘(2) PUBLIC
COMMENT
PERIOD.—Before the 
end of the 60-day period described under subsection 
(d)(1), the Commission may begin a public comment 
period of at least 30 days in conjunction with a stay 
under this section. 
‘‘(f) DISPOSITION OF CERTIFICATION.— 
‘‘(1) IN GENERAL.—A certification made under 
subsection (a) shall— 
‘‘(A) become effective— 
‘‘(i) upon the publication of a notifica-
tion from the Commission to the person 
who made the certification that the Com-
mission does not object to the certification; 
or 
‘‘(ii) at the expiration of the certifi-
cation review period; and 
‘‘(B) not become effective upon the publi-
cation of a notification from the Commission to 
the person who made the certification that the 
Commission has rebutted the certification. 
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‘‘(2) DETAILED ANALYSIS INCLUDED WITH RE-
BUTTAL.—The Commission shall include, with each 
publication of a notification of rebuttal described 
under paragraph (1)(B), a detailed analysis of the 
factors on which the decision was based. 
‘‘(g) 
RECERTIFICATION.—With 
respect 
to 
a 
blockchain system for which a certification has been rebut-
ted under this section, no person may make a certification 
under subsection (a) with respect to such blockchain sys-
tem during the 90-day period beginning on the date of 
such rebuttal. 
‘‘(h) APPEAL OF REBUTTAL.— 
‘‘(1) IN GENERAL.—If a certification is rebut-
ted under this section, the person making such cer-
tification may appeal the decision to the United 
States Court of Appeals for the District of Colum-
bia, not later than 60 days after the notice of rebut-
tal is made. 
‘‘(2) REVIEW.—In an appeal under paragraph 
(1), the court shall have de novo review of the deter-
mination to rebut the certification.’’. 
SEC. 305. 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, 
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to the extent a provision of this title requires a rule-
making, 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 IV—REGISTRATION FOR 
DIGITAL 
ASSET 
INTER-
MEDIARIES AT THE SECURI-
TIES AND EXCHANGE COM-
MISSION 
SEC. 401. TREATMENT OF DIGITAL COMMODITIES AND 
OTHER DIGITAL ASSETS. 
(a) SECURITIES ACT OF 1933.—Section 2(a)(1) of 
the Securities Act of 1933 (15 U.S.C. 77b(a)(1)) is 
amended by adding at the end the following: ‘‘The term 
does not include a digital commodity or permitted pay-
ment stablecoin.’’. 
(b) SECURITIES EXCHANGE ACT OF 1934.—Section 
3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
78c(a)) is amended— 
(1) in paragraph (1), by adding at the end the 
following: ‘‘The term ‘exchange’ does not include a 
digital asset trading system or a blockchain protocol 
offering digital assets, or any person or group of 
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persons solely because of their development of such 
a blockchain protocol.’’; 
(2) in paragraph (2), by adding at the end the 
following: ‘‘A digital asset trading system is not a 
‘facility’ of an exchange.’’; 
(3) in paragraph (4)(A), by inserting ‘‘, other 
than restricted digital assets,’’ after ‘‘securities’’; 
(4) in paragraph (5)(A), by inserting ‘‘re-
stricted digital assets or’’ after ‘‘not including’’; 
(5) in paragraph (26) by inserting ‘‘(other than 
a notice-registered digital asset clearing agency)’’ 
after ‘‘or registered clearing agency’’; 
(6) in paragraph (28) by inserting ‘‘(other than 
a notice-registered digital asset clearing agency)’’ 
after ‘‘registered clearing agency’’; and 
(7) in paragraph (10), by adding at the end the 
following: ‘‘The term does not include a digital com-
modity or permitted payment stablecoin.’’. 
(c) INVESTMENT ADVISERS ACT OF 1940.—Section 
202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 
80b–2) is amended— 
(1) in paragraph (18), by adding at the end the 
following: ‘‘The term does not include a digital com-
modity or permitted payment stablecoin.’’; 
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(2) by redesignating the second paragraph (29) 
(relating to commodity pools) as paragraph (31); 
(3) by adding at the end, the following: 
‘‘(32) DIGITAL
ASSET-RELATED
TERMS.—The 
terms ‘digital commodity’ and ‘permitted payment 
stablecoin’ have the meaning given those terms, re-
spectively, under section 2(a) of the Securities Act 
of 1933 (15 U.S.C. 77b(a)).’’. 
(d) INVESTMENT COMPANY ACT OF 1940.—Section 
2(a) of the Investment Company Act of 1940 (15 U.S.C. 
80a–2) is amended— 
(1) in paragraph (36), by adding at the end the 
following: ‘‘The term does not include a digital com-
modity or permitted payment stablecoin.’’; and 
(2) by adding at the end, the following: 
‘‘(55) DIGITAL
ASSET-RELATED
TERMS.—The 
terms ‘digital commodity’ and ‘permitted payment 
stablecoin’ have the meaning given those terms, re-
spectively, under section 2(a) of the Securities Act 
of 1933 (15 U.S.C. 77b(a)).’’. 
SEC. 
402. 
AUTHORITY 
OVER 
PERMITTED 
PAYMENT 
STABLECOINS AND RESTRICTED DIGITAL AS-
SETS. 
(a) IN GENERAL.—Section 10 of the Securities Ex-
change Act of 1934 (15 U.S.C. 78j) is amended— 
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(1) by moving subsection (c) so as to appear 
after subsection (b); 
(2) by designating the undesignated matter at 
the end of that section as subsection (d); and 
(3) by adding at the end the following: 
‘‘(e)(1) Rules promulgated under subsection (b) that 
prohibit fraud, manipulation, or insider trading (but not 
rules imposing or specifying reporting or recordkeeping re-
quirements, procedures, or standards as prophylactic 
measures against fraud, manipulation, or insider trading), 
and judicial precedents decided under subsection (b) and 
rules promulgated thereunder that prohibit fraud, manip-
ulation, or insider trading, shall apply with respect to per-
mitted payment stablecoin transactions and restricted dig-
ital assets transactions engaged in by a broker, dealer, 
digital asset broker, or digital asset dealer or through an 
alternative trading system or digital asset trading system 
to the same extent as they apply to securities transactions. 
‘‘(2) Judicial precedents decided under section 17(a) 
of the Securities Act of 1933 and sections 9, 15, 16, 20, 
and 21A of this title, and judicial precedents decided 
under applicable rules promulgated under such sections, 
shall apply to permitted payment stablecoins and re-
stricted digital assets with respect to those circumstances 
in which the permitted payment stablecoins or restricted 
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digital assets are brokered, traded, or custodied by a 
broker, dealer, digital asset broker, digital asset dealer, 
or through an alternative trading system or digital asset 
trading system to the same extent as they apply to securi-
ties. 
‘‘(3) Nothing in this subsection may be construed to 
provide the Commission authority to make any rule, regu-
lation, or requirement or impose any obligation or limita-
tion on a permitted payment stablecoin issuer or a digital 
asset issuer regarding any aspect of the operations of a 
permitted payment stablecoin issuer, a digital asset issuer, 
a permitted payment stablecoin, or a restricted digital 
asset.’’. 
(b) 
TREATMENT
OF
PERMITTED
PAYMENT 
STABLECOINS.—Title I of the Securities Exchange Act of 
1934 (15 U.S.C. 78a et seq.), as amended by section 404, 
is amended by inserting after section 6B the following: 
‘‘SEC. 6C. TREATMENT OF TRANSACTIONS IN PERMITTED 
PAYMENT STABLECOINS. 
‘‘(a) AUTHORITY TO BROKER, TRADE, AND CUSTODY 
PERMITTED PAYMENT STABLECOINS.—Permitted pay-
ment stablecoins may be brokered, traded, or custodied by 
a broker, dealer, digital asset broker, or digital asset deal-
er or through an alternative trading system or digital asset 
trading system. 
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‘‘(b) COMMISSION JURISDICTION.—The Commission 
shall only have jurisdiction over a transaction in a per-
mitted payment stablecoin with respect to those cir-
cumstances in which a permitted payment stablecoin is 
brokered, traded, or custodied— 
‘‘(1) by a broker, dealer, digital asset broker, or 
digital asset dealer; or 
‘‘(2) through an alternative trading system or 
digital asset trading system. 
‘‘(c) LIMITATION.—Subsection (b) shall only apply to 
a transaction described in subsection (b) for the purposes 
of regulating the offer, execution, solicitation, or accept-
ance of a permitted payment stablecoin in those cir-
cumstances in which the permitted payment stablecoin is 
brokered, traded, or custodied— 
‘‘(1) by a broker, dealer, digital asset broker, or 
digital asset dealer; or 
‘‘(2) through an alternative trading system or 
digital asset trading system.’’. 
SEC. 403. REGISTRATION OF DIGITAL ASSET TRADING SYS-
TEMS. 
Section 6 of the Securities Exchange Act of 1934 (15 
U.S.C. 78f) is amended by adding at the end the following: 
‘‘(m) DIGITAL ASSET TRADING SYSTEM.— 
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‘‘(1) IN GENERAL.—It shall be unlawful for any 
digital asset trading system to make use of the mails 
or any means or instrumentality of interstate com-
merce within or subject to the jurisdiction of the 
United States to effect any transaction in a re-
stricted digital asset, unless such digital asset trad-
ing system is registered with the Commission. 
‘‘(2) APPLICATION.—A person desiring to reg-
ister as a digital asset trading system shall submit 
to the Commission an application in such form and 
containing such information as the Commission may 
require for the purpose of making the determina-
tions required for approval. 
‘‘(3) EXEMPTIONS.—A digital asset trading sys-
tem that offers or seeks to offer at least one re-
stricted digital asset shall not be required to register 
under this section (and paragraph (1) shall not 
apply to such digital asset trading system) if the 
trading system satisfies any exemption contained on 
a list of exemptions prepared by the Commission to 
be as close as practicable to those exemptions set 
forth in section 240.3b–16(b) of title 17, Code of 
Federal Regulations, applicable to the definition of 
an exchange. 
‘‘(4) ADDITIONAL REGISTRATIONS.— 
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‘‘(A) WITH THE COMMISSION.— 
‘‘(i) IN GENERAL.—A registered dig-
ital asset trading system shall be permitted 
to maintain any other registration with the 
Commission relating to the other activities 
of the registered digital asset trading sys-
tem, including as a— 
‘‘(I) national securities exchange; 
‘‘(II) broker; 
‘‘(III) dealer; 
‘‘(IV) alternative trading system, 
pursuant to part 242 of title 17, Code 
of Federal Regulations, as in effect on 
the date of enactment of this sub-
section; 
‘‘(V) digital asset broker; or 
‘‘(VI) digital asset dealer. 
‘‘(ii) RULEMAKING.—The Commission 
shall prescribe rules for an entity with 
multiple 
registrations 
described 
under 
clause (i) to exempt the entity from dupli-
cative, conflicting, or unduly burdensome 
provisions of this Act and the rules under 
this Act, to the extent such an exemption 
would protect investors, maintain fair, or-
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derly, and efficient markets, and facilitate 
capital formation. 
‘‘(B) WITH
THE
COMMODITY
FUTURES 
TRADING
COMMISSION.—A registered digital 
asset trading system shall be permitted to 
maintain a registration with the Commodity 
Futures Trading Commission as a digital com-
modity exchange to offer contracts of sale for 
digital commodities.’’. 
SEC. 404. REQUIREMENTS FOR DIGITAL ASSET TRADING 
SYSTEMS. 
Title I of the Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.) is amended by inserting after section 
6 the following: 
‘‘SEC. 6A. REQUIREMENTS FOR DIGITAL ASSET TRADING 
SYSTEMS. 
‘‘(a) HOLDING OF CUSTOMER ASSETS.— 
‘‘(1) QUALIFIED
DIGITAL
ASSET
CUSTODIAN 
REQUIRED.—A digital asset trading system shall 
hold customer restricted digital assets with a quali-
fied digital asset custodian described under section 
6B. 
‘‘(2) CUSTODY
PROHIBITED.—A digital asset 
trading system, in its capacity as such, may not hold 
custody of customer money, assets, or property. 
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‘‘(3) CUSTODY IN OTHER CAPACITY.—Nothing 
in this Act may be construed to prohibit a person 
registered as a digital asset trading system from 
holding custody of customer money, assets, or prop-
erty in any other permitted capacity, including as a 
digital asset broker, digital asset dealer, or qualified 
digital asset custodian in compliance with the re-
quirements of this Act. 
‘‘(b) RULEMAKING.—The Commission shall prescribe 
rules for digital asset trading systems relating to the fol-
lowing: 
‘‘(1) NOTICE.—Notice to the Commission of the 
initial operation of a digital asset trading system or 
any material change to the operation of the digital 
asset trading system. 
‘‘(2) ORDER
DISPLAY.—The thresholds at 
which a digital asset trading system is required to 
display the orders of the digital asset trading sys-
tem, and the manner of such display. 
‘‘(3) FAIR ACCESS.—The thresholds at which a 
digital asset trading system is required to have poli-
cies regarding providing fair access to the digital 
asset trading system. 
‘‘(4) CAPACITY, INTEGRITY, AND SECURITY OF 
AUTOMATED SYSTEMS.—Policies and procedures rea-
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sonably designed to ensure the capacity, integrity, 
and security of the digital asset trading system, tak-
ing into account the particular nature of digital 
asset trading systems. 
‘‘(5) EXAMINATIONS, INSPECTIONS, AND INVES-
TIGATIONS.—The examination and inspection of the 
premises, systems, and records of the digital asset 
trading system by the Commission or by a self-regu-
latory organization of which such digital asset trad-
ing system is a member. 
‘‘(6) RECORDKEEPING.—The making, keeping 
current, and preservation of records related to trad-
ing activity on the digital asset trading system. 
‘‘(7) REPORTING.—The reporting of trans-
actions in digital assets that occur through the dig-
ital asset trading system. 
‘‘(8) PROCEDURES.—The establishment of ade-
quate written safeguards and written procedures to 
protect confidential trading information. 
‘‘(c) NAME REQUIREMENT.—A digital asset trading 
system may not use the word ‘exchange’ in the name of 
the digital asset trading system, unless the digital asset 
trading system— 
‘‘(1) is operated by a registered national securi-
ties exchange; and 
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‘‘(2) is clearly indicated as being provided out-
side of the system’s capacity as a national securities 
exchange. 
‘‘SEC. 6B. REQUIREMENTS FOR QUALIFIED DIGITAL ASSET 
CUSTODIANS. 
‘‘(a) IN GENERAL.—A digital asset custodian is a 
qualified digital asset custodian if the digital asset custo-
dian complies with the requirements of this section. 
‘‘(b) SUPERVISION REQUIREMENT.—A digital asset 
custodian that is not subject to supervision and examina-
tion by an appropriate Federal banking agency, the Na-
tional Credit Union Administration, the Commodity Fu-
tures Trading Commission, or the Securities and Ex-
change Commission shall be subject to adequate super-
vision and appropriate regulation by— 
‘‘(1) a State bank supervisor (within the mean-
ing of section 3 of the Federal Deposit Insurance 
Act); 
‘‘(2) a State credit union supervisor, as defined 
under section 6003 of the Anti-Money Laundering 
Act of 2020; or 
‘‘(3) an appropriate foreign governmental au-
thority in the home country of the digital asset cus-
todian. 
‘‘(c) OTHER REQUIREMENTS.— 
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‘‘(1) NOT OTHERWISE PROHIBITED.—The dig-
ital asset custodian has not been prohibited by a su-
pervisor of the digital asset custodian from engaging 
in an activity with respect to the custody and safe-
keeping of digital assets. 
‘‘(2) INFORMATION SHARING.— 
‘‘(A) IN GENERAL.—A digital asset custo-
dian shall share information with the Commis-
sion on request and comply with such require-
ments for periodic sharing of information re-
garding customer accounts that the digital asset 
custodian holds on behalf of an entity registered 
with the Commission as the Commission deter-
mines by rule are reasonably necessary to effec-
tuate any of the provisions, or to accomplish 
any of the purposes, of this Act. 
‘‘(B) PROVISION OF INFORMATION.—Any 
entity that is subject to regulation and exam-
ination by an appropriate Federal banking 
agency may satisfy any information request de-
scribed in subparagraph (A) by providing the 
Commission with a detailed listing, in writing, 
of the restricted digital assets of a customer 
within the custody or use of the entity. 
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‘‘(d) ADEQUATE SUPERVISION
AND APPROPRIATE 
REGULATION.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(b), the terms ‘adequate supervision’ and ‘appro-
priate regulation’ mean such minimum standards for 
supervision and regulation as are reasonably nec-
essary to protect the digital assets of customers of 
an entity registered with the Commission, including 
standards relating to the licensing, examination, and 
supervisory processes that require the digital asset 
custodian to, at a minimum— 
‘‘(A) receive a review and evaluation of 
ownership, character and fitness, conflicts of in-
terest, business model, financial statements, 
funding resources, and policies and procedures 
of the digital asset custodian; 
‘‘(B) hold capital sufficient for the finan-
cial integrity of the digital asset custodian; 
‘‘(C) protect customer assets; 
‘‘(D) establish and maintain books and 
records regarding the business of the digital 
asset custodian; 
‘‘(E) submit financial statements and au-
dited financial statements to the applicable su-
pervisor described in subsection (b); 
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‘‘(F) provide disclosures to the applicable 
supervisor described in subsection (b) regarding 
actions, proceedings, and other items as deter-
mined by such supervisor; 
‘‘(G) maintain and enforce policies and 
procedures for compliance with applicable State 
and Federal laws, including those related to 
anti-money laundering and cybersecurity; 
‘‘(H) establish a business continuity plan 
to ensure functionality in cases of disruption; 
and 
‘‘(I) establish policies and procedures to re-
solve complaints. 
‘‘(2) RULEMAKING WITH RESPECT TO DEFINI-
TIONS.— 
‘‘(A) IN GENERAL.—For purposes of this 
section, the Commission may, by rule, further 
define the terms ‘adequate supervision’ and ‘ap-
propriate regulation’ as necessary in the public 
interest, as appropriate for the protection of in-
vestors, and consistent with the purposes of this 
Act. 
‘‘(B) CONDITIONAL TREATMENT OF CER-
TAIN CUSTODIANS BEFORE RULEMAKING.—Be-
fore the effective date of a rulemaking under 
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subparagraph (A), a trust company is deemed 
subject to adequate supervision and appropriate 
regulation if— 
‘‘(i) the trust company is expressly 
permitted by a State bank supervisor to 
engage in the custody and safekeeping of 
digital assets; 
‘‘(ii) the State bank supervisor has es-
tablished licensing, examination, and su-
pervisory processes that require the trust 
company to, at a minimum, meet the con-
ditions described in subparagraphs (A) 
through (I) of paragraph (1); and 
‘‘(iii) the trust company is in good 
standing with its State bank supervisor. 
‘‘(C) TRANSITION
PERIOD
FOR
CERTAIN 
CUSTODIANS.—In implementing the rulemaking 
under subparagraph (A), the Commission shall 
provide a transition period of not less than two 
years for any trust company which is deemed 
subject to adequate supervision and appropriate 
regulation under subparagraph (B) on the ef-
fective date of the rulemaking.’’. 
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SEC. 405. REGISTRATION OF DIGITAL ASSET BROKERS AND 
DIGITAL ASSET DEALERS. 
The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.) is amended by inserting after section 15G the fol-
lowing: 
‘‘SEC. 15H. REGISTRATION OF DIGITAL ASSET BROKERS 
AND DIGITAL ASSET DEALERS. 
‘‘(a) REGISTRATION.— 
‘‘(1) IN GENERAL.—It shall be unlawful for any 
digital asset broker or digital asset dealer (other 
than a natural person associated with a registered 
digital asset broker or registered digital asset dealer, 
and other than such a digital asset broker or digital 
asset dealer whose business is exclusively intrastate 
and who does not make use of a digital asset trading 
system) to make use of the mails or any means or 
instrumentality of interstate commerce to effect any 
transactions in, or to induce or attempt to induce 
the purchase or sale of, any restricted digital asset 
unless such digital asset broker or digital asset deal-
er is registered in accordance with this section. 
‘‘(2) APPLICATION.—A person desiring to reg-
ister as a digital asset broker or digital asset dealer 
shall submit to the Commission an application in 
such form and containing such information as the 
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Commission may require for the purpose of making 
the determinations required for approval. 
‘‘(b) NATIONAL SECURITIES ASSOCIATION MEMBER-
SHIP.— 
‘‘(1) IN GENERAL.—A digital asset broker or 
digital asset dealer may not register or maintain reg-
istration under this section unless such digital asset 
broker or digital asset dealer is a member of a na-
tional securities association registered under section 
15A. 
‘‘(2) TREATMENT UNDER SECTION 15A.— 
‘‘(A) IN GENERAL.—For purposes of sec-
tion 15A— 
‘‘(i) the term ‘broker’ includes a dig-
ital asset broker and the term ‘registered 
broker’ includes a registered digital asset 
broker; 
‘‘(ii) the term ‘dealer’ includes a dig-
ital asset dealer and the term ‘registered 
dealer’ includes a registered digital asset 
dealer; and 
‘‘(iii) the term ‘security’ includes a re-
stricted digital asset. 
‘‘(B) 
CLARIFICATION.—Notwithstanding 
subparagraph (A), a national securities associa-
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tion shall, with respect to the restricted digital 
asset activities of a digital asset broker or a 
digital asset dealer, only examine for and en-
force against such digital asset broker or digital 
asset dealer— 
‘‘(i) rules of such national securities 
association written specifically for digital 
asset brokers or digital asset dealers; 
‘‘(ii) the provisions of the Financial 
Innovation and Technology for the 21st 
Century Act and rules issued thereunder 
applicable to digital asset brokers and dig-
ital asset dealers; and 
‘‘(iii) the provisions of the securities 
laws and the rules thereunder applicable to 
digital asset brokers and digital asset deal-
ers. 
‘‘(c) ADDITIONAL REGISTRATIONS WITH THE COM-
MISSION.— 
‘‘(1) IN GENERAL.—A registered digital asset 
broker or registered digital asset dealer shall be per-
mitted to maintain any other registration with the 
Commission relating to the other activities of the 
registered digital asset broker or registered digital 
asset dealer, including as— 
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‘‘(A) a national securities exchange; 
‘‘(B) a broker; 
‘‘(C) a dealer; 
‘‘(D) an alternative trading system, pursu-
ant to part 242 of title 17, Code of Federal 
Regulations, as in effect on the date of enact-
ment of this section; or 
‘‘(E) a digital asset trading system. 
‘‘(2) RULEMAKING.—The Commission shall pre-
scribe rules for an entity with multiple registrations 
described under paragraph (1) to exempt the entity 
from duplicative, conflicting, or unduly burdensome 
provisions of this Act and the rules under this Act, 
to the extent such an exemption would protect inves-
tors, maintain fair, orderly, and efficient markets, 
and facilitate capital formation. 
‘‘(3) SELF-REGULATORY ORGANIZATIONS.—The 
Commission shall require any self-regulatory organi-
zation with a registered digital asset broker or reg-
istered digital asset dealer as a member to provide 
such rules as may be necessary to further compli-
ance with this section, protect investors, maintain 
fair, orderly, and efficient markets, and facilitate 
capital formation. 
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‘‘(d) ADDITIONAL REGISTRATIONS WITH THE COM-
MODITY FUTURES TRADING COMMISSION.—A registered 
digital asset broker or registered digital asset dealer shall 
be permitted to maintain a registration with the Com-
modity Futures Trading Commission as a digital com-
modity broker or digital commodity dealer, to list or trade 
contracts of sale for digital commodities.’’. 
SEC. 406. REQUIREMENTS OF DIGITAL ASSET BROKERS 
AND DIGITAL ASSET DEALERS. 
(a) IN GENERAL.—Section 15H of the Securities Ex-
change Act of 1934, as added by section 405, is amended 
by adding at the end the following: 
‘‘(e) ANTI-FRAUD.—No digital asset broker or digital 
asset dealer shall make use of the mails or any means or 
instrumentality of interstate commerce to effect any trans-
action in, or to induce or attempt to induce the purchase 
or sale of, any restricted digital asset by means of any 
manipulative, deceptive, or other fraudulent device or con-
trivance. 
‘‘(f) HOLDING OF CUSTOMER ASSETS.— 
‘‘(1) IN GENERAL.—A digital asset broker or 
digital asset dealer shall hold customer money, as-
sets, and property in a manner to minimize the risk 
of loss to the customer or unreasonable delay in the 
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access to the money, assets, and property of the cus-
tomer. 
‘‘(2) QUALIFIED
DIGITAL
ASSET
CUSTODIAN 
REQUIRED.—A digital asset broker or digital asset 
dealer shall hold customer restricted digital assets 
described in paragraph (1) with a qualified digital 
asset custodian described under section 6B. 
‘‘(3) SEGREGATION OF FUNDS.— 
‘‘(A) IN GENERAL.—A digital asset broker 
or digital asset dealer shall treat and deal with 
all money, assets, and property held for a cus-
tomer of the digital asset broker or digital asset 
dealer, or that accrues to a customer as a result 
of trading in restricted digital assets, as belong-
ing to the customer. 
‘‘(B) COMMINGLING PROHIBITED.—Money, 
assets, and property of a customer described in 
subparagraph (A) shall be separately accounted 
for and shall not be commingled with the funds 
of the digital asset broker or digital asset dealer 
or be used to margin, secure, or guarantee any 
trades of any person other than the customer of 
the digital asset broker or digital asset dealer 
for whom the same are held. 
‘‘(4) EXCEPTIONS.— 
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‘‘(A) USE OF FUNDS.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
paragraph (4), money, assets, and property 
of customers of a digital asset broker or 
digital asset dealer described in paragraph 
(4) may be maintained and deposited in 
the same account or accounts with any 
bank, trust company, or qualified digital 
asset custodian described under section 
6B, if the money, assets, and property re-
main segregated from the money, assets, 
and property of the digital asset broker or 
digital asset dealer. 
‘‘(ii) WITHDRAWAL.—Notwithstanding 
paragraph (4), such share of the money, 
assets, and property described in para-
graph (4) as in the normal course of busi-
ness shall be necessary to transfer, adjust, 
or settle a restricted digital asset trans-
action pursuant to a customer’s instruction 
(standing or otherwise) may be withdrawn 
and applied to such purposes, including the 
withdrawal and payment of commissions, 
brokerage, interest, taxes, storage, and 
other charges lawfully accruing in connec-
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tion with a restricted digital asset trans-
action. 
‘‘(iii) COMMISSION
ACTION.—In ac-
cordance with such terms and conditions 
as the Commission may prescribe by rule, 
regulation, or order, any money, assets, or 
property of a customer of a digital asset 
broker or digital asset dealer described in 
paragraph (4) may be commingled and de-
posited as provided in this section with any 
other money, assets, or property received 
by the digital asset broker or digital asset 
dealer and required by the Commission to 
be separately accounted for and treated 
and dealt with as belonging to the cus-
tomer of the digital asset broker or digital 
asset dealer. 
‘‘(B) 
PARTICIPATION
IN
BLOCKCHAIN 
SERVICES.— 
‘‘(i) IN GENERAL.—A customer shall 
have the right to waive the restrictions in 
paragraph (4) for any unit of a digital 
asset to be used under clause (ii), by af-
firmatively electing, in writing to the dig-
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ital asset broker or digital asset dealer, to 
waive the restrictions. 
‘‘(ii) USE OF FUNDS.—Customer dig-
ital assets removed from segregation under 
clause (i) may be pooled and used by the 
digital asset broker or digital asset dealer 
or its designee to provide a blockchain 
service for a blockchain system to which 
the unit of the digital asset removed from 
segregation under clause (i) relates. 
‘‘(iii) LIMITATIONS.— 
‘‘(I) IN GENERAL.—The Commis-
sion may, by rule, establish notice and 
disclosure 
requirements, 
and 
any 
other limitations and rules related to 
the waiving of any restrictions under 
this subparagraph that are reasonably 
necessary to protect customers. 
‘‘(II) 
CUSTOMER
CHOICE.—A 
digital asset broker or digital asset 
dealer may not require a waiver from 
a customer described in clause (i) as 
a condition of doing business with the 
digital asset broker or digital asset 
dealer. 
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‘‘(iv) 
BLOCKCHAIN
SERVICE
DE-
FINED.—In this subparagraph, the term 
‘blockchain service’ means any activity re-
lating to validating transactions on a 
blockchain system, providing security for a 
blockchain system, or other similar activity 
required for the ongoing operation of a 
blockchain system. 
‘‘(5) FURTHER LIMITATIONS.—No person shall 
treat or deal with a restricted digital asset held on 
behalf of any customer pursuant to paragraph (4) by 
utilizing any unit of such restricted digital asset to 
participate in a blockchain service (as defined in 
paragraph (5)(B)(iv)) or a decentralized governance 
system associated with the restricted digital asset or 
the blockchain system to which the restricted digital 
asset relates in any manner other than that which 
is expressly directed by the customer from which 
such unit of a restricted digital asset was received. 
‘‘(g) CAPITAL REQUIREMENTS.— 
‘‘(1) IN
GENERAL.—Each registered digital 
asset broker and registered digital asset dealer shall 
meet such minimum capital requirements as the 
Commission may prescribe to ensure that the digital 
asset broker or digital asset dealer is able to— 
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‘‘(A) conduct an orderly wind-down of the 
activities of the digital asset broker or digital 
asset dealer; and 
‘‘(B) fulfill the customer obligations of the 
digital asset broker or digital asset dealer. 
‘‘(2) CALCULATION.—For purposes of any 
Commission rule or order adopted under this section 
or any interpretation thereof regulating a digital 
asset broker or digital asset dealer’s financial re-
sponsibility obligations and capital requirements, a 
registered digital asset broker or digital asset dealer 
that maintains control of customer digital assets in 
a manner that satisfies the rules issued by the Com-
mission under subsection (f)(2) shall not be required 
to include the custodial obligation with respect to 
such digital assets as liabilities or such digital assets 
as assets of the digital asset broker or digital asset 
dealer. 
‘‘(h) REPORTING AND RECORDKEEPING.—Each reg-
istered digital asset broker and digital asset 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 asset broker or digital asset dealer; 
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‘‘(2) shall keep books and records in such form 
and manner and for such period as may be pre-
scribed by the Commission by rule or regulation; and 
‘‘(3) shall keep the books and records open to 
inspection and examination by any representative of 
the Commission.’’. 
(b) DEFINITION
OF CLEARING AGENCY.—Section 
3(a)(23)(B) of the Securities Exchange Act of 1934 (15 
U.S.C. 78c(a)(23)(B)) is amended by inserting ‘‘digital 
asset broker, digital asset dealer,’’ after ‘‘broker, dealer,’’ 
each place such term appears. 
SEC. 407. RULES RELATED TO CONFLICTS OF INTEREST. 
The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.) is amended by inserting after section 10D the fol-
lowing: 
‘‘SEC. 10E. CONFLICTS OF INTEREST RELATED TO DIGITAL 
ASSETS. 
‘‘Each registered digital asset trading system, reg-
istered digital asset broker, registered digital asset dealer, 
and notice-registered digital asset clearing agency shall es-
tablish, maintain, and enforce written policies and proce-
dures reasonably designed, taking into consideration the 
nature of such person’s business, to mitigate any conflicts 
of interest and transactions or arrangements with affili-
ates.’’. 
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SEC. 408. TREATMENT OF CERTAIN DIGITAL ASSETS IN 
CONNECTION WITH FEDERALLY REGULATED 
INTERMEDIARIES. 
Section 18(b) of the Securities Act of 1933 (15 
U.S.C. 77r(b)) is amended by adding at the end the fol-
lowing: 
‘‘(5) EXEMPTION FOR CERTAIN DIGITAL ASSETS 
IN
CONNECTION
WITH
FEDERALLY
REGULATED 
INTERMEDIARIES.—A restricted digital asset is 
treated as a covered security with respect to a trans-
action that is exempt from registration under this 
Act when it is— 
‘‘(A) 
brokered, 
traded, 
custodied, 
or 
cleared by a digital asset broker or digital asset 
dealer registered under section 15H of the Se-
curities Exchange Act of 1934; or 
‘‘(B) traded through a digital asset trading 
system.’’. 
SEC. 409. EXCLUSION FOR DECENTRALIZED FINANCE AC-
TIVITIES. 
The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.), as amended by section 405, is further amended 
by inserting after section 15H the following: 
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‘‘SEC. 15I. DECENTRALIZED FINANCE ACTIVITIES NOT SUB-
JECT TO THIS ACT. 
‘‘(a) IN GENERAL.—Notwithstanding any other pro-
vision of this Act, a person shall not be subject to this 
Act and the regulations thereunder based on the person 
directly or indirectly engaging in any of the following ac-
tivities, whether singly or in combination thereof, in rela-
tion to the operation of a blockchain system or in relation 
to decentralized finance (as defined in section 605(d) of 
the Financial Innovation and Technology for the 21st 
Century Act): 
‘‘(1) Compiling network transactions, operating 
or participating in a liquidity pool, relaying, search-
ing, sequencing, validating, or acting in a similar ca-
pacity with respect to 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 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. 
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‘‘(5) Developing, publishing, constituting, ad-
ministering, maintaining, or otherwise distributing 
software or systems that create or deploy a hard-
ware or software wallet or other system facilitating 
an individual user’s own personal ability to keep, 
safeguard, or custody such user’s digital assets or 
related private keys. 
‘‘(b) EXCEPTIONS.—Subsection (a) shall not be con-
strued to apply to the anti-fraud and anti-manipulation 
authorities of the Commission.’’. 
SEC. 410. REGISTRATION AND REQUIREMENTS FOR NO-
TICE-REGISTERED DIGITAL ASSET CLEARING 
AGENCIES. 
Section 17A(b) of the Securities Exchange Act of 
1934 (15 U.S.C. 78q-1(b)) is amended— 
(1) in subsection (1), by inserting after the first 
sentence the following: ‘‘The previous sentence shall 
not apply to a notice-registered digital asset clearing 
agency with respect to a restricted digital asset.’’; 
and 
(2) by adding at the end the following: 
‘‘(9) REGISTRATION AND REQUIREMENTS FOR 
NOTICE-REGISTERED
DIGITAL
ASSET
CLEARING 
AGENCY.— 
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tive upon publication by the Commission of 
such notice, which shall occur no later than 
14 days after the date of such filing. 
‘‘(ii) INITIAL REGISTRATIONS.— 
‘‘(I) IN
GENERAL.—A person 
registered as a notice-registered dig-
ital asset clearing agency before the 
date on which the Commission adopts 
rules under subparagraph (D) shall, 
after such rules are adopted, renew 
the person’s registration pursuant to 
such rules. 
‘‘(II) 
EXCEPTION.—Notwith-
standing subclause (I), a person reg-
istered as a notice-registered digital 
asset clearing agency before the end 
of the 2-year period beginning on the 
date of the enactment of this section 
shall have such registration remain in 
effect until the end of such 2-year pe-
riod. 
‘‘(D) 
RULEMAKING.—The 
Commission 
may adopt rules, which may not take effect 
until at least 360 days following the date of en-
actment of this paragraph, with regard to the 
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activities of notice-registered digital asset clear-
ing agencies, taking into account the nature of 
restricted digital assets.’’. 
SEC. 411. TREATMENT OF CUSTODY ACTIVITIES BY BANK-
ING INSTITUTIONS. 
(a) TREATMENT OF CUSTODY ACTIVITIES.—The ap-
propriate Federal banking agency (as defined under sec-
tion 3 of the Federal Deposit Insurance Act (12 U.S.C. 
1813)), the National Credit Union Administration (in the 
case of a credit union), and the Securities and Exchange 
Commission may not require, or take supervisory action 
that would cause, a depository institution, national bank, 
Federal credit union, State credit union, or trust company, 
or any affiliate (as such term is defined under section 2 
of the Bank Holding Company Act of 1956) thereof— 
(1) to include assets held in custody or safe-
keeping, or the assets associated with a cryp-
tographic key held in custody or safekeeping, as a li-
ability on such institution’s financial statement or 
balance sheet, except that cash held for a third party 
by such institution that is commingled with the gen-
eral assets of such institution may be reflected as a 
liability on a financial statement or balance sheet; 
(2) to hold additional regulatory capital against 
assets in custody or safekeeping, or the assets asso-
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ciated with a cryptographic key held in custody or 
safekeeping, except as necessary to mitigate against 
operational risks inherent with the custody or safe-
keeping services, as determined by— 
(A) the appropriate Federal banking agen-
cy; 
(B) the National Credit Union Administra-
tion (in the case of a credit union); 
(C) a State bank supervisor (as defined 
under section 3 of the Federal Deposit Insur-
ance Act (12 U.S.C. 1813)); or 
(D) a State credit union supervisor (as de-
fined under section 6003 of the Anti-Money 
Laundering Act of 2020); 
(3) to recognize a liability for any obligations 
related to activities or services performed for digital 
assets with respect to which such institution does 
not have beneficial ownership if that liability would 
exceed the expense recognized in the income state-
ment as a result of the corresponding obligation. 
(b) DEFINITIONS.—In this section: 
(1) DEPOSITORY INSTITUTION.—The term ‘‘de-
pository institution’’ has the meaning given that 
term under section 3 of the Federal Deposit Insur-
ance Act. 
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(2) CREDIT UNION TERMS.—The terms ‘‘Fed-
eral credit union’’ and ‘‘State credit union’’ have the 
meaning given those terms, respectively, under sec-
tion 101 of the Federal Credit Union Act. 
SEC. 412. EFFECTIVE DATE; ADMINISTRATION. 
Except as otherwise provided under this title, this 
title and the amendments made by this title shall take ef-
fect 360 days after the date of enactment of this Act, ex-
cept 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. 
SEC. 413. DISCRETIONARY SURPLUS FUND. 
(a) IN
GENERAL.—The dollar amount specified 
under section 7(a)(3)(A) of the Federal Reserve Act (12 
U.S.C. 289(a)(3)(A)) is reduced by $15,000,000. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect on September 30, 2034. 
SEC. 414. STUDIES ON FOREIGN ADVERSARY PARTICIPA-
TION. 
(a) IN GENERAL.—The Secretary of the Treasury, in 
consultation with the Commodity Futures Trading Com-
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mission and the Securities and Exchange Commission, 
shall, not later than 1 year after date of the enactment 
of this section, conduct a study and submit a report to 
the relevant congressional committees that— 
(1) identifies any digital asset registrants which 
are owned by governments of foreign adversaries; 
(2) determines whether any governments of for-
eign adversaries are collecting personal data or trad-
ing data about United States persons in the digital 
asset markets; and 
(3) evaluates whether any proprietary intellec-
tual property of digital asset registrants is being 
misused or stolen by any governments of foreign ad-
versaries. 
(b) GAO STUDY AND REPORT.— 
(1) IN
GENERAL.—The Comptroller General 
shall, not later than 1 year after date of the enact-
ment of this section, conduct a study and submit a 
report to the relevant congressional committees 
that— 
(A) identifies any digital asset registrants 
which are owned by governments of foreign ad-
versaries; 
(B) determines whether any governments 
of foreign adversaries are collecting personal 
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data or trading data about United States per-
sons in the digital asset markets; and 
(C) evaluates whether any proprietary in-
tellectual property of digital asset registrants is 
being misused or stolen by any governments of 
foreign adversaries. 
(c) DEFINITIONS.—In this section: 
(1) DIGITAL
ASSET
REGISTRANT.—The term 
‘‘digital asset registrant’’ means any person required 
to register as a digital asset trading system, digital 
asset broker, digital asset dealer, digital commodity 
exchange, digital commodity broker, or digital com-
modity dealer under this Act. 
(2) FOREIGN
ADVERSARIES.—The term ‘‘for-
eign adversaries’’ means the foreign governments 
and foreign non-government persons determined by 
the Secretary of Commerce to be foreign adversaries 
under section 7.4(a) of title 15, Code of Federal 
Regulations. 
(3) 
RELEVANT
CONGRESSIONAL
COMMIT-
TEES.—The term ‘‘relevant congressional commit-
tees’’ means— 
(A) the Committees on Financial Services 
and Agriculture of the House of Representa-
tives; and 
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(B) the Committees on Banking, Housing, 
and Urban Affairs and Agriculture, Nutrition, 
and Forestry of the Senate. 
TITLE 
V—REGISTRATION 
FOR 
DIGITAL 
ASSET 
INTER-
MEDIARIES 
AT 
THE 
COM-
MODITY FUTURES TRADING 
COMMISSION 
SEC. 501. COMMISSION JURISDICTION OVER DIGITAL COM-
MODITY TRANSACTIONS. 
(a) SAVINGS CLAUSE.—Section 2(a)(1) of the Com-
modity Exchange Act (7 U.S.C. 2(a)(1)) is amended by 
adding at the end the following: 
‘‘(J) Except as expressly provided in this 
Act, nothing in the Financial Innovation and 
Technology for the 21st Century Act shall af-
fect or apply to, or be interpreted to affect or 
apply to— 
‘‘(i) any agreement, contract, or 
transaction that is subject to this Act as— 
‘‘(I) a contract of sale of a com-
modity for future delivery or an op-
tion on such a contract; 
‘‘(II) a swap; 
‘‘(III) a security futures product; 
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‘‘(IV) an option authorized under 
section 4c of this Act; 
‘‘(V) an agreement, contract, or 
transaction described in subparagraph 
(C)(i) or (D)(i) of subsection (c)(2) of 
this section; or 
‘‘(VI) a leverage transaction au-
thorized under section 19 of this Act; 
or 
‘‘(ii) the activities of any person with 
respect to any such an agreement, con-
tract, or transaction.’’. 
(b) LIMITATION ON AUTHORITY OVER PERMITTED 
PAYMENT STABLECOINS.—Section 2(c)(1) of the Com-
modity Exchange Act (7 U.S.C. 2(c)(1)) is amended— 
(1) in subparagraph (F), by striking ‘‘or’’ at 
the end; 
(2) in subparagraph (G), by striking the period 
and inserting ‘‘; or’’; and 
(3) by adding at the end the following: 
‘‘(H) permitted payment stablecoins.’’. 
(c) COMMISSION
JURISDICTION
OVER
DIGITAL 
ASSET TRANSACTIONS.—Section 2(c)(2) of the Com-
modity Exchange Act (7 U.S.C. 2(c)(2)) is amended— 
(1) in subparagraph (D)— 
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(A) in clause (ii)— 
(i) in subclause (I) by inserting 
‘‘(other than an agreement, contract, or 
transaction 
in 
a 
permitted 
payment 
stablecoin)’’ after ‘‘paragraph (1)’’; 
(ii) in subclause (III)— 
(I) in the matter that precedes 
item (aa), by inserting ‘‘of a com-
modity, other than a digital com-
modity 
or 
a 
permitted 
payment 
stablecoin,’’ before ‘‘that’’; and 
(II) in item (bb), by striking 
‘‘or’’ at the end; and 
(iii) by redesignating subclauses (IV) 
and (V) as subclauses (VI) and (VII) and 
inserting after subclause (III) the fol-
lowing: 
‘‘(IV) a contract of sale of a dig-
ital commodity or a permitted pay-
ment stablecoin that results in actual 
delivery, as the Commission shall by 
rule determine, within 2 days or such 
other period as the Commission may 
determine by rule or regulation based 
upon the typical commercial practice 
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in cash or spot markets for the digital 
commodity involved; 
‘‘(V) a contract of sale of a dig-
ital commodity or a permitted pay-
ment stablecoin that— 
‘‘(aa) is executed with a reg-
istered digital commodity deal-
er— 
‘‘(AA) directly; 
‘‘(BB) through a reg-
istered 
digital 
commodity 
broker; or 
‘‘(CC) on or subject to 
the rules of a registered dig-
ital 
commodity 
exchange; 
and 
‘‘(bb) is not a contract of 
sale of— 
‘‘(AA) a digital com-
modity or a permitted pay-
ment stablecoin that ref-
erences, represents an inter-
est in, or is functionally 
equivalent to an agricultural 
commodity, 
an 
excluded 
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commodity, or an exempt 
commodity, other than the 
digital commodity itself, as 
shall be further defined by 
the Commission; or 
‘‘(BB) a digital com-
modity or a permitted pay-
ment stablecoin to which the 
Commission determines, by 
rule or regulation, it is not 
in the public interest for this 
section to apply;’’; and 
(B) by redesignating clause (iv) as clause 
(v) and inserting after clause (iii) the following: 
‘‘(iv) The Commission shall adopt 
rules and regulations applicable to digital 
commodity dealers and digital commodity 
brokers in connection with the agreements, 
contracts or transactions in digital com-
modities or permitted payment stablecoins 
described in clause (ii)(V) of this subpara-
graph, which shall set forth minimum re-
quirements related to disclosure, record-
keeping, margin and financing arrange-
ments, capital, reporting, business conduct, 
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documentation, and supervision of employ-
ees and agents. Except as prohibited in 
subparagraph (G)(iii), the Commission 
may also make, promulgate, and enforce 
such rules and regulations as, in the judg-
ment of the Commission, are reasonably 
necessary to effectuate any of the provi-
sions of, or to accomplish any of the pur-
poses of, this Act in connection with agree-
ments, contracts, or transactions described 
in such clause (ii)(V), which may include, 
without limitation, requirements regarding 
registration with the Commission and 
membership in a registered futures asso-
ciation.’’; and 
(2) by adding at the end the following: 
‘‘(F) COMMISSION JURISDICTION WITH RESPECT TO 
DIGITAL COMMODITY TRANSACTIONS.— 
‘‘(i) IN GENERAL.—Subject to sections 6d and 
12(e), the Commission shall have exclusive jurisdic-
tion with respect to any account, agreement, con-
tract, or transaction involving a contract of sale of 
a digital commodity in interstate commerce, includ-
ing in a digital commodity cash or spot market, that 
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is offered, solicited, traded, facilitated, executed, 
cleared, reported, or otherwise dealt in— 
‘‘(I) on or subject to the rules of a reg-
istered entity or an entity that is required to be 
registered as a registered entity; or 
‘‘(II) by any other entity registered, or re-
quired to be registered, with the Commission. 
‘‘(ii) LIMITATIONS.—Clause (i) shall not apply 
with respect to custodial or depository activities for 
a digital commodity, or custodial or depository ac-
tivities for any promise or right to a future digital 
commodity, of an entity regulated by an appropriate 
Federal banking agency or a State bank supervisor 
(within the meaning of section 3 of the Federal De-
posit Insurance Act). 
‘‘(iii) MIXED DIGITAL ASSET TRANSACTIONS.— 
‘‘(I) IN
GENERAL.—Clause (i) shall not 
apply to a mixed digital asset transaction. 
‘‘(II) REPORTS ON MIXED DIGITAL ASSET 
TRANSACTIONS.—A digital asset issuer, related 
person, affiliated person, or other person reg-
istered with the Securities and Exchange Com-
mission that engages in a mixed digital asset 
transaction, shall, on request, open to inspec-
tion and examination by the Commodity Fu-
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tures Trading Commission all books and 
records relating to the mixed digital asset 
transaction, subject to the confidentiality and 
disclosure requirements of section 8. 
‘‘(G) AGREEMENTS, CONTRACTS, 
AND
TRANS-
ACTIONS 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 
agreement, contract, or transaction in a permitted 
payment stablecoin that is offered, offered to enter 
into, entered into, executed, confirmed the execution 
of, solicited, or accepted— 
‘‘(I) on or subject to the rules of a reg-
istered entity; or 
‘‘(II) by any other entity registered with 
the Commission. 
‘‘(ii) 
PERMITTED
PAYMENT
STABLECOIN 
TRANSACTION
RULES.—This Act shall apply to a 
transaction described in clause (i) only for the pur-
pose of regulating the offer, execution, solicitation, 
or acceptance of a cash or spot permitted payment 
stablecoin transaction on a registered entity or by 
any other entity registered with the Commission, as 
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if the permitted payment stablecoin were a digital 
commodity. 
‘‘(iii) NO AUTHORITY OVER PERMITTED PAY-
MENT
STABLECOINS.—Notwithstanding clauses (i) 
and (ii), the Commission shall not make a rule or 
regulation, impose a requirement or obligation on a 
registered entity or other entity registered with the 
Commission, or impose a requirement or obligation 
on a permitted payment stablecoin issuer, regarding 
the operation of a permitted payment stablecoin 
issuer or a permitted payment 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 
sentence by inserting ‘‘subparagraphs (F) and (G) of sub-
section (c)(2) of this section or’’ before ‘‘section 19’’. 
SEC. 502. 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. 503. 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’’; 
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(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 con-
tract or instrument, in connection with a con-
tract of sale of a commodity for future delivery, 
option, swap, or other agreement, contract, or 
transaction, 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 writ-
ten certification that the digital commodity meets 
the requirements of this Act (including the regula-
tions prescribed under this Act). 
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‘‘(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 sec-
tion 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
DISCLO-
SURES.—In making a certification under this 
subsection, an eligible entity may rely on the 
records and disclosures of any relevant person 
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registered with 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 held by a re-
lated person or an affiliated person. 
‘‘(B) 
RECERTIFICATION.—Modifications 
required 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 there-
under. 
‘‘(B) ANALYSIS REQUIRED.—The Commis-
sion shall include, with any findings referred to 
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(or such shorter period as determined by 
the Commission by rule or regulation) for 
any digital commodity that has been cer-
tified under this section. 
‘‘(B) EXTENSIONS.—The time for consid-
eration under subparagraph (A) may be ex-
tended through notice to the eligible entity that 
there are novel or complex issues that require 
additional time to analyze, that the explanation 
by the submitting eligible entity is inadequate, 
or of a potential inconsistency with this Act— 
‘‘(i) once, for 30 business days, 
through written notice to the eligible entity 
by the Chairman; and 
‘‘(ii) once, for an additional 30 busi-
ness days, through written notice to the 
digital commodity exchange from the Com-
mission that includes a description of any 
deficiencies with the certification, including 
any— 
‘‘(I) novel or complex issues 
which require additional time to ana-
lyze; 
‘‘(II) missing information or in-
adequate explanations; or 
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‘‘(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 Commis-
sion 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 any-
where in the United States, its territories or posses-
sions, for the purpose of soliciting, or accepting any 
order for, or otherwise dealing in, any transaction 
in, or in connection with, a digital commodity, unless 
a certification has been made under this section for 
the digital commodity. 
‘‘(7) PRIOR
APPROVAL
BEFORE
REGISTRA-
TION.— 
‘‘(A) IN GENERAL.—A person applying for 
registration with the Commission for the pur-
poses of listing or offering a digital commodity 
for trading in a digital commodity cash or spot 
market may request that the Commission grant 
prior approval for the person to list or offer the 
digital commodity on being registered with the 
Commission. 
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‘‘(B) REQUEST FOR PRIOR APPROVAL.—A 
person seeking prior approval under subpara-
graph (A) shall furnish the Commission with a 
written certification that the digital commodity 
meets the requirements of this Act (including 
the regulations prescribed under this Act) and 
the information described in paragraph (2). 
‘‘(C) DEADLINE.—The Commission shall 
take final action on a request for prior approval 
not later than 90 business days after submis-
sion of the request, unless the person submit-
ting the request agrees to an extension of the 
time limitation established under this subpara-
graph. 
‘‘(D) DISAPPROVAL.— 
‘‘(i) IN GENERAL.—The Commission 
shall approve a new contract or other in-
strument unless the Commission finds that 
the new contract or other instrument 
would violate this Act (including a regula-
tions prescribed under this Act). 
‘‘(ii) 
ANALYSIS
REQUIRED.—The 
Commission shall include, with any find-
ings made under clause (i), a detailed anal-
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ysis of the factors on which the decision is 
based. 
‘‘(iii) PUBLIC FINDINGS.—The Com-
mission shall make public any disapproval 
decision, and any related findings and 
analysis, made under this paragraph. 
‘‘(8) ELIGIBLE ENTITY DEFINED.—In this sub-
section, the term ‘eligible entity’ means a registered 
entity or group of registered entities acting jointly.’’. 
SEC. 504. 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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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 mar-
ket in at least 1 digital commodity shall not be 
required to register under this section if the 
trading facility— 
‘‘(i) permits no more than a de mini-
mis amount of trading activity in a digital 
commodity; or 
‘‘(ii) serves only customers in a single 
State or territory. 
‘‘(2) ADDITIONAL REGISTRATIONS.— 
‘‘(A) WITH THE COMMISSION.— 
‘‘(i) IN GENERAL.—A registered dig-
ital commodity exchange may also register 
as— 
‘‘(I) a designated contract mar-
ket; or 
‘‘(II) a swap execution facility. 
‘‘(ii) RULES.—For an entity with 
multiple registrations under clause (i), the 
Commission— 
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‘‘(I) shall prescribe rules to ex-
empt the entity from duplicative, con-
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 
customers; 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 
commodity exchange may register with the Se-
curities and Exchange Commission as a digital 
asset trading system to list or trade contracts 
of sale for restricted digital assets. 
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‘‘(C) WITH A REGISTERED FUTURES ASSO-
CIATION.— 
‘‘(i) IN GENERAL.—A registered dig-
ital commodity exchange shall also be a 
member of a registered futures association 
and comply with rules related to such ac-
tivity, if the registered digital commodity 
exchange accepts customer funds required 
to be segregated under subsection (d). 
‘‘(ii) RULEMAKING
REQUIRED.—The 
Commission shall require any registered 
futures association with a digital com-
modity 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 per-
son required to be registered as a digital com-
modity exchange under this section shall reg-
ister with the Commission as such regardless of 
whether the person is registered with another 
State or Federal regulator. 
‘‘(b) TRADING.— 
‘‘(1) PROHIBITION ON CERTAIN TRADING PRAC-
TICES.— 
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‘‘(A) Section 4b shall apply to any agree-
ment, contract, or transaction in a digital com-
modity as if the agreement, contract, or trans-
action were a contract of sale of a commodity 
for future delivery. 
‘‘(B) Section 4c shall apply to any agree-
ment, contract, or transaction in a digital com-
modity as if the agreement, contract, or trans-
action were a transaction involving the purchase 
or sale of a commodity for future delivery. 
‘‘(C) Section 4b-1 shall apply to any agree-
ment, contract, or transaction in a digital com-
modity as if the agreement, contract, or trans-
action were a contract of sale of a commodity 
for future delivery. 
‘‘(2) 
PROHIBITION
ON
ACTING
AS
A 
COUNTERPARTY.— 
‘‘(A) IN GENERAL.—A digital commodity 
exchange or any affiliate of such an exchange 
shall not trade on or subject to the rules of the 
digital commodity exchange for its own account. 
‘‘(B) 
EXCEPTIONS.—The 
Commission 
shall, by rule, permit a digital commodity ex-
change or any affiliate of a digital commodity 
exchange to engage in trading on an affiliated 
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exchange so long as the trading is not solely for 
the purpose of the profit of the exchange, in-
cluding the following: 
‘‘(i) CUSTOMER DIRECTION.—A trans-
action for, or entered into at the direction 
of, or for the benefit of, an unaffiliated 
customer. 
‘‘(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 Com-
mission that shall enumerate how any proposed 
activity 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 
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other employee or employees as the Director of 
the Division of Market Oversight may designate 
from time to time, to carry out these provisions. 
‘‘(3) TRADING SECURITIES.—A registered dig-
ital commodity exchange that is also registered with 
the Securities and Exchange Commission may offer 
a contract of sale of a restricted digital asset. 
‘‘(4) RULES
FOR
CERTAIN
DIGITAL
ASSET 
SALES.—The digital commodity exchange shall have 
in place such rules as may be necessary to reason-
ably ensure the orderly sale of any unit of a digital 
commodity sold by a related person or an affiliated 
person. 
‘‘(c) CORE PRINCIPLES FOR DIGITAL COMMODITY 
EXCHANGES.— 
‘‘(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). 
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‘‘(B) REASONABLE DISCRETION OF A DIG-
ITAL
COMMODITY
EXCHANGE.—Unless other-
wise determined by the Commission by rule or 
regulation, a digital commodity exchange de-
scribed in subparagraph (A) shall have reason-
able discretion in establishing the manner in 
which the digital commodity exchange complies 
with the core principles described in this sub-
section. 
‘‘(2) COMPLIANCE
WITH
RULES.—A digital 
commodity 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, 
investigate, and enforce those rules, including 
means— 
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‘‘(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 oper-
ation of the exchange, including rules specifying 
trading procedures to be used in entering and 
executing orders traded or posted on the facil-
ity. 
‘‘(3) LISTING STANDARDS FOR DIGITAL COM-
MODITIES.— 
‘‘(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 
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allocation, 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; 
‘‘(bb) information detailing 
any applicable consensus mecha-
nism or process for validating 
transactions, method of gener-
ating 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 assets; 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 
VOLATILITY.—The 
trading 
volume 
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and volatility of the digital com-
modity. 
‘‘(V) 
ADDITIONAL
INFORMA-
TION.—Such additional information 
as the Commission may, by rule, de-
termine to be necessary for a cus-
tomer to understand the financial and 
operational risks of a digital com-
modity, and to be in the public inter-
est or in furtherance of the require-
ments of this Act. 
‘‘(iii) 
FORMAT.—The 
Commission 
shall prescribe rules and regulations for 
the standardization and simplification of 
disclosures under clause (ii), including re-
quiring 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 
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subparagraphs (A) and (B), a digital com-
modity 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; 
‘‘(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 
digital commodity exchange shall not permit the 
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trading of a unit of a digital asset that is a re-
stricted digital asset. 
‘‘(4) TREATMENT
OF
CUSTOMER
ASSETS.—A 
digital commodity exchange shall establish standards 
and procedures that are designed to protect and en-
sure the safety of customer money, assets, and prop-
erty. 
‘‘(5) MONITORING
OF
TRADING
AND
TRADE 
PROCESSING.— 
‘‘(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. 
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‘‘(C) TRADING
PROCEDURES.—A digital 
commodity exchange shall— 
‘‘(i) establish and enforce rules or 
terms and conditions defining, or specifica-
tions detailing— 
‘‘(I) trading procedures to be 
used in entering and executing orders 
traded 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 
distortion, and disruptions of the delivery 
or cash settlement process through surveil-
lance, compliance, and disciplinary prac-
tices and procedures, including methods 
for conducting real-time monitoring of 
trading and comprehensive and accurate 
trade reconstructions. 
‘‘(6) ABILITY
TO
OBTAIN
INFORMATION.—A 
digital commodity exchange shall— 
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‘‘(A) establish and enforce rules that will 
allow the facility to obtain any necessary infor-
mation to perform any of the functions de-
scribed in this section; 
‘‘(B) provide the information to the Com-
mission on request; and 
‘‘(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 
cooperation with the Commission or a registered en-
tity, as is necessary and appropriate, including the 
authority to facilitate the liquidation or transfer of 
open positions in any digital commodity or to sus-
pend 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 pre-
scribed by the Commission. 
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‘‘(B) CAPACITY
OF
DIGITAL
COMMODITY 
EXCHANGE.—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.— 
‘‘(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 Com-
mission, such information as the Commis-
sion determines to be necessary or appro-
priate 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 
Securities and Exchange Commission. 
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‘‘(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; 
‘‘(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), 
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the Commission shall receive a written agree-
ment from the entity stating that the entity 
shall abide by the confidentiality requirements 
described in section 8 relating to the informa-
tion on digital commodities that is provided. 
‘‘(D) PROVIDING INFORMATION.—A digital 
commodity exchange shall provide to the Com-
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 
necessary 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— 
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‘‘(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 
conduct standards described in this Act, 
including conflicts arising out of trans-
actions or arrangements with affiliates (in-
cluding affiliates engaging in digital com-
modity activities) or between self-regu-
latory obligations and commercial inter-
ests, which may include information parti-
tions, restrictions on employees and direc-
tors, and the legal separation of different 
persons or entities involved in digital com-
modity 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-
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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 busi-
ness conduct standards described in this 
Act; and 
‘‘(B) address such other issues as the 
Commission determines to be appropriate. 
‘‘(12) FINANCIAL RESOURCES.— 
‘‘(A) IN GENERAL.—A digital commodity 
exchange shall have adequate financial, oper-
ational, and managerial resources, as deter-
mined by the Commission, to discharge each re-
sponsibility 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 greater of— 
‘‘(i) the total amount that would en-
able the digital commodity exchange to 
conduct an orderly wind-down of its activi-
ties or 
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‘‘(ii) the total amount that would en-
able the digital commodity exchange to 
cover the operating costs of the digital 
commodity exchange for a 1-year period, 
as calculated on a rolling basis. 
‘‘(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 
members or market participants that violate the 
rules of the digital commodity exchange, or similar 
methods for performing the same functions, includ-
ing delegation 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. 
‘‘(B) FITNESS
STANDARDS.—A digital 
commodity exchange shall establish and enforce 
appropriate fitness standards for— 
‘‘(i) directors; and 
‘‘(ii) any individual or entity with di-
rect access to, or control of, customer as-
sets. 
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‘‘(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 
procedures, backup facilities, and a plan for dis-
aster 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 
‘‘(C) periodically conduct tests to verify 
that the backup resources of the digital com-
modity exchange are sufficient to ensure contin-
ued— 
‘‘(i) 
order 
processing 
and 
trade 
matching; 
‘‘(ii) price reporting; 
‘‘(iii) market surveillance; and 
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‘‘(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 belong-
ing to the customer. 
‘‘(ii) COMMINGLING
PROHIBITED.— 
Money, assets, and property of a customer 
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. 
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‘‘(B) EXCEPTIONS.— 
‘‘(i) USE OF FUNDS.— 
‘‘(I) 
IN
GENERAL.—Notwith-
standing subparagraph (A), money, 
assets, 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 
clearing organization, or qualified dig-
ital commodity custodian. 
‘‘(II) 
WITHDRAWAL.—Notwith-
standing 
subparagraph 
(A), 
such 
share of the money, assets, and prop-
erty described in item (aa) as in the 
normal course of business shall be 
necessary to margin, guarantee, se-
cure, transfer, adjust, or settle a con-
tract of sale of a digital commodity 
with a registered entity may be with-
drawn and applied to such purposes, 
including the payment of commis-
sions, brokerage, interest, taxes, stor-
age, and other charges, lawfully ac-
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cruing in connection with the contract 
of sale of a digital commodity. 
‘‘(ii) COMMISSION ACTION.—Notwith-
standing subparagraph (A), in accordance 
with such terms and conditions as the 
Commission may prescribe by rule, regula-
tion, or order, any money, assets, or prop-
erty of the customers of a digital com-
modity exchange described in subpara-
graph (A) may be commingled and depos-
ited in customer accounts with any other 
money, assets, or property received by the 
digital commodity exchange and required 
by the Commission to be separately ac-
counted for and treated and dealt with as 
belonging to the customer of the digital 
commodity exchange. 
‘‘(2) PERMITTED
INVESTMENTS.—Money de-
scribed in subparagraph (A) may be invested in obli-
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 prin-
cipal and interest by the United States, or in any 
other investment that the Commission may by rule 
or regulation prescribe, and such investments shall 
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be made in accordance with such rules and regula-
tions and subject to such conditions as the Commis-
sion may prescribe. 
‘‘(3) CUSTOMER
PROTECTION
DURING
BANK-
RUPTCY.— 
‘‘(A) CUSTOMER
PROPERTY.—All assets 
held on behalf of a customer by a digital com-
modity 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 con-
tracts of sale of a digital commodity (including 
money, assets, or property accruing to the cus-
tomer 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 com-
modity exchange shall be considered a ‘contract 
for the purchase or sale of a commodity for fu-
ture delivery, on or subject to the rules of, a 
contract market or board of trade’ for the pur-
poses of the definition of a ‘commodity con-
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tract’ 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. 
‘‘(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 pur-
poses 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 
commodity exchange or any person other 
than a customer of the digital commodity 
exchange; or 
‘‘(ii) for any other person, including 
any depository, other digital commodity ex-
change, or digital commodity custodian 
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that has received any customer money, as-
sets, or property for deposit, to hold, dis-
pose of, or use any such money, assets, or 
property, or property, as belonging to the 
depositing digital commodity exchange or 
any person other than the customers of the 
digital commodity exchange. 
‘‘(B) USE FURTHER DEFINED.—For pur-
poses of this section, ‘use’ of a digital com-
modity includes utilizing any unit of a digital 
asset to participate in a blockchain service de-
fined in paragraph (5) or a decentralized gov-
ernance system associated with the digital com-
modity or the blockchain system to which the 
digital commodity 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 
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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 provide a blockchain service for a blockchain 
system to which the unit of the digital asset re-
moved from segregation in subparagraph (A) 
relates. 
‘‘(C) LIMITATIONS.— 
‘‘(i) IN GENERAL.—The Commission 
may, by rule, establish notice and disclo-
sure requirements, and any other limita-
tions and rules related to the waiving of 
any restrictions under this paragraph that 
are reasonably necessary to protect cus-
tomers, including eligible contract partici-
pants, 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 
business on the exchange. 
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‘‘(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 
activity 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 eligi-
ble contract participant to access trading on the ex-
change through a digital commodity broker. 
‘‘(2) AFFILIATED
COMMODITY
BROKERS.—A 
registered digital commodity exchange may permit 
an affiliated digital commodity broker to facilitate 
access to the digital commodity exchange. 
‘‘(3) DIRECT ACCESS FOR ELIGIBLE CONTRACT 
PARTICIPANTS.—Nothing in this section shall pro-
hibit a digital commodity exchange in compliance 
with this section from permitting direct access for 
eligible contract participants. 
‘‘(4) ADDITIONAL REQUIREMENTS.—The Com-
mission may, by rule, impose any additional require-
ments related to the operations and activities of the 
digital commodity exchange and an affiliated digital 
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commodity broker necessary to protect market par-
ticipants, promote fair and equitable trading on the 
digital commodity exchange, and promote respon-
sible economic or financial innovation. 
‘‘(f) DESIGNATION
OF CHIEF COMPLIANCE OFFI-
CER.— 
‘‘(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 
to that of a board, or the senior officer of the 
exchange, resolve any conflicts of interest that 
may arise; 
‘‘(D) establish and administer the policies 
and procedures required to be established pur-
suant to this section; 
‘‘(E) ensure compliance with this Act and 
the rules and regulations issued under this Act, 
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including rules prescribed by the Commission 
pursuant to this section; and 
‘‘(F) establish procedures for the remedi-
ation of noncompliance issues found during 
compliance office reviews, look backs, internal 
or external audit findings, self-reported errors, 
or through validated complaints. 
‘‘(3) REQUIREMENTS
FOR
PROCEDURES.—In 
establishing procedures under paragraph (2)(F), the 
chief compliance officer shall design the procedures 
to establish the handling, management response, re-
mediation, 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— 
‘‘(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 
interest policies, of the digital commodity 
exchange. 
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‘‘(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 re-
port is accurate and complete. 
‘‘(g) APPOINTMENT OF TRUSTEE.— 
‘‘(1) IN GENERAL.—If a proceeding under sec-
tion 5e results in the suspension or revocation of the 
registration of a digital commodity exchange, or if a 
digital commodity exchange withdraws from registra-
tion, the Commission, on notice to the digital com-
modity exchange, may apply to the appropriate 
United States district court where the digital com-
modity exchange is located for the appointment of a 
trustee. 
‘‘(2) ASSUMPTION
OF
JURISDICTION.—If the 
Commission applies for appointment of a trustee 
under paragraph (1)— 
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‘‘(A) the court may take exclusive 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 
Commission, as trustee with power to take pos-
session and continue to operate or terminate 
the operations of the digital commodity ex-
change in an orderly manner for the protection 
of customers subject to such terms and condi-
tions as the court may prescribe. 
‘‘(h) QUALIFIED
DIGITAL
COMMODITY
CUSTO-
DIAN.—A digital commodity exchange shall hold in a 
qualified digital commodity custodian each unit of a digital 
commodity that is— 
‘‘(1) the property of a customer of the digital 
commodity exchange; 
‘‘(2) required to be held by the digital com-
modity exchange under subsection (c)(12) of this 
section; or 
‘‘(3) otherwise so required by the Commission 
to reasonably protect customers or promote the pub-
lic interest. 
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‘‘(i) EXEMPTIONS.— 
‘‘(1) In order to promote responsible economic 
or financial innovation and fair competition, or pro-
tect customers, the Commission may (on its own ini-
tiative or on application of the registered digital 
commodity exchange) exempt, either unconditionally 
or on stated terms or conditions or for stated peri-
ods and either retroactively or prospectively, or both, 
a registered digital commodity exchange from the re-
quirements of this section, if the Commission deter-
mines 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 mate-
rial adverse effect on the ability of the Commis-
sion or the digital commodity exchange to dis-
charge regulatory or self-regulatory duties 
under this Act. 
‘‘(2) The Commission may exempt, condi-
tionally or unconditionally, a digital commodity ex-
change from registration under this section if the 
Commission finds that the digital commodity ex-
change is subject to comparable, comprehensive su-
pervision and regulation on a consolidated basis by 
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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 dig-
ital 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 person. 
‘‘(k) FEDERAL PREEMPTION.—Notwithstanding any 
other provision of law, the Commission shall have exclusive 
jurisdiction over any digital commodity exchange reg-
istered under this section. 
‘‘(l) 
WITHDRAWAL
OF
CERTIFICATION
OF
A 
BLOCKCHAIN SYSTEM.— 
‘‘(1) IN GENERAL.— 
‘‘(A) DETERMINATION BY A DIGITAL COM-
MODITY EXCHANGE.—With respect to a certifi-
cation of a blockchain system that becomes ef-
fective pursuant to section 44(f) of the Securi-
ties Exchange Act of 1934, if a digital com-
modity exchange determines that the blockchain 
system may not be a decentralized system, the 
digital commodity exchange shall notify the 
Commission of such determination. 
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‘‘(B) WITHDRAWAL
PROCESS.—With re-
spect to each notification received under sub-
paragraph (A), the Commission shall initiate a 
withdrawal process under which the Commis-
sion 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. 
‘‘(C) DETAILED
ANALYSIS
REQUIRED.— 
The Commission shall include, with each publi-
cation of a notification of withdrawal described 
under subparagraph (B)(iii)(I), a detailed anal-
ysis of the factors on which the decision was 
based. 
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‘‘(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 begin-
ning 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 Co-
lumbia, not later than 60 days after the notice 
of withdrawal 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.’’. 
SEC. 505. 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.—A digital commodity custodian 
is a qualified digital commodity custodian if the digital 
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commodity custodian complies with the requirements of 
this section. 
‘‘(b) SUPERVISION REQUIREMENT.—A digital com-
modity custodian that is not subject to supervision and 
examination by an appropriate Federal banking agency, 
the National Credit Union Administration, the Commis-
sion, or the Securities and Exchange Commission shall be 
subject to adequate supervision and appropriate regulation 
by— 
‘‘(1) a State bank supervisor (within the mean-
ing of section 3 of the Federal Deposit Insurance 
Act); 
‘‘(2) a State credit union supervisor, as defined 
under section 6003 of the Anti-Money Laundering 
Act of 2020; or 
‘‘(3) an appropriate foreign governmental au-
thority in the home country of the digital commodity 
custodian. 
‘‘(c) OTHER REQUIREMENTS.— 
‘‘(1) NOT OTHERWISE PROHIBITED.—The dig-
ital commodity custodian has not been prohibited by 
a supervisor of the digital commodity custodian from 
engaging in an activity with respect to the custody 
and safekeeping of digital commodities. 
‘‘(2) INFORMATION SHARING.— 
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‘‘(A) IN GENERAL.—A digital commodity 
custodian shall share information with the 
Commission on request and comply with such 
requirements for periodic sharing of informa-
tion regarding customer accounts that the dig-
ital commodity custodian holds on behalf of an 
entity registered with the Commission as the 
Commission determines by rule are reasonably 
necessary to effectuate any of the provisions, or 
to accomplish any of the purposes, of this Act. 
‘‘(B) PROVISION OF INFORMATION.—Any 
entity that is subject to regulation and exam-
ination by an appropriate Federal banking 
agency may satisfy any information request de-
scribed 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 entity. 
‘‘(d) ADEQUATE SUPERVISION
AND APPROPRIATE 
REGULATION.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(b), the terms ‘adequate supervision’ and ‘appro-
priate regulation’ mean such minimum standards for 
supervision and regulation as are reasonably nec-
essary to protect the digital commodities of cus-
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tomers of an entity registered with the Commission, 
including standards relating to the licensing, exam-
ination, and supervisory processes that require the 
digital commodity custodian to, at a minimum— 
‘‘(A) receive a review and evaluation of 
ownership, character and fitness, conflicts of in-
terest, business model, financial statements, 
funding resources, and policies and procedures 
of the digital commodity custodian; 
‘‘(B) hold capital sufficient for the finan-
cial integrity of the digital commodity custo-
dian; 
‘‘(C) protect customer assets; 
‘‘(D) establish and maintain books and 
records regarding the business of the digital 
commodity custodian; 
‘‘(E) submit financial statements and au-
dited financial statements to the applicable su-
pervisor described in subsection (b); 
‘‘(F) provide disclosures to the applicable 
supervisor described in subsection (b) regarding 
actions, proceedings, and other items as deter-
mined by the supervisor; 
‘‘(G) maintain and enforce policies and 
procedures for compliance with applicable State 
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and Federal laws, including those related to 
anti-money laundering and cybersecurity; 
‘‘(H) establish a business continuity plan 
to ensure functionality in cases of disruption; 
and 
‘‘(I) establish policies and procedures to re-
solve complaints. 
‘‘(2) RULEMAKING WITH RESPECT TO DEFINI-
TIONS.— 
‘‘(A) IN GENERAL.—For purposes of this 
section, the Commission may, by rule, further 
define the terms ‘adequate supervision’ and ‘ap-
propriate regulation’ as necessary in the public 
interest, as appropriate for the protection of in-
vestors, and consistent with the purposes of this 
Act. 
‘‘(B) CONDITIONAL TREATMENT OF CER-
TAIN CUSTODIANS BEFORE RULEMAKING.—Be-
fore the effective date of a rulemaking under 
subparagraph (A), a trust company is deemed 
subject to adequate supervision and appropriate 
regulation if— 
‘‘(i) the trust company is expressly 
permitted by a State bank supervisor to 
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engage in the custody and safekeeping of 
digital commodities; 
‘‘(ii) the State bank supervisor has es-
tablished licensing, examination, and su-
pervisory processes that require the trust 
company to, at a minimum, meet the con-
ditions described in subparagraphs (A) 
through (I) of paragraph (1); and 
‘‘(iii) the trust company is in good 
standing with its State bank supervisor. 
‘‘(C) TRANSITION
PERIOD
FOR
CERTAIN 
CUSTODIANS.—In implementing the rulemaking 
under subparagraph (A), the Commission shall 
provide a transition period of not less than 2 
years for any trust company that is deemed 
subject to adequate supervision and appropriate 
regulation under subparagraph (B) on the ef-
fective date of the rulemaking. 
‘‘(e) 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.’’. 
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SEC. 506. 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 
person 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 by filing a registration application with the 
Commission. 
‘‘(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 
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submit to the Commission reports that contain 
such information pertaining to the business of 
the person as the Commission may require. 
‘‘(3) STATUTORY
DISQUALIFICATION.—Except 
to the extent otherwise specifically provided by rule, 
regulation, or order, it shall be unlawful for a digital 
commodity broker or digital commodity dealer to 
permit any person who is associated with a digital 
commodity broker or a digital commodity dealer and 
who is subject to a statutory disqualification to ef-
fect or be involved in effecting a contract of sale of 
a digital commodity on behalf of the digital com-
modity broker or the digital commodity dealer, re-
spectively, if the digital commodity broker or digital 
commodity dealer, respectively, knew, or in the exer-
cise of reasonable care should have known, of the 
statutory disqualification. 
‘‘(4) LIMITATIONS
ON
CERTAIN
ASSETS.—A 
digital commodity broker or digital commodity deal-
er shall not offer, offer to enter into, enter into, or 
facilitate 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 
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broker or digital commodity dealer may also be reg-
istered as a futures commission merchant, intro-
ducing 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 
broker or digital asset dealer, pursuant to section 
15(b) of the Securities Exchange Act of 1934. 
‘‘(3) WITH MEMBERSHIP IN A REGISTERED FU-
TURES
ASSOCIATION.—Any person required to be 
registered as a digital commodity broker or digital 
commodity dealer under this section shall be a mem-
ber of a registered futures association. 
‘‘(4) REGISTRATION
REQUIRED.—Any person 
required to be registered as a digital commodity 
broker or digital commodity dealer under this sec-
tion shall register with the Commission as such re-
gardless of whether the person is registered with an-
other 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 
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dealers as are appropriate to carry out this section, 
including rules in the public interest that limit the 
activities of digital commodity brokers and digital 
commodity dealers. 
‘‘(2) MULTIPLE REGISTRANTS.—The Commis-
sion shall prescribe rules or regulations permitting, 
or may otherwise authorize, exemptions or additional 
requirements 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 
digital commodity broker or digital commodity deal-
er, respectively, is able to— 
‘‘(A) meet, and continue to meet, at all 
times, the obligations of such a registrant; and 
‘‘(B) in the case of a digital commodity 
dealer, fulfill the counterparty obligations of the 
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digital commodity dealer for any margined, le-
veraged, or financed transactions. 
‘‘(2) RULE
OF
CONSTRUCTION.—Nothing in 
this section shall limit, or be construed to limit, the 
authority of the Securities and Exchange Commis-
sion 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.—Each futures commission mer-
chant, introducing broker, digital commodity broker, 
digital commodity dealer, broker, and dealer shall 
maintain sufficient capital to comply with the strict-
er of any applicable capital requirements to which 
the 
futures 
commission 
merchant, 
introducing 
broker, digital commodity 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.). 
‘‘(f) REPORTING AND RECORDKEEPING.—Each dig-
ital commodity broker and digital commodity dealer— 
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‘‘(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; 
‘‘(2) shall keep books and records in such form 
and manner and for such period as may be pre-
scribed by the Commission by rule or regulation; and 
‘‘(3) shall keep the books and records open to 
inspection 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 dig-
ital commodity broker or digital commodity dealer, 
respectively, and all related records (including re-
lated forward or derivatives transactions) and re-
corded communications, including electronic mail, in-
stant messages, and recordings of telephone calls, 
for such period as the Commission may require by 
rule or regulation. 
‘‘(2) INFORMATION REQUIREMENTS.—The daily 
trading records shall include such information as the 
Commission shall require by rule or regulation. 
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‘‘(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. 
‘‘(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 Com-
mission, 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 trans-
actions (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 Commis-
sion deems appropriate. 
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‘‘(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 
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 
requirements as the Commission may determine 
are— 
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‘‘(i) in the public interest; 
‘‘(ii) appropriate for the protection of 
customers; or 
‘‘(iii) otherwise in furtherance of the 
purposes of this Act. 
‘‘(3) PROHIBITION
ON
FRAUDULENT
PRAC-
TICES.—It shall be unlawful for a digital commodity 
broker or digital commodity dealer to— 
‘‘(A) employ any device, scheme, or artifice 
to defraud any customer or counterparty; 
‘‘(B) engage in any transaction, practice, 
or course of business that operates as a fraud 
or deceit on any customer or counterparty; or 
‘‘(C) engage in any act, practice, or course 
of business that is 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
INFORMA-
TION.—Each digital commodity broker and digital 
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commodity dealer shall disclose to the Commission 
information concerning— 
‘‘(A) the terms and conditions of the trans-
actions of the digital commodity broker or dig-
ital commodity dealer, respectively; 
‘‘(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 infor-
mation to perform any of the functions de-
scribed 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 
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implement conflict-of-interest systems and proce-
dures 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 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 
commodity custodians), which may include 
information partitions and the legal sepa-
ration of different persons involved in dig-
ital 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 
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making determinations as to accepting ex-
change customers are separated by appro-
priate informational partitions within the 
digital commodity broker or digital com-
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 busi-
ness conduct standards described in this 
Act; and 
‘‘(B) address such other issues as the 
Commission determines to be appropriate. 
‘‘(5) 
ANTITRUST
CONSIDERATIONS.—Unless 
necessary or appropriate to achieve the purposes of 
this Act, a digital commodity broker or digital com-
modity 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 OFFI-
CER.— 
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‘‘(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— 
‘‘(A) report directly to the board or to the 
senior officer of the registered digital com-
modity broker or registered digital commodity 
dealer; 
‘‘(B) review the compliance of the reg-
istered digital commodity broker or registered 
digital commodity dealer with respect to the 
registered digital commodity broker and reg-
istered 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 es-
tablished pursuant to this section; 
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‘‘(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; 
‘‘(iii) internal or external audit find-
ing; 
‘‘(iv) self-reported error; or 
‘‘(v) validated complaint; and 
‘‘(G) establish and follow appropriate pro-
cedures for the handling, management response, 
remediation, retesting, and closing of non-
compliance 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 
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‘‘(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 re-
port under subparagraph (A)— 
‘‘(i) accompanies each appropriate fi-
nancial report of the registered digital 
commodity broker or registered digital 
commodity dealer that is required to be 
furnished to the Commission pursuant to 
this section; and 
‘‘(ii) includes a certification that, 
under penalty of law, the compliance re-
port 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-
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cess to the money, assets, and property of the 
customer. 
‘‘(B) QUALIFIED
DIGITAL
COMMODITY 
CUSTODIAN.—Each digital commodity broker 
and digital commodity dealer shall hold in a 
qualified digital commodity custodian each unit 
of a digital commodity that is— 
‘‘(i) the property of a customer or 
counterparty of the digital commodity 
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 cus-
tomers 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 digital com-
modity broker or digital commodity dealer, or 
accrues to a customer as the result of trading 
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in digital commodities, as belonging to the cus-
tomer. 
‘‘(B) COMMINGLING PROHIBITED.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided 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 
digital commodity broker or digital com-
modity dealer, respectively, or use any such 
money, assets, or property to margin, se-
cure, 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, 
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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 busi-
ness shall be necessary to mar-
gin, guarantee, secure, transfer, 
adjust, or settle a contract of sale 
of a digital commodity with a 
registered entity may be with-
drawn and applied to such pur-
poses, including the payment of 
commissions, brokerage, interest, 
taxes, storage, and other charges, 
lawfully accruing in connection 
with the contract. 
‘‘(II) COMMISSION
ACTION.—In 
accordance with such terms and con-
ditions as the Commission may pre-
scribe by rule, regulation, or order, 
any money, assets, or property of the 
customers of a digital commodity 
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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 dig-
ital commodity dealer, respectively, 
and required by the Commission to be 
separately accounted for and treated 
and dealt with as belonging to the 
customer of the digital commodity 
broker or digital 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-
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‘‘(i) for any digital commodity broker 
or digital commodity dealer that has re-
ceived any customer money, assets, or 
property for custody to dispose of, or use 
any such money, assets, or property as be-
longing to the digital commodity broker or 
digital commodity dealer, respectively, or 
any person other than a customer of the 
digital commodity broker or digital com-
modity 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 
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, as belong-
ing to the depositing digital commodity 
broker or digital commodity dealer or any 
person other than the customers of the 
digital commodity broker or digital com-
modity dealer, respectively. 
‘‘(B) USE FURTHER DEFINED.—For pur-
poses of this section, ‘use’ of a digital com-
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modity includes utilizing any unit of a digital 
asset to participate in a blockchain service de-
fined in paragraph (6) or a decentralized gov-
ernance system associated with the digital com-
modity or the blockchain system to which the 
digital commodity 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 
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 com-
modity dealer, or one of their designees, to pro-
vide a blockchain service for a blockchain sys-
tem to which the unit of the digital asset re-
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moved from segregation in subparagraph (A) 
relates. 
‘‘(C) LIMITATIONS.— 
‘‘(i) IN GENERAL.—The Commission 
may, by rule, establish notice and disclo-
sure requirements, and any other limita-
tions and rules related to the waiving of 
any restrictions under this paragraph that 
are reasonably necessary to protect cus-
tomers, including eligible contract partici-
pants, 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 
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 
activity required for the ongoing operation of a 
blockchain system. 
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‘‘(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 stat-
ed periods, and retroactively or prospectively, or both, a 
registered digital commodity broker or registered digital 
commodity 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 
‘‘(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 
comparable, comprehensive supervision and regula-
tion by the appropriate government authorities in 
the home country of the registered digital commodity 
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broker or registered digital commodity dealer, re-
spectively.’’. 
SEC. 507. 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 as-
sociated person of a digital commodity dealer unless the 
person is registered with the Commission under this Act 
and such registration shall not have expired, been sus-
pended (and the period of suspension has not expired), 
or been revoked. It shall be unlawful for a digital com-
modity 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 registration had expired, been sus-
pended (and the period of suspension has not expired), 
or been revoked.’’; and 
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(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 deal-
er’’. 
(b) CONFORMING AMENDMENTS.—The Commodity 
Exchange Act (7 U.S.C. 1a et seq.) is amended by striking 
‘‘section 4k(6)’’ each place it appears and inserting ‘‘sec-
tion 4k(7)’’. 
SEC. 508. REGISTRATION OF COMMODITY POOL OPERA-
TORS AND COMMODITY TRADING ADVISORS. 
(a) IN GENERAL.—Section 4m(3) of the Commodity 
Exchange Act (7 U.S.C. 6m(3)) is amended— 
(1) in subparagraph (A)— 
(A) by striking ‘‘any commodity trading 
advisor’’ and inserting ‘‘a commodity pool oper-
ator or commodity trading advisor’’; and 
(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,’’. 
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(b) EXEMPTIVE AUTHORITY.—Section 4m of such 
Act (7 U.S.C. 6m) is amended by adding at the end the 
following: 
‘‘(4) EXEMPTIVE
AUTHORITY.—The Commission 
shall promulgate rules to provide appropriate exemptions 
for commodity pool operators and commodity trading advi-
sors, to provide relief from duplicative, conflicting, or un-
duly burdensome requirements or to promote responsible 
innovation, to the extent the exemptions foster the devel-
opment of fair and orderly cash or spot digital commodity 
markets, are necessary or appropriate in the public inter-
est, and are consistent with the protection of customers.’’. 
SEC. 509. EXCLUSION FOR DECENTRALIZED FINANCE AC-
TIVITIES. 
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. DECENTRALIZED FINANCE ACTIVITIES NOT SUB-
JECT TO THIS ACT. 
‘‘(a) IN GENERAL.—Notwithstanding any other pro-
vision of this Act, a person shall not be subject to this 
Act and the regulations promulgated under this Act based 
on the person directly or indirectly engaging in any of the 
following activities, whether singly or in combination, in 
relation to the operation of a blockchain system or in rela-
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tion to decentralized finance (as defined in section 605(d) 
of the Financial Innovation and Technology for the 21st 
Century Act): 
‘‘(1) Compiling network transactions, operating 
or participating in a liquidity pool, relaying, search-
ing, sequencing, validating, or acting in a similar ca-
pacity 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 
system, 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, fa-
cilitating an individual user’s own personal ability to 
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keep, safeguard, or custody the user’s digital com-
modities or related private keys. 
‘‘(b) EXCEPTIONS.—Subsection (a) shall not be inter-
preted to apply to the anti-fraud, anti-manipulation, or 
false reporting enforcement authorities of the Commis-
sion.’’. 
SEC. 510. FUNDING FOR IMPLEMENTATION AND ENFORCE-
MENT. 
(a) COLLECTION OF FEES.— 
(1) IN
GENERAL.—The Commodity Futures 
Trading Commission (in this section referred to as 
the ‘‘Commission’’) shall charge and collect a filing 
fee from each person who files with the Commission 
a notice of intent to register as a digital commodity 
exchange, digital commodity broker, or digital com-
modity dealer pursuant to section 106. 
(2) AMOUNT.—The fees authorized under para-
graph (1) may be collected and available for obliga-
tion only in the amounts provided in advance in an 
appropriation Act. 
(3) AUTHORITY
TO
ADJUST
FEES.—Notwith-
standing the preceding provisions of this subsection, 
to promote fair competition or innovation, the Com-
mission, in its sole discretion, may reduce or elimi-
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nate any fee otherwise required to be paid by a small 
or medium filer under this subsection. 
(b) FEE SCHEDULE.— 
(1) IN GENERAL.—The Commission shall pub-
lish in the Federal Register a schedule of the fees 
to be charged and collected under this section. 
(2) CONTENT.—The fee schedule for a fiscal 
year shall include a written analysis of the estimate 
of the Commission of the total costs of carrying out 
the functions of the Commission under this Act dur-
ing the fiscal year. 
(3) SUBMISSION
TO
CONGRESS.—Before pub-
lishing the fee schedule for a fiscal year, the Com-
mission shall submit a copy of the fee schedule to 
the Congress. 
(4) TIMING.— 
(A) 1ST FISCAL YEAR.—The Commission 
shall publish the fee schedule for the fiscal year 
in which this Act is enacted, within 30 days 
after the date of the enactment of this Act. 
(B) SUBSEQUENT
FISCAL
YEARS.—The 
Commission shall publish the fee schedule for 
each subsequent fiscal year, not less than 90 
days before the due date prescribed by the 
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Commission for payment of the annual fee for 
the fiscal year. 
(c) LATE PAYMENT PENALTY.— 
(1) IN GENERAL.—The Commission may im-
pose a penalty against a person that fails to pay an 
annual fee charged under this section, within 30 
days after the due date prescribed by the Commis-
sion for payment of the fee. 
(2) AMOUNT.—The amount of the penalty shall 
be— 
(A) 5 percent of the amount of the fee due; 
multiplied by 
(B) the whole number of consecutive 30- 
day periods that have elapsed since the due 
date. 
(d) REIMBURSEMENT OF EXCESS FEES.—To the ex-
tent that the total amount of fees collected under this sec-
tion during a fiscal year that begins after the date of the 
enactment of this Act exceeds the amount provided under 
subsection (a)(2) with respect to the fiscal year, the Com-
mission shall reimburse the excess amount to the persons 
who have timely paid their annual fees, on a pro-rata basis 
that excludes penalties, and shall do so within 60 days 
after the end of the fiscal year. 
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(e) DEPOSIT OF FEES INTO THE TREASURY.—All 
amounts collected under this section shall be credited to 
the currently applicable appropriation, account, or fund of 
the Commission as discretionary offsetting collections, and 
shall be available for the purposes authorized in subsection 
(f) only to the extent and in the amounts provided in ad-
vance in appropriations Acts. 
(f) AUTHORIZATION OF APPROPRIATIONS.—In addi-
tion to amounts otherwise authorized to be appropriated 
to the Commission, there is authorized to be appropriated 
to the Commission amounts collected under this section 
to cover the costs the costs of carrying out the functions 
of the Commission under this Act. 
(g) SUNSET.—The authority to charge and collect 
fees under this section shall expire at the end of the 4th 
fiscal year that begins after the date of the enactment of 
this Act. 
SEC. 511. 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 rule-
making, the provision shall take effect on the later of— 
(1) 360 days after the date of enactment of this 
Act; or 
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(2) 60 days after the publication in the Federal 
Register of the final rule implementing the provision. 
SEC. 512. SENSE OF THE CONGRESS. 
It is the sense of the Congress that nothing in this 
Act or any amendment made by this Act should be inter-
preted to authorize any entity to regulate any commodity, 
other than a digital commodity, on any spot market. 
TITLE VI—INNOVATION AND 
TECHNOLOGY IMPROVEMENTS 
SEC. 601. FINDINGS; SENSE OF CONGRESS. 
(a) FINDINGS.—Congress finds the following: 
(1) Entrepreneurs and innovators are building 
and deploying this next generation of the internet. 
(2) Digital asset networks represent a new way 
for people to join together and cooperate with one 
another to undertake certain activities. 
(3) Digital assets have the potential to be the 
foundational building blocks of these networks, 
aligning the economic incentive for individuals to co-
operate with one another to achieve a common pur-
pose. 
(4) The digital asset ecosystem has the poten-
tial to grow our economy and improve everyday lives 
of Americans by facilitating collaboration through 
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the use of technology to manage activities, allocate 
resources, and facilitate decision making. 
(5) Blockchain networks and the digital assets 
they empower provide creator control, enhance 
transparency, reduce transaction costs, and increase 
efficiency if proper protections are put in place for 
investors, consumers, our financial system, and our 
national security. 
(6) Blockchain technology facilitates new types 
of network participation which businesses in the 
United States may utilize in innovative ways. 
(7) Other digital asset companies are setting up 
their operations outside of the United States, where 
countries are establishing frameworks to embrace 
the potential of blockchain technology and digital as-
sets and provide safeguards for consumers. 
(8) Digital assets, despite the purported ano-
nymity, provide law enforcement with an exceptional 
tracing tool to identify illicit activity and bring 
criminals to justice. 
(9) The Financial Services Committee of the 
House of Representatives has held multiple hearings 
highlighting various risks that digital assets can 
pose to the financial markets, consumers, and inves-
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tors that must be addressed as we seek to harness 
the benefits of these innovations. 
(b) SENSE OF CONGRESS.—It is the sense of Con-
gress that— 
(1) the United States should seek to prioritize 
understanding the potential opportunities of the next 
generation of the internet; 
(2) the United States should seek to foster ad-
vances in technology that have robust evidence indi-
cating they can improve our financial system and 
create more fair and equitable access to financial 
services for everyday Americans while protecting our 
financial system, investors, and consumers; 
(3) the United States must support the respon-
sible development of digital assets and the under-
lying technology in the United States or risk the 
shifting of the development of such assets and tech-
nology outside of the United States, to less regulated 
countries; 
(4) Congress should consult with public and 
private sector stakeholders to understand how to 
enact a functional framework tailored to the specific 
risks and unique benefits of different digital asset- 
related activities, distributed ledger technology, dis-
tributed networks, and decentralized systems; and 
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(5) Congress should enact a functional frame-
work tailored to the specific risks of different digital 
asset-related activities and unique benefits of distrib-
uted ledger technology, distributed networks, and de-
centralized systems; and 
(6) consumers and market participants will ben-
efit from a framework for digital assets consistent 
with longstanding investor protections in securities 
and commodities markets, yet tailored to the unique 
benefits and risks of the digital asset ecosystem. 
SEC. 602. 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 fol-
lowing: 
‘‘(l) STRATEGIC HUB FOR INNOVATION AND FINAN-
CIAL TECHNOLOGY.— 
‘‘(1) OFFICE
ESTABLISHED.—There is estab-
lished within the Commission the Strategic Hub for 
Innovation 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. 
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‘‘(B) To examine financial technology inno-
vations among market participants. 
‘‘(C) To coordinate the response of the 
Commission to emerging technologies in finan-
cial, regulatory, and supervisory systems. 
‘‘(3) DIRECTOR
OF
FINHUB.—FinHub shall 
have a Director who shall be appointed by the Com-
mission, from among individuals having experience 
in both emerging technologies and Federal securities 
laws and serve at the pleasure of the Commission. 
The Director shall report directly to the Commission 
and perform such functions and duties as the Com-
mission may prescribe. 
‘‘(4) RESPONSIBILITIES.—FinHub shall— 
‘‘(A) foster responsible technological inno-
vation and fair competition within the Commis-
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 Com-
mission’s functions; 
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