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(A) in each of paragraphs (1) and (2), by 
inserting ‘‘digital commodity exchange,’’ before 
‘‘derivatives’’; and 
(B) in paragraph (3), by inserting ‘‘digital 
commodity exchange,’’ before ‘‘derivatives’’ each 
place it appears; 
(3) in subsection (c)— 
(A) in paragraph (2), by inserting ‘‘or par-
ticipants’’ before ‘‘(in a’’; 
(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: 
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‘‘(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 submit a 
written certification to the Commission that the dig-
ital commodity meets the requirements of this Act 
(including the regulations prescribed under this 
Act). 
‘‘(2) CONTENTS OF THE CERTIFICATION.— 
‘‘(A) IN GENERAL.—In making a written 
certification under this paragraph, the eligible 
entity shall furnish to the Commission an anal-
ysis of how the digital commodity meets the re-
quirements of section 5i(c)(3). 
‘‘(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 
registered with the Securities and Exchange 
Commission or other State or Federal agency. 
‘‘(3) MODIFICATIONS.— 
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‘‘(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 dig-
ital commodity related person or a digital 
commodity 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 
listing of the digital commodity is inconsistent 
with the requirements of this Act or the rules 
and regulations prescribed under this Act. 
‘‘(B) ANALYSIS REQUIRED.—The Commis-
sion shall include, with any findings referred to 
in subparagraph (A), a detailed analysis of the 
factors on which the decision was based. 
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‘‘(C) PUBLIC FINDINGS.—The Commission 
shall make public any disapproval decision, and 
any related findings and analysis, made under 
this paragraph. 
‘‘(5) REVIEW.— 
‘‘(A) IN GENERAL.—Unless the Commis-
sion makes a disapproval decision under para-
graph (4), the written certification described in 
paragraph (1) shall become effective, pursuant 
to the certification by the eligible entity and no-
tice of the certification to the public (in a man-
ner determined by the Commission) on the date 
that is— 
‘‘(i) 20 business days after the date 
the Commission receives the certification 
(or such shorter period as determined by 
the Commission by rule or regulation), in 
the case of a digital commodity that has 
not been certified under this section or for 
which a certification is being modified 
under paragraph (3); or 
‘‘(ii) 1 business day after the date the 
Commission receives the certification (or 
such shorter period as determined by the 
Commission by rule or regulation) for any 
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digital commodity that has been certified 
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 Commission; and 
‘‘(ii) once, for an additional 30 busi-
ness days, through written notice to the el-
igible entity from the Commission that in-
cludes 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 
‘‘(III) potential inconsistencies 
with this Act. 
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‘‘(6) 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. 
‘‘(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.— 
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‘‘(i) IN GENERAL.—The Commission 
shall approve the listing of the digital com-
modity unless the Commission finds that 
the listing is inconsistent with this Act (in-
cluding any regulation prescribed under 
this Act). 
‘‘(ii) 
ANALYSIS
REQUIRED.—The 
Commission shall include, with any find-
ings made under clause (i), a detailed anal-
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. 
‘‘(7) ELIGIBLE ENTITY DEFINED.—In this sub-
section, the term ‘eligible entity’ means a registered 
entity or group of registered entities acting jointly.’’. 
SEC. 404. REGISTRATION OF DIGITAL COMMODITY EX-
CHANGES. 
The Commodity Exchange Act (7 U.S.C. 1 et seq.) 
is amended by inserting after section 5h the following: 
‘‘SEC. 5i. REGISTRATION OF DIGITAL COMMODITY EX-
CHANGES. 
‘‘(a) IN GENERAL.— 
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‘‘(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 
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, as the 
Commission may determine by rule or reg-
ulation, in a digital commodity; or 
‘‘(ii) serves only customers in a single 
State, territory, or possession of the 
United States. 
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‘‘(2) ADDITIONAL REGISTRATIONS.— 
‘‘(A) WITH THE COMMISSION.—In order to 
foster the development of fair and orderly mar-
kets, protect customers, and promote respon-
sible innovation, the Commission— 
‘‘(i) shall prescribe rules to exempt an 
entity registered with the Commission 
under more than 1 section of this Act from 
duplicative, conflicting, or unduly burden-
some provisions of this Act and the rules 
under this Act; 
‘‘(ii) shall prescribe rules to address 
conflicts of interests and activities of the 
entity; and 
‘‘(iii) may, after an analysis of the 
risks and benefits, prescribe rules to pro-
vide for portfolio margining. 
‘‘(B) WITH A REGISTERED FUTURES ASSO-
CIATION.— 
‘‘(i) IN GENERAL.—A registered dig-
ital commodity exchange shall become and 
remain a member of a registered futures 
association and comply with rules related 
to such activity, if the registered digital 
commodity exchange accepts customer 
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funds required to be segregated under sub-
section (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. 
‘‘(C) REGISTRATION REQUIRED.—A person 
required to be registered as a digital commodity 
exchange under this section shall register with 
the Commission as such regardless of whether 
the person is registered with another State or 
Federal regulator. 
‘‘(b) TRADING.— 
‘‘(1) PROHIBITION ON CERTAIN TRADING PRAC-
TICES.— 
‘‘(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-
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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 
agreement, contract, or transaction in a digital 
commodity as if the agreement, contract, or 
transaction were a contract of sale of a com-
modity for future delivery. 
‘‘(2) 
PROHIBITION
ON
ACTING
AS
A 
COUNTERPARTY.— 
‘‘(A) IN GENERAL.—A digital 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.—Subject to any condi-
tions, requirements, or limitations imposed by 
the Commission pursuant to subparagraph (C), 
a digital commodity exchange may engage in 
trading on the exchange so long as the trading 
is not solely for the purpose of the profit of the 
exchange, including the following: 
‘‘(i) CUSTOMER DIRECTION.—A trans-
action for, or entered into at the direction 
of, or for the benefit of, an unaffiliated 
customer. 
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‘‘(ii) RISK
MANAGEMENT.—A trans-
action to manage the credit, market, and 
liquidity risks associated with the digital 
commodity business of the exchange. 
‘‘(iii) 
OPERATIONAL
NEEDS.—A 
transaction related to the operational 
needs of the business of the digital com-
modity exchange or its affiliate. 
‘‘(iv) FUNCTIONAL
USE.—A trans-
action related to the functional operation 
of a blockchain system. 
‘‘(C) 
RULEMAKING.—The 
Commission 
may, by rule, establish conditions, requirements, 
or other limitations on the activities of a digital 
commodity exchange and its affiliate permitted 
pursuant to subparagraph (B) that are nec-
essary for the protection of customers, the pro-
motion of innovation, or the maintenance of 
fair, orderly, and efficient markets. 
‘‘(D) NOTICE
REQUIREMENT.—In order 
for a digital commodity exchange or any affil-
iate of a digital commodity exchange to engage 
in trading on the affiliated exchange pursuant 
to subsection (B), notice must be given to the 
Commission that shall enumerate how any pro-
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posed activity is consistent with the exceptions 
in subsection (B) and the purposes of this Act. 
‘‘(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). 
‘‘(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— 
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‘‘(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— 
‘‘(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.— 
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‘‘(A) IN GENERAL.—A digital commodity 
exchange shall establish policies and procedures 
to permit trading in a digital commodity only 
if— 
‘‘(i) reports with respect to the digital 
commodity required under, as applicable, 
section 4B(b)(3) or 4B(b)(5)(C) of the Se-
curities Act of 1933 (or, with respect to a 
digital commodity not issued in reliance on 
section 4(a)(8) of the Securities Act of 
1933, a comparable set of reports, where 
required by the Securities and Exchange 
Commission) have been filed with the Se-
curities and Exchange Commission; or 
‘‘(ii) such other similar information as 
the Commission may, by rule or regulation 
require, that is related to the ongoing de-
velopment plan of the blockchain system 
and is able to be publicly ascertained, has 
been provided to the public. 
‘‘(B) 
PUBLIC
INFORMATION
REQUIRE-
MENTS.— 
‘‘(i) IN
GENERAL.—A digital com-
modity exchange shall— 
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‘‘(I) permit trading in a digital 
commodity only if the digital com-
modity exchange reasonably deter-
mines that the information required 
by clause (ii) is correct, current, and 
available to the public; and 
‘‘(II) establish policies and proce-
dures to determine that the informa-
tion provided pursuant to clause (ii) is 
correct, current, and available to the 
public. 
‘‘(ii) REQUIRED INFORMATION.—With 
respect to a digital commodity and each 
blockchain system to which the digital 
commodity relates for which the digital 
commodity exchange will make the digital 
commodity available to the customers of 
the digital commodity exchange, the fol-
lowing information: 
‘‘(I) SOURCE CODE.—The source 
code for any blockchain system to 
which the digital commodity relates. 
‘‘(II) TRANSACTION HISTORY.—A 
description of the steps necessary to 
independently access, search, and 
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verify the transaction history of any 
blockchain system to which the digital 
commodity relates, to the extent any 
such independent access, search, and 
verification activities are technically 
feasible with respect to the blockchain 
system. 
‘‘(III) DIGITAL COMMODITY ECO-
NOMICS.—A narrative description of 
the purpose of any blockchain system 
to which the digital commodity relates 
and the operation of any such 
blockchain system, including— 
‘‘(aa) information explaining 
the launch and supply process, 
including the number of digital 
assets to be issued in an initial 
allocation, the total number of 
digital commodities to be created, 
the release schedule for the dig-
ital commodities, and the total 
number of digital commodities 
then outstanding; 
‘‘(bb) information detailing 
any applicable consensus mecha-
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nism or process for validating 
transactions, method of gener-
ating or mining digital commod-
ities, and any process for burning 
or destroying digital commodities 
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 commodities; 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 
and volatility of the digital commodity 
on the exchange. 
‘‘(V) 
ADDITIONAL
INFORMA-
TION.—Such additional information 
as the Commission may determine by 
rule to be necessary for a customer to 
understand the financial and oper-
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ational risks of a digital commodity, 
and to be practically feasible to pro-
vide. 
‘‘(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; 
‘‘(III) are not drafted in a way 
that presumes the customer already 
has a base knowledge, familiarity, or 
understanding of the basic termi-
nology, operation, and function of 
blockchain systems; and 
‘‘(IV) succinctly explain the in-
formation that is required to be com-
municated to the customer. 
‘‘(iv) RELIANCE
ON
PREVIOUS
DIS-
CLOSURES.—In complying with this sub-
paragraph, a digital commodity exchange 
may rely on and make available to the pub-
lic relevant information publicly disclosed 
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to the Commission, the Securities and Ex-
change Commission, or an appropriate 
Federal banking agency. 
‘‘(C) DIGITAL COMMODITIES HELD BY RE-
LATED AND DIGITAL COMMODITY AFFILIATED 
PERSONS.—A digital commodity exchange shall 
establish policies and procedures designed to 
permit the trading of a unit of a digital com-
modity acquired from the issuer and held by a 
digital commodity affiliated person or a digital 
commodity related person, only in accordance 
with the requirements of section 4C of the Se-
curities Act of 1933. 
‘‘(4) TREATMENT
OF
CUSTOMER
ASSETS.—A 
digital commodity exchange shall establish policies 
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. 
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‘‘(B) PROTECTION OF MARKETS AND MAR-
KET PARTICIPANTS.—A digital commodity ex-
change shall establish and enforce rules— 
‘‘(i) to protect markets and market 
participants from abusive practices com-
mitted by any party, including abusive 
practices committed by a party acting as 
an agent for a participant; and 
‘‘(ii) to promote fair and equitable 
trading on the exchange. 
‘‘(C) TRADING
PROCEDURES.—A digital 
commodity exchange shall— 
‘‘(i) establish and enforce rules or 
terms and conditions defining, or specifica-
tions detailing— 
‘‘(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 
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distortion, and disruptions, through sur-
veillance, 
compliance, 
and 
disciplinary 
practices and procedures, including meth-
ods for conducting real-time monitoring of 
trading and comprehensive and accurate 
trade reconstructions. 
‘‘(6) ABILITY
TO
OBTAIN
INFORMATION.—A 
digital commodity exchange shall— 
‘‘(A) establish and enforce rules that will 
allow the facility to obtain any necessary infor-
mation to perform any of the functions 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. 
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‘‘(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. 
‘‘(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 relating to the 
business of the exchange, including a com-
plete audit trail, in a form and manner ac-
ceptable 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 
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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. 
‘‘(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— 
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‘‘(I) foreign financial supervisors 
(including foreign futures authorities); 
‘‘(II) foreign central banks; and 
‘‘(III) foreign ministries. 
‘‘(C) CONFIDENTIALITY AGREEMENT.—Be-
fore the Commission may share information 
with any entity described in subparagraph (B), 
the Commission shall receive a written 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 
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‘‘(B) impose any material anticompetitive 
burden on trading. 
‘‘(11) CONFLICTS OF INTEREST.—The digital 
commodity exchange shall establish and enforce 
rules— 
‘‘(A) to minimize conflicts of interest in 
the decision making processes of the contract 
market; and 
‘‘(B) to establish a process for resolving 
conflicts of interest referred to in subparagraph 
(A). 
‘‘(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 sum of— 
‘‘(i) the total amount that would en-
able the digital commodity exchange to 
cover the operating costs of the digital 
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commodity exchange for a 1-year period, 
as calculated on a rolling basis; and 
‘‘(ii) the total amount necessary to 
meet the financial obligations of the digital 
commodity exchange to all customers of 
the digital commodity exchange. 
‘‘(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 and 
designed to permit consideration of the views of 
market participants. 
‘‘(B) FITNESS
STANDARDS.—A digital 
commodity exchange shall establish and enforce 
appropriate fitness standards for— 
‘‘(i) officers and directors; and 
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‘‘(ii) any individual or entity with di-
rect access to, or control of, customer as-
sets. 
‘‘(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 in ac-
cordance with industry standards, that— 
‘‘(i) are reliable and secure; and 
‘‘(ii) have adequate scalable capacity; 
‘‘(B) establish and maintain emergency 
procedures, backup resources, and a plan for 
disaster recovery that allow for— 
‘‘(i) the timely recovery and resump-
tion of operations; and 
‘‘(ii) the fulfillment of the responsibil-
ities and obligations of the digital com-
modity exchange; and 
‘‘(C) periodically conduct tests to verify 
that the backup resources of the digital com-
modity exchange are sufficient to ensure contin-
ued— 
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‘‘(i) 
order 
processing 
and 
trade 
matching; 
‘‘(ii) price reporting; 
‘‘(iii) market surveillance; and 
‘‘(iv) maintenance of a comprehensive 
and accurate audit trail. 
‘‘(d) HOLDING OF CUSTOMER ASSETS.— 
‘‘(1) IN
GENERAL.—A digital commodity ex-
change shall hold customer money, assets, and prop-
erty in a manner to minimize the risk of loss to the 
customer or unreasonable delay in customer access 
to the money, assets, and property of the customer. 
‘‘(2) SEGREGATION OF FUNDS.— 
‘‘(A) IN GENERAL.—A digital commodity 
exchange shall treat and deal with all money, 
assets, and property that is received by the dig-
ital commodity exchange, or accrues to a cus-
tomer as the result of trading in digital com-
modities, as belonging to the customer. 
‘‘(B) COMMINGLING PROHIBITED.—Money, 
assets, and property described in subparagraph 
(A) shall be separately accounted for and shall 
not be commingled with the funds of the digital 
commodity exchange or be used to margin, se-
cure, or guarantee any trades or accounts of 
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any customer or person other than the person 
for whom the same are held. 
‘‘(C) EXCEPTIONS.— 
‘‘(i) USE OF FUNDS.— 
‘‘(I) 
IN
GENERAL.—Notwith-
standing subparagraph (A), money, 
assets, and property described in sub-
paragraph (A) may, for convenience, 
be commingled and deposited in the 
same account or accounts with any 
bank, 
trust 
company, 
derivatives 
clearing organization, or qualified dig-
ital asset custodian. 
‘‘(II) 
WITHDRAWAL.—Notwith-
standing 
subparagraph 
(A), 
such 
share of the money, assets, and prop-
erty described in subparagraph (A) 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-
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age, and other charges, lawfully ac-
cruing in connection with the con-
tract. 
‘‘(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 may be commingled and 
deposited in customer accounts with any 
other money, assets, or property received 
by the digital commodity exchange and re-
quired by the Commission to be separately 
accounted for and treated and dealt with 
as belonging to the customer of the digital 
commodity exchange. 
‘‘(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, 
and in obligations fully guaranteed as to principal 
and interest by the United States, or in any other 
investment that the Commission may by rule or reg-
ulation prescribe, and such investments shall be 
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made in accordance with such rules and regulations 
and subject to such conditions as the Commission 
may prescribe. 
‘‘(4) 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 the sale of a unit of a digital commodity 
occurring on or subject to the rules of a digital 
commodity exchange shall be considered a con-
tract for the purchase or sale of a commodity 
for future delivery, on or subject to the rules of, 
a contract market or board of trade for pur-
poses of the definition of ‘commodity contract’ 
in section 761 of title 11, United States Code. 
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‘‘(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 (6) shall 
not be considered customer property for pur-
poses of section 761 of title 11, United States 
Code. 
‘‘(5) MISUSE OF CUSTOMER PROPERTY.— 
‘‘(A) IN GENERAL.—It shall be 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 asset custodian that has 
received any customer money, assets, or 
property for deposit, to hold, dispose of, or 
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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 (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) USE
OF
FUNDS.—A digital com-
modity exchange (or a designee of a digital 
commodity exchange) may use a unit of a dig-
ital commodity belonging to a customer to pro-
vide a blockchain service for a blockchain sys-
tem to which the unit of the digital commodity 
relates if— 
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‘‘(i) the customer expressly permits 
the use, in writing to the digital commodity 
exchange; and 
‘‘(ii) the digital commodity exchange 
complies with subparagraph (B). 
‘‘(B) LIMITATIONS.— 
‘‘(i) IN GENERAL.—The Commission 
shall, by rule, establish notice and disclo-
sure requirements, and may, by rule, es-
tablish any other limitations and rules re-
lated to a permission provided under sub-
paragraph (A) that are reasonably nec-
essary to protect customers, including eligi-
ble contract participants, non-eligible con-
tract participants, or any other class of 
customers. 
‘‘(ii) CUSTOMER
CHOICE.—A digital 
commodity exchange may not require a 
customer to provide the permission re-
ferred to in subparagraph (A) as a condi-
tion of doing business on the exchange. 
‘‘(C) REQUIREMENTS.—The Commission 
may, by rule, waive or modify the requirements 
of paragraph (2) or subsection (h), to facilitate 
the use of a unit of a digital commodity belong-
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ing to a customer to provide a blockchain serv-
ice. 
‘‘(D) BLOCKCHAIN SERVICE DEFINED.—In 
this paragraph, 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, including protocol consensus participa-
tion activities described in section 2(a)(30)(B) 
of the Securities Act of 1933, required for the 
ongoing operation of a blockchain system. 
‘‘(e) MARKET ACCESS REQUIREMENTS.—The Com-
mission may, by rule, impose any additional requirements 
related to the operations and activities of the digital com-
modity exchange and an affiliated digital commodity 
broker necessary to protect market participants, promote 
fair and equitable trading on the digital commodity ex-
change, and promote responsible 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— 
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‘‘(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, 
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-
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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 conflicts of 
interest policies, of the digital commodity 
exchange. 
‘‘(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.— 
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‘‘(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)— 
‘‘(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. 
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‘‘(h) QUALIFIED DIGITAL ASSET CUSTODIAN.—A 
digital commodity exchange shall hold in a qualified digital 
asset custodian each unit of a digital asset that is— 
‘‘(1) the property of a customer of the digital 
commodity exchange; 
‘‘(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. 
‘‘(i) EXEMPTIONS.— 
‘‘(1) IN
GENERAL.—In order to promote re-
sponsible innovation and fair competition, or protect 
customers, the Commission may (on its own initia-
tive or on application of the digital commodity ex-
change) exempt, either unconditionally or on stated 
terms or conditions or for stated periods and either 
retroactively or prospectively, or both, a digital com-
modity exchange from the requirements of this Act, 
if the Commission determines that— 
‘‘(A) the exemption would be consistent 
with the public interest and the purposes of this 
Act; and 
‘‘(B) the exemption will not have a mate-
rial adverse effect on the ability of the Commis-
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sion or the digital commodity exchange to dis-
charge regulatory or self-regulatory duties 
under this Act. 
‘‘(2) FOREIGN EXCHANGES.—The Commission 
may exempt, conditionally or unconditionally, a dig-
ital commodity exchange from registration under 
this section if the Commission finds that the digital 
commodity exchange is subject to comparable, com-
prehensive supervision and regulation on a consoli-
dated basis by the appropriate governmental au-
thorities 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 with respect to activities and 
transactions subject to this Act.’’. 
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SEC. 405. QUALIFIED DIGITAL ASSET 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 ASSET CUSTODIANS. 
‘‘(a) IN GENERAL.—A person is a qualified digital 
asset custodian for purposes of this Act if the person— 
‘‘(1) holds digital assets on behalf of a person 
registered under this Act or a customer of a person 
registered under this Act; and 
‘‘(2) is in compliance with subsections (b) and 
(c). 
‘‘(b) SUPERVISION REQUIREMENT.—A person is in 
compliance with this subsection if the person is subject 
to— 
‘‘(1) supervision and examination for custody 
and safekeeping of digital assets by an appropriate 
Federal banking agency, the National Credit Union 
Administration, the Commission, or the Securities 
and Exchange Commission; or 
‘‘(2) adequate supervision and appropriate reg-
ulation for custody and safekeeping of digital assets 
by— 
‘‘(A) a State bank supervisor (within the 
meaning of section 3 of the Federal Deposit In-
surance Act); 
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‘‘(B) a State officer, agency, or other enti-
ty which has primary regulatory authority over 
nondepository State trust companies; 
‘‘(C) a State credit union supervisor, as 
defined under section 6003 of the Anti-Money 
Laundering Act of 2020; or 
‘‘(D) an appropriate foreign governmental 
authority in the home country of such person. 
‘‘(c) OTHER REQUIREMENTS.—A person shall be in 
compliance with this subsection if: 
‘‘(1) NOT OTHERWISE PROHIBITED.—The per-
son has not been prohibited by its supervisor from 
engaging in an activity with respect to the custody 
and safekeeping of digital assets. 
‘‘(2) INFORMATION SHARING.— 
‘‘(A) IN GENERAL.—The person shares in-
formation with the Commission on request and 
complies with such requirements for periodic 
sharing of information regarding customer ac-
counts that the person holds on behalf of an en-
tity 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. 
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‘‘(B) PROVISION OF INFORMATION.—If the 
person is subject to regulation and examination 
by an appropriate Federal banking agency, the 
person may satisfy any information request de-
scribed in subparagraph (A) by providing the 
Commission with a detailed listing, in writing, 
of the digital assets of a customer in the cus-
tody of, or use by, the person. 
‘‘(3) RULEMAKING FOR CFTC ENTITIES.— 
‘‘(A) IN GENERAL.—The Commission shall 
prescribe rules to permit a person registered 
with the Commission to be a qualified digital 
asset custodian in compliance with this section. 
‘‘(B) CONTENT.—In prescribing the rules 
under subparagraph (A), the Commission shall 
require a person registered with the Commis-
sion to— 
‘‘(i) implement requirement consistent 
with the requirements in subsection (d)(1); 
‘‘(ii) establish sufficient system safe-
guards; 
‘‘(iii) prevent or mitigate conflicts of 
interest, as appropriate; and 
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‘‘(iv) establish separate governance ar-
rangements for the custodial function 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 assets held by a person 
registered under this Act, including standards relat-
ing to the licensing, examination, and supervisory 
processes that require the person to, at a min-
imum— 
‘‘(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 person; 
‘‘(B) hold capital sufficient for the finan-
cial integrity of the person; 
‘‘(C) protect customer assets; 
‘‘(D) establish and maintain books and 
records regarding the business of the person; 
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‘‘(E) submit financial statements and 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 
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 and appro-
priate for the protection of customers, and con-
sistent with the purposes of this Act. 
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‘‘(B) 
EXISTING
DIGITAL
ASSET 
CUSTODIANS.—A trust company operating as a 
digital asset custodian before the effective date 
of a rulemaking under subparagraph (A) is 
deemed subject to adequate supervision and ap-
propriate 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 2 
years for any trust company that is deemed 
subject to adequate supervision and appropriate 
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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, 
or any requirement to utilize a qualified digital asset cus-
todian, if the Commission determines that the suspension 
would be consistent with the public interest and the pur-
poses of this Act.’’. 
SEC. 406. REGISTRATION AND REGULATION OF DIGITAL 
COMMODITY BROKERS AND DEALERS. 
The Commodity Exchange Act (7 U.S.C. 1 et seq.) 
is amended by inserting after section 4t the following: 
‘‘SEC. 4u. REGISTRATION AND REGULATION OF DIGITAL 
COMMODITY BROKERS AND DEALERS. 
‘‘(a) REGISTRATION.— 
‘‘(1) REQUIREMENT.—It shall be unlawful for 
any person to act as a digital commodity broker or 
digital commodity dealer unless the person is reg-
istered as such with the Commission. 
‘‘(2) ADDITIONAL REGISTRATION.— 
‘‘(A) RULES.—In order to foster the devel-
opment of fair and orderly markets, protect 
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customers, and promote responsible innovation, 
the Commission— 
‘‘(i) shall prescribe rules to exempt an 
entity registered with the Commission 
under more than 1 section of this Act from 
duplicative, conflicting, or unduly burden-
some provisions of this Act and the rules 
under this Act; 
‘‘(ii) shall prescribe rules to address 
conflicts of interests and the activities of 
the entity; and 
‘‘(iii) may after an analysis of the 
risks and benefits, prescribe rules to pro-
vide for portfolio margining. 
‘‘(B) WITH
MEMBERSHIP
IN
A
REG-
ISTERED FUTURES ASSOCIATION.—Any person 
required to be registered as a digital commodity 
broker or digital commodity dealer under this 
section shall become and remain a member of 
a registered futures association. 
‘‘(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. 
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‘‘(2) CONTENTS.— 
‘‘(A) IN GENERAL.—The application shall 
be made in such form and manner as is pre-
scribed by the Commission, and shall contain 
such information as the Commission considers 
necessary concerning the business in which the 
applicant is or will be engaged. 
‘‘(B) CONTINUAL REPORTING.—A person 
that is registered as a digital commodity broker 
or digital commodity dealer shall continue to 
submit to the Commission reports that contain 
such information pertaining to the business of 
the person as the Commission may require. 
‘‘(3) 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-
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cise of reasonable care should have known, of the 
statutory disqualification. 
‘‘(c) RULEMAKING.— 
‘‘(1) IN GENERAL.—The Commission shall pre-
scribe such rules applicable to registered digital com-
modity brokers and registered digital commodity 
dealers as are appropriate to carry out this section, 
including rules in the public interest that limit the 
activities of digital commodity brokers and digital 
commodity dealers. 
‘‘(2) FINANCING AGREEMENTS.— 
‘‘(A) IN GENERAL.—The Commission shall 
prescribe rules and regulations applicable to 
digital commodity brokers or digital commodity 
dealers which shall set forth minimum require-
ments related to disclosure, recordkeeping, mar-
gin financing arrangements, rehypothecation, 
capital, reporting, business conduct, documenta-
tion, and supervision of employees and agents, 
in connection with— 
‘‘(i) an agreement described in section 
2(c)(2)(D)(iv); or 
‘‘(ii) any other margined, leveraged, 
or financing arrangement for the purchase 
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or sale of a digital commodity with an eli-
gible contract participant. 
‘‘(B) SPECIFIC
AUTHORITY.—Except as 
prohibited in section 2(c)(2)(G)(iii), the Com-
mission may also make, promulgate, and en-
force such rules and regulations as, in the judg-
ment of the Commission, are reasonably nec-
essary to effectuate any of the provisions of, or 
to accomplish any of the purposes of, this Act 
in connection with an agreement referred to in 
subparagraph (A) of this paragraph. 
‘‘(d) 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, at all times, to— 
‘‘(A) meet, and continue to meet the obli-
gations of such a registrant; and 
‘‘(B) fulfill obligations to customers or 
counterparties for any margined, leveraged, or 
financed transactions. 
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‘‘(2) 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.). 
‘‘(e) REPORTING AND RECORDKEEPING.—Each dig-
ital commodity broker and digital commodity dealer— 
‘‘(1) shall make such reports as are required by 
the Commission by rule or regulation regarding the 
transactions, positions, and financial condition of the 
digital commodity broker or digital commodity deal-
er, respectively; 
‘‘(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. 
‘‘(f) DAILY TRADING RECORDS.— 
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‘‘(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. 
‘‘(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. 
‘‘(g) BUSINESS CONDUCT STANDARDS.— 
‘‘(1) IN
GENERAL.—Each digital commodity 
broker and digital commodity dealer shall conform 
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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. 
‘‘(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; and 
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‘‘(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 appropriate for the protection of customers. 
‘‘(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. 
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‘‘(h) 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 
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. 
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‘‘(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 
establish, maintain, and enforce written policies and 
procedures reasonably designed, taking into consid-
eration the nature of the business of the person, to 
mitigate any conflicts of interest in transactions or 
arrangements with affiliates. 
‘‘(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. 
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‘‘(i) DESIGNATION
OF CHIEF COMPLIANCE OFFI-
CER.— 
‘‘(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 this Act (in-
cluding regulations); and 
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‘‘(ii) each policy and procedure of the 
registered digital commodity broker or reg-
istered digital commodity dealer followed 
by 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. 
‘‘(j) 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
ASSET
CUSTO-
DIAN.—Each digital commodity broker and dig-
ital commodity dealer shall hold in a qualified 
digital asset custodian each unit of a digital 
asset that is— 
‘‘(i) the property of a customer or 
counterparty of the digital commodity 
broker or digital 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 asset custo-
dian 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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poses of section 761 of title 11, United States 
Code. 
‘‘(B) TRANSACTIONS.—A transaction in-
volving a unit of a digital commodity occurring 
with a digital commodity broker or digital com-
modity dealer shall be considered a contract for 
the purchase or sale of a commodity for future 
delivery, on or subject to the rules of, a con-
tract market or board of trade for purposes of 
the definition of a ‘commodity contract’ in sec-
tion 761 of title 11, United States Code. 
‘‘(C) BROKERS AND DEALERS.—A digital 
commodity broker and a digital commodity 
dealer shall be considered a futures commission 
merchant for purposes of section 761 of title 
11, United States Code. 
‘‘(D) ASSETS
REMOVED
FROM
SEGREGA-
TION.—Assets removed from segregation due to 
a customer election under paragraph (6) shall 
not be considered customer property for pur-
poses of section 761 of title 11, United States 
Code. 
‘‘(5) MISUSE OF CUSTOMER PROPERTY.— 
‘‘(A) IN GENERAL.—It shall be unlawful— 
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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) USE
OF
FUNDS.—A digital com-
modity broker or digital commodity dealer (or a 
designee of a digital commodity broker or a dig-
ital commodity dealer) may use a unit of a dig-
ital commodity belonging to a customer to pro-
vide a blockchain service for a blockchain sys-
tem to which the unit of the digital commodity 
relates if— 
‘‘(i) the customer expressly permits 
the use, in writing to the digital commodity 
broker or digital commodity dealer, as the 
case may be; and 
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‘‘(ii) the digital commodity broker or 
the digital commodity dealer, as the case 
may be, complies with subparagraph (B). 
‘‘(B) LIMITATIONS.— 
‘‘(i) IN GENERAL.—The Commission 
shall, by rule, establish notice and disclo-
sure requirements, and may, by rule, es-
tablish any other limitations and rules re-
lated to a permission provided under sub-
paragraph (A) that are reasonably nec-
essary to protect customers, including eligi-
ble contract participants, non-eligible con-
tract participants, or any other class of 
customers. 
‘‘(ii) CUSTOMER
CHOICE.—A digital 
commodity broker or digital commodity 
dealer may not require a customer to pro-
vide the permission referred to in subpara-
graph (A) as a condition of doing business 
with the broker or dealer. 
‘‘(C) REQUIREMENTS.—The Commission 
may, by rule, waive or modify the requirements 
of paragraph (2) or subsection (h), to facilitate 
the use of a unit of a digital commodity belong-
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ing to a customer to provide a blockchain serv-
ice. 
‘‘(D) BLOCKCHAIN SERVICE DEFINED.—In 
this paragraph, 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, including protocol consensus participa-
tion activities described in section 2(a)(30)(B) 
of the Securities Act of 1933, required for the 
ongoing operation of a blockchain system. 
‘‘(k) 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 with re-
spect to activities subject to this Act. 
‘‘(l) EXEMPTIONS.—In order to promote responsible 
innovation and fair competition, or protect customers, the 
Commission may (on its own initiative or on application 
of the digital commodity broker or digital commodity deal-
er) exempt, unconditionally or on stated terms or condi-
tions, or for stated periods, and retroactively or prospec-
tively, or both, a digital commodity broker or digital com-
modity dealer from the requirements of this Act, if the 
Commission determines that— 
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‘‘(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 digital commodity broker or digital 
commodity dealer is subject to comparable, com-
prehensive supervision and regulation by the appro-
priate government authorities in the home country 
of the digital commodity broker or digital commodity 
dealer, respectively.’’. 
SEC. 407. REGISTRATION OF ASSOCIATED PERSONS. 
(a) IN GENERAL.—Section 4k of the Commodity Ex-
change Act (7 U.S.C. 6k) is amended— 
(1) by redesignating subsections (4) through 
(6) as subsections (5) through (7), respectively; 
(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-
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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 
(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. 408. REGISTRATION OF COMMODITY POOL OPERA-
TORS AND COMMODITY TRADING ADVISORS. 
(a) IN GENERAL.—Section 4m(3) of the Commodity 
Exchange Act (7 U.S.C. 6m(3)) is amended— 
(1) in subparagraph (A)— 
(A) by striking ‘‘any commodity trading 
advisor’’ and inserting ‘‘a commodity pool oper-
ator or commodity trading advisor’’; and 
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(B) by striking ‘‘acting as a commodity 
trading advisor’’ and inserting ‘‘acting as a 
commodity pool operator or commodity trading 
advisor’’; and 
(2) in subparagraph (C), by inserting ‘‘digital 
commodities,’’ after ‘‘physical commodities,’’. 
(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. 409. 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: 
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‘‘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-
tion to decentralized finance trading protocol: 
‘‘(1) Compiling network transactions or relay-
ing, searching, sequencing, validating, or acting in a 
similar capacity. 
‘‘(2) Providing computational work, operating a 
node or oracle service, or procuring, offering, or uti-
lizing network bandwidth, or other similar incidental 
services. 
‘‘(3) Providing a user-interface that enables a 
user to read, and access data about a blockchain 
system. 
‘‘(4) Developing, publishing, or otherwise dis-
tributing a blockchain system or a decentralized fi-
nance messaging system. 
‘‘(5) Constituting, administering, or maintain-
ing a decentralized finance messaging system or de-
centralized finance trading protocol, or operating or 
participating in a liquidity pool with respect thereto, 
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for the purpose of executing a spot transaction for 
the purchase or sale of a digital commodity. 
‘‘(6) 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 
keep, safeguard, or custody the user’s digital assets 
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. 410. RESOURCES FOR IMPLEMENTATION AND EN-
FORCEMENT. 
(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 fee 
from each person in provisional status registered 
with the Commission pursuant to section 106, on— 
(A) the filing of the initial application for 
registration; and 
(B) an annual basis thereafter for main-
taining provisional status. 
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(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-
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 Committees on Agriculture and on Appropria-
tions of the House of Representatives and the Com-
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