I 
116TH CONGRESS 
2D SESSION 
H. R. 8373 
To provide for orderly and secure digital commodity exchange markets, and 
for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 24, 2020 
Mr. CONAWAY (for himself, Mr. AUSTIN SCOTT of Georgia, Mr. JOHNSON of 
South Dakota, Mr. EMMER, Mr. SOTO, and Mr. SCHWEIKERT) introduced 
the following bill; which was referred to the Committee on Agriculture 
A BILL 
To provide for orderly and secure digital commodity exchange 
markets, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Digital Commodity Ex-
change Act of 2020’’. 
SEC. 2. AMENDMENTS TO THE COMMODITY EXCHANGE 
ACT. 
(a) DEFINITIONS.—Section 1a of the Commodity Ex-
change Act (7 U.S.C. 1a) is amended— 
(1) in paragraph (40)— 
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(A) in subparagraph (E), by striking 
‘‘and’’ at the end; and 
(B) by redesignating subparagraph (F) as 
subparagraph (G) and inserting after subpara-
graph (E) the following: 
‘‘(F) a digital commodity exchange reg-
istered under section 5i; and’’; and 
(2) by adding at the end the following: 
‘‘(52) DIGITAL COMMODITY.—The term ‘digital 
commodity’ means any form of fungible intangible 
personal property that can be exclusively possessed 
and transferred person to person without necessary 
reliance on an intermediary, and which does not rep-
resent a financial interest in a company, partner-
ship, or investment vehicle. 
‘‘(53) DIGITAL COMMODITY CUSTODIAN.—The 
term ‘digital commodity custodian’ means an entity 
that holds, maintains, or safeguards digital commod-
ities and other assets on behalf of digital commodity 
market participants. 
‘‘(54) DIGITAL
COMMODITY
EXCHANGE.—The 
term ‘digital commodity exchange’ means a trading 
facility that lists for trading at least one digital com-
modity. 
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‘‘(55) DIGITAL
COMMODITY
PRESALE.—The 
term ‘digital commodity presale’ means the delivery 
of a unit of a digital commodity, or any promise or 
right to a future unit of a digital commodity, to a 
participant in a securities offering conducted in com-
pliance with the Securities Act of 1933 before the 
listing of the digital commodity for trading on a reg-
istered digital commodity exchange.’’. 
(b) COMMISSION JURISDICTION OVER RETAIL DIG-
ITAL COMMODITY TRANSACTIONS.—Section 2(c)(2) of 
such Act (7 U.S.C. 2(c)(2)) is amended— 
(1) in subparagraph (D)(ii)— 
(A) in subclause (III), in the matter that 
precedes item (aa), by inserting ‘‘of a com-
modity, other than a digital commodity,’’ before 
‘‘that’’; and 
(B) by redesignating subclauses (IV) and 
(V) as subclauses (V) and (VI) and inserting 
after subclause (III) the following: 
‘‘(IV) a contract of sale of a dig-
ital commodity that— 
‘‘(aa) results in actual deliv-
ery within 2 days or such other 
period as the Commission may 
determine by rule or regulation 
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based upon the typical commer-
cial practice in cash or spot mar-
kets for the digital commodity in-
volved; or 
‘‘(bb) is executed on or sub-
ject to the rules of a registered 
digital 
commodity 
exchange;’’; 
and 
(2) by adding at the end the following: 
‘‘(F) COMMISSION JURISDICTION OVER DIGITAL 
COMMODITY TRANSACTIONS.— 
‘‘(i) Notwithstanding any other provision of 
law, the Commission shall have exclusive jurisdiction 
over any agreement, contract, or transaction involv-
ing a contract of sale of any digital commodity in 
interstate commerce which is offered, solicited, trad-
ed, executed, or otherwise dealt in on or subject to 
the rules of a registered entity, including the con-
duct of any such office or business. 
‘‘(ii) Notwithstanding any other provision of 
law, the Commission shall have exclusive jurisdiction 
over any agreement, contract, or transaction involv-
ing a unit of a digital commodity, or any promise or 
right to a future unit of a digital commodity, ob-
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tained through a digital commodity presale and sub-
ject to the restrictions in section 4c(h). 
‘‘(iii) Nothing in this subparagraph shall be 
construed to limit the power of any State or other 
Federal regulatory agency, or to provide the Com-
mission with jurisdiction, with respect to— 
‘‘(I) custodial or depository activities for a 
digital asset, or custodial or depository activi-
ties for any promise or right to a future digital 
asset, of an entity regulated by a State or an-
other Federal regulatory agency; or 
‘‘(II) a securities offering or transaction 
associated with— 
‘‘(aa) a digital commodity presale; or 
‘‘(bb) a sale described in section 
4c(h)(3)(A)(i).’’. 
(c) PROHIBITED TRANSACTIONS.—Section 4c of such 
Act (7 U.S.C. 6c) is amended by adding at the end the 
following: 
‘‘(h) PROHIBITED
DIGITAL
COMMODITY
TRANS-
ACTIONS.— 
‘‘(1) IN GENERAL.—It shall be a violation of 
this Act for any person who owns or controls a unit 
of a digital commodity, or any promise or right to 
a future unit of a digital commodity, obtained 
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to be obtained though a digital commodity 
presale. 
‘‘(D) PRIOR
DIGITAL
COMMODITIES.—A 
unit of a digital commodity shall not be subject 
to this subsection if, before the date of the en-
actment of this subsection, the digital com-
modity was publicly available for trading on a 
trading facility licensed as a money transmitter 
in a State or territory of the United States. 
‘‘(4) TRANSITION RULES.— 
‘‘(A) IN GENERAL.—For the purpose of a 
transaction described in paragraph (3)(B), the 
Commission shall consider a trading facility to 
be a registered digital commodity exchange if— 
‘‘(i) the trading facility— 
‘‘(I) has been continuously li-
censed as a money transmitter in at 
least 20 States or territories of the 
United States since August 1, 2019; 
‘‘(II) is a designated contract 
market; or 
‘‘(III) is a swap execution facil-
ity; 
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‘‘(ii) the trading facility submits a 
listing notice to the Commission con-
taining— 
‘‘(I) documentation demonstrat-
ing its licensing referred to in clause 
(i)(I); and 
‘‘(II) the determination made by 
the trading facility under section 
5i(c)(3) that the digital commodity 
that is the subject of the transaction 
is not readily susceptible to manipula-
tion; and 
‘‘(iii) the Commission has not issued a 
notice of disapproval of the listing notice. 
‘‘(B) DISAPPROVAL PROCESS.—In making 
a disapproval under subparagraph (A), the 
Commission shall— 
‘‘(i) issue any disapproval within 20 
business days after receipt of a completed 
listing notice; and 
‘‘(ii) identify the specific deficiencies 
with the listing notice that necessitated the 
disapproval. 
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‘‘(C) EXTENSIONS.—The Commission may 
extend the time for disapproval under subpara-
graph (B)— 
‘‘(i) once, for 20 days, through writ-
ten notice to the digital commodity ex-
change given by a division director; and 
‘‘(ii) once, for an additional 90 busi-
ness days, through notice given by the 
Commission which includes a description of 
any deficiencies with the listing notice, in-
cluding 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. 
‘‘(D) EXPIRATION.—The authority pro-
vided by this subparagraph shall expire 1 year 
after the date of the final promulgation of the 
digital commodity exchange registration re-
quirements, or on the first registration of a dig-
ital commodity exchange, whichever occurs ear-
lier.’’. 
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(d) COMMON PROVISIONS APPLICABLE
TO REG-
ISTERED ENTITIES.—Section 5c of such 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; and 
(3) in subsection (c)— 
(A) in paragraph (2), by inserting ‘‘or par-
ticipants’’ before ‘‘(in’’; 
(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 THE LISTING OF 
CERTAIN DIGITAL COMMODITIES.— 
‘‘(i) IN GENERAL.—In the case of list-
ing a digital commodity for trading which 
has not yet been listed for trading on an-
other registered entity, paragraphs (2) and 
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(3) shall apply as if the listing were a rule, 
and paragraph (2) shall be applied by sub-
stituting ‘20 business days’ for ‘10 busi-
ness days’. 
‘‘(ii) TRANSITIONAL
EXTENSION.— 
For 1 year after the registration of the 
first digital commodity exchange, the Com-
mission shall have an additional 20 busi-
ness days review any certification under 
clause (i). 
‘‘(iii) 
DIGITAL
COMMODITY 
PRESALES.—In conjunction with listing a 
digital commodity in which any unit of the 
digital commodity was obtained through a 
digital commodity presale, the Commission 
shall require the registered entity to pro-
hibit the sale of any unit of the digital 
commodity that was obtained in violation 
of section 4c(h).’’. 
(e) REGISTRATION
OF DIGITAL COMMODITY EX-
CHANGES; 
QUALIFIED
DIGITAL
COMMODITY 
CUSTODIANS.—The Commodity Exchange Act (7 U.S.C. 
1 et seq.) is amended by inserting after section 5h the 
following: 
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‘‘SEC. 5i. REGISTRATION OF DIGITAL COMMODITY EX-
CHANGES. 
‘‘(a) IN GENERAL.— 
‘‘(1) VOLUNTARY REGISTRATION.— 
‘‘(A) IN
GENERAL.—Any trading facility 
that offers or seeks to offer a market in digital 
commodities may register with the Commission 
as a digital commodity exchange. 
‘‘(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 under subsections (c) and (e). 
‘‘(2) DEEMED
REGISTRATION.—A registered 
designated contract market or registered swap exe-
cution facility which fulfills the requirements of this 
section shall be considered a registered digital com-
modity exchange. 
‘‘(b) TRADING.— 
‘‘(1) IN
GENERAL.—A digital commodity ex-
change that is registered under subsection (a) may 
make available for trading any digital commodity 
that is not readily subject to manipulation, subject 
to this subsection. 
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‘‘(2) RULES GOVERNING MARGINED OR LEVER-
AGED TRADING.—The Commission may make, pro-
mulgate, and enforce such rules governing margined, 
leveraged, or financed transactions as are reasonably 
necessary to protect market participants and pro-
mote the orderly settlement of transactions with re-
spect to— 
‘‘(A) disclosure; 
‘‘(B) recordkeeping; 
‘‘(C) capital, margin, and other financial 
resources; 
‘‘(D) reporting; 
‘‘(E) business conduct; 
‘‘(F) documentation; and 
‘‘(G) such other matters as the Commis-
sion demonstrates to be necessary. 
‘‘(3) PROHIBITION ON CERTAIN TRADING PRAC-
TICES.—Sections 4b, 4c, and 6(c) shall apply to any 
agreement, contract, or transaction in a digital com-
modity as if the agreement, contract, or transaction 
were a contract of sale of a commodity for future de-
livery. 
‘‘(4) PROHIBITION ON TRADING DERIVATIVES 
PRODUCTS.—Registration as a digital commodity ex-
change shall not permit a trading facility to offer 
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any contract of sale of a commodity for future deliv-
ery, option, or swap for trading without also being 
registered as a designated contract market or swap 
execution facility. 
‘‘(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, the 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. 
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‘‘(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— 
‘‘(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. 
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‘‘(3) DIGITAL COMMODITIES NOT READILY SUS-
CEPTIBLE TO MANIPULATION.— 
‘‘(A) IN GENERAL.—The digital commodity 
exchange shall permit trading only in digital 
commodities that are not readily susceptible to 
manipulation. 
‘‘(B) DETERMINATIONS.—Prior to offering 
trading in any digital commodity, the digital 
commodity exchange shall make a determina-
tion under this paragraph as to whether the 
digital commodity is readily susceptible to ma-
nipulation. 
‘‘(C) CONSIDERATIONS.—In making a de-
termination under this paragraph, the exchange 
shall consider the digital commodity’s— 
‘‘(i) purpose and use; 
‘‘(ii) governance structure; 
‘‘(iii) participation; 
‘‘(iv) distribution; 
‘‘(v) intended, current, and proposed 
functionality; 
‘‘(vi) other relevant factors deter-
mined by the exchange; and 
‘‘(vii) any other factor required by the 
Commission. 
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‘‘(D) RULES
FOR
DIGITAL
COMMODITY 
PRESALES.—The digital commodity exchange 
shall have in place such rules as may be nec-
essary to reasonably ensure the orderly sale of 
any unit of a digital commodity obtained 
through a digital commodity presale. 
‘‘(4) TREATMENT OF CUSTOMER ASSETS.— 
‘‘(A) REQUIRED STANDARDS AND PROCE-
DURES.—Each digital commodity exchange 
shall establish standards and procedures that 
are designed to protect and ensure the safety of 
customer money, assets, and property. 
‘‘(B) HOLDING OF CUSTOMER ASSETS.— 
‘‘(i) IN GENERAL.—Each digital com-
modity exchange shall hold customer 
money, assets, and property in a manner 
to minimize the customer’s risk of loss or 
unreasonable delay in the access to the 
money, assets, and property of the cus-
tomer. 
‘‘(ii) SEGREGATION OF FUNDS.— 
‘‘(I) IN
GENERAL.—A digital 
commodity exchange shall treat and 
deal with all money, assets, and prop-
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erty of any customer received as be-
longing to the customer. 
‘‘(II) 
COMMINGLING
PROHIB-
ITED.—Money, assets, and property of 
a customer described in subclause (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. 
‘‘(iii) EXCEPTIONS.— 
‘‘(I) USE OF FUNDS.— 
‘‘(aa) IN
GENERAL.—Not-
withstanding clause (ii), money, 
assets, and property of customers 
of a described in clause (ii) may, 
for convenience, be commingled 
and deposited in the same ac-
count or accounts with any bank, 
trust company, or qualified dig-
ital commodity custodian. 
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‘‘(bb) WITHDRAWAL.—Not-
withstanding clause (ii), such 
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 digital com-
modity transaction with a reg-
istered entity may be withdrawn 
and applied to such purposes, in-
cluding the payment of commis-
sions, brokerage, interest, taxes, 
storage, and other charges, law-
fully accruing in connection with 
the 
digital 
commodity 
trans-
action. 
‘‘(II) 
COMMISSION
ACTION.— 
Notwithstanding clause (ii), in accord-
ance with such terms and conditions 
as the Commission may prescribe by 
rule, regulation, or order, any money, 
assets, or property of the customers of 
a digital commodity exchange de-
scribed in clause (ii) may be commin-
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