I 
118TH CONGRESS 
1ST SESSION H. R. 4763 
To provide for a system of regulation of digital assets by the Commodity 
Futures Trading Commission and the Securities and Exchange Commis-
sion, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 20, 2023 
Mr. THOMPSON of Pennsylvania (for himself, Mr. HILL, Mr. JOHNSON of 
South Dakota, Mr. DAVIDSON, and Mr. EMMER) introduced the following 
bill; which was referred to the Committee on Financial Services, and in 
addition to the Committee on Agriculture, for a period to be subsequently 
determined by the Speaker, in each case for consideration of such provi-
sions as fall within the jurisdiction of the committee concerned 
A BILL 
To provide for a system of regulation of digital assets by 
the Commodity Futures Trading Commission and the 
Securities and Exchange Commission, and for other pur-
poses. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Financial Innovation and Technology for the 21st Cen-
tury Act’’. 
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(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
TITLE I—DEFINITIONS; RULEMAKING; PROVISIONAL 
REGISTRATION 
Sec. 101. Definitions under the Securities Act of 1933. 
Sec. 102. Definitions under the Commodity Exchange Act. 
Sec. 103. Definitions under this Act. 
Sec. 104. Joint rulemakings. 
Sec. 105. Notice of intent to register for digital commodity exchanges, brokers, 
and dealers. 
Sec. 106. Notice of intent to register for digital asset brokers, dealers, and 
trading systems. 
Sec. 107. Commodity Exchange Act savings provisions. 
Sec. 108. International harmonization. 
Sec. 109. Implementation. 
TITLE II—DIGITAL ASSET EXEMPTIONS 
Sec. 201. Exempted transactions in digital assets. 
Sec. 202. Requirements to transact in certain digital assets. 
Sec. 203. Enhanced disclosure requirements. 
Sec. 204. Certification of certain digital assets. 
Sec. 205. Effective date. 
TITLE III—REGISTRATION FOR DIGITAL ASSET INTERMEDIARIES 
AT THE SECURITIES AND EXCHANGE COMMISSION 
Sec. 301. Treatment of digital commodities and other digital assets. 
Sec. 302. Antifraud authority over permitted payment stablecoins. 
Sec. 303. Registration of digital asset trading systems. 
Sec. 304. Requirements for digital asset trading systems. 
Sec. 305. Registration of digital asset brokers and digital asset dealers. 
Sec. 306. Requirements of digital asset brokers and digital asset dealers. 
Sec. 307. Rules related to conflicts of interest. 
Sec. 308. Treatment of certain digital assets in connection with federally regu-
lated intermediaries. 
Sec. 309. Dual registration. 
Sec. 310. Exclusion for ancillary activities. 
Sec. 311. Registration and requirements for notice-registered digital asset 
clearing agencies. 
Sec. 312. Treatment of custody activities by banking institutions. 
TITLE IV—REGISTRATION FOR DIGITAL ASSET INTERMEDIARIES 
AT THE COMMODITY FUTURES TRADING COMMISSION 
Sec. 401. Commission jurisdiction over digital commodity transactions. 
Sec. 402. Requiring futures commission merchants to use qualified digital com-
modity custodians. 
Sec. 403. Trading certification and approval for digital commodities. 
Sec. 404. Registration of digital commodity exchanges. 
Sec. 405. Qualified digital commodity custodians. 
Sec. 406. Registration and regulation of digital commodity brokers and dealers. 
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Sec. 407. Registration of associated persons. 
Sec. 408. Registration of commodity pool operators and commodity trading ad-
visors. 
Sec. 409. Exclusion for ancillary activities. 
Sec. 410. Effective date. 
TITLE V—INNOVATION AND TECHNOLOGY IMPROVEMENTS 
Sec. 501. Codification of the SEC Strategic Hub for Innovation and Financial 
Technology. 
Sec. 502. Codification of LabCFTC. 
Sec. 503. CFTC–SEC Joint Advisory Committee on Digital Assets. 
Sec. 504. Modernization of the Securities and Exchange Commission mission. 
Sec. 505. Study on decentralized finance. 
Sec. 506. Study on non-fungible digital assets. 
Sec. 507. Study on financial market infrastructure improvements. 
TITLE 
I—DEFINITIONS; 
RULE-
MAKING; PROVISIONAL REG-
ISTRATION 
SEC. 101. DEFINITIONS UNDER THE SECURITIES ACT OF 
1933. 
Section 2(a) of the Securities Act of 1933 (15 U.S.C. 
77b(a)) is amended by adding at the end the following: 
‘‘(20) AFFILIATED PERSONS.—The term ‘affili-
ated person’ means a person (including a related 
person) that— 
‘‘(A) with respect to a digital asset 
issuer— 
‘‘(i) directly, or indirectly through one 
or more intermediaries, controls, or is con-
trolled by, or is under common control 
with, such digital asset issuer; and 
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‘‘(ii) was described under clause (i) at 
any point in the previous 3-month period; 
or 
‘‘(B) with respect to any digital asset— 
‘‘(i) beneficially owns 5 percent or 
more of the units of such digital asset that 
are then outstanding; and 
‘‘(ii) was described under clause (i) at 
any point in the previous 3-month period. 
‘‘(21) BLOCKCHAIN.—The term ‘blockchain’ 
means any technology— 
‘‘(A) where data is— 
‘‘(i) shared across a network to create 
a public ledger of verified transactions or 
information among network participants; 
‘‘(ii) linked using cryptography to 
maintain the integrity of the public ledger 
and to execute other functions; and 
‘‘(iii) distributed among network par-
ticipants in an automated fashion to con-
currently update network participants on 
the state of the public ledger and any other 
functions; and 
‘‘(B) composed of source code that is pub-
licly available. 
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‘‘(22) 
BLOCKCHAIN
PROTOCOL.—The 
term 
‘blockchain protocol’ means any executable software 
deployed to a blockchain composed of source code 
that is publicly available and accessible, including a 
smart contract or any network of smart contracts. 
‘‘(23) 
BLOCKCHAIN
SYSTEM.—The 
term 
‘blockchain system’ means any blockchain or 
blockchain protocol. 
‘‘(24) DECENTRALIZED
NETWORK.—With re-
spect to a blockchain system to which a digital asset 
relates, the term ‘decentralized network’ means the 
following conditions are met: 
‘‘(A) During the previous 12-month period, 
no person— 
‘‘(i) had the unilateral authority, di-
rectly or indirectly, through any contract, 
arrangement, understanding, relationship, 
or otherwise, to control or materially alter 
the functionality or operation of the 
blockchain system; or 
‘‘(ii) had the unilateral authority to 
restrict or prohibit any person who is not 
a digital asset issuer, related person, or an 
affiliated person from— 
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‘‘(I) using, earning, or transmit-
ting the digital asset; 
‘‘(II) deploying software that 
uses or integrates with the blockchain 
system; 
‘‘(III) participating in a decen-
tralized governance system with re-
spect to the blockchain system; or 
‘‘(IV) operating a node, validator, 
or other form of computational infra-
structure 
with 
respect 
to 
the 
blockchain system. 
‘‘(B) During the previous 12-month pe-
riod— 
‘‘(i) no digital asset issuer or affiliated 
person beneficially owned, in the aggre-
gate, 20 percent or more of the total 
amount of units of such digital asset 
that— 
‘‘(I) can be created, issued, or 
distributed in such blockchain system; 
and 
‘‘(II) were freely transferrable or 
otherwise used or available to be used 
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for the purposes of such blockchain 
network; 
‘‘(ii) no digital asset issuer or affili-
ated person had the unilateral authority to 
direct the voting, in the aggregate, of 20 
percent or more of the outstanding voting 
power of such digital asset or related de-
centralized governance system; or 
‘‘(iii) the digital asset did not include 
voting power. 
‘‘(C) During the previous 3-month period, 
the digital asset issuer, any affiliated person, or 
any related person has not implemented or con-
tributed any intellectual property to the source 
code of the blockchain system that materially 
alters the functionality or operation of the 
blockchain system, unless such implementation 
or contribution to the source code— 
‘‘(i) addressed vulnerabilities, errors, 
regular maintenance, cybersecurity risks, 
or other technical improvements to the 
blockchain system; or 
‘‘(ii) were adopted through the con-
sensus or agreement of a decentralized 
governance system. 
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‘‘(D) During the previous 3-month period, 
neither any digital asset issuer nor any affili-
ated person described under paragraph (20)(A) 
has marketed to the public the digital assets as 
an investment. 
‘‘(E) During the previous 12-month period, 
all issuances of units of such digital asset were 
end user distributions made through the pro-
grammatic functioning of the blockchain sys-
tem. 
‘‘(25) 
DECENTRALIZED
GOVERNANCE
SYS-
TEM.— 
‘‘(A) IN GENERAL.—The term ‘decentral-
ized governance system’ means, with respect to 
a blockchain system, any rules-based system 
permitting persons using the blockchain system 
or the digital assets related to such blockchain 
system to form consensus or reach agreement 
in the development, provision, publication, man-
agement, or administration of such blockchain 
system. 
‘‘(B) RELATIONSHIP OF PERSONS TO DE-
CENTRALIZED
GOVERNANCE
SYSTEMS.—Per-
sons acting through a decentralized governance 
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system shall be treated as separate persons un-
less such persons are under common control. 
‘‘(C) EXCLUSION.—The term ‘decentral-
ized governance system’ does not include a sys-
tem in which— 
‘‘(i) a person or group of persons 
under common control have the ability 
to— 
‘‘(I) unilaterally alter the rules of 
consensus 
or 
agreement 
for 
the 
blockchain system; or 
‘‘(II) determine the final outcome 
of decisions related to the develop-
ment, provision, publication, manage-
ment, or administration of such 
blockchain system; 
‘‘(ii) a person or group of persons is 
directly engaging in an activity that re-
quires registration with the Commission or 
the Commodity Futures Trading Commis-
sion other than— 
‘‘(I) developing, providing, pub-
lishing, managing, or administering a 
blockchain system; or 
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‘‘(II) an activity with respect to 
which the organization is exempt from 
such registration; or 
‘‘(iii) a person or group of persons 
seeking to knowingly evade the require-
ments imposed on a digital asset issuer, a 
related person, an affiliated person, or any 
other person registered (or required to be 
registered) under this Act, the Financial 
Innovation and Technology for the 21st 
Century Act, or the Commodity Exchange 
Act. 
‘‘(26) DIGITAL ASSET.— 
‘‘(A) IN
GENERAL.—The term ‘digital 
asset’ means any fungible digital representation 
of value that can be exclusively possessed and 
transferred, person to person, without necessary 
reliance on an intermediary, and is recorded on 
a cryptographically secured public distributed 
ledger. 
‘‘(B) EXCLUSIONS.—The term ‘digital 
asset’ does not include— 
‘‘(i) any note, stock, treasury stock, 
security future, security-based swap, bond, 
debenture, evidence of indebtedness, cer-
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tificate of interest or participation in any 
profit-sharing agreement, collateral-trust 
certificate, preorganization certificate or 
subscription, or transferable share; or 
‘‘(ii) any asset which represents, oper-
ates as the functional equivalent of, or oth-
erwise has embedded functionality or char-
acteristics which make it an agreement, 
contract, or transaction that is— 
‘‘(I) a contract of sale of a com-
modity (as defined under section 1a of 
the Commodity Exchange Act) for fu-
ture delivery or an option thereon; 
‘‘(II) a security futures product; 
‘‘(III) a swap; 
‘‘(IV) an agreement, contract, or 
transaction 
described 
in 
section 
2(c)(2)(C)(i) or 2(c)(2)(D)(i) of the 
Commodity Exchange Act; 
‘‘(V) a commodity option author-
ized under section 4c of the Com-
modity Exchange Act; or 
‘‘(VI) a leverage transaction au-
thorized under section 19 of the Com-
modity Exchange Act. 
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‘‘(C) RELATIONSHIP
TO
A
BLOCKCHAIN 
SYSTEM.—A digital asset is considered to relate 
to a blockchain system if the digital asset is in-
trinsically linked to the blockchain system, in-
cluding— 
‘‘(i) where the digital asset’s value is 
reasonably expected to be generated by the 
programmatic 
functioning 
of 
the 
blockchain system; 
‘‘(ii) where the asset has voting rights 
with respect to the blockchain system; or 
‘‘(iii) where the digital asset is issued 
through the programmatic functioning of 
the blockchain system. 
‘‘(D) TREATMENT
OF
CERTAIN
DIGITAL 
ASSETS SOLD PURSUANT TO AN INVESTMENT 
CONTRACT.—A digital asset sold or transferred 
or intended to be sold or transferred pursuant 
to an investment contract is not and does not 
become a security as a result of being sold or 
otherwise transferred pursuant to that invest-
ment contract. 
‘‘(27) DIGITAL ASSET ISSUER.—With respect to 
a digital asset, the term ‘digital asset issuer’— 
‘‘(A) means— 
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‘‘(i) any person that, in exchange for 
any consideration— 
‘‘(I) issues or causes to be issued 
a unit of such digital asset to a per-
son; or 
‘‘(II) offers or sells a right to a 
future issuance of a unit of such dig-
ital asset to a person; or 
‘‘(ii) any person who seeks to know-
ingly evade classification as a ‘digital asset 
issuer’ and facilitate an arrangement for 
the primary purpose of effecting a sale, 
distribution, or other issuance of such dig-
ital asset, by— 
‘‘(I) the granting of a license or 
assignment of intellectual property; 
‘‘(II) the making available of free 
software or open source licenses; or 
‘‘(III) the granting of other 
rights or transfer of assets material to 
execution of such sale, distribution, or 
other issuance; and 
‘‘(B) does not include any person solely be-
cause such person, for the purpose of such per-
son participating in operations of a blockchain 
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system, deploys source code to create units of a 
digital asset which are incentive-based re-
wards— 
‘‘(i) to users of the digital asset or 
any blockchain system to which the digital 
asset relates; or 
‘‘(ii) for activities directly related to 
the operation of the blockchain system, 
such as mining, validating, staking, or 
other activity directly tied to the operation 
of the blockchain system. 
‘‘(28) DIGITAL ASSET MATURITY DATE.—The 
term ‘digital asset maturity date’ means, with re-
spect to any units of a digital asset, the first date 
on which 20 percent or more of the total units of 
such digital asset that are then outstanding as of 
such date are— 
‘‘(A) digital commodities; or 
‘‘(B) digital assets that have been reg-
istered with the Commission. 
‘‘(29) DIGITAL COMMODITY.—The term ‘digital 
commodity’ has the meaning given that term under 
section 1a of the Commodity Exchange Act (7 
U.S.C. 1a). 
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‘‘(30) END
USER
DISTRIBUTION.—The term 
‘end user distribution’ means an issuance of a unit 
of a digital asset that— 
‘‘(A) does not involve an exchange of more 
than a nominal value of cash, property, or other 
assets; and 
‘‘(B) is distributed in a broad, equitable, 
and non-discretionary manner based on condi-
tions capable of being satisfied by any partici-
pant in the blockchain system, including, as in-
centive-based rewards— 
‘‘(i) to users of the digital asset or 
any blockchain system to which the digital 
asset relates; 
‘‘(ii) for activities directly related to 
the operation of the blockchain system, 
such as mining, validating, staking, or 
other activity directly tied to the operation 
of the blockchain system; or 
‘‘(iii) to the existing holders of an-
other digital asset, in proportion to the 
total units of such other digital asset as 
are held by each person. 
‘‘(31) FUNCTIONAL
NETWORK.—With respect 
to a blockchain system to which a digital asset re-
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lates, the term ‘functional network’ means the net-
work allows network participants to use such digital 
asset for— 
‘‘(A) the transmission and storage of value 
on the blockchain system; 
‘‘(B) the participation in services provided 
by or an application running on the blockchain 
system; or 
‘‘(C) the participation in governance of the 
blockchain system. 
‘‘(32) PERMITTED
PAYMENT
STABLECOIN.— 
The term ‘permitted payment stablecoin’— 
‘‘(A) means a digital asset— 
‘‘(i) that is or is designed to be used 
as a means of payment or settlement; 
‘‘(ii) the issuer of which— 
‘‘(I) is obligated to convert, re-
deem, or repurchase for a fixed 
amount of monetary value; and 
‘‘(II) represents will maintain or 
creates the reasonable expectation 
that it will maintain a stable value rel-
ative to the value of a fixed amount of 
monetary value; and 
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‘‘(iii) that is subject to regulation by 
a Federal or State regulator with authority 
over 
entities 
that 
issue 
payment 
stablecoins; and 
‘‘(B) that is not— 
‘‘(i) a national currency; or 
‘‘(ii) a security issued by an invest-
ment company registered under section 
8(a) of the Investment Company Act of 
1940 (15 U.S.C. 80a–8(a)). 
‘‘(33) RELATED PERSON.—With respect to a 
digital asset issuer, the term ‘related person’ 
means— 
‘‘(A) a founder, promoter, employee, con-
sultant, advisor, or person serving in a similar 
capacity; 
‘‘(B) any person that is or was in the pre-
vious 6-month period an executive officer, direc-
tor, trustee, general partner, advisory board 
member, or person serving in a similar capacity; 
‘‘(C) any equity holder or other security 
holder of a digital asset issuer; or 
‘‘(D) any other person that received a unit 
of digital asset from such digital asset issuer 
through— 
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‘‘(i) an exempt offering, other than an 
offering made in reliance on section 
4(a)(8); or 
‘‘(ii) a distribution that is not an end 
user distribution described under section 
42(d)(1) of the Securities Exchange Act of 
1934. 
‘‘(34) RESTRICTED DIGITAL ASSET.— 
‘‘(A) IN GENERAL.—The term ‘restricted 
digital asset’ means— 
‘‘(i) any unit of a digital asset held by 
a person, other than a digital asset issuer, 
a related person, or an affiliated person, 
prior to the first date on which each 
blockchain system to which the digital 
asset relates is a functional network and 
certified to be a decentralized network 
under section 44 of the Securities Ex-
change Act of 1934, that was— 
‘‘(I) 
issued 
to 
such 
person 
through a distribution, other than an 
end user distribution described under 
section 42(d)(1) of the Securities Ex-
change Act of 1934; or 
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‘‘(II) acquired by such person in 
a transaction that was not executed 
on a digital commodity exchange; 
‘‘(ii) any digital asset held by a re-
lated person or an affiliated person during 
any period when any blockchain system to 
which the digital asset relates is not a 
functional network or not certified to be a 
decentralized network under section 44 of 
the Securities Exchange Act of 1934; or 
‘‘(iii) any unit of a digital asset held 
by the digital asset issuer. 
‘‘(B) EXCLUSION.—The term ‘restricted 
digital asset’ does not include a permitted pay-
ment stablecoin. 
‘‘(35) SECURITIES LAWS.—The term ‘securities 
laws’ has the meaning given that term under section 
3(a) of the Securities Exchange Act of 1934 (15 
U.S.C. 78c(a)). 
‘‘(36) SOURCE
CODE.—With respect to a 
blockchain system, the term ‘source code’ means a 
listing of commands to be compiled or assembled 
into an executable computer program.’’. 
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SEC. 102. DEFINITIONS UNDER THE COMMODITY EX-
CHANGE ACT. 
Section 1a of the Commodity Exchange Act (7 U.S.C. 
1a) is amended— 
(1) in paragraph (10)(A)— 
(A) by redesignating clauses (iii) and (iv) 
as clauses (iv) and (v), respectively; and 
(B) by inserting after clause (ii) the fol-
lowing: 
‘‘(iii) digital commodity;’’; 
(2) in paragraph (11)— 
(A) in subparagraph (A)(i)— 
(i) by redesignating subclauses (III) 
and (IV) as subclauses (IV) and (V), re-
spectively; and 
(ii) by inserting after subclause (II) 
the following: 
‘‘(III) digital commodity;’’; and 
(B) by redesignating subparagraph (B) as 
subparagraph (C) and inserting after subpara-
graph (A) the following: 
‘‘(B) EXCLUSION.—The term ‘commodity 
pool operator’ does not include— 
‘‘(i) a decentralized governance sys-
tem; or 
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‘‘(i) enters into a digital commodity 
transaction the primary purpose of which 
is to make, send, receive, or facilitate pay-
ments, whether involving a payment service 
provider or on a peer-to-peer basis; or 
‘‘(ii) validates a digital commodity 
transaction, operates a node, or engages in 
similar activity to participate in facili-
tating, operating, or securing a blockchain 
system. 
‘‘(57) DIGITAL COMMODITY CUSTODIAN.—The 
term ‘digital commodity custodian’ means a bank or 
trust company in the business of holding, maintain-
ing, or safeguarding digital commodities. 
‘‘(58) DIGITAL COMMODITY DEALER.— 
‘‘(A) IN GENERAL.—The term ‘digital com-
modity dealer’ means any person who— 
‘‘(i) in digital commodity cash or spot 
markets— 
‘‘(I) holds itself out as a dealer in 
a digital commodity; 
‘‘(II) makes a market in a digital 
commodity; 
‘‘(III) regularly enters into dig-
ital 
commodity 
transactions 
with 
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counterparties as an ordinary course 
of business for its own account; or 
‘‘(IV) engages in any activity 
causing the person to be commonly 
known in the trade as a dealer or 
market maker in a digital commodity; 
‘‘(ii) regularly enters into any agree-
ment, contract, or transaction described in 
subsection (c)(2)(D)(i) involving a digital 
commodity; or 
‘‘(iii) is registered with the Commis-
sion as a digital commodity dealer. 
‘‘(B) EXCEPTION.—The term ‘digital com-
modity dealer’ does not include a person solely 
because the person— 
‘‘(i) enters into a digital commodity 
transaction with an eligible contract partic-
ipant; 
‘‘(ii) enters into a digital commodity 
transaction on or through a registered dig-
ital commodity exchange; 
‘‘(iii) enters into a digital commodity 
transaction for the person’s own account, 
either individually or in a fiduciary capac-
ity, but not as a part of a regular business; 
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‘‘(iv) enters into a digital commodity 
transaction the primary purpose of which 
is to make, send, receive, or facilitate pay-
ments, whether involving a payment service 
provider or on a peer-to-peer basis; or 
‘‘(v) validates a digital commodity 
transaction, operates a node, or engages in 
similar activity to participate in facili-
tating, operating, or securing a blockchain 
system. 
‘‘(59) DIGITAL
COMMODITY
EXCHANGE.—The 
term ‘digital commodity exchange’ means a trading 
facility that offers or seeks to offer a cash or spot 
market in at least 1 digital commodity. 
‘‘(60) 
DIGITAL
ASSET-RELATED
DEFINI-
TIONS.— 
‘‘(A) SECURITIES
ACT
OF
1933.—The 
terms ‘affiliated person’, ‘blockchain system’, 
‘decentralized governance system’, ‘decentral-
ized network’, ‘digital asset’, ‘digital asset 
issuer’, ‘end user distribution’, ‘functional net-
work’, ‘permitted payment stablecoin’, ‘related 
person’, and ‘restricted digital asset’ have the 
meaning given the terms, respectively, under 
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section 2(a) of the Securities Act of 1933 (15 
U.S.C. 77b(a)). 
‘‘(B) SECURITIES
EXCHANGE
ACT
OF 
1934.—The terms ‘digital asset broker’ and ‘dig-
ital asset dealer’ have the meaning given those 
terms, respectively, under section 3(a) of the 
Securities Exchange Act of 1934 (15 U.S.C. 
78c(a)). 
‘‘(61) MIXED DIGITAL ASSET TRANSACTION.— 
The term ‘mixed digital asset transaction’ has the 
meaning given that term under section 3(a) of the 
Securities Exchange Act of 1934 (15 U.S.C. 
78c(a)).’’. 
SEC. 103. DEFINITIONS UNDER THIS ACT. 
In this Act: 
(1) 
ALTERNATIVE
TRADING
SYSTEM.—The 
term ‘‘alternative trading system’’ has the meaning 
given that term under section 242.300 of title 17, 
Code of Federal Regulations. 
(2) DEFINITIONS UNDER THE COMMODITY EX-
CHANGE
ACT.—The terms ‘‘digital commodity’’, 
‘‘digital commodity broker’’, and ‘‘digital commodity 
exchange’’ have the meaning given those terms, re-
spectively, under section 1a of the Commodity Ex-
change Act (7 U.S.C. 1a). 
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(3) DEFINITIONS UNDER THE SECURITIES ACT 
OF
1933.—The 
terms 
‘‘affiliated 
person’’, 
‘‘blockchain’’, ‘‘blockchain system’’, ‘‘blockchain pro-
tocol’’, ‘‘decentralized network’’, ‘‘digital asset’’, 
‘‘digital asset issuer’’, ‘‘digital asset maturity date’’, 
‘‘digital asset trading system’’, ‘‘end user distribu-
tion’’, ‘‘functional network’’, ‘‘permitted payment 
stablecoin’’, ‘‘restricted digital asset’’, ‘‘securities 
laws’’, and ‘‘source code’’ have the meaning given 
those terms, respectively, under section 2(a) of the 
Securities Act of 1933 (15 U.S.C. 77b(a)). 
(4) DEFINITIONS UNDER THE SECURITIES EX-
CHANGE
ACT
OF
1934.—The terms ‘‘digital asset 
broker’’, ‘‘digital asset dealer’’, ‘‘digital asset trading 
system’’, ‘‘mixed digital asset transaction’’, and 
‘‘self-regulatory organization’’ have the meaning 
given those terms, respectively, under section 3(a) of 
the Securities Exchange Act of 1934 (15 U.S.C. 
78c(a)). 
SEC. 104. JOINT RULEMAKINGS. 
(a) DEFINITIONS.—The Commodity Futures Trading 
Commission and the Securities and Exchange Commission 
shall, jointly, issue rules to further define the following 
terms: 
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(1) 
The 
terms 
‘‘affiliated 
person’’, 
‘‘blockchain’’, ‘‘blockchain system’’, ‘‘blockchain pro-
tocol’’, ‘‘decentralized network’’, ‘‘decentralized gov-
ernance system’’, ‘‘digital asset’’, ‘‘digital asset 
issuer’’, ‘‘digital asset maturity date’’, ‘‘end user dis-
tribution’’, ‘‘functional network’’, ‘‘related person’’, 
‘‘restricted digital asset’’, and ‘‘source code’’, as de-
fined under section 2(a) of the Securities Act of 
1933. 
(2) The term ‘‘mixed digital asset transaction’’, 
as defined under section 3(a) of the Securities Ex-
change Act of 1934. 
(3) The term ‘‘digital commodity’’, as defined 
under section 1a of the Commodity Exchange Act. 
(b) JOINT RULEMAKING
FOR EXCHANGES.—The 
Commodity Futures Trading Commission and the Securi-
ties and Exchange Commission shall, jointly, issue rules 
to exempt persons dually registered with the Commodity 
Futures Trading Commission as a digital commodity ex-
change and with the Securities and Exchange Commission 
as a digital asset trading system from duplicative, con-
flicting, or unduly burdensome provisions of this Act, the 
securities laws, and the Commodity Exchange Act and the 
rules thereunder, to the extent such exemption would fos-
ter the development of fair and orderly markets in digital 
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assets, be necessary or appropriate in the public interest, 
and be consistent with the protection of investors. 
(c) JOINT RULEMAKING FOR MIXED DIGITAL ASSET 
TRANSACTIONS.—The Commodity Futures Trading Com-
mission and the Securities and Exchange Commission 
shall, jointly, issue rules applicable to mixed digital asset 
transactions under this Act and the amendments made by 
this Act. 
(d) PROHIBITION.—The Securities Exchange Com-
mission and the Commodity Futures Trading Commission 
shall not issue a rule, a regulation, an order, or guidance, 
or take any other administrative action, which would re-
strict the ability of an individual to use hardware or soft-
ware to facilitate the custody or safekeeping by the indi-
vidual of any digital asset of the individual. 
SEC. 105. NOTICE OF INTENT TO REGISTER FOR DIGITAL 
COMMODITY 
EXCHANGES, 
BROKERS, 
AND 
DEALERS. 
(a) IN GENERAL.— 
(1) NOTICE
OF
INTENT
TO
REGISTER.—Any 
person may file a notice of intent to register with 
the Commodity Futures Trading Commission (in 
this subsection referred to as the ‘‘Commission’’) as 
a— 
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(A) digital commodity exchange, for a per-
son intending to register as a digital commodity 
exchange under section 5i of the Commodity 
Exchange Act; 
(B) digital commodity broker, for a person 
intending to register as a digital commodity 
broker under section 4u of such Act; or 
(C) digital commodity dealer, for a person 
intending to register as a digital commodity 
dealer under section 4u of such Act. 
(2) FILING.—A person desiring to file a notice 
of intent to register under paragraph (1) shall be in 
compliance with this section if the person submits to 
the Commission— 
(A) a statement of the nature of the reg-
istrations the filer intends to pursue; 
(B) the information required by sub-
sections (b) and (c). 
(b) DISCLOSURE
OF GENERAL INFORMATION.—A 
person filing a notice of intent to register under subsection 
(a) shall disclose to the Commission the following: 
(1) Information concerning the management of 
the person, including information describing— 
(A) the ownership and management of the 
person; 
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(B) the financial condition of the person; 
(C) affiliated entities; and 
(D) potential conflicts of interest. 
(2) Information concerning the operations of 
the person, including— 
(A) any rulebook or other customer order 
fulfilment rules; 
(B) risk management procedures; and 
(C) a description of the product listing 
process. 
(c) LISTING INFORMATION.—A person filing a notice 
of intent to register under subsection (a) shall provide to 
the Commission and the Securities and Exchange Com-
mission a detailed description of the product listing deter-
mination made by the person for each asset listed or of-
fered for trading by the person. 
(d) REQUIREMENTS.—A person filing a notice of in-
tent to register under subsection (a) shall comply with the 
following requirements: 
(1) BOOKS AND RECORDS.—The person shall 
keep their books and records open to inspection and 
examination by the Commission. 
(2) CUSTOMER
DISCLOSURES.—The person 
shall disclose to consumers— 
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(A) information about the material risks 
and characteristics of the assets listed for trad-
ing on the person; and 
(B) information about the material risks 
and characteristics of the transactions facili-
tated by the person. 
(3) CUSTOMER ASSETS.— 
(A) IN GENERAL.—The person shall— 
(i) hold customer money, assets, and 
property in a manner to minimize the risk 
of loss to the customer or unreasonable 
delay in customer access to money, assets, 
and property of the customer; 
(ii) treat and deal with all money, as-
sets, and property, including any rights as-
sociated with any such money, assets, or 
property, of any customer received as be-
longing to the customer; 
(iii) segregate all money, assets, and 
property received from any customer of the 
person from the funds of the person, ex-
cept that— 
(I) the money, assets, and prop-
erty of any customer may be commin-
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gled with that of any other customer, 
if separately accounted for; and 
(II) the share of the money, as-
sets, and property, as in the normal 
course of business are necessary to 
margin, guarantee, secure, transfer, 
adjust, or settle a contract of sale of 
a commodity asset, may be withdrawn 
and applied to do so, including the 
payment of commissions, brokerage, 
interest, taxes, storage, and other 
charges lawfully accruing in connec-
tion with the contract of sale of a dig-
ital commodity. 
(B) ADDITIONAL RESOURCES.— 
(i) IN GENERAL.—This section shall 
not prevent or be construed to prevent the 
person from adding to the customer 
money, assets, and property required to be 
segregated under subparagraph (A), addi-
tional amounts of money, assets, or prop-
erty from the account of the person as the 
person determines necessary to prevent the 
account of a customer from becoming 
under-segregated. 
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(ii) 
TREATMENT
AS
CUSTOMER 
FUNDS.—Any money, assets, or property 
deposited pursuant to clause (i) shall be 
considered customer property within the 
meaning of this subsection. 
(e) COMPLIANCE AND ENFORCEMENT.— 
(1) IN GENERAL.—A person who has filed a no-
tice of intent to register under this section and is in 
compliance with this section shall not be subject to 
an enforcement action by the Securities and Ex-
change Commission for— 
(A) listing or offering a digital asset 
deemed a security; or 
(B) failing to register as a national securi-
ties exchange, broker, dealer, or clearing agen-
cy, for activities related to digital assets deemed 
a security. 
(2) NONCOMPLIANCE.—Paragraph (1) shall not 
apply if, after notice from the Commission and a 
reasonable opportunity to correct the deficiency, a 
person who has submitted a notice of intent to reg-
ister is not in compliance with this section. 
(3) ANTIFRAUD
AND
ANTIMANIPULATION.— 
Paragraph (1) shall not be construed to limit any 
antimanipulation, antifraud, or false reporting en-
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(d) REQUIREMENTS.—A person filing a notice of in-
tent to register under subsection (a) shall comply with the 
following requirements: 
(1) BOOKS AND RECORDS.—The person shall 
keep their books and records open to inspection and 
examination by the Commission. 
(2) CUSTOMER
DISCLOSURES.—The person 
shall disclose to consumers— 
(A) information about the material risks 
and characteristics of the assets listed for trad-
ing on the person; and 
(B) information about the material risks 
and characteristics of the transactions facili-
tated by the person. 
(3) CUSTOMER ASSETS.— 
(A) IN GENERAL.—The person shall— 
(i) hold customer money, assets, and 
property in a manner to minimize the risk 
of loss to the customer or unreasonable 
delay in customer access to money, assets, 
and property of the customer; 
(ii) treat and deal with all money, as-
sets, and property, including any rights as-
sociated with any such money, assets, or 
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property, of any customer received as be-
longing to the customer; 
(iii) segregate all money, assets, and 
property received from any customer of the 
person from the funds of the person, ex-
cept that— 
(I) the money, assets, and prop-
erty of any customer may be commin-
gled with that of any other customer, 
if separately accounted for; and 
(II) the share of the money, as-
sets, and property, as in the normal 
course of business are necessary to 
margin, guarantee, secure, transfer, 
adjust, or settle a contract of sale of 
a commodity asset, may be withdrawn 
and applied to do so, including the 
payment of commissions, brokerage, 
interest, taxes, storage, and other 
charges lawfully accruing in connec-
tion with the contract of sale of a dig-
ital commodity. 
(B) ADDITIONAL RESOURCES.— 
(i) IN GENERAL.—This section shall 
not prevent or be construed to prevent the 
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person from adding to the customer 
money, assets, and property required to be 
segregated under subparagraph (A) addi-
tional amounts of money, assets, or prop-
erty from the account of the person as the 
person determines necessary to prevent the 
account of a customer from becoming 
under-segregated. 
(ii) 
TREATMENT
AS
CUSTOMER 
FUNDS.—Any money, assets, or property 
deposited pursuant to clause (i) shall be 
considered customer property within the 
meaning of this subsection. 
(e) COMPLIANCE AND ENFORCEMENT.— 
(1) IN GENERAL.—A person who has filed a no-
tice of intent to register under this section and is in 
compliance with this section shall not be subject to 
an enforcement action by the Commission for— 
(A) listing or offering a digital asset 
deemed a security; or 
(B) failing to register as a national securi-
ties exchange, alternative trading system, 
broker, dealer, or clearing agency, for activities 
related to digital assets deemed a security. 
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(2) NONCOMPLIANCE.—Paragraph (1) shall not 
apply if, after notice from the Commission and a 
reasonable opportunity to correct the deficiency, a 
person who has submitted a notice of intent to reg-
ister is not in compliance with this section. 
(3) ANTIFRAUD
AND
ANTIMANIPULATION.— 
Paragraph (1) shall not be construed to limit any 
antimanipulation, antifraud, or false reporting en-
forcement authority of the Commission or the Com-
modity Futures Trading Commission. 
(4) DELISTING.—Paragraph (1) shall not be 
construed to limit the authority of the Commission 
or the Commodity Futures Trading Commission to 
require a person to delist an asset for trading if the 
Commission or the Commodity Futures Trading 
Commission determines that the listing is incon-
sistent with the Commodity Exchange Act, the secu-
rities laws (including regulations under those laws), 
or this Act. 
(f) FINAL REGISTRATION.— 
(1) IN GENERAL.—A person may not file a no-
tice of intent to register with the Commission after 
the Commission has finalized its rules for the reg-
istration of digital asset brokers, digital asset deal-
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ers, and digital asset trading systems, as appro-
priate. 
(2) TRANSITION TO FINAL REGISTRATION.— 
(A) ONGOING
DEFERRAL
FOR
ENTITIES 
REGISTERED
WITH
THE
COMMISSION.—Sub-
section (e)(1) shall continue to apply to a per-
son who has submitted a notice of intent to reg-
ister while the person is registered with the 
Commission as a digital asset broker, digital 
asset dealer, or digital asset trading system, as 
appropriate. 
(B) 
END
OF
DEFERRAL.—Subsection 
(e)(1) shall not apply to a person who has sub-
mitted a notice of intent to register if— 
(i) the Commission— 
(I) determines that the person 
has failed to comply with the require-
ments of this section; or 
(II) denies the application of the 
person to register; or 
(ii) the digital asset broker, digital 
asset dealer, or digital asset trading sys-
tem that filed a notice of intent to register 
failed to register as such with the Commis-
sion within 180 days after the Commission 
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finalized the rules of the Commission for 
the registration of digital asset brokers, 
digital asset dealers, and digital asset trad-
ing systems, as appropriate. 
(g) LIABILITY OF THE FILER.—It shall be unlawful 
for any person to provide false information in support of 
a filing under this section if the person knowingly or rea-
sonably should have known that the information was false. 
SEC. 107. COMMODITY EXCHANGE ACT SAVINGS PROVI-
SIONS. 
(a) IN GENERAL.—Nothing in this Act shall affect 
or apply to, or be interpreted to affect or apply to— 
(1) any agreement, contract, or transaction that 
is subject to regulation under the Commodity Ex-
change Act as— 
(A) a contract of sale of a commodity for 
future delivery or an option on such a contract; 
(B) a swap; 
(C) a security futures product; 
(D) an option authorized under section 4c 
of such Act; 
(E) an agreement, contract, or transaction 
described in section 2(c)(2)(C)(i) of such Act; 
or 
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(F) a leverage transaction authorized 
under section 19 of such Act; or 
(2) the activities of any person with respect to 
any such agreement, contract, or transaction. 
(b) PROHIBITIONS ON SPOT DIGITAL COMMODITY 
ENTITIES.—Nothing in this Act authorizes, or shall be in-
terpreted to authorize, a digital commodity exchange, dig-
ital commodity broker, or digital commodity dealer to en-
gage in any activities involving any transaction, contract, 
or agreement described in subsection (a)(1), solely by vir-
tue of being registered or filing notice of intent to register 
as a digital commodity exchange, digital commodity 
broker, or digital commodity dealer. 
(c) DEFINITIONS.—In this section, each term shall 
have the meaning provided in the Commodity Exchange 
Act or the regulations prescribed under such Act. 
SEC. 108. INTERNATIONAL HARMONIZATION. 
In order to promote effective and consistent global 
regulation of digital assets, the Commodity Futures Trad-
ing Commission and the Securities and Exchange Com-
mission, as appropriate— 
(1) shall consult and coordinate with foreign 
regulatory authorities on the establishment of con-
sistent international standards with respect to the 
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regulation of digital assets, restricted digital assets, 
and digital commodities; and 
(2) may agree to such information-sharing ar-
rangements as may be deemed to be necessary or 
appropriate in the public interest or for the protec-
tion of investors, customers, and users of digital as-
sets. 
SEC. 109. IMPLEMENTATION. 
(a) GLOBAL RULEMAKING TIMEFRAME.—Unless oth-
erwise provided in this Act or an amendment made by this 
Act, the Commodity Futures Trading Commission and the 
Securities and Exchange Commission, or both, shall indi-
vidually, and jointly where required, promulgate rules and 
regulations required of each Commission under this Act 
or an amendment made by this Act not later than 360 
days after the date of enactment of this Act. 
(b) RULES AND REGISTRATION BEFORE FINAL EF-
FECTIVE DATES.— 
(1) IN GENERAL.—In order to prepare for the 
implementation of this Act, the Commodity Futures 
Trading Commission and the Securities and Ex-
change Commission may, before any effective date 
provided in this Act— 
(A) promulgate rules, regulations, or or-
ders permitted or required by this Act; 
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(B) conduct studies and prepare reports 
and recommendations required by this Act; 
(C) register persons under this Act; and 
(D) exempt persons, agreements, contracts, 
or transactions from provisions of this Act, 
under the terms contained in this Act. 
(2) LIMITATION ON EFFECTIVENESS.—An ac-
tion by the Commodity Futures Trading Commission 
or the Securities and Exchange Commission under 
paragraph (1) shall not become effective before the 
effective date otherwise applicable to the action 
under this Act. 
TITLE II—DIGITAL ASSET 
EXEMPTIONS 
SEC. 201. EXEMPTED TRANSACTIONS IN DIGITAL ASSETS. 
(a) IN GENERAL.—The Securities Act of 1933 (15 
U.S.C. 77a et seq.) is amended— 
(1) in section 4(a), by adding at the end the 
following: 
‘‘(8) transactions involving the offer or sale of 
units of a digital asset by a digital asset issuer, if— 
‘‘(A) the aggregate amount of units of the 
digital asset sold by the digital asset issuer in 
reliance on the exemption provided under this 
paragraph, during the 12-month period pre-
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ceding the date of such transaction, including 
the amount sold in such transaction, is not 
more than $75,000,000 (as such amount is an-
nually adjusted by the Commission to reflect 
the change in the Consumer Price Index for All 
Urban Consumers published by the Bureau of 
Labor Statistics of the Department of Labor); 
‘‘(B) with respect to a transaction involv-
ing the purchase of units of a digital asset by 
a person who is not an accredited investor, the 
aggregate amount of all units of digital assets 
purchased by such person during the 12-month 
period preceding the date of such transaction, 
including the unit of a digital asset purchased 
in such transaction, does not exceed the greater 
of— 
‘‘(i) 10 percent of the person’s annual 
income or joint income with that person’s 
spouse or spousal equivalent; or 
‘‘(ii) 10 percent of the person’s net 
worth or joint net worth with the person’s 
spouse or spousal equivalent; 
‘‘(C) after the completion of the trans-
action, the purchaser does not own more than 
10 percent of the total amount of the units of 
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the digital asset sold in reliance on the exemp-
tion under this paragraph; 
‘‘(D) the transaction does not involve the 
offer or sale of any digital asset not offered as 
part of an investment contract; 
‘‘(E) the transaction does not involve the 
offer or sale of a unit of a digital asset by a 
digital asset issuer that— 
‘‘(i) is not organized under the laws of 
a State, a territory of the United States or 
the District of Columbia; 
‘‘(ii) is a development stage company 
that either— 
‘‘(I) has no specific business plan 
or purpose; or 
‘‘(II) has indicated that the busi-
ness plan of the company is to merge 
with or acquire an unidentified com-
pany; 
‘‘(iii) is an investment company, as 
defined in section 3 of the Investment 
Company Act of 1940 (15 U.S.C. 80a–3), 
or is excluded from the definition of invest-
ment company by section 3(b) or section 
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3(c) of that Act (15 U.S.C. 80a–3(b) or 
80a–3(c)); 
‘‘(iv) is issuing fractional undivided 
interests in oil or gas rights, or a similar 
interest in other mineral rights; 
‘‘(v) is, or has been, subject to any 
order of the Commission entered pursuant 
to section 12(j) of the Securities Exchange 
Act of 1934 during the 5-year period be-
fore the filing of the offering statement; or 
‘‘(vi) is disqualified pursuant to sec-
tion 230.262 of title 17, Code of Federal 
Regulations; and 
‘‘(F) the issuer meets the requirements of 
section 4B(a).’’; and 
(2) by inserting after section 4A the following: 
‘‘SEC. 4B. REQUIREMENTS WITH RESPECT TO CERTAIN DIG-
ITAL ASSET TRANSACTIONS. 
‘‘(a) 
REQUIREMENTS
FOR
DIGITAL
ASSET 
ISSUERS.— 
‘‘(1) 
INFORMATION
REQUIRED
IN
STATE-
MENT.—A digital asset issuer offering or selling a 
unit of digital asset in reliance on section 4(a)(8) 
shall file with the Commission a statement con-
taining the following information: 
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‘‘(A) The name, legal status (including the 
jurisdiction in which the issuer is organized and 
the date of organization), and website of the 
digital asset issuer. 
‘‘(B) A certification that the digital asset 
issuer meets the relevant requirements de-
scribed under section 4(a)(8). 
‘‘(C) An overview of the material aspects 
of the offering. 
‘‘(D) A description of the purpose and in-
tended use of the offering proceeds. 
‘‘(E) A description of the plan of distribu-
tion of any unit of a digital asset that is to be 
offered. 
‘‘(F) A description of the material risks 
surrounding ownership of a unit of a digital 
asset. 
‘‘(G) A description of exempt offerings 
conducted within the past three years by the 
digital asset issuer. 
‘‘(H) A description of the digital asset 
issuer and the current number of employees of 
the digital asset issuer. 
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‘‘(I) A description of any material trans-
actions or relationships between the digital 
asset issuer and affiliated persons. 
‘‘(J) A description of exempt offerings con-
ducted within the past three years. 
‘‘(2) 
INFORMATION
REQUIRED
FOR
PUR-
CHASERS.—A digital asset issuer shall disclose the 
information described under section 43 of the Secu-
rities Exchange Act of 1934 on a freely accessible 
public website. 
‘‘(3) ONGOING DISCLOSURE REQUIREMENTS.— 
A digital asset issuer that has filed a statement 
under paragraph (1) to offer and sell a unit of a dig-
ital asset in reliance on section 4(a)(8) shall file the 
following with the Commission: 
‘‘(A) ANNUAL
REPORTS.—An annual re-
port that includes any material changes to the 
information described under paragraph (2) for 
the current fiscal year and for any fiscal year 
thereafter, unless the issuer is no longer obli-
gated to file such annual report pursuant to 
paragraph (4). 
‘‘(B) SEMIANNUAL REPORTS.—Along with 
each annual report required under subpara-
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graph (A), and separately six months there-
after, a report containing— 
‘‘(i) an updated description of the cur-
rent state and timeline for the development 
of the blockchain system to which the dig-
ital asset relates, showing how and when 
the blockchain system intends or intended 
to be considered a functional network and 
a decentralized network; 
‘‘(ii) the amount of money raised by 
the digital asset issuer in reliance on sec-
tion 4(a)(8), how much of that money has 
been spent, and the general categories and 
amounts on which that money has been 
spent; and 
‘‘(iii) any material changes to the in-
formation in the most recent annual re-
port. 
‘‘(C) CURRENT REPORTS.—A current re-
port shall be filed with the Commission reflect-
ing any material changes to the information 
previously reported to the Commission by the 
digital asset issuer. 
‘‘(4) TERMINATION
OF
REPORTING
REQUIRE-
MENTS.— 
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‘‘(A) IN GENERAL.—The ongoing reporting 
requirements under paragraph (3) shall not 
apply to a digital asset issuer 180 days after 
the end of the covered fiscal year. 
‘‘(B) COVERED FISCAL YEAR DEFINED.— 
In this paragraph, the term ‘covered fiscal year’ 
means the first fiscal year of an issuer in which 
the blockchain system to which the digital asset 
relates is a functional network and certified to 
be a decentralized network under section 44 of 
the Securities Exchange Act of 1934. 
‘‘(b) REQUIREMENTS FOR INTERMEDIARIES.— 
‘‘(1) IN
GENERAL.—A person acting as an 
intermediary in a transaction involving the offer or 
sale of a unit of a digital asset in reliance on section 
4(a)(8) shall— 
‘‘(A) register with the Commission as a 
broker under section 15(b) of the Securities Ex-
change Act of 1934 (15 U.S.C. 78o(b)); and 
‘‘(B) be a member of a national securities 
association registered under section 15A of the 
Securities Exchange Act of 1934 (15 U.S.C. 
78o–3). 
‘‘(2) PURCHASER QUALIFICATION.— 
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‘‘(A) IN GENERAL.—Each time, before ac-
cepting any commitment (including any addi-
tional commitment from the same person), an 
intermediary or digital asset issuer shall have a 
reasonable basis for believing that the pur-
chaser satisfies the requirements of section 
4(a)(8). 
‘‘(B) RELIANCE
ON
PURCHASER’S
REP-
RESENTATIONS.—For purposes of subpara-
graph (A), an intermediary or digital asset 
issuer may rely on a purchaser’s representa-
tions concerning the purchaser’s annual income 
and net worth and the amount of the pur-
chaser’s other investments made, unless the 
intermediary or digital asset issuer has reason 
to question the reliability of the representation. 
‘‘(C) RELIANCE ON INTERMEDIARY.—For 
purposes of determining whether a transaction 
meets the requirements described under sub-
paragraph (A) through (C) of section 4(a)(8), a 
digital asset issuer may rely on the efforts of an 
intermediary. 
‘‘(c) ADDITIONAL PROVISIONS.— 
‘‘(1) 
ACCEPTANCE
OF
WRITTEN
OFFERS; 
SALES.—After an issuer files a statement under 
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paragraph (1) to offer and sell a digital asset in reli-
ance on section 4(a)(8)— 
‘‘(A) written offers of the digital asset may 
be made; and 
‘‘(B) the issuer may sell the digital assets 
in reliance on section 4(a)(8), if such sales meet 
all other requirements. 
‘‘(2) SOLICITATION OF INTEREST.— 
‘‘(A) IN
GENERAL.—At any time before 
the filing of a statement under paragraph (1), 
a digital asset issuer may communicate orally 
or in writing to determine whether there is any 
interest in a contemplated offering. Such com-
munications are deemed to be an offer of a unit 
of a digital asset for sale for purposes of the 
antifraud provisions of the Federal securities 
laws. No solicitation or acceptance of money or 
other consideration, nor of any commitment, 
binding or otherwise, from any person is per-
mitted until the statement is filed. 
‘‘(B) CONDITIONS.—In any communication 
described under subparagraph (A), the digital 
asset issuer shall— 
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‘‘(i) state that no money or other con-
sideration is being solicited, and if sent in 
response, will not be accepted; 
‘‘(ii) state that no offer to buy a unit 
of a digital asset can be accepted and no 
part of the purchase price can be received 
until the statement is filed and then only 
through an intermediary; and 
‘‘(iii) state that a person’s indication 
of interest involves no obligation or com-
mitment of any kind. 
‘‘(C) INDICATIONS
OF
INTEREST.—Any 
written communication described under sub-
paragraph (A) may include a means by which 
a person may indicate to the digital asset issuer 
that such person is interested in a potential of-
fering. A digital asset issuer may require a 
name, address, telephone number, or email ad-
dress in any response form included with a 
communication described under subparagraph 
(A). 
‘‘(3) 
DISQUALIFICATION
PROVISIONS.—The 
Commission shall issue rules to apply the disquali-
fication provisions under section 230.262 of title 17, 
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(D) in subparagraph (G), by striking the 
period and inserting ‘‘; or’’; and 
(E) by adding at the end the following: 
‘‘(H) section 4(a)(8).’’. 
SEC. 202. REQUIREMENTS TO TRANSACT IN CERTAIN DIG-
ITAL ASSETS. 
Title I of the Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.) is amended by adding at the end the 
following: 
‘‘SEC. 42. REQUIREMENTS TO TRANSACT IN CERTAIN DIG-
ITAL ASSETS. 
‘‘(a) TRANSACTIONS IN CERTAIN RESTRICTED DIG-
ITAL ASSETS.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of law, subject to paragraph (2), a re-
stricted digital asset may be offered and sold on an 
alternative trading system by any person other than 
a digital asset issuer if, at the time of such offer or 
sale, any blockchain system to which the restricted 
digital asset relates is a functional network and the 
information described in section 43 has been cer-
tified and made publicly available for any blockchain 
system to which the restricted digital asset relates. 
‘‘(2) ADDITIONAL
RULES
FOR
RELATED
AND 
AFFILIATED
PERSONS.—A restricted digital asset 
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owned by a related person or an affiliated person 
may only be offered or sold after 12 months after 
the later of— 
‘‘(A) the date on which such restricted dig-
ital asset was acquired; or 
‘‘(B) the digital asset maturity date. 
‘‘(b) TRANSACTIONS IN CERTAIN DIGITAL COMMOD-
ITIES.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), a 
digital commodity may be offered and sold by any 
person other than a digital asset issuer. 
‘‘(2) RULES
FOR
RELATED
AND
AFFILIATED 
PERSONS.—A digital commodity may only be offered 
or sold by a related person or an affiliated person 
if— 
‘‘(A) the holder of the digital commodity 
owned the digital commodity while it was a re-
stricted digital asset for 12 months after the 
later of— 
‘‘(i) the date on which such restricted 
digital asset was acquired; or 
‘‘(ii) the digital asset maturity date; 
‘‘(B) any blockchain system to which the 
digital commodity relates is certified to be a de-
centralized network under section 44; and 
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‘‘(C) the digital commodity is offered or 
sold on or subject to the rules of a digital com-
modity exchange registered under section 5i of 
the Commodity Exchange Act. 
‘‘(3) NOT A SECURITY.— 
‘‘(A) IN
GENERAL.—Except as provided 
under subparagraph (B), for purposes of the se-
curities laws, a transaction in a digital com-
modity made in compliance with paragraph (1) 
or (2) shall not be a transaction in a security. 
‘‘(B) 
EXCEPTION.—Subparagraph 
(A) 
does not apply to a transaction in a digital com-
modity if the transaction— 
‘‘(i) is a mixed digital asset trans-
action; or 
‘‘(ii) is made pursuant to an invest-
ment contract or in conjunction with any 
other security. 
‘‘(c) SALES RESTRICTIONS FOR AFFILIATED PER-
SONS.—A digital asset may be offered or sold by an affili-
ated person under subsection (a) or (b) if— 
‘‘(1) the aggregate amount of such digital as-
sets sold in any 3-month period by the affiliated per-
son is not greater than one percent of the digital as-
sets then outstanding; or 
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‘‘(2) the affiliated person promptly, following 
the placement of an order to sell one percent of the 
digital assets then outstanding during any 3-month 
period, reports the sale to— 
‘‘(A) the Commodity Futures Trading 
Commission, in the case of an order to sell a 
digital commodity on or subject to the rules of 
a digital commodity exchange; or 
‘‘(B) the Securities and Exchange Commis-
sion, in the case of a sell order for a restricted 
digital asset placed with an alternative trading 
system. 
‘‘(d) TREATMENT OF CERTAIN END USER DISTRIBU-
TIONS UNDER THE SECURITIES LAWS.— 
‘‘(1) IN GENERAL.—With respect to a digital 
asset, an end user distribution is described under 
this paragraph if— 
‘‘(A) each blockchain system to which such 
digital asset relates is a functional network; and 
‘‘(B) with respect to the digital asset and 
each blockchain system to which such digital 
asset relates, the information described in sec-
tion 43 has been certified and made publicly 
available. 
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‘‘(2) NOT A SECURITY.—For purposes of the 
securities laws, an end user distribution described 
under paragraph (1) shall not be a transaction in a 
security. 
‘‘(3) EXEMPTION.—Section 5 of the Securities 
Act of 1933 (15 U.S.C. 77e) shall not apply to an 
end user distribution described under paragraph (1) 
or a transaction in a unit of digital asset issued in 
such a distribution.’’. 
SEC. 203. ENHANCED DISCLOSURE REQUIREMENTS. 
Title I of the Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.), as amended by section 202, is further 
amended by adding at the end the following: 
‘‘SEC. 43. ENHANCED DISCLOSURE REQUIREMENTS WITH 
RESPECT TO DIGITAL ASSETS. 
‘‘(a) DISCLOSURE INFORMATION.—With respect to a 
digital asset and any blockchain system to which the dig-
ital asset relates, the information described under this sec-
tion is as follows: 
‘‘(1) SOURCE CODE.—The source code for any 
blockchain system to which the digital asset relates. 
‘‘(2) TRANSACTION HISTORY.—A description of 
the steps necessary to independently access, search, 
and verify the transaction history of any blockchain 
system to which the digital asset relates. 
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‘‘(3) DIGITAL ASSET ECONOMICS.—A descrip-
tion of the purpose of any blockchain system to 
which the digital asset relates and the operation of 
any such blockchain system, including— 
‘‘(A) information explaining the launch 
and supply process, including the number of 
digital assets to be issued in an initial alloca-
tion, the total number of digital assets to be 
created, the release schedule for the digital as-
sets, and the total number of digital assets then 
outstanding; 
‘‘(B) information on any applicable con-
sensus mechanism or process for validating 
transactions, method of generating or mining 
digital assets, and any process for burning or 
destroying digital assets on the blockchain sys-
tem; 
‘‘(C) an explanation of governance mecha-
nisms 
for 
implementing 
changes 
to 
the 
blockchain system or forming consensus among 
holders of such digital assets; and 
‘‘(D) sufficient information for a third 
party to create a tool for verifying the trans-
action history of the digital asset. 
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‘‘(4) PLAN
OF
DEVELOPMENT.—The current 
state and timeline for the development of any 
blockchain system to which the digital asset relates, 
showing how and when the blockchain system in-
tends or intended to be considered a functional net-
work and decentralized network. 
‘‘(5) DEVELOPMENT DISCLOSURES.—A list of 
all persons who are related persons or affiliated per-
sons who have been issued a unit of a digital asset 
by a digital asset issuer or have a right to a unit of 
a digital asset from a digital asset issuer. 
‘‘(6) RISK FACTOR DISCLOSURES.—Where ap-
propriate, provide under the caption ‘Risk Factors’ 
a description of the material risks surrounding own-
ership of a unit of a digital asset. This discussion 
shall be organized logically with relevant headings 
and each risk factor shall be set forth under a sub-
caption that adequately describes the risk. 
‘‘(b) CERTIFICATION.—With respect to a digital asset 
and any blockchain system to which the digital asset re-
lates, the information required to be made available under 
this section has been certified if the digital asset issuer, 
an affiliated person, or a decentralized governance system 
(or, if no digital asset issuer, affiliated person, or decen-
tralized governance system are identifiable, an alternative 
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trading system or digital commodity exchange) certifies on 
a quarterly basis to the Securities and Exchange Commis-
sion and Commodity Futures Trading Commission that 
the information is true and correct.’’. 
SEC. 204. CERTIFICATION OF CERTAIN DIGITAL ASSETS. 
Title I of the Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.), as amended by section 203, is further 
amended by adding at the end the following: 
‘‘SEC. 44. CERTIFICATION OF CERTAIN DIGITAL ASSETS. 
‘‘(a) CERTIFICATION.—Any person may certify to the 
Securities and Exchange Commission that the blockchain 
system to which a digital asset relates is a decentralized 
network. 
‘‘(b) FILING REQUIREMENTS.—A certification de-
scribed under subsection (a) shall be filed with the Com-
mission, and include— 
‘‘(1) information regarding the person making 
the certification; 
‘‘(2) a description of the blockchain system and 
the digital asset which relates to such blockchain 
system, including— 
‘‘(A) the operation of the blockchain sys-
tem; 
‘‘(B) the functionality of the related digital 
asset; 
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‘‘(C) any decentralized governance system 
which relates to the blockchain system; and 
‘‘(D) the process to develop consensus or 
agreement within such decentralized governance 
system; 
‘‘(3) a description of the development of the 
blockchain system and the digital asset which relates 
to the blockchain system, including— 
‘‘(A) a history of the development of the 
blockchain system and the digital asset which 
relates to such blockchain system; 
‘‘(B) a description of the issuance process 
for the digital asset which relates to the 
blockchain system; 
‘‘(C) information identifying the digital 
asset issuer of the digital asset which relates to 
the blockchain system; and 
‘‘(D) a list of any affiliated person related 
to the digital asset issuer; 
‘‘(4) an analysis of the factors on which such 
person based the certification that the blockchain 
system is a decentralized network, including— 
‘‘(A) an explanation of the protections and 
prohibitions available during the previous 12 
months against any one person being able to— 
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‘‘(i) control or materially alter the 
blockchain system; 
‘‘(ii) exclude any other person from 
using or participating on the blockchain 
system; and 
‘‘(iii) exclude any other person from 
participating in a decentralized governance 
system; 
‘‘(B) information regarding the beneficial 
ownership of the digital asset which relates to 
such blockchain system and any the distribution 
of voting power in any decentralized governance 
system during the previous 12 months; 
‘‘(C) information regarding the history of 
upgrades to the source code for such blockchain 
system during the previous 3 months, includ-
ing— 
‘‘(i) a description of any consensus or 
agreement process utilized to process or 
approve changes to the source code; 
‘‘(ii) a list of any material changes to 
the source code, the purpose and effect of 
the changes, and the contributor of the 
changes, if known; and 
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‘‘(iii) any changes to the source code 
made by the digital asset issuer, a related 
person, or an affiliated person; 
‘‘(D) information regarding any activities 
conducted to market the digital asset which re-
lates to the blockchain system during the pre-
vious 3 months by the digital asset issuer or an 
affiliated person of the digital asset issuer; and 
‘‘(E) information regarding any issuance of 
a unit of the digital asset which relates to such 
blockchain system during the previous 12 
months; 
‘‘(5) with respect to a blockchain system for 
which a certification has previously been rebutted or 
withdrawn under this section, specific information 
relating to the analysis provided in subsection (f)(2) 
or (g)(3), as applicable, in connection with such re-
buttal or withdrawal. 
‘‘(c) REBUTTABLE PRESUMPTION.—The Commission 
may rebut a certification described under subsection (a) 
with respect to a blockchain system if the Commission, 
within 30 days of receiving such certification, determines 
that the blockchain system is not a decentralized network. 
‘‘(d) CERTIFICATION REVIEW.— 
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‘‘(1) IN GENERAL.—Any blockchain system that 
relates to a digital asset for which a certification has 
been made under subsection (a) shall be considered 
a decentralized network 30 days after the date on 
which the Commission receives a certification under 
subsection (a), unless the Commission notifies the 
person who made the certification within such time 
that the Commission is staying the certification due 
to— 
‘‘(A) an inadequate explanation by the per-
son making the certification; or 
‘‘(B) any novel or complex issues which re-
quire additional time to consider. 
‘‘(2) PUBLIC NOTICE.—The Commission shall 
make the following available to the public and pro-
vide a copy to the Commodity Futures Trading 
Commission: 
‘‘(A) Each certification received under sub-
section (a). 
‘‘(B) Each stay of the Commission under 
this section, and the reasons therefore. 
‘‘(C) Any response from a person making 
a certification under subsection (a) to a stay of 
the certification by the Commission. 
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‘‘(3) CONSOLIDATION.—The Commission may 
consolidate and treat as one submission multiple cer-
tifications made under subsection (a) for the same 
blockchain system which relates to a digital asset 
which are received during the review period provided 
under this subsection. 
‘‘(e) STAY OF CERTIFICATION.— 
‘‘(1) IN GENERAL.—A notification by the Com-
mission pursuant to subsection (d)(1) shall stay the 
certification once for up to an additional 90 days 
from the date of the notification. 
‘‘(2) PUBLIC
COMMENT
PERIOD.—Before the 
end of the 30-day period described under subsection 
(d)(1), the Commission may begin a public comment 
period of at least 30 days in conjunction with a stay 
under this section. 
‘‘(f) DISPOSITION OF CERTIFICATION.— 
‘‘(1) IN GENERAL.—A certification made under 
subsection (a) shall— 
‘‘(A) become effective— 
‘‘(i) upon the publication of a notifica-
tion from the Commission to the person 
who made the certification that the Com-
mission does not object to the certification; 
or 
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‘‘(ii) at the expiration of the certifi-
cation review period; and 
‘‘(B) not become effective upon the publi-
cation of a notification from the Commission to 
the person who made the certification that the 
Commission has rebutted the certification. 
‘‘(2) DETAILED ANALYSIS INCLUDED WITH RE-
BUTTAL.—The Commission shall include, with each 
publication of a notification of rebuttal described 
under paragraph (1)(B), a detailed analysis of the 
factors on which the decision was based. 
‘‘(g) WITHDRAWAL OF CERTIFICATION.— 
‘‘(1) DETERMINATION
BY
A
DIGITAL
COM-
MODITY EXCHANGE.—With respect to a certification 
of a blockchain system that becomes effective pursu-
ant to subsection (f), if a digital commodity ex-
change determines that the blockchain system may 
not be a decentralized network, the digital com-
modity exchange shall notify the Commodity Futures 
Trading Commission of such determination. 
‘‘(2) WITHDRAWAL PROCESS.—With respect to 
each notification received under paragraph (1), the 
Commodity Futures Trading Commission shall ini-
tiate a withdrawal process under which the Com-
modity Futures Trading Commission shall— 
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‘‘(A) publish a notice announcing the pro-
posed withdrawal; 
‘‘(B) provide a 30-day comment period 
with respect to the proposed withdrawal; and 
‘‘(C) after the end of the 30-day comment 
required under subparagraph (B), publish ei-
ther— 
‘‘(i) a notification of withdrawal of the 
applicable certification; or 
‘‘(ii) a notice that the Commodity Fu-
tures Trading Commission is not with-
drawing the certification. 
‘‘(3) DETAILED
ANALYSIS
REQUIRED.—The 
Commodity Futures Trading Commission shall in-
clude, with each publication of a notification of with-
drawal described under paragraph (2)(C)(i), a de-
tailed analysis of the factors on which the decision 
was based. 
‘‘(h) 
RECERTIFICATION.—With 
respect 
to 
a 
blockchain system for which a certification has been rebut-
ted or withdrawn under this section, no person may make 
a certification under subsection (a) with respect to such 
blockchain system during the 90-day period beginning on 
the date of such rebuttal or withdrawal. 
‘‘(i) APPEAL OF REBUTTAL OR WITHDRAWAL.— 
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‘‘(1) IN GENERAL.—If a certification is rebut-
ted or withdrawn under this section, the person 
making such certification may appeal the decision to 
the United States Court of Appeals for the District 
of Columbia, not later than 60 days after the notice 
of rebuttal or withdrawal is made. 
‘‘(2) REVIEW.—In an appeal under paragraph 
(1), the court shall have de novo review of the deter-
mination to rebut or withdraw the certification. 
‘‘(j) LIABILITY FOR PROVIDING FALSE INFORMA-
TION.—It shall be unlawful for any person to provide false 
information in support of a certification under this section 
if such person knowingly or reasonably should have known 
such information was false.’’. 
SEC. 205. EFFECTIVE DATE. 
Unless otherwise provided in this title, this title and 
the amendments made by this title shall take effect 360 
days after the date of enactment of this Act, except that, 
to the extent a provision of this title requires a rule-
making, the provision shall take effect on the later of— 
(1) 360 days after the date of enactment of this 
Act; or 
(2) 60 days after the publication in the Federal 
Register of the final rule implementing the provision. 
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TITLE III—REGISTRATION FOR 
DIGITAL 
ASSET 
INTER-
MEDIARIES AT THE SECURI-
TIES AND EXCHANGE COM-
MISSION 
SEC. 301. TREATMENT OF DIGITAL COMMODITIES AND 
OTHER DIGITAL ASSETS. 
(a) SECURITIES ACT OF 1933.—Section 2(a)(1) of 
the Securities Act of 1933 (15 U.S.C. 77b(a)(1)) is 
amended by adding at the end the following: ‘‘The term 
does not include a digital commodity or permitted pay-
ment stablecoin.’’. 
(b) SECURITIES EXCHANGE ACT OF 1934.—Section 
3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
78c(a)) is amended— 
(1) in paragraph (1), by adding at the end the 
following: ‘‘The term ‘exchange’ does not include a 
digital asset trading system, blockchain protocol, or 
any person or group of persons solely because of 
their development of a blockchain protocol.’’; 
(2) in paragraph (2), by adding at the end the 
following: ‘‘A digital asset trading system is not a 
‘facility’ of an exchange.’’; 
(3) in paragraph (4)(A), by inserting ‘‘, other 
than restricted digital assets,’’ after ‘‘securities’’; 
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(4) in paragraph (5)(A), by inserting ‘‘re-
stricted digital assets or’’ after ‘‘not including’’; 
(5) in paragraph (26) by inserting ‘‘(other than 
a notice-registered digital asset clearing agency)’’ 
after ‘‘or registered clearing agency’’; 
(6) in paragraph (28) by inserting ‘‘(other than 
a notice-registered digital asset clearing agency)’’ 
after ‘‘registered clearing agency’’; 
(7) in paragraph (10), by adding at the end the 
following: ‘‘Subject to subsection (i), the term does 
not include a digital commodity or permitted pay-
ment stablecoin.’’; 
(8) by redesignating the second paragraph (80) 
(relating to funding portals) as paragraph (81); and 
(9) by adding at the end the following: 
‘‘(81) BANK SECRECY ACT.—The term ‘Bank 
Secrecy Act’ means— 
‘‘(A) section 21 of the Federal Deposit In-
surance Act (12 U.S.C. 1829b); 
‘‘(B) chapter 2 of title I of Public Law 91– 
508 (12 U.S.C. 1951 et seq.); and 
‘‘(C) subchapter II of chapter 53 of title 
31, United States Code. 
‘‘(82) DIGITAL ASSET BROKER.—The term ‘dig-
ital asset broker’— 
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‘‘(A) means any person engaged in the 
business of effecting transactions in restricted 
digital assets for the account of others; and 
‘‘(B) does not include a blockchain protocol 
or a person or group of persons solely because 
of their development of a blockchain protocol. 
‘‘(83) DIGITAL ASSET DEALER.—The term ‘dig-
ital asset dealer’— 
‘‘(A) means any person engaged in the 
business of buying and selling digital assets for 
such person’s own account through a broker or 
otherwise; and 
‘‘(B) does not include— 
‘‘(i) a person that buys or sells digital 
assets for such person’s own account, ei-
ther individually or in a fiduciary capacity, 
but not as a part of a regular business; or 
‘‘(ii) a blockchain protocol or a person 
or group of persons solely because of their 
development of a blockchain protocol. 
‘‘(84) DIGITAL ASSET TRADING SYSTEM.—The 
term ‘digital asset trading system’— 
‘‘(A) means any organization, association, 
person, or group of persons, whether incor-
porated or unincorporated, that constitutes, 
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maintains, or provides a market place or facili-
ties for bringing together purchasers and sellers 
of restricted digital assets or for otherwise per-
forming with respect to digital assets the func-
tions commonly performed by a stock exchange 
within the meaning of section 240.3b–16 of title 
17, Code of Federal Regulations, as in effect on 
the date of enactment of this paragraph; and 
‘‘(B) does not include a blockchain protocol 
or a person or group of persons solely because 
of their development of a blockchain protocol. 
‘‘(85) MIXED DIGITAL ASSET TRANSACTION.— 
The term ‘mixed digital asset transaction’ means an 
agreement, contract, or transaction involving a re-
stricted digital asset and a digital commodity. 
‘‘(86) NOTICE-REGISTERED
DIGITAL
ASSET 
CLEARING
AGENCY.—The term ‘notice-registered 
digital asset clearing agency’ means a clearing agen-
cy that has registered with the Commission pursuant 
to section 17A(b)(9). 
‘‘(87) ADDITIONAL
DIGITAL
ASSET-RELATED 
TERMS.— 
‘‘(A) SECURITIES
ACT
OF
1933.—The 
terms ‘affiliated person’, ‘blockchain system’, 
‘decentralized governance system’, ‘decentral-
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ized network’, ‘digital asset’, ‘digital asset 
issuer’, ‘digital asset maturity date’, ‘end user 
distribution’, ‘functional network’, ‘mixed dig-
ital asset transaction’, ‘permitted payment 
stablecoin’, ‘related person’, ‘restricted digital 
asset’, and ‘source code’ have the meaning 
given those terms, respectively, under section 
2(a) of the Securities Act of 1933 (15 U.S.C. 
77b(a)). 
‘‘(B) COMMODITY
EXCHANGE
ACT.—The 
terms ‘digital commodity’, ‘digital commodity 
broker’, ‘digital commodity dealer’, and ‘digital 
commodity exchange’ have the meaning given 
those terms, respectively, under section 1a of 
the Commodity Exchange Act (7 U.S.C. 1a).’’. 
(c) INVESTMENT ADVISERS ACT OF 1940.—Section 
202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 
80b–2) is amended— 
(1) in paragraph (18), by adding at the end the 
following: ‘‘The term does not include a digital com-
modity or permitted payment stablecoin.’’; 
(2) by redesignating the second paragraph (29) 
(relating to commodity pools) as paragraph (31); 
(3) by adding at the end, the following: 
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(3) by adding at the end the following: 
‘‘(e)(1) Rules promulgated under subsection (b) that 
prohibit fraud, manipulation, or insider trading (but not 
rules imposing or specifying reporting or recordkeeping re-
quirements, procedures, or standards as prophylactic 
measures against fraud, manipulation, or insider trading), 
and judicial precedents decided under subsection (b) and 
rules promulgated thereunder that prohibit fraud, manip-
ulation, or insider trading, shall apply to permitted pay-
ment stablecoins with respect to those circumstances in 
which the permitted payment stablecoins are brokered, 
traded, or custodied by a broker, dealer, digital asset 
broker, or digital asset dealer or through an alternative 
trading system or digital asset trading platform to the 
same extent as they apply to securities. 
‘‘(2) Judicial precedents decided under section 17(a) 
of the Securities Act of 1933 and sections 9, 15, 16, 20, 
and 21A of this title, and judicial precedents decided 
under applicable rules promulgated under such sections, 
shall apply to permitted payment stablecoins with respect 
to those circumstances in which the permitted payment 
stablecoins are brokered, traded, or custodied by a digital 
asset broker, digital asset dealer, or digital asset trading 
platform to the same extent as they apply to securities. 
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‘‘(3) Nothing in this subsection may be construed to 
provide the Commission authority to make any rule, regu-
lation, requirement, or obligation on a permitted payment 
stablecoin issuer regarding the operations of a permitted 
payment stablecoin issuer or a permitted payment 
stablecoin, including requirements or obligations regard-
ing— 
‘‘(A) design; 
‘‘(B) structure; 
‘‘(C) issuance; 
‘‘(D) redemption; 
‘‘(E) financial resources; 
‘‘(F) collateral; or 
‘‘(G) any other aspect of the operation of a per-
mitted payment stablecoin issuer or permitted pay-
ment stablecoin.’’. 
SEC. 303. REGISTRATION OF DIGITAL ASSET TRADING SYS-
TEMS. 
Section 6 of the Securities Exchange Act of 1934 (15 
U.S.C. 78f) is amended by adding at the end the following: 
‘‘(m) DIGITAL ASSET TRADING SYSTEM.— 
‘‘(1) IN GENERAL.—It shall be unlawful for any 
digital asset trading system to make use of the mails 
or any means or instrumentality of interstate com-
merce within or subject to the jurisdiction of the 
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United States to effect any transaction in a digital 
asset, unless such digital asset trading system is reg-
istered with the Commission. 
‘‘(2) APPLICATION.—A person desiring to reg-
ister as a digital asset trading system shall submit 
to the Commission an application in such form and 
containing such information as the Commission may 
require for the purpose of making the determina-
tions required for approval. 
‘‘(3) EXEMPTIONS.—A digital asset trading sys-
tem that offers or seeks to offer at least one digital 
asset shall not be required to register under this sec-
tion (and subparagraph (A) shall not apply to such 
digital asset trading system) if the trading system 
satisfies any of the exemptions set forth in section 
240.3b–16(b) of title 17, Code of Federal Regula-
tions.’’. 
SEC. 304. REQUIREMENTS FOR DIGITAL ASSET TRADING 
SYSTEMS. 
Title I of the Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.) is amended by inserting after section 
6 the following: 
‘‘SEC. 6A. REQUIREMENTS FOR DIGITAL ASSET TRADING 
SYSTEMS. 
‘‘(a) HOLDING OF CUSTOMER ASSETS.— 
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‘‘(1) IN GENERAL.—Subject to paragraph (2), a 
digital asset trading system, in its capacity as such, 
may not hold custody of customer money, assets, or 
property. 
‘‘(2) CUSTODY IN OTHER CAPACITY.—Nothing 
in this Act shall prohibit a person registered as a 
digital asset trading system from holding custody of 
customer money, assets, or property in any other 
permitted capacity, including as a digital asset 
broker or digital asset dealer, in compliance with the 
requirements of section 15H. 
‘‘(b) RULEMAKING.—The Commission shall prescribe 
rules for digital asset trading systems relating to the fol-
lowing: 
‘‘(1) NOTICE.—Notice to the Commission of the 
initial operation of a digital asset trading system or 
any material change to the operation of the digital 
asset trading system. 
‘‘(2) ORDER
DISPLAY.—The thresholds at 
which a digital asset trading system is required to 
display the orders of the digital asset trading sys-
tem, and the manner of such display. 
‘‘(3) FAIR ACCESS.—The thresholds at which a 
digital asset trading system is required to have poli-
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cies regarding providing fair access to the digital 
asset trading system. 
‘‘(4) CAPACITY, INTEGRITY, AND SECURITY OF 
AUTOMATED SYSTEMS.—Policies and procedures rea-
sonably designed to ensure the capacity, integrity, 
and security of the digital asset trading system, tak-
ing into account the particular nature of digital 
asset trading systems. 
‘‘(5) EXAMINATIONS, INSPECTIONS, AND INVES-
TIGATIONS.—The examination and inspection of the 
premises, systems, and records of the digital asset 
trading system by the Commission or by a self-regu-
latory organization of which such digital asset trad-
ing system is a member. 
‘‘(6) RECORDKEEPING.—The making, keeping 
current, and preservation of records related to trad-
ing activity on the digital asset trading system. 
‘‘(7) REPORTING.—The reporting of trans-
actions in digital assets that occur through the dig-
ital asset trading system. 
‘‘(8) PROCEDURES.—The establishment of ade-
quate written safeguards and written procedures to 
protect confidential trading information. 
‘‘(c) NAME REQUIREMENT.—A digital asset trading 
system may not use the word ‘exchange’ in the name of 
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the digital asset trading system, unless the digital asset 
trading system— 
‘‘(1) is operated by a registered national securi-
ties exchange; and 
‘‘(2) is clearly indicated as being provided out-
side of the system’s capacity as a national securities 
exchange. 
‘‘(d) TREATMENT
UNDER
THE
BANK
SECRECY 
ACT.—A digital asset trading system shall be treated as 
a financial institution for purposes of the Bank Secrecy 
Act.’’. 
SEC. 305. REGISTRATION OF DIGITAL ASSET BROKERS AND 
DIGITAL ASSET DEALERS. 
The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.) is amended by inserting after section 15G the fol-
lowing: 
‘‘SEC. 15H. REGISTRATION OF DIGITAL ASSET BROKERS 
AND DIGITAL ASSET DEALERS. 
‘‘(a) REGISTRATION.— 
‘‘(1) IN GENERAL.—It shall be unlawful for any 
digital asset broker or digital asset dealer (other 
than a natural person associated with a digital asset 
broker or digital asset dealer, and other than such 
a digital asset broker or digital asset dealer whose 
business is exclusively intrastate and who does not 
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make use of any facility of a digital asset trading 
platform) to make use of the mails or any means or 
instrumentality of interstate commerce to effect any 
transactions in, or to induce or attempt to induce 
the purchase or sale of, any digital asset unless such 
digital asset broker or digital asset dealer is reg-
istered in accordance with this section. 
‘‘(2) APPLICATION.—A person desiring to reg-
ister as a digital asset broker or digital asset dealer 
shall submit to the Commission an application in 
such form and containing such information as the 
Commission may require for the purpose of making 
the determinations required for approval. 
‘‘(b) NATIONAL SECURITIES ASSOCIATION MEMBER-
SHIP.— 
‘‘(1) IN GENERAL.—A digital asset broker or 
digital asset dealer may not register or maintain reg-
istration under this section unless such digital asset 
broker or digital asset dealer is a member of a na-
tional securities association registered under section 
15A. 
‘‘(2) EXCEPTION.—A digital asset broker or 
digital asset dealer may register under this section 
without obtaining membership in a national securi-
ties association until the end of the 360-day period 
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beginning on the date the first national securities as-
sociation adopts rules to admit digital asset brokers 
or digital asset dealers as members. 
‘‘(c) ADDITIONAL REGISTRATIONS WITH THE COM-
MODITY FUTURES TRADING COMMISSION.—A registered 
digital asset broker or digital asset dealer shall be per-
mitted to maintain any other registration with the Com-
modity Futures Trading Commission relating to the other 
activities of the registered digital asset broker or reg-
istered digital asset dealer, including as a digital com-
modity broker or digital commodity dealer, to list or trade 
contracts of sale for digital commodities.’’. 
SEC. 306. REQUIREMENTS OF DIGITAL ASSET BROKERS 
AND DIGITAL ASSET DEALERS. 
Section 15H of the Securities Exchange Act of 1934, 
as added by section 205, is amended by adding at the end 
the following: 
‘‘(d) ANTIFRAUD.—No digital asset broker or digital 
asset dealer shall make use of the mails or any means or 
instrumentality of interstate commerce to effect any trans-
action in, or to induce or attempt to induce the purchase 
or sale of, any digital asset that is not a digital commodity 
by means of any manipulative, deceptive, or other fraudu-
lent device or contrivance. 
‘‘(e) HOLDING OF CUSTOMER ASSETS.— 
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‘‘(1) IN GENERAL.—A digital asset broker or 
digital asset dealer shall hold customer money, as-
sets, and property in a manner to minimize the risk 
of loss to the customer or unreasonable delay in the 
access to the money, assets, and property of the cus-
tomer. 
‘‘(2) RULEMAKING.—Not later than 180 days 
after the date of enactment of this section, the Com-
mission shall issue rules to provide that a registered 
digital asset broker or digital asset dealer will be 
considered to satisfy the requirements of paragraph 
(1), with respect to digital assets, so long as the dig-
ital asset broker or digital asset dealer— 
‘‘(A) holds such digital asset at a bank 
that— 
‘‘(i) is recognized by the appropriate 
Federal banking agency or State bank su-
pervisor (as such terms are defined, re-
spectively, in section 3 of the Federal De-
posit Insurance Act (12 U.S.C. 1813)) as 
having custody over such assets; 
‘‘(ii) delivers the digital asset to the 
digital asset broker or digital asset dealer 
without requiring the payment of money or 
value; and 
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‘‘(iii) has acknowledged in writing 
that the digital asset in the custody or con-
trol of the bank is free of charge, lien, or 
claim of any kind in favor of such bank or 
any person claiming through the bank; 
‘‘(B) establishes, maintains, and enforces 
written policies, procedures, and controls rea-
sonably designed to demonstrate that the digital 
asset broker or digital asset dealer— 
‘‘(i) has control over the digital asset 
that the digital asset broker or digital 
asset dealer holds in custody to protect 
against the theft, loss, or unauthorized use 
of the private keys necessary to access and 
transfer such digital asset; 
‘‘(ii) has identified the steps that will 
be taken in the wake of certain events that 
could affect the custody of the digital as-
sets by the digital asset broker or digital 
asset dealer; 
‘‘(iii) can comply with a court-ordered 
freeze or seizure; and 
‘‘(iv) has established arrangements to 
allow for the transfer of the digital asset 
held by such digital asset broker or digital 
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asset dealer to another digital asset broker 
or digital asset dealer, a trustee, receiver, 
liquidator, or person performing a similar 
function, or to another appropriate person, 
in the event such digital asset broker or 
digital asset dealer can no longer continue 
as a going concern and self-liquidates or is 
subject to a formal bankruptcy, receiver-
ship, liquidation, or similar proceeding; or 
‘‘(C) complies with such other require-
ments as the Commission may permit. 
‘‘(3) SEGREGATION OF FUNDS.— 
‘‘(A) IN GENERAL.—A digital asset broker 
or digital asset dealer shall treat and deal with 
all money, assets, and property held for a cus-
tomer of the digital asset broker or digital asset 
dealer, or that accrues to a customer as a result 
of trading in digital assets, as belonging to the 
customer. 
‘‘(B) COMMINGLING PROHIBITED.—Money, 
assets, and property of a customer described in 
subparagraph (A) shall be separately accounted 
for and shall not be commingled with the funds 
of the digital asset broker or digital asset dealer 
or be used to margin, secure, or guarantee any 
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trades of any person other than the customer of 
the digital asset broker or digital asset dealer 
for whom the same are held. 
‘‘(4) EXCEPTIONS.— 
‘‘(A) USE OF FUNDS.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
paragraph (3), money, assets, and property 
of customers of a digital asset broker or 
digital asset dealer described in paragraph 
(3) may be maintained and deposited in 
the same account or accounts with any 
bank, trust company, digital asset broker, 
or digital asset dealer, if the money, assets, 
and property remain segregated from the 
money, assets, and property of the digital 
asset broker or digital asset dealer. 
‘‘(ii) WITHDRAWAL.—Notwithstanding 
paragraph (3), such share of the money, 
assets, and property described in para-
graph (3) as in the normal course of busi-
ness shall be necessary to transfer, adjust, 
or settle a digital asset transaction pursu-
ant to a customer’s instruction (standing 
or otherwise) may be withdrawn and ap-
plied to such purposes, including the with-
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drawal and payment of commissions, bro-
kerage, interest, taxes, storage, and other 
charges lawfully accruing in connection 
with a digital asset transaction. 
‘‘(iii) COMMISSION
ACTION.—In ac-
cordance with such terms and conditions 
as the Commission may prescribe by rule, 
regulation, or order, any money, assets, or 
property of a customer of a digital asset 
broker or digital asset dealer described in 
paragraph (3) may be commingled and de-
posited as provided in this section with any 
other money, assets, or property received 
by the digital asset broker or digital asset 
dealer and required by the Commission to 
be separately accounted for and treated 
and dealt with as belonging to the cus-
tomer of the digital asset broker or digital 
asset dealer. 
‘‘(B) 
PARTICIPATION
IN
BLOCKCHAIN 
SERVICES.— 
‘‘(i) IN GENERAL.—A customer shall 
have the right to waive the restrictions in 
paragraph (3) for any unit of a digital 
asset, by affirmatively electing, in writing 
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to the digital asset broker or digital asset 
dealer, to waive the restrictions. 
‘‘(ii) USE OF FUNDS.—Customer dig-
ital assets removed from segregation under 
clause (i) may be pooled and used by the 
digital asset broker or digital asset dealer 
or its designee to provide a blockchain 
service for a blockchain system to which 
the unit of the digital asset removed from 
segregation under clause (i) relates. 
‘‘(iii) LIMITATIONS.—The Commission 
may, by rule, establish notice and disclo-
sure requirements, and any other limita-
tions and rules related to the waiving of 
any restrictions under this subparagraph 
that are reasonably necessary to protect 
customers. 
‘‘(iv) 
BLOCKCHAIN
SERVICE
DE-
FINED.—In this subparagraph, the term 
‘blockchain service’ means any activity re-
lating to validating transactions on a 
blockchain system, providing security for a 
blockchain system, or other similar activity 
required for the ongoing operation of a 
blockchain system. 
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‘‘(5) FURTHER LIMITATIONS.—No person shall 
treat or deal with a digital asset held on behalf of 
any customer pursuant to paragraph (3) by utilizing 
any unit of such digital asset to participate in a 
blockchain 
service 
(as 
defined 
in 
paragraph 
(4)(B)(iv)) or a decentralized governance system as-
sociated with the digital asset or the blockchain sys-
tem to which the digital asset relates in any manner 
other than that which is expressly directed by the 
customer from which such unit of a digital asset was 
received. 
‘‘(f) CAPITAL REQUIREMENTS.— 
‘‘(1) IN
GENERAL.—Each registered digital 
asset broker and registered digital asset dealer shall 
meet such minimum capital requirements as the 
Commission may prescribe to ensure that the digital 
asset broker or digital asset dealer is able to— 
‘‘(A) conduct an orderly wind-down of the 
activities of the digital asset broker or digital 
asset dealer; and 
‘‘(B) fulfill the customer obligations of the 
digital asset broker or digital asset dealer. 
‘‘(2) CALCULATION.—For purposes of any 
Commission rule or order adopted under this section 
or any interpretation thereof regulating a digital 
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asset broker or digital asset dealer’s financial re-
sponsibility obligations and capital requirements, a 
registered digital asset broker or digital asset dealer 
that maintains control of customer digital assets in 
a manner that satisfies the rules issued by the Com-
mission under subsection (e)(2) shall not be required 
to include the value of such digital assets as assets 
or liabilities of the digital asset broker or digital 
asset dealer. 
‘‘(3) COORDINATION
OF
CAPITAL
REQUIRE-
MENTS.— 
‘‘(A) COMMISSION
RULE.—The Commis-
sion shall, by rule, provide appropriate offsets 
to any applicable capital requirement for a per-
son with multiple registrations, including as a 
broker, dealer, digital asset broker, or digital 
asset dealer. 
‘‘(B) JOINT RULE.—The Commission and 
the Commodity Futures Trading Commission 
shall jointly, by rule, provide appropriate offsets 
to any applicable capital requirement for a per-
son with multiple registrations, including as a 
digital asset broker, digital asset dealer, digital 
asset trading system, digital commodity broker, 
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100 
digital commodity dealer, or digital commodity 
exchange. 
‘‘(g) REPORTING AND RECORDKEEPING.—Each reg-
istered digital asset broker and digital asset dealer— 
‘‘(1) shall make such reports as are required by 
the Commission by rule or regulation regarding the 
transactions, positions, and financial condition of the 
digital asset broker or digital asset dealer; 
‘‘(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. 
‘‘(h) TREATMENT
UNDER
THE
BANK
SECRECY 
ACT.—A digital asset broker and a digital asset dealer 
shall be treated as a financial institution for purposes of 
the Bank Secrecy Act.’’. 
SEC. 307. RULES RELATED TO CONFLICTS OF INTEREST. 
The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.) is amended by inserting after section 10D the fol-
lowing: 
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101 
‘‘SEC. 10E. CONFLICTS OF INTEREST RELATED TO DIGITAL 
ASSETS. 
‘‘Each registered digital asset trading system, reg-
istered digital asset broker, registered digital asset dealer, 
and notice-registered digital asset clearing agency shall es-
tablish, maintain, and enforce written policies and proce-
dures reasonably designed, taking into consideration the 
nature of such person’s business, to mitigate any conflicts 
of interest and transactions or arrangements with affili-
ates.’’. 
SEC. 308. TREATMENT OF CERTAIN DIGITAL ASSETS IN 
CONNECTION WITH FEDERALLY REGULATED 
INTERMEDIARIES. 
Section 18(b) of the Securities Act of 1933 (15 
U.S.C. 77r(b)) is amended by adding at the end the fol-
lowing: 
‘‘(5) EXEMPTION FOR CERTAIN DIGITAL ASSETS 
IN
CONNECTION
WITH
FEDERALLY
REGULATED 
INTERMEDIARIES.—A digital asset is a covered secu-
rity with respect to a transaction that is exempt 
from registration under this Act when— 
‘‘(A) it is brokered, traded, custodied, or 
cleared by a digital asset broker or digital asset 
dealer registered under section 15H of the Se-
curities Exchange Act of 1934; or 
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103 
SEC. 310. EXCLUSION FOR ANCILLARY ACTIVITIES. 
The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.) is amended by inserting after section 15G the fol-
lowing: 
‘‘SEC. 15H. EXCLUSION FOR ANCILLARY ACTIVITIES. 
‘‘(a) IN GENERAL.—Notwithstanding any other pro-
vision of this Act, a person shall not be subject to this 
Act and the regulations thereunder solely based on the 
person undertaking any ancillary activities. 
‘‘(b) EXCEPTIONS.—Subsection (a) shall not be con-
strued to apply to the antimanipulation and antifraud au-
thorities of the Commission. 
‘‘(c) ANCILLARY ACTIVITIES DEFINED.—In this sec-
tion, the term ‘ancillary activities’ means any of the fol-
lowing activities related to the operation of a blockchain 
system: 
‘‘(1) Compiling network transactions, operating 
a pool, relaying, searching, sequencing, validating, or 
acting in a similar capacity with respect to a re-
stricted digital asset. 
‘‘(2) Providing computational work, operating a 
node, or procuring, offering, or utilizing network 
bandwidth, or other similar incidental services with 
respect to a restricted digital asset. 
‘‘(3) Providing a user interface that enables a 
user to read and access data about a blockchain sys-
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104 
tem, send messages, or otherwise interact with a 
blockchain system. 
‘‘(4) Developing, publishing, constituting, ad-
ministering, maintaining, or otherwise distributing a 
blockchain system. 
‘‘(5) Developing, publishing, constituting, ad-
ministering, maintaining, or otherwise distributing 
software or systems that create or deploy a hard-
ware or software wallet or other system facilitating 
an individual user’s own personal ability to keep, 
safeguard, or custody the user’s restricted digital as-
sets or related private keys.’’. 
SEC. 311. REGISTRATION AND REQUIREMENTS FOR NO-
TICE-REGISTERED DIGITAL ASSET CLEARING 
AGENCIES. 
Section 17A(b) of the Securities Exchange Act of 
1934 (15 U.S.C. 78q–1(b)) is amended— 
(1) in subsection (1), by inserting ‘‘(other than 
a notice-registered digital asset clearing agency)’’ 
after ‘‘unlawful for any clearing agency’’; and 
(2) by adding at the end, the following: 
‘‘(9) REGISTRATION AND REQUIREMENTS FOR 
NOTICE-REGISTERED
DIGITAL
ASSET
CLEARING 
AGENCY.— 
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105 
‘‘(A) ELIGIBILITY.—A person may register 
with the Commission as a notice-registered dig-
ital asset clearing agency if the person— 
‘‘(i) is otherwise registered as a digital 
asset broker or digital asset dealer with the 
Commission and is engaging in a business 
involving digital assets that are not digital 
commodities, in compliance with Commis-
sion rules pursuant to section 15H(e); or 
‘‘(ii) is a bank engaging in a business 
involving digital assets, in compliance with 
applicable banking law and regulation re-
lating to the custody and safekeeping of 
such assets. 
‘‘(B) REGISTRATION.—A person may reg-
ister with the Commission as a notice-registered 
digital asset clearing agency by providing the 
Commission with notice of the activities of the 
person or planned activities in such form as the 
Commission determines appropriate. 
‘‘(C) RULEMAKING.—The Commission may 
adopt rules, which may not take effect until at 
least 360 days following the date of enactment 
of this paragraph, with regard to the activities 
of notice-registered digital asset clearing agen-
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106 
cies, taking into account the nature of digital 
assets.’’. 
SEC. 312. TREATMENT OF CUSTODY ACTIVITIES BY BANK-
ING INSTITUTIONS. 
(a) TREATMENT OF CUSTODY ACTIVITIES.—The ap-
propriate Federal banking agency (as defined under sec-
tion 3 of the Federal Deposit Insurance Act (12 U.S.C. 
1813)), the National Credit Union Administration (in the 
case of a credit union), and the Securities and Exchange 
Commission may not require a depository institution, na-
tional bank, Federal credit union, State credit union, or 
trust company, or any affiliate thereof— 
(1) to include assets held in custody as a liabil-
ity on any financial statement or balance sheet, in-
cluding payment stablecoin custody or safekeeping 
activities; 
(2) to hold additional regulatory capital against 
assets in custody or safekeeping, except as necessary 
to mitigate against operational risks inherent with 
the custody or safekeeping services, as determined 
by— 
(A) the appropriate Federal banking agen-
cy; 
(B) the National Credit Union Administra-
tion (in the case of a credit union); 
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107 
(C) a State bank supervisor (as defined 
under section 3 of the Federal Deposit Insur-
ance Act (12 U.S.C. 1813)); or 
(D) a State credit union supervisor (as de-
fined under section 6003 of the Anti-Money 
Laundering Act of 2020); or 
(3) to recognize a liability for any obligations 
related to activities or services performed for digital 
assets that the entity does not own if that liability 
would exceed the expense recognized in the income 
statement as a result of the corresponding obliga-
tion. 
(b) DEFINITIONS.—In this section: 
(1) DEPOSITORY
INSTITUTION.—The terms 
‘‘depository institution’’ has the meaning given that 
term under section 3 of the Federal Deposit Insur-
ance Act. 
(2) CREDIT UNION TERMS.—The terms ‘‘Fed-
eral credit union’’ and ‘‘State credit union’’ have the 
meaning given those terms, respectively, under sec-
tion 101 of the Federal Credit Union Act. 
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108 
TITLE IV—REGISTRATION FOR 
DIGITAL 
ASSET 
INTER-
MEDIARIES 
AT 
THE 
COM-
MODITY FUTURES TRADING 
COMMISSION 
SEC. 401. COMMISSION JURISDICTION OVER DIGITAL COM-
MODITY TRANSACTIONS. 
(a) IN GENERAL.—Section 2(a)(1) of the Commodity 
Exchange Act (7 U.S.C. 2(a)(1)) is amended by adding 
at the end the following: 
‘‘(J) Except as expressly provided in this 
Act, nothing in the Financial Innovation and 
Technology for the 21st Century Act shall af-
fect or apply to, or be interpreted to affect or 
apply to— 
‘‘(i) any agreement, contract, or 
transaction that is subject to regulation 
under this Act as— 
‘‘(I) a contract of sale of a com-
modity for future delivery or an op-
tion on such a contract; 
‘‘(II) a swap; 
‘‘(III) a security futures product; 
‘‘(IV) an option authorized under 
section 4c of this Act; 
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110 
(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, as the Commission shall by 
rule determine, within 2 days or 
such other period as the Commis-
sion may determine by rule or 
regulation based upon the typical 
commercial practice in cash or 
spot markets for the digital com-
modity involved; or 
‘‘(bb) is executed with a reg-
istered digital commodity deal-
er— 
‘‘(AA) directly; 
‘‘(BB) through a reg-
istered 
digital 
commodity 
broker; or 
‘‘(CC) on or subject to 
the rules of a registered dig-
ital commodity exchange;’’; 
and 
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111 
(2) by adding at the end the following: 
‘‘(F) COMMISSION JURISDICTION WITH RESPECT TO 
DIGITAL COMMODITY TRANSACTIONS.— 
‘‘(i) IN GENERAL.—Subject to sections 6d and 
12(e), the Commission shall have exclusive jurisdic-
tion with respect to any account, agreement, con-
tract, or transaction involving a contract of sale of 
a digital commodity in interstate commerce, includ-
ing in a digital commodity cash or spot market, that 
is offered, solicited, traded, facilitated, executed, 
cleared, reported, or otherwise dealt in— 
‘‘(I) on or subject to the rules of a reg-
istered entity or an entity that is required to be 
registered as a registered entity; or 
‘‘(II) by any other entity registered, or re-
quired to be registered, with the Commission. 
‘‘(ii) LIMITATIONS.—Clause (i) shall not apply 
with respect to custodial or depository activities for 
a digital commodity, or custodial or depository ac-
tivities for any promise or right to a future digital 
commodity, of an entity regulated by an appropriate 
Federal banking agency or a State bank supervisor 
(within the meaning of section 3 of the Federal De-
posit Insurance Act). 
‘‘(iii) MIXED DIGITAL ASSET TRANSACTIONS.— 
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112 
‘‘(I) IN
GENERAL.—Clause (i) shall not 
apply to a mixed digital asset transaction. 
‘‘(II) OVERSIGHT
OF
MIXED
DIGITAL 
ASSET TRANSACTIONS.— 
‘‘(aa) ON A CFTC REGULATED PLAT-
FORM.—A mixed digital asset transaction 
that occurs on or subject to the rules of a 
registered entity or by any other entity 
registered with the Commission— 
‘‘(AA) shall not occur except on 
or subject to the rules of a registered 
entity or by any other entity that is 
dually registered with the Commission 
and the Securities and Exchange 
Commission; and 
‘‘(BB) shall be subject to the ju-
risdiction of the Commission and the 
Securities and Exchange Commission. 
‘‘(bb) OFF EXCHANGE.—A mixed dig-
ital asset transaction that does not occur 
on or subject to the rules of a registered 
entity or by any other entity registered 
with the Commission shall be subject to 
the exclusive jurisdiction of the Securities 
and Exchange Commission. 
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113 
‘‘(III) REPORTS ON MIXED DIGITAL ASSET 
TRANSACTIONS.—A digital asset issuer, related 
person, affiliated person, or other person reg-
istered with the Securities and Exchange Com-
mission that engages in a mixed digital asset 
transaction, shall, on request, open to inspec-
tion and examination by the Commodity Fu-
tures Trading Commission all books and 
records relating to the mixed digital asset 
transaction, subject to the confidentiality and 
disclosure requirements of section 8. 
‘‘(G) AGREEMENTS, CONTRACTS, 
AND
TRANS-
ACTIONS IN STABLECOINS.— 
‘‘(i) TREATMENT
OF
PERMITTED
PAYMENT 
STABLECOINS
ON
COMMISSION-REGISTERED
ENTI-
TIES.—Except as provided in clauses (ii) and (iii), 
the Commission shall only have jurisdiction over a 
cash or spot agreement, contract, or transaction in 
a permitted payment stablecoin that is offered, of-
fered to enter into, entered into, executed, confirmed 
the execution of, solicited, or accepted— 
‘‘(I) on or subject to the rules of a reg-
istered entity; or 
‘‘(II) by any other entity registered by the 
Commission. 
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114 
‘‘(ii) 
PERMITTED
PAYMENT
STABLECOIN 
TRANSACTION RULES.—This Act shall only apply to 
a transaction described in clause (i) for the purposes 
of regulating the offer, execution, solicitation, or ac-
ceptance of a cash or spot permitted payment 
stablecoin transaction on a registered entity or other 
entity registered by the Commission with respect to 
requirements imposed with respect to— 
‘‘(I) recordkeeping; 
‘‘(II) custody; 
‘‘(III) segregation; 
‘‘(IV) reporting; 
‘‘(V) trading procedures and trade proc-
essing requirements; 
‘‘(VI) information sharing; 
‘‘(VII) conflicts of interest; 
‘‘(VIII) antifraud, antimanipulation, or 
false reporting; or 
‘‘(IX) any other transaction level require-
ment imposed on the registered entity or other 
entity registered by the Commission that the 
Commission by rule determines would foster the 
development of fair and orderly cash or spot 
markets in digital commodities, be necessary or 
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115 
appropriate in the public interest, and be con-
sistent with the protection of customers. 
‘‘(iii) NO AUTHORITY OVER PERMITTED PAY-
MENT
STABLECOINS.—Notwithstanding clause (ii), 
the Commission shall not make a rule or regulation, 
impose a requirement or obligation on a registered 
entity or other entity registered by the Commission, 
or impose a requirement or obligation on a per-
mitted payment stablecoin issuer, regarding the op-
eration of a permitted payment stablecoin issuer or 
a permitted payment stablecoin, including a require-
ment or obligation regarding— 
‘‘(I) design; 
‘‘(II) structure; 
‘‘(III) issuance; 
‘‘(IV) redemption; 
‘‘(V) financial resources; 
‘‘(VI) collateral; or 
‘‘(VII) any other aspect of such an oper-
ation or such a stablecoin.’’. 
(d) CONFORMING AMENDMENT.—Section 2(a)(1)(A) 
of such Act (7 U.S.C. 2(a)(1)(A)) is amended in the 1st 
sentence by inserting ‘‘subsection (c)(2)(F) of this section 
or’’ before ‘‘section 19’’. 
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116 
SEC. 402. REQUIRING FUTURES COMMISSION MERCHANTS 
TO USE QUALIFIED DIGITAL COMMODITY 
CUSTODIANS. 
Section 4d of the Commodity Exchange Act (7 U.S.C. 
6d) is amended— 
(1) in subsection (a)(2)— 
(A) in the 1st proviso, by striking ‘‘any 
bank or trust company’’ and inserting ‘‘any 
bank, trust company, or qualified digital com-
modity custodian’’; and 
(B) by inserting ‘‘: Provided further, That 
any such property that is a digital commodity 
shall be held in a qualified digital commodity 
custodian’’ before the period at the end; and 
(2) in subsection (f)(3)(A)(i), by striking ‘‘any 
bank or trust company’’ and inserting ‘‘any bank, 
trust company, or qualified digital commodity custo-
dian’’. 
SEC. 403. TRADING CERTIFICATION AND APPROVAL FOR 
DIGITAL COMMODITIES. 
Section 5c of the Commodity Exchange Act (7 U.S.C. 
7a–2) is amended— 
(1) in subsection (a), by striking ‘‘5(d) and 
5b(c)(2)’’ and inserting ‘‘5(d), 5b(c)(2), and 5i(c)’’; 
(2) in subsection (b)— 
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117 
(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’’; 
(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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118 
‘‘(d) CERTIFICATIONS
FOR DIGITAL COMMODITY 
TRADING.— 
‘‘(1) IN GENERAL.—Notwithstanding subsection 
(c), for the purposes of listing or offering a digital 
commodity for trading in a digital commodity cash 
or spot market, an eligible entity shall issue a writ-
ten certification that the digital commodity meets 
the requirements of this Act (including regulations 
thereunder). 
‘‘(2) CONTENTS OF THE CERTIFICATION.— 
‘‘(A) IN GENERAL.—In making a written 
certification under this paragraph, the eligible 
entity shall furnish to the Commission— 
‘‘(i) an analysis of how the digital 
commodity meets the requirements of sec-
tion 5i(c)(3); 
‘‘(ii) information about the digital 
commodity regarding— 
‘‘(I) its purpose and use; 
‘‘(II) its unit creation or release 
process; 
‘‘(III) its consensus mechanism; 
‘‘(IV) its governance structure; 
‘‘(V) its participation and dis-
tribution; and 
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119 
‘‘(VI) its current and proposed 
functionality; and 
‘‘(iii) any other information, analysis, 
or documentation the Commission may, by 
rule, require. 
‘‘(B) 
RELIANCE
ON
PRIOR
DISCLO-
SURES.—In making a certification under this 
subsection, an eligible entity may rely on the 
records and disclosures of any relevant person 
registered with the Securities and Exchange 
Commission or other State or Federal agency. 
‘‘(3) MODIFICATIONS.— 
‘‘(A) IN GENERAL.—An eligible entity shall 
modify a certification made under paragraph 
(1) to— 
‘‘(i) account for significant changes in 
any information provided to the Commis-
sion under paragraph (2)(A)(ii); or 
‘‘(ii) permit or restrict trading in 
units of a digital commodity asset held by 
a related person or an affiliated person. 
‘‘(B) 
RECERTIFICATION.—Modifications 
required by this subsection shall be subject to 
the same disapproval and review process as a 
new certification under paragraphs (4) and (5). 
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120 
‘‘(4) DISAPPROVAL.— 
‘‘(A) IN
GENERAL.—The written certifi-
cation described in paragraph (1) shall become 
effective unless the Commission finds that the 
digital asset does not meet the requirements of 
this Act or the rules and regulations there-
under. 
‘‘(B) ANALYSIS REQUIRED.—The Commis-
sion shall include, with any findings referred to 
in subparagraph (A), a detailed analysis of the 
factors on which the decision was based. 
‘‘(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— 
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‘‘(ii) once, for an additional 30 busi-
ness days, through written notice to the 
digital commodity exchange from the Com-
mission that includes a description of any 
deficiencies with the certification, including 
any— 
‘‘(I) novel or complex issues 
which require additional time to ana-
lyze; 
‘‘(II) missing information or in-
adequate explanations; or 
‘‘(III) potential inconsistencies 
with this Act. 
‘‘(6) 
CERTIFICATION
REQUIRED.—Notwith-
standing any other requirement of this Act, a reg-
istered entity or other entity registered with the 
Commission shall not list for trading, accept for 
clearing, offer to enter into, enter into, execute, con-
firm the execution of, or conduct any office or busi-
ness anywhere in the United States, its territories or 
possessions, for the purpose of soliciting, or accept-
ing any order for, or otherwise dealing in, any trans-
action in, or in connection with, a digital asset, un-
less a certification has been made under this section 
for the digital asset. 
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‘‘(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.— 
‘‘(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-
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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; or 
‘‘(ii) serves only customers in a single 
State or territory. 
‘‘(2) ADDITIONAL REGISTRATIONS.— 
‘‘(A) WITH THE COMMISSION.— 
‘‘(i) IN GENERAL.—A registered dig-
ital commodity exchange may also register 
as— 
‘‘(I) a designated contract mar-
ket; or 
‘‘(II) a swap execution facility. 
‘‘(ii) RULES.—For an entity with 
multiple registrations under clause (i), the 
Commission— 
‘‘(I) shall prescribe rules to ex-
empt the entity from duplicative, con-
flicting, or unduly burdensome provi-
sions of this Act and the rules under 
this Act, to the extent such an exemp-
tion would foster the development of 
fair and orderly cash or spot markets 
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in digital commodities, be necessary or 
appropriate in the public interest, and 
be consistent with the protection of 
customers; and 
‘‘(II) may, after an analysis of 
the risks and benefits, prescribe rules 
to provide for portfolio margining, as 
may be necessary to protect market 
participants, promote fair and equi-
table trading in digital commodity 
markets, and promote responsible eco-
nomic or financial innovation. 
‘‘(B) WITH
THE
SECURITIES
AND
EX-
CHANGE
COMMISSION.—A registered digital 
commodity exchange may register with the Se-
curities and Exchange Commission as a digital 
asset trading system to list or trade contracts 
of sale for digital assets deemed securities. 
‘‘(C) WITH A REGISTERED FUTURES ASSO-
CIATION.— 
‘‘(i) IN GENERAL.—A registered dig-
ital commodity exchange shall also be a 
member of a registered futures association 
and comply with rules related to such ac-
tivity, if the registered digital commodity 
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exchange accepts customer funds required 
to be segregated under subsection (d). 
‘‘(ii) RULEMAKING
REQUIRED.—The 
Commission shall require any registered 
futures association with a digital com-
modity exchange as a member to provide 
such rules as may be necessary to further 
compliance with subsection (d), protect 
customers, and promote the public interest. 
‘‘(D) REGISTRATION
REQUIRED.—A per-
son required to be registered as a digital com-
modity exchange under this section shall reg-
ister with the Commission as such regardless of 
whether the person is registered as such 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. 
‘‘(2) 
PROHIBITION
ON
ACTING
AS
A 
COUNTERPARTY.—A registered digital commodity 
exchange or any affiliate of such an exchange shall 
not act as counterparty to any transaction executed 
on or subject to the rules of the registered digital 
commodity exchange. 
‘‘(3) TRADING SECURITIES.—A registered dig-
ital commodity exchange that is also registered with 
the Securities and Exchange Commission may offer 
a contract of sale of a digital asset deemed a secu-
rity. 
‘‘(4) RULES
FOR
CERTAIN
DIGITAL
ASSET 
SALES.—The digital commodity exchange shall have 
in place such rules as may be necessary to reason-
ably ensure the orderly sale of any unit of a digital 
commodity sold by a related person or an affiliated 
person. 
‘‘(c) CORE PRINCIPLES FOR DIGITAL COMMODITY 
EXCHANGES.— 
‘‘(1) COMPLIANCE WITH CORE PRINCIPLES.— 
‘‘(A) IN GENERAL.—To be registered, and 
maintain registration, as a digital commodity 
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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— 
‘‘(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 
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129 
‘‘(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.— 
‘‘(A) IN GENERAL.—A digital commodity 
exchange shall permit trading only in a digital 
commodity that is not readily susceptible to ma-
nipulation. 
‘‘(B) 
PUBLIC
INFORMATION
REQUIRE-
MENTS.— 
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130 
‘‘(i) IN
GENERAL.—A digital com-
modity exchange shall permit trading only 
in a digital commodity if the information 
required in clause (ii) is correct, current, 
and available to the public. 
‘‘(ii) 
REQUIRED
INFORMATION.— 
With respect to a digital commodity and 
each blockchain system to which the digital 
commodity relates for which the digital 
commodity exchange will make the digital 
commodity available to the customers of 
the digital commodity exchange, the infor-
mation required in this clause is as follows: 
‘‘(I) SOURCE CODE.—The source 
code for any blockchain system to 
which the digital commodity relates. 
‘‘(II) TRANSACTION HISTORY.—A 
narrative description of the steps nec-
essary to independently access, search, 
and verify the transaction history of 
any blockchain system to which the 
digital commodity relates. 
‘‘(III) DIGITAL ASSET ECONOM-
ICS.—A narrative description of the 
purpose of any blockchain system to 
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131 
which the digital asset relates and the 
operation of any such blockchain sys-
tem, 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 assets to be created, the 
release schedule for the digital 
assets, and the total number of 
digital assets then outstanding; 
‘‘(bb) information detailing 
any applicable consensus mecha-
nism or process for validating 
transactions, method of gener-
ating or mining digital assets, 
and any process for burning or 
destroying digital assets on the 
blockchain system; 
‘‘(cc) an explanation of gov-
ernance mechanisms for imple-
menting 
changes 
to 
the 
blockchain system or forming 
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132 
consensus among holders of the 
digital assets; and 
‘‘(dd) sufficient information 
for a third party to create a tool 
for verifying the transaction his-
tory of the digital asset. 
‘‘(IV) 
ADDITIONAL
INFORMA-
TION.—Such additional information 
as the Commission may, by rule, de-
termine to be necessary for a cus-
tomer to understand the financial and 
operational risks of a digital com-
modity, and to be in the public inter-
est or in furtherance of the require-
ments of this Act. 
‘‘(C) ADDITIONAL
LISTING
CONSIDER-
ATIONS.—In addition to the requirements of 
subparagraphs (A) and (B), a digital com-
modity exchange shall consider— 
‘‘(i) if a sufficient percentage of the 
units of the digital asset are units of a dig-
ital commodity to permit robust price dis-
covery; 
‘‘(ii) if it is reasonably unlikely that 
the transaction history can be fraudulently 
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133 
altered by any person or group of persons 
acting collectively; 
‘‘(iii) if the operating structure and 
system of the digital commodity is secure 
from cybersecurity threats; 
‘‘(iv) if the functionality of the digital 
commodity will protect holders from oper-
ational failures; 
‘‘(v) if sufficient public information 
about the operation, functionality, and use 
of the digital commodity is available; and 
‘‘(vi) any other factor which the Com-
mission has, by rule, determined to be in 
the public interest or in furtherance of the 
requirements of this Act. 
‘‘(D) RESTRICTED
DIGITAL
ASSETS.—A 
digital commodity exchange shall not permit the 
trading of a unit of a digital asset that is a re-
stricted digital asset. 
‘‘(4) TREATMENT
OF
CUSTOMER
ASSETS.—A 
digital commodity exchange shall establish standards 
and procedures that are designed to protect and en-
sure the safety of customer money, assets, and prop-
erty. 
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134 
‘‘(5) MONITORING
OF
TRADING
AND
TRADE 
PROCESSING.— 
‘‘(A) IN GENERAL.—A digital commodity 
exchange shall provide a competitive, open, and 
efficient market and mechanism for executing 
transactions that protects the price discovery 
process of trading on the exchange. 
‘‘(B) PROTECTION OF MARKETS AND MAR-
KET PARTICIPANTS.—A digital commodity ex-
change shall establish and enforce rules— 
‘‘(i) to protect markets and market 
participants from abusive practices com-
mitted by any party, including abusive 
practices committed by a party acting as 
an agent for a participant; and 
‘‘(ii) to promote fair and equitable 
trading on the exchange. 
‘‘(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 
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135 
traded on or through the facilities of 
the digital commodity exchange; and 
‘‘(II) procedures for trade proc-
essing of digital commodities on or 
through the facilities of the digital 
commodity exchange; and 
‘‘(ii) monitor trading in digital com-
modities to prevent manipulation, price 
distortion, and disruptions of the delivery 
or cash settlement process through surveil-
lance, compliance, and disciplinary prac-
tices and procedures, including methods 
for conducting real-time monitoring of 
trading and comprehensive and accurate 
trade reconstructions. 
‘‘(6) ABILITY
TO
OBTAIN
INFORMATION.—A 
digital commodity exchange shall— 
‘‘(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 
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‘‘(C) have the capacity to carry out such 
international information-sharing agreements as 
the Commission may require. 
‘‘(7) EMERGENCY AUTHORITY.—A digital com-
modity exchange shall adopt rules to provide for the 
exercise of emergency authority, in consultation or 
cooperation with the Commission or a registered en-
tity, as is necessary and appropriate, including the 
authority to facilitate the liquidation or transfer of 
open positions in any digital commodity or to sus-
pend or curtail trading in a digital commodity. 
‘‘(8) TIMELY PUBLICATION OF TRADING INFOR-
MATION.— 
‘‘(A) IN GENERAL.—A digital commodity 
exchange shall make public timely information 
on price, trading volume, and other trading 
data on digital commodities to the extent pre-
scribed by the Commission. 
‘‘(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.— 
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‘‘(A) IN GENERAL.—A digital commodity 
exchange shall— 
‘‘(i) maintain records of all activities 
relating to the business of the facility, in-
cluding a complete audit trail, in a form 
and manner acceptable to the Commission 
for a period of 5 years; 
‘‘(ii) report to the Commission, in a 
form and manner acceptable to the Com-
mission, such information as the Commis-
sion determines to be necessary or appro-
priate for the Commission to perform the 
duties of the Commission under this Act; 
and 
‘‘(iii) keep any such records of digital 
commodities which relate to a security 
open to inspection and examination by the 
Securities and Exchange Commission. 
‘‘(B) INFORMATION SHARING.—Subject to 
section 8, and on request, the Commission shall 
share information collected under subparagraph 
(A) with— 
‘‘(i) the Board; 
‘‘(ii) the Securities and Exchange 
Commission; 
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138 
‘‘(iii) each appropriate Federal bank-
ing agency; 
‘‘(iv) each appropriate State bank su-
pervisor (within the meaning of section 3 
of the Federal Deposit Insurance Act); 
‘‘(v) the Financial Stability Oversight 
Council; 
‘‘(vi) the Department of Justice; and 
‘‘(vii) any other person that the Com-
mission determines to be appropriate, in-
cluding— 
‘‘(I) foreign financial supervisors 
(including foreign futures authorities); 
‘‘(II) foreign central banks; and 
‘‘(III) foreign ministries. 
‘‘(C) CONFIDENTIALITY AGREEMENT.—Be-
fore the Commission may share information 
with any entity described in subparagraph (B), 
the Commission shall receive a written 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-
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139 
mission (including any designee of the Commis-
sion) information under subparagraph (A) in 
such form and at such frequency as is required 
by the Commission. 
‘‘(10) ANTITRUST
CONSIDERATIONS.—Unless 
necessary or appropriate to achieve the purposes of 
this Act, a digital commodity exchange shall not— 
‘‘(A) adopt any rules or take any actions 
that result in any unreasonable restraint of 
trade; or 
‘‘(B) impose any material anticompetitive 
burden on trading. 
‘‘(11) CONFLICTS OF INTEREST.—A registered 
digital commodity exchange shall implement conflict- 
of-interest systems and procedures that— 
‘‘(A) establish structural and institutional 
safeguards— 
‘‘(i) to minimize conflicts of interest 
that might potentially bias the judgment or 
supervision of the digital commodity ex-
change and contravene the principles of 
fair and equitable trading and the business 
conduct standards described in this Act, 
including conflicts arising out of trans-
actions or arrangements with affiliates (in-
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140 
cluding affiliates engaging in digital com-
modity activities) which may include infor-
mation partitions and the legal separation 
of different persons or entities involved in 
digital commodity activities; and 
‘‘(ii) to ensure that the activities of 
any person within the digital commodity 
exchange or any affiliated entity relating to 
research or analysis of the price or market 
for any digital commodity or acting in a 
role of providing dealing, brokering, or ad-
vising activities are separated by appro-
priate informational partitions within the 
digital commodity exchange or any affili-
ated entity from the review, pressure, or 
oversight of persons whose involvement in 
pricing, trading, exchange, or clearing ac-
tivities might potentially bias their judg-
ment or supervision and contravene the 
core principles of open access and the busi-
ness conduct standards described in this 
Act; and 
‘‘(B) address such other issues as the 
Commission determines to be appropriate. 
‘‘(12) FINANCIAL RESOURCES.— 
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141 
‘‘(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 total amount that would enable the 
digital commodity exchange to conduct an or-
derly wind-down of its activities. 
‘‘(13) DISCIPLINARY
PROCEDURES.—A digital 
commodity exchange shall establish and enforce dis-
ciplinary procedures that authorize the digital com-
modity exchange to discipline, suspend, or expel 
members or market participants that violate the 
rules of the digital commodity exchange, or similar 
methods for performing the same functions, includ-
ing delegation of the functions to third parties. 
‘‘(14) GOVERNANCE FITNESS STANDARDS.— 
‘‘(A) GOVERNANCE
ARRANGEMENTS.—A 
digital commodity exchange shall establish gov-
ernance arrangements that are transparent to 
fulfill public interest requirements. 
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142 
‘‘(B) FITNESS
STANDARDS.—A digital 
commodity exchange shall establish and enforce 
appropriate fitness standards for— 
‘‘(i) directors; and 
‘‘(ii) any individual or entity with di-
rect access to, or control of, customer as-
sets. 
‘‘(15) SYSTEM
SAFEGUARDS.—A digital com-
modity exchange shall— 
‘‘(A) establish and maintain a program of 
risk analysis and oversight to identify and mini-
mize sources of operational and security risks, 
through the development of appropriate controls 
and procedures, and automated systems, that— 
‘‘(i) are reliable and secure; and 
‘‘(ii) have adequate scalable capacity; 
‘‘(B) establish and maintain emergency 
procedures, backup facilities, and a plan for dis-
aster recovery that allow for— 
‘‘(i) the timely recovery and resump-
tion of operations; and 
‘‘(ii) the fulfillment of the responsibil-
ities and obligations of the digital com-
modity exchange; and 
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143 
‘‘(C) periodically conduct tests to verify 
that the backup resources of the digital com-
modity exchange are sufficient to ensure contin-
ued— 
‘‘(i) 
order 
processing 
and 
trade 
matching; 
‘‘(ii) price reporting; 
‘‘(iii) market surveillance; and 
‘‘(iv) maintenance of a comprehensive 
and accurate audit trail. 
‘‘(d) HOLDING OF CUSTOMER ASSETS.— 
‘‘(1) IN
GENERAL.—A digital commodity ex-
change shall hold customer money, assets, and prop-
erty in a manner to minimize the risk of loss to the 
customer or unreasonable delay in the access to the 
money, assets, and property of the customer. 
‘‘(A) SEGREGATION OF FUNDS.— 
‘‘(i) IN
GENERAL.—A digital com-
modity exchange shall treat and deal with 
all money, assets, and property that is re-
ceived by the digital commodity exchange, 
or accrues to a customer as the result of 
trading in digital commodities, as belong-
ing to the customer. 
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144 
‘‘(ii) COMMINGLING
PROHIBITED.— 
Money, assets, and property of a customer 
described in clause (i) shall be separately 
accounted for and shall not be commingled 
with the funds of the digital commodity ex-
change or be used to margin, secure, or 
guarantee any trades or accounts of any 
customer or person other than the person 
for whom the same are held. 
‘‘(B) EXCEPTIONS.— 
‘‘(i) USE OF FUNDS.— 
‘‘(I) 
IN
GENERAL.—Notwith-
standing subparagraph (A), money, 
assets, and property of customers of a 
digital commodity exchange described 
in subparagraph (A) may, for conven-
ience, be commingled and deposited in 
the same account or accounts with 
any bank, trust company, derivatives 
clearing organization, or qualified dig-
ital commodity custodian. 
‘‘(II) 
WITHDRAWAL.—Notwith-
standing 
subparagraph 
(A), 
such 
share of the money, assets, and prop-
erty described in item (aa) as in the 
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145 
normal course of business shall be 
necessary to margin, guarantee, se-
cure, transfer, adjust, or settle a con-
tract of sale of a digital commodity 
with a registered entity may be with-
drawn and applied to such purposes, 
including the payment of commis-
sions, brokerage, interest, taxes, stor-
age, and other charges, lawfully ac-
cruing in connection with the contract 
of sale of a digital commodity. 
‘‘(ii) COMMISSION ACTION.—Notwith-
standing subparagraph (A), in accordance 
with such terms and conditions as the 
Commission may prescribe by rule, regula-
tion, or order, any money, assets, or prop-
erty of the customers of a digital com-
modity exchange described in subpara-
graph (A) may be commingled and depos-
ited in customer accounts with any other 
money, assets, or property received by the 
digital commodity exchange and required 
by the Commission to be separately ac-
counted for and treated and dealt with as 
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146 
belonging to the customer of the digital 
commodity exchange. 
‘‘(2) PERMITTED
INVESTMENTS.—Money de-
scribed in subparagraph (A) may be invested in obli-
gations of the United States, in general obligations 
of any State or of any political subdivision of a 
State, and in obligations fully guaranteed as to prin-
cipal and interest by the United States, or in any 
other investment that the Commission may by rule 
or regulation prescribe, and such investments shall 
be made in accordance with such rules and regula-
tions and subject to such conditions as the Commis-
sion may prescribe. 
‘‘(3) CUSTOMER
PROTECTION
DURING
BANK-
RUPTCY.— 
‘‘(A) CUSTOMER
PROPERTY.—All assets 
held on behalf of a customer by a digital com-
modity exchange, and all money, assets, and 
property of any customer received by a digital 
commodity exchange registered under section 5i 
of this Act for trading or custody, or to facili-
tate, margin, guarantee, or secure contracts of 
sale of a digital commodity (including money, 
assets, or property accruing to the customer as 
the result of the transactions), shall be consid-
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ered customer property for purposes of section 
761 of title 11, United States Code. 
‘‘(B) TRANSACTIONS.—A transaction in-
volving a unit of a digital commodity occurring 
on or subject to the rules of a digital com-
modity exchange shall be considered a ‘contract 
for the purchase or sale of a commodity for fu-
ture delivery, on or subject to the rules of, a 
contract market or board of trade’ for the pur-
poses of the definition of a ‘commodity con-
tract’ in section 761 of title 11, United States 
Code. 
‘‘(C) EXCHANGES.—A digital commodity 
exchange shall be considered a futures commis-
sion merchant for purposes of section 761 of 
title 11, United States Code. 
‘‘(4) MISUSE OF CUSTOMER PROPERTY.— 
‘‘(A) IN GENERAL.—It shall be unlawful— 
‘‘(i) for any digital commodity ex-
change that has received any customer 
money, assets, or property for custody to 
dispose of, or use any such money, assets, 
or property as belonging to the digital 
commodity exchange; or 
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‘‘(ii) for any other person, including 
any depository, other digital commodity ex-
change, or digital commodity custodian 
that has received any customer money, as-
sets, or property for deposit, to hold, dis-
pose of, or use any such money, assets, or 
property, or property, as belonging to the 
depositing digital commodity exchange or 
any person other than the customers of the 
digital commodity exchange. 
‘‘(B) USE FURTHER DEFINED.—For pur-
poses of this section, ‘use’ of a digital com-
modity includes utilizing any unit of a digital 
asset to participate in a blockchain service de-
fined in paragraph (5) or a decentralized gov-
ernance system associated with the digital com-
modity or the blockchain system to which the 
digital commodity relates in any manner other 
than that expressly directed by the customer 
from whom the unit of a digital commodity was 
received. 
‘‘(5) PARTICIPATION
IN
BLOCKCHAIN
SERV-
ICES.— 
‘‘(A) IN GENERAL.—A customer shall have 
the right to waive the restrictions in paragraph 
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149 
(1) for any unit of a digital commodity, by af-
firmatively electing, in writing to the digital 
commodity exchange, to waive the restrictions. 
‘‘(B) USE
OF
FUNDS.—Customer digital 
commodities removed from segregation under 
subparagraph (A) may be pooled and used by 
the digital commodity exchange or its designee 
to provide a blockchain service for a blockchain 
system to which the unit of the digital asset re-
moved from segregation in subparagraph (A) 
relates. 
‘‘(C) 
LIMITATIONS.—The 
Commission 
may, by rule, establish notice and disclosure re-
quirements, and any other limitations and rules 
related to the waiving of any restrictions under 
this paragraph that are reasonably necessary to 
protect customers, including eligible contract 
participants, non-eligible contract participants, 
or any other class of customers. 
‘‘(D) BLOCKCHAIN SERVICE DEFINED.—In 
this subparagraph, the term ‘blockchain service’ 
means any activity relating to validating trans-
actions on a blockchain system, providing secu-
rity for a blockchain system, or other similar 
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activity required for the ongoing operation of a 
blockchain system. 
‘‘(e) MARKET ACCESS REQUIREMENTS.— 
‘‘(1) IN
GENERAL.—A digital commodity ex-
change shall require any person who is not an eligi-
ble contract participant to access trading on the ex-
change through a digital commodity broker. 
‘‘(2) AFFILIATED
COMMODITY
BROKERS.—A 
registered digital commodity exchange may maintain 
an affiliated digital commodity broker to facilitate 
access to the digital commodity exchange, if— 
‘‘(A) no other digital commodity brokers 
are permitted to facilitate access to the ex-
change; 
‘‘(B) the affiliated digital commodity 
broker limits its activities only to providing cus-
tomer access to the digital commodity exchange; 
and 
‘‘(C) the affiliated digital commodity 
broker is not also registered as a digital com-
modity dealer. 
‘‘(3) DIRECT ACCESS FOR ELIGIBLE CONTRACT 
PARTICIPANTS.—Nothing in this section shall pro-
hibit a digital commodity exchange in compliance 
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151 
with this section from permitting direct access for 
eligible contract participants. 
‘‘(4) ADDITIONAL REQUIREMENTS.— 
‘‘(A) IN GENERAL.—The Commission may, 
by rule, impose any additional requirements re-
lated to the operations and activities of the dig-
ital commodity exchange and the affiliated dig-
ital commodity broker necessary to protect mar-
ket participants, promote fair and equitable 
trading on the digital commodity exchange, and 
promote responsible economic or financial inno-
vation. 
‘‘(B) DELEGATION
OF
AUTHORITY.—The 
Commission may delegate to a registered fu-
tures association such oversight and regulatory 
requirements as the Commission determines are 
necessary to— 
‘‘(i) supervise the activities of the dig-
ital commodity exchange and an affiliated 
digital commodity broker; and 
‘‘(ii) protect market participants, pro-
mote fair and equitable trading on the dig-
ital commodity exchange, and promote re-
sponsible economic or financial innovation. 
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152 
‘‘(f) DESIGNATION
OF CHIEF COMPLIANCE OFFI-
CER.— 
‘‘(1) IN
GENERAL.—A digital commodity ex-
change shall designate an individual to serve as a 
chief compliance officer. 
‘‘(2) DUTIES.—The chief compliance officer 
shall— 
‘‘(A) report directly to the board or to the 
senior officer of the exchange; 
‘‘(B) review compliance with the core prin-
ciples in this subsection; 
‘‘(C) in consultation with the board of the 
exchange, a body performing a function similar 
to that of a board, or the senior officer of the 
exchange, resolve any conflicts of interest that 
may arise; 
‘‘(D) establish and administer the policies 
and procedures required to be established pur-
suant to this section; 
‘‘(E) ensure compliance with this Act and 
the rules and regulations issued under this Act, 
including rules prescribed by the Commission 
pursuant to this section; and 
‘‘(F) establish procedures for the remedi-
ation of noncompliance issues found during 
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153 
compliance office reviews, look backs, internal 
or external audit findings, self-reported errors, 
or through validated complaints. 
‘‘(3) REQUIREMENTS
FOR
PROCEDURES.—In 
establishing procedures under paragraph (2)(F), the 
chief compliance officer shall design the procedures 
to establish the handling, management response, re-
mediation, retesting, and closing of noncompliance 
issues. 
‘‘(4) ANNUAL REPORTS.— 
‘‘(A) IN
GENERAL.—In accordance with 
rules prescribed by the Commission, the chief 
compliance officer shall annually prepare and 
sign a report that contains a description of— 
‘‘(i) the compliance of the digital com-
modity exchange with this Act; and 
‘‘(ii) the policies and procedures, in-
cluding the code of ethics and conflict of 
interest policies, of the digital commodity 
exchange. 
‘‘(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-
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154 
change that is required to be submitted to 
the Commission pursuant to this section; 
and 
‘‘(ii) include in the report a certifi-
cation that, under penalty of law, the re-
port is accurate and complete. 
‘‘(g) APPOINTMENT OF TRUSTEE.— 
‘‘(1) IN GENERAL.—If a proceeding under sec-
tion 5e results in the suspension or revocation of the 
registration of a digital commodity exchange, or if a 
digital commodity exchange withdraws from registra-
tion, the Commission, on notice to the digital com-
modity exchange, may apply to the appropriate 
United States district court where the digital com-
modity exchange is located for the appointment of a 
trustee. 
‘‘(2) ASSUMPTION
OF
JURISDICTION.—If the 
Commission applies for appointment of a trustee 
under paragraph (1)— 
‘‘(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 
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155 
Commission, or a person designated by the 
Commission, as trustee with power to take pos-
session and continue to operate or terminate 
the operations of the digital commodity ex-
change in an orderly manner for the protection 
of customers subject to such terms and condi-
tions as the court may prescribe. 
‘‘(h) QUALIFIED
DIGITAL
COMMODITY
CUSTO-
DIAN.—A digital commodity exchange shall hold in a 
qualified digital commodity custodian each unit of a digital 
commodity that is— 
‘‘(1) the property of a customer of the digital 
commodity exchange; 
‘‘(2) required to be held by the digital com-
modity exchange under subsection (c)(12) of this 
section; or 
‘‘(3) otherwise so required by the Commission 
to reasonably protect customers or promote the pub-
lic interest. 
‘‘(i) EXEMPTIONS.—In order to promote responsible 
economic or financial innovation and fair competition, or 
protect customers, the Commission may (on its own initia-
tive or on application of the registered digital commodity 
exchange) exempt, either unconditionally or on stated 
terms or conditions or for stated periods and either retro-
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156 
actively or prospectively, or both, a registered digital com-
modity exchange from the requirements of this section, if 
the Commission determines that— 
‘‘(1)(A) the exemption would be consistent with 
the public interest and the purposes of this Act; and 
‘‘(B) the exemption will not have a material ad-
verse effect on the ability of the Commission or the 
digital commodity exchange to discharge regulatory 
or self-regulatory duties under this Act; or 
‘‘(2) the digital commodity exchange is subject 
to comparable, comprehensive supervision and regu-
lation by the appropriate government authorities in 
the home country of the exchange. 
‘‘(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 
other any 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. 
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157 
‘‘(l) TREATMENT
UNDER
THE
BANK
SECRECY 
ACT.—A registered digital commodity exchange shall be 
treated as a financial institution for purposes of the Bank 
Secrecy Act.’’. 
SEC. 405. QUALIFIED DIGITAL COMMODITY CUSTODIANS. 
The Commodity Exchange Act (7 U.S.C. 1 et seq.), 
as amended by the preceding provisions of this Act, is 
amended by inserting after section 5i the following: 
‘‘SEC. 5j. QUALIFIED DIGITAL COMMODITY CUSTODIANS. 
‘‘(a) IN GENERAL.—For purposes of this Act, a 
qualified digital commodity custodian is a digital com-
modity custodian who meets the following conditions: 
‘‘(1) SUPERVISION.—The digital commodity 
custodian is subject to adequate supervision and ap-
propriate regulation. 
‘‘(2) NO PROHIBITION.—The digital commodity 
custodian is— 
‘‘(A) subject to the supervision of— 
‘‘(i) an appropriate Federal banking 
agency; 
‘‘(ii) a State bank supervisor (within 
the meaning of section 3 of the Federal 
Deposit Insurance Act); or 
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158 
‘‘(iii) an appropriate foreign govern-
mental authority in the home country of 
the digital commodity custodian; and 
‘‘(B) not prohibited by the applicable su-
pervisor referred to in subparagraph (A) from 
engaging in any activity with respect to the 
holding of digital commodities. 
‘‘(3) INFORMATION SHARING.— 
‘‘(A) IN GENERAL.—The digital commodity 
custodian agrees to such periodic sharing of in-
formation regarding customer accounts the dig-
ital commodity custodian holds on behalf of an 
entity registered with the Commission, as the 
Commission determines by rule shall be reason-
ably necessary to effectuate any of the provi-
sions, or to accomplish any of the purposes, of 
this Act. 
‘‘(B) PROVISION OF INFORMATION.—Any 
person that is subject to regulation and exam-
ination by a prudential regulator may satisfy 
any information request described in subpara-
graph (A), by providing the Commission with a 
detailed listing, in writing, of the digital com-
modities of a customer within the custody or 
use of the person. 
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159 
‘‘(b) ADEQUATE SUPERVISION
AND APPROPRIATE 
REGULATION FURTHER DEFINED.— 
‘‘(1) IN
GENERAL.—In subsection (a), the 
terms ‘adequate supervision’ and ‘appropriate regu-
lation’ mean such minimum standards for super-
vision and regulation as are reasonably necessary to 
protect the digital commodities of customers of an 
entity registered with the Commission, including 
minimum standards relating to— 
‘‘(A) accessibility of customer assets; 
‘‘(B) financial resources; 
‘‘(C) risk management requirements; 
‘‘(D) governance arrangements; 
‘‘(E) fitness standards; 
‘‘(F) recordkeeping; 
‘‘(G) information sharing; and 
‘‘(H) conflicts of interest. 
‘‘(2) DEEMED COMPLIANCE.—For purposes of 
subsection (a), a bank subject to the supervision of 
an appropriate Federal banking agency or a State 
bank supervisor (within the meaning of section 3 of 
the Federal Deposit Insurance Act) is deemed to be 
subject to adequate supervision and appropriate reg-
ulation. 
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160 
‘‘(3) RULEMAKING AUTHORITY.—For purposes 
of subsection (a), the Commission, by rule or order, 
may further define the terms ‘adequate supervision’ 
and ‘appropriate regulation’ as necessary in the pub-
lic interest, as appropriate for the protection of cus-
tomers, and consistent with the purposes of this Act. 
‘‘(c) 
AUTHORITY
TO
TEMPORARILY
SUSPEND 
STANDARDS.—The Commission may, by rule or order, 
temporarily suspend, in whole or in part, any requirement 
imposed under, or any standard referred to in, this section 
if the Commission determines that the suspension would 
be consistent with the public interest and the purposes of 
this Act.’’. 
SEC. 406. REGISTRATION AND REGULATION OF DIGITAL 
COMMODITY BROKERS AND DEALERS. 
The Commodity Exchange Act (7 U.S.C. 1 et seq.), 
as amended by the preceding provisions of this Act, is 
amended by inserting after section 4t the following: 
‘‘SEC. 4u. REGISTRATION AND REGULATION OF DIGITAL 
COMMODITY BROKERS AND DEALERS. 
‘‘(a) REGISTRATION.—It shall be unlawful for any 
person to act as a digital commodity broker or digital com-
modity dealer unless the person is registered as such with 
the Commission. 
‘‘(b) REQUIREMENTS.— 
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161 
‘‘(1) IN GENERAL.—A person shall register as 
a digital commodity broker or digital commodity 
dealer by filing a registration application with the 
Commission. 
‘‘(2) CONTENTS.— 
‘‘(A) IN GENERAL.—The application shall 
be made in such form and manner as is pre-
scribed by the Commission, and shall contain 
such information as the Commission considers 
necessary concerning the business in which the 
applicant is or will be engaged. 
‘‘(B) CONTINUAL REPORTING.—A person 
that is registered as a digital commodity broker 
or digital commodity dealer shall continue to 
submit to the Commission reports that contain 
such information pertaining to the business of 
the person as the Commission may require. 
‘‘(3) TRANSITION.—Within 180 days after the 
date of the enactment of this section, the Commis-
sion shall prescribe rules providing for the registra-
tion of digital commodity brokers and digital com-
modity dealers under this section. 
‘‘(4) STATUTORY
DISQUALIFICATION.—Except 
to the extent otherwise specifically provided by rule, 
regulation, or order, it shall be unlawful for a digital 
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162 
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 for sale of 
a digital commodity on behalf of the digital com-
modity broker or the digital commodity dealer, re-
spectively, if the digital commodity broker or digital 
commodity dealer, respectively, knew, or in the exer-
cise of reasonable care should have known, of the 
statutory disqualification. 
‘‘(5) LIMITATIONS
ON
CERTAIN
ASSETS.—A 
registered digital commodity broker or registered 
digital commodity dealer shall not offer, offer to 
enter into, enter into, or facilitate any contract for 
sale of a digital commodity that has not been cer-
tified under section 5c(d). 
‘‘(c) ADDITIONAL REGISTRATIONS.— 
‘‘(1) WITH THE COMMISSION.—Any person re-
quired to be registered as a digital commodity 
broker or digital commodity dealer may also be reg-
istered as a futures commission merchant, intro-
ducing broker, or swap dealer. 
‘‘(2) WITH THE SECURITIES AND EXCHANGE 
COMMISSION.—Any person required to be registered 
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163 
as a digital commodity broker or digital commodity 
dealer under this section may register with the Secu-
rities and Exchange Commission as a digital asset 
broker or digital asset dealer, pursuant to section 
15(b) of the Securities Exchange Act of 1934, as ap-
plicable, if the digital asset broker or digital asset 
dealer limits its solicitation of orders, acceptance of 
orders, or execution of orders, or placing of orders 
on behalf of others involving any contract of sale of 
digital assets. 
‘‘(3) WITH MEMBERSHIP IN A REGISTERED FU-
TURES
ASSOCIATION.—Any person required to be 
registered as a digital commodity broker or digital 
commodity dealer under this section shall be a mem-
ber of a registered futures association. 
‘‘(4) REGISTRATION
REQUIRED.—Any person 
required to be registered as a digital commodity 
broker or digital commodity dealer under this sec-
tion shall register with the Commission as such re-
gardless of whether the person is registered as such 
with another State or Federal regulator. 
‘‘(d) RULEMAKING.— 
‘‘(1) IN GENERAL.—The Commission shall pre-
scribe such rules applicable to registered digital com-
modity brokers and registered digital commodity 
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164 
dealers as are appropriate to carry out this section, 
including rules in the public interest that limit the 
activities of digital commodity brokers and digital 
commodity dealers. 
‘‘(2) MULTIPLE REGISTRANTS.—The Commis-
sion shall prescribe rules or regulations permitting, 
or may otherwise authorize, exemptions or additional 
requirements applicable to persons with multiple reg-
istrations under this Act, including as futures com-
mission merchants, introducing brokers, digital com-
modity brokers, digital commodity dealers, or swap 
dealers, as may be in the public interest to reduce 
compliance costs and promote customer protection. 
‘‘(e) CAPITAL REQUIREMENTS.— 
‘‘(1) IN
GENERAL.—Each registered digital 
commodity broker and registered digital commodity 
dealer shall meet such minimum capital require-
ments as the Commission may prescribe to ensure 
that the digital commodity broker or digital com-
modity dealer, respectively, is able to— 
‘‘(A) meet, and continue to meet, at all 
times, the obligations of such a registrant; 
‘‘(B) conduct an orderly wind-down of the 
activities of the digital commodity broker or 
digital commodity dealer, respectively; and 
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165 
‘‘(C) in the case of a digital commodity 
dealer, fulfill the customer obligations of the 
digital commodity dealer for any margined, le-
veraged, or financed transactions. 
‘‘(2) RULE
OF
CONSTRUCTION.—Nothing in 
this section shall limit, or be construed to limit, the 
authority of the Securities and Exchange Commis-
sion to set financial responsibility rules for a broker 
or dealer registered pursuant to section 15(b) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o(b)) 
(except for section 15(b)(11) of such Act (15 U.S.C. 
78o(b)(11)) in accordance with section 15(c)(3) of 
such Act (15 U.S.C. 78o(c)(3)). 
‘‘(3) FUTURES COMMISSION MERCHANTS AND 
OTHER DEALERS.— 
‘‘(A) IN GENERAL.—Each futures commis-
sion merchant, introducing broker, digital com-
modity 
broker, 
digital 
commodity 
dealer, 
broker, and dealer shall maintain sufficient cap-
ital to comply with the stricter of any applicable 
capital requirements to which the futures com-
mission merchant, introducing broker, digital 
commodity broker, digital commodity dealer, 
broker, or dealer, respectively, is subject under 
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this Act or the Securities Exchange Act of 1934 
(15 U.S.C. 78a et seq.). 
‘‘(B) COORDINATION
OF
CAPITAL
RE-
QUIREMENTS.— 
‘‘(i) COMMISSION
RULE.—The Com-
mission shall, by rule, provide appropriate 
offsets to any applicable capital require-
ment for a person with multiple registra-
tions as a digital commodity dealer, digital 
commodity broker, futures commission 
merchant, or introducing broker. 
‘‘(ii) JOINT RULE.—The Commission 
and the Securities and Exchange Commis-
sion shall jointly, by rule, provide appro-
priate offsets to any applicable capital re-
quirement for a person with multiple reg-
istrations as a digital commodity dealer, 
digital commodity broker, futures commis-
sion merchant, introducing broker, broker, 
or dealer. 
‘‘(f) REPORTING AND RECORDKEEPING.—Each reg-
istered digital commodity broker and registered digital 
commodity dealer— 
‘‘(1) shall make such reports as are required by 
the Commission by rule or regulation regarding the 
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transactions, positions, and financial condition of the 
digital commodity broker or digital commodity deal-
er, respectively; 
‘‘(2) shall keep books and records in such form 
and manner and for such period as may be pre-
scribed by the Commission by rule or regulation; and 
‘‘(3) shall keep the books and records open to 
inspection and examination by any representative of 
the Commission. 
‘‘(g) DAILY TRADING RECORDS.— 
‘‘(1) IN
GENERAL.—Each registered digital 
commodity broker and registered digital commodity 
dealer shall maintain daily trading records of the 
transactions of the digital commodity broker or dig-
ital commodity dealer, respectively, and all related 
records (including related forward or derivatives 
transactions) and recorded communications, includ-
ing electronic mail, instant 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 reg-
istered digital commodity broker and registered dig-
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ital commodity dealer shall maintain daily trading 
records for each customer or counterparty in a man-
ner and form that is identifiable with each digital 
commodity transaction. 
‘‘(4) AUDIT
TRAIL.—Each registered digital 
commodity broker and registered digital commodity 
dealer shall maintain a complete audit trail for con-
ducting comprehensive and accurate trade recon-
structions. 
‘‘(h) BUSINESS CONDUCT STANDARDS.— 
‘‘(1) IN
GENERAL.—Each registered digital 
commodity broker and registered digital commodity 
dealer shall conform with such business conduct 
standards as the Commission, by rule or regulation, 
prescribes related to— 
‘‘(A) fraud, manipulation, and other abu-
sive practices involving spot or margined, lever-
aged, or financed digital commodity trans-
actions (including transactions that are offered 
but not entered into); 
‘‘(B) diligent supervision of the business of 
the registered digital commodity broker or dig-
ital commodity dealer, respectively; and 
‘‘(C) such other matters as the Commis-
sion deems appropriate. 
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169 
‘‘(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 
‘‘(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 platform marketing and advertising, 
including testimonials and endorsements; and 
‘‘(D) establish such other standards and 
requirements as the Commission may determine 
are— 
‘‘(i) in the public interest; 
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170 
‘‘(ii) appropriate for the protection of 
customers; or 
‘‘(iii) otherwise in furtherance of the 
purposes of this Act. 
‘‘(3) PROHIBITION
ON
FRAUDULENT
PRAC-
TICES.—It shall be unlawful for a registered digital 
commodity broker or registered digital commodity 
dealer to— 
‘‘(A) employ any device, scheme, or artifice 
to defraud any customer or counterparty; 
‘‘(B) engage in any transaction, practice, 
or course of business that operates as a fraud 
or deceit on any customer or counterparty; or 
‘‘(C) engage in any act, practice, or course 
of business that is fraudulent, deceptive, or ma-
nipulative. 
‘‘(i) DUTIES.— 
‘‘(1) RISK MANAGEMENT PROCEDURES.—Each 
registered digital commodity broker and registered 
digital commodity dealer shall establish robust and 
professional risk management systems adequate for 
managing the day-to-day business of the digital com-
modity broker or digital commodity dealer, respec-
tively. 
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171 
‘‘(2) DISCLOSURE
OF
GENERAL
INFORMA-
TION.—Each registered digital commodity broker 
and registered digital commodity dealer shall dis-
close to the Commission information concerning— 
‘‘(A) the terms and conditions of the trans-
actions of the digital commodity broker or dig-
ital commodity dealer, respectively; 
‘‘(B) the trading operations, mechanisms, 
and practices of the digital commodity broker 
or digital commodity dealer, respectively; 
‘‘(C) financial integrity protections relating 
to the activities of the digital commodity broker 
or digital commodity dealer, respectively; and 
‘‘(D) other information relevant to trading 
in digital commodities by the digital commodity 
broker or digital commodity dealer, respectively. 
‘‘(3) ABILITY TO OBTAIN INFORMATION.—Each 
registered digital commodity broker and registered 
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. 
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172 
‘‘(4) CONFLICTS
OF
INTEREST.—Each reg-
istered digital commodity broker and digital com-
modity dealer shall implement conflict-of-interest 
systems and procedures that— 
‘‘(A) establish structural and institutional 
safeguards— 
‘‘(i) to minimize conflicts of interest 
that might potentially bias the judgment or 
supervision of the digital commodity broker 
or digital commodity dealer, respectively, 
and contravene the principles of fair and 
equitable trading and the business conduct 
standards described in this Act, including 
conflicts arising out of transactions or ar-
rangements with affiliates (including affili-
ates acting as digital asset issuers, digital 
commodity dealers, or qualified digital 
commodity custodians), which may include 
information partitions and the legal sepa-
ration of different digital commodity trans-
action intermediaries; and 
‘‘(ii) to ensure that the activities of 
any person within the digital commodity 
broker or digital commodity dealer relating 
to research or analysis of the price or mar-
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173 
ket for any digital commodity or acting in 
a role of providing exchange activities or 
making determinations as to accepting ex-
change customers are separated by appro-
priate informational partitions within the 
digital commodity broker or digital com-
modity dealer from the review, pressure, or 
oversight of persons whose involvement in 
pricing, trading, exchange, or clearing ac-
tivities might potentially bias their judg-
ment or supervision and contravene the 
core principles of open access and the busi-
ness conduct standards described in this 
Act; and 
‘‘(B) address such other issues as the 
Commission determines to be appropriate. 
‘‘(5) 
ANTITRUST
CONSIDERATIONS.—Unless 
necessary or appropriate to achieve the purposes of 
this Act, a digital commodity broker or digital com-
modity dealer shall not— 
‘‘(A) adopt any process or take any action 
that results in any unreasonable restraint of 
trade; or 
‘‘(B) impose any material anticompetitive 
burden on trading or clearing. 
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174 
‘‘(j) DESIGNATION
OF CHIEF COMPLIANCE OFFI-
CER.— 
‘‘(1) IN
GENERAL.—Each registered digital 
commodity broker and registered 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; 
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175 
‘‘(D) be responsible for administering each 
policy and procedure that is required to be es-
tablished pursuant to this section; 
‘‘(E) ensure compliance with this Act (in-
cluding regulations), including each rule pre-
scribed by the Commission under this section; 
‘‘(F) establish procedures for the remedi-
ation of noncompliance issues identified by the 
chief compliance officer through any— 
‘‘(i) compliance office review; 
‘‘(ii) look-back; 
‘‘(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— 
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176 
‘‘(i) the compliance of the registered 
digital commodity broker or registered dig-
ital commodity dealer with respect to this 
Act (including regulations); and 
‘‘(ii) each policy and procedure of the 
registered digital commodity broker or reg-
istered digital commodity dealer of the 
chief compliance officer (including the code 
of ethics and conflict of interest policies). 
‘‘(B) REQUIREMENTS.—The chief compli-
ance officer shall ensure that a compliance re-
port under subparagraph (A)— 
‘‘(i) accompanies each appropriate fi-
nancial report of the registered digital 
commodity broker or registered digital 
commodity dealer that is required to be 
furnished to the Commission pursuant to 
this section; and 
‘‘(ii) includes a certification that, 
under penalty of law, the compliance re-
port is accurate and complete. 
‘‘(k) SEGREGATION OF DIGITAL COMMODITIES.— 
‘‘(1) HOLDING OF CUSTOMER ASSETS.— 
‘‘(A) IN GENERAL.—Each registered dig-
ital commodity broker and registered digital 
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177 
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 access to the money, assets, 
and property of the customer. 
‘‘(B) QUALIFIED
DIGITAL
COMMODITY 
CUSTODIAN.—Each 
registered 
digital 
com-
modity broker and registered digital commodity 
dealer shall hold in a qualified digital com-
modity custodian each unit of a digital com-
modity that is— 
‘‘(i) the property of a customer or 
counterparty of the digital commodity 
broker or digital commodity dealer, respec-
tively; or 
‘‘(ii) otherwise so required by the 
Commission to reasonably protect cus-
tomers or promote the public interest. 
‘‘(2) SEGREGATION OF FUNDS.— 
‘‘(A) IN GENERAL.—Each registered dig-
ital commodity broker and registered digital 
commodity dealer shall treat and deal with all 
money, assets, and property that is received by 
the registered digital commodity broker or reg-
istered digital commodity dealer, or accrues to 
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178 
a customer as the result of trading in digital 
commodities, as belonging to the customer. 
‘‘(B) COMMINGLING PROHIBITED.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), each registered digital 
commodity broker and registered digital 
commodity dealer shall separately account 
for money, assets, and property of a digital 
commodity customer, and shall not com-
mingle any such money, assets, or property 
with the funds of the digital commodity 
broker or digital commodity dealer, respec-
tively, or use any such money, assets, or 
property to margin, secure, or guarantee 
any trades or accounts of any customer or 
person other than the person for whom the 
money, assets, or property are held. 
‘‘(ii) EXCEPTIONS.— 
‘‘(I) USE OF FUNDS.— 
‘‘(aa) IN GENERAL.—A reg-
istered digital commodity broker 
or registered digital commodity 
dealer may, for convenience, com-
mingle and deposit in the same 
account or accounts with any 
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179 
bank, trust company, derivatives 
clearing organization, or qualified 
digital 
commodity 
custodian 
money, assets, and property of 
customers. 
‘‘(bb) 
WITHDRAWAL.—The 
share of the money, assets, and 
property described in item (aa) 
as in the normal course of busi-
ness shall be necessary to mar-
gin, guarantee, secure, transfer, 
adjust, or settle a contract for 
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 
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180 
customers of a registered digital com-
modity broker or registered digital 
commodity dealer may be commingled 
and deposited in customer accounts 
with any other money, assets, or prop-
erty received by the digital commodity 
broker or digital commodity dealer, 
respectively, and required by the Com-
mission to be separately accounted for 
and treated and dealt with as belong-
ing to the customer of the digital com-
modity 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) 
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181 
shall be considered customer property for pur-
poses of section 761 of title 11, United States 
Code. 
‘‘(B) TRANSACTIONS.—A transaction in-
volving a unit of a digital commodity occurring 
with a digital commodity dealer shall be consid-
ered a ‘contract for the purchase or sale of a 
commodity for future delivery, on or subject to 
the rules of, a contract market or board of 
trade’ for purposes of the definition of a ‘com-
modity contract’ in section 761 of title 11, 
United States Code. 
‘‘(C) BROKERS
AND
DEALERS.—A reg-
istered digital commodity dealer and a reg-
istered digital commodity broker shall be con-
sidered a futures commission merchant for pur-
poses of section 761 of title 11, United States 
Code. 
‘‘(D) ASSETS
REMOVED
FROM
SEGREGA-
TION.—Assets removed from segregation due to 
a customer election under paragraph (5) shall 
not be considered customer property for pur-
poses of section 761 of title 11, United States 
Code. 
‘‘(5) MISUSE OF CUSTOMER PROPERTY.— 
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182 
‘‘(A) IN GENERAL.—It shall be unlawful— 
‘‘(i) for any digital commodity broker 
or digital commodity dealer that has re-
ceived any customer money, assets, or 
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 
‘‘(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-
modity includes utilizing any unit of a digital 
asset to participate in a blockchain service de-
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183 
fined in paragraph (5) or a decentralized gov-
ernance system associated with the digital com-
modity or the blockchain system to which the 
digital commodity relates in any manner other 
than that expressly directed by the customer 
from whom the unit of a digital commodity was 
received. 
‘‘(6) PARTICIPATION
IN
BLOCKCHAIN
SERV-
ICES.— 
‘‘(A) IN GENERAL.—A customer shall have 
the right to waive the restrictions in paragraph 
(1) for any unit of a digital commodity, by af-
firmatively electing, in writing to the digital 
commodity broker or digital commodity dealer, 
to waive the restrictions. 
‘‘(B) USE
OF
FUNDS.—Customer digital 
commodities removed from segregation under 
subparagraph (A) may be pooled and used by 
the digital commodity broker or digital com-
modity dealer, or one of their designees, to pro-
vide a blockchain service for a blockchain sys-
tem to which the unit of the digital asset re-
moved from segregation in subparagraph (A) 
relates. 
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184 
‘‘(C) 
LIMITATIONS.—The 
Commission 
may, by rule, establish notice and disclosure re-
quirements, and any other limitations and rules 
related to the waiving of any restrictions under 
this paragraph that are reasonably necessary to 
protect customers, including eligible contract 
participants, non-eligible contract participants, 
or any other class of customers. 
‘‘(D) BLOCKCHAIN SERVICE DEFINED.—In 
this subparagraph, the term ‘blockchain service’ 
means any activity relating to validating trans-
actions on a blockchain system, providing secu-
rity for a blockchain system, or other similar 
activity required for the ongoing operation of a 
blockchain system. 
‘‘(l) FEDERAL PREEMPTION.—Notwithstanding any 
other provision of law, the Commission shall have exclusive 
jurisdiction over any digital commodity broker or digital 
commodity dealer registered under this section. 
‘‘(m) EXEMPTIONS.—In order to promote responsible 
economic or financial innovation and fair competition, or 
protect customers, the Commission may (on its own initia-
tive or on application of the registered digital commodity 
broker or registered digital commodity dealer) exempt, un-
conditionally or on stated terms or conditions, or for stat-
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