296 
be a transaction in an investment con-
tract. 
‘‘(c) SALES RESTRICTIONS
FOR AFFILIATED 
PERSONS.—A digital asset may be offered and 
sold by an affiliated person under subsection 
(a) or (b) if— 
‘‘(1) the aggregate amount of such 
digital assets sold in any 3-month period 
by the affiliated person is not greater 
than one percent of the digital assets 
then outstanding; or 
‘‘(2) the affiliated person promptly, 
following the placement of an order to 
sell one percent or more of the digital as-
sets then outstanding during any 3- 
month period, reports the sale to— 
‘‘(A) the Commodity Futures Trad-
ing 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 
Commission, in the case of a sell 
order for a restricted digital asset 
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placed with a digital asset trading 
system. 
‘‘(d) TREATMENT OF CERTAIN END USER DIS-
TRIBUTIONS 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 section 43 
has been certified and made publicly 
available. 
‘‘(2) NOT
AN
INVESTMENT
CONTRACT.— 
For purposes of the securities laws, an 
end user distribution described under 
paragraph (1) shall not be a transaction 
in an investment contract. 
‘‘(3) EXEMPTION.—Section 5 of the Se-
curities Act of 1933 (15 U.S.C. 77e) shall 
not apply to an end user distribution de-
scribed under paragraph (1) or a trans-
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action 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 sec-
tion 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 re-
spect to a digital asset and any blockchain 
system to which the digital asset relates, the 
information described under this section is as 
follows: 
‘‘(1) SOURCE
CODE.—The source code 
for any blockchain system to which the 
digital asset relates. 
‘‘(2) TRANSACTION HISTORY.—A descrip-
tion of the steps necessary to independ-
ently access, search, and verify the trans-
action history of any blockchain system 
to which the digital asset relates. 
‘‘(3) DIGITAL ASSET ECONOMICS.—A de-
scription 
of 
the 
purpose 
of 
any 
blockchain system to which the digital 
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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 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; 
‘‘(B) information on any applica-
ble consensus mechanism or process 
for validating transactions, method of 
generating or mining digital assets, 
and any process for burning or de-
stroying 
digital 
assets 
on 
the 
blockchain system; 
‘‘(C) an explanation of governance 
mechanisms 
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 
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verifying the transaction history of 
the digital asset. 
‘‘(4) PLAN OF DEVELOPMENT.—The cur-
rent state and timeline for the develop-
ment of any blockchain system to which 
the digital asset relates, showing how 
and when the blockchain system intends 
or intended to be considered a functional 
network and decentralized network. 
‘‘(5) 
DEVELOPMENT
DISCLOSURES.—A 
list of all persons who are related persons 
or affiliated persons 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 
appropriate, provide under the caption 
‘Risk Factors’ a description of the mate-
rial risks surrounding ownership 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 subcaption that adequately 
describes the risk. 
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‘‘(b) CERTIFICATION.—With respect to a dig-
ital asset and any blockchain system to which 
the digital asset relates, the information re-
quired to be made available under this sec-
tion has been certified if the digital asset 
issuer, an affiliated person, a decentralized 
governance system, or a digital commodity ex-
change certifies on a quarterly basis to the 
Commodity Futures Trading Commission and 
the Securities and Exchange 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 sec-
tion 203, is further amended by adding at the 
end the following: 
‘‘SEC. 44. CERTIFICATION OF CERTAIN DIGITAL ASSETS. 
‘‘(a) CERTIFICATION.—Any person may cer-
tify to the Securities and Exchange Commis-
sion that the blockchain system to which a 
digital asset relates is a decentralized net-
work. 
‘‘(b) 
FILING
REQUIREMENTS.—A 
certifi-
cation described under subsection (a) shall be 
filed with the Commission, and include— 
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‘‘(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 system; 
‘‘(B) the functionality of the re-
lated digital asset; 
‘‘(C) any decentralized govern-
ance system which relates to the 
blockchain system; and 
‘‘(D) the process to develop con-
sensus or agreement within such de-
centralized governance system; 
‘‘(3) a description of the development 
of the blockchain system and the digital 
asset which relates to the blockchain sys-
tem, including— 
‘‘(A) a history of the development 
of the blockchain system and the dig-
ital asset 
which 
relates 
to 
such 
blockchain system; 
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‘‘(B) a description of the issuance 
process for the digital asset which re-
lates to the blockchain system; 
‘‘(C) information identifying the 
digital asset issuer of the digital asset 
which relates to the blockchain sys-
tem; 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 decentral-
ized network, including— 
‘‘(A) an explanation of the protec-
tions and prohibitions available dur-
ing the previous 12 months against 
any one person being able to— 
‘‘(i) control or materially alter 
the blockchain system; 
‘‘(ii) exclude any other person 
from using or participating on the 
blockchain system; and 
‘‘(iii) exclude any other person 
from participating in a decentral-
ized governance system; 
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‘‘(B) information regarding the 
beneficial ownership of the digital 
asset 
which 
relates 
to 
such 
blockchain system and the distribu-
tion of voting power in any decentral-
ized governance system during the 
previous 12 months; 
‘‘(C) information regarding the 
history of upgrades to the source 
code for such blockchain system dur-
ing the previous 3 months, includ-
ing— 
‘‘(i) a description of any con-
sensus or agreement process uti-
lized 
to 
process 
or 
approve 
changes to the source code; 
‘‘(ii) a list of any material 
changes to the source code, the 
purpose and effect of the changes, 
and 
the 
contributor 
of 
the 
changes, if known; and 
‘‘(iii) 
any 
changes 
to 
the 
source code made by the digital 
asset issuer, a related person, or 
an affiliated person; 
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‘‘(D) information regarding any 
activities conducted to market the 
digital asset which relates 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 sys-
tem during the previous 12 months; 
and 
‘‘(5) with respect to a blockchain sys-
tem for which a certification has pre-
viously been rebutted under this section 
or withdrawn under section 5i(m) of the 
Commodity Exchange Act, specific infor-
mation relating to the analysis provided 
in subsection (f)(2) in connection with 
such rebuttal or such section 5i(m)(1)(C) 
in connection with such withdrawal. 
‘‘(c) REBUTTABLE PRESUMPTION.—The Com-
mission may rebut a certification described 
under subsection (a) with respect to a 
blockchain system if the Commission, within 
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60 days of receiving such certification, deter-
mines that the blockchain system is not a de-
centralized network. 
‘‘(d) CERTIFICATION REVIEW.— 
‘‘(1) IN GENERAL.—Any blockchain sys-
tem that relates to a digital asset for 
which a certification has been made 
under subsection (a) shall be considered 
a decentralized network 60 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 cer-
tification due to— 
‘‘(A) an inadequate explanation by 
the person making the certification; 
or 
‘‘(B) any novel or complex issues 
which require additional time to con-
sider. 
‘‘(2) PUBLIC NOTICE.—The Commission 
shall make the following available to the 
public and provide a copy to the Com-
modity Futures Trading Commission: 
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‘‘(A) Each certification received 
under subsection (a). 
‘‘(B) Each stay of the Commission 
under this section, and the reasons 
therefore. 
‘‘(C) Any response from a person 
making a certification under sub-
section (a) to a stay of the certifi-
cation by the Commission. 
‘‘(3) CONSOLIDATION.—The Commission 
may consolidate and treat as one submis-
sion multiple certifications made under 
subsection (a) for the same blockchain 
system which relates to a digital asset 
which are received during the review pe-
riod provided under this subsection. 
‘‘(e) STAY OF CERTIFICATION.— 
‘‘(1) IN
GENERAL.—A notification by 
the Commission pursuant to subsection 
(d)(1) shall stay the certification once for 
up to an additional 120 days from the 
date of the notification. 
‘‘(2) PUBLIC COMMENT PERIOD.—Before 
the end of the 60-day period described 
under subsection (d)(1), the Commission 
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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 
notification from the Commission 
to the person who made the cer-
tification that the Commission 
does not object to the certifi-
cation; or 
‘‘(ii) at the expiration of the 
certification review period; and 
‘‘(B) not become effective upon 
the publication of a notification from 
the Commission to the person who 
made the certification that the Com-
mission 
has 
rebutted 
the 
certifi-
cation. 
‘‘(2) DETAILED ANALYSIS INCLUDED WITH 
REBUTTAL.—The 
Commission 
shall 
in-
clude, with each publication of a notifica-
tion of rebuttal described under para-
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graph (1)(B), a detailed analysis of the 
factors on which the decision was based. 
‘‘(g) RECERTIFICATION.—With respect to a 
blockchain system for which a certification 
has been rebutted under this section, no per-
son may make a certification under sub-
section (a) with respect to such blockchain 
system during the 90-day period beginning on 
the date of such rebuttal. 
‘‘(h) APPEAL OF REBUTTAL.— 
‘‘(1) IN GENERAL.—If a certification is 
rebutted under this section, the person 
making such certification may appeal the 
decision to the United States Court of Ap-
peals for the District of Columbia, not 
later than 60 days after the notice of re-
buttal is made. 
‘‘(2) REVIEW.—In an appeal under 
paragraph (1), the court shall have de 
novo review of the determination to 
rebut the certification. 
‘‘(i) LIABILITY FOR PROVIDING FALSE INFOR-
MATION.—It shall be unlawful for any person 
to provide false information in support of a 
certification under this section if such person 
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knew 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 enact-
ment of this Act; or 
(2) 60 days after the publication in 
the Federal Register of the final rule im-
plementing the provision. 
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 
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following: ‘‘The term does not include a digital 
commodity 
or 
permitted 
payment 
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 per-
son or group of persons solely because of 
their development of a blockchain pro-
tocol.’’; 
(2) in paragraph (2), by adding at the 
end the following: ‘‘A digital asset trading 
system is not a ‘facility’ of an exchange.’’; 
(3) in paragraph (4)(A), by inserting ‘‘, 
other than restricted digital assets,’’ after 
‘‘securities’’; 
(4) in paragraph (5)(A), by inserting 
‘‘restricted digital assets or’’ after ‘‘not in-
cluding’’; 
(5) in paragraph (26) by inserting 
‘‘(other than a notice-registered digital 
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asset clearing agency)’’ after ‘‘or reg-
istered clearing agency’’; 
(6) in paragraph (28) by inserting 
‘‘(other than a notice-registered digital 
asset clearing agency)’’ after ‘‘registered 
clearing agency’’; and 
(7) in paragraph (10), by adding at 
the end the following: ‘‘Subject to sub-
section (i), the term does not include a 
digital commodity or permitted payment 
stablecoin.’’. 
(c) INVESTMENT ADVISERS ACT OF 1940.— 
Section 202(a) of the Investment Advisers Act 
of 1940 (15 U.S.C. 80b–2) is amended— 
(1) in paragraph (18), by adding at 
the end the following: ‘‘The term does not 
include a digital commodity or permitted 
payment stablecoin.’’; 
(2) by redesignating the second para-
graph (29) (relating to commodity pools) 
as paragraph (31); 
(3) by adding at the end, the fol-
lowing: 
‘‘(32) DIGITAL ASSET-RELATED TERMS.— 
The terms ‘digital commodity’ and ‘per-
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313 
mitted payment stablecoin’ have the 
meaning given those terms, respectively, 
under section 2(a) of the Securities Act of 
1933 (15 U.S.C. 77b(a)).’’. 
(d) INVESTMENT COMPANY ACT OF 1940.— 
Section 2(a) of the Investment Company Act 
of 1940 (15 U.S.C. 80a–2) is amended— 
(1) in paragraph (36), by adding at 
the end the following: ‘‘The term does not 
include a digital commodity or permitted 
payment stablecoin.’’; and 
(2) by adding at the end, the fol-
lowing: 
‘‘(55) DIGITAL ASSET-RELATED TERMS.— 
The terms ‘digital commodity’ and ‘per-
mitted payment stablecoin’ have the 
meaning given those terms, respectively, 
under section 2(a) of the Securities Act of 
1933 (15 U.S.C. 77b(a)).’’. 
SEC. 302. ANTI-FRAUD AUTHORITY OVER PERMITTED PAY-
MENT STABLECOINS. 
(a) IN GENERAL.—Section 10 of the Securi-
ties Exchange Act of 1934 (15 U.S.C. 78j) is 
amended— 
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(1) by moving subsection (c) so as to 
appear after subsection (b); 
(2) by designating the undesignated 
matter at the end of that section as sub-
section (d); and 
(3) by adding at the end the fol-
lowing: 
‘‘(e)(1) Rules promulgated under sub-
section (b) that prohibit fraud, manipulation, 
or insider trading (but not rules imposing or 
specifying reporting or recordkeeping re-
quirements, procedures, or standards as pro-
phylactic measures against fraud, manipula-
tion, or insider trading), and judicial prece-
dents decided under subsection (b) and rules 
promulgated thereunder that prohibit fraud, 
manipulation, or insider trading, shall apply 
to permitted payment stablecoins with re-
spect to those circumstances in which the per-
mitted payment stablecoins are brokered, 
traded, or custodied by a broker, dealer, dig-
ital asset broker, or digital asset dealer or 
through an alternative trading system or dig-
ital asset trading platform to the same extent 
as they apply to securities. 
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‘‘(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 
system to the same extent as they apply to se-
curities. 
‘‘(3) Nothing in this subsection may be 
construed to provide the Commission author-
ity to make any rule, regulation, requirement, 
or 
obligation 
on 
a 
permitted 
payment 
stablecoin issuer regarding the operations of 
a permitted payment stablecoin issuer or a 
permitted payment stablecoin, including any 
aspect of the operation of a permitted pay-
ment stablecoin issuer or permitted payment 
stablecoin.’’. 
(b) TREATMENT
OF
PERMITTED
PAYMENT 
STABLECOINS.—Title I of the Securities Ex-
change Act of 1934 (15 U.S.C. 78a et seq.), as 
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amended by section 304, is amended by insert-
ing after section 6B the following 
‘‘SEC. 6C. TREATMENT OF TRANSACTIONS IN PERMITTED 
PAYMENT STABLECOINS. 
‘‘(a) AUTHORITY
TO BROKER, TRADE, AND 
CUSTODY PERMITTED PAYMENT STABLECOINS.— 
Permitted payment stablecoins may be bro-
kered, traded, or custodied by a broker, deal-
er, digital asset broker, or digital asset dealer 
or through an alternative trading system or 
digital asset trading platform. 
‘‘(b) COMMISSION JURISDICTION.—The Com-
mission shall have jurisdiction over a trans-
action in a permitted payment stablecoin with 
respect to those circumstances in which a 
permitted payment stablecoin is brokered, 
traded, or custodied— 
‘‘(1) by a broker, dealer, digital asset 
broker, or digital asset dealer; or 
‘‘(2) through an alternative trading 
system or digital asset trading system. 
‘‘(c) LIMITATION.—Subsection (b) shall only 
apply to a transaction described in subsection 
(b) for the purposes of regulating the offer, 
execution, solicitation, or acceptance of a per-
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mitted payment stablecoin in those cir-
cumstances in which the permitted payment 
stablecoin is brokered, traded, or custodied— 
‘‘(1) by a broker, dealer, digital asset 
broker, or digital asset dealer; or 
‘‘(2) through an alternative trading 
system or digital asset trading system.’’. 
SEC. 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 in-
strumentality 
of 
interstate 
commerce 
within or subject to the jurisdiction of 
the United States to effect any trans-
action in a restricted digital asset, unless 
such digital asset trading system is reg-
istered with the Commission. 
‘‘(2) APPLICATION.—A person desiring 
to register as a digital asset trading sys-
tem shall submit to the Commission an 
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318 
application in such form and containing 
such information as the Commission may 
require for the purpose of making the de-
terminations required for approval. 
‘‘(3) EXEMPTIONS.—A digital asset trad-
ing system that offers or seeks to offer at 
least one restricted digital asset shall not 
be required to register under this section 
(and subparagraph (A) shall not apply to 
such digital asset trading system) if the 
trading system satisfies any exemption 
contained on a list of exemptions pre-
pared by the Commission to be as close 
as practicable to those exemptions set 
forth in section 240.3b–16(b) of title 17, 
Code of Federal Regulations, applicable 
to the definition of an exchange. 
‘‘(4) ADDITIONAL REGISTRATIONS.— 
‘‘(A) WITH THE COMMISSION.— 
‘‘(i) IN GENERAL.—A registered 
digital asset trading system shall 
be permitted to maintain any 
other registration with the Com-
mission relating to the other ac-
tivities of the registered digital 
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asset trading system, including as 
a— 
‘‘(I) national securities ex-
change; 
‘‘(II) broker; 
‘‘(III) dealer; 
‘‘(IV) alternative trading 
system, pursuant to part 242 
of title 17, Code of Federal 
Regulations, as in effect on 
the date of enactment of this 
subsection; 
‘‘(V) digital asset broker; 
or 
‘‘(VI) digital asset dealer. 
‘‘(ii) RULEMAKING.—The Com-
mission shall prescribe rules for 
an entity with multiple registra-
tions described under subpara-
graph (A) to exempt the entity 
from duplicative, conflicting, or 
unduly burdensome provisions of 
this Act and the rules under this 
Act, to the extent such an exemp-
tion 
would 
protect 
investors, 
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maintain fair, orderly, and effi-
cient markets, and facilitate cap-
ital formation. 
‘‘(B) WITH THE COMMODITY FUTURES 
TRADING
COMMISSION.—A 
registered 
digital asset trading system shall be 
permitted to maintain a registration 
with the Commodity Futures Trading 
Commission as a digital commodity 
exchange to offer contracts of sale for 
digital commodities.’’. 
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 in-
serting after section 6 the following: 
‘‘SEC. 6A. REQUIREMENTS FOR DIGITAL ASSET TRADING 
SYSTEMS. 
‘‘(a) HOLDING OF CUSTOMER ASSETS.— 
‘‘(1) IN GENERAL.—A digital asset trad-
ing system shall hold customer money, 
assets, and property in a manner to mini-
mize the risk of loss to the customer or 
unreasonable delay in the access to the 
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money, assets, and property of the cus-
tomer. 
‘‘(2) QUALIFIED
DIGITAL
ASSET
CUSTO-
DIAN
REQUIRED.—A digital asset trading 
system shall hold customer restricted dig-
ital assets described in paragraph (1) 
with a qualified digital asset custodian 
described under section 6B. 
‘‘(3) CUSTODY
PROHIBITED.—A digital 
asset trading system, in its capacity as 
such, may not hold custody of customer 
money, assets, or property. 
‘‘(b) RULEMAKING.—The Commission shall 
prescribe rules for digital asset trading sys-
tems relating to the following: 
‘‘(1) NOTICE.—Notice to the Commis-
sion 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 dig-
ital asset trading system, and the manner 
of such display. 
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‘‘(3) FAIR ACCESS.—The thresholds at 
which a digital asset trading system is re-
quired to have policies regarding pro-
viding fair access to the digital asset 
trading system. 
‘‘(4) CAPACITY, INTEGRITY, AND
SECU-
RITY OF AUTOMATED SYSTEMS.—Policies and 
procedures reasonably designed to en-
sure the capacity, integrity, and security 
of the digital asset trading system, taking 
into account the particular nature of dig-
ital asset trading systems. 
‘‘(5) EXAMINATIONS, INSPECTIONS, AND 
INVESTIGATIONS.—The examination and in-
spection of the premises, systems, and 
records of the digital asset trading sys-
tem by the Commission or by a self-regu-
latory organization of which such digital 
asset trading system is a member. 
‘‘(6) 
RECORDKEEPING.—The 
making, 
keeping current, and preservation of 
records related to trading activity on the 
digital asset trading system. 
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‘‘(7) 
REPORTING.—The 
reporting 
of 
transactions in digital assets that occur 
through the digital asset trading system. 
‘‘(8) PROCEDURES.—The establishment 
of adequate written safeguards and writ-
ten procedures to protect confidential 
trading information. 
‘‘(c) NAME REQUIREMENT.—A digital asset 
trading system may not use the word ‘ex-
change’ in the name of the digital asset trad-
ing system, unless the digital asset trading 
system— 
‘‘(1) is operated by a registered na-
tional securities exchange; and 
‘‘(2) is clearly indicated as being pro-
vided outside 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. 6B. REQUIREMENTS FOR QUALIFIED DIGITAL ASSET 
CUSTODIANS. 
‘‘(a) IN GENERAL.—A digital asset custo-
dian is a qualified digital asset custodian if 
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the digital asset custodian complies with the 
requirements of this section. 
‘‘(b) SUPERVISION REQUIREMENT.— 
‘‘(1) IN GENERAL.—A digital asset cus-
todian shall— 
‘‘(A) be subject to adequate super-
vision and appropriate regulation 
by— 
‘‘(i) the Board of Governors of 
the Federal Reserve System; 
‘‘(ii) the Comptroller of the 
Currency; 
‘‘(iii) the Federal Deposit In-
surance Corporation; 
‘‘(iv) the Commodity Futures 
Trading Commission; 
‘‘(v) the Securities and Ex-
change Commission; 
‘‘(vi) a State bank supervisor 
(within the meaning of section 3 
of the Federal Deposit Insurance 
Act); or 
‘‘(vii) an appropriate foreign 
governmental authority in the 
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home country of the digital asset 
custodian; and 
‘‘(B) not be prohibited by the ap-
plicable supervisor from engaging in 
an activity with respect to the cus-
tody and safekeeping of digital assets. 
‘‘(2) ADEQUATE SUPERVISION AND APPRO-
PRIATE
REGULATION.—For 
purposes 
of 
paragraph (1), the terms ‘adequate super-
vision’ and ‘appropriate regulation’ mean 
such minimum standards for supervision 
and regulation as are reasonably nec-
essary to protect the digital assets of cus-
tomers of an entity registered with the 
Commission, including minimum stand-
ards relating to— 
‘‘(A) accessibility of customer as-
sets; 
‘‘(B) financial resources; 
‘‘(C) risk management require-
ments; 
‘‘(D) governance arrangements; 
‘‘(E) fitness standards for officers 
and directors; 
‘‘(F) recordkeeping; 
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‘‘(G) information sharing; and 
‘‘(H) conflicts of interest. 
‘‘(3) DEEMED
COMPLIANCE.—A digital 
asset custodian shall be deemed to be 
subject to adequate supervision and ap-
propriate regulation, if— 
‘‘(A) it is supervised by an agency 
described under any of clauses (i) 
through (v) of paragraph (1)(A); or 
‘‘(B) it is a bank supervised by a 
State bank supervisor (within the 
meaning of section 3 of the Federal 
Deposit Insurance Act). 
‘‘(4) RULEMAKING
WITH
RESPECT
TO 
DEFINITIONS.—For purposes of this sub-
section, the Commission may, by rule, 
further define the terms ‘adequate super-
vision’ and ‘appropriate regulation’ as 
necessary in the public interest, as appro-
priate for the protection of investors, and 
consistent with the purposes of this Act. 
‘‘(c) INFORMATION SHARING.—Each digital 
asset custodian shall periodically share of in-
formation with the Commission, as the Com-
mission determines by rule to be reasonably 
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necessary to effectuate any of the provisions, 
or to accomplish any of the purposes, of this 
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 following: 
‘‘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 make use of 
any facility of a digital asset trading plat-
form) to make use of the mails or any 
means or instrumentality of interstate 
commerce to effect any transactions in, 
or to induce or attempt to induce the 
purchase or sale of, any restricted digital 
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asset unless such digital asset broker or 
digital asset dealer is registered in ac-
cordance with this section. 
‘‘(2) APPLICATION.—A person desiring 
to register 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 
MEMBERSHIP.— 
‘‘(1) 
IN
GENERAL.—A 
digital 
asset 
broker or digital asset dealer may not 
register or maintain registration under 
this section unless such digital asset 
broker or digital asset dealer is a mem-
ber of a national securities association 
registered under section 15A. 
‘‘(2) TREATMENT UNDER SECTION 15A.— 
‘‘(A) IN GENERAL.—For purposes of 
section 15A— 
‘‘(i) the term ‘broker’ includes 
a digital asset broker; 
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‘‘(ii) the term ‘dealer’ includes 
a digital asset dealer; and 
‘‘(iii) the term ‘security’ in-
cludes a restricted digital asset. 
‘‘(B) 
CLARIFICATION.—Notwith-
standing subparagraph (A), a national 
securities association shall only ex-
amine for and enforce against a dig-
ital asset broker and digital asset 
dealer rules of such national securi-
ties association written specifically 
for digital asset brokers and a digital 
asset dealers. 
‘‘(3) 
EXCEPTION.—A 
digital 
asset 
broker or digital asset dealer may reg-
ister under this section without obtaining 
membership in a national securities asso-
ciation until the end of the 360-day pe-
riod beginning on the date the first na-
tional securities association adopts rules 
to admit digital asset brokers or digital 
asset dealers as members. 
‘‘(c) ADDITIONAL REGISTRATIONS WITH THE 
COMMISSION.— 
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‘‘(1) IN GENERAL.—A registered digital 
asset broker or registered digital asset 
dealer shall be permitted to maintain any 
other registration with the Commission 
relating to the other activities of the reg-
istered digital asset broker or registered 
digital asset dealer, including as— 
‘‘(A) 
a 
national 
securities 
ex-
change; 
‘‘(B) a broker; 
‘‘(C) a dealer; 
‘‘(D) an alternative trading sys-
tem, pursuant to part 242 of title 17, 
Code of Federal Regulations, as in ef-
fect on the date of enactment of this 
section; or 
‘‘(E) a digital asset trading sys-
tem. 
‘‘(2) RULEMAKING.—The Commission 
shall prescribe rules for an entity with 
multiple registrations described under 
paragraph (1) to exempt the entity from 
duplicative, conflicting, or unduly bur-
densome provisions of this Act and the 
rules under this Act, to the extent such 
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an exemption would protect investors, 
maintain fair, orderly, and efficient mar-
kets, and facilitate capital formation. 
‘‘(3) 
SELF-REGULATORY
ORGANIZA-
TIONS.—The Commission shall require 
any self-regulatory organization with a 
registered digital asset broker or reg-
istered digital asset dealer as a member 
to provide such rules as may be nec-
essary to further compliance with this 
section, protect investors, maintain fair, 
orderly, and efficient markets, and facili-
tate capital formation. 
‘‘(d) ADDITIONAL REGISTRATIONS WITH THE 
COMMODITY FUTURES TRADING COMMISSION.—A 
registered digital asset broker or registered 
digital asset dealer shall be permitted to 
maintain a registration with the Commodity 
Futures Trading Commission as a digital com-
modity broker or digital commodity dealer, to 
list or trade contracts of sale for digital com-
modities.’’. 
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SEC. 306. REQUIREMENTS OF DIGITAL ASSET BROKERS 
AND DIGITAL ASSET DEALERS. 
Section 15H of the Securities Exchange 
Act of 1934, as added by section 305, is amend-
ed by adding at the end the following: 
‘‘(e) ANTI-FRAUD.—No digital asset broker 
or digital asset dealer shall make use of the 
mails or any means or instrumentality of 
interstate commerce to effect any transaction 
in, or to induce or attempt to induce the pur-
chase or sale of, any restricted digital asset by 
means of any manipulative, deceptive, or 
other fraudulent device or contrivance. 
‘‘(f) HOLDING OF CUSTOMER ASSETS.— 
‘‘(1) 
IN
GENERAL.—A 
digital 
asset 
broker or digital asset dealer shall hold 
customer money, assets, 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 prop-
erty of the customer. 
‘‘(2) QUALIFIED
DIGITAL
ASSET
CUSTO-
DIAN REQUIRED.—A digital asset broker or 
digital asset dealer shall hold customer 
restricted digital assets described in 
paragraph (1) with a qualified digital 
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asset custodian described under section 
6B. 
‘‘(3) SEGREGATION OF FUNDS.— 
‘‘(A) IN GENERAL.—A digital asset 
broker or digital asset dealer shall 
treat and deal with all money, assets, 
and property held for a customer of 
the digital asset broker or digital 
asset dealer, or that accrues to a cus-
tomer as a result of trading in re-
stricted digital assets, as belonging to 
the customer. 
‘‘(B) COMMINGLING
PROHIBITED.— 
Money, assets, and property of a cus-
tomer 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 mar-
gin, secure, or guarantee any trades 
of any person other than the cus-
tomer of the digital asset broker or 
digital asset dealer for whom the 
same are held. 
‘‘(4) EXCEPTIONS.— 
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‘‘(A) USE OF FUNDS.— 
‘‘(i) 
IN
GENERAL.—Notwith-
standing paragraph (3), money, 
assets, and property of customers 
of a digital asset broker or digital 
asset dealer described in para-
graph (3) may be maintained and 
deposited in the same account or 
accounts with any bank, trust 
company, 
or 
qualified 
digital 
asset custodian described under 
section 6B, if the money, assets, 
and property remain segregated 
from the money, assets, and prop-
erty of the digital asset broker or 
digital asset dealer. 
‘‘(ii) 
WITHDRAWAL.—Notwith-
standing 
paragraph 
(3), 
such 
share of the money, assets, and 
property described in paragraph 
(3) as in the normal course of 
business shall be necessary to 
transfer, adjust, or settle a re-
stricted digital asset transaction 
pursuant to a customer’s instruc-
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tion (standing or otherwise) may 
be withdrawn and applied to such 
purposes, 
including 
the 
with-
drawal and payment of commis-
sions, brokerage, interest, taxes, 
storage, and other charges law-
fully accruing in connection with 
a restricted digital asset trans-
action. 
‘‘(iii) COMMISSION
ACTION.—In 
accordance 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 dig-
ital asset broker or digital asset 
dealer described in paragraph (3) 
may be commingled and depos-
ited as provided in this section 
with any other money, assets, or 
property received by the digital 
asset broker or digital asset deal-
er and required by the Commis-
sion to be separately accounted 
for and treated and dealt with as 
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belonging to the customer 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 to be 
used under clause (ii), by affirma-
tively electing, in writing to the 
digital asset broker or digital 
asset dealer, to waive the restric-
tions. 
‘‘(ii) USE OF FUNDS.—Customer 
digital assets removed from seg-
regation under clause (i) may be 
pooled and used by the digital 
asset broker or digital asset deal-
er 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. 
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‘‘(iii) LIMITATIONS.—The Com-
mission may, by rule, establish 
notice 
and 
disclosure 
require-
ments, and any other limitations 
and rules related to the waiving 
of any restrictions under this sub-
paragraph that are reasonably 
necessary to protect customers. 
‘‘(iv) BLOCKCHAIN
SERVICE
DE-
FINED.—In this subparagraph, the 
term ‘blockchain service’ means 
any activity relating to validating 
transactions on a blockchain sys-
tem, providing security for a 
blockchain system, or other simi-
lar activity required for the ongo-
ing operation of a blockchain sys-
tem. 
‘‘(5) FURTHER LIMITATIONS.—No person 
shall treat or deal with a restricted dig-
ital asset held on behalf of any customer 
pursuant to paragraph (3) by utilizing 
any unit of such restricted digital asset to 
participate in a blockchain service (as de-
fined in paragraph (4)(B)(iv) or a decen-
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tralized governance system associated 
with the restricted digital asset or the 
blockchain system to which the restricted 
digital asset relates in any manner other 
than that which is expressly directed by 
the customer from which such unit of a 
restricted digital asset was received. 
‘‘(g) CAPITAL REQUIREMENTS.— 
‘‘(1) IN GENERAL.—Each registered dig-
ital 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 obliga-
tions 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 
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thereof regulating a digital asset broker 
or digital asset dealer’s financial respon-
sibility obligations and capital require-
ments, a registered digital asset broker 
or digital asset dealer that maintains con-
trol of customer digital assets in a man-
ner that satisfies the rules issued by the 
Commission under subsection (f)(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
RE-
QUIREMENTS.— 
‘‘(A) COMMISSION RULE.—The Com-
mission shall, by rule, provide appro-
priate offsets to any applicable cap-
ital requirement for a person with 
multiple registrations, including as a 
broker, dealer, digital asset broker, 
or digital asset dealer. 
‘‘(B) JOINT
RULE.—The Commis-
sion and the Commodity Futures 
Trading Commission shall jointly, by 
rule, provide appropriate offsets to 
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any applicable capital requirement 
for a person with multiple registra-
tions, including as a digital asset 
broker, digital asset dealer, digital 
asset trading system, digital com-
modity 
broker, 
digital 
commodity 
dealer, 
or 
digital 
commodity 
ex-
change. 
‘‘(h) REPORTING
AND
RECORDKEEPING.— 
Each registered digital asset broker and dig-
ital asset dealer— 
‘‘(1) shall make such reports as are re-
quired by the Commission by rule or reg-
ulation regarding the transactions, posi-
tions, and financial condition of the dig-
ital asset broker or digital asset dealer; 
‘‘(2) shall keep books and records in 
such form and manner and for such pe-
riod as may be prescribed by the Com-
mission by rule or regulation; and 
‘‘(3) shall keep the books and records 
open to inspection and examination by 
any representative of the Commission. 
‘‘(i) TREATMENT UNDER THE BANK SECRECY 
ACT.—A digital asset broker and a digital 
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asset dealer shall be treated as a financial in-
stitution 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 following: 
‘‘SEC. 10E. CONFLICTS OF INTEREST RELATED TO DIGITAL 
ASSETS. 
‘‘Each registered digital asset trading sys-
tem, registered digital asset broker, reg-
istered digital asset dealer, and notice-reg-
istered digital asset clearing agency shall es-
tablish, maintain, and enforce written policies 
and procedures 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 following: 
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‘‘(5) EXEMPTION
FOR
CERTAIN
DIGITAL 
ASSETS
IN
CONNECTION
WITH
FEDERALLY 
REGULATED INTERMEDIARIES.—A restricted 
digital asset is a covered security with re-
spect 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 
Securities Exchange Act of 1934; or 
‘‘(B) traded through a digital asset 
trading system.’’. 
SEC. 309. EXCLUSION FOR ANCILLARY ACTIVITIES. 
The Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.), as amended by section 305, 
is further amended by inserting after section 
15H the following: 
‘‘SEC. 15I. EXCLUSION FOR ANCILLARY ACTIVITIES. 
‘‘(a) IN
GENERAL.—Notwithstanding any 
other provision of this Act, a person shall not 
be subject to this Act and the regulations 
thereunder solely based on the person under-
taking any ancillary activities. 
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343 
‘‘(b) EXCEPTIONS.—Subsection (a) shall not 
be construed to apply to the anti-fraud and 
anti-manipulation authorities of the Commis-
sion. 
‘‘(c) ANCILLARY
ACTIVITIES
DEFINED.—In 
this section, the term ‘ancillary activities’ 
means any of the following activities related 
to the operation of a blockchain system: 
‘‘(1) Compiling network transactions, 
operating or participating in a liquidity 
pool, 
relaying, 
searching, 
sequencing, 
validating, or acting in a similar capacity 
with respect to a digital asset. 
‘‘(2) Providing computational work, 
operating a node, or procuring, offering, 
or utilizing network bandwidth, or other 
similar incidental services with respect 
to a digital asset. 
‘‘(3) Providing a user-interface that 
enables a user to read and access data 
about a blockchain system, send mes-
sages, 
or 
otherwise 
interact 
with 
a 
blockchain system. 
‘‘(4) Developing, publishing, consti-
tuting, administering, maintaining, or 
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344 
otherwise distributing a blockchain sys-
tem. 
‘‘(5) Developing, publishing, consti-
tuting, administering, maintaining, or 
otherwise distributing software or sys-
tems that create or deploy a hardware or 
software wallet or other system facili-
tating an individual user’s own personal 
ability to keep, safeguard, or custody the 
user’s digital assets or related private 
keys.’’. 
SEC. 310. 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 fol-
lowing: 
‘‘(9) REGISTRATION AND REQUIREMENTS 
FOR
NOTICE-REGISTERED
DIGITAL
ASSET 
CLEARING AGENCY.— 
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345 
‘‘(A) ELIGIBILITY.—A person may 
register with the Commission as a no-
tice-registered digital 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 in-
volving restricted digital assets, 
in compliance with Commission 
rules pursuant to section 15H(f); 
or 
‘‘(ii) is a bank engaging in a 
business involving digital assets, 
in compliance with applicable 
banking law and regulation relat-
ing to the custody and safe-
keeping of such assets. 
‘‘(B) REGISTRATION.—A person may 
register with the Commission as a no-
tice-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 
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346 
appropriate. Such notice shall in-
clude information describing the per-
son’s policies and procedures relating 
to the holding of customer assets. 
‘‘(C) RULEMAKING.—The Commis-
sion may adopt rules, which may not 
take effect until at least 360 days fol-
lowing the date of enactment of this 
paragraph, with regard to the activi-
ties of notice-registered digital asset 
clearing agencies, taking into account 
the nature of restricted digital as-
sets.’’. 
SEC. 311. TREATMENT OF CUSTODY ACTIVITIES BY BANK-
ING INSTITUTIONS. 
(a) TREATMENT OF CUSTODY ACTIVITIES.— 
The appropriate Federal banking agency (as 
defined under section 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 Ex-
change Commission may not require, or take 
supervisory action that would cause, a deposi-
tory institution, national bank, Federal credit 
union, State credit union, or trust company, 
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347 
or any affiliate (as such term is defined under 
section 2 of the Bank Holding Company Act 
of 1956) thereof— 
(1) to include assets held in custody 
or safekeeping, or the assets associated 
with a cryptographic key held in custody 
or safekeeping, as a liability on such in-
stitution’s financial statement or balance 
sheet, except that cash held for a third 
party by such institution that is commin-
gled with the general assets of such insti-
tution may be reflected as a liability on a 
financial statement or balance sheet; 
(2) to hold additional regulatory cap-
ital against assets in custody or safe-
keeping, or the assets associated with a 
cryptographic key held in custody or 
safekeeping, except as necessary to miti-
gate against operational risks inherent 
with the custody or safekeeping services, 
as determined by— 
(A) the appropriate Federal bank-
ing agency; 
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348 
(B) the National Credit Union Ad-
ministration (in the case of a credit 
union); 
(C) a State bank supervisor (as 
defined under section 3 of the Fed-
eral Deposit Insurance Act (12 U.S.C. 
1813)); or 
(D) a State credit union super-
visor (as defined under section 6003 
of the Anti-Money Laundering Act of 
2020); 
(3) to recognize a liability for any ob-
ligations related to activities or services 
performed for digital assets with respect 
to which such institution does not have 
beneficial 
ownership 
if 
that 
liability 
would exceed the expense recognized in 
the income statement as a result of the 
corresponding obligation. 
(b) DEFINITIONS.—In this section: 
(1) 
DEPOSITORY
INSTITUTION.—The 
term ‘‘depository institution’’ has the 
meaning given that term under section 3 
of the Federal Deposit Insurance Act. 
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349 
(2) CREDIT
UNION
TERMS.—The terms 
‘‘Federal credit union’’ and ‘‘State credit 
union’’ have the meaning given those 
terms, respectively, under section 101 of 
the Federal Credit Union Act. 
SEC. 312. EFFECTIVE DATE; ADMINISTRATION. 
(a) IN GENERAL.—Except as otherwise pro-
vided under this title, this title and the 
amendments made by this title shall take ef-
fect 360 days after the date of enactment of 
this Act, except that, to the extent a provision 
of this title requires a rulemaking, the provi-
sion shall take effect on the later of— 
(1) 360 days after the date of enact-
ment of this Act; or 
(2) 60 days after the publication in 
the Federal Register of the final rule im-
plementing the provision. 
(b) LIMITATION.—During fiscal years 2024, 
2025, and 2026, registration fees collected by 
the Securities and Exchange Commission 
shall not be deposited in the Securities and 
Exchange Commission Reserve Fund. 
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350 
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 affect 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 
commodity for future delivery 
or an option on such a con-
tract; 
‘‘(II) a swap; 
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351 
‘‘(III) a security futures 
product; 
‘‘(IV) an option authorized 
under section 4c of this Act; 
‘‘(V) an agreement, con-
tract, 
or 
transaction 
de-
scribed in subparagraph (C)(i) 
or (D)(i) of subsection (c)(2) of 
this section; or 
‘‘(VI) 
a 
leverage 
trans-
action authorized under sec-
tion 19 of this Act; or 
‘‘(ii) the activities of any per-
son with respect to any such an 
agreement, 
contract, 
or 
trans-
action.’’. 
(b) IN GENERAL.—Section 2(c)(1) of the 
Commodity Exchange Act (7 U.S.C. 2(c)(1)) is 
amended— 
(1) in subparagraph (F), by striking 
‘‘or’’ at the end; 
(2) in subparagraph (G), by striking 
the period and inserting ‘‘; or’’; and 
(3) by adding at the end the fol-
lowing: 
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352 
‘‘(H) 
permitted 
payment 
stablecoins.’’. 
(c) IN GENERAL.—Section 2(c)(2) of the 
Commodity Exchange Act (7 U.S.C. 2(c)(2)) is 
amended— 
(1) in subparagraph (D)(ii)— 
(A) in subclause (III), in the mat-
ter that precedes item (aa), by insert-
ing ‘‘of a commodity, other than a dig-
ital commodity,’’ before ‘‘that’’; and 
(B) by redesignating subclauses 
(IV) and (V) as subclauses (V) and (VI) 
and inserting after subclause (III) the 
following: 
‘‘(IV) a contract of sale of 
a digital commodity that— 
‘‘(aa) results in actual 
delivery, as the Commis-
sion shall by rule deter-
mine, within 2 days or 
such other period as the 
Commission 
may 
deter-
mine by rule or regulation 
based upon the typical 
commercial 
practice 
in 
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353 
cash or spot markets for 
the digital commodity in-
volved; or 
‘‘(bb) is executed with 
a registered digital com-
modity dealer— 
‘‘(AA) directly; 
‘‘(BB) 
through 
a 
registered digital com-
modity broker; or 
‘‘(CC) on or subject 
to the rules of a reg-
istered 
digital 
com-
modity 
exchange;’’; 
and 
(2) by adding at the end the fol-
lowing: 
‘‘(F) COMMISSION JURISDICTION WITH RE-
SPECT TO DIGITAL COMMODITY TRANSACTIONS.— 
‘‘(i) IN GENERAL.—Subject to sections 
6d and 12(e), the Commission shall have 
exclusive jurisdiction with respect to any 
account, agreement, contract, or trans-
action involving a contract of sale of a 
digital commodity in interstate com-
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354 
merce, including in a digital commodity 
cash or spot market, that is offered, solic-
ited, 
traded, 
facilitated, 
executed, 
cleared, reported, or otherwise dealt in— 
‘‘(I) on or subject to the rules of a 
registered entity or an entity that is 
required to be registered as a reg-
istered entity; or 
‘‘(II) by any other entity reg-
istered, or required to be registered, 
with the Commission. 
‘‘(ii) LIMITATIONS.—Clause (i) shall not 
apply with respect to custodial or deposi-
tory activities for a digital commodity, or 
custodial or depository activities for any 
promise or right to a future digital com-
modity, of an entity regulated by an ap-
propriate Federal banking agency or a 
State bank supervisor (within the mean-
ing of section 3 of the Federal Deposit In-
surance Act). 
‘‘(iii) 
MIXED
DIGITAL
ASSET
TRANS-
ACTIONS.— 
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355 
‘‘(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 
PLATFORM.—A mixed digital asset 
transaction that occurs on or sub-
ject to the rules of a registered 
entity or by any other entity reg-
istered with the Commission— 
‘‘(AA) shall not occur ex-
cept on or subject to the rules 
of a registered entity or by 
any other entity that is dually 
registered with the Commis-
sion and the Securities and 
Exchange Commission; and 
‘‘(BB) shall be subject to 
the jurisdiction of the Com-
mission and the Securities 
and Exchange Commission. 
‘‘(bb) OFF EXCHANGE.—A mixed 
digital asset transaction that does 
not occur on or subject to the 
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356 
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 Commis-
sion. 
‘‘(III) REPORTS
ON
MIXED
DIGITAL 
ASSET
TRANSACTIONS.—A digital asset 
issuer, related person, affiliated per-
son, or other person registered with 
the Securities and Exchange Commis-
sion that engages in a mixed digital 
asset transaction, shall, on request, 
open to inspection and examination 
by the Commodity Futures Trading 
Commission all books and records re-
lating to the mixed digital asset 
transaction, subject to the confiden-
tiality and disclosure requirements of 
section 8. 
‘‘(G) AGREEMENTS, CONTRACTS, AND TRANS-
ACTIONS IN STABLECOINS.— 
‘‘(i) TREATMENT OF PERMITTED PAYMENT 
STABLECOINS
ON
COMMISSION-REGISTERED 
ENTITIES.—Except as provided in clauses 
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357 
(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 of-
fered, offered to enter into, entered into, 
executed, confirmed the execution of, so-
licited, or accepted— 
‘‘(I) on or subject to the rules of a 
registered entity; or 
‘‘(II) by any other entity reg-
istered by the Commission. 
‘‘(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 accept-
ance of a cash or spot permitted payment 
stablecoin transaction on a registered en-
tity or other entity registered by the 
Commission with respect to requirements 
imposed with respect to— 
‘‘(I) recordkeeping; 
‘‘(II) custody; 
‘‘(III) segregation; 
‘‘(IV) reporting; 
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358 
‘‘(V) trading procedures and trade 
processing requirements; 
‘‘(VI) information sharing; 
‘‘(VII) conflicts of interest; 
‘‘(VIII) 
antifraud, 
antimanipulation, or false reporting; 
or 
‘‘(IX) any other transaction level 
requirement imposed on the reg-
istered entity or other entity reg-
istered 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 
appropriate in the public interest, 
and be consistent with the protection 
of customers. 
‘‘(iii) NO
AUTHORITY
OVER
PERMITTED 
PAYMENT
STABLECOINS.—Notwithstanding 
clause (ii), the Commission shall not 
make a rule or regulation, impose a re-
quirement or obligation on a registered 
entity or other entity registered by the 
Commission, or impose a requirement or 
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359 
obligation 
on 
a 
permitted 
payment 
stablecoin issuer, regarding the oper-
ation of a permitted payment stablecoin 
issuer or a permitted payment stablecoin, 
including a requirement or obligation re-
garding— 
‘‘(I) design; 
‘‘(II) structure; 
‘‘(III) issuance; 
‘‘(IV) redemption; 
‘‘(V) financial resources; 
‘‘(VI) collateral; or 
‘‘(VII) any other aspect of such an 
operation or such a stablecoin.’’. 
(d) 
CONFORMING
AMENDMENT.—Section 
2(a)(1)(A) of such Act (7 U.S.C. 2(a)(1)(A)) is 
amended in the 1st sentence by inserting 
‘‘subsection (c)(2)(F) of this section or’’ before 
‘‘section 19’’. 
SEC. 402. REQUIRING FUTURES COMMISSION MERCHANTS 
TO USE QUALIFIED DIGITAL COMMODITY 
CUSTODIANS. 
Section 4d of the Commodity Exchange 
Act (7 U.S.C. 6d) is amended— 
(1) in subsection (a)(2)— 
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361 
(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 participants’’ before ‘‘(in’’; 
(B) in paragraph (4)(B), by strik-
ing ‘‘1a(10)’’ and inserting ‘‘1a(9)’’; and 
(C) in paragraph (5), by adding at 
the end the following: 
‘‘(D) SPECIAL
RULES
FOR
DIGITAL 
COMMODITY CONTRACTS.—In certifying 
any new rule or rule amendment, or 
listing any new contract or instru-
ment, in connection with a contract 
of sale of a commodity for future de-
livery, option, swap, or other agree-
ment, contract, or transaction, that is 
based on or references a digital com-
modity, a registered entity shall make 
or rely on a certification under sub-
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362 
section 
(d) 
for 
the 
digital 
com-
modity.’’; and 
(4) by inserting after subsection (c) 
the following: 
‘‘(d) CERTIFICATIONS
FOR
DIGITAL
COM-
MODITY TRADING.— 
‘‘(1) 
IN
GENERAL.—Notwithstanding 
subsection (c), for the purposes of listing 
or offering a digital commodity for trad-
ing in a digital commodity cash or spot 
market, an eligible entity shall issue a 
written certification that the digital com-
modity meets the requirements of this 
Act (including regulations thereunder). 
‘‘(2) CONTENTS OF THE CERTIFICATION.— 
‘‘(A) IN
GENERAL.—In making a 
written certification under this para-
graph, the eligible entity shall furnish 
to the Commission— 
‘‘(i) an analysis of how the dig-
ital commodity meets the require-
ments of section 5i(c)(3); 
‘‘(ii) information about the 
digital commodity regarding— 
‘‘(I) its purpose and use; 
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363 
‘‘(II) its unit creation or 
release process; 
‘‘(III) its consensus mecha-
nism; 
‘‘(IV) its governance struc-
ture; 
‘‘(V) its participation and 
distribution; and 
‘‘(VI) its current and pro-
posed 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 en-
tity may rely on the records and dis-
closures of any relevant person reg-
istered with the Securities and Ex-
change Commission or other State or 
Federal agency. 
‘‘(3) MODIFICATIONS.— 
‘‘(A) IN GENERAL.—An eligible enti-
ty shall modify a certification made 
under paragraph (1) to— 
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364 
‘‘(i) account for significant 
changes in any information pro-
vided to the Commission 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.—Modifica-
tions required by this subsection 
shall be subject to the same dis-
approval and review process as a new 
certification under paragraphs (4) 
and (5). 
‘‘(4) DISAPPROVAL.— 
‘‘(A) IN GENERAL.—The written cer-
tification 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 regula-
tions thereunder. 
‘‘(B) 
ANALYSIS
REQUIRED.—The 
Commission shall include, with any 
findings referred to in subparagraph 
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365 
(A), a detailed analysis of the factors 
on which the decision was based. 
‘‘(C) PUBLIC
FINDINGS.—The Com-
mission shall make public any dis-
approval decision, and any related 
findings and analysis, made under 
this paragraph. 
‘‘(5) REVIEW.— 
‘‘(A) IN GENERAL.—Unless the Com-
mission makes a disapproval decision 
under paragraph (4), the written cer-
tification described in paragraph (1) 
shall become effective, pursuant to 
the certification by the eligible entity 
and notice of the certification to the 
public (in a manner determined by 
the Commission) on the date that is— 
‘‘(i) 20 business days after the 
date the Commission receives the 
certification (or such shorter pe-
riod as determined by the Com-
mission by rule or regulation), in 
the case of a digital commodity 
that has not been certified under 
this section or for which a certifi-
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366 
cation is being modified under 
paragraph (3); or 
‘‘(ii) 2 business days after the 
date the Commission receives the 
certification (or such shorter pe-
riod as determined by the Com-
mission by rule or regulation) for 
any digital commodity that has 
been certified under this section. 
‘‘(B) EXTENSIONS.—The time for 
consideration 
under 
subparagraph 
(A) may be extended through notice 
to the eligible entity that there are 
novel or complex issues that require 
additional time to analyze, that the 
explanation by the submitting eligible 
entity is inadequate, or of a potential 
inconsistency with this Act— 
‘‘(i) once, for 30 business days, 
through written notice to the eli-
gible entity by the Chairman; and 
‘‘(ii) once, for an additional 30 
business days, through written 
notice to the digital commodity 
exchange from the Commission 
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that includes a description of any 
deficiencies with the certification, 
including any— 
‘‘(I) 
novel 
or 
complex 
issues which require addi-
tional time to analyze; 
‘‘(II) missing information 
or inadequate explanations; 
or 
‘‘(III) potential inconsist-
encies with this Act. 
‘‘(6) 
CERTIFICATION
REQUIRED.—Not-
withstanding any other requirement of 
this Act, a registered entity or other enti-
ty registered with the Commission shall 
not list for trading, accept for clearing, 
offer to enter into, enter into, execute, 
confirm the execution of, or conduct any 
office or business anywhere in the United 
States, its territories or possessions, for 
the purpose of soliciting, or accepting 
any order for, or otherwise dealing in, 
any transaction in, or in connection with, 
a digital asset, unless a certification has 
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been made under this section for the dig-
ital asset. 
‘‘(7) ELIGIBLE ENTITY DEFINED.—In this 
subsection, 
the 
term 
‘eligible 
entity’ 
means a registered entity or group of reg-
istered 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 facil-
ity 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 
exchange. 
‘‘(B) APPLICATION.—A person desir-
ing to register as a digital commodity 
exchange shall submit to the Commis-
sion an application in such form and 
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containing such information as the 
Commission may require for the pur-
pose of making the determinations re-
quired for approval. 
‘‘(C) EXEMPTIONS.—A trading facil-
ity that offers or seeks to offer a cash 
or spot market in at least 1 digital 
commodity shall not be required to 
register under this section if the trad-
ing facility— 
‘‘(i) permits no more than a de 
minimis amount of trading activ-
ity; or 
‘‘(ii) serves only customers in 
a single State or territory. 
‘‘(2) ADDITIONAL REGISTRATIONS.— 
‘‘(A) WITH THE COMMISSION.— 
‘‘(i) IN GENERAL.—A registered 
digital commodity exchange may 
also register as— 
‘‘(I) a designated contract 
market; or 
‘‘(II) a swap execution fa-
cility. 
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‘‘(ii) 
RULES.—For 
an 
entity 
with multiple registrations under 
clause (i), the Commission— 
‘‘(I) shall prescribe rules 
to exempt the entity from du-
plicative, conflicting, or un-
duly burdensome provisions 
of this Act and the rules 
under this Act, to the extent 
such an exemption would fos-
ter the development of fair 
and orderly cash or spot mar-
kets 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, pre-
scribe rules to provide for 
portfolio margining, as may 
be necessary to protect mar-
ket participants, promote fair 
and equitable trading in dig-
ital commodity markets, and 
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promote responsible economic 
or financial innovation. 
‘‘(B) WITH THE SECURITIES AND EX-
CHANGE
COMMISSION.—A 
registered 
digital commodity exchange may reg-
ister with the Securities and Ex-
change Commission as a digital asset 
trading system to list or trade con-
tracts 
of 
sale 
for 
digital 
assets 
deemed securities. 
‘‘(C) WITH
A
REGISTERED
FUTURES 
ASSOCIATION.— 
‘‘(i) IN GENERAL.—A registered 
digital commodity exchange shall 
also be a member of a registered 
futures association and comply 
with rules related to such activ-
ity, if the registered digital com-
modity 
exchange 
accepts 
cus-
tomer funds required to be seg-
regated under subsection (d). 
‘‘(ii) RULEMAKING
REQUIRED.— 
The Commission shall require any 
registered 
futures 
association 
with a digital commodity ex-
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change as a member to provide 
such rules as may be necessary to 
further 
compliance 
with 
sub-
section (d), protect customers, 
and promote the public interest. 
‘‘(D) REGISTRATION
REQUIRED.—A 
person required to be registered as a 
digital commodity exchange under 
this section shall register with the 
Commission as such regardless of 
whether the person is registered as 
such with another State or Federal 
regulator. 
‘‘(b) TRADING.— 
‘‘(1) PROHIBITION ON CERTAIN TRADING 
PRACTICES.— 
‘‘(A) Section 4b shall apply to any 
agreement, contract, or transaction in 
a digital commodity as if the agree-
ment, contract, or transaction were a 
contract of sale of a commodity for 
future delivery. 
‘‘(B) Section 4c shall apply to any 
agreement, contract, or transaction in 
a digital commodity as if the agree-
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ment, contract, or transaction were a 
transaction involving the purchase or 
sale of a commodity for future deliv-
ery. 
‘‘(2) PROHIBITION
ON
ACTING
AS
A 
COUNTERPARTY.—A registered digital com-
modity 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 com-
modity exchange. 
‘‘(3) 
TRADING
SECURITIES.—A 
reg-
istered digital commodity exchange that 
is also registered with the Securities and 
Exchange Commission may offer a con-
tract of sale of a digital asset deemed a 
security. 
‘‘(4) RULES FOR CERTAIN DIGITAL ASSET 
SALES.—The digital commodity exchange 
shall have in place such rules as may be 
necessary to reasonably ensure the or-
derly sale of any unit of a digital com-
modity sold by a related person or an af-
filiated person. 
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‘‘(c) CORE PRINCIPLES
FOR DIGITAL COM-
MODITY EXCHANGES.— 
‘‘(1) COMPLIANCE
WITH
CORE
PRIN-
CIPLES.— 
‘‘(A) 
IN
GENERAL.—To 
be 
reg-
istered, and maintain registration, as 
a digital commodity exchange, a dig-
ital commodity exchange shall com-
ply with— 
‘‘(i) the core principles de-
scribed in this subsection; and 
‘‘(ii) any requirement that the 
Commission may impose by rule 
or regulation pursuant to section 
8a(5). 
‘‘(B) REASONABLE DISCRETION OF A 
DIGITAL COMMODITY EXCHANGE.—Unless 
otherwise determined by the Commis-
sion by rule or regulation, a digital 
commodity exchange described in 
subparagraph (A) shall have reason-
able discretion in establishing the 
manner in which the digital com-
modity exchange complies with the 
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core principles described in this sub-
section. 
‘‘(2) COMPLIANCE WITH RULES.—A dig-
ital commodity exchange shall— 
‘‘(A) establish and enforce compli-
ance with any rule of the digital com-
modity exchange, including— 
‘‘(i) the terms and conditions 
of the trades traded or processed 
on or through the digital com-
modity exchange; and 
‘‘(ii) any limitation on access 
to 
the 
digital 
commodity 
ex-
change; 
‘‘(B) establish and enforce trad-
ing, trade processing, and participa-
tion rules that will deter abuses and 
have the capacity to detect, inves-
tigate, and enforce those rules, in-
cluding means— 
‘‘(i) to provide market partici-
pants with impartial access to the 
market; and 
‘‘(ii) to capture information 
that may be used in establishing 
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whether rule violations have oc-
curred; and 
‘‘(C) establish rules governing the 
operation 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 
COMMODITIES.— 
‘‘(A) IN
GENERAL.—A digital com-
modity exchange shall permit trading 
only in a digital commodity that is 
not readily susceptible to manipula-
tion. 
‘‘(B) PUBLIC INFORMATION REQUIRE-
MENTS.— 
‘‘(i) 
IN
GENERAL.—A 
digital 
commodity exchange shall permit 
trading only in a digital com-
modity if the information re-
quired in clause (ii) is correct, 
current, and available to the pub-
lic. 
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‘‘(ii) REQUIRED INFORMATION.— 
With respect to a digital com-
modity and each blockchain sys-
tem to which the digital com-
modity relates for which the dig-
ital 
commodity 
exchange 
will 
make the digital commodity avail-
able to the customers of the dig-
ital commodity exchange, the in-
formation 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
HIS-
TORY.—A 
narrative 
descrip-
tion of the steps necessary to 
independently access, search, 
and verify the transaction his-
tory of any blockchain system 
to which the digital com-
modity relates. 
‘‘(III) DIGITAL
ASSET
ECO-
NOMICS.—A narrative descrip-
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tion of the purpose of any 
blockchain system to which 
the digital asset relates and 
the operation of any such 
blockchain 
system, 
includ-
ing— 
‘‘(aa) information ex-
plaining the launch and 
supply process, including 
the number of digital as-
sets to be issued in an ini-
tial allocation, 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 out-
standing; 
‘‘(bb) information de-
tailing any applicable con-
sensus 
mechanism 
or 
process 
for 
validating 
transactions, 
method 
of 
generating or mining dig-
ital assets, and any proc-
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ess for burning or destroy-
ing digital assets on the 
blockchain system; 
‘‘(cc) an explanation of 
governance 
mechanisms 
for implementing changes 
to the blockchain system 
or 
forming 
consensus 
among holders of the dig-
ital assets; and 
‘‘(dd) sufficient infor-
mation for a third party to 
create a tool for verifying 
the transaction history of 
the digital asset. 
‘‘(IV) ADDITIONAL INFORMA-
TION.—Such additional infor-
mation as the Commission 
may, by rule, determine to be 
necessary for a customer to 
understand the financial and 
operational risks of a digital 
commodity, and to be in the 
public interest or in further-
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ance of the requirements of 
this Act. 
‘‘(C) ADDITIONAL LISTING CONSIDER-
ATIONS.—In addition to the require-
ments of subparagraphs (A) and (B), a 
digital 
commodity 
exchange 
shall 
consider— 
‘‘(i) if a sufficient percentage 
of the units of the digital asset 
are units of a digital commodity 
to permit robust price discovery; 
‘‘(ii) if it is reasonably un-
likely that the transaction history 
can be fraudulently altered by 
any person or group of persons 
acting collectively; 
‘‘(iii) if the operating struc-
ture and system of the digital 
commodity is secure from cyber-
security threats; 
‘‘(iv) if the functionality of the 
digital commodity will protect 
holders from operational failures; 
‘‘(v) if sufficient public infor-
mation 
about 
the 
operation, 
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functionality, and use of the dig-
ital commodity is available; and 
‘‘(vi) any other factor which 
the Commission has, by rule, de-
termined to be in the public inter-
est or in furtherance of the re-
quirements 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 restricted dig-
ital asset. 
‘‘(4) TREATMENT OF CUSTOMER ASSETS.— 
A digital commodity exchange shall es-
tablish standards and procedures that 
are designed to protect and ensure the 
safety of customer money, assets, and 
property. 
‘‘(5) 
MONITORING
OF
TRADING
AND 
TRADE PROCESSING.— 
‘‘(A) IN
GENERAL.—A digital com-
modity exchange shall provide a com-
petitive, open, and efficient market 
and mechanism for executing trans-
actions that protects the price dis-
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covery process of trading on the ex-
change. 
‘‘(B) PROTECTION OF MARKETS AND 
MARKET PARTICIPANTS.—A digital com-
modity exchange shall establish and 
enforce rules— 
‘‘(i) to protect markets and 
market participants from abusive 
practices committed by any party, 
including abusive practices com-
mitted by a party acting as an 
agent for a participant; and 
‘‘(ii) to promote fair and equi-
table trading on the exchange. 
‘‘(C) TRADING PROCEDURES.—A dig-
ital commodity exchange shall— 
‘‘(i) 
establish 
and 
enforce 
rules or terms and conditions de-
fining, or specifications detail-
ing— 
‘‘(I) trading procedures to 
be used in entering and exe-
cuting orders traded on or 
through the facilities of the 
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383 
digital commodity exchange; 
and 
‘‘(II) procedures for trade 
processing of digital commod-
ities on or through the facili-
ties of the digital commodity 
exchange; and 
‘‘(ii) monitor trading in digital 
commodities to prevent manipula-
tion, price distortion, and disrup-
tions of the delivery or cash set-
tlement process through surveil-
lance, compliance, and discipli-
nary practices 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 information to perform 
any of the functions described in this 
section; 
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‘‘(B) provide the information to 
the Commission on request; and 
‘‘(C) have the capacity to carry 
out such international information- 
sharing agreements as the Commis-
sion may require. 
‘‘(7) EMERGENCY AUTHORITY.—A digital 
commodity exchange shall adopt rules to 
provide for the exercise of emergency au-
thority, in consultation or cooperation 
with the Commission or a registered enti-
ty, as is necessary and appropriate, in-
cluding the authority to facilitate the liq-
uidation or transfer of open positions in 
any digital commodity or to suspend or 
curtail trading in a digital commodity. 
‘‘(8) TIMELY
PUBLICATION
OF
TRADING 
INFORMATION.— 
‘‘(A) IN
GENERAL.—A digital com-
modity exchange shall make public 
timely information on price, trading 
volume, and other trading data on 
digital commodities to the extent pre-
scribed by the Commission. 
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385 
‘‘(B) CAPACITY
OF
DIGITAL
COM-
MODITY
EXCHANGE.—A 
digital 
com-
modity exchange shall have the ca-
pacity to electronically capture and 
transmit trade information with re-
spect to transactions executed on the 
exchange. 
‘‘(9) RECORDKEEPING AND REPORTING.— 
‘‘(A) IN
GENERAL.—A digital com-
modity exchange shall— 
‘‘(i) maintain records of all ac-
tivities relating to the business of 
the facility, including 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 Commission, such informa-
tion as the Commission deter-
mines to be necessary or appro-
priate for the Commission to per-
form the duties of the Commis-
sion under this Act; and 
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386 
‘‘(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.—Sub-
ject to section 8, and on request, the 
Commission shall share information 
collected 
under 
subparagraph 
(A) 
with— 
‘‘(i) the Board; 
‘‘(ii) the Securities and Ex-
change Commission; 
‘‘(iii) each appropriate Fed-
eral banking agency; 
‘‘(iv) each appropriate State 
bank 
supervisor 
(within 
the 
meaning of section 3 of the Fed-
eral Deposit Insurance Act); 
‘‘(v) the Financial Stability 
Oversight Council; 
‘‘(vi) the Department of Jus-
tice; and 
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‘‘(vii) any other person that 
the Commission determines to be 
appropriate, including— 
‘‘(I) foreign financial su-
pervisors (including foreign 
futures authorities); 
‘‘(II) 
foreign 
central 
banks; and 
‘‘(III) foreign ministries. 
‘‘(C) 
CONFIDENTIALITY
AGREE-
MENT.—Before the Commission may 
share information with any entity de-
scribed in subparagraph (B), the 
Commission shall receive a written 
agreement from the entity stating 
that the entity shall abide by the con-
fidentiality 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 Commission (including 
any designee of the Commission) in-
formation under subparagraph (A) in 
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388 
such form and at such frequency as is 
required by the Commission. 
‘‘(10) ANTITRUST CONSIDERATIONS.—Un-
less necessary or appropriate to achieve 
the purposes of this Act, a digital com-
modity exchange shall not— 
‘‘(A) adopt any rules or take any 
actions that result in any unreason-
able restraint of trade; or 
‘‘(B) impose any material anti-
competitive burden on trading. 
‘‘(11) CONFLICTS OF INTEREST.—A reg-
istered digital commodity exchange shall 
implement 
conflict-of-interest 
systems 
and procedures that— 
‘‘(A) establish structural and insti-
tutional safeguards— 
‘‘(i) to minimize conflicts of in-
terest that might potentially bias 
the judgment or supervision of 
the digital commodity exchange 
and contravene the principles of 
fair and equitable trading and the 
business conduct standards de-
scribed in this Act, including con-
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389 
flicts arising out of transactions 
or arrangements with affiliates 
(including affiliates engaging in 
digital 
commodity 
activities) 
which may include information 
partitions and the legal separa-
tion of different persons or enti-
ties involved in digital commodity 
activities; and 
‘‘(ii) to ensure that the activi-
ties of any person within the dig-
ital commodity exchange or any 
affiliated entity relating to re-
search or analysis of the price or 
market for any digital commodity 
or acting in a role of providing 
dealing, brokering, or advising 
activities are separated by appro-
priate 
informational 
partitions 
within the digital commodity ex-
change or any affiliated entity 
from the review, pressure, or 
oversight of persons whose in-
volvement in pricing, trading, ex-
change, 
or 
clearing 
activities 
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390 
might potentially bias their judg-
ment or supervision and con-
travene the core principles of 
open access and the business con-
duct standards described in this 
Act; and 
‘‘(B) address such other issues as 
the Commission determines to be ap-
propriate. 
‘‘(12) FINANCIAL RESOURCES.— 
‘‘(A) IN
GENERAL.—A digital com-
modity exchange shall have adequate 
financial, operational, and manage-
rial resources, as determined by the 
Commission, to discharge each re-
sponsibility of the digital commodity 
exchange. 
‘‘(B) MINIMUM
AMOUNT
OF
FINAN-
CIAL RESOURCES.—A digital commodity 
exchange shall possess financial re-
sources that, at a minimum, exceed 
the total amount that would enable 
the digital commodity exchange to 
conduct an orderly wind-down of its 
activities. 
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‘‘(13) 
DISCIPLINARY
PROCEDURES.—A 
digital commodity exchange shall estab-
lish and enforce disciplinary procedures 
that authorize the digital commodity ex-
change to discipline, suspend, or expel 
members or market participants that vio-
late the rules of the digital commodity ex-
change, or similar methods for per-
forming the same functions, including 
delegation of the functions to third par-
ties. 
‘‘(14) 
GOVERNANCE
FITNESS
STAND-
ARDS.— 
‘‘(A) 
GOVERNANCE
ARRANGE-
MENTS.—A 
digital 
commodity 
ex-
change shall establish governance ar-
rangements that are transparent to 
fulfill public interest requirements. 
‘‘(B) FITNESS STANDARDS.—A digital 
commodity exchange shall establish 
and 
enforce 
appropriate 
fitness 
standards for— 
‘‘(i) directors; and 
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‘‘(ii) any individual or entity 
with direct access to, or control 
of, customer assets. 
‘‘(15) SYSTEM
SAFEGUARDS.—A digital 
commodity exchange shall— 
‘‘(A) establish and maintain a pro-
gram of risk analysis and oversight to 
identify and minimize sources of 
operational 
and 
security 
risks, 
through the development of appro-
priate controls and procedures, and 
automated systems, that— 
‘‘(i) are reliable and secure; 
and 
‘‘(ii) have adequate scalable 
capacity; 
‘‘(B) establish and maintain emer-
gency procedures, backup facilities, 
and a plan for disaster recovery that 
allow for— 
‘‘(i) the timely recovery and 
resumption of operations; and 
‘‘(ii) the fulfillment of the re-
sponsibilities and obligations of 
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the digital commodity exchange; 
and 
‘‘(C) periodically conduct tests to 
verify that the backup resources of 
the digital commodity exchange are 
sufficient to ensure continued— 
‘‘(i) 
order 
processing 
and 
trade matching; 
‘‘(ii) price reporting; 
‘‘(iii) market surveillance; and 
‘‘(iv) maintenance of a com-
prehensive and accurate audit 
trail. 
‘‘(d) HOLDING OF CUSTOMER ASSETS.— 
‘‘(1) IN GENERAL.—A digital commodity 
exchange shall hold customer money, as-
sets, and property in a manner to mini-
mize the risk of loss to the customer or 
unreasonable delay in the access to the 
money, assets, and property of the cus-
tomer. 
‘‘(A) SEGREGATION OF FUNDS.— 
‘‘(i) 
IN
GENERAL.—A 
digital 
commodity exchange shall treat 
and deal with all money, assets, 
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and property that is received by 
the digital commodity exchange, 
or accrues to a customer as the 
result of trading in digital com-
modities, as belonging to the cus-
tomer. 
‘‘(ii) 
COMMINGLING
PROHIB-
ITED.—Money, assets, and prop-
erty of a customer described in 
clause (i) shall be separately ac-
counted for and shall not be com-
mingled with the funds of the dig-
ital commodity exchange or be 
used to margin, secure, or guar-
antee 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 com-
modity exchange described in 
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subparagraph (A) may, for 
convenience, be commingled 
and deposited in the same ac-
count or accounts with any 
bank, trust company, deriva-
tives clearing organization, or 
qualified digital commodity 
custodian. 
‘‘(II) 
WITHDRAWAL.—Not-
withstanding 
subparagraph 
(A), such share of the money, 
assets, 
and 
property 
de-
scribed in item (aa) as in the 
normal 
course 
of 
business 
shall be necessary to margin, 
guarantee, 
secure, 
transfer, 
adjust, or settle a contract of 
sale of a digital commodity 
with a registered entity may 
be withdrawn and applied to 
such purposes, including the 
payment of commissions, bro-
kerage, interest, taxes, stor-
age, and other charges, law-
fully accruing in connection 
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with the contract of sale of a 
digital commodity. 
‘‘(ii) COMMISSION ACTION.—Not-
withstanding subparagraph (A), 
in accordance with such terms 
and conditions as the Commission 
may prescribe by rule, regulation, 
or order, any money, assets, or 
property of the customers of a 
digital commodity exchange de-
scribed in subparagraph (A) may 
be commingled and deposited in 
customer accounts with any other 
money, assets, or property re-
ceived by the digital commodity 
exchange and required by the 
Commission to be separately ac-
counted for and treated and dealt 
with as belonging to the customer 
of 
the 
digital 
commodity 
ex-
change. 
‘‘(2) PERMITTED
INVESTMENTS.—Money 
described in subparagraph (A) may be in-
vested in obligations of the United States, 
in general obligations of any State or of 
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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 Com-
mission may by rule or regulation pre-
scribe, and such investments shall be 
made in accordance with such rules and 
regulations and subject to such condi-
tions as the Commission may prescribe. 
‘‘(3) CUSTOMER
PROTECTION
DURING 
BANKRUPTCY.— 
‘‘(A) CUSTOMER PROPERTY.—All as-
sets held on behalf of a customer by a 
digital commodity exchange, and all 
money, assets, and property of any 
customer received by a digital com-
modity exchange registered under 
section 5i of this Act for trading or 
custody, or to facilitate, margin, guar-
antee, or secure contracts of sale of a 
digital commodity (including money, 
assets, or property accruing to the 
customer as the result of the trans-
actions), shall be considered cus-
tomer property for purposes of sec-
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tion 761 of title 11, United States 
Code. 
‘‘(B) TRANSACTIONS.—A transaction 
involving a unit of a digital com-
modity occurring on or subject to the 
rules of a digital commodity exchange 
shall be considered 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 the purposes of the defi-
nition of a ‘commodity contract’ in 
section 761 of title 11, United States 
Code. 
‘‘(C) EXCHANGES.—A digital com-
modity exchange shall be considered 
a futures commission merchant for 
purposes of section 761 of title 11, 
United States Code. 
‘‘(4) MISUSE OF CUSTOMER PROPERTY.— 
‘‘(A) IN GENERAL.—It shall be un-
lawful— 
‘‘(i) for any digital commodity 
exchange that has received any 
customer money, assets, or prop-
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erty for custody to dispose of, or 
use any such money, assets, or 
property as belonging to the dig-
ital commodity exchange; or 
‘‘(ii) for any other person, in-
cluding any depository, other dig-
ital commodity exchange, or dig-
ital commodity custodian that has 
received any customer money, as-
sets, or property for deposit, to 
hold, dispose of, or use any such 
money, assets, or property, or 
property, as belonging to the de-
positing digital commodity ex-
change or any person other than 
the customers of the digital com-
modity exchange. 
‘‘(B) USE
FURTHER
DEFINED.—For 
purposes of this section, ‘use’ of a dig-
ital commodity includes utilizing any 
unit of a digital asset to participate in 
a blockchain service defined in para-
graph (5) or a decentralized govern-
ance system associated with the dig-
ital commodity or the blockchain sys-
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tem to which the digital commodity 
relates in any manner other than that 
expressly directed by the customer 
from whom the unit of a digital com-
modity was received. 
‘‘(5) 
PARTICIPATION
IN
BLOCKCHAIN 
SERVICES.— 
‘‘(A) 
IN
GENERAL.—A 
customer 
shall have the right to waive the re-
strictions in paragraph (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 dig-
ital commodities removed from seg-
regation 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 removed from seg-
regation in subparagraph (A) relates. 
‘‘(C) LIMITATIONS.—The Commis-
sion may, by rule, establish notice 
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and disclosure requirements, and any 
other limitations and rules related to 
the waiving of any restrictions under 
this paragraph that are reasonably 
necessary to protect customers, in-
cluding eligible contract participants, 
non-eligible contract participants, or 
any other class of customers. 
‘‘(D) 
BLOCKCHAIN
SERVICE
DE-
FINED.—In 
this 
subparagraph, 
the 
term ‘blockchain service’ means any 
activity relating to validating trans-
actions on a blockchain system, pro-
viding security for a blockchain sys-
tem, or other similar activity re-
quired for the ongoing operation of a 
blockchain system. 
‘‘(e) MARKET ACCESS REQUIREMENTS.— 
‘‘(1) IN GENERAL.—A digital commodity 
exchange shall require any person who is 
not an eligible contract participant to ac-
cess trading on the exchange through a 
digital commodity broker. 
‘‘(2) AFFILIATED COMMODITY BROKERS.— 
A registered digital commodity exchange 
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may maintain an affiliated digital com-
modity broker to facilitate access to the 
digital commodity exchange, if— 
‘‘(A) no other digital commodity 
brokers are permitted to facilitate ac-
cess to the exchange; 
‘‘(B) the affiliated digital com-
modity broker limits its activities 
only to providing customer access to 
the digital commodity exchange; and 
‘‘(C) the affiliated digital com-
modity broker is not also registered 
as a digital commodity dealer. 
‘‘(3) DIRECT ACCESS FOR ELIGIBLE CON-
TRACT PARTICIPANTS.—Nothing in this sec-
tion shall prohibit a digital commodity 
exchange in compliance with this section 
from permitting direct access for eligible 
contract participants. 
‘‘(4) ADDITIONAL REQUIREMENTS.— 
‘‘(A) IN
GENERAL.—The Commis-
sion may, by rule, impose any addi-
tional requirements related to the op-
erations and activities of the digital 
commodity exchange and the affili-
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ated digital commodity broker nec-
essary to protect market participants, 
promote fair and equitable trading on 
the digital commodity exchange, and 
promote responsible economic or fi-
nancial innovation. 
‘‘(B) DELEGATION
OF
AUTHORITY.— 
The Commission may delegate to a 
registered futures association such 
oversight 
and 
regulatory 
require-
ments as the Commission determines 
are necessary to— 
‘‘(i) supervise the activities of 
the digital commodity exchange 
and an affiliated digital com-
modity broker; and 
‘‘(ii) protect market partici-
pants, promote fair and equitable 
trading on the digital commodity 
exchange, and promote respon-
sible economic or financial inno-
vation. 
‘‘(f) DESIGNATION OF CHIEF COMPLIANCE OF-
FICER.— 
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‘‘(1) IN GENERAL.—A digital commodity 
exchange shall designate an individual to 
serve as a chief compliance officer. 
‘‘(2) DUTIES.—The chief compliance of-
ficer shall— 
‘‘(A) report directly to the board 
or to the senior officer of the ex-
change; 
‘‘(B) review compliance with the 
core principles in this subsection; 
‘‘(C) in consultation with the 
board of the exchange, a body per-
forming a function similar to that of a 
board, or the senior officer of the ex-
change, resolve any conflicts of inter-
est that may arise; 
‘‘(D) establish and administer the 
policies and procedures required to 
be established pursuant to this sec-
tion; 
‘‘(E) ensure compliance with this 
Act and the rules and regulations 
issued under this Act, including rules 
prescribed by the Commission pursu-
ant to this section; and 
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‘‘(F) establish procedures for the 
remediation of noncompliance issues 
found during compliance office re-
views, look backs, internal or exter-
nal audit findings, self-reported er-
rors, 
or 
through 
validated 
com-
plaints. 
‘‘(3) REQUIREMENTS FOR PROCEDURES.— 
In establishing procedures under para-
graph (2)(F), the chief compliance officer 
shall design the procedures to establish 
the handling, management response, re-
mediation, retesting, and closing of non-
compliance issues. 
‘‘(4) ANNUAL REPORTS.— 
‘‘(A) IN
GENERAL.—In accordance 
with rules prescribed by the Commis-
sion, the chief compliance officer 
shall annually prepare and sign a re-
port that contains a description of— 
‘‘(i) the compliance of the dig-
ital commodity exchange with 
this Act; and 
‘‘(ii) the policies and proce-
dures, including the code of eth-
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ics and conflict of interest poli-
cies, of the digital commodity ex-
change. 
‘‘(B) 
REQUIREMENTS.—The 
chief 
compliance officer shall— 
‘‘(i) submit each report de-
scribed in subparagraph (A) with 
the appropriate financial report 
of 
the 
digital 
commodity 
ex-
change that is required to be sub-
mitted to the Commission pursu-
ant to this section; and 
‘‘(ii) include in the report a 
certification that, under penalty 
of law, the report is accurate and 
complete. 
‘‘(g) APPOINTMENT OF TRUSTEE.— 
‘‘(1) IN
GENERAL.—If a proceeding 
under section 5e results in the suspen-
sion or revocation of the registration of a 
digital commodity exchange, or if a dig-
ital commodity exchange withdraws from 
registration, the Commission, on notice 
to the digital commodity exchange, may 
apply to the appropriate United States 
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district court where the digital com-
modity exchange is located for the ap-
pointment 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 
jurisdiction over the digital com-
modity exchange and the records and 
assets of the digital commodity ex-
change, wherever located; and 
‘‘(B) if the court takes jurisdiction 
under subparagraph (A), the court 
shall appoint the Commission, or a 
person designated by the Commis-
sion, as trustee with power to take 
possession and continue to operate or 
terminate the operations of the dig-
ital commodity exchange in an or-
derly manner for the protection of 
customers subject to such terms and 
conditions as the court may pre-
scribe. 
‘‘(h) QUALIFIED DIGITAL COMMODITY CUSTO-
DIAN.—A digital commodity exchange shall 
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ulation regarding the transactions, posi-
tions, and financial condition of the dig-
ital commodity broker or digital com-
modity dealer, respectively; 
‘‘(2) shall keep books and records in 
such form and manner and for such pe-
riod as may be prescribed by the Com-
mission 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 dig-
ital commodity broker and registered dig-
ital commodity dealer shall maintain 
daily trading records of the transactions 
of the digital commodity broker or digital 
commodity dealer, respectively, and all 
related records (including related for-
ward or derivatives transactions) and re-
corded communications, including elec-
tronic mail, instant messages, and record-
ings of telephone calls, for such period as 
the Commission may require by rule or 
regulation. 
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‘‘(2) INFORMATION REQUIREMENTS.—The 
daily trading records shall include such 
information as the Commission shall re-
quire by rule or regulation. 
‘‘(3) 
COUNTERPARTY
RECORDS.—Each 
registered digital commodity broker and 
registered digital commodity dealer shall 
maintain daily trading records for each 
customer or counterparty in a manner 
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 conducting com-
prehensive and accurate trade recon-
structions. 
‘‘(h) BUSINESS CONDUCT STANDARDS.— 
‘‘(1) IN GENERAL.—Each registered dig-
ital commodity broker and registered dig-
ital commodity dealer shall conform with 
such business conduct standards as the 
Commission, by rule or regulation, pre-
scribes related to— 
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‘‘(A) report directly to the board 
or to the senior officer of the reg-
istered digital commodity broker or 
registered digital commodity dealer; 
‘‘(B) review the compliance of the 
registered digital commodity broker 
or registered digital commodity deal-
er with respect to the registered dig-
ital commodity broker and registered 
digital 
commodity 
dealer 
require-
ments described in this section; 
‘‘(C) in consultation with the 
board of directors, a body performing 
a function similar to the board, or the 
senior officer of the organization, re-
solve any conflicts of interest that 
may arise; 
‘‘(D) be responsible for admin-
istering each policy and procedure 
that is required to be established pur-
suant to this section; 
‘‘(E) ensure compliance with this 
Act (including regulations), including 
each rule prescribed by the Commis-
sion under this section; 
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