US
Us Congress House Bill HB4763

Us Congress 2023-2024 Regular Session

Us Congress House Bill HB4763 Compare Versions

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1+IB
2+Union Calendar No. 401
13 118THCONGRESS
24 2
35 DSESSION H. R. 4763
4-AN ACT
6+[Report No. 118–484, Parts I and II]
7+To provide for a system of regulation of digital assets by the Commodity
8+Futures Trading Commission and the Securities and Exchange Commis-
9+sion, and for other purposes.
10+IN THE HOUSE OF REPRESENTATIVES
11+JULY20, 2023
12+Mr. T
13+HOMPSONof Pennsylvania (for himself, Mr. HILL, Mr. JOHNSONof
14+South Dakota, Mr. D
15+AVIDSON, and Mr. EMMER) introduced the following
16+bill; which was referred to the Committee on Financial Services, and in
17+addition to the Committee on Agriculture, for a period to be subsequently
18+determined by the Speaker, in each case for consideration of such provi-
19+sions as fall within the jurisdiction of the committee concerned
20+M
21+AY6, 2024
22+Additional sponsors: Mr. M
23+OLINARO, Mr. CUELLAR, Mr. NICKEL, Mr. CURTIS,
24+Mr. B
25+ANKS, Mr. MCHENRY, and Mr. TORRESof New York
26+M
27+AY6, 2024
28+Reported from the Committee on Agriculture with an amendment
29+[Strike out all after the enacting clause and insert the part printed in italic]
30+MAY6, 2024
31+Reported from the Committee on Financial Services with an amendment; com-
32+mitted to the Committee of the Whole House on the State of the Union
33+and ordered to be printed
34+[Strike out all after the enacting clause and insert the part printed in boldface roman]
35+[For text of introduced bill, see copy of bill as introduced on July 20, 2023]
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38+•HR 4763 RH
39+A BILL
540 To provide for a system of regulation of digital assets by
641 the Commodity Futures Trading Commission and the
742 Securities and Exchange Commission, and for other pur-
843 poses.
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947 Be it enacted by the Senate and House of Representa-1
10-tives of the United States of America in Congress assembled, 2 2
11-•HR 4763 EH
12-SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 1
48+tives of the United States of America in Congress assembled, 2
49+SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 3
1350 (a) S
14-HORTTITLE.—This Act may be cited as the 2
15-‘‘Financial Innovation and Technology for the 21st Cen-3
16-tury Act’’. 4
51+HORTTITLE.—This Act may be cited as the ‘‘Fi-4
52+nancial Innovation and Technology for the 21st Century 5
53+Act’’. 6
1754 (b) T
18-ABLE OFCONTENTS.—The table of contents for 5
19-this Act is as follows: 6
55+ABLE OFCONTENTS.—The table of contents for 7
56+this Act is as follows: 8
2057 Sec. 1. Short title; table of contents.
2158 TITLE I—DEFINITIONS; RULEMAKING; NOTICE OF INTENT TO
2259 REGISTER
2360 Sec. 101. Definitions under the Securities Act of 1933.
24-Sec. 102. Definitions under the Securities Exchange Act of 1934.
25-Sec. 103. Definitions under the Commodity Exchange Act.
26-Sec. 104. Definitions under this Act.
27-Sec. 105. Rulemakings.
28-Sec. 106. Notice of intent to register for digital commodity exchanges, brokers,
61+Sec. 102. Definitions under the Commodity Exchange Act.
62+Sec. 103. Definitions under this Act.
63+Sec. 104. Joint rulemakings.
64+Sec. 105. Notice of intent to register for digital commodity exchanges, brokers,
2965 and dealers.
30-Sec. 107. Notice of intent to register for digital asset brokers, dealers, and
31-trading systems.
32-Sec. 108. Commodity Exchange Act savings provisions.
33-Sec. 109. Administrative requirements.
34-Sec. 110. International harmonization.
35-Sec. 111. Implementation.
36-Sec. 112. Application of the Bank Secrecy Act.
37-TITLE II—CLARITY FOR ASSETS OFFERED AS PART OF AN
38-INVESTMENT CONTRACT
39-Sec. 201. Short title.
40-Sec. 202. Treatment of investment contract assets.
41-TITLE III—OFFERS AND SALES OF DIGITAL ASSETS
42-Sec. 301. Exempted transactions in digital assets.
43-Sec. 302. Requirements for offers and sales of certain digital assets.
44-Sec. 303. Enhanced disclosure requirements.
45-Sec. 304. Certification of certain digital assets.
46-Sec. 305. Effective date.
66+Sec. 106. Notice of intent to register for digital asset brokers, dealers, and trading
67+systems.
68+Sec. 107. Commodity Exchange Act savings provisions.
69+Sec. 108. International harmonization.
70+Sec. 109. Implementation.
71+TITLE II—DIGITAL ASSET EXEMPTIONS
72+Sec. 201. Exempted transactions in digital assets.
73+Sec. 202. Requirements to transact in certain digital assets.
74+Sec. 203. Enhanced disclosure requirements.
75+Sec. 204. Certification of certain digital assets.
76+Sec. 205. Effective date.
77+TITLE III—REGISTRATION FOR DIGITAL ASSET INTERMEDIARIES
78+AT THE SECURITIES AND EXCHANGE COMMISSION
79+Sec. 301. Treatment of digital commodities and other digital assets.
80+Sec. 302. Antifraud authority over permitted payment stablecoins.
81+Sec. 303. Registration of digital asset trading systems.
82+Sec. 304. Requirements for digital asset trading systems.
83+Sec. 305. Registration of digital asset brokers and digital asset dealers.
84+Sec. 306. Requirements of digital asset brokers and digital asset dealers.
85+Sec. 307. Rules related to conflicts of interest.
86+Sec. 308. Treatment of certain digital assets in connection with federally regu-
87+lated intermediaries.
88+Sec. 309. Dual registration.
89+Sec. 310. Exclusion for ancillary activities.
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93+Sec. 311. Registration and requirements for notice-registered digital asset clearing
94+agencies.
95+Sec. 312. Treatment of custody activities by banking institutions.
4796 TITLE IV—REGISTRATION FOR DIGITAL ASSET INTERMEDIARIES
48-AT THE SECURITIES AND EXCHANGE COMMISSION
49-Sec. 401. Treatment of digital commodities and other digital assets.
50-Sec. 402. Authority over permitted payment stablecoins and restricted digital
51-assets.
52-Sec. 403. Registration of digital asset trading systems.
53-Sec. 404. Requirements for digital asset trading systems.
54-Sec. 405. Registration of digital asset brokers and digital asset dealers.
55-Sec. 406. Requirements of digital asset brokers and digital asset dealers. 3
56-•HR 4763 EH
57-Sec. 407. Rules related to conflicts of interest.
58-Sec. 408. Treatment of certain digital assets in connection with federally regu-
59-lated intermediaries.
60-Sec. 409. Exclusion for decentralized finance activities.
61-Sec. 410. Registration and requirements for notice-registered digital asset
62-clearing agencies.
63-Sec. 411. Treatment of custody activities by banking institutions.
64-Sec. 412. Effective date; administration.
65-Sec. 413. Discretionary Surplus Fund.
66-Sec. 414. Studies on foreign adversary participation.
67-TITLE V—REGISTRATION FOR DIGITAL ASSET INTERMEDIARIES
6897 AT THE COMMODITY FUTURES TRADING COMMISSION
69-Sec. 501. Commission jurisdiction over digital commodity transactions.
70-Sec. 502. Requiring futures commission merchants to use qualified digital com-
98+Sec. 401. Commission jurisdiction over digital commodity transactions.
99+Sec. 402. Requiring futures commission merchants to use qualified digital com-
71100 modity custodians.
72-Sec. 503. Trading certification and approval for digital commodities.
73-Sec. 504. Registration of digital commodity exchanges.
74-Sec. 505. Qualified digital commodity custodians.
75-Sec. 506. Registration and regulation of digital commodity brokers and dealers.
76-Sec. 507. Registration of associated persons.
77-Sec. 508. Registration of commodity pool operators and commodity trading ad-
78-visors.
79-Sec. 509. Exclusion for decentralized finance activities.
80-Sec. 510. Funding for implementation and enforcement.
81-Sec. 511. Effective date.
82-Sec. 512. Sense of the Congress.
83-TITLE VI—INNOVATION AND TECHNOLOGY IMPROVEMENTS
84-Sec. 601. Findings; sense of Congress.
85-Sec. 602. Codification of the SEC Strategic Hub for Innovation and Financial
101+Sec. 403. Trading certification and approval for digital commodities.
102+Sec. 404. Registration of digital commodity exchanges.
103+Sec. 405. Qualified digital commodity custodians.
104+Sec. 406. Registration and regulation of digital commodity brokers and dealers.
105+Sec. 407. Registration of associated persons.
106+Sec. 408. Registration of commodity pool operators and commodity trading advi-
107+sors.
108+Sec. 409. Exclusion for ancillary activities.
109+Sec. 410. Funding for implementation, administration, and enforcement.
110+Sec. 411. Effective date.
111+TITLE V—INNOVATION AND TECHNOLOGY IMPROVEMENTS
112+Sec. 501. Codification of the SEC Strategic Hub for Innovation and Financial
86113 Technology.
87-Sec. 603. Codification of LabCFTC.
88-Sec. 604. CFTC-SEC Joint Advisory Committee on Digital Assets.
89-Sec. 605. Study on decentralized finance.
90-Sec. 606. Study on non-fungible digital assets.
91-Sec. 607. Study on expanding financial literacy amongst digital asset holders.
92-Sec. 608. Study on financial market infrastructure improvements.
93-TITLE I—DEFINITIONS; RULE-1
114+Sec. 502. Codification of LabCFTC.
115+Sec. 503. CFTC-SEC Joint Advisory Committee on Digital Assets.
116+Sec. 504. Modernization of the Securities and Exchange Commission mission.
117+Sec. 505. Study on decentralized finance.
118+Sec. 506. Study on non-fungible digital assets.
119+Sec. 507. Study on financial market infrastructure improvements.
120+TITLE I.—DEFINITIONS; RULE-1
94121 MAKING; NOTICE OF INTENT 2
95122 TO REGISTER 3
96123 SEC. 101. DEFINITIONS UNDER THE SECURITIES ACT OF 4
97124 1933. 5
98125 Section 2(a) of the Securities Act of 1933 (15 U.S.C. 6
99-77b(a)) is amended by adding at the end the following: 7 4
100-•HR 4763 EH
101-‘‘(20) AFFILIATED PERSON.— 1
126+77b(a)) is amended by adding at the end the following: 7
127+‘‘(20) A
128+FFILIATED PERSONS.—The term ‘affili-8
129+ated person’ means a person (including a related per-9
130+son) that— 10
131+‘‘(A) with respect to a digital asset issuer— 11
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135+‘‘(i) directly, or indirectly through one 1
136+or more intermediaries, controls, or is con-2
137+trolled by, or is under common control with, 3
138+such digital asset issuer; and 4
139+‘‘(ii) was described under clause (i) at 5
140+any point in the previous 3-month period; 6
141+or 7
142+‘‘(B) with respect to any digital asset— 8
143+‘‘(i) beneficially owns 5 percent or 9
144+more of the units of such digital asset that 10
145+are then outstanding; and 11
146+‘‘(ii) was described under clause (i) at 12
147+any point in the previous 3-month period. 13
148+‘‘(21) B
149+LOCKCHAIN.—The term ‘blockchain’ 14
150+means any technology— 15
151+‘‘(A) where data is— 16
152+‘‘(i) shared across a network to create 17
153+a public ledger of verified transactions or 18
154+information among network participants; 19
155+‘‘(ii) linked using cryptography to 20
156+maintain the integrity of the public ledger 21
157+and to execute other functions; and 22
158+‘‘(iii) distributed among network par-23
159+ticipants in an automated fashion to con-24
160+currently update network participants on 25
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164+the state of the public ledger and any other 1
165+functions; and 2
166+‘‘(B) composed of source code that is pub-3
167+licly available. 4
168+‘‘(22) B
169+LOCKCHAIN PROTOCOL .—The term 5
170+‘blockchain protocol’ means any executable software 6
171+deployed to a blockchain composed of source code that 7
172+is publicly available and accessible, including a smart 8
173+contract or any network of smart contracts. 9
174+‘‘(23) B
175+LOCKCHAIN SYSTEM .—The term 10
176+‘blockchain system’ means any blockchain or 11
177+blockchain protocol. 12
178+‘‘(24) D
179+ECENTRALIZED NETWORK .—With respect 13
180+to a blockchain system to which a digital asset relates, 14
181+the term ‘decentralized network’ means the following 15
182+conditions are met: 16
183+‘‘(A) During the previous 12-month period, 17
184+no person— 18
185+‘‘(i) had the unilateral authority, di-19
186+rectly or indirectly, through any contract, 20
187+arrangement, understanding, relationship, 21
188+or otherwise, to control or materially alter 22
189+the functionality or operation of the 23
190+blockchain system; or 24
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193+•HR 4763 RH
194+‘‘(ii) had the unilateral authority to 1
195+restrict or prohibit any person who is not 2
196+a digital asset issuer, related person, or an 3
197+affiliated person from— 4
198+‘‘(I) using, earning, or transmit-5
199+ting the digital asset; 6
200+‘‘(II) deploying software that uses 7
201+or integrates with the blockchain sys-8
202+tem; 9
203+‘‘(III) participating in a decen-10
204+tralized governance system with respect 11
205+to the blockchain system; or 12
206+‘‘(IV) operating a node, validator, 13
207+or other form of computational infra-14
208+structure with respect to the blockchain 15
209+system. 16
210+‘‘(B) During the previous 12-month pe-17
211+riod— 18
212+‘‘(i) no digital asset issuer or affiliated 19
213+person beneficially owned, in the aggregate, 20
214+20 percent or more of the total amount of 21
215+units of such digital asset that— 22
216+‘‘(I) can be created, issued, or dis-23
217+tributed in such blockchain system; 24
218+and 25
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221+•HR 4763 RH
222+‘‘(II) were freely transferrable or 1
223+otherwise used or available to be used 2
224+for the purposes of such blockchain net-3
225+work; 4
226+‘‘(ii) no digital asset issuer or affili-5
227+ated person had the unilateral authority to 6
228+direct the voting, in the aggregate, of 20 7
229+percent or more of the outstanding voting 8
230+power of such digital asset or related decen-9
231+tralized governance system; or 10
232+‘‘(iii) the digital asset did not include 11
233+voting power. 12
234+‘‘(C) During the previous 3-month period, 13
235+the digital asset issuer, any affiliated person, or 14
236+any related person has not implemented or con-15
237+tributed any intellectual property to the source 16
238+code of the blockchain system that materially al-17
239+ters the functionality or operation of the 18
240+blockchain system, unless such implementation 19
241+or contribution to the source code— 20
242+‘‘(i) addressed vulnerabilities, errors, 21
243+regular maintenance, cybersecurity risks, or 22
244+other technical improvements to the 23
245+blockchain system; or 24
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248+•HR 4763 RH
249+‘‘(ii) were adopted through the con-1
250+sensus or agreement of a decentralized gov-2
251+ernance system. 3
252+‘‘(D) During the previous 3-month period, 4
253+neither any digital asset issuer nor any affili-5
254+ated person described under paragraph (20)(A) 6
255+has marketed to the public the digital assets as 7
256+an investment. 8
257+‘‘(E) During the previous 12-month period, 9
258+all issuances of units of such digital asset were 10
259+end user distributions made through the pro-11
260+grammatic functioning of the blockchain system. 12
261+‘‘(25) D
262+ECENTRALIZED GOVERNANCE SYSTEM .— 13
102263 ‘‘(A) I
103-N GENERAL.—The term ‘affiliated 2
104-person’ means a person (including a related 3
105-person) that— 4
106-‘‘(i) with respect to a digital asset 5
107-issuer— 6
108-‘‘(I) directly, or indirectly 7
109-through one or more intermediaries, 8
110-controls, or is controlled by, or is 9
111-under common control with, such dig-10
112-ital asset issuer; or 11
113-‘‘(II) was described under clause 12
114-(i) at any point in the previous 3- 13
115-month period; or 14
116-‘‘(ii) with respect to any digital 15
117-asset— 16
118-‘‘(I) beneficially owns 5 percent 17
119-or more of the units of such digital 18
120-asset that are then outstanding; or 19
121-‘‘(II) was described under clause 20
122-(i) at any point in the previous 3- 21
123-month period. 22
124-‘‘(B) B
125-ENEFICIAL OWNERSHIP DISCLO -23
126-SURE.—The Commission shall issue rules to re-24
127-quire a person that beneficially owns 5 percent 25 5
128-•HR 4763 EH
129-or more of the units of a digital asset that are 1
130-then outstanding to file with the Commission a 2
131-report at such time as the Commission deter-3
132-mines appropriate. 4
133-‘‘(21) B
134-LOCKCHAIN.—The term ‘blockchain’ 5
135-means any technology— 6
136-‘‘(A) where data is— 7
137-‘‘(i) shared across a network to create 8
138-a public ledger of verified transactions or 9
139-information among network participants; 10
140-‘‘(ii) linked using cryptography to 11
141-maintain the integrity of the public ledger 12
142-and to execute other functions; and 13
143-‘‘(iii) distributed among network par-14
144-ticipants in an automated fashion to con-15
145-currently update network participants on 16
146-the state of the public ledger and any other 17
147-functions; and 18
148-‘‘(B) composed of source code that is pub-19
149-licly available. 20
150-‘‘(22) B
151-LOCKCHAIN PROTOCOL .—The term 21
152-‘blockchain protocol’ means any executable software 22
153-deployed to a blockchain composed of source code 23
154-that is publicly available and accessible, including a 24
155-smart contract or any network of smart contracts. 25 6
156-•HR 4763 EH
157-‘‘(23) BLOCKCHAIN SYSTEM .—The term 1
158-‘blockchain system’ means any blockchain or 2
159-blockchain protocol. 3
160-‘‘(24) D
161-ECENTRALIZED GOVERNANCE SYS -4
162-TEM.— 5
163-‘‘(A) I
164-N GENERAL.—The term ‘decentral-6
165-ized governance system’ means, with respect to 7
166-a blockchain system, any rules-based system 8
167-permitting persons using the blockchain system 9
168-or the digital assets related to such blockchain 10
169-system to form consensus or reach agreement 11
170-in the development, provision, publication, man-12
171-agement, or administration of such blockchain 13
172-system. 14
264+N GENERAL.—The term ‘decentralized 14
265+governance system’ means, with respect to a 15
266+blockchain system, any rules-based system per-16
267+mitting persons using the blockchain system or 17
268+the digital assets related to such blockchain sys-18
269+tem to form consensus or reach agreement in the 19
270+development, provision, publication, manage-20
271+ment, or administration of such blockchain sys-21
272+tem. 22
173273 ‘‘(B) R
174-ELATIONSHIP OF PERSONS TO DE -15
175-CENTRALIZED GOVERNANCE SYSTEMS .—Per-16
176-sons acting through a decentralized governance 17
177-system shall be treated as separate persons un-18
178-less such persons are under common control. 19
274+ELATIONSHIP OF PERSONS TO DE -23
275+CENTRALIZED GOVERNANCE SYSTEMS .—Persons 24
276+acting through a decentralized governance system 25
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280+shall be treated as separate persons unless such 1
281+persons are under common control. 2
179282 ‘‘(C) E
180-XCLUSION.—The term ‘decentral-20
181-ized governance system’ does not include a sys-21
182-tem in which— 22
183-‘‘(i) a person or group of persons 23
184-under common control have the ability 24
185-to— 25 7
186-•HR 4763 EH
187-‘‘(I) unilaterally alter the rules of 1
188-consensus or agreement for the 2
189-blockchain system; or 3
190-‘‘(II) determine the final outcome 4
191-of decisions related to the develop-5
192-ment, provision, publication, manage-6
193-ment, or administration of such 7
194-blockchain system; 8
195-‘‘(ii) a person or group of persons is 9
196-directly engaging in an activity that re-10
197-quires registration with the Commission or 11
198-the Commodity Futures Trading Commis-12
199-sion other than— 13
200-‘‘(I) developing, providing, pub-14
201-lishing, managing, or administering a 15
202-blockchain system; or 16
203-‘‘(II) an activity with respect to 17
204-which the organization is exempt from 18
205-such registration; or 19
206-‘‘(iii) a person or group of persons 20
207-seeking to knowingly evade the require-21
208-ments imposed on a digital asset issuer, a 22
209-related person, an affiliated person, or any 23
210-other person registered (or required to be 24
211-registered) under the securities laws, the 25 8
212-•HR 4763 EH
213-Financial Innovation and Technology for 1
214-the 21st Century Act, or the Commodity 2
215-Exchange Act. 3
216-‘‘(25) D
217-ECENTRALIZED SYSTEM .—With respect 4
218-to a blockchain system to which a digital asset re-5
219-lates, the term ‘decentralized system’ means the fol-6
220-lowing conditions are met: 7
221-‘‘(A) During the previous 12-month period, 8
222-no person— 9
223-‘‘(i) had the unilateral authority, di-10
224-rectly or indirectly, through any contract, 11
225-arrangement, understanding, relationship, 12
226-or otherwise, to control or materially alter 13
227-the functionality or operation of the 14
228-blockchain system; or 15
229-‘‘(ii) had the unilateral authority to 16
230-restrict or prohibit any person who is not 17
231-a digital asset issuer, related person, or an 18
232-affiliated person from— 19
233-‘‘(I) using, earning, or transmit-20
234-ting the digital asset; 21
235-‘‘(II) deploying software that 22
236-uses or integrates with the blockchain 23
237-system; 24 9
238-•HR 4763 EH
239-‘‘(III) participating in a decen-1
240-tralized governance system with re-2
241-spect to the blockchain system; or 3
242-‘‘(IV) operating a node, validator, 4
243-or other form of computational infra-5
244-structure with respect to the 6
245-blockchain system. 7
246-‘‘(B) During the previous 12-month pe-8
247-riod— 9
248-‘‘(i) no digital asset issuer or affiliated 10
249-person beneficially owned, in the aggre-11
250-gate, 20 percent or more of the total 12
251-amount of units of such digital asset 13
252-that— 14
253-‘‘(I) can be created, issued, or 15
254-distributed in such blockchain system; 16
255-and 17
256-‘‘(II) were freely transferrable or 18
257-otherwise used or available to be used 19
258-for the purposes of such blockchain 20
259-system; 21
260-‘‘(ii) no digital asset issuer or affili-22
261-ated person had the unilateral authority to 23
262-direct the voting, in the aggregate, of 20 24
263-percent or more of the outstanding voting 25 10
264-•HR 4763 EH
265-power of such digital asset or related de-1
266-centralized governance system; or 2
267-‘‘(iii) the digital asset did not include 3
268-voting power with respect to any decentral-4
269-ized governance system of the blockchain 5
270-system. 6
271-‘‘(C) During the previous 3-month period, 7
272-the digital asset issuer, any affiliated person, or 8
273-any related person has not implemented or con-9
274-tributed any intellectual property to the source 10
275-code of the blockchain system that materially 11
276-alters the functionality or operation of the 12
277-blockchain system, unless such implementation 13
278-or contribution to the source code— 14
279-‘‘(i) addressed vulnerabilities, errors, 15
280-regular maintenance, cybersecurity risks, 16
281-or other technical changes to the 17
282-blockchain system; or 18
283-‘‘(ii) were adopted through the con-19
284-sensus or agreement of a decentralized 20
285-governance system. 21
286-‘‘(D) During the previous 3-month period, 22
287-neither any digital asset issuer nor any affili-23
288-ated person described under paragraph (20)(A) 24 11
289-•HR 4763 EH
290-has marketed to the public the digital assets as 1
291-an investment. 2
292-‘‘(E) During the previous 12-month period, 3
293-all issuances of units of such digital asset 4
294-through the programmatic functioning of the 5
295-blockchain system were end user distributions. 6
296-For purposes of the previous sentence, any 7
297-units of such digital asset that are made avail-8
298-able over time and were created in the initial 9
299-block of the blockchain system shall be consid-10
300-ered issued at the point in time of creation. 11
283+XCLUSION.—The term ‘decentralized 3
284+governance system’ does not include a system in 4
285+which— 5
286+‘‘(i) a person or group of persons 6
287+under common control have the ability to— 7
288+‘‘(I) unilaterally alter the rules of 8
289+consensus or agreement for the 9
290+blockchain system; or 10
291+‘‘(II) determine the final outcome 11
292+of decisions related to the development, 12
293+provision, publication, management, or 13
294+administration of such blockchain sys-14
295+tem; 15
296+‘‘(ii) a person or group of persons is 16
297+directly engaging in an activity that re-17
298+quires registration with the Commission or 18
299+the Commodity Futures Trading Commis-19
300+sion other than— 20
301+‘‘(I) developing, providing, pub-21
302+lishing, managing, or administering a 22
303+blockchain system; or 23
304+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
305+rfrederick on LAP8M3WLY3PROD with BILLS 11
306+•HR 4763 RH
307+‘‘(II) an activity with respect to 1
308+which the organization is exempt from 2
309+such registration; or 3
310+‘‘(iii) a person or group of persons 4
311+seeking to knowingly evade the requirements 5
312+imposed on a digital asset issuer, a related 6
313+person, an affiliated person, or any other 7
314+person registered (or required to be reg-8
315+istered) under this Act, the Financial Inno-9
316+vation and Technology for the 21st Century 10
317+Act, or the Commodity Exchange Act. 11
301318 ‘‘(26) D
302319 IGITAL ASSET.— 12
303320 ‘‘(A) I
304-N GENERAL.—The term ‘digital 13
305-asset’ means any fungible digital representation 14
306-of value that can be exclusively possessed and 15
321+N GENERAL.—The term ‘digital asset’ 13
322+means any fungible digital representation of 14
323+value that can be exclusively possessed and 15
307324 transferred, person to person, without necessary 16
308325 reliance on an intermediary, and is recorded on 17
309326 a cryptographically secured public distributed 18
310327 ledger. 19
311328 ‘‘(B) E
312-XCLUSIONS.—The term ‘digital 20
313-asset’ does not include— 21
314-‘‘(i) any note, stock, treasury stock, 22
315-security future, security-based swap, bond, 23
316-debenture, evidence of indebtedness, cer-24
317-tificate of interest or participation in any 25 12
318-•HR 4763 EH
319-profit-sharing agreement, collateral-trust 1
320-certificate, preorganization certificate or 2
321-subscription, transferable share, voting- 3
322-trust certificate, certificate of deposit for a 4
323-security, fractional undivided interest in 5
324-oil, gas, or other mineral rights, any put, 6
325-call, straddle, option, privilege on any secu-7
326-rity, certificate of deposit, or group or 8
327-index of securities (including any interest 9
328-therein or based on the value thereof); or 10
329-‘‘(ii) any asset which, based on its 11
330-terms and other characteristics, is, rep-12
331-resents, or is functionally equivalent to an 13
332-agreement, contract, or transaction that 14
333-is— 15
334-‘‘(I) a contract of sale of a com-16
335-modity (as defined under section 1a of 17
336-the Commodity Exchange Act) for fu-18
337-ture delivery or an option thereon; 19
338-‘‘(II) a security futures product; 20
339-‘‘(III) a swap; 21
340-‘‘(IV) an agreement, contract, or 22
341-transaction described in section 23
342-2(c)(2)(C)(i) or 2(c)(2)(D)(i) of the 24
343-Commodity Exchange Act; 25 13
344-•HR 4763 EH
345-‘‘(V) a commodity option author-1
346-ized under section 4c of the Com-2
347-modity Exchange Act; or 3
348-‘‘(VI) a leverage transaction au-4
349-thorized under section 19 of the Com-5
350-modity Exchange Act. 6
351-‘‘(C) R
352-ULE OF CONSTRUCTION .—Nothing 7
353-in this paragraph shall be construed to create 8
354-a presumption that a digital asset is a represen-9
355-tation of any type of security not excluded from 10
356-the definition of digital asset. 11
357-‘‘(D) R
358-ELATIONSHIP TO A BLOCKCHAIN 12
359-SYSTEM.—A digital asset is considered to relate 13
360-to a blockchain system if the digital asset is in-14
361-trinsically linked to the blockchain system, in-15
362-cluding— 16
363-‘‘(i) where the digital asset’s value is 17
364-reasonably expected to be generated by the 18
365-programmatic functioning of the 19
366-blockchain system; 20
367-‘‘(ii) where the digital asset has voting 21
368-rights with respect to the decentralized 22
369-governance system of the blockchain sys-23
370-tem; or 24 14
371-•HR 4763 EH
372-‘‘(iii) where the digital asset is issued 1
373-through the programmatic functioning of 2
374-the blockchain system. 3
375-‘‘(E) T
376-REATMENT OF CERTAIN DIGITAL 4
377-ASSETS SOLD PURSUANT TO AN INVESTMENT 5
378-CONTRACT.—A digital asset offered or sold or 6
379-intended to be offered or sold pursuant to an 7
380-investment contract is not and does not become 8
381-a security as a result of being sold or otherwise 9
382-transferred pursuant to that investment con-10
383-tract. 11
329+XCLUSIONS.—The term ‘digital asset’ 20
330+does not include— 21
331+‘‘(i) any note, stock, treasury stock, se-22
332+curity future, security-based swap, bond, de-23
333+benture, evidence of indebtedness, certificate 24
334+of interest or participation in any profit- 25
335+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
336+rfrederick on LAP8M3WLY3PROD with BILLS 12
337+•HR 4763 RH
338+sharing agreement, collateral-trust certifi-1
339+cate, preorganization certificate or subscrip-2
340+tion, or transferable share; or 3
341+‘‘(ii) any asset which represents, oper-4
342+ates as the functional equivalent of, or oth-5
343+erwise has embedded functionality or char-6
344+acteristics which make it an agreement, 7
345+contract, or transaction that is— 8
346+‘‘(I) a contract of sale of a com-9
347+modity (as defined under section 1a of 10
348+the Commodity Exchange Act) for fu-11
349+ture delivery or an option thereon; 12
350+‘‘(II) a security futures product; 13
351+‘‘(III) a swap; 14
352+‘‘(IV) an agreement, contract, or 15
353+transaction described in section 16
354+2(c)(2)(C)(i) or 2(c)(2)(D)(i) of the 17
355+Commodity Exchange Act; 18
356+‘‘(V) a commodity option author-19
357+ized under section 4c of the Commodity 20
358+Exchange Act; or 21
359+‘‘(VI) a leverage transaction au-22
360+thorized under section 19 of the Com-23
361+modity Exchange Act. 24
362+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
363+rfrederick on LAP8M3WLY3PROD with BILLS 13
364+•HR 4763 RH
365+‘‘(C) RELATIONSHIP TO A BLOCKCHAIN SYS -1
366+TEM.—A digital asset is considered to relate to 2
367+a blockchain system if the digital asset is intrin-3
368+sically linked to the blockchain system, includ-4
369+ing— 5
370+‘‘(i) where the digital asset’s value is 6
371+reasonably expected to be generated by the 7
372+programmatic functioning of the blockchain 8
373+system; 9
374+‘‘(ii) where the asset has voting rights 10
375+with respect to the blockchain system; or 11
376+‘‘(iii) where the digital asset is issued 12
377+through the programmatic functioning of 13
378+the blockchain system. 14
379+‘‘(D) T
380+REATMENT OF CERTAIN DIGITAL AS -15
381+SETS SOLD PURSUANT TO AN INVESTMENT CON -16
382+TRACT.—A digital asset sold or transferred or 17
383+intended to be sold or transferred pursuant to an 18
384+investment contract is not and does not become 19
385+a security as a result of being sold or otherwise 20
386+transferred pursuant to that investment contract. 21
384387 ‘‘(27) D
385-IGITAL ASSET ISSUER.— 12
388+IGITAL ASSET ISSUER.—With respect to 22
389+a digital asset, the term ‘digital asset issuer’— 23
390+‘‘(A) means— 24
391+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
392+rfrederick on LAP8M3WLY3PROD with BILLS 14
393+•HR 4763 RH
394+‘‘(i) any person that, in exchange for 1
395+any consideration— 2
396+‘‘(I) issues or causes to be issued 3
397+a unit of such digital asset to a person; 4
398+or 5
399+‘‘(II) offers or sells a right to a fu-6
400+ture issuance of a unit of such digital 7
401+asset to a person; or 8
402+‘‘(ii) any person who seeks to know-9
403+ingly evade classification as a ‘digital asset 10
404+issuer’ and facilitate an arrangement for 11
405+the primary purpose of effecting a sale, dis-12
406+tribution, or other issuance of such digital 13
407+asset, by— 14
408+‘‘(I) the granting of a license or 15
409+assignment of intellectual property; 16
410+‘‘(II) the making available of free 17
411+software or open source licenses; or 18
412+‘‘(III) the granting of other rights 19
413+or transfer of assets material to execu-20
414+tion of such sale, distribution, or other 21
415+issuance; and 22
416+‘‘(B) does not include any person solely be-23
417+cause such person, for the purpose of such person 24
418+participating in operations of a blockchain sys-25
419+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
420+rfrederick on LAP8M3WLY3PROD with BILLS 15
421+•HR 4763 RH
422+tem, deploys source code to create units of a dig-1
423+ital asset which are incentive-based rewards— 2
424+‘‘(i) to users of the digital asset or any 3
425+blockchain system to which the digital asset 4
426+relates; or 5
427+‘‘(ii) for activities directly related to 6
428+the operation of the blockchain system, such 7
429+as mining, validating, staking, or other ac-8
430+tivity directly tied to the operation of the 9
431+blockchain system. 10
432+‘‘(28) D
433+IGITAL ASSET MATURITY DATE .—The 11
434+term ‘digital asset maturity date’ means, with respect 12
435+to any units of a digital asset, the first date on which 13
436+20 percent or more of the total units of such digital 14
437+asset that are then outstanding as of such date are— 15
438+‘‘(A) digital commodities; or 16
439+‘‘(B) digital assets that have been registered 17
440+with the Commission. 18
441+‘‘(29) D
442+IGITAL COMMODITY.—The term ‘digital 19
443+commodity’ has the meaning given that term under 20
444+section 1a of the Commodity Exchange Act (7 U.S.C. 21
445+1a). 22
446+‘‘(30) E
447+ND USER DISTRIBUTION.—The term ‘end 23
448+user distribution’ means an issuance of a unit of a 24
449+digital asset that— 25
450+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
451+rfrederick on LAP8M3WLY3PROD with BILLS 16
452+•HR 4763 RH
453+‘‘(A) does not involve an exchange of more 1
454+than a nominal value of cash, property, or other 2
455+assets; and 3
456+‘‘(B) is distributed in a broad, equitable, 4
457+and non-discretionary manner based on condi-5
458+tions capable of being satisfied by any partici-6
459+pant in the blockchain system, including, as in-7
460+centive-based rewards— 8
461+‘‘(i) to users of the digital asset or any 9
462+blockchain system to which the digital asset 10
463+relates; 11
464+‘‘(ii) for activities directly related to 12
465+the operation of the blockchain system, such 13
466+as mining, validating, staking, or other ac-14
467+tivity directly tied to the operation of the 15
468+blockchain system; or 16
469+‘‘(iii) to the existing holders of another 17
470+digital asset, in proportion to the total 18
471+units of such other digital asset as are held 19
472+by each person. 20
473+‘‘(31) F
474+UNCTIONAL NETWORK.—With respect to a 21
475+blockchain system to which a digital asset relates, the 22
476+term ‘functional network’ means the network allows 23
477+network participants to use such digital asset for— 24
478+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
479+rfrederick on LAP8M3WLY3PROD with BILLS 17
480+•HR 4763 RH
481+‘‘(A) the transmission and storage of value 1
482+on the blockchain system; 2
483+‘‘(B) the participation in services provided 3
484+by or an application running on the blockchain 4
485+system; or 5
486+‘‘(C) the participation in governance of the 6
487+blockchain system. 7
488+‘‘(32) P
489+ERMITTED PAYMENT STABLECOIN .—The 8
490+term ‘permitted payment stablecoin’— 9
491+‘‘(A) means a digital asset— 10
492+‘‘(i) that is or is designed to be used as 11
493+a means of payment or settlement; 12
494+‘‘(ii) the issuer of which— 13
495+‘‘(I) is obligated to convert, re-14
496+deem, or repurchase for a fixed amount 15
497+of monetary value; and 16
498+‘‘(II) represents will maintain or 17
499+creates the reasonable expectation that 18
500+it will maintain a stable value relative 19
501+to the value of a fixed amount of mone-20
502+tary value; and 21
503+‘‘(iii) that is subject to regulation by a 22
504+Federal or State regulator with authority 23
505+over entities that issue payment stablecoins; 24
506+and 25
507+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00017 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
508+rfrederick on LAP8M3WLY3PROD with BILLS 18
509+•HR 4763 RH
510+‘‘(B) that is not— 1
511+‘‘(i) a national currency; or 2
512+‘‘(ii) a security issued by an invest-3
513+ment company registered under section 8(a) 4
514+of the Investment Company Act of 1940 (15 5
515+U.S.C. 80a–8(a)). 6
516+‘‘(33) R
517+ELATED PERSON.—With respect to a dig-7
518+ital asset issuer, the term ‘related person’ means— 8
519+‘‘(A) a founder, promoter, employee, con-9
520+sultant, advisor, or person serving in a similar 10
521+capacity; 11
522+‘‘(B) any person that is or was in the pre-12
523+vious 6-month period an executive officer, direc-13
524+tor, trustee, general partner, advisory board 14
525+member, or person serving in a similar capacity; 15
526+‘‘(C) any equity holder or other security 16
527+holder of a digital asset issuer; or 17
528+‘‘(D) any other person that received a unit 18
529+of digital asset from such digital asset issuer 19
530+through— 20
531+‘‘(i) an exempt offering, other than an 21
532+offering made in reliance on section 4(a)(8); 22
533+or 23
534+‘‘(ii) a distribution that is not an end 24
535+user distribution described under section 25
536+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00018 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
537+rfrederick on LAP8M3WLY3PROD with BILLS 19
538+•HR 4763 RH
539+42(d)(1) of the Securities Exchange Act of 1
540+1934. 2
541+‘‘(34) R
542+ESTRICTED DIGITAL ASSET.— 3
386543 ‘‘(A) I
387-N GENERAL.—With respect to a dig-13
388-ital asset, the term ‘digital asset issuer’ means 14
389-any person that, in exchange for any consider-15
390-ation— 16
391-‘‘(i) issues or causes to be issued a 17
392-unit of such digital asset to a person; or 18
393-‘‘(ii) offers or sells a right to a future 19
394-issuance of a unit of such digital asset to 20
395-a person. 21
544+N GENERAL.—The term ‘restricted 4
545+digital asset’ means— 5
546+‘‘(i) any unit of a digital asset held by 6
547+a person, other than a digital asset issuer, 7
548+a related person, or an affiliated person, 8
549+prior to the first date on which each 9
550+blockchain system to which the digital asset 10
551+relates is a functional network and certified 11
552+to be a decentralized network under section 12
553+44 of the Securities Exchange Act of 1934, 13
554+that was— 14
555+‘‘(I) issued to such person through 15
556+a distribution, other than an end user 16
557+distribution described under section 17
558+42(d)(1) of the Securities Exchange Act 18
559+of 1934; or 19
560+‘‘(II) acquired by such person in 20
561+a transaction that was not executed on 21
562+a digital commodity exchange; 22
563+‘‘(ii) any digital asset held by a related 23
564+person or an affiliated person during any 24
565+period when any blockchain system to 25
566+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00019 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
567+rfrederick on LAP8M3WLY3PROD with BILLS 20
568+•HR 4763 RH
569+which the digital asset relates is not a func-1
570+tional network or not certified to be a de-2
571+centralized network under section 44 of the 3
572+Securities Exchange Act of 1934; or 4
573+‘‘(iii) any unit of a digital asset held 5
574+by the digital asset issuer. 6
396575 ‘‘(B) E
397-XCLUSION.—The term ‘digital asset 22
398-issuer’ does not include any person solely be-23
399-cause such person deploys source code that cre-24 15
400-•HR 4763 EH
401-ates or issues units of a digital asset that are 1
402-only distributed in end user distributions. 2
403-‘‘(C) P
404-ROHIBITION ON EVASION .—It shall 3
405-be unlawful for any person to knowingly evade 4
406-classification as a ‘digital asset issuer’ and fa-5
407-cilitate an arrangement for the primary purpose 6
408-of effecting a sale, distribution, or other 7
409-issuance of a digital asset. 8
410-‘‘(28) D
411-IGITAL ASSET MATURITY DATE .—The 9
412-term ‘digital asset maturity date’ means, with re-10
413-spect to any digital asset, the first date on which 20 11
414-percent or more of the total units of such digital 12
415-asset that are then outstanding as of such date 13
416-are— 14
417-‘‘(A) digital commodities; or 15
418-‘‘(B) digital assets that have been reg-16
419-istered with the Commission. 17
420-‘‘(29) D
421-IGITAL COMMODITY.—The term ‘digital 18
422-commodity’ has the meaning given that term under 19
423-section 1a of the Commodity Exchange Act (7 20
424-U.S.C. 1a). 21
425-‘‘(30) E
426-ND USER DISTRIBUTION.— 22
576+XCLUSION.—The term ‘restricted dig-7
577+ital asset’ does not include a permitted payment 8
578+stablecoin. 9
579+‘‘(35) S
580+ECURITIES LAWS.—The term ‘securities 10
581+laws’ has the meaning given that term under section 11
582+3(a) of the Securities Exchange Act of 1934 (15 12
583+U.S.C. 78c(a)). 13
584+‘‘(36) S
585+OURCE CODE.—With respect to a 14
586+blockchain system, the term ‘source code’ means a list-15
587+ing of commands to be compiled or assembled into an 16
588+executable computer program.’’. 17
589+SEC. 102. DEFINITIONS UNDER THE COMMODITY EX-18
590+CHANGE ACT. 19
591+Section 1a of the Commodity Exchange Act (7 U.S.C. 20
592+1a) is amended— 21
593+(1) in paragraph (10)(A)— 22
594+(A) by redesignating clauses (iii) and (iv) 23
595+as clauses (iv) and (v), respectively; and 24
596+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00020 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
597+rfrederick on LAP8M3WLY3PROD with BILLS 21
598+•HR 4763 RH
599+(B) by inserting after clause (ii) the fol-1
600+lowing: 2
601+‘‘(iii) digital commodity;’’; 3
602+(2) in paragraph (11)— 4
603+(A) in subparagraph (A)(i)— 5
604+(i) by redesignating subclauses (III) 6
605+and (IV) as subclauses (IV) and (V), respec-7
606+tively; and 8
607+(ii) by inserting after subclause (II) 9
608+the following: 10
609+‘‘(III) digital commodity;’’; and 11
610+(B) by redesignating subparagraph (B) as 12
611+subparagraph (C) and inserting after subpara-13
612+graph (A) the following: 14
613+‘‘(B) E
614+XCLUSION.—The term ‘commodity 15
615+pool operator’ does not include— 16
616+‘‘(i) a decentralized governance system; 17
617+or 18
618+‘‘(ii) ancillary activities, as defined in 19
619+section 4v.’’; 20
620+(3) in paragraph (12)(A)(i)— 21
621+(A) in subclause (II), by adding at the end 22
622+a semicolon; 23
623+(B) by redesignating subclauses (III) and 24
624+(IV) as subclauses (IV) and (V), respectively; and 25
625+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00021 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
626+rfrederick on LAP8M3WLY3PROD with BILLS 22
627+•HR 4763 RH
628+(C) by inserting after subclause (II) the fol-1
629+lowing: 2
630+‘‘(III) a digital commodity;’’; 3
631+(4) in paragraph (40)— 4
632+(A) by striking ‘‘and’’ at the end of sub-5
633+paragraph (E); 6
634+(B) by striking the period at the end of sub-7
635+paragraph (F) and inserting ‘‘; and’’; and 8
636+(C) by adding at the end the following: 9
637+‘‘(G) a digital commodity exchange reg-10
638+istered under section 5i.’’; and 11
639+(5) by adding at the end the following: 12
640+‘‘(52) A
641+SSOCIATED PERSON OF A DIGITAL COM -13
642+MODITY BROKER.— 14
427643 ‘‘(A) I
428-N GENERAL.—The term ‘end user 23
429-distribution’ means an issuance of a unit of a 24
430-digital asset that— 25 16
431-•HR 4763 EH
432-‘‘(i) does not involve an exchange of 1
433-more than a nominal value of cash, prop-2
434-erty, or other assets; and 3
435-‘‘(ii) is distributed in a broad, equi-4
436-table, and non-discretionary manner based 5
437-on conditions capable of being satisfied by 6
438-any participant in the blockchain system, 7
439-including, as incentive-based rewards— 8
440-‘‘(I) to users of the digital asset 9
441-or any blockchain system to which the 10
442-digital asset relates; 11
443-‘‘(II) for activities directly related 12
444-to the operation of the blockchain sys-13
445-tem, such as mining, validating, stak-14
446-ing, or other activity directly tied to 15
447-the operation of the blockchain sys-16
448-tem; or 17
449-‘‘(III) to the existing holders of 18
450-another digital asset, in proportion to 19
451-the total units of such other digital 20
452-asset as are held by each person. 21
453-‘‘(B) P
454-ROHIBITION ON EVASION .—It shall 22
455-be unlawful for any person to facilitate an end 23
456-user distribution to knowingly evade classifica-24
457-tion as a digital asset issuer, related person, or 25 17
458-•HR 4763 EH
459-an affiliated person, or the requirements related 1
460-to a digital asset issuance. 2
461-‘‘(31) F
462-UNCTIONAL SYSTEM.—With respect to a 3
463-blockchain system to which a digital asset relates, 4
464-the term ‘functional system’ means the network al-5
465-lows network participants to use such digital asset 6
466-for— 7
467-‘‘(A) the transmission and storage of value 8
468-on the blockchain system; 9
469-‘‘(B) the participation in services provided 10
470-by or an application running on the blockchain 11
471-system; or 12
472-‘‘(C) the participation in the decentralized 13
473-governance system of the blockchain system. 14
474-‘‘(32) P
475-ERMITTED PAYMENT STABLECOIN .— 15
644+N GENERAL.—Except as provided in 15
645+subparagraph (B), the term ‘associated person of 16
646+a digital commodity broker’ means a person who 17
647+is associated with a digital commodity broker as 18
648+a partner, officer, employee, or agent (or any 19
649+person occupying a similar status or performing 20
650+similar functions) in any capacity that in-21
651+volves— 22
652+‘‘(i) the solicitation or acceptance of a 23
653+contract of sale of a digital commodity; or 24
654+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
655+rfrederick on LAP8M3WLY3PROD with BILLS 23
656+•HR 4763 RH
657+‘‘(ii) the supervision of any person en-1
658+gaged in the solicitation or acceptance of a 2
659+contract of sale of a digital commodity. 3
660+‘‘(B) E
661+XCLUSION.—The term ‘associated 4
662+person of a digital commodity broker’ does not 5
663+include any person associated with a digital 6
664+commodity broker the functions of which are 7
665+solely clerical or ministerial. 8
666+‘‘(53) A
667+SSOCIATED PERSON OF A DIGITAL COM -9
668+MODITY DEALER.— 10
476669 ‘‘(A) I
477-N GENERAL.—The term ‘permitted 16
478-payment stablecoin’ means a digital asset— 17
479-‘‘(i) that is or is designed to be used 18
480-as a means of payment or settlement; 19
481-‘‘(ii) the issuer of which— 20
482-‘‘(I) is obligated to convert, re-21
483-deem, or repurchase for a fixed 22
484-amount of monetary value; or 23
485-‘‘(II) represents will maintain or 24
486-creates the reasonable expectation 25 18
487-•HR 4763 EH
488-that it will maintain a stable value rel-1
489-ative to the value of a fixed amount of 2
490-monetary value; 3
491-‘‘(iii) the issuer of which is subject to 4
492-regulation by a Federal or State regulator 5
493-with authority over entities that issue pay-6
494-ment stablecoins; and 7
495-‘‘(iv) that is not— 8
496-‘‘(I) a national currency; or 9
497-‘‘(II) a security issued by an in-10
498-vestment company registered under 11
499-section 8(a) of the Investment Com-12
500-pany Act of 1940 (15 U.S.C. 80a– 13
501-8(a)). 14
502-‘‘(B) M
503-ONETARY VALUE DEFINED .—For 15
504-purposes of subparagraph (A), the term ‘mone-16
505-tary value’ means a national currency, deposit 17
506-(as defined under section 3 of the Federal De-18
507-posit Insurance Act), or an equivalent instru-19
508-ment that is denominated in a national cur-20
509-rency. 21
510-‘‘(33) R
511-ELATED PERSON.—With respect to a 22
512-digital asset issuer, the term ‘related person’ 23
513-means— 24 19
514-•HR 4763 EH
515-‘‘(A) a founder, promoter, employee, con-1
516-sultant, advisor, or person serving in a similar 2
517-capacity; 3
518-‘‘(B) any person that is or was in the pre-4
519-vious 6-month period an executive officer, direc-5
520-tor, trustee, general partner, advisory board 6
521-member, or person serving in a similar capacity; 7
522-‘‘(C) any equity holder or other security 8
523-holder; or 9
524-‘‘(D) any other person that received a unit 10
525-of digital asset from such digital asset issuer 11
526-through— 12
527-‘‘(i) an exempt offering, other than an 13
528-offering made in reliance on section 14
529-4(a)(8); or 15
530-‘‘(ii) a distribution that is not an end 16
531-user distribution described under section 17
532-42(d)(1) of the Securities Exchange Act of 18
533-1934. 19
534-‘‘(34) R
535-ESTRICTED DIGITAL ASSET.— 20
670+N GENERAL.—Except as provided in 11
671+subparagraph (B), the term ‘associated person of 12
672+a digital commodity dealer’ means a person who 13
673+is associated with a digital commodity dealer as 14
674+a partner, officer, employee, or agent (or any 15
675+person occupying a similar status or performing 16
676+similar functions) in any capacity that in-17
677+volves— 18
678+‘‘(i) the solicitation or acceptance of a 19
679+contract of sale of a digital commodity; or 20
680+‘‘(ii) the supervision of any person en-21
681+gaged in the solicitation or acceptance of a 22
682+contract of sale of a digital commodity. 23
683+‘‘(B) E
684+XCLUSION.—The term ‘associated 24
685+person of a digital commodity dealer’ does not 25
686+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00023 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
687+rfrederick on LAP8M3WLY3PROD with BILLS 24
688+•HR 4763 RH
689+include any person associated with a digital 1
690+commodity dealer the functions of which are sole-2
691+ly clerical or ministerial. 3
692+‘‘(54) B
693+ANK SECRECY ACT.—The term ‘Bank Se-4
694+crecy Act’ means— 5
695+‘‘(A) section 21 of the Federal Deposit In-6
696+surance Act (12 U.S.C. 1829b); 7
697+‘‘(B) chapter 2 of title I of Public Law 91– 8
698+508 (12 U.S.C. 1951 et seq.); and 9
699+‘‘(C) subchapter II of chapter 53 of title 31, 10
700+United States Code. 11
701+‘‘(55) D
702+IGITAL COMMODITY.— 12
536703 ‘‘(A) I
537-N GENERAL.—The term ‘restricted 21
538-digital asset’ means— 22
539-‘‘(i) prior to the first date on which 23
540-each blockchain system to which a digital 24
541-asset relates is a functional system and 25 20
542-•HR 4763 EH
543-certified to be a decentralized system 1
544-under section 44 of the Securities Ex-2
545-change Act of 1934, any unit of the digital 3
546-asset held by a person, other than the dig-4
547-ital asset issuer, a related person, or an af-5
548-filiated person, that was— 6
549-‘‘(I) issued to such person 7
550-through a distribution, other than an 8
551-end user distribution described under 9
552-section 42(d)(1) of the Securities Ex-10
553-change Act of 1934; or 11
554-‘‘(II) acquired by such person in 12
555-a transaction that was not executed 13
556-on a digital commodity exchange; 14
557-‘‘(ii) during any period when any 15
558-blockchain system to which a digital asset 16
559-relates is not a functional system or not 17
560-certified to be a decentralized system 18
561-under section 44 of the Securities Ex-19
562-change Act of 1934, any digital asset held 20
563-by a related person or an affiliated person; 21
564-and 22
565-‘‘(iii) any unit of a digital asset held 23
566-by the digital asset issuer. 24 21
567-•HR 4763 EH
568-‘‘(B) EXCLUSION.—The term ‘restricted 1
569-digital asset’ does not include a permitted pay-2
570-ment stablecoin. 3
571-‘‘(35) S
572-ECURITIES LAWS.—The term ‘securities 4
573-laws’ has the meaning given that term under section 5
574-3(a) of the Securities Exchange Act of 1934 (15 6
575-U.S.C. 78c(a)). 7
576-‘‘(36) S
577-OURCE CODE.—With respect to a 8
578-blockchain system, the term ‘source code’ means a 9
579-listing of commands to be compiled or assembled 10
580-into an executable computer program.’’. 11
581-SEC. 102. DEFINITIONS UNDER THE SECURITIES EX-12
582-CHANGE ACT OF 1934. 13
583-Section 3(a) of the Securities Exchange Act of 1934 14
584-(15 U.S.C. 78c(a)) is amended— 15
585-(8) by redesignating the second paragraph (80) 16
586-(relating to funding portals) as paragraph (81); and 17
587-(9) by adding at the end the following: 18
588-‘‘(82) B
589-ANK SECRECY ACT .—The term ‘Bank 19
590-Secrecy Act’ means— 20
591-‘‘(A) section 21 of the Federal Deposit In-21
592-surance Act (12 U.S.C. 1829b); 22
593-‘‘(B) chapter 2 of title I of Public Law 91– 23
594-508 (12 U.S.C. 1951 et seq.); and 24 22
595-•HR 4763 EH
596-‘‘(C) subchapter II of chapter 53 of title 1
597-31, United States Code. 2
598-‘‘(83) D
599-IGITAL ASSET BROKER.—The term ‘dig-3
600-ital asset broker’— 4
601-‘‘(A) means any person engaged in the 5
602-business of effecting transactions in restricted 6
603-digital assets for the account of others; and 7
604-‘‘(B) does not include— 8
605-‘‘(i) a blockchain protocol or a person 9
606-or group of persons solely because of their 10
607-development of a blockchain protocol; or 11
608-‘‘(ii) a bank engaging in certain bank-12
609-ing activities with respect to a restricted 13
610-digital asset in the same manner as a bank 14
611-is excluded from the definition of a broker 15
612-under paragraph (4). 16
613-‘‘(84) D
614-IGITAL ASSET CUSTODIAN .—The term 17
615-‘digital asset custodian’ means an entity in the busi-18
616-ness of providing custodial or safekeeping services 19
617-for restricted digital assets for others. 20
618-‘‘(85) D
619-IGITAL ASSET DEALER.—The term ‘dig-21
620-ital asset dealer’— 22
621-‘‘(A) means any person engaged in the 23
622-business of buying and selling restricted digital 24 23
623-•HR 4763 EH
624-assets for such person’s own account through a 1
625-broker or otherwise; and 2
626-‘‘(B) does not include— 3
627-‘‘(i) a person that buys or sells re-4
628-stricted digital assets for such person’s 5
629-own account, either individually or in a fi-6
630-duciary capacity, but not as a part of a 7
631-regular business; 8
632-‘‘(ii) a blockchain protocol or a person 9
633-or group of persons solely because of their 10
634-development of a blockchain protocol; or 11
635-‘‘(iii) a bank engaging in certain 12
636-banking activities with respect to a re-13
637-stricted digital asset in the same manner 14
638-as a bank is excluded from the definition 15
639-of a dealer under paragraph (5). 16
640-‘‘(86) D
641-IGITAL ASSET TRADING SYSTEM .—The 17
642-term ‘digital asset trading system’— 18
643-‘‘(A) means any organization, association, 19
644-person, or group of persons, whether incor-20
645-porated or unincorporated, that constitutes, 21
646-maintains, or provides a market place or facili-22
647-ties for bringing together purchasers and sellers 23
648-of restricted digital assets or for otherwise per-24
649-forming with respect to restricted digital assets 25 24
650-•HR 4763 EH
651-the functions commonly performed by a stock 1
652-exchange within the meaning of section 240.3b– 2
653-16 of title 17, Code of Federal Regulations, as 3
654-in effect on the date of enactment of this para-4
655-graph; and 5
656-‘‘(B) does not include a blockchain protocol 6
657-or a person or group of persons solely because 7
658-of their development of a blockchain protocol. 8
659-‘‘(87) N
660-OTICE-REGISTERED DIGITAL ASSET 9
661-CLEARING AGENCY .—The term ‘notice-registered 10
662-digital asset clearing agency’ means a clearing agen-11
663-cy that has registered with the Commission pursuant 12
664-to section 17A(b)(9). 13
665-‘‘(88) A
666-DDITIONAL DIGITAL ASSET -RELATED 14
667-TERMS.— 15
668-‘‘(A) S
669-ECURITIES ACT OF 1933 .—The 16
670-terms ‘affiliated person’, ‘blockchain system’, 17
671-‘decentralized governance system’, ‘decentral-18
672-ized system’, ‘digital asset’, ‘digital asset 19
673-issuer’, ‘digital asset maturity date’, ‘end user 20
674-distribution’, ‘functional system’, ‘permitted 21
675-payment stablecoin’, ‘related person’, ‘restricted 22
676-digital asset’, and ‘source code’ have the mean-23
677-ing given those terms, respectively, under sec-24 25
678-•HR 4763 EH
679-tion 2(a) of the Securities Act of 1933 (15 1
680-U.S.C. 77b(a)). 2
681-‘‘(B) C
682-OMMODITY EXCHANGE ACT .—The 3
683-terms ‘digital commodity’, ‘digital commodity 4
684-broker’, ‘digital commodity dealer’, and ‘digital 5
685-commodity exchange’ have the meaning given 6
686-those terms, respectively, under section 1a of 7
687-the Commodity Exchange Act (7 U.S.C. 1a).’’. 8
688-SEC. 103. DEFINITIONS UNDER THE COMMODITY EX-9
689-CHANGE ACT. 10
690-Section 1a of the Commodity Exchange Act (7 U.S.C. 11
691-1a) is amended— 12
692-(1) in paragraph (10)(A)— 13
693-(A) by redesignating clauses (iii) and (iv) 14
694-as clauses (iv) and (v), respectively; and 15
695-(B) by inserting after clause (ii) the fol-16
696-lowing: 17
697-‘‘(iii) digital commodity;’’; 18
698-(2) in paragraph (11)— 19
699-(A) in subparagraph (A)(i)— 20
700-(i) by redesignating subclauses (III) 21
701-and (IV) as subclauses (IV) and (V), re-22
702-spectively; and 23
703-(ii) by inserting after subclause (II) 24
704-the following: 25 26
705-•HR 4763 EH
706-‘‘(III) digital commodity;’’; and 1
707-(B) by redesignating subparagraph (B) as 2
708-subparagraph (C) and inserting after subpara-3
709-graph (A) the following: 4
704+N GENERAL.—The term ‘digital com-13
705+modity’ means— 14
706+‘‘(i) any unit of a digital asset held by 15
707+a person, other than the digital asset issuer, 16
708+a related person, or an affiliated person, be-17
709+fore the first date on which each blockchain 18
710+system to which the digital asset relates is 19
711+a functional network and certified to be a 20
712+decentralized network under section 44 of 21
713+the Securities Exchange Act of 1934, that 22
714+was— 23
715+‘‘(I) issued to the person through 24
716+an end user distribution described 25
717+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00024 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
718+rfrederick on LAP8M3WLY3PROD with BILLS 25
719+•HR 4763 RH
720+under section 42(d)(1) of the Securities 1
721+Exchange Act of 1934; or 2
722+‘‘(II) acquired by such person in 3
723+a transaction that was executed on a 4
724+digital commodity exchange; or 5
725+‘‘(ii) any unit of a digital asset held by 6
726+a person, other than the digital asset issuer, 7
727+a related person, or an affiliated person, 8
728+after the first date on which each blockchain 9
729+system to which the digital asset relates is 10
730+a functional network and certified to be a 11
731+decentralized network under section 44 of 12
732+the Securities Exchange Act of 1934; and 13
733+‘‘(iii) any unit of a digital asset held 14
734+by a related person or an affiliated person 15
735+during any period when any blockchain 16
736+system to which the digital asset relates is 17
737+a functional network and certified to be a 18
738+decentralized network under section 44 of 19
739+the Securities Exchange Act of 1934. 20
710740 ‘‘(B) E
711-XCLUSION.—The term ‘commodity 5
712-pool operator’ does not include— 6
713-‘‘(i) a decentralized governance sys-7
714-tem; or 8
715-‘‘(ii) any excluded activity, as de-9
716-scribed in section 4v.’’; 10
717-(3) in paragraph (12)(A)(i)— 11
718-(A) in subclause (II), by adding at the end 12
719-a semicolon; 13
720-(B) by redesignating subclauses (III) and 14
721-(IV) as subclauses (IV) and (V), respectively; 15
722-and 16
723-(C) by inserting after subclause (II) the 17
724-following: 18
725-‘‘(III) a digital commodity;’’; 19
726-(4) in paragraph (40)— 20
727-(A) by striking ‘‘and’’ at the end of sub-21
728-paragraph (E); 22
729-(B) by striking the period at the end of 23
730-subparagraph (F) and inserting ‘‘; and’’; and 24
731-(C) by adding at the end the following: 25 27
732-•HR 4763 EH
733-‘‘(G) a digital commodity exchange reg-1
734-istered under section 5i.’’; and 2
735-(5) by adding at the end the following: 3
736-‘‘(52) A
737-SSOCIATED PERSON OF A DIGITAL COM -4
738-MODITY BROKER.— 5
739-‘‘(A) I
740-N GENERAL.—Except as provided in 6
741-subparagraph (B), the term ‘associated person 7
742-of a digital commodity broker’ means a person 8
743-who is associated with a digital commodity 9
744-broker as a partner, officer, employee, or agent 10
745-(or any person occupying a similar status or 11
746-performing similar functions) in any capacity 12
747-that involves— 13
748-‘‘(i) the solicitation or acceptance of 14
749-an order for the purchase or sale of a dig-15
750-ital commodity; or 16
751-‘‘(ii) the supervision of any person en-17
752-gaged in the solicitation or acceptance of 18
753-an order for the purchase or sale of a dig-19
754-ital commodity. 20
741+XCLUSION.—The term ‘digital com-21
742+modity’ does not include a permitted payment 22
743+stablecoin. 23
744+‘‘(56) D
745+IGITAL COMMODITY BROKER .— 24
746+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00025 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
747+rfrederick on LAP8M3WLY3PROD with BILLS 26
748+•HR 4763 RH
749+‘‘(A) IN GENERAL.—The term ‘digital com-1
750+modity broker’ means any person who, in a dig-2
751+ital commodity cash or spot market, is— 3
752+‘‘(i) engaged in soliciting or accepting 4
753+orders for the purchase or sale of a unit of 5
754+a digital commodity from a person that is 6
755+not an eligible contract participant; 7
756+‘‘(ii) engaged in soliciting or accepting 8
757+orders for the purchase or sale of a unit of 9
758+a digital commodity from a person on or 10
759+subject to the rules of a registered entity; or 11
760+‘‘(iii) registered with the Commission 12
761+as a digital commodity broker. 13
755762 ‘‘(B) E
756-XCLUSION.—The term ‘associated 21
757-person of a digital commodity broker’ does not 22
758-include any person associated with a digital 23
759-commodity broker the functions of which are 24
760-solely clerical or ministerial. 25 28
761-•HR 4763 EH
762-‘‘(53) ASSOCIATED PERSON OF A DIGITAL COM -1
763-MODITY DEALER.— 2
764-‘‘(A) I
765-N GENERAL.—Except as provided in 3
766-subparagraph (B), the term ‘associated person 4
767-of a digital commodity dealer’ means a person 5
768-who is associated with a digital commodity deal-6
769-er as a partner, officer, employee, or agent (or 7
770-any person occupying a similar status or per-8
771-forming similar functions) in any capacity that 9
772-involves— 10
773-‘‘(i) the solicitation or acceptance of 11
774-an order for the purchase or sale of a dig-12
775-ital commodity; or 13
776-‘‘(ii) the supervision of any person en-14
777-gaged in the solicitation or acceptance of 15
778-an order for the purchase or sale of a dig-16
779-ital commodity. 17
780-‘‘(B) E
781-XCLUSION.—The term ‘associated 18
782-person of a digital commodity dealer’ does not 19
783-include any person associated with a digital 20
784-commodity dealer the functions of which are 21
785-solely clerical or ministerial. 22
786-‘‘(54) B
787-ANK SECRECY ACT .—The term ‘Bank 23
788-Secrecy Act’ means— 24 29
789-•HR 4763 EH
790-‘‘(A) section 21 of the Federal Deposit In-1
791-surance Act (12 U.S.C. 1829b); 2
792-‘‘(B) chapter 2 of title I of Public Law 91– 3
793-508 (12 U.S.C. 1951 et seq.); and 4
794-‘‘(C) subchapter II of chapter 53 of title 5
795-31, United States Code. 6
796-‘‘(55) D
797-IGITAL COMMODITY.— 7
763+XCEPTIONS.—The term ‘digital com-14
764+modity broker’ does not include a person solely 15
765+because the person— 16
766+‘‘(i) enters into a digital commodity 17
767+transaction the primary purpose of which is 18
768+to make, send, receive, or facilitate pay-19
769+ments, whether involving a payment service 20
770+provider or on a peer-to-peer basis; or 21
771+‘‘(ii) validates a digital commodity 22
772+transaction, operates a node, or engages in 23
773+similar activity to participate in facili-24
774+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
775+rfrederick on LAP8M3WLY3PROD with BILLS 27
776+•HR 4763 RH
777+tating, operating, or securing a blockchain 1
778+system. 2
779+‘‘(57) D
780+IGITAL COMMODITY CUSTODIAN .—The 3
781+term ‘digital commodity custodian’ means an entity 4
782+in the business of holding, maintaining, or safe-5
783+guarding digital commodities. 6
784+‘‘(58) D
785+IGITAL COMMODITY DEALER .— 7
798786 ‘‘(A) I
799787 N GENERAL.—The term ‘digital com-8
800-modity’ means— 9
801-‘‘(i) any unit of a digital asset held by 10
802-a person, other than the digital asset 11
803-issuer, a related person, or an affiliated 12
804-person, before the first date on which each 13
805-blockchain system to which the digital 14
806-asset relates is a functional system and 15
807-certified to be a decentralized system 16
808-under section 44 of the Securities Ex-17
809-change Act of 1934, that was— 18
810-‘‘(I) issued to the person through 19
811-an end user distribution described 20
812-under section 42(d)(1) of the Securi-21
813-ties Exchange Act of 1934; or 22
814-‘‘(II) acquired by such person in 23
815-a transaction that was executed on a 24
816-digital commodity exchange; 25 30
817-•HR 4763 EH
818-‘‘(ii) any unit of a digital asset held 1
819-by a person, other than the digital asset 2
820-issuer, a related person, or an affiliated 3
821-person, after the first date on which each 4
822-blockchain system to which the digital 5
823-asset relates is a functional system and 6
824-certified to be a decentralized system 7
825-under section 44 of the Securities Ex-8
826-change Act of 1934; and 9
827-‘‘(iii) any unit of a digital asset held 10
828-by a related person or an affiliated person 11
829-during any period when any blockchain 12
830-system to which the digital asset relates is 13
831-a functional system and certified to be a 14
832-decentralized system under section 44 of 15
833-the Securities Exchange Act of 1934. 16
788+modity dealer’ means any person who— 9
789+‘‘(i) in digital commodity cash or spot 10
790+markets— 11
791+‘‘(I) holds itself out as a dealer in 12
792+a digital commodity; 13
793+‘‘(II) makes a market in a digital 14
794+commodity; 15
795+‘‘(III) regularly enters into digital 16
796+commodity transactions with counter-17
797+parties as an ordinary course of busi-18
798+ness for its own account; or 19
799+‘‘(IV) engages in any activity 20
800+causing the person to be commonly 21
801+known in the trade as a dealer or mar-22
802+ket maker in a digital commodity; 23
803+‘‘(ii) regularly enters into any agree-24
804+ment, contract, or transaction described in 25
805+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
806+rfrederick on LAP8M3WLY3PROD with BILLS 28
807+•HR 4763 RH
808+subsection (c)(2)(D)(i) involving a digital 1
809+commodity; or 2
810+‘‘(iii) is registered with the Commis-3
811+sion as a digital commodity dealer. 4
834812 ‘‘(B) E
835-XCLUSION.—The term ‘digital com-17
836-modity’ does not include a permitted payment 18
837-stablecoin. 19
838-‘‘(C) T
839-REATMENT OF ADJUDICATED NON - 20
840-SECURITIES.—If, before enactment of this para-21
841-graph, a Federal court in a Securities and Ex-22
842-change Commission enforcement action deter-23
843-mines that a digital asset transaction is not an 24
844-offer or sale of a security, any unit of a digital 25 31
845-•HR 4763 EH
846-asset transferred pursuant to the transaction 1
847-shall be considered a digital commodity, unless 2
848-the determination is overturned. 3
849-‘‘(56) D
850-IGITAL COMMODITY BROKER .— 4
813+XCEPTION.—The term ‘digital com-5
814+modity dealer’ does not include a person solely 6
815+because the person— 7
816+‘‘(i) enters into a digital commodity 8
817+transaction with an eligible contract partic-9
818+ipant; 10
819+‘‘(ii) enters into a digital commodity 11
820+transaction on or through a registered dig-12
821+ital commodity exchange; 13
822+‘‘(iii) enters into a digital commodity 14
823+transaction for the person’s own account, ei-15
824+ther individually or in a fiduciary capac-16
825+ity, but not as a part of a regular business; 17
826+‘‘(iv) enters into a digital commodity 18
827+transaction the primary purpose of which is 19
828+to make, send, receive, or facilitate pay-20
829+ments, whether involving a payment service 21
830+provider or on a peer-to-peer basis; or 22
831+‘‘(v) validates a digital commodity 23
832+transaction, operates a node, or engages in 24
833+similar activity to participate in facili-25
834+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00028 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
835+rfrederick on LAP8M3WLY3PROD with BILLS 29
836+•HR 4763 RH
837+tating, operating, or securing a blockchain 1
838+system. 2
839+‘‘(59) D
840+IGITAL COMMODITY EXCHANGE .—The 3
841+term ‘digital commodity exchange’ means a trading 4
842+facility that offers or seeks to offer a cash or spot 5
843+market in at least 1 digital commodity. 6
844+‘‘(60) D
845+IGITAL ASSET-RELATED DEFINITIONS.— 7
846+‘‘(A) S
847+ECURITIES ACT OF 1933.—The terms 8
848+‘affiliated person’, ‘blockchain system’, ‘decen-9
849+tralized governance system’ ‘decentralized net-10
850+work’, ‘digital asset’, ‘digital asset issuer’, ‘end 11
851+user distribution’, ‘functional network’, ‘per-12
852+mitted payment stablecoin’, ‘related person’, and 13
853+‘restricted digital asset’ have the meaning given 14
854+the terms, respectively, under section 2(a) of the 15
855+Securities Act of 1933 (15 U.S.C. 77b(a)). 16
856+‘‘(B) S
857+ECURITIES EXCHANGE ACT OF 1934.— 17
858+The terms ‘digital asset broker’ and ‘digital asset 18
859+dealer’ have the meaning given those terms, re-19
860+spectively, under section 3(a) of the Securities 20
861+Exchange Act of 1934 (15 U.S.C. 78c(a)). 21
862+‘‘(61) M
863+IXED DIGITAL ASSET TRANSACTION .— 22
864+The term ‘mixed digital asset transaction’ has the 23
865+meaning given that term under section 3(a) of the Se-24
866+curities Exchange Act of 1934 (15 U.S.C. 78c(a)).’’. 25
867+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
868+rfrederick on LAP8M3WLY3PROD with BILLS 30
869+•HR 4763 RH
870+SEC. 103. DEFINITIONS UNDER THIS ACT. 1
871+In this Act: 2
872+(1) D
873+EFINITIONS UNDER THE COMMODITY EX -3
874+CHANGE ACT.—The terms ‘‘digital commodity’’, ‘‘dig-4
875+ital commodity broker’’, ‘‘digital commodity dealer’’, 5
876+and ‘‘digital commodity exchange’’ have the meaning 6
877+given those terms, respectively, under section 1a of the 7
878+Commodity Exchange Act (7 U.S.C. 1a). 8
879+(2) D
880+EFINITIONS UNDER THE SECURITIES ACT 9
881+OF 1933.—The terms ‘‘affiliated person’’, ‘‘blockchain’’, 10
882+‘‘blockchain system’’, ‘‘blockchain protocol’’, ‘‘decen-11
883+tralized network’’, ‘‘digital asset’’, ‘‘digital asset 12
884+issuer’’, ‘‘digital asset maturity date’’, ‘‘digital asset 13
885+trading system’’, ‘‘end user distribution’’, ‘‘functional 14
886+network’’, ‘‘permitted payment stablecoin’’, ‘‘restricted 15
887+digital asset’’, ‘‘securities laws’’, and ‘‘source code’’ 16
888+have the meaning given those terms, respectively, 17
889+under section 2(a) of the Securities Act of 1933 (15 18
890+U.S.C. 77b(a)). 19
891+(3) D
892+EFINITIONS UNDER THE SECURITIES EX -20
893+CHANGE ACT OF 1934 .—The terms ‘‘Bank Secrecy 21
894+Act’’, ‘‘digital asset broker’’, ‘‘digital asset dealer’’, 22
895+‘‘digital asset trading system’’, ‘‘mixed digital asset 23
896+transaction’’, and ‘‘self-regulatory organization’’ have 24
897+the meaning given those terms, respectively, under 25
898+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
899+rfrederick on LAP8M3WLY3PROD with BILLS 31
900+•HR 4763 RH
901+section 3(a) of the Securities Exchange Act of 1934 1
902+(15 U.S.C. 78c(a)). 2
903+SEC. 104. JOINT RULEMAKINGS. 3
904+(a) D
905+EFINITIONS.—The Commodity Futures Trading 4
906+Commission and the Securities and Exchange Commission 5
907+shall, jointly, issue rules to further define the following 6
908+terms: 7
909+(1) The terms ‘‘affiliated person’’, ‘‘blockchain’’, 8
910+‘‘blockchain system’’, ‘‘blockchain protocol’’, ‘‘decen-9
911+tralized network’’, ‘‘decentralized governance system’’, 10
912+‘‘digital asset’’, ‘‘digital asset issuer’’, ‘‘digital asset 11
913+maturity date’’, ‘‘end user distribution’’, ‘‘functional 12
914+network’’, ‘‘related person’’, ‘‘restricted digital asset’’, 13
915+and ‘‘source code’’, as defined under section 2(a) of 14
916+the Securities Act of 1933. 15
917+(2) The term ‘‘mixed digital asset transaction’’, 16
918+as defined under section 3(a) of the Securities Ex-17
919+change Act of 1934. 18
920+(3) The term ‘‘digital commodity’’, as defined 19
921+under section 1a of the Commodity Exchange Act. 20
922+(b) J
923+OINTRULEMAKING FOREXCHANGES.—The Com-21
924+modity Futures Trading Commission and the Securities 22
925+and Exchange Commission shall, jointly, issue rules to ex-23
926+empt persons dually registered with the Commodity Futures 24
927+Trading Commission as a digital commodity exchange and 25
928+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00031 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
929+rfrederick on LAP8M3WLY3PROD with BILLS 32
930+•HR 4763 RH
931+with the Securities and Exchange Commission as a digital 1
932+asset trading system from duplicative, conflicting, or un-2
933+duly burdensome provisions of this Act, the securities laws, 3
934+and the Commodity Exchange Act and the rules thereunder, 4
935+to the extent such exemption would foster the development 5
936+of fair and orderly markets in digital assets, be necessary 6
937+or appropriate in the public interest, and be consistent with 7
938+the protection of investors. 8
939+(c) J
940+OINTRULEMAKING FOR MIXEDDIGITALASSET 9
941+T
942+RANSACTIONS.—The Commodity Futures Trading Com-10
943+mission and the Securities and Exchange Commission shall, 11
944+jointly, issue rules applicable to mixed digital asset trans-12
945+actions under this Act and the amendments made by this 13
946+Act. 14
947+(d) P
948+ROTECTION OFSELF-CUSTODY.— 15
949+(1) I
950+N GENERAL.—The Financial Crimes En-16
951+forcement Network may not issue any rule or order 17
952+that would prohibit a U.S. individual from— 18
953+(A) maintaining a hardware wallet, soft-19
954+ware wallet, or other means to facilitate such in-20
955+dividual’s own custody of digital assets; or 21
956+(B) conducting transactions and self-cus-22
957+tody of digital assets for any lawful purpose. 23
958+(2) R
959+ULE OF CONSTRUCTION .—Paragraph (1) 24
960+may not be construed to limit the ability of Financial 25
961+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00032 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
962+rfrederick on LAP8M3WLY3PROD with BILLS 33
963+•HR 4763 RH
964+Crimes Enforcement Network to carry out any en-1
965+forcement authority. 2
966+SEC. 105. NOTICE OF INTENT TO REGISTER FOR DIGITAL 3
967+COMMODITY EXCHANGES, BROKERS, AND 4
968+DEALERS. 5
969+(a) I
970+NGENERAL.— 6
971+(1) N
972+OTICE OF INTENT TO REGISTER .—Any per-7
973+son may file a notice of intent to register with the 8
974+Commodity Futures Trading Commission (in this 9
975+subsection referred to as the ‘‘Commission’’) as a— 10
976+(A) digital commodity exchange, for a per-11
977+son intending to register as a digital commodity 12
978+exchange under section 5i of the Commodity Ex-13
979+change Act; 14
980+(B) digital commodity broker, for a person 15
981+intending to register as a digital commodity 16
982+broker under section 4u of such Act; 17
983+(C) digital commodity dealer, for a person 18
984+intending to register as a digital commodity 19
985+dealer under section 4u of such Act; or 20
986+(D) associated person, for a person intend-21
987+ing to register under section 4k(4) of such Act. 22
988+(2) F
989+ILING.—A person, other than a person de-23
990+scribed in paragraph (1)(D), desiring to file a notice 24
991+of intent to register under paragraph (1) shall be in 25
992+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00033 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
993+rfrederick on LAP8M3WLY3PROD with BILLS 34
994+•HR 4763 RH
995+compliance with this section if the person submits to 1
996+the Commission— 2
997+(A) a statement of the nature of the reg-3
998+istrations the filer intends to pursue; 4
999+(B) the information required by subsections 5
1000+(b) and (c). 6
1001+(b) D
1002+ISCLOSURE OFGENERALINFORMATION.—A per-7
1003+son filing a notice of intent to register under subsection (a) 8
1004+shall disclose to the Commission the following: 9
1005+(1) Information concerning the management of 10
1006+the person, including information describing— 11
1007+(A) the ownership and management of the 12
1008+person; 13
1009+(B) the financial condition of the person; 14
1010+(C) affiliated entities; 15
1011+(D) potential conflicts of interest; and 16
1012+(E) the physical address of the person. 17
1013+(2) Information concerning the operations of the 18
1014+person, including— 19
1015+(A) any rulebook or other customer order 20
1016+fulfilment rules; 21
1017+(B) risk management procedures; and 22
1018+(C) a description of the product listing 23
1019+process. 24
1020+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00034 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
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1022+•HR 4763 RH
1023+(c) ASSET ANDLISTINGINFORMATION.—A person fil-1
1024+ing a notice of intent to register under subsection(a) shall 2
1025+provide to the Commission and the Securities and Exchange 3
1026+Commission a detailed description of—. 4
1027+(1) the specific characteristics of each asset listed 5
1028+or offered for trading by the person, including infor-6
1029+mation regarding the assets market activity, token 7
1030+distribution, and functional use; 8
1031+(2) the product listing determination made by 9
1032+the person for each asset listed or offered for trading 10
1033+by the person. 11
1034+(d) R
1035+EQUIREMENTS.—A person filing a notice of in-12
1036+tent to register under subsection (a) shall comply with the 13
1037+following requirements: 14
1038+(1) R
1039+EGISTERED FUTURES ASSOCIATION .—The 15
1040+person shall be a member of a futures association reg-16
1041+istered under section 17 of the Commodity Exchange 17
1042+Act, and shall comply with the rules of the associa-18
1043+tion, including the rules of the association pertaining 19
1044+to customer disclosures and protection of customer as-20
1045+sets. 21
1046+(2) B
1047+OOKS AND RECORDS .—The person shall 22
1048+keep their books and records open to inspection and 23
1049+examination by the Commission. 24
1050+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00035 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
1051+rfrederick on LAP8M3WLY3PROD with BILLS 36
1052+•HR 4763 RH
1053+(3) CUSTOMER DISCLOSURES .—The person shall 1
1054+disclose to customers— 2
1055+(A) information about the material risks 3
1056+and characteristics of the assets listed for trading 4
1057+on the person; 5
1058+(B) information about the material risks 6
1059+and characteristics of the transactions facilitated 7
1060+by the person; 8
1061+(C) information about the location and 9
1062+manner in which the digital assets of the cus-10
1063+tomer will be and are custodied; and 11
1064+(D) in their disclosure documents, offering 12
1065+documents, and promotional material— 13
1066+(i) in a prominent manner, that they 14
1067+are not registered with or regulated by the 15
1068+Commission; and 16
1069+(ii) the contact information for the 17
1070+whistleblower, complaint, and reparation 18
1071+programs of the Commission. 19
1072+(4) C
1073+USTOMER ASSETS.— 20
1074+(A) I
1075+N GENERAL.—The person shall— 21
1076+(i) hold customer money, assets, and 22
1077+property in a manner to minimize the risk 23
1078+of loss to the customer or unreasonable delay 24
1079+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00036 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
1080+rfrederick on LAP8M3WLY3PROD with BILLS 37
1081+•HR 4763 RH
1082+in customer access to money, assets, and 1
1083+property of the customer; 2
1084+(ii) treat and deal with all money, as-3
1085+sets, and property, including any rights as-4
1086+sociated with any such money, assets, or 5
1087+property, of any customer received as be-6
1088+longing to the customer; 7
1089+(iii) calculate the total digital asset ob-8
1090+ligations of the person, and at all times 9
1091+hold money, assets, or property equal to or 10
1092+in excess of the total digital asset obliga-11
1093+tions; and 12
1094+(iv) not commingle such money, assets 13
1095+and property held to meet the total com-14
1096+modity obligation with the funds of the per-15
1097+son or use the money, assets, or property to 16
1098+margin, secure, or guarantee any trade or 17
1099+contract, or to secure or extend the credit, of 18
1100+any customer or person other than the one 19
1101+for whom the same are held, except that— 20
1102+(I) the money, assets, and prop-21
1103+erty of any customer may be commin-22
1104+gled with that of any other customer, if 23
1105+separately accounted for; and 24
1106+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00037 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
1107+rfrederick on LAP8M3WLY3PROD with BILLS 38
1108+•HR 4763 RH
1109+(II) the share of the money, assets, 1
1110+and property, as in the normal course 2
1111+of business are necessary to margin, 3
1112+guarantee, secure, transfer, adjust, or 4
1113+settle a contract of sale of a commodity 5
1114+asset, may be withdrawn and applied 6
1115+to do so, including the payment of 7
1116+commissions, brokerage, interest, taxes, 8
1117+storage, and other charges lawfully ac-9
1118+cruing in connection with the contract 10
1119+of sale of a digital commodity. 11
1120+(B) A
1121+DDITIONAL RESOURCES.— 12
1122+(i) I
1123+N GENERAL.—This section shall 13
1124+not prevent or be construed to prevent the 14
1125+person from adding to the customer money, 15
1126+assets, and property required to be seg-16
1127+regated under subparagraph (A), additional 17
1128+amounts of money, assets, or property from 18
1129+the account of the person as the person de-19
1130+termines necessary to hold money, assets, or 20
1131+property equal to or in excess of the total 21
1132+digital asset obligations of the person. 22
1133+(ii) T
1134+REATMENT AS CUSTOMER 23
1135+FUNDS.—Any money, assets, or property de-24
1136+posited pursuant to clause (i) shall be con-25
1137+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00038 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
1138+rfrederick on LAP8M3WLY3PROD with BILLS 39
1139+•HR 4763 RH
1140+sidered customer property within the mean-1
1141+ing of this subsection. 2
1142+(e) C
1143+OMPLIANCE.— 3
1144+(1) I
1145+N GENERAL.—A person who has filed a no-4
1146+tice of intent to register under this section and is in 5
1147+compliance with this section shall be exempt from Se-6
1148+curities and Exchange Commission rules and regula-7
1149+tions pertaining to registering as a national securities 8
1150+exchange, broker, dealer, or clearing agency, for ac-9
1151+tivities related to a digital asset deemed a security. 10
1152+(2) N
1153+ONCOMPLIANCE.—Paragraph (1) shall not 11
1154+apply if, after notice from the Commission and a rea-12
1155+sonable opportunity to correct the deficiency, a person 13
1156+who has submitted a notice of intent to register is not 14
1157+in compliance with this section. 15
1158+(3) A
1159+NTI-FRAUD AND ANTI -MANIPULATION.— 16
1160+Paragraph (1) shall not be construed to limit any 17
1161+anti-fraud, anti-manipulation, or false reporting en-18
1162+forcement authority of the Commission or the Securi-19
1163+ties and Exchange Commission. 20
1164+(4) D
1165+ELISTING.—Paragraph (1) shall not be con-21
1166+strued to limit the authority of the Commission and 22
1167+the Securities and Exchange Commission to jointly 23
1168+require a person to delist an asset for trading if the 24
1169+Commission and the Securities and Exchange Com-25
1170+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00039 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
1171+rfrederick on LAP8M3WLY3PROD with BILLS 40
1172+•HR 4763 RH
1173+mission determines that the listing is inconsistent 1
1174+with the Commodity Exchange Act, the securities laws 2
1175+(including regulations under those laws), or this Act. 3
1176+(f) F
1177+INALREGISTRATION.— 4
1178+(1) I
1179+N GENERAL.—A person may not file a no-5
1180+tice of intent to register with the Commission after 6
1181+the Commission has finalized its rules for the reg-7
1182+istration of digital commodity exchanges, digital com-8
1183+modity brokers, or digital commodity dealers, as ap-9
1184+propriate. 10
1185+(2) T
1186+RANSITION TO FINAL REGISTRATION .—Sub-11
1187+section (e)(1) shall not apply to a person who has 12
1188+submitted a notice of intent to register if— 13
1189+(A) the Commission— 14
1190+(i) determines that the person has 15
1191+failed to comply with the requirements of 16
1192+this section; or 17
1193+(ii) denies the application of the per-18
1194+son to register; or 19
1195+(B) the digital commodity exchange, digital 20
1196+commodity broker, or digital commodity dealer 21
1197+that filed a notice of intent to register failed to 22
1198+apply for registration as such with the Commis-23
1199+sion within 180 days after the effective date of 24
1200+the final rules of the Commission for the reg-25
1201+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00040 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
1202+rfrederick on LAP8M3WLY3PROD with BILLS 41
1203+•HR 4763 RH
1204+istration of digital commodity exchanges, digital 1
1205+commodity brokers, or digital commodity dealers, 2
1206+as appropriate. 3
1207+(g) L
1208+IABILITY OF THEFILER.—It shall be unlawful 4
1209+for any person to provide false information in support of 5
1210+a filing under this section if the person knew or reasonably 6
1211+should have known that the information was false. 7
1212+(h) R
1213+EGISTEREDFUTURESASSOCIATION.—Within 8
1214+180 days after the date of the enactment of this Act, a reg-9
1215+istered futures association shall adopt rules for membership 10
1216+in the association for persons required to be members of the 11
1217+association under subsection (d)(1). 12
1218+SEC. 106. NOTICE OF INTENT TO REGISTER FOR DIGITAL 13
1219+ASSET BROKERS, DEALERS, AND TRADING 14
1220+SYSTEMS. 15
1221+(a) I
1222+NGENERAL.— 16
1223+(1) N
1224+OTICE OF INTENT TO REGISTER .—Any per-17
1225+son may file a notice of intent to register with the Se-18
1226+curities and Exchange Commission (in this subsection 19
1227+referred to as the ‘‘Commission’’) as a— 20
1228+(A) digital asset trading system, for a per-21
1229+son intending to register as a digital asset trad-22
1230+ing system under section 6(m) of the Securities 23
1231+Exchange Act of 1934; 24
1232+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00041 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
1233+rfrederick on LAP8M3WLY3PROD with BILLS 42
1234+•HR 4763 RH
1235+(B) digital asset broker, for a person in-1
1236+tending to register as a digital asset broker 2
1237+under section 15H of the Securities Exchange 3
1238+Act of 1934; or 4
1239+(C) digital asset dealer, for a person intend-5
1240+ing to register as a digital asset dealer under sec-6
1241+tion 15H of the Securities Exchange Act of 1934. 7
1242+(2) F
1243+ILING.—A person desiring to file a notice of 8
1244+intent to register under paragraph (1) shall be in 9
1245+compliance with this section if the person submits to 10
1246+the Commission— 11
1247+(A) a statement of the nature of the reg-12
1248+istrations the filer intends to pursue; 13
1249+(B) the information required by subsections 14
1250+(b) and (c). 15
1251+(b) D
1252+ISCLOSURE OFGENERALINFORMATION.—A per-16
1253+son filing a notice of intent to register under subsection (a) 17
1254+shall disclose to the Commission the following: 18
1255+(1) Information concerning the management of 19
1256+the person, including information describing— 20
1257+(A) the ownership and management of the 21
1258+person; 22
1259+(B) the financial condition of the person; 23
1260+(C) affiliated entities; and 24
1261+(D) potential conflicts of interest. 25
1262+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00042 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
1263+rfrederick on LAP8M3WLY3PROD with BILLS 43
1264+•HR 4763 RH
1265+(2) Information concerning the operations of the 1
1266+person, including— 2
1267+(A) any rulebook or other customer order 3
1268+fulfilment rules; 4
1269+(B) risk management procedures; and 5
1270+(C) a description of the product listing 6
1271+process. 7
1272+(c) L
1273+ISTINGINFORMATION.—A person filing a notice 8
1274+of intent to register under subsection (a) shall provide to 9
1275+the Commission and the Commodity Futures Trading Com-10
1276+mission a detailed description of the product listing deter-11
1277+mination made by the person for each asset listed or offered 12
1278+for trading by the person. 13
1279+(d) R
1280+EQUIREMENTS.—A person filing a notice of in-14
1281+tent to register under subsection (a) shall comply with the 15
1282+following requirements: 16
1283+(1) B
1284+OOKS AND RECORDS .—The person shall 17
1285+keep their books and records open to inspection and 18
1286+examination by the Commission. 19
1287+(2) C
1288+USTOMER DISCLOSURES .—The person shall 20
1289+disclose to consumers— 21
1290+(A) information about the material risks 22
1291+and characteristics of the assets listed for trading 23
1292+on the person; and 24
1293+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00043 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
1294+rfrederick on LAP8M3WLY3PROD with BILLS 44
1295+•HR 4763 RH
1296+(B) information about the material risks 1
1297+and characteristics of the transactions facilitated 2
1298+by the person. 3
1299+(3) C
1300+USTOMER ASSETS.— 4
1301+(A) I
1302+N GENERAL.—The person shall— 5
1303+(i) hold customer money, assets, and 6
1304+property in a manner to minimize the risk 7
1305+of loss to the customer or unreasonable delay 8
1306+in customer access to money, assets, and 9
1307+property of the customer; 10
1308+(ii) treat and deal with all money, as-11
1309+sets, and property, including any rights as-12
1310+sociated with any such money, assets, or 13
1311+property, of any customer received as be-14
1312+longing to the customer; 15
1313+(iii) segregate all money, assets, and 16
1314+property received from any customer of the 17
1315+person from the funds of the person, except 18
1316+that— 19
1317+(I) the money, assets, and prop-20
1318+erty of any customer may be commin-21
1319+gled with that of any other customer, if 22
1320+separately accounted for; and 23
1321+(II) the share of the money, assets, 24
1322+and property, as in the normal course 25
1323+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00044 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
1324+rfrederick on LAP8M3WLY3PROD with BILLS 45
1325+•HR 4763 RH
1326+of business are necessary to margin, 1
1327+guarantee, secure, transfer, adjust, or 2
1328+settle a contract of sale of a commodity 3
1329+asset, may be withdrawn and applied 4
1330+to do so, including the payment of 5
1331+commissions, brokerage, interest, taxes, 6
1332+storage, and other charges lawfully ac-7
1333+cruing in connection with the contract 8
1334+of sale of a digital commodity. 9
1335+(B) A
1336+DDITIONAL RESOURCES.— 10
1337+(i) I
1338+N GENERAL.—This section shall 11
1339+not prevent or be construed to prevent the 12
1340+person from adding to the customer money, 13
1341+assets, and property required to be seg-14
1342+regated under subparagraph (A) additional 15
1343+amounts of money, assets, or property from 16
1344+the account of the person as the person de-17
1345+termines necessary to prevent the account of 18
1346+a customer from becoming under-segregated. 19
1347+(ii) T
1348+REATMENT AS CUSTOMER 20
1349+FUNDS.—Any money, assets, or property de-21
1350+posited pursuant to clause (i) shall be con-22
1351+sidered customer property within the mean-23
1352+ing of this subsection. 24
1353+(e) C
1354+OMPLIANCE ANDENFORCEMENT.— 25
1355+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00045 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
1356+rfrederick on LAP8M3WLY3PROD with BILLS 46
1357+•HR 4763 RH
1358+(1) IN GENERAL.—A person who has filed a no-1
1359+tice of intent to register under this section and is in 2
1360+compliance with this section shall not be subject to an 3
1361+enforcement action by the Commission for— 4
1362+(A) listing or offering a digital asset deemed 5
1363+a security; or 6
1364+(B) failing to register as a national securi-7
1365+ties exchange, alternative trading system, broker, 8
1366+dealer, or clearing agency, for activities related 9
1367+to digital assets deemed a security. 10
1368+(2) N
1369+ONCOMPLIANCE.—Paragraph (1) shall not 11
1370+apply if, after notice from the Commission and a rea-12
1371+sonable opportunity to correct the deficiency, a person 13
1372+who has submitted a notice of intent to register is not 14
1373+in compliance with this section. 15
1374+(3) A
1375+NTIFRAUD AND ANTIMANIPULATION .—Para-16
1376+graph (1) shall not be construed to limit any 17
1377+antimanipulation, antifraud, or false reporting en-18
1378+forcement authority of the Commission or the Com-19
1379+modity Futures Trading Commission. 20
1380+(4) D
1381+ELISTING.—Paragraph (1) shall not be con-21
1382+strued to limit the authority of the Commission or the 22
1383+Commodity Futures Trading Commission to require a 23
1384+person to delist an asset for trading if the Commis-24
1385+sion or the Commodity Futures Trading Commission 25
1386+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00046 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
1387+rfrederick on LAP8M3WLY3PROD with BILLS 47
1388+•HR 4763 RH
1389+determines that the listing is inconsistent with the 1
1390+Commodity Exchange Act, the securities laws (includ-2
1391+ing regulations under those laws), or this Act. 3
1392+(f) F
1393+INALREGISTRATION.— 4
1394+(1) I
1395+N GENERAL.—A person may not file a no-5
1396+tice of intent to register with the Commission after 6
1397+the Commission has finalized its rules for the reg-7
1398+istration of digital asset brokers, digital asset dealers, 8
1399+and digital asset trading systems, as appropriate. 9
1400+(2) T
1401+RANSITION TO FINAL REGISTRATION .— 10
1402+(A) O
1403+NGOING DEFERRAL FOR ENTITIES 11
1404+REGISTERED WITH THE COMMISSION .—Sub-12
1405+section (e)(1) shall continue to apply to a person 13
1406+who has submitted a notice of intent to register 14
1407+while the person is registered with the Commis-15
1408+sion as a digital asset broker, digital asset deal-16
1409+er, or digital asset trading system, as appro-17
1410+priate. 18
1411+(B) E
1412+ND OF DEFERRAL.—Subsection (e)(1) 19
1413+shall not apply to a person who has submitted 20
1414+a notice of intent to register if— 21
1415+(i) the Commission— 22
1416+(I) determines that the person has 23
1417+failed to comply with the requirements 24
1418+of this section; or 25
1419+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00047 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
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1421+•HR 4763 RH
1422+(II) denies the application of the 1
1423+person to register; or 2
1424+(ii) the digital asset broker, digital 3
1425+asset dealer, or digital asset trading system 4
1426+that filed a notice of intent to register failed 5
1427+to register as such with the Commission 6
1428+within 180 days after the Commission fi-7
1429+nalized the rules of the Commission for the 8
1430+registration of digital asset brokers, digital 9
1431+asset dealers, and digital asset trading sys-10
1432+tems, as appropriate. 11
1433+(g) L
1434+IABILITY OF THEFILER.—It shall be unlawful 12
1435+for any person to provide false information in support of 13
1436+a filing under this section if the person knowingly or rea-14
1437+sonably should have known that the information was false. 15
1438+SEC. 107. COMMODITY EXCHANGE ACT SAVINGS PROVI-16
1439+SIONS. 17
1440+(a) I
1441+NGENERAL.—Nothing in this Act shall affect or 18
1442+apply to, or be interpreted to affect or apply to— 19
1443+(1) any agreement, contract, or transaction that 20
1444+is subject to the Commodity Exchange Act as— 21
1445+(A) a contract of sale of a commodity for 22
1446+future delivery or an option on such a contract; 23
1447+(B) a swap; 24
1448+(C) a security futures product; 25
1449+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00048 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
1450+rfrederick on LAP8M3WLY3PROD with BILLS 49
1451+•HR 4763 RH
1452+(D) an option authorized under section 4c 1
1453+of such Act; 2
1454+(E) an agreement, contract, or transaction 3
1455+described in section 2(c)(2)(C)(i) of such Act; or 4
1456+(F) a leverage transaction authorized under 5
1457+section 19 of such Act; or 6
1458+(2) the activities of any person with respect to 7
1459+any such agreement, contract, or transaction. 8
1460+(b) P
1461+ROHIBITIONS ONSPOTDIGITALCOMMODITYEN-9
1462+TITIES.—Nothing in this Act authorizes, or shall be inter-10
1463+preted to authorize, a digital commodity exchange, digital 11
1464+commodity broker, or digital commodity dealer to engage 12
1465+in any activities involving any transaction, contract, or 13
1466+agreement described in subsection (a)(1), solely by virtue 14
1467+of being registered or filing notice of intent to register as 15
1468+a digital commodity exchange, digital commodity broker, 16
1469+or digital commodity dealer. 17
1470+(c) D
1471+EFINITIONS.—In this section, each term shall 18
1472+have the meaning provided in the Commodity Exchange Act 19
1473+or the regulations prescribed under such Act. 20
1474+SEC. 108. INTERNATIONAL HARMONIZATION. 21
1475+In order to promote effective and consistent global reg-22
1476+ulation of digital assets, the Commodity Futures Trading 23
1477+Commission and the Securities and Exchange Commission, 24
1478+as appropriate— 25
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1480+rfrederick on LAP8M3WLY3PROD with BILLS 50
1481+•HR 4763 RH
1482+(1) shall consult and coordinate with foreign reg-1
1483+ulatory authorities on the establishment of consistent 2
1484+international standards with respect to the regulation 3
1485+of digital assets, restricted digital assets, and digital 4
1486+commodities; and 5
1487+(2) may agree to such information-sharing ar-6
1488+rangements as may be deemed to be necessary or ap-7
1489+propriate in the public interest or for the protection 8
1490+of investors, customers, and users of digital assets. 9
1491+SEC. 109. IMPLEMENTATION. 10
1492+(a) G
1493+LOBALRULEMAKINGTIMEFRAME.—Unless other-11
1494+wise provided in this Act or an amendment made by this 12
1495+Act, the Commodity Futures Trading Commission and the 13
1496+Securities and Exchange Commission, or both, shall indi-14
1497+vidually, and jointly where required, promulgate rules and 15
1498+regulations required of each Commission under this Act or 16
1499+an amendment made by this Act not later than 360 days 17
1500+after the date of enactment of this Act. 18
1501+(b) R
1502+ULES ANDREGISTRATIONBEFOREFINALEFFEC-19
1503+TIVEDATES.— 20
1504+(1) I
1505+N GENERAL.—In order to prepare for the 21
1506+implementation of this Act, the Commodity Futures 22
1507+Trading Commission and the Securities and Ex-23
1508+change Commission may, before any effective date 24
1509+provided in this Act— 25
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1511+rfrederick on LAP8M3WLY3PROD with BILLS 51
1512+•HR 4763 RH
1513+(A) promulgate rules, regulations, or orders 1
1514+permitted or required by this Act; 2
1515+(B) conduct studies and prepare reports 3
1516+and recommendations required by this Act; 4
1517+(C) register persons under this Act; and 5
1518+(D) exempt persons, agreements, contracts, 6
1519+or transactions from provisions of this Act, 7
1520+under the terms contained in this Act. 8
1521+(2) L
1522+IMITATION ON EFFECTIVENESS .—An action 9
1523+by the Commodity Futures Trading Commission or 10
1524+the Securities and Exchange Commission under para-11
1525+graph (1) shall not become effective before the effective 12
1526+date otherwise applicable to the action under this Act. 13
1527+TITLE II.—DIGITAL ASSET 14
1528+EXEMPTIONS 15
1529+SEC. 201. EXEMPTED TRANSACTIONS IN DIGITAL ASSETS. 16
1530+(a) I
1531+NGENERAL.—The Securities Act of 1933 (15 17
1532+U.S.C. 77a et seq.) is amended— 18
1533+(1) in section 4(a), by adding at the end the fol-19
1534+lowing: 20
1535+‘‘(8) transactions involving the offer or sale of 21
1536+units of a digital asset by a digital asset issuer, if— 22
1537+‘‘(A) the aggregate amount of units of the 23
1538+digital asset sold by the digital asset issuer in re-24
1539+liance on the exemption provided under this 25
1540+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00051 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
1541+rfrederick on LAP8M3WLY3PROD with BILLS 52
1542+•HR 4763 RH
1543+paragraph, during the 12-month period pre-1
1544+ceding the date of such transaction, including the 2
1545+amount sold in such transaction, is not more 3
1546+than $75,000,000 (as such amount is annually 4
1547+adjusted by the Commission to reflect the change 5
1548+in the Consumer Price Index for All Urban Con-6
1549+sumers published by the Bureau of Labor Statis-7
1550+tics of the Department of Labor); 8
1551+‘‘(B) with respect to a transaction involving 9
1552+the purchase of units of a digital asset by a per-10
1553+son who is not an accredited investor, the aggre-11
1554+gate amount of all units of digital assets pur-12
1555+chased by such person during the 12-month pe-13
1556+riod preceding the date of such transaction, in-14
1557+cluding the unit of a digital asset purchased in 15
1558+such transaction, does not exceed the greater of— 16
1559+‘‘(i) 10 percent of the person’s annual 17
1560+income or joint income with that person’s 18
1561+spouse or spousal equivalent; or 19
1562+‘‘(ii) 10 percent of the person’s net 20
1563+worth or joint net worth with the person’s 21
1564+spouse or spousal equivalent; 22
1565+‘‘(C) after the completion of the transaction, 23
1566+the purchaser does not own more than 10 percent 24
1567+of the total amount of the units of the digital 25
1568+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00052 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
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1570+•HR 4763 RH
1571+asset sold in reliance on the exemption under 1
1572+this paragraph; 2
1573+‘‘(D) the transaction does not involve the 3
1574+offer or sale of any digital asset not offered as 4
1575+part of an investment contract; 5
1576+‘‘(E) the transaction does not involve the 6
1577+offer or sale of a unit of a digital asset by a dig-7
1578+ital asset issuer that— 8
1579+‘‘(i) is not organized under the laws of 9
1580+a State, a territory of the United States or 10
1581+the District of Columbia; 11
1582+‘‘(ii) is a development stage company 12
1583+that either— 13
1584+‘‘(I) has no specific business plan 14
1585+or purpose; or 15
1586+‘‘(II) has indicated that the busi-16
1587+ness plan of the company is to merge 17
1588+with or acquire an unidentified com-18
1589+pany; 19
1590+‘‘(iii) is an investment company, as 20
1591+defined in section 3 of the Investment Com-21
1592+pany Act of 1940 (15 U.S.C. 80a–3), or is 22
1593+excluded from the definition of investment 23
1594+company by section 3(b) or section 3(c) of 24
1595+that Act (15 U.S.C. 80a–3(b) or 80a–3(c)); 25
1596+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00053 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
1597+rfrederick on LAP8M3WLY3PROD with BILLS 54
1598+•HR 4763 RH
1599+‘‘(iv) is issuing fractional undivided 1
1600+interests in oil or gas rights, or a similar 2
1601+interest in other mineral rights; 3
1602+‘‘(v) is, or has been, subject to any 4
1603+order of the Commission entered pursuant 5
1604+to section 12(j) of the Securities Exchange 6
1605+Act of 1934 during the 5-year period before 7
1606+the filing of the offering statement; or 8
1607+‘‘(vi) is disqualified pursuant to sec-9
1608+tion 230.262 of title 17, Code of Federal 10
1609+Regulations; and 11
1610+‘‘(F) the issuer meets the requirements of 12
1611+section 4B(a).’’; and 13
1612+(2) by inserting after section 4A the following: 14
1613+‘‘SEC. 4B. REQUIREMENTS WITH RESPECT TO CERTAIN DIG-15
1614+ITAL ASSET TRANSACTIONS. 16
1615+‘‘(a) R
1616+EQUIREMENTS FORDIGITALASSETISSUERS.— 17
1617+‘‘(1) I
1618+NFORMATION REQUIRED IN STATEMENT .— 18
1619+A digital asset issuer offering or selling a unit of dig-19
1620+ital asset in reliance on section 4(a)(8) shall file with 20
1621+the Commission a statement containing the following 21
1622+information: 22
1623+‘‘(A) The name, legal status (including the 23
1624+jurisdiction in which the issuer is organized and 24
1625+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00054 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
1626+rfrederick on LAP8M3WLY3PROD with BILLS 55
1627+•HR 4763 RH
1628+the date of organization), and website of the dig-1
1629+ital asset issuer. 2
1630+‘‘(B) A certification that the digital asset 3
1631+issuer meets the relevant requirements described 4
1632+under section 4(a)(8). 5
1633+‘‘(C) An overview of the material aspects of 6
1634+the offering. 7
1635+‘‘(D) A description of the purpose and in-8
1636+tended use of the offering proceeds. 9
1637+‘‘(E) A description of the plan of distribu-10
1638+tion of any unit of a digital asset that is to be 11
1639+offered. 12
1640+‘‘(F) A description of the material risks sur-13
1641+rounding ownership of a unit of a digital asset. 14
1642+‘‘(G) A description of exempt offerings con-15
1643+ducted within the past three years by the digital 16
1644+asset issuer. 17
1645+‘‘(H) A description of the digital asset 18
1646+issuer and the current number of employees of 19
1647+the digital asset issuer. 20
1648+‘‘(I) A description of any material trans-21
1649+actions or relationships between the digital asset 22
1650+issuer and affiliated persons. 23
1651+‘‘(J) A description of exempt offerings con-24
1652+ducted within the past three years. 25
1653+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00055 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
1654+rfrederick on LAP8M3WLY3PROD with BILLS 56
1655+•HR 4763 RH
1656+‘‘(2) INFORMATION REQUIRED FOR PUR -1
1657+CHASERS.—A digital asset issuer shall disclose the in-2
1658+formation described under section 43 of the Securities 3
1659+Exchange Act of 1934 on a freely accessible public 4
1660+website. 5
1661+‘‘(3) O
1662+NGOING DISCLOSURE REQUIREMENTS .—A 6
1663+digital asset issuer that has filed a statement under 7
1664+paragraph (1) to offer and sell a unit of a digital 8
1665+asset in reliance on section 4(a)(8) shall file the fol-9
1666+lowing with the Commission: 10
1667+‘‘(A) A
1668+NNUAL REPORTS.—An annual report 11
1669+that includes any material changes to the infor-12
1670+mation described under paragraph (2) for the 13
1671+current fiscal year and for any fiscal year there-14
1672+after, unless the issuer is no longer obligated to 15
1673+file such annual report pursuant to paragraph 16
1674+(4). 17
1675+‘‘(B) S
1676+EMIANNUAL REPORTS .—Along with 18
1677+each annual report required under subparagraph 19
1678+(A), and separately six months thereafter, a re-20
1679+port containing— 21
1680+‘‘(i) an updated description of the cur-22
1681+rent state and timeline for the development 23
1682+of the blockchain system to which the digital 24
1683+asset relates, showing how and when the 25
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1686+•HR 4763 RH
1687+blockchain system intends or intended to be 1
1688+considered a functional network and a de-2
1689+centralized network; 3
1690+‘‘(ii) the amount of money raised by 4
1691+the digital asset issuer in reliance on sec-5
1692+tion 4(a)(8), how much of that money has 6
1693+been spent, and the general categories and 7
1694+amounts on which that money has been 8
1695+spent; and 9
1696+‘‘(iii) any material changes to the in-10
1697+formation in the most recent annual report. 11
1698+‘‘(C) C
1699+URRENT REPORTS.—A current report 12
1700+shall be filed with the Commission reflecting any 13
1701+material changes to the information previously 14
1702+reported to the Commission by the digital asset 15
1703+issuer. 16
1704+‘‘(4) T
1705+ERMINATION OF REPORTING REQUIRE -17
1706+MENTS.— 18
8511707 ‘‘(A) I
852-N GENERAL.—The term ‘digital com-5
853-modity broker’ means any person who, in a dig-6
854-ital commodity cash or spot market, is— 7
855-‘‘(i) engaged in soliciting or accepting 8
856-orders for the purchase or sale of a unit of 9
857-a digital commodity from a person that is 10
858-not an eligible contract participant; 11
859-‘‘(ii) engaged in soliciting or accepting 12
860-orders for the purchase or sale of a unit of 13
861-a digital commodity from a person on or 14
862-subject to the rules of a registered entity; 15
863-or 16
864-‘‘(iii) registered with the Commission 17
865-as a digital commodity broker. 18
866-‘‘(B) E
867-XCEPTIONS.—The term ‘digital 19
868-commodity broker’ does not include a person 20
869-solely because the person— 21
870-‘‘(i) enters into a digital commodity 22
871-transaction the primary purpose of which 23
872-is to make, send, receive, or facilitate pay-24 32
873-•HR 4763 EH
874-ments, whether involving a payment service 1
875-provider or on a peer-to-peer basis; 2
876-‘‘(ii) validates a digital commodity 3
877-transaction, operates a node, or engages in 4
878-similar activity to participate in facili-5
879-tating, operating, or securing a blockchain 6
880-system; or 7
881-‘‘(iii) is a bank (as defined under sec-8
882-tion 3(a) of the Securities Exchange Act of 9
883-1934) engaging in certain banking activi-10
884-ties with respect to a digital commodity in 11
885-the same manner as a bank is excluded 12
886-from the definition of a broker under sec-13
887-tion 3(a)(4) of the Securities Exchange Act 14
888-of 1934. 15
889-‘‘(57) D
890-IGITAL COMMODITY CUSTODIAN .—The 16
891-term ‘digital commodity custodian’ means an entity 17
892-in the business of holding, maintaining, or safe-18
893-guarding digital commodities for others. 19
894-‘‘(58) D
895-IGITAL COMMODITY DEALER .— 20
1708+N GENERAL.—The ongoing reporting 19
1709+requirements under paragraph (3) shall not 20
1710+apply to a digital asset issuer 180 days after the 21
1711+end of the covered fiscal year. 22
1712+‘‘(B) C
1713+OVERED FISCAL YEAR DEFINED .—In 23
1714+this paragraph, the term ‘covered fiscal year’ 24
1715+means the first fiscal year of an issuer in which 25
1716+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00057 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
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1718+•HR 4763 RH
1719+the blockchain system to which the digital asset 1
1720+relates is a functional network and certified to be 2
1721+a decentralized network under section 44 of the 3
1722+Securities Exchange Act of 1934. 4
1723+‘‘(b) R
1724+EQUIREMENTS FORINTERMEDIARIES.— 5
1725+‘‘(1) I
1726+N GENERAL.—A person acting as an inter-6
1727+mediary in a transaction involving the offer or sale 7
1728+of a unit of a digital asset in reliance on section 8
1729+4(a)(8) shall— 9
1730+‘‘(A) register with the Commission as a 10
1731+broker under section 15(b) of the Securities Ex-11
1732+change Act of 1934 (15 U.S.C. 78o(b)); and 12
1733+‘‘(B) be a member of a national securities 13
1734+association registered under section 15A of the 14
1735+Securities Exchange Act of 1934 (15 U.S.C. 78o– 15
1736+3). 16
1737+‘‘(2) P
1738+URCHASER QUALIFICATION.— 17
8961739 ‘‘(A) I
897-N GENERAL.—The term ‘digital com-21
898-modity dealer’ means any person who— 22
899-‘‘(i) in digital commodity cash or spot 23
900-markets— 24 33
901-•HR 4763 EH
902-‘‘(I) holds itself out as a dealer in 1
903-a digital commodity; 2
904-‘‘(II) makes a market in a digital 3
905-commodity; 4
906-‘‘(III) has an identifiable busi-5
907-ness of dealing in a digital commodity 6
908-as principal for its own account; or 7
909-‘‘(IV) engages in any activity 8
910-causing the person to be commonly 9
911-known in the trade as a dealer or 10
912-market maker in a digital commodity; 11
913-‘‘(ii) has an identifiable business of 12
914-entering into any agreement, contract, or 13
915-transaction described in subsection 14
916-(c)(2)(D)(i) involving a digital commodity; 15
917-or 16
918-‘‘(iii) is registered with the Commis-17
919-sion as a digital commodity dealer. 18
920-‘‘(B) E
921-XCEPTION.—The term ‘digital com-19
922-modity dealer’ does not include a person solely 20
923-because the person— 21
924-‘‘(i) enters into a digital commodity 22
925-transaction with an eligible contract partic-23
926-ipant; 24 34
927-•HR 4763 EH
928-‘‘(ii) enters into a digital commodity 1
929-transaction on or through a registered dig-2
930-ital commodity exchange; 3
931-‘‘(iii) enters into a digital commodity 4
932-transaction for the person’s own account, 5
933-either individually or in a fiduciary capac-6
934-ity, but not as a part of a regular business; 7
935-‘‘(iv) enters into a digital commodity 8
936-transaction the primary purpose of which 9
937-is to make, send, receive, or facilitate pay-10
938-ments, whether involving a payment service 11
939-provider or on a peer-to-peer basis; 12
940-‘‘(v) validates a digital commodity 13
941-transaction, operates a node, or engages in 14
942-similar activity to participate in facili-15
943-tating, operating, or securing a blockchain 16
944-system; or 17
945-‘‘(vi) is a bank (as defined under sec-18
946-tion 3(a) of the Securities Exchange Act of 19
947-1934) engaging in certain banking activi-20
948-ties with respect to a digital commodity in 21
949-the same manner as a bank is excluded 22
950-from the definition of a dealer under sec-23
951-tion 3(a)(5) of the Securities Exchange Act 24
952-of 1934. 25 35
953-•HR 4763 EH
954-‘‘(59) DIGITAL COMMODITY EXCHANGE .—The 1
955-term ‘digital commodity exchange’ means a trading 2
956-facility that offers or seeks to offer a cash or spot 3
957-market in at least 1 digital commodity. 4
958-‘‘(60) D
959-IGITAL ASSET-RELATED DEFINI -5
960-TIONS.— 6
961-‘‘(A) S
962-ECURITIES ACT OF 1933 .—The 7
963-terms ‘affiliated person’, ‘blockchain system’, 8
964-‘decentralized governance system’, ‘decentral-9
965-ized system’, ‘digital asset’, ‘digital asset 10
966-issuer’, ‘end user distribution’, ‘functional sys-11
967-tem’, ‘permitted payment stablecoin’, ‘related 12
968-person’, and ‘restricted digital asset’ have the 13
969-meaning given the terms, respectively, under 14
970-section 2(a) of the Securities Act of 1933 (15 15
971-U.S.C. 77b(a)). 16
972-‘‘(B) S
973-ECURITIES EXCHANGE ACT OF 17
974-1934.—The terms ‘digital asset broker’ and ‘dig-18
975-ital asset dealer’ have the meaning given those 19
976-terms, respectively, under section 3(a) of the 20
977-Securities Exchange Act of 1934 (15 U.S.C. 21
978-78c(a)). 22
979-‘‘(61) M
980-IXED DIGITAL ASSET TRANSACTION .— 23
981-The term ‘mixed digital asset transaction’ means an 24 36
982-•HR 4763 EH
983-agreement, contract, or transaction involving a dig-1
984-ital commodity and— 2
985-‘‘(A) a security; or 3
986-‘‘(B) a restricted digital asset.’’. 4
987-SEC. 104. DEFINITIONS UNDER THIS ACT. 5
988-In this Act: 6
989-(1) D
990-EFINITIONS UNDER THE COMMODITY EX -7
991-CHANGE ACT.—The terms ‘‘digital commodity’’, 8
992-‘‘digital commodity broker’’, ‘‘digital commodity 9
993-dealer’’, ‘‘digital commodity exchange’’, and ‘‘mixed 10
994-digital asset transaction’’ have the meaning given 11
995-those terms, respectively, under section 1a of the 12
996-Commodity Exchange Act (7 U.S.C. 1a). 13
997-(2) D
998-EFINITIONS UNDER THE SECURITIES ACT 14
999-OF 1933.—The terms ‘‘affiliated person’’, 15
1000-‘‘blockchain’’, ‘‘blockchain system’’, ‘‘blockchain pro-16
1001-tocol’’, ‘‘decentralized system’’, ‘‘digital asset’’, ‘‘dig-17
1002-ital asset issuer’’, ‘‘digital asset maturity date’’, 18
1003-‘‘digital asset trading system’’, ‘‘end user distribu-19
1004-tion’’, ‘‘functional system’’, ‘‘permitted payment 20
1005-stablecoin’’, ‘‘restricted digital asset’’, ‘‘securities 21
1006-laws’’, and ‘‘source code’’ have the meaning given 22
1007-those terms, respectively, under section 2(a) of the 23
1008-Securities Act of 1933 (15 U.S.C. 77b(a)). 24 37
1009-•HR 4763 EH
1010-(3) DEFINITIONS UNDER THE SECURITIES EX -1
1011-CHANGE ACT OF 1934 .—The terms ‘‘Bank Secrecy 2
1012-Act’’, ‘‘digital asset broker’’, ‘‘digital asset dealer’’, 3
1013-‘‘digital asset trading system’’, and ‘‘self-regulatory 4
1014-organization’’ have the meaning given those terms, 5
1015-respectively, under section 3(a) of the Securities Ex-6
1016-change Act of 1934 (15 U.S.C. 78c(a)). 7
1017-SEC. 105. RULEMAKINGS. 8
1018-(a) D
1019-EFINITIONS.—The Commodity Futures Trading 9
1020-Commission and the Securities and Exchange Commission 10
1021-shall jointly issue rules to further define the following 11
1022-terms: 12
1023-(1) The terms ‘‘affiliated person’’, 13
1024-‘‘blockchain’’, ‘‘blockchain system’’, ‘‘blockchain pro-14
1025-tocol’’, ‘‘decentralized system’’, ‘‘decentralized gov-15
1026-ernance system’’, ‘‘digital asset’’, ‘‘digital asset 16
1027-issuer’’, ‘‘digital asset maturity date’’, ‘‘end user dis-17
1028-tribution’’, ‘‘functional system’’, ‘‘related person’’, 18
1029-‘‘restricted digital asset’’, and ‘‘source code’’, as de-19
1030-fined under section 2(a) of the Securities Act of 20
1031-1933. 21
1032-(2) The term ‘‘digital commodity’’, as defined 22
1033-under section 1a of the Commodity Exchange Act. 23
1034-(b) J
1035-OINTRULEMAKING FOR EXCHANGES AND 24
1036-I
1037-NTERMEDIARIES.—The Commodity Futures Trading 25 38
1038-•HR 4763 EH
1039-Commission and the Securities and Exchange Commission 1
1040-shall jointly issue rules to exempt persons dually registered 2
1041-with the Commodity Futures Trading Commission and the 3
1042-Securities and Exchange Commission from duplicative, 4
1043-conflicting, or unduly burdensome provisions of this Act, 5
1044-the securities laws, and the Commodity Exchange Act and 6
1045-the rules thereunder, to the extent such exemption would 7
1046-foster the development of fair and orderly markets in dig-8
1047-ital assets, be necessary or appropriate in the public inter-9
1048-est, and be consistent with the protection of investors. 10
1049-(c) J
1050-OINTRULEMAKING FOR MIXEDDIGITALASSET 11
1051-T
1052-RANSACTIONS.—The Commodity Futures Trading Com-12
1053-mission and the Securities and Exchange Commission 13
1054-shall jointly issue rules applicable to mixed digital asset 14
1055-transactions under this Act and the amendments made by 15
1056-this Act, including by further defining such term. 16
1057-(d) P
1058-ROTECTION OFSELF-CUSTODY.— 17
1059-(1) I
1060-N GENERAL.—The Financial Crimes En-18
1061-forcement Network may not issue any rule or order 19
1062-that would prohibit a U.S. individual from— 20
1063-(A) maintaining a hardware wallet, soft-21
1064-ware wallet, or other means to facilitate such 22
1065-individual’s own custody of digital assets; or 23
1066-(B) conducting transactions with and self- 24
1067-custody of digital assets for any lawful purpose. 25 39
1068-•HR 4763 EH
1069-(2) RULE OF CONSTRUCTION .—Paragraph (1) 1
1070-may not be construed to limit the ability of Finan-2
1071-cial Crimes Enforcement Network to carry out any 3
1072-enforcement action. 4
1073-(e) J
1074-OINTRULEMAKING, PROCEDURES, ORGUID-5
1075-ANCE FORDELISTING.—Not later than 30 days after the 6
1076-date of the enactment of this Act, the Commodity Futures 7
1077-Trading Commission and the Securities and Exchange 8
1078-Commission shall jointly issue rules, procedures, or guid-9
1079-ance (as determined appropriate by the Commissions) re-10
1080-garding the process to delist an asset for trading under 11
1081-sections 106 and 107 of this Act if the Commissions deter-12
1082-mine that the listing is inconsistent with the Commodity 13
1083-Exchange Act, the securities laws (including regulations 14
1084-under those laws), or this Act. 15
1085-(f) J
1086-OINTRULEMAKING FOR CAPITALREQUIRE-16
1087-MENTS.—The Commodity Futures Trading Commission 17
1088-and the Securities and Exchange Commission shall jointly 18
1089-issue rules to require a person with multiple registrations 19
1090-with the Commodity Futures Trading Commission, the 20
1091-Securities and Exchange Commission, or both such agen-21
1092-cies to maintain sufficient capital to comply with the 22
1093-stricter of any applicable capital requirements to which 23
1094-such person is subject to by reason of such registrations. 24 40
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1096-SEC. 106. NOTICE OF INTENT TO REGISTER FOR DIGITAL 1
1097-COMMODITY EXCHANGES, BROKERS, AND 2
1098-DEALERS. 3
1099-(a) I
1100-NGENERAL.— 4
1101-(1) N
1102-OTICE OF INTENT TO REGISTER .—Any 5
1103-person may file a notice of intent to register with 6
1104-the Commodity Futures Trading Commission (in 7
1105-this subsection referred to as the ‘‘Commission’’) as 8
1106-a— 9
1107-(A) digital commodity exchange, for a per-10
1108-son intending to register as a digital commodity 11
1109-exchange under section 5i of the Commodity 12
1110-Exchange Act; 13
1111-(B) digital commodity broker, for a person 14
1112-intending to register as a digital commodity 15
1113-broker under section 4u of such Act; or 16
1114-(C) digital commodity dealer, for a person 17
1115-intending to register as a digital commodity 18
1116-dealer under section 4u of such Act. 19
1117-(2) C
1118-ONDITIONS.—A person filing a notice of 20
1119-intent to register under paragraph (1) shall be in 21
1120-compliance with this section if the person— 22
1121-(A) submits to the Commission and con-23
1122-tinues to materially update a statement of the 24
1123-nature of the registrations the filer intends to 25
1124-pursue; 26 41
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1126-(B) submits to the Commission and con-1
1127-tinues to materially update the information re-2
1128-quired by subsections (b) and (c); 3
1129-(C) complies with subsection (d); 4
1130-(D) is a member of a futures association 5
1131-registered under section 17 of the Commodity 6
1132-Exchange Act, and complies with the rules of 7
1133-the association, including the rules of the asso-8
1134-ciation pertaining to customer disclosures and 9
1135-protection of customer assets; and 10
1136-(E) pays all fees and penalties imposed on 11
1137-the person under section 510 of this Act. 12
1138-(b) D
1139-ISCLOSURE OF GENERALINFORMATION.—A 13
1140-person filing a notice of intent to register under subsection 14
1141-(a) shall disclose to the Commission the following: 15
1142-(1) Information concerning the management of 16
1143-the person, including information describing— 17
1144-(A) the ownership and management of the 18
1145-person; 19
1146-(B) the financial condition of the person; 20
1147-(C) affiliated entities; 21
1148-(D) potential conflicts of interest; 22
1149-(E) the address of the person, including— 23
1150-(i) the place of incorporation; 24
1151-(ii) principal place of business; and 25 42
1152-•HR 4763 EH
1153-(iii) an address for service of process; 1
1154-and 2
1155-(F) a list of the States in which the person 3
1156-has operations. 4
1157-(2) Information concerning the operations of 5
1158-the person, including— 6
1159-(A) a general description of the person’s 7
1160-business and the terms of service for United 8
1161-States customers; 9
1162-(B) a description of the person’s account 10
1163-approval process; 11
1164-(C) any rulebook or other customer order 12
1165-fulfilment rules; 13
1166-(D) risk management procedures; 14
1167-(E) a description of the product listing 15
1168-process; and 16
1169-(F) anti-money laundering policies and 17
1170-procedures. 18
1171-(c) L
1172-ISTINGINFORMATION.—A person filing a notice 19
1173-of intent to register under subsection (a) shall provide to 20
1174-the Commission and the Securities and Exchange Com-21
1175-mission a detailed description of— 22
1176-(1) the specific characteristics of each digital 23
1177-asset listed or offered by the person, including infor-24 43
1178-•HR 4763 EH
1179-mation regarding the digital asset’s market activity, 1
1180-distribution, and functional use; and 2
1181-(2) the product listing determination made by 3
1182-the person for each asset listed or offered for trad-4
1183-ing by the person. 5
1184-(d) R
1185-EQUIREMENTS.—A person filing a notice of in-6
1186-tent to register under subsection (a) shall comply with the 7
1187-following requirements: 8
1188-(1) S
1189-TATUTORY DISQUALIFICATIONS .—Except 9
1190-to the extent otherwise specifically provided by Com-10
1191-mission or registered futures association rule, regu-11
1192-lation, or order, the person shall not permit an indi-12
1193-vidual who is subject to a statutory disqualification 13
1194-under paragraph (2) or (3) of section 8a of the 14
1195-Commodity Exchange Act to effect or be involved in 15
1196-effecting transactions on behalf of the person, if the 16
1197-person knew, or in the exercise of reasonable care 17
1198-should have known, of the statutory disqualification. 18
1199-(2) B
1200-OOKS AND RECORDS .—The person shall 19
1201-keep their books and records open to inspection and 20
1202-examination by the Commission and by any reg-21
1203-istered futures association of which the person is a 22
1204-member. 23
1205-(3) C
1206-USTOMER DISCLOSURES .—The person 24
1207-shall disclose to customers— 25 44
1208-•HR 4763 EH
1209-(A) information about the material risks 1
1210-and characteristics of the assets listed for trad-2
1211-ing on the person; 3
1212-(B) information about the material risks 4
1213-and characteristics of the transactions facili-5
1214-tated by the person; 6
1215-(C) information about the location and 7
1216-manner in which the digital assets of the cus-8
1217-tomer will be and are custodied; 9
1218-(D) information concerning the policies 10
1219-and procedures of the person that are related to 11
1220-the protection of the data of customers of the 12
1221-person; and 13
1222-(E) in their disclosure documents, offering 14
1223-documents, and promotional material— 15
1224-(i) in a prominent manner, that they 16
1225-are not registered with or regulated by the 17
1226-Commission; and 18
1227-(ii) the contact information for the 19
1228-whistleblower, complaint, and reparation 20
1229-programs of the Commission. 21
1230-(4) C
1231-USTOMER ASSETS.— 22
1232-(A) I
1233-N GENERAL.—The person shall— 23
1234-(i) hold customer money, assets, and 24
1235-property in a manner to minimize the risk 25 45
1236-•HR 4763 EH
1237-of loss to the customer or unreasonable 1
1238-delay in customer access to money, assets, 2
1239-and property of the customer; 3
1240-(ii) treat and deal with all money, as-4
1241-sets, and property, including any rights as-5
1242-sociated with any such money, assets, or 6
1243-property, of any customer received as be-7
1244-longing to the customer; 8
1245-(iii) calculate the total digital asset 9
1246-obligations of the person, and at all times 10
1247-hold money, assets, or property equal to or 11
1248-in excess of the total digital asset obliga-12
1249-tions; and 13
1250-(iv) not commingle such money, assets 14
1251-and property held to meet the total com-15
1252-modity obligation with the funds of the 16
1253-person or use the money, assets, or prop-17
1254-erty to margin, secure, or guarantee any 18
1255-trade or contract, or to secure or extend 19
1256-the credit, of any customer or person other 20
1257-than the one for whom the same are held, 21
1258-except that— 22
1259-(I) the money, assets, and prop-23
1260-erty of any customer may be commin-24 46
1261-•HR 4763 EH
1262-gled with that of any other customer, 1
1263-if separately accounted for; and 2
1264-(II) the share of the money, as-3
1265-sets, and property, as in the normal 4
1266-course of business are necessary to 5
1267-margin, guarantee, secure, transfer, 6
1268-adjust, or settle a contract of sale of 7
1269-a commodity asset, may be withdrawn 8
1270-and applied to do so, including the 9
1271-payment of commissions, brokerage, 10
1272-interest, taxes, storage, and other 11
1273-charges lawfully accruing in connec-12
1274-tion with the contract of sale of a dig-13
1275-ital commodity. 14
1740+N GENERAL.—Each time, before ac-18
1741+cepting any commitment (including any addi-19
1742+tional commitment from the same person), an 20
1743+intermediary or digital asset issuer shall have a 21
1744+reasonable basis for believing that the purchaser 22
1745+satisfies the requirements of section 4(a)(8). 23
1746+‘‘(B) R
1747+ELIANCE ON PURCHASER ’S REP-24
1748+RESENTATIONS.—For purposes of subparagraph 25
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1751+•HR 4763 RH
1752+(A), an intermediary or digital asset issuer may 1
1753+rely on a purchaser’s representations concerning 2
1754+the purchaser’s annual income and net worth 3
1755+and the amount of the purchaser’s other invest-4
1756+ments made, unless the intermediary or digital 5
1757+asset issuer has reason to question the reliability 6
1758+of the representation. 7
1759+‘‘(C) R
1760+ELIANCE ON INTERMEDIARY .—For 8
1761+purposes of determining whether a transaction 9
1762+meets the requirements described under subpara-10
1763+graph (A) through (C) of section 4(a)(8), a dig-11
1764+ital asset issuer may rely on the efforts of an 12
1765+intermediary. 13
1766+‘‘(c) A
1767+DDITIONALPROVISIONS.— 14
1768+‘‘(1) A
1769+CCEPTANCE OF WRITTEN OFFERS ; 15
1770+SALES.—After an issuer files a statement under para-16
1771+graph (1) to offer and sell a digital asset in reliance 17
1772+on section 4(a)(8)— 18
1773+‘‘(A) written offers of the digital asset may 19
1774+be made; and 20
1775+‘‘(B) the issuer may sell the digital assets in 21
1776+reliance on section 4(a)(8), if such sales meet all 22
1777+other requirements. 23
1778+‘‘(2) S
1779+OLICITATION OF INTEREST.— 24
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1782+•HR 4763 RH
1783+‘‘(A) IN GENERAL.—At any time before the 1
1784+filing of a statement under paragraph (1), a dig-2
1785+ital asset issuer may communicate orally or in 3
1786+writing to determine whether there is any inter-4
1787+est in a contemplated offering. Such communica-5
1788+tions are deemed to be an offer of a unit of a 6
1789+digital asset for sale for purposes of the anti-7
1790+fraud provisions of the Federal securities laws. 8
1791+No solicitation or acceptance of money or other 9
1792+consideration, nor of any commitment, binding 10
1793+or otherwise, from any person is permitted until 11
1794+the statement is filed. 12
1795+‘‘(B) C
1796+ONDITIONS.—In any communication 13
1797+described under subparagraph (A), the digital 14
1798+asset issuer shall— 15
1799+‘‘(i) state that no money or other con-16
1800+sideration is being solicited, and if sent in 17
1801+response, will not be accepted; 18
1802+‘‘(ii) state that no offer to buy a unit 19
1803+of a digital asset can be accepted and no 20
1804+part of the purchase price can be received 21
1805+until the statement is filed and then only 22
1806+through an intermediary; and 23
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1809+•HR 4763 RH
1810+‘‘(iii) state that a person’s indication 1
1811+of interest involves no obligation or commit-2
1812+ment of any kind. 3
1813+‘‘(C) I
1814+NDICATIONS OF INTEREST .—Any 4
1815+written communication described under subpara-5
1816+graph (A) may include a means by which a per-6
1817+son may indicate to the digital asset issuer that 7
1818+such person is interested in a potential offering. 8
1819+A digital asset issuer may require a name, ad-9
1820+dress, telephone number, or email address in any 10
1821+response form included with a communication 11
1822+described under subparagraph (A). 12
1823+‘‘(3) D
1824+ISQUALIFICATION PROVISIONS.—The Com-13
1825+mission shall issue rules to apply the disqualification 14
1826+provisions under section 230.262 of title 17, Code of 15
1827+Federal Regulations, to the exemption provided under 16
1828+section 4(a)(8). 17
1829+‘‘(4) D
1830+IGITAL ASSETS DEEMED RESTRICTED DIG -18
1831+ITAL ASSET.—A unit of a digital asset acquired di-19
1832+rectly or indirectly from the digital asset issuer in re-20
1833+liance on the exemption provided under section 21
1834+4(a)(8) is deemed a restricted digital asset.’’. 22
12761835 (b) A
1277-DDITIONAL RESOURCES .— 15
1278-(i) I
1279-N GENERAL.—This section shall 16
1280-not prevent or be construed to prevent the 17
1281-person from adding to the customer 18
1282-money, assets, and property required to be 19
1283-segregated under subparagraph (A), addi-20
1284-tional amounts of money, assets, or prop-21
1285-erty from the account of the person as the 22
1286-person determines necessary to hold 23
1287-money, assets, or property equal to or in 24 47
1288-•HR 4763 EH
1289-excess of the total digital asset obligations 1
1290-of the person. 2
1291-(ii) T
1292-REATMENT AS CUSTOMER 3
1293-FUNDS.—Any money, assets, or property 4
1294-deposited pursuant to clause (i) shall be 5
1295-considered customer property within the 6
1296-meaning of this subsection. 7
1297-(e) C
1298-OMPLIANCE.— 8
1299-(1) I
1300-N GENERAL.—A person who has filed a no-9
1301-tice of intent to register under this section and is in 10
1302-compliance with this section shall be exempt from 11
1303-Securities and Exchange Commission rules and reg-12
1304-ulations pertaining to registering as a national secu-13
1305-rities exchange, broker, dealer, or clearing agency, 14
1306-for activities related to a digital asset. 15
1307-(2) N
1308-ONCOMPLIANCE.—Paragraph (1) shall not 16
1309-apply if, after notice from the Commission and a 17
1310-reasonable opportunity to correct the deficiency, a 18
1311-person who has submitted a notice of intent to reg-19
1312-ister is not in compliance with this section. 20
1313-(3) A
1314-NTI-FRAUD AND ANTI -MANIPULATION.— 21
1315-Paragraph (1) shall not be construed to limit any 22
1316-anti-fraud, anti-manipulation, or false reporting en-23
1317-forcement authority of the Commission, the Securi-24 48
1318-•HR 4763 EH
1319-ties and Exchange Commission, a registered futures 1
1320-association, or a national securities association. 2
1321-(4) D
1322-ELISTING.—Paragraph (1) shall not be 3
1323-construed to limit the authority of the Commission 4
1324-and the Securities and Exchange Commission to 5
1325-jointly require a person to delist an asset for trading 6
1326-if the Commission and the Securities and Exchange 7
1327-Commission determines that the listing is incon-8
1328-sistent with the Commodity Exchange Act, the secu-9
1329-rities laws (including regulations under those laws), 10
1330-or this Act. 11
1331-(f) R
1332-EGISTRATION.— 12
1333-(1) I
1334-N GENERAL.—A person may not file a no-13
1335-tice of intent to register with the Commission after 14
1336-the Commission has finalized its rules for the reg-15
1337-istration of digital commodity exchanges, digital 16
1338-commodity brokers, or digital commodity dealers, as 17
1339-appropriate. 18
1340-(2) T
1341-RANSITION TO REGISTRATION .—Sub-19
1342-section (e)(1) shall not apply to a person who has 20
1343-submitted a notice of intent to register if— 21
1344-(A) the Commission— 22
1345-(i) determines that the person has 23
1346-failed to comply with the requirements of 24
1347-this section; or 25 49
1348-•HR 4763 EH
1349-(ii) denies the application of the per-1
1350-son to register; or 2
1351-(B) the digital commodity exchange, digital 3
1352-commodity broker, or digital commodity dealer 4
1353-that filed a notice of intent to register failed to 5
1354-apply for registration as such with the Commis-6
1355-sion within 180 days after the effective date of 7
1356-the final rules of the Commission for the reg-8
1357-istration of digital commodity exchanges, digital 9
1358-commodity brokers, or digital commodity deal-10
1359-ers, as appropriate. 11
1360-(g) R
1361-ULEMAKING.— 12
1362-(1) I
1363-N GENERAL.—Within 180 days after the 13
1364-date of the enactment of this Act, a registered fu-14
1365-tures association shall adopt and enforce rules appli-15
1366-cable to persons required by subsection (a)(3) to be 16
1367-members of the association. 17
1368-(2) F
1369-EES.—The rules adopted under paragraph 18
1370-(1) may provide for dues in accordance with section 19
1371-17(b)(6) of the Commodity Exchange Act. 20
1372-(3) E
1373-FFECT.—A registered futures association 21
1374-shall submit to the Commission any rule adopted 22
1375-under paragraph (1), which shall take effect pursu-23
1376-ant to the requirements of section 17(j) of the Com-24
1377-modity Exchange Act. 25 50
1378-•HR 4763 EH
1379-(h) LIABILITY OF THEFILER.—It shall be unlawful 1
1380-for any person to provide false information in support of 2
1381-a filing under this section if the person knew or reasonably 3
1382-should have known that the information was false. 4
1383-(i) W
1384-HISTLEBLOWERENFORCEMENT.—For purposes 5
1385-of section 23 of the Commodity Exchange Act, the term 6
1386-‘‘this Act’’ includes this section. 7
1387-SEC. 107. NOTICE OF INTENT TO REGISTER FOR DIGITAL 8
1388-ASSET BROKERS, DEALERS, AND TRADING 9
1389-SYSTEMS. 10
1390-(a) I
1391-NGENERAL.— 11
1392-(1) N
1393-OTICE OF INTENT TO REGISTER .—Any 12
1394-person may file a notice of intent to register with 13
1395-the Securities and Exchange Commission (in this 14
1396-section referred to as the ‘‘Commission’’) as— 15
1397-(A) a digital asset trading system, for a 16
1398-person intending to register as a digital asset 17
1399-trading system under section 6(m) of the Secu-18
1400-rities Exchange Act of 1934; 19
1401-(B) a digital asset broker, for a person in-20
1402-tending to register as a digital asset broker 21
1403-under section 15H of the Securities Exchange 22
1404-Act of 1934; or 23
1405-(C) a digital asset dealer, for a person in-24
1406-tending to register as a digital asset dealer 25 51
1407-•HR 4763 EH
1408-under section 15H of the Securities Exchange 1
1409-Act of 1934. 2
1410-(2) C
1411-ONDITIONS.—A person filing a notice of 3
1412-intent to register under paragraph (1) shall be in 4
1413-compliance with this section if the person— 5
1414-(A) submits to the Commission and con-6
1415-tinues to materially update a statement of the 7
1416-nature of the registrations the filer intends to 8
1417-pursue; 9
1418-(B) submits to the Commission and con-10
1419-tinues to materially update the information re-11
1420-quired by subsections (b) and (c); 12
1421-(C) complies with the requirements of sub-13
1422-section (d); and 14
1423-(D) is a member of a national securities 15
1424-association registered under section 15A of the 16
1425-Securities Exchange Act of 1934 (15 U.S.C. 17
1426-78o–3) and complies with the rules of the asso-18
1427-ciation, including the rules of the association 19
1428-pertaining to customer disclosures and protec-20
1429-tion of customer assets. 21
1430-(b) D
1431-ISCLOSURE OF GENERALINFORMATION.—A 22
1432-person filing a notice of intent to register under subsection 23
1433-(a) shall disclose to the Commission the following: 24 52
1434-•HR 4763 EH
1435-(1) Information concerning the management of 1
1436-the person, including information describing— 2
1437-(A) the ownership and management of the 3
1438-person; 4
1439-(B) the financial condition of the person; 5
1440-(C) affiliated entities; 6
1441-(D) potential conflicts of interest; 7
1442-(E) the address of the person, including— 8
1443-(i) the place of incorporation; 9
1444-(ii) the principal place of business; 10
1445-and 11
1446-(iii) an address for service of process; 12
1447-and 13
1448-(F) a list of the States in which the person 14
1449-has operations. 15
1450-(2) Information concerning the operations of 16
1451-the person, including— 17
1452-(A) a general description of the person’s 18
1453-business and the terms of service for United 19
1454-States customers; 20
1455-(B) a description of the person’s account 21
1456-approval process; 22
1457-(C) any rulebook or other customer order 23
1458-fulfilment rules; 24
1459-(D) risk management procedures; 25 53
1460-•HR 4763 EH
1461-(E) a description of the product listing 1
1462-process; and 2
1463-(F) anti-money laundering policies and 3
1464-procedures. 4
1465-(c) L
1466-ISTINGINFORMATION.—A person filing a notice 5
1467-of intent to register under subsection (a) shall provide to 6
1468-the Commission and the Commodity Futures Trading 7
1469-Commission a detailed description of— 8
1470-(1) the specific characteristics of each digital 9
1471-asset listed or offered for trading by the person, in-10
1472-cluding information regarding the digital asset’s 11
1473-market activity, distribution, and functional use; and 12
1474-(2) the product listing determination made by 13
1475-the person for each asset listed or offered for trad-14
1476-ing by the person. 15
1477-(d) R
1478-EQUIREMENTS.—A person filing a notice of in-16
1479-tent to register under subsection (a) shall comply with the 17
1480-following requirements: 18
1481-(1) S
1482-TATUTORY DISQUALIFICATION .—Except to 19
1483-the extent otherwise specifically provided by Com-20
1484-mission or a national securities association rule, reg-21
1485-ulation, or order, the person may not permit an indi-22
1486-vidual who is subject to a statutory disqualification 23
1487-(as defined under section 3(a) of the Securities Ex-24
1488-change Act of 1934) to effect or be involved in ef-25 54
1489-•HR 4763 EH
1490-fecting transactions on behalf of the person if the 1
1491-person knows, or in the exercise of reasonable dis-2
1492-cretion should know, the individual is subject to a 3
1493-statutory disqualification. 4
1494-(2) B
1495-OOKS AND RECORDS .—The person shall 5
1496-keep their books and records open to inspection and 6
1497-examination by the Commission and any national se-7
1498-curities association of which they are a member. 8
1499-(3) C
1500-USTOMER DISCLOSURES .—The person 9
1501-shall disclose to customers— 10
1502-(A) information about the material risks 11
1503-and characteristics of the assets listed for trad-12
1504-ing on the person; 13
1505-(B) information about the material risks 14
1506-and characteristics of the transactions facili-15
1507-tated by the person; 16
1508-(C) information about the location and 17
1509-manner in which the digital assets of the cus-18
1510-tomer will be and are custodied; 19
1511-(D) information concerning the person’s 20
1512-policies and procedures related to the protection 21
1513-of customers’ data; and 22
1514-(E) in their disclosure documents, offering 23
1515-documents, and promotional material— 24 55
1516-•HR 4763 EH
1517-(i) in a prominent manner, that they 1
1518-are not registered with or regulated by the 2
1519-Commission; and 3
1520-(ii) the contact information for the 4
1521-whistleblower, complaint, and reparation 5
1522-programs of the Commission. 6
1523-(4) C
1524-USTOMER ASSETS.— 7
1525-(A) I
1526-N GENERAL.—The person shall— 8
1527-(i) hold customer money, assets, and 9
1528-property in a manner to minimize the risk 10
1529-of loss to the customer or unreasonable 11
1530-delay in customer access to money, assets, 12
1531-and property of the customer; 13
1532-(ii) treat and deal with all money, as-14
1533-sets, and property, including any rights as-15
1534-sociated with any such money, assets, or 16
1535-property, of any customer received as be-17
1536-longing to the customer; 18
1537-(iii) segregate all money, assets, and 19
1538-property received from any customer of the 20
1539-person from the funds of the person, ex-21
1540-cept that— 22
1541-(I) the money, assets, and prop-23
1542-erty of any customer may be commin-24 56
1543-•HR 4763 EH
1544-gled with that of any other customer, 1
1545-if separately accounted for; and 2
1546-(II) the share of the money, as-3
1547-sets, and property, as in the normal 4
1548-course of business are necessary to 5
1549-margin, guarantee, secure, transfer, 6
1550-adjust, or settle a contract of sale of 7
1551-a digital asset, may be withdrawn and 8
1552-applied to do so, including the pay-9
1553-ment of commissions, brokerage, in-10
1554-terest, taxes, storage, and other 11
1555-charges lawfully accruing in connec-12
1556-tion with the contract of sale of a dig-13
1557-ital asset. 14
1558-(B) A
1559-DDITIONAL RESOURCES .— 15
1560-(i) I
1561-N GENERAL.—This section shall 16
1562-not prevent or be construed to prevent the 17
1563-person from adding to the customer 18
1564-money, assets, and property required to be 19
1565-segregated under subparagraph (A) addi-20
1566-tional amounts of money, assets, or prop-21
1567-erty from the account of the person as the 22
1568-person determines necessary to hold 23
1569-money, assets, or property equal to or in 24 57
1570-•HR 4763 EH
1571-excess of the total digital asset obligation 1
1572-of the person. 2
1573-(ii) T
1574-REATMENT AS CUSTOMER 3
1575-FUNDS.—Any money, assets, or property 4
1576-deposited pursuant to clause (i) shall be 5
1577-considered customer property within the 6
1578-meaning of this subsection. 7
1579-(e) C
1580-OMPLIANCE.— 8
1581-(1) I
1582-N GENERAL.—A person who has filed a no-9
1583-tice of intent to register under this section and is in 10
1584-compliance with this section shall be exempt from 11
1585-Commission rules and regulations pertaining to reg-12
1586-istering as a national securities exchange, broker, 13
1587-dealer, or clearing agency, for activities related to a 14
1588-digital asset. 15
1589-(2) N
1590-ONCOMPLIANCE.—Paragraph (1) shall not 16
1591-apply if, after notice from the Commission and a 17
1592-reasonable opportunity to correct the deficiency, a 18
1593-person who has submitted a notice of intent to reg-19
1594-ister is not in compliance with this section. 20
1595-(3) A
1596-NTI-FRAUD AND ANTI -MANIPULATION.— 21
1597-Paragraph (1) shall not be construed to limit any 22
1598-fraud, anti-manipulation, or false reporting enforce-23
1599-ment authority of the Commission, the Commodity 24 58
1600-•HR 4763 EH
1601-Futures Trading Commission, a registered futures 1
1602-association, or a national securities association. 2
1603-(4) D
1604-ELISTING.—Paragraph (1) shall not be 3
1605-construed to limit the authority of the Commission 4
1606-and the Commodity Futures Trading Commission to 5
1607-jointly require a person to delist an asset for trading 6
1608-if the Commission and the Commodity Futures 7
1609-Trading Commission determines that the listing is 8
1610-inconsistent with the Commodity Exchange Act, the 9
1611-securities laws (including regulations under those 10
1612-laws), or this Act. 11
1613-(f) R
1614-EGISTRATION.— 12
1615-(1) I
1616-N GENERAL.—A person may not file a no-13
1617-tice of intent to register with the Commission after 14
1618-the Commission has finalized its rules for the reg-15
1619-istration of digital asset brokers, digital asset deal-16
1620-ers, digital asset trading systems, and notice-reg-17
1621-istered clearing agencies, as appropriate. 18
1622-(2) T
1623-RANSITION TO REGISTRATION .—Sub-19
1624-section (e)(1) shall not apply to a person who has 20
1625-submitted a notice of intent to register if— 21
1626-(A) the Commission— 22
1627-(i) determines that the person has 23
1628-failed to comply with the requirements of 24
1629-this section; or 25 59
1630-•HR 4763 EH
1631-(ii) denies the application of the per-1
1632-son to register; or 2
1633-(B) the digital asset broker, digital asset 3
1634-dealer, or digital asset trading system that filed 4
1635-a notice of intent to register failed to apply for 5
1636-registration as such with the Commission within 6
1637-180 days after the effective date of the Com-7
1638-mission’s final rules for the registration of dig-8
1639-ital asset brokers, digital asset dealers, and dig-9
1640-ital asset trading systems, as appropriate. 10
1641-(g) L
1642-IABILITY OF THEFILER.—It shall be unlawful 11
1643-for any person to provide false information in support of 12
1644-a filing under this section if the person knew or reasonably 13
1645-should have known that the information was false. 14
1646-(h) N
1647-ATIONALSECURITIESASSOCIATION.— 15
1648-(1) I
1649-N GENERAL.—A national securities asso-16
1650-ciation may adopt and enforce rules written specifi-17
1651-cally for persons filing a notice of intent to register 18
1652-under subsection (a), including rules that prescribe 19
1653-reasonable fees and charges to defray the costs of 20
1654-the national securities association related to over-21
1655-seeing such persons. 22
1656-(2) A
1657-PPROVAL BY THE COMMISSION .—With re-23
1658-spect to a provisional rule described under para-24 60
1659-•HR 4763 EH
1660-graph (1) filed with the Commission, the Commis-1
1661-sion shall— 2
1662-(A) not later than 90 days following the 3
1663-date of such filing, approve the rule if the Com-4
1664-mission determines that the rule effectuates the 5
1665-purposes of this section; and 6
1666-(B) make such approval on a summary 7
1667-basis pursuant to section 19(b)(3)(B) of the Se-8
1668-curities Exchange Act of 1934. 9
1669-(i) W
1670-HISTLEBLOWERENFORCEMENT.—For purposes 10
1671-of section 21F of the Securities Exchange Act of 1934 11
1672-(15 U.S.C. 78u-6), the term ‘‘securities laws’’ includes 12
1673-this section. 13
1674-SEC. 108. COMMODITY EXCHANGE ACT SAVINGS PROVI-14
1675-SIONS. 15
1676-(a) I
1677-NGENERAL.—Nothing in this Act shall affect 16
1678-or apply to, or be interpreted to affect or apply to— 17
1679-(1) any agreement, contract, or transaction that 18
1680-is subject to the Commodity Exchange Act as— 19
1681-(A) a contract of sale of a commodity for 20
1682-future delivery or an option on such a contract; 21
1683-(B) a swap; 22
1684-(C) a security futures product; 23
1685-(D) an option authorized under section 4c 24
1686-of such Act; 25 61
1687-•HR 4763 EH
1688-(E) an agreement, contract, or transaction 1
1689-described in section 2(c)(2)(C)(i) of such Act; 2
1690-or 3
1691-(F) a leverage transaction authorized 4
1692-under section 19 of such Act; or 5
1693-(2) the activities of any person with respect to 6
1694-any such agreement, contract, or transaction. 7
1695-(b) P
1696-ROHIBITIONS ON SPOTDIGITALCOMMODITY 8
1697-E
1698-NTITIES.—Nothing in this Act authorizes, or shall be in-9
1699-terpreted to authorize, a digital commodity exchange, dig-10
1700-ital commodity broker, or digital commodity dealer to en-11
1701-gage in any activities involving any transaction, contract, 12
1702-or agreement described in subsection (a)(1), solely by vir-13
1703-tue of being registered or filing notice of intent to register 14
1704-as a digital commodity exchange, digital commodity 15
1705-broker, or digital commodity dealer. 16
1706-(c) D
1707-EFINITIONS.—In this section, each term shall 17
1708-have the meaning provided in the Commodity Exchange 18
1709-Act or the regulations prescribed under such Act. 19
1710-SEC. 109. ADMINISTRATIVE REQUIREMENTS. 20
1711-(a) S
1712-ECURITIES AND EXCHANGEACT OF1934.— 21
1713-Section 21A of the Securities and Exchange Act of 1934 22
1714-(15 U.S.C. 78u-1) is amended by adding at the end the 23
1715-following: 24 62
1716-•HR 4763 EH
1717-‘‘(j) DUTY OFMEMBERS ANDFEDERALEMPLOYEES 1
1718-R
1719-ELATED TODIGITALASSETS.— 2
1720-‘‘(1) I
1721-N GENERAL.—Solely for purposes of the 3
1722-insider trading prohibitions arising under this Act, 4
1723-including section 10 and Rule 10b–5 thereunder, 5
1724-each individual who is a Member of Congress, an 6
1725-employee of Congress, or an employee or agent of 7
1726-any department or agency of the Federal Govern-8
1727-ment owes a duty arising from a relationship of 9
1728-trust and confidence to the Congress, the United 10
1729-States Government, and the citizens of the United 11
1730-States with respect to material, nonpublic informa-12
1731-tion related to a restricted digital asset that is de-13
1732-rived from such individual’s position as a Member of 14
1733-Congress, employee of Congress, or as an employee 15
1734-or agent of a department or agency of the Federal 16
1735-Government or gained from the performance of such 17
1736-individual’s official responsibilities. 18
1737-‘‘(2) D
1738-EFINITIONS.—ln this subsection, the 19
1739-terms ‘Member of Congress’ and ‘employee of Con-20
1740-gress’ have the meaning given those terms, respec-21
1741-tively, under subsection (g)(2).’’. 22
1742-(b) C
1743-OMMODITYEXCHANGEACT.—Section 4c(a) of 23
1744-the Commodity Exchange Act (7 U.S.C. 6c(a)) is amend-24
1745-ed— 25 63
1746-•HR 4763 EH
1747-(1) in paragraph (3)— 1
1748-(A) in subparagraph (B), by striking ‘‘or’’ 2
1749-at the end; 3
1750-(B) in subparagraph (C), by striking the 4
1751-period and inserting ‘‘; or’’; and 5
1752-(C) by adding at the end the following: 6
1753-‘‘(D) a contract of sale of a digital com-7
1754-modity.’’; 8
1755-(2) in paragraph (4)— 9
1756-(A) in subparagraph (A)— 10
1757-(i) in clause (ii), by striking ‘‘or’’ at 11
1758-the end; 12
1759-(ii) in clause (iii), by striking the pe-13
1760-riod and inserting ‘‘; or’’; and 14
1761-(iii) by adding at the end the fol-15
1762-lowing: 16
1763-‘‘(iv) a contract of sale of a digital 17
1764-commodity.’’; 18
1765-(B) in subparagraph (B)— 19
1766-(i) in clause (ii), by striking ‘‘or’’ at 20
1767-the end; 21
1768-(ii) in clause (iii), by striking the pe-22
1769-riod and inserting ‘‘; or’’; and 23
1770-(iii) by adding at the end the fol-24
1771-lowing: 25 64
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1773-‘‘(iv) a contract of sale of a digital 1
1774-commodity.’’; and 2
1775-(C) in subparagraph (C)— 3
1776-(i) in clause (ii), by striking ‘‘or’’ at 4
1777-the end; 5
1778-(ii) by striking ‘‘(iii) a swap, provided 6
1779-however,’’ and inserting the following: 7
1780-‘‘(iii) a swap; or 8
1781-‘‘(iv) a contract of sale of a digital 9
1782-commodity, 10
1783-provided, however,’’; and 11
1784-(iii) by striking ‘‘clauses (i), (ii), or 12
1785-(iii)’’ and insert ‘‘any of clauses (i) 13
1786-through (iv)’’. 14
1787-SEC. 110. INTERNATIONAL HARMONIZATION. 15
1788-In order to promote effective and consistent global 16
1789-regulation of digital assets, the Commodity Futures Trad-17
1790-ing Commission and the Securities and Exchange Com-18
1791-mission, as appropriate— 19
1792-(1) shall consult and coordinate with foreign 20
1793-regulatory authorities on the establishment of con-21
1794-sistent international standards with respect to the 22
1795-regulation of digital assets, restricted digital assets, 23
1796-and digital commodities; and 24 65
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1798-(2) may agree to such information-sharing ar-1
1799-rangements as may be deemed to be necessary or 2
1800-appropriate in the public interest or for the protec-3
1801-tion of investors, customers, and users of digital as-4
1802-sets. 5
1803-SEC. 111. IMPLEMENTATION. 6
1804-(a) G
1805-LOBALRULEMAKINGTIMEFRAME.—Unless oth-7
1806-erwise provided in this Act or an amendment made by this 8
1807-Act, the Commodity Futures Trading Commission and the 9
1808-Securities and Exchange Commission, or both, shall indi-10
1809-vidually, and jointly where required, promulgate rules and 11
1810-regulations required of each Commission under this Act 12
1811-or an amendment made by this Act not later than 360 13
1812-days after the date of enactment of this Act. 14
1813-(b) R
1814-ULES ANDREGISTRATIONBEFOREFINALEF-15
1815-FECTIVEDATES.— 16
1816-(1) I
1817-N GENERAL.—In order to prepare for the 17
1818-implementation of this Act, the Commodity Futures 18
1819-Trading Commission and the Securities and Ex-19
1820-change Commission may, before any effective date 20
1821-provided in this Act— 21
1822-(A) promulgate rules, regulations, or or-22
1823-ders permitted or required by this Act; 23
1824-(B) conduct studies and prepare reports 24
1825-and recommendations required by this Act; 25 66
1826-•HR 4763 EH
1827-(C) register persons under this Act; and 1
1828-(D) exempt persons, agreements, contracts, 2
1829-or transactions from provisions of this Act, 3
1830-under the terms contained in this Act. 4
1831-(2) L
1832-IMITATION ON EFFECTIVENESS .—An ac-5
1833-tion by the Commodity Futures Trading Commission 6
1834-or the Securities and Exchange Commission under 7
1835-paragraph (1) shall not become effective before the 8
1836-effective date otherwise applicable to the action 9
1837-under this Act. 10
1838-SEC. 112. APPLICATION OF THE BANK SECRECY ACT. 11
1839-(a) I
1840-NGENERAL.—Section 5312 of title 31, United 12
1841-States Code, is amended— 13
1842-(1) in subsection (a)(2)(G), by striking ‘‘or 14
1843-dealer’’ and inserting ‘‘, dealer, digital asset broker, 15
1844-digital asset dealer, or digital asset trading system’’; 16
1845-and 17
1846-(2) in subsection (c)(1)(A)— 18
1847-(A) by inserting ‘‘digital commodity 19
1848-broker, digital commodity dealer,’’ after ‘‘fu-20
1849-tures commission merchant,’’; and 21
1850-(B) by inserting before the period the fol-22
1851-lowing: ‘‘and any digital commodity exchange 23
1852-registered, or required to register, under the 24 67
1853-•HR 4763 EH
1854-Commodity Exchange Act which permits direct 1
1855-customer access’’. 2
1856-(b) GAO S
1857-TUDY.— 3
1858-(1) I
1859-N GENERAL.—The Comptroller General of 4
1860-the United States, in consultation with the Secretary 5
1861-of the Treasury, shall conduct a study to— 6
1862-(A) assess the risks posed by centralized 7
1863-intermediaries that are primarily located in for-8
1864-eign jurisdictions that provide services to U.S. 9
1865-persons without regulatory requirements that 10
1866-are substantially similar to the requirements of 11
1867-the Bank Secrecy Act; and 12
1868-(B) provide any regulatory or legislative 13
1869-recommendations to address these risks under 14
1870-subparagraph (A). 15
1871-(2) R
1872-EPORT.—Not later than 1 year after the 16
1873-date of enactment of this Act, the Comptroller Gen-17
1874-eral shall issue a report to Congress containing all 18
1875-findings and determinations made in carrying out 19
1876-the study required under paragraph (1). 20 68
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1878-TITLE II—CLARITY FOR ASSETS 1
1879-OFFERED AS PART OF AN IN-2
1880-VESTMENT CONTRACT 3
1881-SEC. 201. SHORT TITLE. 4
1882-This title may be referred to as the ‘‘Securities Clar-5
1883-ity Act of 2024’’. 6
1884-SEC. 202. TREATMENT OF INVESTMENT CONTRACT ASSETS. 7
1885-(a) S
1886-ECURITIESACT OF1933.—Section 2(a) of the 8
1887-Securities Act of 1933 (15 U.S.C. 77b(a)), as amended 9
1888-by section 101, is further amended— 10
1889-(1) in paragraph (1), by adding at the end the 11
1890-following: ‘‘The term ‘security’ does not include an 12
1891-investment contract asset.’’; and 13
1892-(2) by adding at the end the following: 14
1893-‘‘(37) The term ‘investment contract asset’ 15
1894-means a fungible digital representation of value— 16
1895-‘‘(A) that can be exclusively possessed and 17
1896-transferred, person to person, without necessary 18
1897-reliance on an intermediary, and is recorded on 19
1898-a cryptographically secured public distributed 20
1899-ledger; 21
1900-‘‘(B) sold or otherwise transferred, or in-22
1901-tended to be sold or otherwise transferred, pur-23
1902-suant to an investment contract; and 24 69
1903-•HR 4763 EH
1904-‘‘(C) that is not otherwise a security pur-1
1905-suant to the first sentence of paragraph (1).’’. 2
1906-(b) I
1907-NVESTMENTADVISERSACT OF1940.—Section 3
1908-202(a)(18) of the Investment Advisers Act of 1940 (15 4
1909-U.S.C. 80b–2(a)(18)) is amended by adding at the end 5
1910-the following: ‘‘The term ‘security’ does not include an in-6
1911-vestment contract asset (as such term is defined under 7
1912-section 2(a) of the Securities Act of 1933).’’. 8
1913-(c) I
1914-NVESTMENTCOMPANYACT OF1940.—Section 9
1915-2(a)(36) of the Investment Company Act of 1940 (15 10
1916-U.S.C. 80a–2(a)(36)) is amended by adding at the end 11
1917-the following: ‘‘The term ‘security’ does not include an in-12
1918-vestment contract asset (as such term is defined under 13
1919-section 2(a) of the Securities Act of 1933).’’. 14
1920-(d) S
1921-ECURITIESEXCHANGEACT OF1934.—Section 15
1922-3(a)(10) of the Securities Exchange Act of 1934 (15 16
1923-U.S.C. 78c(a)(10)) is amended by adding at the end the 17
1924-following: ‘‘The term ‘security’ does not include an invest-18
1925-ment contract asset (as such term is defined under section 19
1926-2(a) of the Securities Act of 1933).’’. 20
1927-(e) S
1928-ECURITIESINVESTORPROTECTIONACT OF 21
1929-1970.—Section 16(14) of the Securities Investor Protec-22
1930-tion Act of 1970 (15 U.S.C. 78lll(14)) is amended by add-23
1931-ing at the end the following: ‘‘The term ‘security’ does 24
1932-not include an investment contract asset (as such term 25 70
1933-•HR 4763 EH
1934-is defined under section 2(a) of the Securities Act of 1
1935-1933).’’. 2
1936-TITLE III—OFFERS AND SALES 3
1937-OF DIGITAL ASSETS 4
1938-SEC. 301. EXEMPTED TRANSACTIONS IN DIGITAL ASSETS. 5
1939-(a) I
1940-NGENERAL.—The Securities Act of 1933 (15 6
1941-U.S.C. 77a et seq.) is amended— 7
1942-(1) in section 4(a), by adding at the end the 8
1943-following: 9
1944-‘‘(8) transactions involving the offer or sale of 10
1945-units of a digital asset by a digital asset issuer, if— 11
1946-‘‘(A) the aggregate amount of units of the 12
1947-digital asset sold by the digital asset issuer in 13
1948-reliance on the exemption provided under this 14
1949-paragraph, during the 12-month period pre-15
1950-ceding the date of such transaction, including 16
1951-the amount sold in such transaction, is not 17
1952-more than $75,000,000 (as such amount is an-18
1953-nually adjusted by the Commission to reflect 19
1954-the change in the Consumer Price Index for All 20
1955-Urban Consumers published by the Bureau of 21
1956-Labor Statistics of the Department of Labor); 22
1957-‘‘(B) with respect to a transaction involv-23
1958-ing the purchase of units of a digital asset by 24
1959-a person who is not an accredited investor, the 25 71
1960-•HR 4763 EH
1961-aggregate amount of all units of digital assets 1
1962-purchased by such person during the 12-month 2
1963-period preceding the date of such transaction, 3
1964-including the unit of a digital asset purchased 4
1965-in such transaction, does not exceed the greater 5
1966-of— 6
1967-‘‘(i) 10 percent of the person’s annual 7
1968-income or joint income with that person’s 8
1969-spouse or spousal equivalent; or 9
1970-‘‘(ii) 10 percent of the person’s net 10
1971-worth or joint net worth with the person’s 11
1972-spouse or spousal equivalent; 12
1973-‘‘(C) after the completion of the trans-13
1974-action, the purchaser does not own more than 14
1975-10 percent of the total amount of the units of 15
1976-the digital asset sold in reliance on the exemp-16
1977-tion under this paragraph; 17
1978-‘‘(D) the transaction does not involve the 18
1979-offer or sale of any digital asset not offered as 19
1980-part of an investment contract; 20
1981-‘‘(E) the transaction does not involve the 21
1982-offer or sale of a unit of a digital asset by a 22
1983-digital asset issuer that— 23 72
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1985-‘‘(i) is not organized under the laws of 1
1986-a State, a territory of the United States, 2
1987-or the District of Columbia; 3
1988-‘‘(ii) is a development stage company 4
1989-that either— 5
1990-‘‘(I) has no specific business plan 6
1991-or purpose; or 7
1992-‘‘(II) has indicated that the busi-8
1993-ness plan of the company is to merge 9
1994-with or acquire an unidentified com-10
1995-pany; 11
1996-‘‘(iii) is an investment company, as 12
1997-defined in section 3 of the Investment 13
1998-Company Act of 1940 (15 U.S.C. 80a-3), 14
1999-or is excluded from the definition of invest-15
2000-ment company by section 3(b) or section 16
2001-3(c) of that Act (15 U.S.C. 80a–3(b) or 17
2002-80a–3(c)); 18
2003-‘‘(iv) is issuing fractional undivided 19
2004-interests in oil or gas rights, or a similar 20
2005-interest in other mineral rights; 21
2006-‘‘(v) is, or has been, subject to any 22
2007-order of the Commission entered pursuant 23
2008-to section 12(j) of the Securities Exchange 24 73
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2010-Act of 1934 during the 5-year period be-1
2011-fore the filing of the offering statement; or 2
2012-‘‘(vi) is disqualified pursuant to sec-3
2013-tion 230.262 of title 17, Code of Federal 4
2014-Regulations; and 5
2015-‘‘(F) the issuer meets the requirements of 6
2016-section 4B(a).’’; and 7
2017-(2) by inserting after section 4A the following: 8
2018-‘‘SEC. 4B. REQUIREMENTS WITH RESPECT TO CERTAIN DIG-9
2019-ITAL ASSET TRANSACTIONS. 10
2020-‘‘(a) R
2021-EQUIREMENTS FOR DIGITALASSET 11
2022-I
2023-SSUERS.— 12
2024-‘‘(1) I
2025-NFORMATION REQUIRED IN STATE -13
2026-MENT.—A digital asset issuer offering or selling a 14
2027-unit of digital asset in reliance on section 4(a)(8) 15
2028-shall file with the Commission a statement con-16
2029-taining the following information: 17
2030-‘‘(A) The name, legal status (including the 18
2031-jurisdiction in which the issuer is organized and 19
2032-the date of organization), and website of the 20
2033-digital asset issuer. 21
2034-‘‘(B) The address and telephone number of 22
2035-the issuer or a legal representative of the 23
2036-issuer. 24 74
2037-•HR 4763 EH
2038-‘‘(C) A certification that the digital asset 1
2039-issuer meets the relevant requirements de-2
2040-scribed under section 4(a)(8). 3
2041-‘‘(D) An overview of the material aspects 4
2042-of the offering. 5
2043-‘‘(E) A description of the purpose and in-6
2044-tended use of the offering proceeds. 7
2045-‘‘(F) A description of the plan of distribu-8
2046-tion of any unit of a digital asset that is to be 9
2047-offered. 10
2048-‘‘(G) A description of the material risks 11
2049-surrounding ownership of a unit of a digital 12
2050-asset. 13
2051-‘‘(H) A description of the material aspects 14
2052-of the digital asset issuer’s business. 15
2053-‘‘(I) A description of exempt offerings con-16
2054-ducted within the past three years by the digital 17
2055-asset issuer. 18
2056-‘‘(J) A description of the digital asset 19
2057-issuer and the current number of employees of 20
2058-the digital asset issuer. 21
2059-‘‘(K) A description of any material trans-22
2060-actions or relationships between the digital 23
2061-asset issuer and affiliated persons. 24 75
2062-•HR 4763 EH
2063-‘‘(L) A description of exempt offerings 1
2064-conducted within the past three years. 2
2065-‘‘(2) I
2066-NFORMATION REQUIRED FOR PUR -3
2067-CHASERS.—A digital asset issuer that has filed a 4
2068-statement under paragraph (1) to offer and sell a 5
2069-unit of a digital asset in reliance on section 4(a)(8) 6
2070-shall disclose the information described under sec-7
2071-tion 43 of the Securities Exchange Act of 1934 on 8
2072-a freely accessible public website. 9
2073-‘‘(3) O
2074-NGOING DISCLOSURE REQUIREMENTS .— 10
2075-A digital asset issuer that has filed a statement 11
2076-under paragraph (1) to offer and sell a unit of a dig-12
2077-ital asset in reliance on section 4(a)(8) shall file the 13
2078-following with the Commission: 14
2079-‘‘(A) A
2080-NNUAL REPORTS .—An annual re-15
2081-port that includes any material changes to the 16
2082-information described under paragraph (2) for 17
2083-the current fiscal year and for any fiscal year 18
2084-thereafter, unless the issuer is no longer obli-19
2085-gated to file such annual report pursuant to 20
2086-paragraph (4). 21
2087-‘‘(B) S
2088-EMIANNUAL REPORTS .—Along with 22
2089-each annual report required under subpara-23
2090-graph (A), and separately six months there-24
2091-after, a report containing— 25 76
2092-•HR 4763 EH
2093-‘‘(i) an updated description of the cur-1
2094-rent state and timeline for the development 2
2095-of the blockchain system to which the dig-3
2096-ital asset relates, showing how and when 4
2097-the blockchain system intends or intended 5
2098-to be considered a functional system and a 6
2099-decentralized system; 7
2100-‘‘(ii) the amount of money raised by 8
2101-the digital asset issuer in reliance on sec-9
2102-tion 4(a)(8), how much of that money has 10
2103-been spent, and the general categories and 11
2104-amounts on which that money has been 12
2105-spent; and 13
2106-‘‘(iii) any material changes to the in-14
2107-formation in the most recent annual re-15
2108-port. 16
2109-‘‘(C) C
2110-URRENT REPORTS .—A current re-17
2111-port shall be filed with the Commission reflect-18
2112-ing any material changes to the information 19
2113-previously reported to the Commission by the 20
2114-digital asset issuer. 21
2115-‘‘(4) T
2116-ERMINATION OF REPORTING REQUIRE -22
2117-MENTS.— 23
2118-‘‘(A) I
2119-N GENERAL.—The ongoing reporting 24
2120-requirements under paragraph (3) shall not 25 77
2121-•HR 4763 EH
2122-apply to a digital asset issuer 180 days after 1
2123-the end of the covered fiscal year. 2
2124-‘‘(B) C
2125-OVERED FISCAL YEAR DEFINED .— 3
2126-In this paragraph, the term ‘covered fiscal year’ 4
2127-means the first fiscal year of an issuer in which 5
2128-the blockchain system to which the digital asset 6
2129-relates is a functional system and certified to be 7
2130-a decentralized system under section 44 of the 8
2131-Securities Exchange Act of 1934. 9
2132-‘‘(b) R
2133-EQUIREMENTS FOR INTERMEDIARIES.— 10
2134-‘‘(1) I
2135-N GENERAL.—A person acting as an 11
2136-intermediary in a transaction involving the offer or 12
2137-sale of a unit of a digital asset in reliance on section 13
2138-4(a)(8) shall— 14
2139-‘‘(A) register with the Commission as a 15
2140-digital asset broker; and 16
2141-‘‘(B) be a member of a national securities 17
2142-association registered under section 15A of the 18
2143-Securities Exchange Act of 1934 (15 U.S.C. 19
2144-78o–3). 20
2145-‘‘(2) P
2146-URCHASER QUALIFICATION .— 21
2147-‘‘(A) I
2148-N GENERAL.—Each time, before ac-22
2149-cepting any commitment (including any addi-23
2150-tional commitment from the same person), an 24
2151-intermediary or digital asset issuer shall have a 25 78
2152-•HR 4763 EH
2153-reasonable basis for believing that the pur-1
2154-chaser satisfies the requirements of section 2
2155-4(a)(8). 3
2156-‘‘(B) R
2157-ELIANCE ON PURCHASER ’S REP-4
2158-RESENTATIONS.—For purposes of subpara-5
2159-graph (A), an intermediary or digital asset 6
2160-issuer may rely on a purchaser’s representa-7
2161-tions concerning the purchaser’s annual income 8
2162-and net worth and the amount of the pur-9
2163-chaser’s other investments made, unless the 10
2164-intermediary or digital asset issuer has reason 11
2165-to question the reliability of the representation. 12
2166-‘‘(C) R
2167-ELIANCE ON ISSUER.—For purposes 13
2168-of determining whether a transaction meets the 14
2169-requirements described under subparagraph (A) 15
2170-through (C) of section 4(a)(8), an intermediary 16
2171-may rely on the efforts of a digital asset issuer. 17
2172-‘‘(c) A
2173-DDITIONALPROVISIONS.— 18
2174-‘‘(1) A
2175-CCEPTANCE OF WRITTEN OFFERS ; 19
2176-SALES.—After an issuer files a statement under 20
2177-paragraph (1) to offer and sell a digital asset in reli-21
2178-ance on section 4(a)(8)— 22
2179-‘‘(A) written offers of the digital asset may 23
2180-be made; and 24 79
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2182-‘‘(B) the issuer may sell the digital assets 1
2183-in reliance on section 4(a)(8), if such sales meet 2
2184-all other requirements. 3
2185-‘‘(2) S
2186-OLICITATION OF INTEREST.— 4
2187-‘‘(A) I
2188-N GENERAL.—At any time before 5
2189-the filing of a statement under paragraph (1), 6
2190-a digital asset issuer may communicate orally 7
2191-or in writing to determine whether there is any 8
2192-interest in a contemplated offering. Such com-9
2193-munications are deemed to be an offer of a unit 10
2194-of a digital asset for sale for purposes of the 11
2195-anti-fraud provisions of the Federal securities 12
2196-laws. No solicitation or acceptance of money or 13
2197-other consideration, nor of any commitment, 14
2198-binding or otherwise, from any person is per-15
2199-mitted until the statement is filed. 16
2200-‘‘(B) C
2201-ONDITIONS.—In any communication 17
2202-described under subparagraph (A), the digital 18
2203-asset issuer shall— 19
2204-‘‘(i) state that no money or other con-20
2205-sideration is being solicited, and if sent in 21
2206-response, will not be accepted; 22
2207-‘‘(ii) state that no offer to buy a unit 23
2208-of a digital asset can be accepted and no 24
2209-part of the purchase price can be received 25 80
2210-•HR 4763 EH
2211-until the statement is filed and then only 1
2212-through an intermediary; and 2
2213-‘‘(iii) state that a person’s indication 3
2214-of interest involves no obligation or com-4
2215-mitment of any kind. 5
2216-‘‘(C) I
2217-NDICATIONS OF INTEREST .—Any 6
2218-written communication described under sub-7
2219-paragraph (A) may include a means by which 8
2220-a person may indicate to the digital asset issuer 9
2221-that such person is interested in a potential of-10
2222-fering. A digital asset issuer may require a 11
2223-name, address, telephone number, or email ad-12
2224-dress in any response form included with a 13
2225-communication described under subparagraph 14
2226-(A). 15
2227-‘‘(3) D
2228-ISQUALIFICATION PROVISIONS .—The 16
2229-Commission shall issue rules to apply the disquali-17
2230-fication provisions under section 230.262 of title 17, 18
2231-Code of Federal Regulations, to the exemption pro-19
2232-vided under section 4(a)(8).’’. 20
2233-(b) A
2234-DDITIONALEXEMPTIONS.— 21
1836+DDITIONALEXEMPTIONS.— 23
22351837 (1) C
2236-ERTAIN REGISTRATION REQUIREMENTS .— 22
2237-Section 12(g)(6) of the Securities Exchange Act of 23
2238-1934 (15 U.S.C. 78l(g)(6)) is amended by striking 24 81
2239-•HR 4763 EH
2240-‘‘under section 4(6)’’ and inserting ‘‘under section 1
2241-4(a)(6) or 4(a)(8)’’. 2
1838+ERTAIN REGISTRATION REQUIREMENTS .— 24
1839+Section 12(g)(6) of the Securities Exchange Act of 25
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1842+•HR 4763 RH
1843+1934 (15 U.S.C. 78l(g)(6)) is amended by striking 1
1844+‘‘under section 4(6)’’ and inserting ‘‘under section 2
1845+4(a)(6) or 4(a)(8)’’. 3
22421846 (2) E
2243-XEMPTION FROM STATE REGULATION .— 3
2244-Section 18(b)(4) of the Securities Act of 1933 (15 4
2245-U.S.C. 77r(b)(4)) is amended— 5
2246-(A) in section (B), by striking ‘‘section 6
2247-4(4)’’ and inserting ‘‘section 4(a)(4)’’; 7
2248-(B) in section (C), by striking ‘‘section 8
2249-4(6)’’ and inserting ‘‘section 4(a)(6)’’; 9
2250-(C) in subparagraph (F)— 10
2251-(i) by striking ‘‘section 4(2)’’ each 11
2252-place such term appears and inserting 12
2253-‘‘section 4(a)(2)’’; 13
2254-(ii) by striking ‘‘or’’ at the end; 14
2255-(D) in subparagraph (G), by striking the 15
2256-period and inserting ‘‘; or’’; and 16
2257-(E) by adding at the end the following: 17
2258-‘‘(H) section 4(a)(8).’’. 18
2259-SEC. 302. REQUIREMENTS FOR OFFERS AND SALES OF CER-19
2260-TAIN DIGITAL ASSETS. 20
2261-(a) I
2262-NGENERAL.—Title I of the Securities Exchange 21
2263-Act of 1934 (15 U.S.C. 78a et seq.) is amended by adding 22
2264-at the end the following: 23 82
2265-•HR 4763 EH
2266-‘‘SEC. 42. REQUIREMENTS FOR OFFERS AND SALES OF CER-1
2267-TAIN DIGITAL ASSETS. 2
2268-‘‘(a) O
2269-FFERS ANDSALES OFCERTAINRESTRICTED 3
2270-D
2271-IGITALASSETS.— 4
1847+XEMPTION FROM STATE REGULATION .—Sec-4
1848+tion 18(b)(4) of the Securities Act of 1933 (15 U.S.C. 5
1849+77r(b)(4)) is amended— 6
1850+(A) in section (B), by striking ‘‘section 7
1851+4(4)’’ and inserting ‘‘section 4(a)(4)’’; 8
1852+(B) in section (C), by striking ‘‘section 9
1853+4(6)’’ and inserting ‘‘section 4(a)(6)’’; 10
1854+(C) in subparagraph (F)— 11
1855+(i) by striking ‘‘section 4(2)’’ each 12
1856+place such term appears and inserting ‘‘sec-13
1857+tion 4(a)(2)’’; 14
1858+(ii) by striking ‘‘or’’ at the end; 15
1859+(D) in subparagraph (G), by striking the 16
1860+period and inserting ‘‘; or’’; and 17
1861+(E) by adding at the end the following: 18
1862+‘‘(H) section 4(a)(8).’’. 19
1863+SEC. 202. REQUIREMENTS TO TRANSACT IN CERTAIN DIG-20
1864+ITAL ASSETS. 21
1865+Title I of the Securities Exchange Act of 1934 (15 22
1866+U.S.C. 78a et seq.) is amended by adding at the end the 23
1867+following: 24
1868+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00062 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
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1870+•HR 4763 RH
1871+‘‘SEC. 42. REQUIREMENTS TO TRANSACT IN CERTAIN DIG-1
1872+ITAL ASSETS. 2
1873+‘‘(a) T
1874+RANSACTIONS INCERTAINRESTRICTEDDIGITAL 3
1875+A
1876+SSETS.— 4
22721877 ‘‘(1) I
22731878 N GENERAL.—Notwithstanding any other 5
22741879 provision of law, subject to paragraph (2), a re-6
2275-stricted digital asset may be offered and sold on a 7
2276-digital asset trading system by any person other 8
2277-than a digital asset issuer if, at the time of such 9
2278-offer or sale, any blockchain system to which the re-10
2279-stricted digital asset relates is a functional system 11
2280-and the information described in section 43 has been 12
2281-certified and made publicly available for any 13
2282-blockchain system to which the restricted digital 14
2283-asset relates. 15
1880+stricted digital asset may be offered and sold on an 7
1881+alternative trading system by any person other than 8
1882+a digital asset issuer if, at the time of such offer or 9
1883+sale, any blockchain system to which the restricted 10
1884+digital asset relates is a functional network and the 11
1885+information described in section 43 has been certified 12
1886+and made publicly available for any blockchain sys-13
1887+tem to which the restricted digital asset relates. 14
22841888 ‘‘(2) A
2285-DDITIONAL RULES FOR RELATED PER -16
2286-SONS AND AFFILIATED PERSONS .—Except as pro-17
2287-vided under subsection (c), a restricted digital asset 18
2288-owned by a related person or an affiliated person 19
2289-may only be offered or sold after 12 months after 20
2290-the later of— 21
2291-‘‘(A) the date on which such restricted dig-22
2292-ital asset was acquired; or 23
2293-‘‘(B) the digital asset maturity date. 24
2294-‘‘(b) O
2295-FFERS ANDSALES OFCERTAINDIGITALCOM-25
2296-MODITIES.— 26 83
2297-•HR 4763 EH
1889+DDITIONAL RULES FOR RELATED AND AF -15
1890+FILIATED PERSONS.—A restricted digital asset owned 16
1891+by a related person or an affiliated person may only 17
1892+be offered or sold after 12 months after the later of— 18
1893+‘‘(A) the date on which such restricted dig-19
1894+ital asset was acquired; or 20
1895+‘‘(B) the digital asset maturity date. 21
1896+‘‘(b) T
1897+RANSACTIONS INCERTAINDIGITALCOMMOD-22
1898+ITIES.— 23
1899+‘‘(1) I
1900+N GENERAL.—Subject to paragraph (2), a 24
1901+digital commodity may be offered and sold by any 25
1902+person other than a digital asset issuer. 26
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1905+•HR 4763 RH
1906+‘‘(2) RULES FOR RELATED AND AFFILIATED PER -1
1907+SONS.—A digital commodity may only be offered or 2
1908+sold by a related person or an affiliated person if— 3
1909+‘‘(A) the holder of the digital commodity 4
1910+owned the digital commodity while it was a re-5
1911+stricted digital asset for 12 months after the later 6
1912+of— 7
1913+‘‘(i) the date on which such restricted 8
1914+digital asset was acquired; or 9
1915+‘‘(ii) the digital asset maturity date; 10
1916+‘‘(B) any blockchain system to which the 11
1917+digital commodity relates is certified to be a de-12
1918+centralized network under section 44; and 13
1919+‘‘(C) the digital commodity is offered or sold 14
1920+on or subject to the rules of a digital commodity 15
1921+exchange registered under section 5i of the Com-16
1922+modity Exchange Act. 17
1923+‘‘(3) N
1924+OT A SECURITY.— 18
1925+‘‘(A) I
1926+N GENERAL.—Except as provided 19
1927+under subparagraph (B), for purposes of the se-20
1928+curities laws, a transaction in a digital com-21
1929+modity made in compliance with paragraph (1) 22
1930+or (2) shall not be a transaction in a security. 23
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1933+•HR 4763 RH
1934+‘‘(B) EXCEPTION.—Subparagraph (A) does 1
1935+not apply to a transaction in a digital com-2
1936+modity if the transaction— 3
1937+‘‘(i) is a mixed digital asset trans-4
1938+action; or 5
1939+‘‘(ii) is made pursuant to an invest-6
1940+ment contract or in conjunction with any 7
1941+other security. 8
1942+‘‘(c) S
1943+ALESRESTRICTIONS FOR AFFILIATEDPER-9
1944+SONS.—A digital asset may be offered or sold by an affili-10
1945+ated person under subsection (a) or (b) if— 11
1946+‘‘(1) the aggregate amount of such digital assets 12
1947+sold in any 3-month period by the affiliated person 13
1948+is not greater than one percent of the digital assets 14
1949+then outstanding; or 15
1950+‘‘(2) the affiliated person promptly, following the 16
1951+placement of an order to sell one percent of the digital 17
1952+assets then outstanding during any 3-month period, 18
1953+reports the sale to— 19
1954+‘‘(A) the Commodity Futures Trading Com-20
1955+mission, in the case of an order to sell a digital 21
1956+commodity on or subject to the rules of a digital 22
1957+commodity exchange; or 23
1958+‘‘(B) the Securities and Exchange Commis-24
1959+sion, in the case of a sell order for a restricted 25
1960+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00065 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
1961+rfrederick on LAP8M3WLY3PROD with BILLS 66
1962+•HR 4763 RH
1963+digital asset placed with an alternative trading 1
1964+system. 2
1965+‘‘(d) T
1966+REATMENT OFCERTAINENDUSERDISTRIBU-3
1967+TIONSUNDER THESECURITIESLAWS.— 4
1968+‘‘(1) I
1969+N GENERAL.—With respect to a digital 5
1970+asset, an end user distribution is described under this 6
1971+paragraph if— 7
1972+‘‘(A) each blockchain system to which such 8
1973+digital asset relates is a functional network; and 9
1974+‘‘(B) with respect to the digital asset and 10
1975+each blockchain system to which such digital 11
1976+asset relates, the information described in section 12
1977+43 has been certified and made publicly avail-13
1978+able. 14
1979+‘‘(2) N
1980+OT A SECURITY.—For purposes of the se-15
1981+curities laws, an end user distribution described 16
1982+under paragraph (1) shall not be a transaction in a 17
1983+security. 18
1984+‘‘(3) E
1985+XEMPTION.—Section 5 of the Securities 19
1986+Act of 1933 (15 U.S.C. 77e) shall not apply to an end 20
1987+user distribution described under paragraph (1) or a 21
1988+transaction in a unit of digital asset issued in such 22
1989+a distribution.’’. 23
1990+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00066 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
1991+rfrederick on LAP8M3WLY3PROD with BILLS 67
1992+•HR 4763 RH
1993+SEC. 203. ENHANCED DISCLOSURE REQUIREMENTS. 1
1994+Title I of the Securities Exchange Act of 1934 (15 2
1995+U.S.C. 78a et seq.), as amended by section 202, is further 3
1996+amended by adding at the end the following: 4
1997+‘‘SEC. 43. ENHANCED DISCLOSURE REQUIREMENTS WITH 5
1998+RESPECT TO DIGITAL ASSETS. 6
1999+‘‘(a) D
2000+ISCLOSUREINFORMATION.—With respect to a 7
2001+digital asset and any blockchain system to which the digital 8
2002+asset relates, the information described under this section 9
2003+is as follows: 10
2004+‘‘(1) S
2005+OURCE CODE.—The source code for any 11
2006+blockchain system to which the digital asset relates. 12
2007+‘‘(2) T
2008+RANSACTION HISTORY.—A description of 13
2009+the steps necessary to independently access, search, 14
2010+and verify the transaction history of any blockchain 15
2011+system to which the digital asset relates. 16
2012+‘‘(3) D
2013+IGITAL ASSET ECONOMICS.—A description 17
2014+of the purpose of any blockchain system to which the 18
2015+digital asset relates and the operation of any such 19
2016+blockchain system, including— 20
2017+‘‘(A) information explaining the launch and 21
2018+supply process, including the number of digital 22
2019+assets to be issued in an initial allocation, the 23
2020+total number of digital assets to be created, the 24
2021+release schedule for the digital assets, and the 25
2022+total number of digital assets then outstanding; 26
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2025+•HR 4763 RH
2026+‘‘(B) information on any applicable con-1
2027+sensus mechanism or process for validating 2
2028+transactions, method of generating or mining 3
2029+digital assets, and any process for burning or de-4
2030+stroying digital assets on the blockchain system; 5
2031+‘‘(C) an explanation of governance mecha-6
2032+nisms for implementing changes to the 7
2033+blockchain system or forming consensus among 8
2034+holders of such digital assets; and 9
2035+‘‘(D) sufficient information for a third 10
2036+party to create a tool for verifying the trans-11
2037+action history of the digital asset. 12
2038+‘‘(4) P
2039+LAN OF DEVELOPMENT.—The current state 13
2040+and timeline for the development of any blockchain 14
2041+system to which the digital asset relates, showing how 15
2042+and when the blockchain system intends or intended 16
2043+to be considered a functional network and decentral-17
2044+ized network. 18
2045+‘‘(5) D
2046+EVELOPMENT DISCLOSURES .—A list of all 19
2047+persons who are related persons or affiliated persons 20
2048+who have been issued a unit of a digital asset by a 21
2049+digital asset issuer or have a right to a unit of a dig-22
2050+ital asset from a digital asset issuer. 23
2051+‘‘(6) R
2052+ISK FACTOR DISCLOSURES.—Where appro-24
2053+priate, provide under the caption ‘Risk Factors’ a de-25
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2056+•HR 4763 RH
2057+scription of the material risks surrounding ownership 1
2058+of a unit of a digital asset. This discussion shall be 2
2059+organized logically with relevant headings and each 3
2060+risk factor shall be set forth under a subcaption that 4
2061+adequately describes the risk. 5
2062+‘‘(b) C
2063+ERTIFICATION.—With respect to a digital asset 6
2064+and any blockchain system to which the digital asset relates, 7
2065+the information required to be made available under this 8
2066+section has been certified if the digital asset issuer, an affili-9
2067+ated person, a decentralized governance system, or a digital 10
2068+commodity exchange certifies on a quarterly basis to the 11
2069+Commodity Futures Trading Commission and the Securi-12
2070+ties and Exchange Commission that the information is true 13
2071+and correct.’’. 14
2072+SEC. 204. CERTIFICATION OF CERTAIN DIGITAL ASSETS. 15
2073+Title I of the Securities Exchange Act of 1934 (15 16
2074+U.S.C. 78a et seq.), as amended by section 203, is further 17
2075+amended by adding at the end the following: 18
2076+‘‘SEC. 44. CERTIFICATION OF CERTAIN DIGITAL ASSETS. 19
2077+‘‘(a) C
2078+ERTIFICATION.—Any person may certify to the 20
2079+Securities and Exchange Commission that the blockchain 21
2080+system to which a digital asset relates is a decentralized 22
2081+network. 23
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2084+•HR 4763 RH
2085+‘‘(b) FILINGREQUIREMENTS.—A certification de-1
2086+scribed under subsection (a) shall be filed with the Commis-2
2087+sion, and include— 3
2088+‘‘(1) information regarding the person making 4
2089+the certification; 5
2090+‘‘(2) a description of the blockchain system and 6
2091+the digital asset which relates to such blockchain sys-7
2092+tem, including— 8
2093+‘‘(A) the operation of the blockchain system; 9
2094+‘‘(B) the functionality of the related digital 10
2095+asset; 11
2096+‘‘(C) any decentralized governance system 12
2097+which relates to the blockchain system; and 13
2098+‘‘(D) the process to develop consensus or 14
2099+agreement within such decentralized governance 15
2100+system; 16
2101+‘‘(3) a description of the development of the 17
2102+blockchain system and the digital asset which relates 18
2103+to the blockchain system, including— 19
2104+‘‘(A) a history of the development of the 20
2105+blockchain system and the digital asset which re-21
2106+lates to such blockchain system; 22
2107+‘‘(B) a description of the issuance process 23
2108+for the digital asset which relates to the 24
2109+blockchain system; 25
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2112+•HR 4763 RH
2113+‘‘(C) information identifying the digital 1
2114+asset issuer of the digital asset which relates to 2
2115+the blockchain system; and 3
2116+‘‘(D) a list of any affiliated person related 4
2117+to the digital asset issuer; 5
2118+‘‘(4) an analysis of the factors on which such 6
2119+person based the certification that the blockchain sys-7
2120+tem is a decentralized network, including— 8
2121+‘‘(A) an explanation of the protections and 9
2122+prohibitions available during the previous 12 10
2123+months against any one person being able to— 11
2124+‘‘(i) control or materially alter the 12
2125+blockchain system; 13
2126+‘‘(ii) exclude any other person from 14
2127+using or participating on the blockchain 15
2128+system; and 16
2129+‘‘(iii) exclude any other person from 17
2130+participating in a decentralized governance 18
2131+system; 19
2132+‘‘(B) information regarding the beneficial 20
2133+ownership of the digital asset which relates to 21
2134+such blockchain system and the distribution of 22
2135+voting power in any decentralized governance 23
2136+system during the previous 12 months; 24
2137+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00071 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
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2139+•HR 4763 RH
2140+‘‘(C) information regarding the history of 1
2141+upgrades to the source code for such blockchain 2
2142+system during the previous 3 months, includ-3
2143+ing— 4
2144+‘‘(i) a description of any consensus or 5
2145+agreement process utilized to process or ap-6
2146+prove changes to the source code; 7
2147+‘‘(ii) a list of any material changes to 8
2148+the source code, the purpose and effect of the 9
2149+changes, and the contributor of the changes, 10
2150+if known; and 11
2151+‘‘(iii) any changes to the source code 12
2152+made by the digital asset issuer, a related 13
2153+person, or an affiliated person; 14
2154+‘‘(D) information regarding any activities 15
2155+conducted to market the digital asset which re-16
2156+lates to the blockchain system during the pre-17
2157+vious 3 months by the digital asset issuer or an 18
2158+affiliated person of the digital asset issuer; and 19
2159+‘‘(E) information regarding any issuance of 20
2160+a unit of the digital asset which relates to such 21
2161+blockchain system during the previous 12 22
2162+months; and 23
2163+‘‘(5) with respect to a blockchain system for 24
2164+which a certification has previously been rebutted 25
2165+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00072 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
2166+rfrederick on LAP8M3WLY3PROD with BILLS 73
2167+•HR 4763 RH
2168+under this section or withdrawn under section 5i(m) 1
2169+of the Commodity Exchange Act, specific information 2
2170+relating to the analysis provided in subsection (f)(2) 3
2171+in connection with such rebuttal or such section 4
2172+5i(m)(1)(C) in connection with such withdrawal. 5
2173+‘‘(c) R
2174+EBUTTABLEPRESUMPTION.—The Commission 6
2175+may rebut a certification described under subsection (a) 7
2176+with respect to a blockchain system if the Commission, 8
2177+within 30 days of receiving such certification, determines 9
2178+that the blockchain system is not a decentralized network. 10
2179+‘‘(d) C
2180+ERTIFICATIONREVIEW.— 11
2181+‘‘(1) I
2182+N GENERAL.—Any blockchain system that 12
2183+relates to a digital asset for which a certification has 13
2184+been made under subsection (a) shall be considered a 14
2185+decentralized network 30 days after the date on which 15
2186+the Commission receives a certification under sub-16
2187+section (a), unless the Commission notifies the person 17
2188+who made the certification within such time that the 18
2189+Commission is staying the certification due to— 19
2190+‘‘(A) an inadequate explanation by the per-20
2191+son making the certification; or 21
2192+‘‘(B) any novel or complex issues which re-22
2193+quire additional time to consider. 23
2194+‘‘(2) P
2195+UBLIC NOTICE.—The Commission shall 24
2196+make the following available to the public and provide 25
2197+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00073 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
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2199+•HR 4763 RH
2200+a copy to the Commodity Futures Trading Commis-1
2201+sion: 2
2202+‘‘(A) Each certification received under sub-3
2203+section (a). 4
2204+‘‘(B) Each stay of the Commission under 5
2205+this section, and the reasons therefore. 6
2206+‘‘(C) Any response from a person making a 7
2207+certification under subsection (a) to a stay of the 8
2208+certification by the Commission. 9
2209+‘‘(3) C
2210+ONSOLIDATION.—The Commission may 10
2211+consolidate and treat as one submission multiple cer-11
2212+tifications made under subsection (a) for the same 12
2213+blockchain system which relates to a digital asset 13
2214+which are received during the review period provided 14
2215+under this subsection. 15
2216+‘‘(e) S
2217+TAY OFCERTIFICATION.— 16
2218+‘‘(1) I
2219+N GENERAL.—A notification by the Com-17
2220+mission pursuant to subsection (d)(1) shall stay the 18
2221+certification once for up to an additional 120 days 19
2222+from the date of the notification. 20
2223+‘‘(2) P
2224+UBLIC COMMENT PERIOD .—Before the end 21
2225+of the 30-day period described under subsection 22
2226+(d)(1), the Commission may begin a public comment 23
2227+period of at least 30 days in conjunction with a stay 24
2228+under this section. 25
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2231+•HR 4763 RH
2232+‘‘(f) DISPOSITION OFCERTIFICATION.— 1
2233+‘‘(1) I
2234+N GENERAL.—A certification made under 2
2235+subsection (a) shall— 3
2236+‘‘(A) become effective— 4
2237+‘‘(i) upon the publication of a notifica-5
2238+tion from the Commission to the person who 6
2239+made the certification that the Commission 7
2240+does not object to the certification; or 8
2241+‘‘(ii) at the expiration of the certifi-9
2242+cation review period; and 10
2243+‘‘(B) not become effective upon the publica-11
2244+tion of a notification from the Commission to the 12
2245+person who made the certification that the Com-13
2246+mission has rebutted the certification. 14
2247+‘‘(2) D
2248+ETAILED ANALYSIS INCLUDED WITH RE -15
2249+BUTTAL.—The Commission shall include, with each 16
2250+publication of a notification of rebuttal described 17
2251+under paragraph (1)(B), a detailed analysis of the 18
2252+factors on which the decision was based. 19
2253+‘‘(g) R
2254+ECERTIFICATION.—With respect to a blockchain 20
2255+system for which a certification has been rebutted under this 21
2256+section, no person may make a certification under sub-22
2257+section (a) with respect to such blockchain system during 23
2258+the 90-day period beginning on the date of such rebuttal. 24
2259+‘‘(h) A
2260+PPEAL OFREBUTTAL.— 25
2261+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00075 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
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2263+•HR 4763 RH
2264+‘‘(1) IN GENERAL.—If a certification is rebutted 1
2265+under this section, the person making such certifi-2
2266+cation may appeal the decision to the United States 3
2267+Court of Appeals for the District of Columbia, not 4
2268+later than 60 days after the notice of rebuttal is 5
2269+made. 6
2270+‘‘(2) R
2271+EVIEW.—In an appeal under paragraph 7
2272+(1), the court shall have de novo review of the deter-8
2273+mination to rebut the certification. 9
2274+‘‘(i) L
2275+IABILITY FORPROVIDINGFALSEINFORMA-10
2276+TION.—It shall be unlawful for any person to provide false 11
2277+information in support of a certification under this section 12
2278+if such person knew or reasonably should have known such 13
2279+information was false.’’. 14
2280+SEC. 205. EFFECTIVE DATE. 15
2281+Unless otherwise provided in this title, this title and 16
2282+the amendments made by this title shall take effect 360 days 17
2283+after the date of enactment of this Act, except that, to the 18
2284+extent a provision of this title requires a rulemaking, the 19
2285+provision shall take effect on the later of— 20
2286+(1) 360 days after the date of enactment of this 21
2287+Act; or 22
2288+(2) 60 days after the publication in the Federal 23
2289+Register of the final rule implementing the provision. 24
2290+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00076 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
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2292+•HR 4763 RH
2293+TITLE III.—REGISTRATION FOR 1
2294+DIGITAL ASSET INTER-2
2295+MEDIARIES AT THE SECURI-3
2296+TIES AND EXCHANGE COM-4
2297+MISSION 5
2298+SEC. 301. TREATMENT OF DIGITAL COMMODITIES AND 6
2299+OTHER DIGITAL ASSETS. 7
2300+(a) S
2301+ECURITIESACT OF1933.—Section 2(a)(1) of the 8
2302+Securities Act of 1933 (15 U.S.C. 77b(a)(1)) is amended 9
2303+by adding at the end the following: ‘‘The term does not in-10
2304+clude a digital commodity or permitted payment 11
2305+stablecoin.’’. 12
2306+(b) S
2307+ECURITIESEXCHANGEACT OF1934.—Section 13
2308+3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 14
2309+78c(a)) is amended— 15
2310+(1) in paragraph (1), by adding at the end the 16
2311+following: ‘‘The term ‘exchange’ does not include a 17
2312+digital asset trading system, blockchain protocol, or 18
2313+any person or group of persons solely because of their 19
2314+development of a blockchain protocol.’’; 20
2315+(2) in paragraph (2), by adding at the end the 21
2316+following: ‘‘A digital asset trading system is not a ‘fa-22
2317+cility’ of an exchange.’’; 23
2318+(3) in paragraph (4)(A), by inserting ‘‘, other 24
2319+than restricted digital assets,’’ after ‘‘securities’’; 25
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2322+•HR 4763 RH
2323+(4) in paragraph (5)(A), by inserting ‘‘restricted 1
2324+digital assets or’’ after ‘‘not including’’; 2
2325+(5) in paragraph (26) by inserting ‘‘(other than 3
2326+a notice-registered digital asset clearing agency)’’ 4
2327+after ‘‘or registered clearing agency’’; 5
2328+(6) in paragraph (28) by inserting ‘‘(other than 6
2329+a notice-registered digital asset clearing agency)’’ 7
2330+after ‘‘registered clearing agency’’; 8
2331+(7) in paragraph (10), by adding at the end the 9
2332+following: ‘‘Subject to subsection (i), the term does not 10
2333+include a digital commodity or permitted payment 11
2334+stablecoin.’’; 12
2335+(8) by redesignating the second paragraph (80) 13
2336+(relating to funding portals) as paragraph (81); and 14
2337+(9) by adding at the end the following: 15
2338+‘‘(81) B
2339+ANK SECRECY ACT.—The term ‘Bank Se-16
2340+crecy Act’ means— 17
2341+‘‘(A) section 21 of the Federal Deposit In-18
2342+surance Act (12 U.S.C. 1829b); 19
2343+‘‘(B) chapter 2 of title I of Public Law 91– 20
2344+508 (12 U.S.C. 1951 et seq.); and 21
2345+‘‘(C) subchapter II of chapter 53 of title 31, 22
2346+United States Code. 23
2347+‘‘(82) D
2348+IGITAL ASSET BROKER.—The term ‘dig-24
2349+ital asset broker’— 25
2350+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00078 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
2351+rfrederick on LAP8M3WLY3PROD with BILLS 79
2352+•HR 4763 RH
2353+‘‘(A) means any person engaged in the busi-1
2354+ness of effecting transactions in restricted digital 2
2355+assets for the account of others; and 3
2356+‘‘(B) does not include a blockchain protocol 4
2357+or a person or group of persons solely because of 5
2358+their development of a blockchain protocol. 6
2359+‘‘(83) D
2360+IGITAL ASSET DEALER.—The term ‘dig-7
2361+ital asset dealer’— 8
2362+‘‘(A) means any person engaged in the busi-9
2363+ness of buying and selling digital assets for such 10
2364+person’s own account through a broker or other-11
2365+wise; and 12
2366+‘‘(B) does not include— 13
2367+‘‘(i) a person that buys or sells digital 14
2368+assets for such person’s own account, either 15
2369+individually or in a fiduciary capacity, but 16
2370+not as a part of a regular business; or 17
2371+‘‘(ii) a blockchain protocol or a person 18
2372+or group of persons solely because of their 19
2373+development of a blockchain protocol. 20
2374+‘‘(84) D
2375+IGITAL ASSET TRADING SYSTEM .—The 21
2376+term ‘digital asset trading system’— 22
2377+‘‘(A) means any organization, association, 23
2378+person, or group of persons, whether incor-24
2379+porated or unincorporated, that constitutes, 25
2380+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00079 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
2381+rfrederick on LAP8M3WLY3PROD with BILLS 80
2382+•HR 4763 RH
2383+maintains, or provides a market place or facili-1
2384+ties for bringing together purchasers and sellers 2
2385+of restricted digital assets or for otherwise per-3
2386+forming with respect to digital assets the func-4
2387+tions commonly performed by a stock exchange 5
2388+within the meaning of section 240.3b–16 of title 6
2389+17, Code of Federal Regulations, as in effect on 7
2390+the date of enactment of this paragraph; and 8
2391+‘‘(B) does not include a blockchain protocol 9
2392+or a person or group of persons solely because of 10
2393+their development of a blockchain protocol. 11
2394+‘‘(85) M
2395+IXED DIGITAL ASSET TRANSACTION .— 12
2396+The term ‘mixed digital asset transaction’ means an 13
2397+agreement, contract, or transaction involving a re-14
2398+stricted digital asset and a digital commodity. 15
2399+‘‘(86) N
2400+OTICE-REGISTERED DIGITAL ASSET 16
2401+CLEARING AGENCY.—The term ‘notice-registered dig-17
2402+ital asset clearing agency’ means a clearing agency 18
2403+that has registered with the Commission pursuant to 19
2404+section 17A(b)(9). 20
2405+‘‘(87) A
2406+DDITIONAL DIGITAL ASSET -RELATED 21
2407+TERMS.— 22
2408+‘‘(A) S
2409+ECURITIES ACT OF 1933.—The terms 23
2410+‘affiliated person’, ‘blockchain system’, ‘decen-24
2411+tralized governance system’, ‘decentralized net-25
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2413+rfrederick on LAP8M3WLY3PROD with BILLS 81
2414+•HR 4763 RH
2415+work’, ‘digital asset’, ‘digital asset issuer’, ‘dig-1
2416+ital asset maturity date’, ‘end user distribution’, 2
2417+‘functional network’, ‘mixed digital asset trans-3
2418+action’, ‘permitted payment stablecoin’, ‘related 4
2419+person’, ‘restricted digital asset’, and ‘source 5
2420+code’ have the meaning given those terms, respec-6
2421+tively, under section 2(a) of the Securities Act of 7
2422+1933 (15 U.S.C. 77b(a)). 8
2423+‘‘(B) C
2424+OMMODITY EXCHANGE ACT .—The 9
2425+terms ‘digital commodity’, ‘digital commodity 10
2426+broker’, ‘digital commodity dealer’, and ‘digital 11
2427+commodity exchange’ have the meaning given 12
2428+those terms, respectively, under section 1a of the 13
2429+Commodity Exchange Act (7 U.S.C. 1a).’’. 14
2430+(c) I
2431+NVESTMENTADVISERSACT OF1940.—Section 15
2432+202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 16
2433+80b–2) is amended— 17
2434+(1) in paragraph (18), by adding at the end the 18
2435+following: ‘‘The term does not include a digital com-19
2436+modity or permitted payment stablecoin.’’; 20
2437+(2) by redesignating the second paragraph (29) 21
2438+(relating to commodity pools) as paragraph (31); 22
2439+(3) by adding at the end, the following: 23
2440+‘‘(32) D
2441+IGITAL ASSET-RELATED TERMS .—The 24
2442+terms ‘digital commodity’ and ‘permitted payment 25
2443+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00081 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
2444+rfrederick on LAP8M3WLY3PROD with BILLS 82
2445+•HR 4763 RH
2446+stablecoin’ have the meaning given those terms, re-1
2447+spectively, under section 2(a) of the Securities Act of 2
2448+1933 (15 U.S.C. 77b(a)).’’. 3
2449+(d) I
2450+NVESTMENTCOMPANYACT OF1940.—Section 4
2451+2(a) of the Investment Company Act of 1940 (15 U.S.C. 5
2452+80a–2) is amended— 6
2453+(1) in paragraph (36), by adding at the end the 7
2454+following: ‘‘The term does not include a digital com-8
2455+modity or permitted payment stablecoin.’’; and 9
2456+(2) by adding at the end the following: 10
2457+‘‘(55) D
2458+IGITAL ASSET-RELATED TERMS .—The 11
2459+terms ‘digital commodity’ and ‘permitted payment 12
2460+stablecoin’ have the meaning given those terms, re-13
2461+spectively, under section 2(a) of the Securities Act of 14
2462+1933 (15 U.S.C. 77b(a)).’’. 15
2463+SEC. 302. ANTIFRAUD AUTHORITY OVER PERMITTED PAY-16
2464+MENT STABLECOINS. 17
2465+Section 10 of the Securities Exchange Act of 1934 (15 18
2466+U.S.C. 78j) is amended— 19
2467+(1) by moving subsection (c) so as to appear 20
2468+after subsection (b); 21
2469+(2) by designating the undesignated matter at 22
2470+the end of that section as subsection (d); and 23
2471+(3) by adding at the end the following: 24
2472+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00082 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
2473+rfrederick on LAP8M3WLY3PROD with BILLS 83
2474+•HR 4763 RH
2475+‘‘(e)(1) Rules promulgated under subsection (b) that 1
2476+prohibit fraud, manipulation, or insider trading (but not 2
2477+rules imposing or specifying reporting or recordkeeping re-3
2478+quirements, procedures, or standards as prophylactic meas-4
2479+ures against fraud, manipulation, or insider trading), and 5
2480+judicial precedents decided under subsection (b) and rules 6
2481+promulgated thereunder that prohibit fraud, manipulation, 7
2482+or insider trading, shall apply to permitted payment 8
2483+stablecoins with respect to those circumstances in which the 9
2484+permitted payment stablecoins are brokered, traded, or 10
2485+custodied by a broker, dealer, digital asset broker, or digital 11
2486+asset dealer or through an alternative trading system or 12
2487+digital asset trading platform to the same extent as they 13
2488+apply to securities. 14
2489+‘‘(2) Judicial precedents decided under section 17(a) 15
2490+of the Securities Act of 1933 and sections 9, 15, 16, 20, 16
2491+and 21A of this title, and judicial precedents decided under 17
2492+applicable rules promulgated under such sections, shall 18
2493+apply to permitted payment stablecoins with respect to 19
2494+those circumstances in which the permitted payment 20
2495+stablecoins are brokered, traded, or custodied by a digital 21
2496+asset broker, digital asset dealer, or digital asset trading 22
2497+platform to the same extent as they apply to securities. 23
2498+‘‘(3) Nothing in this subsection may be construed to 24
2499+provide the Commission authority to make any rule, regula-25
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2501+rfrederick on LAP8M3WLY3PROD with BILLS 84
2502+•HR 4763 RH
2503+tion, requirement, or obligation on a permitted payment 1
2504+stablecoin issuer regarding the operations of a permitted 2
2505+payment stablecoin issuer or a permitted payment 3
2506+stablecoin, including requirements or obligations regard-4
2507+ing— 5
2508+‘‘(A) design; 6
2509+‘‘(B) structure; 7
2510+‘‘(C) issuance; 8
2511+‘‘(D) redemption; 9
2512+‘‘(E) financial resources; 10
2513+‘‘(F) collateral; or 11
2514+‘‘(G) any other aspect of the operation of a per-12
2515+mitted payment stablecoin issuer or permitted pay-13
2516+ment stablecoin.’’. 14
2517+SEC. 303. REGISTRATION OF DIGITAL ASSET TRADING SYS-15
2518+TEMS. 16
2519+Section 6 of the Securities Exchange Act of 1934 (15 17
2520+U.S.C. 78f) is amended by adding at the end the following: 18
2521+‘‘(m) D
2522+IGITALASSETTRADINGSYSTEM.— 19
2523+‘‘(1) I
2524+N GENERAL.—It shall be unlawful for any 20
2525+digital asset trading system to make use of the mails 21
2526+or any means or instrumentality of interstate com-22
2527+merce within or subject to the jurisdiction of the 23
2528+United States to effect any transaction in a digital 24
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2530+rfrederick on LAP8M3WLY3PROD with BILLS 85
2531+•HR 4763 RH
2532+asset, unless such digital asset trading system is reg-1
2533+istered with the Commission. 2
2534+‘‘(2) A
2535+PPLICATION.—A person desiring to reg-3
2536+ister as a digital asset trading system shall submit to 4
2537+the Commission an application in such form and con-5
2538+taining such information as the Commission may re-6
2539+quire for the purpose of making the determinations 7
2540+required for approval. 8
2541+‘‘(3) E
2542+XEMPTIONS.—A digital asset trading sys-9
2543+tem that offers or seeks to offer at least one digital 10
2544+asset shall not be required to register under this sec-11
2545+tion (and subparagraph (A) shall not apply to such 12
2546+digital asset trading system) if the trading system 13
2547+satisfies any of the exemptions set forth in section 14
2548+240.3b–16(b) of title 17, Code of Federal Regula-15
2549+tions.’’. 16
2550+SEC. 304. REQUIREMENTS FOR DIGITAL ASSET TRADING 17
2551+SYSTEMS. 18
2552+Title I of the Securities Exchange Act of 1934 (15 19
2553+U.S.C. 78a et seq.) is amended by inserting after section 20
2554+6 the following: 21
2555+‘‘SEC. 6A. REQUIREMENTS FOR DIGITAL ASSET TRADING 22
2556+SYSTEMS. 23
2557+‘‘(a) H
2558+OLDING OFCUSTOMERASSETS.— 24
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2561+•HR 4763 RH
22982562 ‘‘(1) IN GENERAL.—Subject to paragraph (2), a 1
2299-digital commodity may be offered and sold by any 2
2300-person. 3
2563+digital asset trading system, in its capacity as such, 2
2564+may not hold custody of customer money, assets, or 3
2565+property. 4
2566+‘‘(2) C
2567+USTODY IN OTHER CAPACITY .—Nothing in 5
2568+this Act shall prohibit a person registered as a digital 6
2569+asset trading system from holding custody of customer 7
2570+money, assets, or property in any other permitted ca-8
2571+pacity, including as a digital asset broker or digital 9
2572+asset dealer, in compliance with the requirements of 10
2573+section 15H. 11
2574+‘‘(b) R
2575+ULEMAKING.—The Commission shall prescribe 12
2576+rules for digital asset trading systems relating to the fol-13
2577+lowing: 14
2578+‘‘(1) N
2579+OTICE.—Notice to the Commission of the 15
2580+initial operation of a digital asset trading system or 16
2581+any material change to the operation of the digital 17
2582+asset trading system. 18
2583+‘‘(2) O
2584+RDER DISPLAY.—The thresholds at which 19
2585+a digital asset trading system is required to display 20
2586+the orders of the digital asset trading system, and the 21
2587+manner of such display. 22
2588+‘‘(3) F
2589+AIR ACCESS.—The thresholds at which a 23
2590+digital asset trading system is required to have poli-24
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2593+•HR 4763 RH
2594+cies regarding providing fair access to the digital 1
2595+asset trading system. 2
2596+‘‘(4) C
2597+APACITY, INTEGRITY, AND SECURITY OF 3
2598+AUTOMATED SYSTEMS .—Policies and procedures rea-4
2599+sonably designed to ensure the capacity, integrity, 5
2600+and security of the digital asset trading system, tak-6
2601+ing into account the particular nature of digital asset 7
2602+trading systems. 8
2603+‘‘(5) E
2604+XAMINATIONS, INSPECTIONS, AND INVES-9
2605+TIGATIONS.—The examination and inspection of the 10
2606+premises, systems, and records of the digital asset 11
2607+trading system by the Commission or by a self-regu-12
2608+latory organization of which such digital asset trad-13
2609+ing system is a member. 14
2610+‘‘(6) R
2611+ECORDKEEPING.—The making, keeping 15
2612+current, and preservation of records related to trading 16
2613+activity on the digital asset trading system. 17
2614+‘‘(7) R
2615+EPORTING.—The reporting of transactions 18
2616+in digital assets that occur through the digital asset 19
2617+trading system. 20
2618+‘‘(8) P
2619+ROCEDURES.—The establishment of ade-21
2620+quate written safeguards and written procedures to 22
2621+protect confidential trading information. 23
2622+‘‘(c) N
2623+AMEREQUIREMENT.—A digital asset trading 24
2624+system may not use the word ‘exchange’ in the name of the 25
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2627+•HR 4763 RH
2628+digital asset trading system, unless the digital asset trading 1
2629+system— 2
2630+‘‘(1) is operated by a registered national securi-3
2631+ties exchange; and 4
2632+‘‘(2) is clearly indicated as being provided out-5
2633+side of the system’s capacity as a national securities 6
2634+exchange. 7
2635+‘‘(d) T
2636+REATMENTUNDER THEBANKSECRECYACT.— 8
2637+A digital asset trading system shall be treated as a financial 9
2638+institution for purposes of the Bank Secrecy Act.’’. 10
2639+SEC. 305. REGISTRATION OF DIGITAL ASSET BROKERS AND 11
2640+DIGITAL ASSET DEALERS. 12
2641+The Securities Exchange Act of 1934 (15 U.S.C. 78a 13
2642+et seq.) is amended by inserting after section 15G the fol-14
2643+lowing: 15
2644+‘‘SEC. 15H. REGISTRATION OF DIGITAL ASSET BROKERS 16
2645+AND DIGITAL ASSET DEALERS. 17
2646+‘‘(a) R
2647+EGISTRATION.— 18
2648+‘‘(1) I
2649+N GENERAL.—It shall be unlawful for any 19
2650+digital asset broker or digital asset dealer (other than 20
2651+a natural person associated with a digital asset 21
2652+broker or digital asset dealer, and other than such a 22
2653+digital asset broker or digital asset dealer whose busi-23
2654+ness is exclusively intrastate and who does not make 24
2655+use of any facility of a digital asset trading platform) 25
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2659+to make use of the mails or any means or instrumen-1
2660+tality of interstate commerce to effect any trans-2
2661+actions in, or to induce or attempt to induce the pur-3
2662+chase or sale of, any digital asset unless such digital 4
2663+asset broker or digital asset dealer is registered in ac-5
2664+cordance with this section. 6
2665+‘‘(2) A
2666+PPLICATION.—A person desiring to reg-7
2667+ister as a digital asset broker or digital asset dealer 8
2668+shall submit to the Commission an application in 9
2669+such form and containing such information as the 10
2670+Commission may require for the purpose of making 11
2671+the determinations required for approval. 12
2672+‘‘(b) N
2673+ATIONALSECURITIESASSOCIATIONMEMBER-13
2674+SHIP.— 14
2675+‘‘(1) I
2676+N GENERAL.—A digital asset broker or dig-15
2677+ital asset dealer may not register or maintain reg-16
2678+istration under this section unless such digital asset 17
2679+broker or digital asset dealer is a member of a na-18
2680+tional securities association registered under section 19
2681+15A. 20
2682+‘‘(2) E
2683+XCEPTION.—A digital asset broker or dig-21
2684+ital asset dealer may register under this section with-22
2685+out obtaining membership in a national securities as-23
2686+sociation until the end of the 360-day period begin-24
2687+ning on the date the first national securities associa-25
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2690+•HR 4763 RH
2691+tion adopts rules to admit digital asset brokers or dig-1
2692+ital asset dealers as members. 2
2693+‘‘(c) A
2694+DDITIONALREGISTRATIONSWITH THECOM-3
2695+MODITYFUTURESTRADINGCOMMISSION.—A registered 4
2696+digital asset broker or digital asset dealer shall be permitted 5
2697+to maintain any other registration with the Commodity Fu-6
2698+tures Trading Commission relating to the other activities 7
2699+of the registered digital asset broker or registered digital 8
2700+asset dealer, including as a digital commodity broker or 9
2701+digital commodity dealer, to list or trade contracts of sale 10
2702+for digital commodities.’’. 11
2703+SEC. 306. REQUIREMENTS OF DIGITAL ASSET BROKERS AND 12
2704+DIGITAL ASSET DEALERS. 13
2705+Section 15H of the Securities Exchange Act of 1934, 14
2706+as added by section 205, is amended by adding at the end 15
2707+the following: 16
2708+‘‘(d) A
2709+NTIFRAUD.—No digital asset broker or digital 17
2710+asset dealer shall make use of the mails or any means or 18
2711+instrumentality of interstate commerce to effect any trans-19
2712+action in, or to induce or attempt to induce the purchase 20
2713+or sale of, any digital asset that is not a digital commodity 21
2714+by means of any manipulative, deceptive, or other fraudu-22
2715+lent device or contrivance. 23
2716+‘‘(e) H
2717+OLDING OFCUSTOMERASSETS.— 24
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2720+•HR 4763 RH
2721+‘‘(1) IN GENERAL.—A digital asset broker or dig-1
2722+ital asset dealer shall hold customer money, assets, 2
2723+and property in a manner to minimize the risk of 3
2724+loss to the customer or unreasonable delay in the ac-4
2725+cess to the money, assets, and property of the cus-5
2726+tomer. 6
23012727 ‘‘(2) R
2302-ULES FOR RELATED AND AFFILIATED 4
2303-PERSONS.—Except as provided under subsection (c), 5
2304-a digital commodity may only be offered or sold by 6
2305-a related person or an affiliated person if— 7
2306-‘‘(A) the holder of the digital commodity 8
2307-originally acquired the digital asset while it was 9
2308-a restricted digital asset not less than 12 10
2309-months after the later of— 11
2310-‘‘(i) the date on which such restricted 12
2311-digital asset was acquired; or 13
2312-‘‘(ii) the digital asset maturity date; 14
2313-‘‘(B) any blockchain system to which the 15
2314-digital commodity relates is certified to be a de-16
2315-centralized system under section 44; and 17
2316-‘‘(C) the digital commodity is offered or 18
2317-sold on or subject to the rules of a digital com-19
2318-modity exchange registered under section 5i of 20
2319-the Commodity Exchange Act. 21
2320-‘‘(3) N
2321-OT AN INVESTMENT CONTRACT .—For 22
2322-purposes of the securities laws, an offer or sale of 23
2323-a digital commodity that does not violate paragraph 24 84
2324-•HR 4763 EH
2325-(2) shall not be a transaction in an investment con-1
2326-tract. 2
2327-‘‘(c) S
2328-ALESRESTRICTIONS FOR AFFILIATEDPER-3
2329-SONS.—A digital asset may be offered and sold by an af-4
2330-filiated person under subsection (a) or (b) if— 5
2331-‘‘(1) the aggregate amount of such digital as-6
2332-sets sold in any 3-month period by the affiliated per-7
2333-son is not greater than one percent of the digital as-8
2334-sets then outstanding; or 9
2335-‘‘(2) the affiliated person promptly, following 10
2336-the placement of an order to sell one percent or 11
2337-more of the digital assets then outstanding during 12
2338-any 3-month period, reports the sale to— 13
2339-‘‘(A) the Commodity Futures Trading 14
2340-Commission, in the case of an order to sell a 15
2341-digital commodity on or subject to the rules of 16
2342-a digital commodity exchange; or 17
2343-‘‘(B) the Securities and Exchange Commis-18
2344-sion, in the case of a sell order for a restricted 19
2345-digital asset placed with a digital asset trading 20
2346-system. 21
2347-‘‘(d) T
2348-REATMENT OFCERTAINENDUSERDISTRIBU-22
2349-TIONSUNDER THESECURITIESLAWS.— 23 85
2350-•HR 4763 EH
2351-‘‘(1) IN GENERAL.—With respect to a digital 1
2352-asset, an end user distribution is described under 2
2353-this paragraph if— 3
2354-‘‘(A) each blockchain system to which such 4
2355-digital asset relates is a functional system; and 5
2356-‘‘(B) with respect to the digital asset and 6
2357-each blockchain system to which such digital 7
2358-asset relates, the information described in sec-8
2359-tion 43 has been certified and made publicly 9
2360-available. 10
2361-‘‘(2) N
2362-OT AN INVESTMENT CONTRACT .—For 11
2363-purposes of the securities laws, an end user distribu-12
2364-tion described under paragraph (1) shall not be a 13
2365-transaction in an investment contract. 14
2366-‘‘(3) E
2367-XEMPTION.—Section 5 of the Securities 15
2368-Act of 1933 (15 U.S.C. 77e) shall not apply to an 16
2369-end user distribution described under paragraph (1) 17
2370-or a transaction in a unit of digital asset issued in 18
2371-such a distribution.’’. 19
2372-(b) R
2373-ULE OFCONSTRUCTION.—Nothing in this Act 20
2374-or the amendments made by this Act may be construed 21
2375-to restrict the use of a digital asset, except as expressly 22
2376-provided in connection with— 23
2377-(1) the offer or sale of a restricted digital asset 24
2378-or digital commodity; or 25 86
2379-•HR 4763 EH
2380-(2) an intermediary’s custody of a restricted 1
2381-digital asset or digital commodity. 2
2382-SEC. 303. ENHANCED DISCLOSURE REQUIREMENTS. 3
2383-Title I of the Securities Exchange Act of 1934 (15 4
2384-U.S.C. 78a et seq.), as amended by section 302, is further 5
2385-amended by adding at the end the following: 6
2386-‘‘SEC. 43. ENHANCED DISCLOSURE REQUIREMENTS WITH 7
2387-RESPECT TO DIGITAL ASSETS. 8
2388-‘‘(a) D
2389-ISCLOSUREINFORMATION.—With respect to a 9
2390-digital asset and any blockchain system to which the dig-10
2391-ital asset relates, the information described under this sec-11
2392-tion is as follows: 12
2393-‘‘(1) S
2394-OURCE CODE.—The source code for any 13
2395-blockchain system to which the digital asset relates. 14
2396-‘‘(2) T
2397-RANSACTION HISTORY.—A description of 15
2398-the steps necessary to independently access, search, 16
2399-and verify the transaction history of any blockchain 17
2400-system to which the digital asset relates. 18
2401-‘‘(3) D
2402-IGITAL ASSET ECONOMICS .—A descrip-19
2403-tion of the purpose of any blockchain system to 20
2404-which the digital asset relates and the operation of 21
2405-any such blockchain system, including— 22
2406-‘‘(A) information explaining the launch 23
2407-and supply process, including the number of 24
2408-digital assets to be issued in an initial alloca-25 87
2409-•HR 4763 EH
2410-tion, the total number of digital assets to be 1
2411-created, the release schedule for the digital as-2
2412-sets, and the total number of digital assets then 3
2413-outstanding; 4
2414-‘‘(B) information on any applicable con-5
2415-sensus mechanism or process for validating 6
2416-transactions, method of generating or mining 7
2417-digital assets, and any process for burning or 8
2418-destroying digital assets on the blockchain sys-9
2419-tem; 10
2420-‘‘(C) an explanation of governance mecha-11
2421-nisms for implementing changes to the 12
2422-blockchain system or forming consensus among 13
2423-holders of such digital assets; and 14
2424-‘‘(D) sufficient information for a third 15
2425-party to create a tool for verifying the trans-16
2426-action history of the digital asset. 17
2427-‘‘(4) P
2428-LAN OF DEVELOPMENT .—The current 18
2429-state and timeline for the development of any 19
2430-blockchain system to which the digital asset relates, 20
2431-showing how and when the blockchain system in-21
2432-tends or intended to be considered a functional sys-22
2433-tem and decentralized system. 23
2434-‘‘(5) D
2435-EVELOPMENT DISCLOSURES .—A list of 24
2436-all persons who are related persons or affiliated per-25 88
2437-•HR 4763 EH
2438-sons who have been issued a unit of a digital asset 1
2439-by a digital asset issuer or have a right to a unit of 2
2440-a digital asset from a digital asset issuer. 3
2441-‘‘(6) R
2442-ISK FACTOR DISCLOSURES .—A descrip-4
2443-tion of the material risks surrounding ownership of 5
2444-a unit of a digital asset. 6
2728+ULEMAKING.—Not later than 180 days 7
2729+after the date of enactment of this section, the Com-8
2730+mission shall issue rules to provide that a registered 9
2731+digital asset broker or digital asset dealer will be con-10
2732+sidered to satisfy the requirements of paragraph (1), 11
2733+with respect to digital assets, so long as the digital 12
2734+asset broker or digital asset dealer— 13
2735+‘‘(A) holds such digital asset at a bank 14
2736+that— 15
2737+‘‘(i) is recognized by the appropriate 16
2738+Federal banking agency or State bank su-17
2739+pervisor (as such terms are defined, respec-18
2740+tively, in section 3 of the Federal Deposit 19
2741+Insurance Act (12 U.S.C. 1813)) as having 20
2742+custody over such assets; 21
2743+‘‘(ii) delivers the digital asset to the 22
2744+digital asset broker or digital asset dealer 23
2745+without requiring the payment of money or 24
2746+value; and 25
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2749+•HR 4763 RH
2750+‘‘(iii) has acknowledged in writing that 1
2751+the digital asset in the custody or control of 2
2752+the bank is free of charge, lien, or claim of 3
2753+any kind in favor of such bank or any per-4
2754+son claiming through the bank; 5
2755+‘‘(B) establishes, maintains, and enforces 6
2756+written policies, procedures, and controls reason-7
2757+ably designed to demonstrate that the digital 8
2758+asset broker or digital asset dealer— 9
2759+‘‘(i) has control over the digital asset 10
2760+that the digital asset broker or digital asset 11
2761+dealer holds in custody to protect against 12
2762+the theft, loss, or unauthorized use of the 13
2763+private keys necessary to access and transfer 14
2764+such digital asset; 15
2765+‘‘(ii) has identified the steps that will 16
2766+be taken in the wake of certain events that 17
2767+could affect the custody of the digital assets 18
2768+by the digital asset broker or digital asset 19
2769+dealer; 20
2770+‘‘(iii) can comply with a court-ordered 21
2771+freeze or seizure; and 22
2772+‘‘(iv) has established arrangements to 23
2773+allow for the transfer of the digital asset 24
2774+held by such digital asset broker or digital 25
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2777+•HR 4763 RH
2778+asset dealer to another digital asset broker 1
2779+or digital asset dealer, a trustee, receiver, 2
2780+liquidator, or person performing a similar 3
2781+function, or to another appropriate person, 4
2782+in the event such digital asset broker or dig-5
2783+ital asset dealer can no longer continue as 6
2784+a going concern and self-liquidates or is 7
2785+subject to a formal bankruptcy, receivership, 8
2786+liquidation, or similar proceeding; or 9
2787+‘‘(C) complies with such other requirements 10
2788+as the Commission may permit. 11
2789+‘‘(3) S
2790+EGREGATION OF FUNDS.— 12
2791+‘‘(A) I
2792+N GENERAL.—A digital asset broker 13
2793+or digital asset dealer shall treat and deal with 14
2794+all money, assets, and property held for a cus-15
2795+tomer of the digital asset broker or digital asset 16
2796+dealer, or that accrues to a customer as a result 17
2797+of trading in digital assets, as belonging to the 18
2798+customer. 19
24452799 ‘‘(B) C
2446-ERTIFICATION.— 7
2447-‘‘(1) I
2448-N GENERAL.—With respect to a digital 8
2449-asset and any blockchain system to which the digital 9
2450-asset relates, the information described under this 10
2451-section has been certified if the digital asset issuer, 11
2452-an affiliated person, a decentralized governance sys-12
2453-tem, or a digital commodity exchange certifies on a 13
2454-quarterly basis to the Commodity Futures Trading 14
2455-Commission and the Securities and Exchange Com-15
2456-mission that the information is true and correct. 16
2457-‘‘(2) P
2458-RIOR DISCLOSURES .—Information de-17
2459-scribed under this section which was made available 18
2460-to the public prior to the date of enactment of this 19
2461-section may be certified as true and correct on the 20
2462-date such information was published in final form. 21
2463-‘‘(3) R
2464-ULEMAKING.—The Commission and the 22
2465-Commodity Futures Trading Commission may joint-23
2466-ly issue rules regarding the certification process de-24
2467-scribed under paragraph (1).’’. 25 89
2468-•HR 4763 EH
2469-SEC. 304. CERTIFICATION OF CERTAIN DIGITAL ASSETS. 1
2470-Title I of the Securities Exchange Act of 1934 (15 2
2471-U.S.C. 78a et seq.), as amended by section 303, is further 3
2472-amended by adding at the end the following: 4
2473-‘‘SEC. 44. CERTIFICATION OF CERTAIN DIGITAL ASSETS. 5
2474-‘‘(a) C
2475-ERTIFICATION.—Any person may certify to the 6
2476-Securities and Exchange Commission that the blockchain 7
2477-system to which a digital asset relates is a decentralized 8
2478-system. 9
2479-‘‘(b) F
2480-ILINGREQUIREMENTS.—A certification de-10
2481-scribed under subsection (a) shall be filed with the Com-11
2482-mission, and include— 12
2483-‘‘(1) information regarding the person making 13
2484-the certification; 14
2485-‘‘(2) a description of the blockchain system and 15
2486-the digital asset which relates to such blockchain 16
2487-system, including— 17
2488-‘‘(A) the operation of the blockchain sys-18
2489-tem; 19
2490-‘‘(B) the functionality of the related digital 20
2491-asset; 21
2492-‘‘(C) any decentralized governance system 22
2493-which relates to the blockchain system; and 23
2494-‘‘(D) the process to develop consensus or 24
2495-agreement within such decentralized governance 25
2496-system; 26 90
2497-•HR 4763 EH
2498-‘‘(3) a description of the development of the 1
2499-blockchain system and the digital asset which relates 2
2500-to the blockchain system, including— 3
2501-‘‘(A) a history of the development of the 4
2502-blockchain system and the digital asset which 5
2503-relates to such blockchain system; 6
2504-‘‘(B) a description of the issuance process 7
2505-for the digital asset which relates to the 8
2506-blockchain system; 9
2507-‘‘(C) information identifying the digital 10
2508-asset issuer of the digital asset which relates to 11
2509-the blockchain system; and 12
2510-‘‘(D) a list of any affiliated person related 13
2511-to the digital asset issuer; 14
2512-‘‘(4) an analysis of the factors on which such 15
2513-person based the certification that the blockchain 16
2514-system is a decentralized system, including— 17
2515-‘‘(A) an explanation of the protections and 18
2516-prohibitions available during the previous 12 19
2517-months against any one person being able to— 20
2518-‘‘(i) control or materially alter the 21
2519-blockchain system; 22
2520-‘‘(ii) exclude any other person from 23
2521-using or participating on the blockchain 24
2522-system; and 25 91
2523-•HR 4763 EH
2524-‘‘(iii) exclude any other person from 1
2525-participating in a decentralized governance 2
2526-system; 3
2527-‘‘(B) information regarding the beneficial 4
2528-ownership of the digital asset which relates to 5
2529-such blockchain system and the distribution of 6
2530-voting power in any decentralized governance 7
2531-system during the previous 12 months; 8
2532-‘‘(C) information regarding the history of 9
2533-upgrades to the source code for such blockchain 10
2534-system during the previous 3 months, includ-11
2535-ing— 12
2536-‘‘(i) a description of any consensus or 13
2537-agreement process utilized to process or 14
2538-approve changes to the source code; 15
2539-‘‘(ii) a list of any material changes to 16
2540-the source code, the purpose and effect of 17
2541-the changes, and the contributor of the 18
2542-changes, if known; and 19
2543-‘‘(iii) any changes to the source code 20
2544-made by the digital asset issuer, a related 21
2545-person, or an affiliated person; 22
2546-‘‘(D) information regarding any activities 23
2547-conducted to market the digital asset which re-24
2548-lates to the blockchain system during the pre-25 92
2549-•HR 4763 EH
2550-vious 3 months by the digital asset issuer or an 1
2551-affiliated person of the digital asset issuer; and 2
2552-‘‘(E) information regarding any issuance of 3
2553-a unit of the digital asset which relates to such 4
2554-blockchain system during the previous 12 5
2555-months; and 6
2556-‘‘(5) with respect to a blockchain system for 7
2557-which a certification has previously been rebutted 8
2558-under this section or withdrawn under section 5i(m) 9
2559-of the Commodity Exchange Act, specific informa-10
2560-tion relating to the analysis provided in subsection 11
2561-(f)(2) in connection with such rebuttal or such sec-12
2562-tion 5i(m)(1)(C) in connection with such withdrawal. 13
2563-‘‘(c) R
2564-EBUTTABLEPRESUMPTION.—The Commission 14
2565-may rebut a certification described under subsection (a) 15
2566-with respect to a blockchain system if the Commission, 16
2567-within 60 days of receiving such certification, determines 17
2568-that the blockchain system is not a decentralized system. 18
2569-‘‘(d) C
2570-ERTIFICATIONREVIEW.— 19
2571-‘‘(1) I
2572-N GENERAL.—Any blockchain system that 20
2573-relates to a digital asset for which a certification has 21
2574-been made under subsection (a) shall be considered 22
2575-a decentralized system 60 days after the date on 23
2576-which the Commission receives a certification under 24
2577-subsection (a), unless the Commission notifies the 25 93
2578-•HR 4763 EH
2579-person who made the certification within such time 1
2580-that the Commission is staying the certification due 2
2581-to— 3
2582-‘‘(A) an inadequate explanation by the per-4
2583-son making the certification; or 5
2584-‘‘(B) any novel or complex issues which re-6
2585-quire additional time to consider. 7
2586-‘‘(2) P
2587-UBLIC NOTICE.—The Commission shall 8
2588-make the following available to the public and pro-9
2589-vide a copy to the Commodity Futures Trading 10
2590-Commission: 11
2591-‘‘(A) Each certification received under sub-12
2592-section (a). 13
2593-‘‘(B) Each stay of the Commission under 14
2594-this section, and the reasons therefore. 15
2595-‘‘(C) Any response from a person making 16
2596-a certification under subsection (a) to a stay of 17
2597-the certification by the Commission. 18
2598-‘‘(3) C
2599-ONSOLIDATION.—The Commission may 19
2600-consolidate and treat as one submission multiple cer-20
2601-tifications made under subsection (a) for the same 21
2602-blockchain system which relates to a digital asset 22
2603-which are received during the review period provided 23
2604-under this subsection. 24
2605-‘‘(e) S
2606-TAY OFCERTIFICATION.— 25 94
2607-•HR 4763 EH
2608-‘‘(1) IN GENERAL.—A notification by the Com-1
2609-mission pursuant to subsection (d)(1) shall stay the 2
2610-certification once for up to an additional 120 days 3
2611-from the date of the notification. 4
2612-‘‘(2) P
2613-UBLIC COMMENT PERIOD .—Before the 5
2614-end of the 60-day period described under subsection 6
2615-(d)(1), the Commission may begin a public comment 7
2616-period of at least 30 days in conjunction with a stay 8
2617-under this section. 9
2618-‘‘(f) D
2619-ISPOSITION OFCERTIFICATION.— 10
2620-‘‘(1) I
2621-N GENERAL.—A certification made under 11
2622-subsection (a) shall— 12
2623-‘‘(A) become effective— 13
2624-‘‘(i) upon the publication of a notifica-14
2625-tion from the Commission to the person 15
2626-who made the certification that the Com-16
2627-mission does not object to the certification; 17
2628-or 18
2629-‘‘(ii) at the expiration of the certifi-19
2630-cation review period; and 20
2631-‘‘(B) not become effective upon the publi-21
2632-cation of a notification from the Commission to 22
2633-the person who made the certification that the 23
2634-Commission has rebutted the certification. 24 95
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2636-‘‘(2) DETAILED ANALYSIS INCLUDED WITH RE -1
2637-BUTTAL.—The Commission shall include, with each 2
2638-publication of a notification of rebuttal described 3
2639-under paragraph (1)(B), a detailed analysis of the 4
2640-factors on which the decision was based. 5
2641-‘‘(g) R
2642-ECERTIFICATION.—With respect to a 6
2643-blockchain system for which a certification has been rebut-7
2644-ted under this section, no person may make a certification 8
2645-under subsection (a) with respect to such blockchain sys-9
2646-tem during the 90-day period beginning on the date of 10
2647-such rebuttal. 11
2648-‘‘(h) A
2649-PPEAL OFREBUTTAL.— 12
2650-‘‘(1) I
2651-N GENERAL.—If a certification is rebut-13
2652-ted under this section, the person making such cer-14
2653-tification may appeal the decision to the United 15
2654-States Court of Appeals for the District of Colum-16
2655-bia, not later than 60 days after the notice of rebut-17
2656-tal is made. 18
2657-‘‘(2) R
2658-EVIEW.—In an appeal under paragraph 19
2659-(1), the court shall have de novo review of the deter-20
2660-mination to rebut the certification.’’. 21
2661-SEC. 305. EFFECTIVE DATE. 22
2662-Unless otherwise provided in this title, this title and 23
2663-the amendments made by this title shall take effect 360 24
2664-days after the date of enactment of this Act, except that, 25 96
2665-•HR 4763 EH
2666-to the extent a provision of this title requires a rule-1
2667-making, the provision shall take effect on the later of— 2
2668-(1) 360 days after the date of enactment of this 3
2669-Act; or 4
2670-(2) 60 days after the publication in the Federal 5
2671-Register of the final rule implementing the provision. 6
2672-TITLE IV—REGISTRATION FOR 7
2673-DIGITAL ASSET INTER-8
2674-MEDIARIES AT THE SECURI-9
2675-TIES AND EXCHANGE COM-10
2676-MISSION 11
2677-SEC. 401. TREATMENT OF DIGITAL COMMODITIES AND 12
2678-OTHER DIGITAL ASSETS. 13
2679-(a) S
2680-ECURITIESACT OF1933.—Section 2(a)(1) of 14
2681-the Securities Act of 1933 (15 U.S.C. 77b(a)(1)) is 15
2682-amended by adding at the end the following: ‘‘The term 16
2683-does not include a digital commodity or permitted pay-17
2684-ment stablecoin.’’. 18
2685-(b) S
2686-ECURITIESEXCHANGEACT OF1934.—Section 19
2687-3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 20
2688-78c(a)) is amended— 21
2689-(1) in paragraph (1), by adding at the end the 22
2690-following: ‘‘The term ‘exchange’ does not include a 23
2691-digital asset trading system or a blockchain protocol 24
2692-offering digital assets, or any person or group of 25 97
2693-•HR 4763 EH
2694-persons solely because of their development of such 1
2695-a blockchain protocol.’’; 2
2696-(2) in paragraph (2), by adding at the end the 3
2697-following: ‘‘A digital asset trading system is not a 4
2698-‘facility’ of an exchange.’’; 5
2699-(3) in paragraph (4)(A), by inserting ‘‘, other 6
2700-than restricted digital assets,’’ after ‘‘securities’’; 7
2701-(4) in paragraph (5)(A), by inserting ‘‘re-8
2702-stricted digital assets or’’ after ‘‘not including’’; 9
2703-(5) in paragraph (26) by inserting ‘‘(other than 10
2704-a notice-registered digital asset clearing agency)’’ 11
2705-after ‘‘or registered clearing agency’’; 12
2706-(6) in paragraph (28) by inserting ‘‘(other than 13
2707-a notice-registered digital asset clearing agency)’’ 14
2708-after ‘‘registered clearing agency’’; and 15
2709-(7) in paragraph (10), by adding at the end the 16
2710-following: ‘‘The term does not include a digital com-17
2711-modity or permitted payment stablecoin.’’. 18
2712-(c) I
2713-NVESTMENTADVISERSACT OF1940.—Section 19
2714-202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 20
2715-80b–2) is amended— 21
2716-(1) in paragraph (18), by adding at the end the 22
2717-following: ‘‘The term does not include a digital com-23
2718-modity or permitted payment stablecoin.’’; 24 98
2719-•HR 4763 EH
2720-(2) by redesignating the second paragraph (29) 1
2721-(relating to commodity pools) as paragraph (31); 2
2722-(3) by adding at the end, the following: 3
2723-‘‘(32) D
2724-IGITAL ASSET-RELATED TERMS .—The 4
2725-terms ‘digital commodity’ and ‘permitted payment 5
2726-stablecoin’ have the meaning given those terms, re-6
2727-spectively, under section 2(a) of the Securities Act 7
2728-of 1933 (15 U.S.C. 77b(a)).’’. 8
2729-(d) I
2730-NVESTMENTCOMPANYACT OF1940.—Section 9
2731-2(a) of the Investment Company Act of 1940 (15 U.S.C. 10
2732-80a–2) is amended— 11
2733-(1) in paragraph (36), by adding at the end the 12
2734-following: ‘‘The term does not include a digital com-13
2735-modity or permitted payment stablecoin.’’; and 14
2736-(2) by adding at the end, the following: 15
2737-‘‘(55) D
2738-IGITAL ASSET-RELATED TERMS .—The 16
2739-terms ‘digital commodity’ and ‘permitted payment 17
2740-stablecoin’ have the meaning given those terms, re-18
2741-spectively, under section 2(a) of the Securities Act 19
2742-of 1933 (15 U.S.C. 77b(a)).’’. 20
2743-SEC. 402. AUTHORITY OVER PERMITTED PAYMENT 21
2744-STABLECOINS AND RESTRICTED DIGITAL AS-22
2745-SETS. 23
2746-(a) I
2747-NGENERAL.—Section 10 of the Securities Ex-24
2748-change Act of 1934 (15 U.S.C. 78j) is amended— 25 99
2749-•HR 4763 EH
2750-(1) by moving subsection (c) so as to appear 1
2751-after subsection (b); 2
2752-(2) by designating the undesignated matter at 3
2753-the end of that section as subsection (d); and 4
2754-(3) by adding at the end the following: 5
2755-‘‘(e)(1) Rules promulgated under subsection (b) that 6
2756-prohibit fraud, manipulation, or insider trading (but not 7
2757-rules imposing or specifying reporting or recordkeeping re-8
2758-quirements, procedures, or standards as prophylactic 9
2759-measures against fraud, manipulation, or insider trading), 10
2760-and judicial precedents decided under subsection (b) and 11
2761-rules promulgated thereunder that prohibit fraud, manip-12
2762-ulation, or insider trading, shall apply with respect to per-13
2763-mitted payment stablecoin transactions and restricted dig-14
2764-ital assets transactions engaged in by a broker, dealer, 15
2765-digital asset broker, or digital asset dealer or through an 16
2766-alternative trading system or digital asset trading system 17
2767-to the same extent as they apply to securities transactions. 18
2768-‘‘(2) Judicial precedents decided under section 17(a) 19
2769-of the Securities Act of 1933 and sections 9, 15, 16, 20, 20
2770-and 21A of this title, and judicial precedents decided 21
2771-under applicable rules promulgated under such sections, 22
2772-shall apply to permitted payment stablecoins and re-23
2773-stricted digital assets with respect to those circumstances 24
2774-in which the permitted payment stablecoins or restricted 25 100
2775-•HR 4763 EH
2776-digital assets are brokered, traded, or custodied by a 1
2777-broker, dealer, digital asset broker, digital asset dealer, 2
2778-or through an alternative trading system or digital asset 3
2779-trading system to the same extent as they apply to securi-4
2780-ties. 5
2781-‘‘(3) Nothing in this subsection may be construed to 6
2782-provide the Commission authority to make any rule, regu-7
2783-lation, or requirement or impose any obligation or limita-8
2784-tion on a permitted payment stablecoin issuer or a digital 9
2785-asset issuer regarding any aspect of the operations of a 10
2786-permitted payment stablecoin issuer, a digital asset issuer, 11
2787-a permitted payment stablecoin, or a restricted digital 12
2788-asset.’’. 13
2789-(b) T
2790-REATMENT OF PERMITTED PAYMENT 14
2791-S
2792-TABLECOINS.—Title I of the Securities Exchange Act of 15
2793-1934 (15 U.S.C. 78a et seq.), as amended by section 404, 16
2794-is amended by inserting after section 6B the following: 17
2795-‘‘SEC. 6C. TREATMENT OF TRANSACTIONS IN PERMITTED 18
2796-PAYMENT STABLECOINS. 19
2797-‘‘(a) A
2798-UTHORITY TOBROKER, TRADE, ANDCUSTODY 20
2799-P
2800-ERMITTEDPAYMENTSTABLECOINS.—Permitted pay-21
2801-ment stablecoins may be brokered, traded, or custodied by 22
2802-a broker, dealer, digital asset broker, or digital asset deal-23
2803-er or through an alternative trading system or digital asset 24
2804-trading system. 25 101
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2806-‘‘(b) COMMISSIONJURISDICTION.—The Commission 1
2807-shall only have jurisdiction over a transaction in a per-2
2808-mitted payment stablecoin with respect to those cir-3
2809-cumstances in which a permitted payment stablecoin is 4
2810-brokered, traded, or custodied— 5
2811-‘‘(1) by a broker, dealer, digital asset broker, or 6
2812-digital asset dealer; or 7
2813-‘‘(2) through an alternative trading system or 8
2814-digital asset trading system. 9
2815-‘‘(c) L
2816-IMITATION.—Subsection (b) shall only apply to 10
2817-a transaction described in subsection (b) for the purposes 11
2818-of regulating the offer, execution, solicitation, or accept-12
2819-ance of a permitted payment stablecoin in those cir-13
2820-cumstances in which the permitted payment stablecoin is 14
2821-brokered, traded, or custodied— 15
2822-‘‘(1) by a broker, dealer, digital asset broker, or 16
2823-digital asset dealer; or 17
2824-‘‘(2) through an alternative trading system or 18
2825-digital asset trading system.’’. 19
2826-SEC. 403. REGISTRATION OF DIGITAL ASSET TRADING SYS-20
2827-TEMS. 21
2828-Section 6 of the Securities Exchange Act of 1934 (15 22
2829-U.S.C. 78f) is amended by adding at the end the following: 23
2830-‘‘(m) D
2831-IGITALASSETTRADINGSYSTEM.— 24 102
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2833-‘‘(1) IN GENERAL.—It shall be unlawful for any 1
2834-digital asset trading system to make use of the mails 2
2835-or any means or instrumentality of interstate com-3
2836-merce within or subject to the jurisdiction of the 4
2837-United States to effect any transaction in a re-5
2838-stricted digital asset, unless such digital asset trad-6
2839-ing system is registered with the Commission. 7
2840-‘‘(2) A
2841-PPLICATION.—A person desiring to reg-8
2842-ister as a digital asset trading system shall submit 9
2843-to the Commission an application in such form and 10
2844-containing such information as the Commission may 11
2845-require for the purpose of making the determina-12
2846-tions required for approval. 13
2847-‘‘(3) E
2848-XEMPTIONS.—A digital asset trading sys-14
2849-tem that offers or seeks to offer at least one re-15
2850-stricted digital asset shall not be required to register 16
2851-under this section (and paragraph (1) shall not 17
2852-apply to such digital asset trading system) if the 18
2853-trading system satisfies any exemption contained on 19
2854-a list of exemptions prepared by the Commission to 20
2855-be as close as practicable to those exemptions set 21
2856-forth in section 240.3b–16(b) of title 17, Code of 22
2857-Federal Regulations, applicable to the definition of 23
2858-an exchange. 24
2859-‘‘(4) A
2860-DDITIONAL REGISTRATIONS .— 25 103
2861-•HR 4763 EH
2862-‘‘(A) WITH THE COMMISSION.— 1
2800+OMMINGLING PROHIBITED .—Money, 20
2801+assets, and property of a customer described in 21
2802+subparagraph (A) shall be separately accounted 22
2803+for and shall not be commingled with the funds 23
2804+of the digital asset broker or digital asset dealer 24
2805+or be used to margin, secure, or guarantee any 25
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2809+trades of any person other than the customer of 1
2810+the digital asset broker or digital asset dealer for 2
2811+whom the same are held. 3
2812+‘‘(4) E
2813+XCEPTIONS.— 4
2814+‘‘(A) U
2815+SE OF FUNDS.— 5
28632816 ‘‘(i) I
2864-N GENERAL.—A registered dig-2
2865-ital asset trading system shall be permitted 3
2866-to maintain any other registration with the 4
2867-Commission relating to the other activities 5
2868-of the registered digital asset trading sys-6
2869-tem, including as a— 7
2870-‘‘(I) national securities exchange; 8
2871-‘‘(II) broker; 9
2872-‘‘(III) dealer; 10
2873-‘‘(IV) alternative trading system, 11
2874-pursuant to part 242 of title 17, Code 12
2875-of Federal Regulations, as in effect on 13
2876-the date of enactment of this sub-14
2877-section; 15
2878-‘‘(V) digital asset broker; or 16
2879-‘‘(VI) digital asset dealer. 17
2880-‘‘(ii) R
2881-ULEMAKING.—The Commission 18
2882-shall prescribe rules for an entity with 19
2883-multiple registrations described under 20
2884-clause (i) to exempt the entity from dupli-21
2885-cative, conflicting, or unduly burdensome 22
2886-provisions of this Act and the rules under 23
2887-this Act, to the extent such an exemption 24
2888-would protect investors, maintain fair, or-25 104
2889-•HR 4763 EH
2890-derly, and efficient markets, and facilitate 1
2891-capital formation. 2
2892-‘‘(B) W
2893-ITH THE COMMODITY FUTURES 3
2894-TRADING COMMISSION .—A registered digital 4
2895-asset trading system shall be permitted to 5
2896-maintain a registration with the Commodity 6
2897-Futures Trading Commission as a digital com-7
2898-modity exchange to offer contracts of sale for 8
2899-digital commodities.’’. 9
2900-SEC. 404. REQUIREMENTS FOR DIGITAL ASSET TRADING 10
2901-SYSTEMS. 11
2902-Title I of the Securities Exchange Act of 1934 (15 12
2903-U.S.C. 78a et seq.) is amended by inserting after section 13
2904-6 the following: 14
2905-‘‘SEC. 6A. REQUIREMENTS FOR DIGITAL ASSET TRADING 15
2906-SYSTEMS. 16
2907-‘‘(a) H
2908-OLDING OFCUSTOMERASSETS.— 17
2909-‘‘(1) Q
2910-UALIFIED DIGITAL ASSET CUSTODIAN 18
2911-REQUIRED.—A digital asset trading system shall 19
2912-hold customer restricted digital assets with a quali-20
2913-fied digital asset custodian described under section 21
2914-6B. 22
2915-‘‘(2) C
2916-USTODY PROHIBITED .—A digital asset 23
2917-trading system, in its capacity as such, may not hold 24
2918-custody of customer money, assets, or property. 25 105
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2920-‘‘(3) CUSTODY IN OTHER CAPACITY .—Nothing 1
2921-in this Act may be construed to prohibit a person 2
2922-registered as a digital asset trading system from 3
2923-holding custody of customer money, assets, or prop-4
2924-erty in any other permitted capacity, including as a 5
2925-digital asset broker, digital asset dealer, or qualified 6
2926-digital asset custodian in compliance with the re-7
2927-quirements of this Act. 8
2928-‘‘(b) R
2929-ULEMAKING.—The Commission shall prescribe 9
2930-rules for digital asset trading systems relating to the fol-10
2931-lowing: 11
2932-‘‘(1) N
2933-OTICE.—Notice to the Commission of the 12
2934-initial operation of a digital asset trading system or 13
2935-any material change to the operation of the digital 14
2936-asset trading system. 15
2937-‘‘(2) O
2938-RDER DISPLAY.—The thresholds at 16
2939-which a digital asset trading system is required to 17
2940-display the orders of the digital asset trading sys-18
2941-tem, and the manner of such display. 19
2942-‘‘(3) F
2943-AIR ACCESS.—The thresholds at which a 20
2944-digital asset trading system is required to have poli-21
2945-cies regarding providing fair access to the digital 22
2946-asset trading system. 23
2947-‘‘(4) C
2948-APACITY, INTEGRITY, AND SECURITY OF 24
2949-AUTOMATED SYSTEMS .—Policies and procedures rea-25 106
2950-•HR 4763 EH
2951-sonably designed to ensure the capacity, integrity, 1
2952-and security of the digital asset trading system, tak-2
2953-ing into account the particular nature of digital 3
2954-asset trading systems. 4
2955-‘‘(5) E
2956-XAMINATIONS, INSPECTIONS, AND INVES-5
2957-TIGATIONS.—The examination and inspection of the 6
2958-premises, systems, and records of the digital asset 7
2959-trading system by the Commission or by a self-regu-8
2960-latory organization of which such digital asset trad-9
2961-ing system is a member. 10
2962-‘‘(6) R
2963-ECORDKEEPING.—The making, keeping 11
2964-current, and preservation of records related to trad-12
2965-ing activity on the digital asset trading system. 13
2966-‘‘(7) R
2967-EPORTING.—The reporting of trans-14
2968-actions in digital assets that occur through the dig-15
2969-ital asset trading system. 16
2970-‘‘(8) P
2971-ROCEDURES.—The establishment of ade-17
2972-quate written safeguards and written procedures to 18
2973-protect confidential trading information. 19
2974-‘‘(c) N
2975-AMEREQUIREMENT.—A digital asset trading 20
2976-system may not use the word ‘exchange’ in the name of 21
2977-the digital asset trading system, unless the digital asset 22
2978-trading system— 23
2979-‘‘(1) is operated by a registered national securi-24
2980-ties exchange; and 25 107
2981-•HR 4763 EH
2982-‘‘(2) is clearly indicated as being provided out-1
2983-side of the system’s capacity as a national securities 2
2984-exchange. 3
2985-‘‘SEC. 6B. REQUIREMENTS FOR QUALIFIED DIGITAL ASSET 4
2986-CUSTODIANS. 5
2987-‘‘(a) I
2988-NGENERAL.—A digital asset custodian is a 6
2989-qualified digital asset custodian if the digital asset custo-7
2990-dian complies with the requirements of this section. 8
2991-‘‘(b) S
2992-UPERVISIONREQUIREMENT.—A digital asset 9
2993-custodian that is not subject to supervision and examina-10
2994-tion by an appropriate Federal banking agency, the Na-11
2995-tional Credit Union Administration, the Commodity Fu-12
2996-tures Trading Commission, or the Securities and Ex-13
2997-change Commission shall be subject to adequate super-14
2998-vision and appropriate regulation by— 15
2999-‘‘(1) a State bank supervisor (within the mean-16
3000-ing of section 3 of the Federal Deposit Insurance 17
3001-Act); 18
3002-‘‘(2) a State credit union supervisor, as defined 19
3003-under section 6003 of the Anti-Money Laundering 20
3004-Act of 2020; or 21
3005-‘‘(3) an appropriate foreign governmental au-22
3006-thority in the home country of the digital asset cus-23
3007-todian. 24
3008-‘‘(c) O
3009-THERREQUIREMENTS.— 25 108
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3011-‘‘(1) NOT OTHERWISE PROHIBITED .—The dig-1
3012-ital asset custodian has not been prohibited by a su-2
3013-pervisor of the digital asset custodian from engaging 3
3014-in an activity with respect to the custody and safe-4
3015-keeping of digital assets. 5
3016-‘‘(2) I
3017-NFORMATION SHARING .— 6
3018-‘‘(A) I
3019-N GENERAL.—A digital asset custo-7
3020-dian shall share information with the Commis-8
3021-sion on request and comply with such require-9
3022-ments for periodic sharing of information re-10
3023-garding customer accounts that the digital asset 11
3024-custodian holds on behalf of an entity registered 12
3025-with the Commission as the Commission deter-13
3026-mines by rule are reasonably necessary to effec-14
3027-tuate any of the provisions, or to accomplish 15
3028-any of the purposes, of this Act. 16
2817+N GENERAL.—Notwithstanding 6
2818+paragraph (3), money, assets, and property 7
2819+of customers of a digital asset broker or dig-8
2820+ital asset dealer described in paragraph (3) 9
2821+may be maintained and deposited in the 10
2822+same account or accounts with any bank, 11
2823+trust company, digital asset broker, or dig-12
2824+ital asset dealer, if the money, assets, and 13
2825+property remain segregated from the money, 14
2826+assets, and property of the digital asset 15
2827+broker or digital asset dealer. 16
2828+‘‘(ii) W
2829+ITHDRAWAL.—Notwithstanding 17
2830+paragraph (3), such share of the money, as-18
2831+sets, and property described in paragraph 19
2832+(3) as in the normal course of business shall 20
2833+be necessary to transfer, adjust, or settle a 21
2834+digital asset transaction pursuant to a cus-22
2835+tomer’s instruction (standing or otherwise) 23
2836+may be withdrawn and applied to such 24
2837+purposes, including the withdrawal and 25
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2841+payment of commissions, brokerage, inter-1
2842+est, taxes, storage, and other charges law-2
2843+fully accruing in connection with a digital 3
2844+asset transaction. 4
2845+‘‘(iii) C
2846+OMMISSION ACTION.—In ac-5
2847+cordance with such terms and conditions as 6
2848+the Commission may prescribe by rule, reg-7
2849+ulation, or order, any money, assets, or 8
2850+property of a customer of a digital asset 9
2851+broker or digital asset dealer described in 10
2852+paragraph (3) may be commingled and de-11
2853+posited as provided in this section with any 12
2854+other money, assets, or property received by 13
2855+the digital asset broker or digital asset deal-14
2856+er and required by the Commission to be 15
2857+separately accounted for and treated and 16
2858+dealt with as belonging to the customer of 17
2859+the digital asset broker or digital asset deal-18
2860+er. 19
30292861 ‘‘(B) P
3030-ROVISION OF INFORMATION .—Any 17
3031-entity that is subject to regulation and exam-18
3032-ination by an appropriate Federal banking 19
3033-agency may satisfy any information request de-20
3034-scribed in subparagraph (A) by providing the 21
3035-Commission with a detailed listing, in writing, 22
3036-of the restricted digital assets of a customer 23
3037-within the custody or use of the entity. 24 109
3038-•HR 4763 EH
3039-‘‘(d) ADEQUATESUPERVISION AND APPROPRIATE 1
3040-R
3041-EGULATION.— 2
3042-‘‘(1) I
3043-N GENERAL.—For purposes of subsection 3
3044-(b), the terms ‘adequate supervision’ and ‘appro-4
3045-priate regulation’ mean such minimum standards for 5
3046-supervision and regulation as are reasonably nec-6
3047-essary to protect the digital assets of customers of 7
3048-an entity registered with the Commission, including 8
3049-standards relating to the licensing, examination, and 9
3050-supervisory processes that require the digital asset 10
3051-custodian to, at a minimum— 11
3052-‘‘(A) receive a review and evaluation of 12
3053-ownership, character and fitness, conflicts of in-13
3054-terest, business model, financial statements, 14
3055-funding resources, and policies and procedures 15
3056-of the digital asset custodian; 16
3057-‘‘(B) hold capital sufficient for the finan-17
3058-cial integrity of the digital asset custodian; 18
3059-‘‘(C) protect customer assets; 19
3060-‘‘(D) establish and maintain books and 20
3061-records regarding the business of the digital 21
3062-asset custodian; 22
3063-‘‘(E) submit financial statements and au-23
3064-dited financial statements to the applicable su-24
3065-pervisor described in subsection (b); 25 110
3066-•HR 4763 EH
3067-‘‘(F) provide disclosures to the applicable 1
3068-supervisor described in subsection (b) regarding 2
3069-actions, proceedings, and other items as deter-3
3070-mined by such supervisor; 4
3071-‘‘(G) maintain and enforce policies and 5
3072-procedures for compliance with applicable State 6
3073-and Federal laws, including those related to 7
3074-anti-money laundering and cybersecurity; 8
3075-‘‘(H) establish a business continuity plan 9
3076-to ensure functionality in cases of disruption; 10
3077-and 11
3078-‘‘(I) establish policies and procedures to re-12
3079-solve complaints. 13
3080-‘‘(2) R
3081-ULEMAKING WITH RESPECT TO DEFINI -14
3082-TIONS.— 15
3083-‘‘(A) I
3084-N GENERAL.—For purposes of this 16
3085-section, the Commission may, by rule, further 17
3086-define the terms ‘adequate supervision’ and ‘ap-18
3087-propriate regulation’ as necessary in the public 19
3088-interest, as appropriate for the protection of in-20
3089-vestors, and consistent with the purposes of this 21
3090-Act. 22
3091-‘‘(B) C
3092-ONDITIONAL TREATMENT OF CER -23
3093-TAIN CUSTODIANS BEFORE RULEMAKING .—Be-24
3094-fore the effective date of a rulemaking under 25 111
3095-•HR 4763 EH
3096-subparagraph (A), a trust company is deemed 1
3097-subject to adequate supervision and appropriate 2
3098-regulation if— 3
3099-‘‘(i) the trust company is expressly 4
3100-permitted by a State bank supervisor to 5
3101-engage in the custody and safekeeping of 6
3102-digital assets; 7
3103-‘‘(ii) the State bank supervisor has es-8
3104-tablished licensing, examination, and su-9
3105-pervisory processes that require the trust 10
3106-company to, at a minimum, meet the con-11
3107-ditions described in subparagraphs (A) 12
3108-through (I) of paragraph (1); and 13
3109-‘‘(iii) the trust company is in good 14
3110-standing with its State bank supervisor. 15
3111-‘‘(C) T
3112-RANSITION PERIOD FOR CERTAIN 16
3113-CUSTODIANS.—In implementing the rulemaking 17
3114-under subparagraph (A), the Commission shall 18
3115-provide a transition period of not less than two 19
3116-years for any trust company which is deemed 20
3117-subject to adequate supervision and appropriate 21
3118-regulation under subparagraph (B) on the ef-22
3119-fective date of the rulemaking.’’. 23 112
3120-•HR 4763 EH
3121-SEC. 405. REGISTRATION OF DIGITAL ASSET BROKERS AND 1
3122-DIGITAL ASSET DEALERS. 2
3123-The Securities Exchange Act of 1934 (15 U.S.C. 78a 3
3124-et seq.) is amended by inserting after section 15G the fol-4
3125-lowing: 5
3126-‘‘SEC. 15H. REGISTRATION OF DIGITAL ASSET BROKERS 6
3127-AND DIGITAL ASSET DEALERS. 7
3128-‘‘(a) R
3129-EGISTRATION.— 8
3130-‘‘(1) I
3131-N GENERAL.—It shall be unlawful for any 9
3132-digital asset broker or digital asset dealer (other 10
3133-than a natural person associated with a registered 11
3134-digital asset broker or registered digital asset dealer, 12
3135-and other than such a digital asset broker or digital 13
3136-asset dealer whose business is exclusively intrastate 14
3137-and who does not make use of a digital asset trading 15
3138-system) to make use of the mails or any means or 16
3139-instrumentality of interstate commerce to effect any 17
3140-transactions in, or to induce or attempt to induce 18
3141-the purchase or sale of, any restricted digital asset 19
3142-unless such digital asset broker or digital asset deal-20
3143-er is registered in accordance with this section. 21
3144-‘‘(2) A
3145-PPLICATION.—A person desiring to reg-22
3146-ister as a digital asset broker or digital asset dealer 23
3147-shall submit to the Commission an application in 24
3148-such form and containing such information as the 25 113
3149-•HR 4763 EH
3150-Commission may require for the purpose of making 1
3151-the determinations required for approval. 2
3152-‘‘(b) N
3153-ATIONALSECURITIESASSOCIATIONMEMBER-3
3154-SHIP.— 4
3155-‘‘(1) I
3156-N GENERAL.—A digital asset broker or 5
3157-digital asset dealer may not register or maintain reg-6
3158-istration under this section unless such digital asset 7
3159-broker or digital asset dealer is a member of a na-8
3160-tional securities association registered under section 9
3161-15A. 10
3162-‘‘(2) T
3163-REATMENT UNDER SECTION 15A .— 11
3164-‘‘(A) I
3165-N GENERAL.—For purposes of sec-12
3166-tion 15A— 13
3167-‘‘(i) the term ‘broker’ includes a dig-14
3168-ital asset broker and the term ‘registered 15
3169-broker’ includes a registered digital asset 16
3170-broker; 17
3171-‘‘(ii) the term ‘dealer’ includes a dig-18
3172-ital asset dealer and the term ‘registered 19
3173-dealer’ includes a registered digital asset 20
3174-dealer; and 21
3175-‘‘(iii) the term ‘security’ includes a re-22
3176-stricted digital asset. 23
3177-‘‘(B) C
3178-LARIFICATION.—Notwithstanding 24
3179-subparagraph (A), a national securities associa-25 114
3180-•HR 4763 EH
3181-tion shall, with respect to the restricted digital 1
3182-asset activities of a digital asset broker or a 2
3183-digital asset dealer, only examine for and en-3
3184-force against such digital asset broker or digital 4
3185-asset dealer— 5
3186-‘‘(i) rules of such national securities 6
3187-association written specifically for digital 7
3188-asset brokers or digital asset dealers; 8
3189-‘‘(ii) the provisions of the Financial 9
3190-Innovation and Technology for the 21st 10
3191-Century Act and rules issued thereunder 11
3192-applicable to digital asset brokers and dig-12
3193-ital asset dealers; and 13
3194-‘‘(iii) the provisions of the securities 14
3195-laws and the rules thereunder applicable to 15
3196-digital asset brokers and digital asset deal-16
3197-ers. 17
3198-‘‘(c) A
3199-DDITIONALREGISTRATIONSWITH THECOM-18
3200-MISSION.— 19
3201-‘‘(1) I
3202-N GENERAL.—A registered digital asset 20
3203-broker or registered digital asset dealer shall be per-21
3204-mitted to maintain any other registration with the 22
3205-Commission relating to the other activities of the 23
3206-registered digital asset broker or registered digital 24
3207-asset dealer, including as— 25 115
3208-•HR 4763 EH
3209-‘‘(A) a national securities exchange; 1
3210-‘‘(B) a broker; 2
3211-‘‘(C) a dealer; 3
3212-‘‘(D) an alternative trading system, pursu-4
3213-ant to part 242 of title 17, Code of Federal 5
3214-Regulations, as in effect on the date of enact-6
3215-ment of this section; or 7
3216-‘‘(E) a digital asset trading system. 8
3217-‘‘(2) R
3218-ULEMAKING.—The Commission shall pre-9
3219-scribe rules for an entity with multiple registrations 10
3220-described under paragraph (1) to exempt the entity 11
3221-from duplicative, conflicting, or unduly burdensome 12
3222-provisions of this Act and the rules under this Act, 13
3223-to the extent such an exemption would protect inves-14
3224-tors, maintain fair, orderly, and efficient markets, 15
3225-and facilitate capital formation. 16
3226-‘‘(3) S
3227-ELF-REGULATORY ORGANIZATIONS .—The 17
3228-Commission shall require any self-regulatory organi-18
3229-zation with a registered digital asset broker or reg-19
3230-istered digital asset dealer as a member to provide 20
3231-such rules as may be necessary to further compli-21
3232-ance with this section, protect investors, maintain 22
3233-fair, orderly, and efficient markets, and facilitate 23
3234-capital formation. 24 116
3235-•HR 4763 EH
3236-‘‘(d) ADDITIONALREGISTRATIONSWITH THECOM-1
3237-MODITYFUTURESTRADINGCOMMISSION.—A registered 2
3238-digital asset broker or registered digital asset dealer shall 3
3239-be permitted to maintain a registration with the Com-4
3240-modity Futures Trading Commission as a digital com-5
3241-modity broker or digital commodity dealer, to list or trade 6
3242-contracts of sale for digital commodities.’’. 7
3243-SEC. 406. REQUIREMENTS OF DIGITAL ASSET BROKERS 8
3244-AND DIGITAL ASSET DEALERS. 9
3245-(a) I
3246-NGENERAL.—Section 15H of the Securities Ex-10
3247-change Act of 1934, as added by section 405, is amended 11
3248-by adding at the end the following: 12
3249-‘‘(e) A
3250-NTI-FRAUD.—No digital asset broker or digital 13
3251-asset dealer shall make use of the mails or any means or 14
3252-instrumentality of interstate commerce to effect any trans-15
3253-action in, or to induce or attempt to induce the purchase 16
3254-or sale of, any restricted digital asset by means of any 17
3255-manipulative, deceptive, or other fraudulent device or con-18
3256-trivance. 19
3257-‘‘(f) H
3258-OLDING OFCUSTOMERASSETS.— 20
3259-‘‘(1) I
3260-N GENERAL.—A digital asset broker or 21
3261-digital asset dealer shall hold customer money, as-22
3262-sets, and property in a manner to minimize the risk 23
3263-of loss to the customer or unreasonable delay in the 24 117
3264-•HR 4763 EH
3265-access to the money, assets, and property of the cus-1
3266-tomer. 2
3267-‘‘(2) Q
3268-UALIFIED DIGITAL ASSET CUSTODIAN 3
3269-REQUIRED.—A digital asset broker or digital asset 4
3270-dealer shall hold customer restricted digital assets 5
3271-described in paragraph (1) with a qualified digital 6
3272-asset custodian described under section 6B. 7
3273-‘‘(3) S
3274-EGREGATION OF FUNDS .— 8
3275-‘‘(A) I
3276-N GENERAL.—A digital asset broker 9
3277-or digital asset dealer shall treat and deal with 10
3278-all money, assets, and property held for a cus-11
3279-tomer of the digital asset broker or digital asset 12
3280-dealer, or that accrues to a customer as a result 13
3281-of trading in restricted digital assets, as belong-14
3282-ing to the customer. 15
3283-‘‘(B) C
3284-OMMINGLING PROHIBITED .—Money, 16
3285-assets, and property of a customer described in 17
3286-subparagraph (A) shall be separately accounted 18
3287-for and shall not be commingled with the funds 19
3288-of the digital asset broker or digital asset dealer 20
3289-or be used to margin, secure, or guarantee any 21
3290-trades of any person other than the customer of 22
3291-the digital asset broker or digital asset dealer 23
3292-for whom the same are held. 24
3293-‘‘(4) E
3294-XCEPTIONS.— 25 118
3295-•HR 4763 EH
3296-‘‘(A) USE OF FUNDS.— 1
2862+ARTICIPATION IN BLOCKCHAIN SERV -20
2863+ICES.— 21
32972864 ‘‘(i) I
3298-N GENERAL.—Notwithstanding 2
3299-paragraph (4), money, assets, and property 3
3300-of customers of a digital asset broker or 4
3301-digital asset dealer described in paragraph 5
3302-(4) may be maintained and deposited in 6
3303-the same account or accounts with any 7
3304-bank, trust company, or qualified digital 8
3305-asset custodian described under section 9
3306-6B, if the money, assets, and property re-10
3307-main segregated from the money, assets, 11
3308-and property of the digital asset broker or 12
3309-digital asset dealer. 13
3310-‘‘(ii) W
3311-ITHDRAWAL.—Notwithstanding 14
3312-paragraph (4), such share of the money, 15
3313-assets, and property described in para-16
3314-graph (4) as in the normal course of busi-17
3315-ness shall be necessary to transfer, adjust, 18
3316-or settle a restricted digital asset trans-19
3317-action pursuant to a customer’s instruction 20
3318-(standing or otherwise) may be withdrawn 21
3319-and applied to such purposes, including the 22
3320-withdrawal and payment of commissions, 23
3321-brokerage, interest, taxes, storage, and 24
3322-other charges lawfully accruing in connec-25 119
3323-•HR 4763 EH
3324-tion with a restricted digital asset trans-1
3325-action. 2
3326-‘‘(iii) C
3327-OMMISSION ACTION.—In ac-3
3328-cordance with such terms and conditions 4
3329-as the Commission may prescribe by rule, 5
3330-regulation, or order, any money, assets, or 6
3331-property of a customer of a digital asset 7
3332-broker or digital asset dealer described in 8
3333-paragraph (4) may be commingled and de-9
3334-posited as provided in this section with any 10
3335-other money, assets, or property received 11
3336-by the digital asset broker or digital asset 12
3337-dealer and required by the Commission to 13
3338-be separately accounted for and treated 14
3339-and dealt with as belonging to the cus-15
3340-tomer of the digital asset broker or digital 16
3341-asset dealer. 17
3342-‘‘(B) P
3343-ARTICIPATION IN BLOCKCHAIN 18
3344-SERVICES.— 19
3345-‘‘(i) I
3346-N GENERAL.—A customer shall 20
3347-have the right to waive the restrictions in 21
3348-paragraph (4) for any unit of a digital 22
3349-asset to be used under clause (ii), by af-23
3350-firmatively electing, in writing to the dig-24 120
3351-•HR 4763 EH
3352-ital asset broker or digital asset dealer, to 1
3353-waive the restrictions. 2
2865+N GENERAL.—A customer shall 22
2866+have the right to waive the restrictions in 23
2867+paragraph (3) for any unit of a digital 24
2868+asset, by affirmatively electing, in writing 25
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2871+•HR 4763 RH
2872+to the digital asset broker or digital asset 1
2873+dealer, to waive the restrictions. 2
33542874 ‘‘(ii) U
33552875 SE OF FUNDS.—Customer dig-3
33562876 ital assets removed from segregation under 4
33572877 clause (i) may be pooled and used by the 5
3358-digital asset broker or digital asset dealer 6
3359-or its designee to provide a blockchain 7
3360-service for a blockchain system to which 8
3361-the unit of the digital asset removed from 9
3362-segregation under clause (i) relates. 10
2878+digital asset broker or digital asset dealer or 6
2879+its designee to provide a blockchain service 7
2880+for a blockchain system to which the unit of 8
2881+the digital asset removed from segregation 9
2882+under clause (i) relates. 10
33632883 ‘‘(iii) L
3364-IMITATIONS.— 11
2884+IMITATIONS.—The Commission 11
2885+may, by rule, establish notice and disclosure 12
2886+requirements, and any other limitations 13
2887+and rules related to the waiving of any re-14
2888+strictions under this subparagraph that are 15
2889+reasonably necessary to protect customers. 16
2890+‘‘(iv) B
2891+LOCKCHAIN SERVICE DE -17
2892+FINED.—In this subparagraph, the term 18
2893+‘blockchain service’ means any activity re-19
2894+lating to validating transactions on a 20
2895+blockchain system, providing security for a 21
2896+blockchain system, or other similar activity 22
2897+required for the ongoing operation of a 23
2898+blockchain system. 24
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2901+•HR 4763 RH
2902+‘‘(5) FURTHER LIMITATIONS.—No person shall 1
2903+treat or deal with a digital asset held on behalf of any 2
2904+customer pursuant to paragraph (3) by utilizing any 3
2905+unit of such digital asset to participate in a 4
2906+blockchain service (as defined in paragraph 5
2907+(4)(B)(iv)) or a decentralized governance system asso-6
2908+ciated with the digital asset or the blockchain system 7
2909+to which the digital asset relates in any manner other 8
2910+than that which is expressly directed by the customer 9
2911+from which such unit of a digital asset was received. 10
2912+‘‘(f) C
2913+APITALREQUIREMENTS.— 11
2914+‘‘(1) I
2915+N GENERAL.—Each registered digital asset 12
2916+broker and registered digital asset dealer shall meet 13
2917+such minimum requirements as the Commission may 14
2918+prescribe to ensure that the digital asset broker or dig-15
2919+ital asset dealer is able to— 16
2920+‘‘(A) conduct an orderly wind-down of the 17
2921+activities of the digital asset broker or digital 18
2922+asset dealer; and 19
2923+‘‘(B) fulfill the customer obligations of the 20
2924+digital asset broker or digital asset dealer. 21
2925+‘‘(2) C
2926+ALCULATION.—For purposes of any Com-22
2927+mission rule or order adopted under this section or 23
2928+any interpretation thereof regulating a digital asset 24
2929+broker or digital asset dealer’s financial responsibility 25
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2932+•HR 4763 RH
2933+obligations and capital requirements, a registered dig-1
2934+ital asset broker or digital asset dealer that maintains 2
2935+control of customer digital assets in a manner that 3
2936+satisfies the rules issued by the Commission under 4
2937+subsection (e)(2) shall not be required to include the 5
2938+value of such digital assets as assets or liabilities of 6
2939+the digital asset broker or digital asset dealer. 7
2940+‘‘(3) C
2941+OORDINATION OF CAPITAL REQUIRE -8
2942+MENTS.— 9
2943+‘‘(A) C
2944+OMMISSION RULE.—The Commission 10
2945+shall, by rule, provide appropriate offsets to any 11
2946+applicable capital requirement for a person with 12
2947+multiple registrations, including as a broker, 13
2948+dealer, digital asset broker, or digital asset deal-14
2949+er. 15
2950+‘‘(B) J
2951+OINT RULE.—The Commission and 16
2952+the Commodity Futures Trading Commission 17
2953+shall jointly, by rule, provide appropriate offsets 18
2954+to any applicable capital requirement for a per-19
2955+son with multiple registrations, including as a 20
2956+digital asset broker, digital asset dealer, digital 21
2957+asset trading system, digital commodity broker, 22
2958+digital commodity dealer, or digital commodity 23
2959+exchange. 24
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2962+•HR 4763 RH
2963+‘‘(g) REPORTING AND RECORDKEEPING.—Each reg-1
2964+istered digital asset broker and digital asset dealer— 2
2965+‘‘(1) shall make such reports as are required by 3
2966+the Commission by rule or regulation regarding the 4
2967+transactions, positions, and financial condition of the 5
2968+digital asset broker or digital asset dealer; 6
2969+‘‘(2) shall keep books and records in such form 7
2970+and manner and for such period as may be prescribed 8
2971+by the Commission by rule or regulation; and 9
2972+‘‘(3) shall keep the books and records open to in-10
2973+spection and examination by any representative of 11
2974+the Commission. 12
2975+‘‘(h) T
2976+REATMENTUNDER THEBANKSECRECYACT.— 13
2977+A digital asset broker and a digital asset dealer shall be 14
2978+treated as a financial institution for purposes of the Bank 15
2979+Secrecy Act.’’. 16
2980+SEC. 307. RULES RELATED TO CONFLICTS OF INTEREST. 17
2981+The Securities Exchange Act of 1934 (15 U.S.C. 78a 18
2982+et seq.) is amended by inserting after section 10D the fol-19
2983+lowing: 20
2984+‘‘SEC. 10E. CONFLICTS OF INTEREST RELATED TO DIGITAL 21
2985+ASSETS. 22
2986+‘‘Each registered digital asset trading system, reg-23
2987+istered digital asset broker, registered digital asset dealer, 24
2988+and notice-registered digital asset clearing agency shall es-25
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2991+•HR 4763 RH
2992+tablish, maintain, and enforce written policies and proce-1
2993+dures reasonably designed, taking into consideration the na-2
2994+ture of such person’s business, to mitigate any conflicts of 3
2995+interest and transactions or arrangements with affiliates.’’. 4
2996+SEC. 308. TREATMENT OF CERTAIN DIGITAL ASSETS IN 5
2997+CONNECTION WITH FEDERALLY REGULATED 6
2998+INTERMEDIARIES. 7
2999+Section 18(b) of the Securities Act of 1933 (15 U.S.C. 8
3000+77r(b)) is amended by adding at the end the following: 9
3001+‘‘(5) E
3002+XEMPTION FOR CERTAIN DIGITAL ASSETS 10
3003+IN CONNECTION WITH FEDERALLY REGULATED INTER -11
3004+MEDIARIES.—A digital asset is a covered security 12
3005+with respect to a transaction that is exempt from reg-13
3006+istration under this Act when— 14
3007+‘‘(A) it is brokered, traded, custodied, or 15
3008+cleared by a digital asset broker or digital asset 16
3009+dealer registered under section 15H of the Secu-17
3010+rities Exchange Act of 1934; or 18
3011+‘‘(B) traded through a digital asset trading 19
3012+system (as defined under section 242.301 of title 20
3013+17, Code of Federal Regulations).’’. 21
3014+SEC. 309. DUAL REGISTRATION. 22
3015+Any person that is registered with the Securities and 23
3016+Exchange Commission as a digital asset broker, digital 24
3017+asset dealer, or digital asset trading system may register 25
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3020+•HR 4763 RH
3021+with the Commodity Futures Trading Commission, as ap-1
3022+propriate, as— 2
3023+(1) a digital commodity exchange under section 3
3024+5i of the Commodity Exchange Act (7 U.S.C. 1 et 4
3025+seq.), as added by this Act, if the person offers or seeks 5
3026+to offer a cash or spot market in at least one digital 6
3027+commodity; 7
3028+(2) a digital commodity broker under section 4u 8
3029+of the Commodity Exchange Act, as added by this 9
3030+Act, if the person is engaged in soliciting or accepting 10
3031+orders in digital commodity cash or spot markets; or 11
3032+(3) a digital commodity dealer under section 4u 12
3033+of the Commodity Exchange Act, as added by this 13
3034+Act, if the person holds themself out as a dealer in 14
3035+digital commodity cash or spot markets. 15
3036+SEC. 310. EXCLUSION FOR ANCILLARY ACTIVITIES. 16
3037+The Securities Exchange Act of 1934 (15 U.S.C. 78a 17
3038+et seq.) is amended by inserting after section 15G the fol-18
3039+lowing: 19
3040+‘‘SEC. 15H. EXCLUSION FOR ANCILLARY ACTIVITIES. 20
3041+‘‘(a) I
3042+NGENERAL.—Notwithstanding any other provi-21
3043+sion of this Act, a person shall not be subject to this Act 22
3044+and the regulations thereunder solely based on the person 23
3045+undertaking any ancillary activities. 24
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3048+•HR 4763 RH
3049+‘‘(b) EXCEPTIONS.—Subsection (a) shall not be con-1
3050+strued to apply to the antimanipulation and antifraud au-2
3051+thorities of the Commission. 3
3052+‘‘(c) A
3053+NCILLARYACTIVITIESDEFINED.—In this sec-4
3054+tion, the term ‘ancillary activities’ means any of the fol-5
3055+lowing activities related to the operation of a blockchain 6
3056+system: 7
3057+‘‘(1) Compiling network transactions, operating 8
3058+a pool, relaying, searching, sequencing, validating, or 9
3059+acting in a similar capacity with respect to a re-10
3060+stricted digital asset. 11
3061+‘‘(2) Providing computational work, operating a 12
3062+node, or procuring, offering, or utilizing network 13
3063+bandwidth, or other similar incidental services with 14
3064+respect to a restricted digital asset. 15
3065+‘‘(3) Providing a user interface that enables a 16
3066+user to read and access data about a blockchain sys-17
3067+tem, send messages, or otherwise interact with a 18
3068+blockchain system. 19
3069+‘‘(4) Developing, publishing, constituting, ad-20
3070+ministering, maintaining, or otherwise distributing a 21
3071+blockchain system. 22
3072+‘‘(5) Developing, publishing, constituting, ad-23
3073+ministering, maintaining, or otherwise distributing 24
3074+software or systems that create or deploy a hardware 25
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3077+•HR 4763 RH
3078+or software wallet or other system facilitating an in-1
3079+dividual user’s own personal ability to keep, safe-2
3080+guard, or custody the user’s restricted digital assets or 3
3081+related private keys.’’. 4
3082+SEC. 311. REGISTRATION AND REQUIREMENTS FOR NO-5
3083+TICE-REGISTERED DIGITAL ASSET CLEARING 6
3084+AGENCIES. 7
3085+Section 17A(b) of the Securities Exchange Act of 1934 8
3086+(15 U.S.C. 78q–1(b)) is amended— 9
3087+(1) in subsection (1), by inserting ‘‘(other than 10
3088+a notice-registered digital asset clearing agency)’’ 11
3089+after ‘‘unlawful for any clearing agency’’; and 12
3090+(2) by adding at the end, the following: 13
3091+‘‘(9) R
3092+EGISTRATION AND REQUIREMENTS FOR 14
3093+NOTICE-REGISTERED DIGITAL ASSET CLEARING AGEN -15
3094+CY.— 16
3095+‘‘(A) E
3096+LIGIBILITY.—A person may register 17
3097+with the Commission as a notice-registered dig-18
3098+ital asset clearing agency if the person— 19
3099+‘‘(i) is otherwise registered as a digital 20
3100+asset broker or digital asset dealer with the 21
3101+Commission and is engaging in a business 22
3102+involving digital assets that are not digital 23
3103+commodities, in compliance with Commis-24
3104+sion rules pursuant to section 15H(e); or 25
3105+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00103 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
3106+rfrederick on LAP8M3WLY3PROD with BILLS 104
3107+•HR 4763 RH
3108+‘‘(ii) is a bank engaging in a business 1
3109+involving digital assets, in compliance with 2
3110+applicable banking law and regulation re-3
3111+lating to the custody and safekeeping of 4
3112+such assets. 5
3113+‘‘(B) R
3114+EGISTRATION.—A person may reg-6
3115+ister with the Commission as a notice-registered 7
3116+digital asset clearing agency by providing the 8
3117+Commission with notice of the activities of the 9
3118+person or planned activities in such form as the 10
3119+Commission determines appropriate. 11
3120+‘‘(C) R
3121+ULEMAKING.—The Commission may 12
3122+adopt rules, which may not take effect until at 13
3123+least 360 days following the date of enactment of 14
3124+this paragraph, with regard to the activities of 15
3125+notice-registered digital asset clearing agencies, 16
3126+taking into account the nature of digital assets.’’. 17
3127+SEC. 312. TREATMENT OF CUSTODY ACTIVITIES BY BANK-18
3128+ING INSTITUTIONS. 19
3129+(a) T
3130+REATMENT OFCUSTODYACTIVITIES.—The ap-20
3131+propriate Federal banking agency (as defined under section 21
3132+3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)), 22
3133+the National Credit Union Administration (in the case of 23
3134+a credit union), and the Securities and Exchange Commis-24
3135+sion may not require a depository institution, national 25
3136+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00104 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
3137+rfrederick on LAP8M3WLY3PROD with BILLS 105
3138+•HR 4763 RH
3139+bank, Federal credit union, State credit union, or trust 1
3140+company, or any affiliate thereof— 2
3141+(1) to include assets held in custody as a liabil-3
3142+ity on any financial statement or balance sheet, in-4
3143+cluding payment stablecoin custody or safekeeping ac-5
3144+tivities; 6
3145+(2) to hold additional regulatory capital against 7
3146+assets in custody or safekeeping, except as necessary 8
3147+to mitigate against operational risks inherent with 9
3148+the custody or safekeeping services, as determined 10
3149+by— 11
3150+(A) the appropriate Federal banking agen-12
3151+cy; 13
3152+(B) the National Credit Union Administra-14
3153+tion (in the case of a credit union); 15
3154+(C) a State bank supervisor (as defined 16
3155+under section 3 of the Federal Deposit Insurance 17
3156+Act (12 U.S.C. 1813)); or 18
3157+(D) a State credit union supervisor (as de-19
3158+fined under section 6003 of the Anti-Money 20
3159+Laundering Act of 2020); or 21
3160+(3) to recognize a liability for any obligations re-22
3161+lated to activities or services performed for digital as-23
3162+sets that the entity does not own if that liability 24
3163+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00105 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
3164+rfrederick on LAP8M3WLY3PROD with BILLS 106
3165+•HR 4763 RH
3166+would exceed the expense recognized in the income 1
3167+statement as a result of the corresponding obligation. 2
3168+(b) D
3169+EFINITIONS.—In this section: 3
3170+(1) D
3171+EPOSITORY INSTITUTION.—The terms ‘‘de-4
3172+pository institution’’ has the meaning given that term 5
3173+under section 3 of the Federal Deposit Insurance Act. 6
3174+(2) C
3175+REDIT UNION TERMS.—The terms ‘‘Federal 7
3176+credit union’’ and ‘‘State credit union’’ have the 8
3177+meaning given those terms, respectively, under section 9
3178+101 of the Federal Credit Union Act. 10
3179+TITLE IV.—REGISTRATION FOR 11
3180+DIGITAL ASSET INTER-12
3181+MEDIARIES AT THE COM-13
3182+MODITY FUTURES TRADING 14
3183+COMMISSION 15
3184+SEC. 401. COMMISSION JURISDICTION OVER DIGITAL COM-16
3185+MODITY TRANSACTIONS. 17
3186+(a) I
3187+NGENERAL.—Section 2(a)(1) of the Commodity 18
3188+Exchange Act (7 U.S.C. 2(a)(1)) is amended by adding at 19
3189+the end the following: 20
3190+‘‘(J) Except as expressly provided in this 21
3191+Act, nothing in the Financial Innovation and 22
3192+Technology for the 21st Century Act shall affect 23
3193+or apply to, or be interpreted to affect or apply 24
3194+to— 25
3195+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00106 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
3196+rfrederick on LAP8M3WLY3PROD with BILLS 107
3197+•HR 4763 RH
3198+‘‘(i) any agreement, contract, or trans-1
3199+action that is subject to this Act as— 2
3200+‘‘(I) a contract of sale of a com-3
3201+modity for future delivery or an option 4
3202+on such a contract; 5
3203+‘‘(II) a swap; 6
3204+‘‘(III) a security futures product; 7
3205+‘‘(IV) an option authorized under 8
3206+section 4c of this Act; 9
3207+‘‘(V) an agreement, contract, or 10
3208+transaction described in subparagraph 11
3209+(C)(i) or (D)(i) of subsection (c)(2) of 12
3210+this section; or 13
3211+‘‘(VI) a leverage transaction au-14
3212+thorized under section 19 of this Act; 15
3213+or 16
3214+‘‘(ii) the activities of any person with 17
3215+respect to any such an agreement, contract, 18
3216+or transaction.’’. 19
3217+(b) I
3218+NGENERAL.—Section 2(c)(1) of the Commodity 20
3219+Exchange Act (7 U.S.C. 2(c)(1)) is amended— 21
3220+(1) in subparagraph (F), by striking ‘‘or’’ at the 22
3221+end; 23
3222+(2) in subparagraph (G), by striking the period 24
3223+and inserting ‘‘; or’’; and 25
3224+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00107 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
3225+rfrederick on LAP8M3WLY3PROD with BILLS 108
3226+•HR 4763 RH
3227+(3) by adding at the end the following: 1
3228+‘‘(H) permitted payment stablecoins.’’. 2
3229+(c) I
3230+NGENERAL.—Section 2(c)(2) of the Commodity 3
3231+Exchange Act (7 U.S.C. 2(c)(2)) is amended— 4
3232+(1) in subparagraph (D)(ii)— 5
3233+(A) in subclause (III), in the matter that 6
3234+precedes item (aa), by inserting ‘‘of a com-7
3235+modity, other than a digital commodity,’’ before 8
3236+‘‘that’’; and 9
3237+(B) by redesignating subclauses (IV) and 10
3238+(V) as subclauses (V) and (VI) and inserting 11
3239+after subclause (III) the following: 12
3240+‘‘(IV) a contract of sale of a dig-13
3241+ital commodity that— 14
3242+‘‘(aa) results in actual deliv-15
3243+ery, as the Commission shall by 16
3244+rule determine, within 2 days or 17
3245+such other period as the Commis-18
3246+sion may determine by rule or 19
3247+regulation based upon the typical 20
3248+commercial practice in cash or 21
3249+spot markets for the digital com-22
3250+modity involved; or 23
3251+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00108 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
3252+rfrederick on LAP8M3WLY3PROD with BILLS 109
3253+•HR 4763 RH
3254+‘‘(bb) is executed with a reg-1
3255+istered digital commodity deal-2
3256+er— 3
3257+‘‘(AA) directly; 4
3258+‘‘(BB) through a reg-5
3259+istered digital commodity 6
3260+broker; or 7
3261+‘‘(CC) on or subject to 8
3262+the rules of a registered dig-9
3263+ital commodity exchange;’’; 10
3264+and 11
3265+(2) by adding at the end the following: 12
3266+‘‘(F) C
3267+OMMISSIONJURISDICTIONWITHRESPECT TO 13
3268+D
3269+IGITALCOMMODITYTRANSACTIONS.— 14
33653270 ‘‘(i) I
3366-N GENERAL.—The Commis-12
3367-sion may, by rule, establish notice and 13
3368-disclosure requirements, and any 14
3369-other limitations and rules related to 15
3370-the waiving of any restrictions under 16
3371-this subparagraph that are reasonably 17
3372-necessary to protect customers. 18
3373-‘‘(II) C
3374-USTOMER CHOICE .—A 19
3375-digital asset broker or digital asset 20
3376-dealer may not require a waiver from 21
3377-a customer described in clause (i) as 22
3378-a condition of doing business with the 23
3379-digital asset broker or digital asset 24
3380-dealer. 25 121
3381-•HR 4763 EH
3382-‘‘(iv) BLOCKCHAIN SERVICE DE -1
3383-FINED.—In this subparagraph, the term 2
3384-‘blockchain service’ means any activity re-3
3385-lating to validating transactions on a 4
3386-blockchain system, providing security for a 5
3387-blockchain system, or other similar activity 6
3388-required for the ongoing operation of a 7
3389-blockchain system. 8
3390-‘‘(5) F
3391-URTHER LIMITATIONS.—No person shall 9
3392-treat or deal with a restricted digital asset held on 10
3393-behalf of any customer pursuant to paragraph (4) by 11
3394-utilizing any unit of such restricted digital asset to 12
3395-participate in a blockchain service (as defined in 13
3396-paragraph (5)(B)(iv)) or a decentralized governance 14
3397-system associated with the restricted digital asset or 15
3398-the blockchain system to which the restricted digital 16
3399-asset relates in any manner other than that which 17
3400-is expressly directed by the customer from which 18
3401-such unit of a restricted digital asset was received. 19
3402-‘‘(g) C
3403-APITALREQUIREMENTS.— 20
3404-‘‘(1) I
3405-N GENERAL.—Each registered digital 21
3406-asset broker and registered digital asset dealer shall 22
3407-meet such minimum capital requirements as the 23
3408-Commission may prescribe to ensure that the digital 24
3409-asset broker or digital asset dealer is able to— 25 122
3410-•HR 4763 EH
3411-‘‘(A) conduct an orderly wind-down of the 1
3412-activities of the digital asset broker or digital 2
3413-asset dealer; and 3
3414-‘‘(B) fulfill the customer obligations of the 4
3415-digital asset broker or digital asset dealer. 5
3416-‘‘(2) C
3417-ALCULATION.—For purposes of any 6
3418-Commission rule or order adopted under this section 7
3419-or any interpretation thereof regulating a digital 8
3420-asset broker or digital asset dealer’s financial re-9
3421-sponsibility obligations and capital requirements, a 10
3422-registered digital asset broker or digital asset dealer 11
3423-that maintains control of customer digital assets in 12
3424-a manner that satisfies the rules issued by the Com-13
3425-mission under subsection (f)(2) shall not be required 14
3426-to include the custodial obligation with respect to 15
3427-such digital assets as liabilities or such digital assets 16
3428-as assets of the digital asset broker or digital asset 17
3429-dealer. 18
3430-‘‘(h) R
3431-EPORTING ANDRECORDKEEPING.—Each reg-19
3432-istered digital asset broker and digital asset dealer— 20
3433-‘‘(1) shall make such reports as are required by 21
3434-the Commission by rule or regulation regarding the 22
3435-transactions, positions, and financial condition of the 23
3436-digital asset broker or digital asset dealer; 24 123
3437-•HR 4763 EH
3438-‘‘(2) shall keep books and records in such form 1
3439-and manner and for such period as may be pre-2
3440-scribed by the Commission by rule or regulation; and 3
3441-‘‘(3) shall keep the books and records open to 4
3442-inspection and examination by any representative of 5
3443-the Commission.’’. 6
3444-(b) D
3445-EFINITION OFCLEARINGAGENCY.—Section 7
3446-3(a)(23)(B) of the Securities Exchange Act of 1934 (15 8
3447-U.S.C. 78c(a)(23)(B)) is amended by inserting ‘‘digital 9
3448-asset broker, digital asset dealer,’’ after ‘‘broker, dealer,’’ 10
3449-each place such term appears. 11
3450-SEC. 407. RULES RELATED TO CONFLICTS OF INTEREST. 12
3451-The Securities Exchange Act of 1934 (15 U.S.C. 78a 13
3452-et seq.) is amended by inserting after section 10D the fol-14
3453-lowing: 15
3454-‘‘SEC. 10E. CONFLICTS OF INTEREST RELATED TO DIGITAL 16
3455-ASSETS. 17
3456-‘‘Each registered digital asset trading system, reg-18
3457-istered digital asset broker, registered digital asset dealer, 19
3458-and notice-registered digital asset clearing agency shall es-20
3459-tablish, maintain, and enforce written policies and proce-21
3460-dures reasonably designed, taking into consideration the 22
3461-nature of such person’s business, to mitigate any conflicts 23
3462-of interest and transactions or arrangements with affili-24
3463-ates.’’. 25 124
3464-•HR 4763 EH
3465-SEC. 408. TREATMENT OF CERTAIN DIGITAL ASSETS IN 1
3466-CONNECTION WITH FEDERALLY REGULATED 2
3467-INTERMEDIARIES. 3
3468-Section 18(b) of the Securities Act of 1933 (15 4
3469-U.S.C. 77r(b)) is amended by adding at the end the fol-5
3470-lowing: 6
3471-‘‘(5) E
3472-XEMPTION FOR CERTAIN DIGITAL ASSETS 7
3473-IN CONNECTION WITH FEDERALLY REGULATED 8
3474-INTERMEDIARIES.—A restricted digital asset is 9
3475-treated as a covered security with respect to a trans-10
3476-action that is exempt from registration under this 11
3477-Act when it is— 12
3478-‘‘(A) brokered, traded, custodied, or 13
3479-cleared by a digital asset broker or digital asset 14
3480-dealer registered under section 15H of the Se-15
3481-curities Exchange Act of 1934; or 16
3482-‘‘(B) traded through a digital asset trading 17
3483-system.’’. 18
3484-SEC. 409. EXCLUSION FOR DECENTRALIZED FINANCE AC-19
3485-TIVITIES. 20
3486-The Securities Exchange Act of 1934 (15 U.S.C. 78a 21
3487-et seq.), as amended by section 405, is further amended 22
3488-by inserting after section 15H the following: 23 125
3489-•HR 4763 EH
3490-‘‘SEC. 15I. DECENTRALIZED FINANCE ACTIVITIES NOT SUB-1
3491-JECT TO THIS ACT. 2
3492-‘‘(a) I
3493-NGENERAL.—Notwithstanding any other pro-3
3494-vision of this Act, a person shall not be subject to this 4
3495-Act and the regulations thereunder based on the person 5
3496-directly or indirectly engaging in any of the following ac-6
3497-tivities, whether singly or in combination thereof, in rela-7
3498-tion to the operation of a blockchain system or in relation 8
3499-to decentralized finance (as defined in section 605(d) of 9
3500-the Financial Innovation and Technology for the 21st 10
3501-Century Act): 11
3502-‘‘(1) Compiling network transactions, operating 12
3503-or participating in a liquidity pool, relaying, search-13
3504-ing, sequencing, validating, or acting in a similar ca-14
3505-pacity with respect to a digital asset. 15
3506-‘‘(2) Providing computational work, operating a 16
3507-node, or procuring, offering, or utilizing network 17
3508-bandwidth, or other similar incidental services with 18
3509-respect to a digital asset. 19
3510-‘‘(3) Providing a user-interface that enables a 20
3511-user to read and access data about a blockchain sys-21
3512-tem, send messages, or otherwise interact with a 22
3513-blockchain system. 23
3514-‘‘(4) Developing, publishing, constituting, ad-24
3515-ministering, maintaining, or otherwise distributing a 25
3516-blockchain system. 26 126
3517-•HR 4763 EH
3518-‘‘(5) Developing, publishing, constituting, ad-1
3519-ministering, maintaining, or otherwise distributing 2
3520-software or systems that create or deploy a hard-3
3521-ware or software wallet or other system facilitating 4
3522-an individual user’s own personal ability to keep, 5
3523-safeguard, or custody such user’s digital assets or 6
3524-related private keys. 7
3525-‘‘(b) E
3526-XCEPTIONS.—Subsection (a) shall not be con-8
3527-strued to apply to the anti-fraud and anti-manipulation 9
3528-authorities of the Commission.’’. 10
3529-SEC. 410. REGISTRATION AND REQUIREMENTS FOR NO-11
3530-TICE-REGISTERED DIGITAL ASSET CLEARING 12
3531-AGENCIES. 13
3532-Section 17A(b) of the Securities Exchange Act of 14
3533-1934 (15 U.S.C. 78q-1(b)) is amended— 15
3534-(1) in subsection (1), by inserting after the first 16
3535-sentence the following: ‘‘The previous sentence shall 17
3536-not apply to a notice-registered digital asset clearing 18
3537-agency with respect to a restricted digital asset.’’; 19
3538-and 20
3539-(2) by adding at the end the following: 21
3540-‘‘(9) R
3541-EGISTRATION AND REQUIREMENTS FOR 22
3542-NOTICE-REGISTERED DIGITAL ASSET CLEARING 23
3543-AGENCY.— 24 127
3544-•HR 4763 EH
3545-‘‘(A) ELIGIBILITY.—A person may register 1
3546-with the Commission as a notice-registered dig-2
3547-ital asset clearing agency if the person— 3
3548-‘‘(i) is otherwise registered as a digital 4
3549-asset broker or digital asset dealer with the 5
3550-Commission and is engaging in a business 6
3551-involving restricted digital assets, in com-7
3552-pliance with Commission rules pursuant to 8
3553-section 15H(f); 9
3554-‘‘(ii) is a bank; or 10
3555-‘‘(iii) is a clearing agency already reg-11
3556-istered with the Commission pursuant to 12
3557-this section. 13
3558-‘‘(B) R
3559-EGISTRATION.—A person may reg-14
3560-ister with the Commission as a notice-registered 15
3561-digital asset clearing agency by filing with the 16
3562-Commission a notice of the activities of the per-17
3563-son or planned activities in such form as the 18
3564-Commission determines appropriate. 19
3565-‘‘(C) E
3566-FFECTIVENESS OF REGISTRA -20
3567-TION.— 21
3271+N GENERAL.—Subject to sections 6d and 15
3272+12(e), the Commission shall have exclusive jurisdic-16
3273+tion with respect to any account, agreement, contract, 17
3274+or transaction involving a contract of sale of a digital 18
3275+commodity in interstate commerce, including in a 19
3276+digital commodity cash or spot market, that is of-20
3277+fered, solicited, traded, facilitated, executed, cleared, 21
3278+reported, or otherwise dealt in— 22
3279+‘‘(I) on or subject to the rules of a registered 23
3280+entity or an entity that is required to be reg-24
3281+istered as a registered entity; or 25
3282+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00109 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
3283+rfrederick on LAP8M3WLY3PROD with BILLS 110
3284+•HR 4763 RH
3285+‘‘(II) by any other entity registered, or re-1
3286+quired to be registered, with the Commission. 2
3287+‘‘(ii) L
3288+IMITATIONS.—Clause (i) shall not apply 3
3289+with respect to custodial or depository activities for a 4
3290+digital commodity, or custodial or depository activi-5
3291+ties for any promise or right to a future digital com-6
3292+modity, of an entity regulated by an appropriate 7
3293+Federal banking agency or a State bank supervisor 8
3294+(within the meaning of section 3 of the Federal De-9
3295+posit Insurance Act). 10
3296+‘‘(iii) M
3297+IXED DIGITAL ASSET TRANSACTIONS .— 11
35683298 ‘‘(I) I
3569-N GENERAL.—The registration 22
3570-of a person filing a notice described under 23
3571-subparagraph (B) as a notice-registered 24
3572-digital asset clearing agency shall be effec-25 128
3573-•HR 4763 EH
3574-tive upon publication by the Commission of 1
3575-such notice, which shall occur no later than 2
3576-14 days after the date of such filing. 3
3577-‘‘(ii) I
3578-NITIAL REGISTRATIONS.— 4
3579-‘‘(I) I
3580-N GENERAL.—A person 5
3581-registered as a notice-registered dig-6
3582-ital asset clearing agency before the 7
3583-date on which the Commission adopts 8
3584-rules under subparagraph (D) shall, 9
3585-after such rules are adopted, renew 10
3586-the person’s registration pursuant to 11
3587-such rules. 12
3588-‘‘(II) E
3589-XCEPTION.—Notwith-13
3590-standing subclause (I), a person reg-14
3591-istered as a notice-registered digital 15
3592-asset clearing agency before the end 16
3593-of the 2-year period beginning on the 17
3594-date of the enactment of this section 18
3595-shall have such registration remain in 19
3596-effect until the end of such 2-year pe-20
3597-riod. 21
3598-‘‘(D) R
3599-ULEMAKING.—The Commission 22
3600-may adopt rules, which may not take effect 23
3601-until at least 360 days following the date of en-24
3602-actment of this paragraph, with regard to the 25 129
3603-•HR 4763 EH
3604-activities of notice-registered digital asset clear-1
3605-ing agencies, taking into account the nature of 2
3606-restricted digital assets.’’. 3
3607-SEC. 411. TREATMENT OF CUSTODY ACTIVITIES BY BANK-4
3608-ING INSTITUTIONS. 5
3609-(a) T
3610-REATMENT OFCUSTODYACTIVITIES.—The ap-6
3611-propriate Federal banking agency (as defined under sec-7
3612-tion 3 of the Federal Deposit Insurance Act (12 U.S.C. 8
3613-1813)), the National Credit Union Administration (in the 9
3614-case of a credit union), and the Securities and Exchange 10
3615-Commission may not require, or take supervisory action 11
3616-that would cause, a depository institution, national bank, 12
3617-Federal credit union, State credit union, or trust company, 13
3618-or any affiliate (as such term is defined under section 2 14
3619-of the Bank Holding Company Act of 1956) thereof— 15
3620-(1) to include assets held in custody or safe-16
3621-keeping, or the assets associated with a cryp-17
3622-tographic key held in custody or safekeeping, as a li-18
3623-ability on such institution’s financial statement or 19
3624-balance sheet, except that cash held for a third party 20
3625-by such institution that is commingled with the gen-21
3626-eral assets of such institution may be reflected as a 22
3627-liability on a financial statement or balance sheet; 23
3628-(2) to hold additional regulatory capital against 24
3629-assets in custody or safekeeping, or the assets asso-25 130
3630-•HR 4763 EH
3631-ciated with a cryptographic key held in custody or 1
3632-safekeeping, except as necessary to mitigate against 2
3633-operational risks inherent with the custody or safe-3
3634-keeping services, as determined by— 4
3635-(A) the appropriate Federal banking agen-5
3636-cy; 6
3637-(B) the National Credit Union Administra-7
3638-tion (in the case of a credit union); 8
3639-(C) a State bank supervisor (as defined 9
3640-under section 3 of the Federal Deposit Insur-10
3641-ance Act (12 U.S.C. 1813)); or 11
3642-(D) a State credit union supervisor (as de-12
3643-fined under section 6003 of the Anti-Money 13
3644-Laundering Act of 2020); 14
3645-(3) to recognize a liability for any obligations 15
3646-related to activities or services performed for digital 16
3647-assets with respect to which such institution does 17
3648-not have beneficial ownership if that liability would 18
3649-exceed the expense recognized in the income state-19
3650-ment as a result of the corresponding obligation. 20
3651-(b) D
3652-EFINITIONS.—In this section: 21
3653-(1) D
3654-EPOSITORY INSTITUTION.—The term ‘‘de-22
3655-pository institution’’ has the meaning given that 23
3656-term under section 3 of the Federal Deposit Insur-24
3657-ance Act. 25 131
3658-•HR 4763 EH
3659-(2) CREDIT UNION TERMS .—The terms ‘‘Fed-1
3660-eral credit union’’ and ‘‘State credit union’’ have the 2
3661-meaning given those terms, respectively, under sec-3
3662-tion 101 of the Federal Credit Union Act. 4
3663-SEC. 412. EFFECTIVE DATE; ADMINISTRATION. 5
3664-Except as otherwise provided under this title, this 6
3665-title and the amendments made by this title shall take ef-7
3666-fect 360 days after the date of enactment of this Act, ex-8
3667-cept that, to the extent a provision of this title requires 9
3668-a rulemaking, the provision shall take effect on the later 10
3669-of— 11
3670-(1) 360 days after the date of enactment of this 12
3671-Act; or 13
3672-(2) 60 days after the publication in the Federal 14
3673-Register of the final rule implementing the provision. 15
3674-SEC. 413. DISCRETIONARY SURPLUS FUND. 16
3675-(a) I
3676-NGENERAL.—The dollar amount specified 17
3677-under section 7(a)(3)(A) of the Federal Reserve Act (12 18
3678-U.S.C. 289(a)(3)(A)) is reduced by $15,000,000. 19
3679-(b) E
3680-FFECTIVEDATE.—The amendment made by 20
3681-subsection (a) shall take effect on September 30, 2034. 21
3682-SEC. 414. STUDIES ON FOREIGN ADVERSARY PARTICIPA-22
3683-TION. 23
3684-(a) I
3685-NGENERAL.—The Secretary of the Treasury, in 24
3686-consultation with the Commodity Futures Trading Com-25 132
3687-•HR 4763 EH
3688-mission and the Securities and Exchange Commission, 1
3689-shall, not later than 1 year after date of the enactment 2
3690-of this section, conduct a study and submit a report to 3
3691-the relevant congressional committees that— 4
3692-(1) identifies any digital asset registrants which 5
3693-are owned by governments of foreign adversaries; 6
3694-(2) determines whether any governments of for-7
3695-eign adversaries are collecting personal data or trad-8
3696-ing data about United States persons in the digital 9
3697-asset markets; and 10
3698-(3) evaluates whether any proprietary intellec-11
3699-tual property of digital asset registrants is being 12
3700-misused or stolen by any governments of foreign ad-13
3701-versaries. 14
3702-(b) GAO S
3703-TUDY ANDREPORT.— 15
3704-(1) I
3705-N GENERAL.—The Comptroller General 16
3706-shall, not later than 1 year after date of the enact-17
3707-ment of this section, conduct a study and submit a 18
3708-report to the relevant congressional committees 19
3709-that— 20
3710-(A) identifies any digital asset registrants 21
3711-which are owned by governments of foreign ad-22
3712-versaries; 23
3713-(B) determines whether any governments 24
3714-of foreign adversaries are collecting personal 25 133
3715-•HR 4763 EH
3716-data or trading data about United States per-1
3717-sons in the digital asset markets; and 2
3718-(C) evaluates whether any proprietary in-3
3719-tellectual property of digital asset registrants is 4
3720-being misused or stolen by any governments of 5
3721-foreign adversaries. 6
3722-(c) D
3723-EFINITIONS.—In this section: 7
3724-(1) D
3725-IGITAL ASSET REGISTRANT .—The term 8
3726-‘‘digital asset registrant’’ means any person required 9
3727-to register as a digital asset trading system, digital 10
3728-asset broker, digital asset dealer, digital commodity 11
3729-exchange, digital commodity broker, or digital com-12
3730-modity dealer under this Act. 13
3731-(2) F
3732-OREIGN ADVERSARIES .—The term ‘‘for-14
3733-eign adversaries’’ means the foreign governments 15
3734-and foreign non-government persons determined by 16
3735-the Secretary of Commerce to be foreign adversaries 17
3736-under section 7.4(a) of title 15, Code of Federal 18
3737-Regulations. 19
3738-(3) R
3739-ELEVANT CONGRESSIONAL COMMIT -20
3740-TEES.—The term ‘‘relevant congressional commit-21
3741-tees’’ means— 22
3742-(A) the Committees on Financial Services 23
3743-and Agriculture of the House of Representa-24
3744-tives; and 25 134
3745-•HR 4763 EH
3746-(B) the Committees on Banking, Housing, 1
3747-and Urban Affairs and Agriculture, Nutrition, 2
3748-and Forestry of the Senate. 3
3749-TITLE V—REGISTRATION FOR 4
3750-DIGITAL ASSET INTER-5
3751-MEDIARIES AT THE COM-6
3752-MODITY FUTURES TRADING 7
3753-COMMISSION 8
3754-SEC. 501. COMMISSION JURISDICTION OVER DIGITAL COM-9
3755-MODITY TRANSACTIONS. 10
3756-(a) S
3757-AVINGSCLAUSE.—Section 2(a)(1) of the Com-11
3758-modity Exchange Act (7 U.S.C. 2(a)(1)) is amended by 12
3759-adding at the end the following: 13
3760-‘‘(J) Except as expressly provided in this 14
3761-Act, nothing in the Financial Innovation and 15
3762-Technology for the 21st Century Act shall af-16
3763-fect or apply to, or be interpreted to affect or 17
3764-apply to— 18
3765-‘‘(i) any agreement, contract, or 19
3766-transaction that is subject to this Act as— 20
3767-‘‘(I) a contract of sale of a com-21
3768-modity for future delivery or an op-22
3769-tion on such a contract; 23
3770-‘‘(II) a swap; 24
3771-‘‘(III) a security futures product; 25 135
3772-•HR 4763 EH
3773-‘‘(IV) an option authorized under 1
3774-section 4c of this Act; 2
3775-‘‘(V) an agreement, contract, or 3
3776-transaction described in subparagraph 4
3777-(C)(i) or (D)(i) of subsection (c)(2) of 5
3778-this section; or 6
3779-‘‘(VI) a leverage transaction au-7
3780-thorized under section 19 of this Act; 8
3781-or 9
3782-‘‘(ii) the activities of any person with 10
3783-respect to any such an agreement, con-11
3784-tract, or transaction.’’. 12
3785-(b) L
3786-IMITATION ONAUTHORITYOVERPERMITTED 13
3787-P
3788-AYMENTSTABLECOINS.—Section 2(c)(1) of the Com-14
3789-modity Exchange Act (7 U.S.C. 2(c)(1)) is amended— 15
3790-(1) in subparagraph (F), by striking ‘‘or’’ at 16
3791-the end; 17
3792-(2) in subparagraph (G), by striking the period 18
3793-and inserting ‘‘; or’’; and 19
3794-(3) by adding at the end the following: 20
3795-‘‘(H) permitted payment stablecoins.’’. 21
3796-(c) C
3797-OMMISSIONJURISDICTIONOVERDIGITAL 22
3798-A
3799-SSETTRANSACTIONS.—Section 2(c)(2) of the Com-23
3800-modity Exchange Act (7 U.S.C. 2(c)(2)) is amended— 24
3801-(1) in subparagraph (D)— 25 136
3802-•HR 4763 EH
3803-(A) in clause (ii)— 1
3804-(i) in subclause (I) by inserting 2
3805-‘‘(other than an agreement, contract, or 3
3806-transaction in a permitted payment 4
3807-stablecoin)’’ after ‘‘paragraph (1)’’; 5
3808-(ii) in subclause (III)— 6
3809-(I) in the matter that precedes 7
3810-item (aa), by inserting ‘‘of a com-8
3811-modity, other than a digital com-9
3812-modity or a permitted payment 10
3813-stablecoin,’’ before ‘‘that’’; and 11
3814-(II) in item (bb), by striking 12
3815-‘‘or’’ at the end; and 13
3816-(iii) by redesignating subclauses (IV) 14
3817-and (V) as subclauses (VI) and (VII) and 15
3818-inserting after subclause (III) the fol-16
3819-lowing: 17
3820-‘‘(IV) a contract of sale of a dig-18
3821-ital commodity or a permitted pay-19
3822-ment stablecoin that results in actual 20
3823-delivery, as the Commission shall by 21
3824-rule determine, within 2 days or such 22
3825-other period as the Commission may 23
3826-determine by rule or regulation based 24
3827-upon the typical commercial practice 25 137
3828-•HR 4763 EH
3829-in cash or spot markets for the digital 1
3830-commodity involved; 2
3831-‘‘(V) a contract of sale of a dig-3
3832-ital commodity or a permitted pay-4
3833-ment stablecoin that— 5
3834-‘‘(aa) is executed with a reg-6
3835-istered digital commodity deal-7
3836-er— 8
3837-‘‘(AA) directly; 9
3838-‘‘(BB) through a reg-10
3839-istered digital commodity 11
3840-broker; or 12
3841-‘‘(CC) on or subject to 13
3842-the rules of a registered dig-14
3843-ital commodity exchange; 15
3844-and 16
3845-‘‘(bb) is not a contract of 17
3846-sale of— 18
3847-‘‘(AA) a digital com-19
3848-modity or a permitted pay-20
3849-ment stablecoin that ref-21
3850-erences, represents an inter-22
3851-est in, or is functionally 23
3852-equivalent to an agricultural 24
3853-commodity, an excluded 25 138
3854-•HR 4763 EH
3855-commodity, or an exempt 1
3856-commodity, other than the 2
3857-digital commodity itself, as 3
3858-shall be further defined by 4
3859-the Commission; or 5
3860-‘‘(BB) a digital com-6
3861-modity or a permitted pay-7
3862-ment stablecoin to which the 8
3863-Commission determines, by 9
3864-rule or regulation, it is not 10
3865-in the public interest for this 11
3866-section to apply;’’; and 12
3867-(B) by redesignating clause (iv) as clause 13
3868-(v) and inserting after clause (iii) the following: 14
3869-‘‘(iv) The Commission shall adopt 15
3870-rules and regulations applicable to digital 16
3871-commodity dealers and digital commodity 17
3872-brokers in connection with the agreements, 18
3873-contracts or transactions in digital com-19
3874-modities or permitted payment stablecoins 20
3875-described in clause (ii)(V) of this subpara-21
3876-graph, which shall set forth minimum re-22
3877-quirements related to disclosure, record-23
3878-keeping, margin and financing arrange-24
3879-ments, capital, reporting, business conduct, 25 139
3880-•HR 4763 EH
3881-documentation, and supervision of employ-1
3882-ees and agents. Except as prohibited in 2
3883-subparagraph (G)(iii), the Commission 3
3884-may also make, promulgate, and enforce 4
3885-such rules and regulations as, in the judg-5
3886-ment of the Commission, are reasonably 6
3887-necessary to effectuate any of the provi-7
3888-sions of, or to accomplish any of the pur-8
3889-poses of, this Act in connection with agree-9
3890-ments, contracts, or transactions described 10
3891-in such clause (ii)(V), which may include, 11
3892-without limitation, requirements regarding 12
3893-registration with the Commission and 13
3894-membership in a registered futures asso-14
3895-ciation.’’; and 15
3896-(2) by adding at the end the following: 16
3897-‘‘(F) C
3898-OMMISSIONJURISDICTIONWITHRESPECT TO 17
3899-D
3900-IGITALCOMMODITYTRANSACTIONS.— 18
3901-‘‘(i) I
3902-N GENERAL.—Subject to sections 6d and 19
3903-12(e), the Commission shall have exclusive jurisdic-20
3904-tion with respect to any account, agreement, con-21
3905-tract, or transaction involving a contract of sale of 22
3906-a digital commodity in interstate commerce, includ-23
3907-ing in a digital commodity cash or spot market, that 24 140
3908-•HR 4763 EH
3909-is offered, solicited, traded, facilitated, executed, 1
3910-cleared, reported, or otherwise dealt in— 2
3911-‘‘(I) on or subject to the rules of a reg-3
3912-istered entity or an entity that is required to be 4
3913-registered as a registered entity; or 5
3914-‘‘(II) by any other entity registered, or re-6
3915-quired to be registered, with the Commission. 7
3916-‘‘(ii) L
3917-IMITATIONS.—Clause (i) shall not apply 8
3918-with respect to custodial or depository activities for 9
3919-a digital commodity, or custodial or depository ac-10
3920-tivities for any promise or right to a future digital 11
3921-commodity, of an entity regulated by an appropriate 12
3922-Federal banking agency or a State bank supervisor 13
3923-(within the meaning of section 3 of the Federal De-14
3924-posit Insurance Act). 15
3925-‘‘(iii) M
3926-IXED DIGITAL ASSET TRANSACTIONS .— 16
3927-‘‘(I) I
3928-N GENERAL.—Clause (i) shall not 17
3929-apply to a mixed digital asset transaction. 18
3930-‘‘(II) R
3931-EPORTS ON MIXED DIGITAL ASSET 19
3932-TRANSACTIONS.—A digital asset issuer, related 20
3933-person, affiliated person, or other person reg-21
3934-istered with the Securities and Exchange Com-22
3935-mission that engages in a mixed digital asset 23
3936-transaction, shall, on request, open to inspec-24
3937-tion and examination by the Commodity Fu-25 141
3938-•HR 4763 EH
3939-tures Trading Commission all books and 1
3940-records relating to the mixed digital asset 2
3941-transaction, subject to the confidentiality and 3
3942-disclosure requirements of section 8. 4
3299+N GENERAL.—Clause (i) shall not 12
3300+apply to a mixed digital asset transaction. 13
3301+‘‘(II) O
3302+VERSIGHT OF MIXED DIGITAL ASSET 14
3303+TRANSACTIONS.—A mixed digital asset trans-15
3304+action shall be subject to the exclusive jurisdic-16
3305+tion of the Securities and Exchange Commission. 17
3306+‘‘(III) R
3307+EPORTS ON MIXED DIGITAL ASSET 18
3308+TRANSACTIONS.—A digital asset issuer, related 19
3309+person, affiliated person, or other person reg-20
3310+istered with the Securities and Exchange Com-21
3311+mission that engages in a mixed digital asset 22
3312+transaction, shall, on request, open to inspection 23
3313+and examination by the Commodity Futures 24
3314+Trading Commission all books and records relat-25
3315+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00110 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
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3317+•HR 4763 RH
3318+ing to the mixed digital asset transaction, subject 1
3319+to the confidentiality and disclosure require-2
3320+ments of section 8. 3
39433321 ‘‘(G) A
3944-GREEMENTS, CONTRACTS, ANDTRANS-5
3945-ACTIONS INSTABLECOINS.— 6
3322+GREEMENTS, CONTRACTS, ANDTRANSACTIONS 4
3323+INSTABLECOINS.— 5
39463324 ‘‘(i) T
3947-REATMENT OF PERMITTED PAYMENT 7
3948-STABLECOINS ON COMMISSION -REGISTERED ENTI-8
3949-TIES.—Subject to clauses (ii) and (iii), the Commis-9
3950-sion shall have jurisdiction over a cash or spot 10
3951-agreement, contract, or transaction in a permitted 11
3952-payment stablecoin that is offered, offered to enter 12
3953-into, entered into, executed, confirmed the execution 13
3954-of, solicited, or accepted— 14
3955-‘‘(I) on or subject to the rules of a reg-15
3956-istered entity; or 16
3957-‘‘(II) by any other entity registered with 17
3958-the Commission. 18
3325+REATMENT OF PERMITTED PAYMENT 6
3326+STABLECOINS ON COMMISSION -REGISTERED ENTI-7
3327+TIES.—Subject to clauses (ii) and (iii), the Commis-8
3328+sion shall have jurisdiction over a cash or spot agree-9
3329+ment, contract, or transaction in a permitted pay-10
3330+ment stablecoin that is offered, offered to enter into, 11
3331+entered into, executed, confirmed the execution of, so-12
3332+licited, or accepted— 13
3333+‘‘(I) on or subject to the rules of a registered 14
3334+entity; or 15
3335+‘‘(II) by any other entity registered with the 16
3336+Commission. 17
39593337 ‘‘(ii) P
3960-ERMITTED PAYMENT STABLECOIN 19
3961-TRANSACTION RULES .—This Act shall apply to a 20
3962-transaction described in clause (i) only for the pur-21
3963-pose of regulating the offer, execution, solicitation, 22
3964-or acceptance of a cash or spot permitted payment 23
3965-stablecoin transaction on a registered entity or by 24
3966-any other entity registered with the Commission, as 25 142
3967-•HR 4763 EH
3968-if the permitted payment stablecoin were a digital 1
3969-commodity. 2
3970-‘‘(iii) N
3971-O AUTHORITY OVER PERMITTED PAY -3
3972-MENT STABLECOINS .—Notwithstanding clauses (i) 4
3973-and (ii), the Commission shall not make a rule or 5
3974-regulation, impose a requirement or obligation on a 6
3975-registered entity or other entity registered with the 7
3976-Commission, or impose a requirement or obligation 8
3977-on a permitted payment stablecoin issuer, regarding 9
3978-the operation of a permitted payment stablecoin 10
3979-issuer or a permitted payment stablecoin.’’. 11
3338+ERMITTED PAYMENT STABLECOIN TRANS -18
3339+ACTION RULES.—This Act shall apply to a trans-19
3340+action described in clause (i) only for the purpose of 20
3341+regulating the offer, execution, solicitation, or accept-21
3342+ance of a cash or spot permitted payment stablecoin 22
3343+transaction on a registered entity or by any other en-23
3344+tity registered with the Commission, as if the per-24
3345+mitted payment stablecoin were a digital commodity. 25
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3348+•HR 4763 RH
3349+‘‘(iii) NO AUTHORITY OVER PERMITTED PAYMENT 1
3350+STABLECOINS.—Notwithstanding clause (ii), the Com-2
3351+mission shall not make a rule or regulation, impose 3
3352+a requirement or obligation on a registered entity or 4
3353+other entity registered with the Commission, or im-5
3354+pose a requirement or obligation on a permitted pay-6
3355+ment stablecoin issuer, regarding the operation of a 7
3356+permitted payment stablecoin issuer or a permitted 8
3357+payment stablecoin, including any aspect of such an 9
3358+operation or such a stablecoin.’’. 10
39803359 (d) C
3981-ONFORMINGAMENDMENT.—Section 2(a)(1)(A) 12
3982-of such Act (7 U.S.C. 2(a)(1)(A)) is amended in the 1st 13
3983-sentence by inserting ‘‘subparagraphs (F) and (G) of sub-14
3984-section (c)(2) of this section or’’ before ‘‘section 19’’. 15
3985-SEC. 502. REQUIRING FUTURES COMMISSION MERCHANTS 16
3986-TO USE QUALIFIED DIGITAL COMMODITY 17
3987-CUSTODIANS. 18
3988-Section 4d of the Commodity Exchange Act (7 U.S.C. 19
3989-6d) is amended— 20
3990-(1) in subsection (a)(2)— 21
3991-(A) in the 1st proviso, by striking ‘‘any 22
3992-bank or trust company’’ and inserting ‘‘any 23
3993-bank, trust company, or qualified digital com-24
3994-modity custodian’’; and 25 143
3995-•HR 4763 EH
3360+ONFORMINGAMENDMENT.—Section 2(a)(1)(A) of 11
3361+such Act (7 U.S.C. 2(a)(1)(A)) is amended in the 1st sen-12
3362+tence by inserting ‘‘subparagraphs (F) and (G) of sub-13
3363+section (c)(2) of this section or’’ before ‘‘section 19’’. 14
3364+SEC. 402. REQUIRING FUTURES COMMISSION MERCHANTS 15
3365+TO USE QUALIFIED DIGITAL COMMODITY 16
3366+CUSTODIANS. 17
3367+Section 4d of the Commodity Exchange Act (7 U.S.C. 18
3368+6d) is amended— 19
3369+(1) in subsection (a)(2)— 20
3370+(A) in the 1st proviso, by striking ‘‘any 21
3371+bank or trust company’’ and inserting ‘‘any 22
3372+bank, trust company, or qualified digital com-23
3373+modity custodian’’; and 24
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3376+•HR 4763 RH
39963377 (B) by inserting ‘‘: Provided further, That 1
39973378 any such property that is a digital commodity 2
39983379 shall be held in a qualified digital commodity 3
39993380 custodian’’ before the period at the end; and 4
40003381 (2) in subsection (f)(3)(A)(i), by striking ‘‘any 5
40013382 bank or trust company’’ and inserting ‘‘any bank, 6
40023383 trust company, or qualified digital commodity custo-7
40033384 dian’’. 8
4004-SEC. 503. TRADING CERTIFICATION AND APPROVAL FOR 9
3385+SEC. 403. TRADING CERTIFICATION AND APPROVAL FOR 9
40053386 DIGITAL COMMODITIES. 10
40063387 Section 5c of the Commodity Exchange Act (7 U.S.C. 11
40073388 7a–2) is amended— 12
40083389 (1) in subsection (a), by striking ‘‘5(d) and 13
40093390 5b(c)(2)’’ and inserting ‘‘5(d), 5b(c)(2), and 5i(c)’’; 14
40103391 (2) in subsection (b)— 15
40113392 (A) in each of paragraphs (1) and (2), by 16
40123393 inserting ‘‘digital commodity exchange,’’ before 17
40133394 ‘‘derivatives’’; and 18
40143395 (B) in paragraph (3), by inserting ‘‘digital 19
40153396 commodity exchange,’’ before ‘‘derivatives’’ each 20
40163397 place it appears; 21
40173398 (3) in subsection (c)— 22
40183399 (A) in paragraph (2), by inserting ‘‘or par-23
4019-ticipants’’ before ‘‘(in’’; 24 144
4020-•HR 4763 EH
3400+ticipants’’ before ‘‘(in a’’; 24
3401+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00113 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
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40213404 (B) in paragraph (4)(B), by striking 1
40223405 ‘‘1a(10)’’ and inserting ‘‘1a(9)’’; and 2
40233406 (C) in paragraph (5), by adding at the end 3
40243407 the following: 4
40253408 ‘‘(D) S
40263409 PECIAL RULES FOR DIGITAL COM -5
4027-MODITY CONTRACTS .—In certifying any new 6
4028-rule or rule amendment, or listing any new con-7
4029-tract or instrument, in connection with a con-8
4030-tract of sale of a commodity for future delivery, 9
4031-option, swap, or other agreement, contract, or 10
4032-transaction, that is based on or references a 11
4033-digital commodity, a registered entity shall 12
4034-make or rely on a certification under subsection 13
4035-(d) for the digital commodity.’’; and 14
3410+MODITY CONTRACTS.—In certifying any new rule 6
3411+or rule amendment, or listing any new contract 7
3412+or instrument, in connection with a contract of 8
3413+sale of a commodity for future delivery, option, 9
3414+swap, or other agreement, contract, or trans-10
3415+action, that is based on or references a digital 11
3416+commodity, a registered entity shall make or rely 12
3417+on a certification under subsection (d) for the 13
3418+digital commodity.’’; and 14
40363419 (4) by inserting after subsection (c) the fol-15
40373420 lowing: 16
40383421 ‘‘(d) C
40393422 ERTIFICATIONS FOR DIGITALCOMMODITY 17
40403423 T
40413424 RADING.— 18
40423425 ‘‘(1) I
40433426 N GENERAL.—Notwithstanding subsection 19
40443427 (c), for the purposes of listing or offering a digital 20
40453428 commodity for trading in a digital commodity cash 21
4046-or spot market, an eligible entity shall issue a writ-22
4047-ten certification that the digital commodity meets 23
4048-the requirements of this Act (including the regula-24
4049-tions prescribed under this Act). 25 145
4050-•HR 4763 EH
3429+or spot market, an eligible entity shall issue a written 22
3430+certification that the digital commodity meets the re-23
3431+quirements of this Act (including regulations there-24
3432+under). 25
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3435+•HR 4763 RH
40513436 ‘‘(2) CONTENTS OF THE CERTIFICATION .— 1
40523437 ‘‘(A) I
40533438 N GENERAL.—In making a written 2
40543439 certification under this paragraph, the eligible 3
40553440 entity shall furnish to the Commission— 4
40563441 ‘‘(i) an analysis of how the digital 5
4057-commodity meets the requirements of sec-6
4058-tion 5i(c)(3); 7
3442+commodity meets the requirements of section 6
3443+5i(c)(3); 7
40593444 ‘‘(ii) information about the digital 8
40603445 commodity regarding— 9
40613446 ‘‘(I) its purpose and use; 10
40623447 ‘‘(II) its unit creation or release 11
40633448 process; 12
40643449 ‘‘(III) its consensus mechanism; 13
40653450 ‘‘(IV) its governance structure; 14
40663451 ‘‘(V) its participation and dis-15
40673452 tribution; and 16
40683453 ‘‘(VI) its current and proposed 17
40693454 functionality; and 18
40703455 ‘‘(iii) any other information, analysis, 19
40713456 or documentation the Commission may, by 20
40723457 rule, require. 21
40733458 ‘‘(B) R
4074-ELIANCE ON PRIOR DISCLO -22
4075-SURES.—In making a certification under this 23
4076-subsection, an eligible entity may rely on the 24
4077-records and disclosures of any relevant person 25 146
4078-•HR 4763 EH
4079-registered with the Securities and Exchange 1
4080-Commission or other State or Federal agency. 2
3459+ELIANCE ON PRIOR DISCLOSURES .— 22
3460+In making a certification under this subsection, 23
3461+an eligible entity may rely on the records and 24
3462+disclosures of any relevant person registered with 25
3463+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00115 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
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3465+•HR 4763 RH
3466+the Securities and Exchange Commission or 1
3467+other State or Federal agency. 2
40813468 ‘‘(3) M
40823469 ODIFICATIONS.— 3
40833470 ‘‘(A) I
40843471 N GENERAL.—An eligible entity shall 4
40853472 modify a certification made under paragraph 5
40863473 (1) to— 6
40873474 ‘‘(i) account for significant changes in 7
40883475 any information provided to the Commis-8
40893476 sion under paragraph (2)(A)(ii); or 9
40903477 ‘‘(ii) permit or restrict trading in 10
4091-units of a digital commodity held by a re-11
4092-lated person or an affiliated person. 12
3478+units of a digital commodity asset held by 11
3479+a related person or an affiliated person. 12
40933480 ‘‘(B) R
4094-ECERTIFICATION.—Modifications 13
4095-required by this subsection shall be subject to 14
4096-the same disapproval and review process as a 15
4097-new certification under paragraphs (4) and (5). 16
3481+ECERTIFICATION.—Modifications re-13
3482+quired by this subsection shall be subject to the 14
3483+same disapproval and review process as a new 15
3484+certification under paragraphs (4) and (5). 16
40983485 ‘‘(4) D
40993486 ISAPPROVAL.— 17
41003487 ‘‘(A) I
41013488 N GENERAL.—The written certifi-18
41023489 cation described in paragraph (1) shall become 19
41033490 effective unless the Commission finds that the 20
41043491 digital asset does not meet the requirements of 21
4105-this Act or the rules and regulations there-22
4106-under. 23
3492+this Act or the rules and regulations thereunder. 22
41073493 ‘‘(B) A
4108-NALYSIS REQUIRED.—The Commis-24
4109-sion shall include, with any findings referred to 25 147
4110-•HR 4763 EH
3494+NALYSIS REQUIRED.—The Commis-23
3495+sion shall include, with any findings referred to 24
3496+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00116 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
3497+rfrederick on LAP8M3WLY3PROD with BILLS 117
3498+•HR 4763 RH
41113499 in subparagraph (A), a detailed analysis of the 1
41123500 factors on which the decision was based. 2
41133501 ‘‘(C) P
41143502 UBLIC FINDINGS.—The Commission 3
41153503 shall make public any disapproval decision, and 4
41163504 any related findings and analysis, made under 5
41173505 this paragraph. 6
41183506 ‘‘(5) R
41193507 EVIEW.— 7
41203508 ‘‘(A) I
4121-N GENERAL.—Unless the Commis-8
4122-sion makes a disapproval decision under para-9
4123-graph (4), the written certification described in 10
4124-paragraph (1) shall become effective, pursuant 11
4125-to the certification by the eligible entity and no-12
4126-tice of the certification to the public (in a man-13
4127-ner determined by the Commission) on the date 14
4128-that is— 15
4129-‘‘(i) 20 business days after the date 16
4130-the Commission receives the certification 17
4131-(or such shorter period as determined by 18
4132-the Commission by rule or regulation), in 19
4133-the case of a digital commodity that has 20
4134-not been certified under this section or for 21
3509+N GENERAL.—Unless the Commission 8
3510+makes a disapproval decision under paragraph 9
3511+(4), the written certification described in para-10
3512+graph (1) shall become effective, pursuant to the 11
3513+certification by the eligible entity and notice of 12
3514+the certification to the public (in a manner de-13
3515+termined by the Commission) on the date that 14
3516+is— 15
3517+‘‘(i) 20 business days after the date the 16
3518+Commission receives the certification (or 17
3519+such shorter period as determined by the 18
3520+Commission by rule or regulation), in the 19
3521+case of a digital commodity that has not 20
3522+been certified under this section or for 21
41353523 which a certification is being modified 22
41363524 under paragraph (3); or 23
4137-‘‘(ii) 2 business days after the date 24
4138-the Commission receives the certification 25 148
4139-•HR 4763 EH
4140-(or such shorter period as determined by 1
4141-the Commission by rule or regulation) for 2
4142-any digital commodity that has been cer-3
4143-tified under this section. 4
3525+‘‘(ii) 2 business days after the date the 24
3526+Commission receives the certification (or 25
3527+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00117 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
3528+rfrederick on LAP8M3WLY3PROD with BILLS 118
3529+•HR 4763 RH
3530+such shorter period as determined by the 1
3531+Commission by rule or regulation) for any 2
3532+digital commodity that has been certified 3
3533+under this section. 4
41443534 ‘‘(B) E
4145-XTENSIONS.—The time for consid-5
4146-eration under subparagraph (A) may be ex-6
4147-tended through notice to the eligible entity that 7
4148-there are novel or complex issues that require 8
4149-additional time to analyze, that the explanation 9
4150-by the submitting eligible entity is inadequate, 10
4151-or of a potential inconsistency with this Act— 11
4152-‘‘(i) once, for 30 business days, 12
4153-through written notice to the eligible entity 13
4154-by the Chairman; and 14
3535+XTENSIONS.—The time for consider-5
3536+ation under subparagraph (A) may be extended 6
3537+through notice to the eligible entity that there are 7
3538+novel or complex issues that require additional 8
3539+time to analyze, that the explanation by the sub-9
3540+mitting eligible entity is inadequate, or of a po-10
3541+tential inconsistency with this Act— 11
3542+‘‘(i) once, for 30 business days, through 12
3543+written notice to the eligible entity by the 13
3544+Chairman; and 14
41553545 ‘‘(ii) once, for an additional 30 busi-15
4156-ness days, through written notice to the 16
4157-digital commodity exchange from the Com-17
4158-mission that includes a description of any 18
4159-deficiencies with the certification, including 19
3546+ness days, through written notice to the dig-16
3547+ital commodity exchange from the Commis-17
3548+sion that includes a description of any defi-18
3549+ciencies with the certification, including 19
41603550 any— 20
4161-‘‘(I) novel or complex issues 21
4162-which require additional time to ana-22
4163-lyze; 23
4164-‘‘(II) missing information or in-24
4165-adequate explanations; or 25 149
4166-•HR 4763 EH
3551+‘‘(I) novel or complex issues which 21
3552+require additional time to analyze; 22
3553+‘‘(II) missing information or in-23
3554+adequate explanations; or 24
3555+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00118 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
3556+rfrederick on LAP8M3WLY3PROD with BILLS 119
3557+•HR 4763 RH
41673558 ‘‘(III) potential inconsistencies 1
41683559 with this Act. 2
41693560 ‘‘(6) C
41703561 ERTIFICATION REQUIRED .—Notwith-3
41713562 standing any other provision of this Act, a registered 4
4172-entity or other entity registered with the Commis-5
4173-sion shall not list for trading, accept for clearing, 6
4174-offer to enter into, enter into, execute, confirm the 7
4175-execution of, or conduct any office or business any-8
4176-where in the United States, its territories or posses-9
4177-sions, for the purpose of soliciting, or accepting any 10
4178-order for, or otherwise dealing in, any transaction 11
4179-in, or in connection with, a digital commodity, unless 12
4180-a certification has been made under this section for 13
4181-the digital commodity. 14
3563+entity or other entity registered with the Commission 5
3564+shall not list for trading, accept for clearing, offer to 6
3565+enter into, enter into, execute, confirm the execution 7
3566+of, or conduct any office or business anywhere in the 8
3567+United States, its territories or possessions, for the 9
3568+purpose of soliciting, or accepting any order for, or 10
3569+otherwise dealing in, any transaction in, or in con-11
3570+nection with, a digital commodity, unless a certifi-12
3571+cation has been made under this section for the dig-13
3572+ital commodity. 14
41823573 ‘‘(7) P
4183-RIOR APPROVAL BEFORE REGISTRA -15
4184-TION.— 16
4185-‘‘(A) I
4186-N GENERAL.—A person applying for 17
4187-registration with the Commission for the pur-18
4188-poses of listing or offering a digital commodity 19
4189-for trading in a digital commodity cash or spot 20
4190-market may request that the Commission grant 21
4191-prior approval for the person to list or offer the 22
4192-digital commodity on being registered with the 23
4193-Commission. 24 150
4194-•HR 4763 EH
4195-‘‘(B) REQUEST FOR PRIOR APPROVAL .—A 1
4196-person seeking prior approval under subpara-2
4197-graph (A) shall furnish the Commission with a 3
4198-written certification that the digital commodity 4
4199-meets the requirements of this Act (including 5
4200-the regulations prescribed under this Act) and 6
4201-the information described in paragraph (2). 7
3574+RIOR APPROVAL.— 15
3575+‘‘(A) N
3576+EW REGISTRANTS.—A digital com-16
3577+modity exchange may only list, as of the effective 17
3578+date of approval of the registration of the digital 18
3579+commodity exchange, the digital commodity for 19
3580+which the digital commodity exchange has re-20
3581+ceived prior approval under this subsection. 21
3582+‘‘(B) D
3583+EADLINE.—The Commission shall 22
3584+take final action on a request for prior approval 23
3585+not later than 90 business days after submission 24
3586+of the request, unless the person submitting the 25
3587+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00119 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
3588+rfrederick on LAP8M3WLY3PROD with BILLS 120
3589+•HR 4763 RH
3590+request agrees to an extension of the time limita-1
3591+tion established under this subparagraph. 2
42023592 ‘‘(C) D
4203-EADLINE.—The Commission shall 8
4204-take final action on a request for prior approval 9
4205-not later than 90 business days after submis-10
4206-sion of the request, unless the person submit-11
4207-ting the request agrees to an extension of the 12
4208-time limitation established under this subpara-13
4209-graph. 14
4210-‘‘(D) D
4211-ISAPPROVAL.— 15
4212-‘‘(i) I
4213-N GENERAL.—The Commission 16
4214-shall approve a new contract or other in-17
4215-strument unless the Commission finds that 18
4216-the new contract or other instrument 19
4217-would violate this Act (including a regula-20
4218-tions prescribed under this Act). 21
4219-‘‘(ii) A
4220-NALYSIS REQUIRED .—The 22
4221-Commission shall include, with any find-23
4222-ings made under clause (i), a detailed anal-24 151
4223-•HR 4763 EH
4224-ysis of the factors on which the decision is 1
4225-based. 2
4226-‘‘(iii) P
4227-UBLIC FINDINGS.—The Com-3
4228-mission shall make public any disapproval 4
4229-decision, and any related findings and 5
4230-analysis, made under this paragraph. 6
3593+ISAPPROVAL.—The Commission may 3
3594+disapprove a request for prior approval under 4
3595+subparagraph (B) in accordance with criteria 5
3596+applicable to disapproval in paragraph (4). 6
42313597 ‘‘(8) E
42323598 LIGIBLE ENTITY DEFINED.—In this sub-7
42333599 section, the term ‘eligible entity’ means a registered 8
42343600 entity or group of registered entities acting jointly.’’. 9
4235-SEC. 504. REGISTRATION OF DIGITAL COMMODITY EX-10
3601+SEC. 404. REGISTRATION OF DIGITAL COMMODITY EX-10
42363602 CHANGES. 11
4237-The Commodity Exchange Act (7 U.S.C. 1 et seq.) 12
4238-is amended by inserting after section 5h the following: 13
3603+The Commodity Exchange Act (7 U.S.C. 1 et seq.) is 12
3604+amended by inserting after section 5h the following: 13
42393605 ‘‘SEC. 5i. REGISTRATION OF DIGITAL COMMODITY EX-14
42403606 CHANGES. 15
42413607 ‘‘(a) I
42423608 NGENERAL.— 16
42433609 ‘‘(1) R
42443610 EGISTRATION.— 17
42453611 ‘‘(A) I
42463612 N GENERAL.—A trading facility that 18
4247-offers or seeks to offer a cash or spot market 19
4248-in at least 1 digital commodity shall register 20
4249-with the Commission as a digital commodity ex-21
3613+offers or seeks to offer a cash or spot market in 19
3614+at least 1 digital commodity shall register with 20
3615+the Commission as a digital commodity ex-21
42503616 change. 22
42513617 ‘‘(B) A
42523618 PPLICATION.—A person desiring to 23
42533619 register as a digital commodity exchange shall 24
4254-submit to the Commission an application in 25 152
4255-•HR 4763 EH
3620+submit to the Commission an application in 25
3621+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00120 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
3622+rfrederick on LAP8M3WLY3PROD with BILLS 121
3623+•HR 4763 RH
42563624 such form and containing such information as 1
42573625 the Commission may require for the purpose of 2
42583626 making the determinations required for ap-3
42593627 proval. 4
42603628 ‘‘(C) E
4261-XEMPTIONS.—A trading facility 5
4262-that offers or seeks to offer a cash or spot mar-6
4263-ket in at least 1 digital commodity shall not be 7
4264-required to register under this section if the 8
4265-trading facility— 9
3629+XEMPTIONS.—A trading facility that 5
3630+offers or seeks to offer a cash or spot market in 6
3631+at least 1 digital commodity shall not be re-7
3632+quired to register under this section if the trad-8
3633+ing facility— 9
42663634 ‘‘(i) permits no more than a de mini-10
4267-mis amount of trading activity in a digital 11
4268-commodity; or 12
4269-‘‘(ii) serves only customers in a single 13
4270-State or territory. 14
3635+mis amount of trading activity; or 11
3636+‘‘(ii) serves only customers in a single 12
3637+State or territory. 13
42713638 ‘‘(2) A
3639+DDITIONAL REGISTRATIONS.— 14
3640+‘‘(A) W
3641+ITH THE COMMISSION.— 15
3642+‘‘(i) I
3643+N GENERAL.—A registered digital 16
3644+commodity exchange may also register as— 17
3645+‘‘(I) a designated contract market; 18
3646+or 19
3647+‘‘(II) a swap execution facility. 20
3648+‘‘(ii) R
3649+ULES.—For an entity with mul-21
3650+tiple registrations under clause (i), the 22
3651+Commission— 23
3652+‘‘(I) shall prescribe rules to ex-24
3653+empt the entity from duplicative, con-25
3654+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00121 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
3655+rfrederick on LAP8M3WLY3PROD with BILLS 122
3656+•HR 4763 RH
3657+flicting, or unduly burdensome provi-1
3658+sions of this Act and the rules under 2
3659+this Act, to the extent such an exemp-3
3660+tion would foster the development of 4
3661+fair and orderly cash or spot markets 5
3662+in digital commodities, be necessary or 6
3663+appropriate in the public interest, and 7
3664+be consistent with the protection of cus-8
3665+tomers; and 9
3666+‘‘(II) may, after an analysis of 10
3667+the risks and benefits, prescribe rules to 11
3668+provide for portfolio margining, as 12
3669+may be necessary to protect market 13
3670+participants, promote fair and equi-14
3671+table trading in digital commodity 15
3672+markets, and promote responsible eco-16
3673+nomic or financial innovation. 17
3674+‘‘(B) W
3675+ITH THE SECURITIES AND EX -18
3676+CHANGE COMMISSION.—A registered digital com-19
3677+modity exchange may register with the Securities 20
3678+and Exchange Commission as a digital asset 21
3679+trading system to list or trade contracts of sale 22
3680+for digital assets deemed securities. 23
3681+‘‘(C) W
3682+ITH A REGISTERED FUTURES ASSO -24
3683+CIATION.— 25
3684+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00122 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
3685+rfrederick on LAP8M3WLY3PROD with BILLS 123
3686+•HR 4763 RH
3687+‘‘(i) IN GENERAL.—A registered digital 1
3688+commodity exchange shall also be a member 2
3689+of a registered futures association and com-3
3690+ply with rules related to such activity, if the 4
3691+registered digital commodity exchange ac-5
3692+cepts customer funds required to be seg-6
3693+regated under subsection (d). 7
3694+‘‘(ii) R
3695+ULEMAKING REQUIRED .—The 8
3696+Commission shall require any registered fu-9
3697+tures association with a digital commodity 10
3698+exchange as a member to provide such rules 11
3699+as may be necessary to further compliance 12
3700+with subsection (d), protect customers, and 13
3701+promote the public interest. 14
3702+‘‘(D) R
3703+EGISTRATION REQUIRED.—A person 15
3704+required to be registered as a digital commodity 16
3705+exchange under this section shall register with 17
3706+the Commission as such regardless of whether the 18
3707+person is registered with another State or Fed-19
3708+eral regulator. 20
3709+‘‘(b) T
3710+RADING.— 21
3711+‘‘(1) P
3712+ROHIBITION ON CERTAIN TRADING PRAC -22
3713+TICES.— 23
3714+‘‘(A) Section 4b shall apply to any agree-24
3715+ment, contract, or transaction in a digital com-25
3716+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00123 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
3717+rfrederick on LAP8M3WLY3PROD with BILLS 124
3718+•HR 4763 RH
3719+modity as if the agreement, contract, or trans-1
3720+action were a contract of sale of a commodity for 2
3721+future delivery. 3
3722+‘‘(B) Section 4c shall apply to any agree-4
3723+ment, contract, or transaction in a digital com-5
3724+modity as if the agreement, contract, or trans-6
3725+action were a transaction involving the purchase 7
3726+or sale of a commodity for future delivery. 8
3727+‘‘(2) P
3728+ROHIBITION ON ACTING AS A 9
3729+COUNTERPARTY.— 10
3730+‘‘(A) I
3731+N GENERAL.—A digital commodity 11
3732+exchange or any affiliate of such an exchange 12
3733+shall not trade on or subject to the rules of the 13
3734+digital commodity exchange for its own account. 14
3735+‘‘(B) E
3736+XCEPTIONS.—The Commission shall, 15
3737+by rule, permit a digital commodity exchange or 16
3738+any affiliate of a digital commodity exchange to 17
3739+engage in trading on an affiliated exchange so 18
3740+long as the trading is not solely for the purpose 19
3741+of the profit of the exchange, including the fol-20
3742+lowing: 21
3743+‘‘(i) C
3744+USTOMER DIRECTION.—A trans-22
3745+action for, or entered into at the direction 23
3746+of, or for the benefit of, an unaffiliated cus-24
3747+tomer. 25
3748+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00124 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
3749+rfrederick on LAP8M3WLY3PROD with BILLS 125
3750+•HR 4763 RH
3751+‘‘(ii) RISK MANAGEMENT .—A trans-1
3752+action to manage the risks associated with 2
3753+the digital commodity business of the ex-3
3754+change. 4
3755+‘‘(iii) F
3756+UNCTIONAL USE.—A trans-5
3757+action related to the functional operation of 6
3758+a blockchain network. 7
3759+‘‘(C) N
3760+OTICE REQUIREMENT.—In order for 8
3761+a digital commodity exchange or any affiliate of 9
3762+a digital commodity exchange to engage in trad-10
3763+ing on the affiliated exchange pursuant to sub-11
3764+section (B), notice must be given to the Commis-12
3765+sion that shall enumerate how any proposed ac-13
3766+tivity is consistent with the exceptions in sub-14
3767+section (B) and the principles of the Act. 15
3768+‘‘(D) D
3769+ELEGATION.—The Commission may, 16
3770+by rule, delegate authority to the Director of the 17
3771+Division of Market Oversight, or such other em-18
3772+ployee or employees as the Director of the Divi-19
3773+sion of Market Oversight may designate from 20
3774+time to time, to carry out these provisions. 21
3775+‘‘(3) T
3776+RADING SECURITIES.—A registered digital 22
3777+commodity exchange that is also registered with the 23
3778+Securities and Exchange Commission may offer a 24
3779+contract of sale of a digital asset deemed a security. 25
3780+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00125 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
3781+rfrederick on LAP8M3WLY3PROD with BILLS 126
3782+•HR 4763 RH
3783+‘‘(4) RULES FOR CERTAIN DIGITAL ASSET 1
3784+SALES.—The digital commodity exchange shall have 2
3785+in place such rules as may be necessary to reasonably 3
3786+ensure the orderly sale of any unit of a digital com-4
3787+modity sold by a related person or an affiliated per-5
3788+son. 6
3789+‘‘(c) C
3790+OREPRINCIPLES FORDIGITALCOMMODITYEX-7
3791+CHANGES.— 8
3792+‘‘(1) C
3793+OMPLIANCE WITH CORE PRINCIPLES .— 9
3794+‘‘(A) I
3795+N GENERAL.—To be registered, and 10
3796+maintain registration, as a digital commodity 11
3797+exchange, a digital commodity exchange shall 12
3798+comply with— 13
3799+‘‘(i) the core principles described in 14
3800+this subsection; and 15
3801+‘‘(ii) any requirement that the Com-16
3802+mission may impose by rule or regulation 17
3803+pursuant to section 8a(5). 18
3804+‘‘(B) R
3805+EASONABLE DISCRETION OF A DIG -19
3806+ITAL COMMODITY EXCHANGE .—Unless otherwise 20
3807+determined by the Commission by rule or regula-21
3808+tion, a digital commodity exchange described in 22
3809+subparagraph (A) shall have reasonable discre-23
3810+tion in establishing the manner in which the 24
3811+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00126 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
3812+rfrederick on LAP8M3WLY3PROD with BILLS 127
3813+•HR 4763 RH
3814+digital commodity exchange complies with the 1
3815+core principles described in this subsection. 2
3816+‘‘(2) C
3817+OMPLIANCE WITH RULES .—A digital com-3
3818+modity exchange shall— 4
3819+‘‘(A) establish and enforce compliance with 5
3820+any rule of the digital commodity exchange, in-6
3821+cluding— 7
3822+‘‘(i) the terms and conditions of the 8
3823+trades traded or processed on or through the 9
3824+digital commodity exchange; and 10
3825+‘‘(ii) any limitation on access to the 11
3826+digital commodity exchange; 12
3827+‘‘(B) establish and enforce trading, trade 13
3828+processing, and participation rules that will 14
3829+deter abuses and have the capacity to detect, in-15
3830+vestigate, and enforce those rules, including 16
3831+means— 17
3832+‘‘(i) to provide market participants 18
3833+with impartial access to the market; and 19
3834+‘‘(ii) to capture information that may 20
3835+be used in establishing whether rule viola-21
3836+tions have occurred; and 22
3837+‘‘(C) establish rules governing the operation 23
3838+of the exchange, including rules specifying trad-24
3839+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00127 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
3840+rfrederick on LAP8M3WLY3PROD with BILLS 128
3841+•HR 4763 RH
3842+ing procedures to be used in entering and exe-1
3843+cuting orders traded or posted on the facility. 2
3844+‘‘(3) L
3845+ISTING STANDARDS FOR DIGITAL COMMOD -3
3846+ITIES.— 4
3847+‘‘(A) I
3848+N GENERAL.—A digital commodity 5
3849+exchange shall permit trading only in a digital 6
3850+commodity that is not readily susceptible to ma-7
3851+nipulation. 8
3852+‘‘(B) P
3853+UBLIC INFORMATION REQUIRE -9
3854+MENTS.— 10
3855+‘‘(i) I
3856+N GENERAL.—A digital com-11
3857+modity exchange shall permit trading only 12
3858+in a digital commodity if the information 13
3859+required in clause (ii) is correct, current, 14
3860+and available to the public. 15
3861+‘‘(ii) R
3862+EQUIRED INFORMATION.— With 16
3863+respect to a digital commodity and each 17
3864+blockchain system to which the digital com-18
3865+modity relates for which the digital com-19
3866+modity exchange will make the digital com-20
3867+modity available to the customers of the dig-21
3868+ital commodity exchange, the information 22
3869+required in this clause is as follows: 23
3870+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00128 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
3871+rfrederick on LAP8M3WLY3PROD with BILLS 129
3872+•HR 4763 RH
3873+‘‘(I) SOURCE CODE.—The source 1
3874+code for any blockchain system to 2
3875+which the digital commodity relates. 3
3876+‘‘(II) T
3877+RANSACTION HISTORY.—A 4
3878+narrative description of the steps nec-5
3879+essary to independently access, search, 6
3880+and verify the transaction history of 7
3881+any blockchain system to which the 8
3882+digital commodity relates. 9
3883+‘‘(III) D
3884+IGITAL ASSET ECONOM -10
3885+ICS.—A narrative description of the 11
3886+purpose of any blockchain system to 12
3887+which the digital asset relates and the 13
3888+operation of any such blockchain sys-14
3889+tem, including— 15
3890+‘‘(aa) information explaining 16
3891+the launch and supply process, in-17
3892+cluding the number of digital as-18
3893+sets to be issued in an initial allo-19
3894+cation, the total number of digital 20
3895+assets to be created, the release 21
3896+schedule for the digital assets, and 22
3897+the total number of digital assets 23
3898+then outstanding; 24
3899+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00129 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
3900+rfrederick on LAP8M3WLY3PROD with BILLS 130
3901+•HR 4763 RH
3902+‘‘(bb) information detailing 1
3903+any applicable consensus mecha-2
3904+nism or process for validating 3
3905+transactions, method of generating 4
3906+or mining digital assets, and any 5
3907+process for burning or destroying 6
3908+digital assets on the blockchain 7
3909+system; 8
3910+‘‘(cc) an explanation of gov-9
3911+ernance mechanisms for imple-10
3912+menting changes to the blockchain 11
3913+system or forming consensus 12
3914+among holders of the digital as-13
3915+sets; and 14
3916+‘‘(dd) sufficient information 15
3917+for a third party to create a tool 16
3918+for verifying the transaction his-17
3919+tory of the digital asset. 18
3920+‘‘(IV) T
3921+RADING VOLUME AND VOL -19
3922+ATILITY.—The trading volume and vol-20
3923+atility of the digital commodity. 21
3924+‘‘(V) A
3925+DDITIONAL INFORMA -22
3926+TION.—Such additional information as 23
3927+the Commission may, by rule, deter-24
3928+mine to be necessary for a customer to 25
3929+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00130 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
3930+rfrederick on LAP8M3WLY3PROD with BILLS 131
3931+•HR 4763 RH
3932+understand the financial and oper-1
3933+ational risks of a digital commodity, 2
3934+and to be in the public interest or in 3
3935+furtherance of the requirements of this 4
3936+Act. 5
3937+‘‘(iii) F
3938+ORMAT.—The Commission shall 6
3939+prescribe rules and regulations for the 7
3940+standardization and simplification of dis-8
3941+closures under clause (ii), including requir-9
3942+ing that disclosures— 10
3943+‘‘(I) be conspicuous; 11
3944+‘‘(II) use plain language com-12
3945+prehensible to customers; and 13
3946+‘‘(III) succinctly explain the in-14
3947+formation that is required to be com-15
3948+municated to the customer. 16
3949+‘‘(C) A
3950+DDITIONAL LISTING CONSIDER -17
3951+ATIONS.—In addition to the requirements of sub-18
3952+paragraphs (A) and (B), a digital commodity 19
3953+exchange shall consider— 20
3954+‘‘(i) if a sufficient percentage of the 21
3955+units of the digital asset are units of a dig-22
3956+ital commodity to permit robust price dis-23
3957+covery; 24
3958+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00131 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
3959+rfrederick on LAP8M3WLY3PROD with BILLS 132
3960+•HR 4763 RH
3961+‘‘(ii) if it is reasonably unlikely that 1
3962+the transaction history can be fraudulently 2
3963+altered by any person or group of persons 3
3964+acting collectively; 4
3965+‘‘(iii) if the operating structure and 5
3966+system of the digital commodity is secure 6
3967+from cybersecurity threats; 7
3968+‘‘(iv) if the functionality of the digital 8
3969+commodity will protect holders from oper-9
3970+ational failures; 10
3971+‘‘(v) if sufficient public information 11
3972+about the operation, functionality, and use 12
3973+of the digital commodity is available; and 13
3974+‘‘(vi) any other factor which the Com-14
3975+mission has, by rule, determined to be in 15
3976+the public interest or in furtherance of the 16
3977+requirements of this Act. 17
3978+‘‘(D) R
3979+ESTRICTED DIGITAL ASSETS.—A dig-18
3980+ital commodity exchange shall not permit the 19
3981+trading of a unit of a digital asset that is a re-20
3982+stricted digital asset. 21
3983+‘‘(4) T
3984+REATMENT OF CUSTOMER ASSETS .—A dig-22
3985+ital commodity exchange shall establish standards 23
3986+and procedures that are designed to protect and en-24
3987+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00132 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
3988+rfrederick on LAP8M3WLY3PROD with BILLS 133
3989+•HR 4763 RH
3990+sure the safety of customer money, assets, and prop-1
3991+erty. 2
3992+‘‘(5) M
3993+ONITORING OF TRADING AND TRADE PROC -3
3994+ESSING.— 4
3995+‘‘(A) I
3996+N GENERAL.—A digital commodity 5
3997+exchange shall provide a competitive, open, and 6
3998+efficient market and mechanism for executing 7
3999+transactions that protects the price discovery 8
4000+process of trading on the exchange. 9
4001+‘‘(B) P
4002+ROTECTION OF MARKETS AND MAR -10
4003+KET PARTICIPANTS.—A digital commodity ex-11
4004+change shall establish and enforce rules— 12
4005+‘‘(i) to protect markets and market 13
4006+participants from abusive practices com-14
4007+mitted by any party, including abusive 15
4008+practices committed by a party acting as 16
4009+an agent for a participant; and 17
4010+‘‘(ii) to promote fair and equitable 18
4011+trading on the exchange. 19
4012+‘‘(C) T
4013+RADING PROCEDURES .—A digital 20
4014+commodity exchange shall— 21
4015+‘‘(i) establish and enforce rules or 22
4016+terms and conditions defining, or specifica-23
4017+tions detailing— 24
4018+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00133 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4019+rfrederick on LAP8M3WLY3PROD with BILLS 134
4020+•HR 4763 RH
4021+‘‘(I) trading procedures to be used 1
4022+in entering and executing orders trad-2
4023+ed on or through the facilities of the 3
4024+digital commodity exchange; and 4
4025+‘‘(II) procedures for trade proc-5
4026+essing of digital commodities on or 6
4027+through the facilities of the digital 7
4028+commodity exchange; and 8
4029+‘‘(ii) monitor trading in digital com-9
4030+modities to prevent manipulation, price dis-10
4031+tortion, and disruptions of the delivery or 11
4032+cash settlement process through surveillance, 12
4033+compliance, and disciplinary practices and 13
4034+procedures, including methods for con-14
4035+ducting real-time monitoring of trading 15
4036+and comprehensive and accurate trade re-16
4037+constructions. 17
4038+‘‘(6) A
4039+BILITY TO OBTAIN INFORMATION .—A dig-18
4040+ital commodity exchange shall— 19
4041+‘‘(A) establish and enforce rules that will 20
4042+allow the facility to obtain any necessary infor-21
4043+mation to perform any of the functions described 22
4044+in this section; 23
4045+‘‘(B) provide the information to the Com-24
4046+mission on request; and 25
4047+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00134 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4048+rfrederick on LAP8M3WLY3PROD with BILLS 135
4049+•HR 4763 RH
4050+‘‘(C) have the capacity to carry out such 1
4051+international information-sharing agreements as 2
4052+the Commission may require. 3
4053+‘‘(7) E
4054+MERGENCY AUTHORITY .—A digital com-4
4055+modity exchange shall adopt rules to provide for the 5
4056+exercise of emergency authority, in consultation or co-6
4057+operation with the Commission or a registered entity, 7
4058+as is necessary and appropriate, including the au-8
4059+thority to facilitate the liquidation or transfer of open 9
4060+positions in any digital commodity or to suspend or 10
4061+curtail trading in a digital commodity. 11
4062+‘‘(8) T
4063+IMELY PUBLICATION OF TRADING INFOR -12
4064+MATION.— 13
4065+‘‘(A) I
4066+N GENERAL.—A digital commodity 14
4067+exchange shall make public timely information 15
4068+on price, trading volume, and other trading data 16
4069+on digital commodities to the extent prescribed 17
4070+by the Commission. 18
4071+‘‘(B) C
4072+APACITY OF DIGITAL COMMODITY EX -19
4073+CHANGE.—A digital commodity exchange shall 20
4074+have the capacity to electronically capture and 21
4075+transmit trade information with respect to 22
4076+transactions executed on the exchange. 23
4077+‘‘(9) R
4078+ECORDKEEPING AND REPORTING .— 24
4079+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00135 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4080+rfrederick on LAP8M3WLY3PROD with BILLS 136
4081+•HR 4763 RH
4082+‘‘(A) IN GENERAL.—A digital commodity 1
4083+exchange shall— 2
4084+‘‘(i) maintain records of all activities 3
4085+relating to the business of the facility, in-4
4086+cluding a complete audit trail, in a form 5
4087+and manner acceptable to the Commission 6
4088+for a period of 5 years; 7
4089+‘‘(ii) report to the Commission, in a 8
4090+form and manner acceptable to the Commis-9
4091+sion, such information as the Commission 10
4092+determines to be necessary or appropriate 11
4093+for the Commission to perform the duties of 12
4094+the Commission under this Act; and 13
4095+‘‘(iii) keep any such records of digital 14
4096+commodities which relate to a security open 15
4097+to inspection and examination by the Secu-16
4098+rities and Exchange Commission. 17
4099+‘‘(B) I
4100+NFORMATION-SHARING.—Subject to 18
4101+section 8, and on request, the Commission shall 19
4102+share information collected under subparagraph 20
4103+(A) with— 21
4104+‘‘(i) the Board; 22
4105+‘‘(ii) the Securities and Exchange 23
4106+Commission; 24
4107+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00136 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4108+rfrederick on LAP8M3WLY3PROD with BILLS 137
4109+•HR 4763 RH
4110+‘‘(iii) each appropriate Federal bank-1
4111+ing agency; 2
4112+‘‘(iv) each appropriate State bank su-3
4113+pervisor (within the meaning of section 3 of 4
4114+the Federal Deposit Insurance Act); 5
4115+‘‘(v) the Financial Stability Oversight 6
4116+Council; 7
4117+‘‘(vi) the Department of Justice; and 8
4118+‘‘(vii) any other person that the Com-9
4119+mission determines to be appropriate, in-10
4120+cluding— 11
4121+‘‘(I) foreign financial supervisors 12
4122+(including foreign futures authorities); 13
4123+‘‘(II) foreign central banks; and 14
4124+‘‘(III) foreign ministries. 15
4125+‘‘(C) C
4126+ONFIDENTIALITY AGREEMENT .—Be-16
4127+fore the Commission may share information with 17
4128+any entity described in subparagraph (B), the 18
4129+Commission shall receive a written agreement 19
4130+from the entity stating that the entity shall abide 20
4131+by the confidentiality requirements described in 21
4132+section 8 relating to the information on digital 22
4133+commodities that is provided. 23
4134+‘‘(D) P
4135+ROVIDING INFORMATION.—A digital 24
4136+commodity exchange shall provide to the Com-25
4137+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00137 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4138+rfrederick on LAP8M3WLY3PROD with BILLS 138
4139+•HR 4763 RH
4140+mission (including any designee of the Commis-1
4141+sion) information under subparagraph (A) in 2
4142+such form and at such frequency as is required 3
4143+by the Commission. 4
4144+‘‘(10) A
4145+NTITRUST CONSIDERATIONS.—Unless nec-5
4146+essary or appropriate to achieve the purposes of this 6
4147+Act, a digital commodity exchange shall not— 7
4148+‘‘(A) adopt any rules or take any actions 8
4149+that result in any unreasonable restraint of 9
4150+trade; or 10
4151+‘‘(B) impose any material anticompetitive 11
4152+burden on trading. 12
4153+‘‘(11) C
4154+ONFLICTS OF INTEREST .—A registered 13
4155+digital commodity exchange shall implement conflict- 14
4156+of-interest systems and procedures that— 15
4157+‘‘(A) establish structural and institutional 16
4158+safeguards— 17
4159+‘‘(i) to minimize conflicts of interest 18
4160+that might potentially bias the judgment or 19
4161+supervision of the digital commodity ex-20
4162+change and contravene the principles of fair 21
4163+and equitable trading and the business con-22
4164+duct standards described in this Act, includ-23
4165+ing conflicts arising out of transactions or 24
4166+arrangements with affiliates (including af-25
4167+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00138 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4168+rfrederick on LAP8M3WLY3PROD with BILLS 139
4169+•HR 4763 RH
4170+filiates engaging in digital commodity ac-1
4171+tivities) which may include information 2
4172+partitions and the legal separation of dif-3
4173+ferent persons or entities involved in digital 4
4174+commodity activities; and 5
4175+‘‘(ii) to ensure that the activities of 6
4176+any person within the digital commodity 7
4177+exchange or any affiliated entity relating to 8
4178+research or analysis of the price or market 9
4179+for any digital commodity or acting in a 10
4180+role of providing dealing, brokering, or ad-11
4181+vising activities are separated by appro-12
4182+priate informational partitions within the 13
4183+digital commodity exchange or any affili-14
4184+ated entity from the review, pressure, or 15
4185+oversight of persons whose involvement in 16
4186+pricing, trading, exchange, or clearing ac-17
4187+tivities might potentially bias their judg-18
4188+ment or supervision and contravene the core 19
4189+principles of open access and the business 20
4190+conduct standards described in this Act; 21
4191+and 22
4192+‘‘(B) address such other issues as the Com-23
4193+mission determines to be appropriate. 24
4194+‘‘(12) F
4195+INANCIAL RESOURCES.— 25
4196+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00139 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4197+rfrederick on LAP8M3WLY3PROD with BILLS 140
4198+•HR 4763 RH
4199+‘‘(A) IN GENERAL.—A digital commodity 1
4200+exchange shall have adequate financial, oper-2
4201+ational, and managerial resources, as determined 3
4202+by the Commission, to discharge each responsi-4
4203+bility of the digital commodity exchange. 5
4204+‘‘(B) M
4205+INIMUM AMOUNT OF FINANCIAL RE -6
4206+SOURCES.—A digital commodity exchange shall 7
4207+possess financial resources that, at a minimum, 8
4208+exceed the total amount that would enable the 9
4209+digital commodity exchange to conduct an or-10
4210+derly wind-down of its activities. 11
4211+‘‘(13) D
4212+ISCIPLINARY PROCEDURES .—A digital 12
4213+commodity exchange shall establish and enforce dis-13
4214+ciplinary procedures that authorize the digital com-14
4215+modity exchange to discipline, suspend, or expel mem-15
4216+bers or market participants that violate the rules of 16
4217+the digital commodity exchange, or similar methods 17
4218+for performing the same functions, including delega-18
4219+tion of the functions to third parties. 19
4220+‘‘(14) G
4221+OVERNANCE FITNESS STANDARDS .— 20
4222+‘‘(A) G
4223+OVERNANCE ARRANGEMENTS .—A 21
4224+digital commodity exchange shall establish gov-22
4225+ernance arrangements that are transparent to 23
4226+fulfill public interest requirements. 24
4227+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00140 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4228+rfrederick on LAP8M3WLY3PROD with BILLS 141
4229+•HR 4763 RH
4230+‘‘(B) FITNESS STANDARDS.—A digital com-1
4231+modity exchange shall establish and enforce ap-2
4232+propriate fitness standards for— 3
4233+‘‘(i) directors; and 4
4234+‘‘(ii) any individual or entity with di-5
4235+rect access to, or control of, customer assets. 6
4236+‘‘(15) S
4237+YSTEM SAFEGUARDS .—A digital com-7
4238+modity exchange shall— 8
4239+‘‘(A) establish and maintain a program of 9
4240+risk analysis and oversight to identify and mini-10
4241+mize sources of operational and security risks, 11
4242+through the development of appropriate controls 12
4243+and procedures, and automated systems, that— 13
4244+‘‘(i) are reliable and secure; and 14
4245+‘‘(ii) have adequate scalable capacity; 15
4246+‘‘(B) establish and maintain emergency pro-16
4247+cedures, backup facilities, and a plan for disaster 17
4248+recovery that allow for— 18
4249+‘‘(i) the timely recovery and resump-19
4250+tion of operations; and 20
4251+‘‘(ii) the fulfillment of the responsibil-21
4252+ities and obligations of the digital com-22
4253+modity exchange; and 23
4254+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00141 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4255+rfrederick on LAP8M3WLY3PROD with BILLS 142
4256+•HR 4763 RH
4257+‘‘(C) periodically conduct tests to verify that 1
4258+the backup resources of the digital commodity ex-2
4259+change are sufficient to ensure continued— 3
4260+‘‘(i) order processing and trade match-4
4261+ing; 5
4262+‘‘(ii) price reporting; 6
4263+‘‘(iii) market surveillance; and 7
4264+‘‘(iv) maintenance of a comprehensive 8
4265+and accurate audit trail. 9
4266+‘‘(d) H
4267+OLDING OFCUSTOMERASSETS.— 10
4268+‘‘(1) I
4269+N GENERAL.—A digital commodity ex-11
4270+change shall hold customer money, assets, and prop-12
4271+erty in a manner to minimize the risk of loss to the 13
4272+customer or unreasonable delay in the access to the 14
4273+money, assets, and property of the customer. 15
4274+‘‘(A) S
4275+EGREGATION OF FUNDS.— 16
4276+‘‘(i) I
4277+N GENERAL.—A digital com-17
4278+modity exchange shall treat and deal with 18
4279+all money, assets, and property that is re-19
4280+ceived by the digital commodity exchange, 20
4281+or accrues to a customer as the result of 21
4282+trading in digital commodities, as belonging 22
4283+to the customer. 23
4284+‘‘(ii) C
4285+OMMINGLING PROHIBITED .— 24
4286+Money, assets, and property of a customer 25
4287+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00142 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4288+rfrederick on LAP8M3WLY3PROD with BILLS 143
4289+•HR 4763 RH
4290+described in clause (i) shall be separately 1
4291+accounted for and shall not be commingled 2
4292+with the funds of the digital commodity ex-3
4293+change or be used to margin, secure, or 4
4294+guarantee any trades or accounts of any 5
4295+customer or person other than the person for 6
4296+whom the same are held. 7
4297+‘‘(B) E
4298+XCEPTIONS.— 8
4299+‘‘(i) U
4300+SE OF FUNDS.— 9
4301+‘‘(I) I
4302+N GENERAL .—Notwith-10
4303+standing subparagraph (A), money, as-11
4304+sets, and property of customers of a 12
4305+digital commodity exchange described 13
4306+in subparagraph (A) may, for conven-14
4307+ience, be commingled and deposited in 15
4308+the same account or accounts with any 16
4309+bank, trust company, derivatives clear-17
4310+ing organization, or qualified digital 18
4311+commodity custodian. 19
4312+‘‘(II) W
4313+ITHDRAWAL.—Notwith-20
4314+standing subparagraph (A), such share 21
4315+of the money, assets, and property de-22
4316+scribed in item (aa) as in the normal 23
4317+course of business shall be necessary to 24
4318+margin, guarantee, secure, transfer, 25
4319+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00143 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4320+rfrederick on LAP8M3WLY3PROD with BILLS 144
4321+•HR 4763 RH
4322+adjust, or settle a contract of sale of a 1
4323+digital commodity with a registered 2
4324+entity may be withdrawn and applied 3
4325+to such purposes, including the pay-4
4326+ment of commissions, brokerage, inter-5
4327+est, taxes, storage, and other charges, 6
4328+lawfully accruing in connection with 7
4329+the contract of sale of a digital com-8
4330+modity. 9
4331+‘‘(ii) C
4332+OMMISSION ACTION.—Notwith-10
4333+standing subparagraph (A), in accordance 11
4334+with such terms and conditions as the Com-12
4335+mission may prescribe by rule, regulation, 13
4336+or order, any money, assets, or property of 14
4337+the customers of a digital commodity ex-15
4338+change described in subparagraph (A) may 16
4339+be commingled and deposited in customer 17
4340+accounts with any other money, assets, or 18
4341+property received by the digital commodity 19
4342+exchange and required by the Commission 20
4343+to be separately accounted for and treated 21
4344+and dealt with as belonging to the customer 22
4345+of the digital commodity exchange. 23
4346+‘‘(2) P
4347+ERMITTED INVESTMENTS .—Money de-24
4348+scribed in subparagraph (A) may be invested in obli-25
4349+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00144 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4350+rfrederick on LAP8M3WLY3PROD with BILLS 145
4351+•HR 4763 RH
4352+gations of the United States, in general obligations of 1
4353+any State or of any political subdivision of a State, 2
4354+and in obligations fully guaranteed as to principal 3
4355+and interest by the United States, or in any other in-4
4356+vestment that the Commission may by rule or regula-5
4357+tion prescribe, and such investments shall be made in 6
4358+accordance with such rules and regulations and sub-7
4359+ject to such conditions as the Commission may pre-8
4360+scribe. 9
4361+‘‘(3) C
4362+USTOMER PROTECTION DURING BANK -10
4363+RUPTCY.— 11
4364+‘‘(A) C
4365+USTOMER PROPERTY.—All assets held 12
4366+on behalf of a customer by a digital commodity 13
4367+exchange, and all money, assets, and property of 14
4368+any customer received by a digital commodity 15
4369+exchange for trading or custody, or to facilitate, 16
4370+margin, guarantee, or secure contracts of sale of 17
4371+a digital commodity (including money, assets, or 18
4372+property accruing to the customer as the result 19
4373+of the transactions), shall be considered customer 20
4374+property for purposes of section 761 of title 11, 21
4375+United States Code. 22
4376+‘‘(B) T
4377+RANSACTIONS.—A transaction in-23
4378+volving a unit of a digital commodity occurring 24
4379+on or subject to the rules of a digital commodity 25
4380+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00145 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4381+rfrederick on LAP8M3WLY3PROD with BILLS 146
4382+•HR 4763 RH
4383+exchange shall be considered a ‘contract for the 1
4384+purchase or sale of a commodity for future deliv-2
4385+ery, on or subject to the rules of, a contract mar-3
4386+ket or board of trade’ for the purposes of the defi-4
4387+nition of a ‘commodity contract’ in section 761 5
4388+of title 11, United States Code. 6
4389+‘‘(C) E
4390+XCHANGES.—A digital commodity 7
4391+exchange shall be considered a futures commis-8
4392+sion merchant for purposes of section 761 of title 9
4393+11, United States Code. 10
4394+‘‘(4) M
4395+ISUSE OF CUSTOMER PROPERTY .— 11
4396+‘‘(A) I
4397+N GENERAL.—It shall be unlawful— 12
4398+‘‘(i) for any digital commodity ex-13
4399+change that has received any customer 14
4400+money, assets, or property for custody to 15
4401+dispose of, or use any such money, assets, or 16
4402+property as belonging to the digital com-17
4403+modity exchange; or 18
4404+‘‘(ii) for any other person, including 19
4405+any depository, other digital commodity ex-20
4406+change, or digital commodity custodian that 21
4407+has received any customer money, assets, or 22
4408+property for deposit, to hold, dispose of, or 23
4409+use any such money, assets, or property, or 24
4410+property, as belonging to the depositing dig-25
4411+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00146 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4412+rfrederick on LAP8M3WLY3PROD with BILLS 147
4413+•HR 4763 RH
4414+ital commodity exchange or any person 1
4415+other than the customers of the digital com-2
4416+modity exchange. 3
4417+‘‘(B) U
4418+SE FURTHER DEFINED .—For pur-4
4419+poses of this section, ‘use’ of a digital commodity 5
4420+includes utilizing any unit of a digital asset to 6
4421+participate in a blockchain service defined in 7
4422+paragraph (5) or a decentralized governance sys-8
4423+tem associated with the digital commodity or the 9
4424+blockchain system to which the digital com-10
4425+modity relates in any manner other than that 11
4426+expressly directed by the customer from whom 12
4427+the unit of a digital commodity was received. 13
4428+‘‘(5) P
4429+ARTICIPATION IN BLOCKCHAIN SERV -14
4430+ICES.— 15
4431+‘‘(A) I
4432+N GENERAL.—A customer shall have 16
4433+the right to waive the restrictions in paragraph 17
4434+(1) for any unit of a digital commodity to be 18
4435+used under subparagraph (B), by affirmatively 19
4436+electing, in writing to the digital commodity ex-20
4437+change, to waive the restrictions. 21
4438+‘‘(B) U
4439+SE OF FUNDS.—Customer digital 22
4440+commodities removed from segregation under 23
4441+subparagraph (A) may be pooled and used by the 24
4442+digital commodity exchange or its designee to 25
4443+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00147 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4444+rfrederick on LAP8M3WLY3PROD with BILLS 148
4445+•HR 4763 RH
4446+provide a blockchain service for a blockchain sys-1
4447+tem to which the unit of the digital asset re-2
4448+moved from segregation in subparagraph (A) re-3
4449+lates. 4
4450+‘‘(C) L
4451+IMITATIONS.— 5
4452+‘‘(i) I
4453+N GENERAL.—The Commission 6
4454+may, by rule, establish notice and disclosure 7
4455+requirements, and any other limitations 8
4456+and rules related to the waiving of any re-9
4457+strictions under this paragraph that are 10
4458+reasonably necessary to protect customers, 11
4459+including eligible contract participants, 12
4460+non-eligible contract participants, or any 13
4461+other class of customers. 14
4462+‘‘(ii) C
4463+USTOMER CHOICE.—A digital 15
4464+commodity exchange may not require a 16
4465+waiver from a customer described in sub-17
4466+paragraph (A) as a condition of doing busi-18
4467+ness on the exchange. 19
4468+‘‘(D) B
4469+LOCKCHAIN SERVICE DEFINED .—In 20
4470+this subparagraph, the term ‘blockchain service’ 21
4471+means any activity relating to validating trans-22
4472+actions on a blockchain system, providing secu-23
4473+rity for a blockchain system, or other similar ac-24
4474+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00148 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4475+rfrederick on LAP8M3WLY3PROD with BILLS 149
4476+•HR 4763 RH
4477+tivity required for the ongoing operation of a 1
4478+blockchain system. 2
4479+‘‘(e) M
4480+ARKETACCESSREQUIREMENTS.— 3
4481+‘‘(1) I
4482+N GENERAL.—A digital commodity ex-4
4483+change shall require any person who is not an eligible 5
4484+contract participant to access trading on the exchange 6
4485+through a digital commodity broker. 7
4486+‘‘(2) A
4487+FFILIATED COMMODITY BROKERS .—A reg-8
4488+istered digital commodity exchange may allow an af-9
4489+filiated digital commodity broker to facilitate access 10
4490+to the digital commodity exchange, if— 11
4491+‘‘(A) no other digital commodity brokers fa-12
4492+cilitate access to the exchange; 13
4493+‘‘(B) the affiliated digital commodity can-14
4494+not provide customer access to another digital 15
4495+commodity exchange; and 16
4496+‘‘(C) the affiliated digital commodity broker 17
4497+is not also registered as a digital commodity 18
4498+dealer. 19
4499+‘‘(3) D
4500+IRECT ACCESS FOR ELIGIBLE CONTRACT 20
4501+PARTICIPANTS.—Nothing in this section shall prohibit 21
4502+a digital commodity exchange in compliance with this 22
4503+section from permitting direct access for eligible con-23
4504+tract participants. 24
4505+‘‘(4) A
4506+DDITIONAL REQUIREMENTS .— 25
4507+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00149 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4508+rfrederick on LAP8M3WLY3PROD with BILLS 150
4509+•HR 4763 RH
4510+‘‘(A) IN GENERAL.—The Commission may, 1
4511+by rule, impose any additional requirements re-2
4512+lated to the operations and activities of the dig-3
4513+ital commodity exchange and the affiliated dig-4
4514+ital commodity broker necessary to protect mar-5
4515+ket participants, promote fair and equitable 6
4516+trading on the digital commodity exchange, and 7
4517+promote responsible economic or financial inno-8
4518+vation. 9
4519+‘‘(B) D
4520+ELEGATION OF AUTHORITY .—The 10
4521+Commission may delegate to a registered futures 11
4522+association such oversight and regulatory re-12
4523+quirements as the Commission determines are 13
4524+necessary to— 14
4525+‘‘(i) supervise the activities of the dig-15
4526+ital commodity exchange and an affiliated 16
4527+digital commodity broker; and 17
4528+‘‘(ii) protect market participants, pro-18
4529+mote fair and equitable trading on the dig-19
4530+ital commodity exchange, and promote re-20
4531+sponsible economic or financial innovation. 21
4532+‘‘(C) C
4533+OMPETITIVE ACCESS RULE .—Not-22
4534+withstanding paragraph (2)(A), the Commission 23
4535+shall, by rule, adopt standards that permit a 24
4536+digital commodity exchange to allow both affili-25
4537+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00150 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4538+rfrederick on LAP8M3WLY3PROD with BILLS 151
4539+•HR 4763 RH
4540+ated and unaffiliated digital commodity brokers 1
4541+to facilitate access to the digital commodity ex-2
4542+change. The Commission rule shall address— 3
4543+‘‘(i) additional requirements for inde-4
4544+pendent governance arrangements and fit-5
4545+ness standards of affiliated entities; 6
4546+‘‘(ii) open access; 7
4547+‘‘(iii) conflicts of interest; 8
4548+‘‘(iv) antitrust considerations; and 9
4549+‘‘(v) any other factor that the Commis-10
4550+sion determines is necessary or appropriate 11
4551+to foster an open and competitive market 12
4552+and is in the public interest. 13
4553+‘‘(f) D
4554+ESIGNATION OFCHIEFCOMPLIANCEOFFICER.— 14
4555+‘‘(1) I
4556+N GENERAL.—A digital commodity ex-15
4557+change shall designate an individual to serve as a 16
4558+chief compliance officer. 17
4559+‘‘(2) D
4560+UTIES.—The chief compliance officer 18
4561+shall— 19
4562+‘‘(A) report directly to the board or to the 20
4563+senior officer of the exchange; 21
4564+‘‘(B) review compliance with the core prin-22
4565+ciples in this subsection; 23
4566+‘‘(C) in consultation with the board of the 24
4567+exchange, a body performing a function similar 25
4568+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00151 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4569+rfrederick on LAP8M3WLY3PROD with BILLS 152
4570+•HR 4763 RH
4571+to that of a board, or the senior officer of the ex-1
4572+change, resolve any conflicts of interest that may 2
4573+arise; 3
4574+‘‘(D) establish and administer the policies 4
4575+and procedures required to be established pursu-5
4576+ant to this section; 6
4577+‘‘(E) ensure compliance with this Act and 7
4578+the rules and regulations issued under this Act, 8
4579+including rules prescribed by the Commission 9
4580+pursuant to this section; and 10
4581+‘‘(F) establish procedures for the remedi-11
4582+ation of noncompliance issues found during com-12
4583+pliance office reviews, look backs, internal or ex-13
4584+ternal audit findings, self-reported errors, or 14
4585+through validated complaints. 15
4586+‘‘(3) R
4587+EQUIREMENTS FOR PROCEDURES .—In es-16
4588+tablishing procedures under paragraph (2)(F), the 17
4589+chief compliance officer shall design the procedures to 18
4590+establish the handling, management response, remedi-19
4591+ation, retesting, and closing of noncompliance issues. 20
4592+‘‘(4) A
4593+NNUAL REPORTS.— 21
4594+‘‘(A) I
4595+N GENERAL.—In accordance with 22
4596+rules prescribed by the Commission, the chief 23
4597+compliance officer shall annually prepare and 24
4598+sign a report that contains a description of— 25
4599+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00152 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4600+rfrederick on LAP8M3WLY3PROD with BILLS 153
4601+•HR 4763 RH
4602+‘‘(i) the compliance of the digital com-1
4603+modity exchange with this Act; and 2
4604+‘‘(ii) the policies and procedures, in-3
4605+cluding the code of ethics and conflict of in-4
4606+terest policies, of the digital commodity ex-5
4607+change. 6
4608+‘‘(B) R
4609+EQUIREMENTS.—The chief compli-7
4610+ance officer shall— 8
4611+‘‘(i) submit each report described in 9
4612+subparagraph (A) with the appropriate fi-10
4613+nancial report of the digital commodity ex-11
4614+change that is required to be submitted to 12
4615+the Commission pursuant to this section; 13
4616+and 14
4617+‘‘(ii) include in the report a certifi-15
4618+cation that, under penalty of law, the report 16
4619+is accurate and complete. 17
4620+‘‘(g) A
4621+PPOINTMENT OFTRUSTEE.— 18
4622+‘‘(1) I
4623+N GENERAL.—If a proceeding under section 19
4624+5e results in the suspension or revocation of the reg-20
4625+istration of a digital commodity exchange, or if a dig-21
4626+ital commodity exchange withdraws from registration, 22
4627+the Commission, on notice to the digital commodity 23
4628+exchange, may apply to the appropriate United 24
4629+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00153 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4630+rfrederick on LAP8M3WLY3PROD with BILLS 154
4631+•HR 4763 RH
4632+States district court where the digital commodity ex-1
4633+change is located for the appointment of a trustee. 2
4634+‘‘(2) A
4635+SSUMPTION OF JURISDICTION .—If the 3
4636+Commission applies for appointment of a trustee 4
4637+under paragraph (1)— 5
4638+‘‘(A) the court may take exclusive jurisdic-6
4639+tion over the digital commodity exchange and 7
4640+the records and assets of the digital commodity 8
4641+exchange, wherever located; and 9
4642+‘‘(B) if the court takes jurisdiction under 10
4643+subparagraph (A), the court shall appoint the 11
4644+Commission, or a person designated by the Com-12
4645+mission, as trustee with power to take possession 13
4646+and continue to operate or terminate the oper-14
4647+ations of the digital commodity exchange in an 15
4648+orderly manner for the protection of customers 16
4649+subject to such terms and conditions as the court 17
4650+may prescribe. 18
4651+‘‘(h) Q
4652+UALIFIEDDIGITALCOMMODITYCUSTODIAN.— 19
4653+A digital commodity exchange shall hold in a qualified dig-20
4654+ital commodity custodian each unit of a digital commodity 21
4655+that is— 22
4656+‘‘(1) the property of a customer of the digital 23
4657+commodity exchange; 24
4658+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00154 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4659+rfrederick on LAP8M3WLY3PROD with BILLS 155
4660+•HR 4763 RH
4661+‘‘(2) required to be held by the digital commodity 1
4662+exchange under subsection (c)(12) of this section; or 2
4663+‘‘(3) otherwise so required by the Commission to 3
4664+reasonably protect customers or promote the public 4
4665+interest. 5
4666+‘‘(i) E
4667+XEMPTIONS.— 6
4668+‘‘(1) In order to promote responsible economic or 7
4669+financial innovation and fair competition, or protect 8
4670+customers, the Commission may (on its own initiative 9
4671+or on application of the registered digital commodity 10
4672+exchange) exempt, either unconditionally or on stated 11
4673+terms or conditions or for stated periods and either 12
4674+retroactively or prospectively, or both, a registered 13
4675+digital commodity exchange from the requirements of 14
4676+this section, if the Commission determines that— 15
4677+‘‘(A) the exemption would be consistent with 16
4678+the public interest and the purposes of this Act; 17
4679+and 18
4680+‘‘(B) the exemption will not have a material 19
4681+adverse effect on the ability of the Commission or 20
4682+the digital commodity exchange to discharge reg-21
4683+ulatory or self-regulatory duties under this Act. 22
4684+‘‘(2) The Commission may exempt, conditionally 23
4685+or unconditionally, a digital commodity exchange 24
4686+from registration under this section if the Commis-25
4687+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00155 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4688+rfrederick on LAP8M3WLY3PROD with BILLS 156
4689+•HR 4763 RH
4690+sion finds that the digital commodity exchange is sub-1
4691+ject to comparable, comprehensive supervision and 2
4692+regulation on a consolidated basis by the appropriate 3
4693+governmental authorities in the home country of the 4
4694+facility. 5
4695+‘‘(j) C
4696+USTOMERDEFINED.—In this section, the term 6
4697+‘customer’ means any person that maintains an account for 7
4698+the trading of digital commodities directly with a digital 8
4699+commodity exchange (other than a person that is owned or 9
4700+controlled, directly or indirectly, by the digital commodity 10
4701+exchange) for its own behalf or on behalf of any other per-11
4702+son. 12
4703+‘‘(k) F
4704+EDERALPREEMPTION.—Notwithstanding any 13
4705+other provision of law, the Commission shall have exclusive 14
4706+jurisdiction over any digital commodity exchange registered 15
4707+under this section. 16
4708+‘‘(l) T
4709+REATMENTUNDER THEBANKSECRECYACT.— 17
4710+A registered digital commodity exchange shall be treated as 18
4711+a financial institution for purposes of the Bank Secrecy 19
4712+Act. 20
4713+‘‘(m) W
4714+ITHDRAWAL OF CERTIFICATION OF A 21
4715+B
4716+LOCKCHAINSYSTEM.— 22
4717+‘‘(1) I
4718+N GENERAL.— 23
4719+‘‘(A) D
4720+ETERMINATION BY A DIGITAL COM -24
4721+MODITY EXCHANGE.—With respect to a certifi-25
4722+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00156 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4723+rfrederick on LAP8M3WLY3PROD with BILLS 157
4724+•HR 4763 RH
4725+cation of a blockchain system that becomes effec-1
4726+tive pursuant to section 44(f) of the Securities 2
4727+Exchange Act of 1934, if a digital commodity ex-3
4728+change determines that the blockchain system 4
4729+may not be a decentralized network, the digital 5
4730+commodity exchange shall notify the Commission 6
4731+of such determination. 7
4732+‘‘(B) W
4733+ITHDRAWAL PROCESS.—With respect 8
4734+to each notification received under subparagraph 9
4735+(A), the Commission shall initiate a withdrawal 10
4736+process under which the Commission shall— 11
4737+‘‘(i) publish a notice announcing the 12
4738+proposed withdrawal; 13
4739+‘‘(ii) provide a 30 day comment period 14
4740+with respect to the proposed withdrawal; 15
4741+and 16
4742+‘‘(iii) after the end of the 30-day com-17
4743+ment required under clause (ii), publish ei-18
4744+ther— 19
4745+‘‘(I) a notification of withdrawal 20
4746+of the applicable certification; or 21
4747+‘‘(II) a notice that the Commis-22
4748+sion is not withdrawing the certifi-23
4749+cation. 24
4750+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00157 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4751+rfrederick on LAP8M3WLY3PROD with BILLS 158
4752+•HR 4763 RH
4753+‘‘(C) DETAILED ANALYSIS REQUIRED .—The 1
4754+Commission shall include, with each publication 2
4755+of a notification of withdrawal described under 3
4756+subparagraph (B)(iii)(I), a detailed analysis of 4
4757+the factors on which the decision was based. 5
4758+‘‘(2) R
4759+ECERTIFICATION.—With respect to a 6
4760+blockchain system for which a certification has been 7
4761+withdrawn under this subsection, no person may 8
4762+make a certification under section 44(a) of the Secu-9
4763+rities Exchange Act of 1934 with respect to such 10
4764+blockchain system during the 90-day period beginning 11
4765+on the date of such withdrawal. 12
4766+‘‘(3) A
4767+PPEAL OF WITHDRAWAL .— 13
4768+‘‘(A) I
4769+N GENERAL.—If a certification is 14
4770+withdrawn under this subsection, a person mak-15
4771+ing may appeal the decision to the United States 16
4772+Court of Appeals for the District of Columbia, 17
4773+not later than 60 days after the notice of with-18
4774+drawal is made. 19
4775+‘‘(B) R
4776+EVIEW.—In an appeal under sub-20
4777+paragraph (A), the court shall have de novo re-21
4778+view of the determination to withdraw the cer-22
4779+tification.’’. 23
4780+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00158 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4781+rfrederick on LAP8M3WLY3PROD with BILLS 159
4782+•HR 4763 RH
4783+SEC. 405. QUALIFIED DIGITAL COMMODITY CUSTODIANS. 1
4784+The Commodity Exchange Act (7 U.S.C. 1 et seq.), as 2
4785+amended by the preceding provisions of this Act, is amended 3
4786+by inserting after section 5i the following: 4
4787+‘‘SEC. 5j. QUALIFIED DIGITAL COMMODITY CUSTODIANS. 5
4788+‘‘(a) I
4789+NGENERAL.—For purposes of this Act, a quali-6
4790+fied digital commodity custodian is a digital commodity 7
4791+custodian who meets the following conditions: 8
4792+‘‘(1) S
4793+UPERVISION.—The digital commodity cus-9
4794+todian is subject to adequate supervision and appro-10
4795+priate regulation. 11
4796+‘‘(2) N
4797+O PROHIBITION.—The digital commodity 12
4798+custodian is— 13
4799+‘‘(A) subject to the supervision of— 14
4800+‘‘(i) an appropriate Federal banking 15
4801+agency; 16
4802+‘‘(ii) a State bank supervisor (within 17
4803+the meaning of section 3 of the Federal De-18
4804+posit Insurance Act); 19
4805+‘‘(iii) the Commission or the Securities 20
4806+and Exchange Commission; or 21
4807+‘‘(iv) an appropriate foreign govern-22
4808+mental authority in the home country of the 23
4809+digital commodity custodian; and 24
4810+‘‘(B) not prohibited by the applicable super-25
4811+visor referred to in subparagraph (A) from en-26
4812+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00159 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4813+rfrederick on LAP8M3WLY3PROD with BILLS 160
4814+•HR 4763 RH
4815+gaging in any activity with respect to the hold-1
4816+ing of digital commodities. 2
4817+‘‘(3) I
4818+NFORMATION-SHARING.— 3
4819+‘‘(A) I
4820+N GENERAL.—The digital commodity 4
4821+custodian agrees to such periodic sharing of in-5
4822+formation regarding customer accounts the dig-6
4823+ital commodity custodian holds on behalf of an 7
4824+entity registered with the Commission, as the 8
4825+Commission determines by rule shall be reason-9
4826+ably necessary to effectuate any of the provisions, 10
4827+or to accomplish any of the purposes, of this Act. 11
4828+‘‘(B) P
4829+ROVISION OF INFORMATION .—Any 12
4830+person that is subject to regulation and examina-13
4831+tion by an appropriate Federal banking agency 14
4832+may satisfy any information request described in 15
4833+subparagraph (A), by providing the Commission 16
4834+with a detailed listing, in writing, of the digital 17
4835+commodities of a customer within the custody or 18
4836+use of the person. 19
4837+‘‘(b) A
4838+DEQUATESUPERVISION AND APPROPRIATE 20
4839+R
4840+EGULATIONFURTHERDEFINED.— 21
4841+‘‘(1) I
4842+N GENERAL.—In subsection (a), the terms 22
4843+‘adequate supervision’ and ‘appropriate regulation’ 23
4844+mean such minimum standards for supervision and 24
4845+regulation as are reasonably necessary to protect the 25
4846+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00160 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4847+rfrederick on LAP8M3WLY3PROD with BILLS 161
4848+•HR 4763 RH
4849+digital commodities of customers of an entity reg-1
4850+istered with the Commission, including minimum 2
4851+standards relating to— 3
4852+‘‘(A) accessibility of customer assets; 4
4853+‘‘(B) financial resources; 5
4854+‘‘(C) risk management requirements; 6
4855+‘‘(D) governance arrangements; 7
4856+‘‘(E) fitness standards for officers and direc-8
4857+tors; 9
4858+‘‘(F) recordkeeping; 10
4859+‘‘(G) information-sharing; and 11
4860+‘‘(H) conflicts of interest. 12
4861+‘‘(2) D
4862+EEMED COMPLIANCE .—For purposes of 13
4863+subsection (a), a digital commodity custodian is 14
4864+deemed to be subject to adequate supervision and ap-15
4865+propriate regulation, if the digital commodity custo-16
4866+dian is— 17
4867+‘‘(A) subject to the supervision of the Com-18
4868+mission; or 19
4869+‘‘(B) a bank subject to the supervision of an 20
4870+appropriate Federal banking agency or a State 21
4871+bank supervisor (within the meaning of section 22
4872+3 of the Federal Deposit Insurance Act). 23
4873+‘‘(3) R
4874+ULEMAKING AUTHORITY .—For purposes of 24
4875+subsection (a), the Commission may, by rule, further 25
4876+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00161 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4877+rfrederick on LAP8M3WLY3PROD with BILLS 162
4878+•HR 4763 RH
4879+define the terms ‘adequate supervision’ and ‘appro-1
4880+priate regulation’ as necessary in the public interest, 2
4881+as appropriate for the protection of customers, and 3
4882+consistent with the purposes of this Act. 4
4883+‘‘(c) A
4884+UTHORITY TOTEMPORARILYSUSPENDSTAND-5
4885+ARDS.—The Commission may, by rule or order, tempo-6
4886+rarily suspend, in whole or in part, any requirement im-7
4887+posed under, or any standard referred to in, this section 8
4888+if the Commission determines that the suspension would be 9
4889+consistent with the public interest and the purposes of this 10
4890+Act.’’. 11
4891+SEC. 406. REGISTRATION AND REGULATION OF DIGITAL 12
4892+COMMODITY BROKERS AND DEALERS. 13
4893+The Commodity Exchange Act (7 U.S.C. 1 et seq.), as 14
4894+amended by the preceding provisions of this Act, is amended 15
4895+by inserting after section 4t the following: 16
4896+‘‘SEC. 4u. REGISTRATION AND REGULATION OF DIGITAL 17
4897+COMMODITY BROKERS AND DEALERS. 18
4898+‘‘(a) R
4899+EGISTRATION.—It shall be unlawful for any per-19
4900+son to act as a digital commodity broker or digital com-20
4901+modity dealer unless the person is registered as such with 21
4902+the Commission. 22
4903+‘‘(b) R
4904+EQUIREMENTS.— 23
4905+‘‘(1) I
4906+N GENERAL.—A person shall register as a 24
4907+digital commodity broker or digital commodity dealer 25
4908+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00162 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4909+rfrederick on LAP8M3WLY3PROD with BILLS 163
4910+•HR 4763 RH
4911+by filing a registration application with the Commis-1
4912+sion. 2
4913+‘‘(2) C
4914+ONTENTS.— 3
4915+‘‘(A) I
4916+N GENERAL.—The application shall 4
4917+be made in such form and manner as is pre-5
4918+scribed by the Commission, and shall contain 6
4919+such information as the Commission considers 7
4920+necessary concerning the business in which the 8
4921+applicant is or will be engaged. 9
4922+‘‘(B) C
4923+ONTINUAL REPORTING .—A person 10
4924+that is registered as a digital commodity broker 11
4925+or digital commodity dealer shall continue to 12
4926+submit to the Commission reports that contain 13
4927+such information pertaining to the business of 14
4928+the person as the Commission may require. 15
4929+‘‘(3) T
4930+RANSITION.—Within 180 days after the 16
4931+date of the enactment of this section, the Commission 17
4932+shall prescribe rules providing for the registration of 18
4933+digital commodity brokers and digital commodity 19
4934+dealers under this section. 20
4935+‘‘(4) S
4936+TATUTORY DISQUALIFICATION .—Except to 21
4937+the extent otherwise specifically provided by rule, reg-22
4938+ulation, or order, it shall be unlawful for a digital 23
4939+commodity broker or digital commodity dealer to per-24
4940+mit any person who is associated with a digital com-25
4941+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00163 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
4942+rfrederick on LAP8M3WLY3PROD with BILLS 164
4943+•HR 4763 RH
4944+modity broker or a digital commodity dealer and who 1
4945+is subject to a statutory disqualification to effect or 2
4946+be involved in effecting a contract of sale of a digital 3
4947+commodity on behalf of the digital commodity broker 4
4948+or the digital commodity dealer, respectively, if the 5
4949+digital commodity broker or digital commodity deal-6
4950+er, respectively, knew, or in the exercise of reasonable 7
4951+care should have known, of the statutory disqualifica-8
4952+tion. 9
4953+‘‘(5) L
4954+IMITATIONS ON CERTAIN ASSETS .—A dig-10
4955+ital commodity broker or digital commodity dealer 11
4956+shall not offer, offer to enter into, enter into, or facili-12
4957+tate any contract of sale of a digital commodity that 13
4958+has not been certified under section 5c(d). 14
4959+‘‘(c) A
42724960 DDITIONALREGISTRATIONS.— 15
4273-‘‘(A) W
4274-ITH THE COMMISSION.— 16
4275-‘‘(i) I
4276-N GENERAL.—A registered dig-17
4277-ital commodity exchange may also register 18
4278-as— 19
4279-‘‘(I) a designated contract mar-20
4280-ket; or 21
4281-‘‘(II) a swap execution facility. 22
4282-‘‘(ii) R
4283-ULES.—For an entity with 23
4284-multiple registrations under clause (i), the 24
4285-Commission— 25 153
4286-•HR 4763 EH
4287-‘‘(I) shall prescribe rules to ex-1
4288-empt the entity from duplicative, con-2
4289-flicting, or unduly burdensome provi-3
4290-sions of this Act and the rules under 4
4291-this Act, to the extent such an exemp-5
4292-tion would foster the development of 6
4293-fair and orderly cash or spot markets 7
4294-in digital commodities, be necessary or 8
4295-appropriate in the public interest, and 9
4296-be consistent with the protection of 10
4297-customers; and 11
4298-‘‘(II) may, after an analysis of 12
4299-the risks and benefits, prescribe rules 13
4300-to provide for portfolio margining, as 14
4301-may be necessary to protect market 15
4302-participants, promote fair and equi-16
4303-table trading in digital commodity 17
4304-markets, and promote responsible eco-18
4305-nomic or financial innovation. 19
4306-‘‘(B) W
4307-ITH THE SECURITIES AND EX -20
4308-CHANGE COMMISSION .—A registered digital 21
4309-commodity exchange may register with the Se-22
4310-curities and Exchange Commission as a digital 23
4311-asset trading system to list or trade contracts 24
4312-of sale for restricted digital assets. 25 154
4313-•HR 4763 EH
4314-‘‘(C) WITH A REGISTERED FUTURES ASSO -1
4315-CIATION.— 2
4316-‘‘(i) I
4317-N GENERAL.—A registered dig-3
4318-ital commodity exchange shall also be a 4
4319-member of a registered futures association 5
4320-and comply with rules related to such ac-6
4321-tivity, if the registered digital commodity 7
4322-exchange accepts customer funds required 8
4323-to be segregated under subsection (d). 9
4324-‘‘(ii) R
4325-ULEMAKING REQUIRED .—The 10
4326-Commission shall require any registered 11
4327-futures association with a digital com-12
4328-modity exchange as a member to provide 13
4329-such rules as may be necessary to further 14
4330-compliance with subsection (d), protect 15
4331-customers, and promote the public interest. 16
4961+‘‘(1) W
4962+ITH THE COMMISSION .—Any person re-16
4963+quired to be registered as a digital commodity broker 17
4964+or digital commodity dealer may also be registered as 18
4965+a futures commission merchant, introducing broker, 19
4966+or swap dealer. 20
4967+‘‘(2) W
4968+ITH THE SECURITIES AND EXCHANGE 21
4969+COMMISSION.—Any person required to be registered as 22
4970+a digital commodity broker or digital commodity 23
4971+dealer under this section may register with the Secu-24
4972+rities and Exchange Commission as a digital asset 25
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4975+•HR 4763 RH
4976+broker or digital asset dealer, pursuant to section 1
4977+15(b) of the Securities Exchange Act of 1934, as ap-2
4978+plicable, if the digital asset broker or digital asset 3
4979+dealer limits its solicitation of orders, acceptance of 4
4980+orders, or execution of orders, or placing of orders on 5
4981+behalf of others involving any contract of sale of dig-6
4982+ital assets. 7
4983+‘‘(3) W
4984+ITH MEMBERSHIP IN A REGISTERED FU -8
4985+TURES ASSOCIATION.—Any person required to be reg-9
4986+istered as a digital commodity broker or digital com-10
4987+modity dealer under this section shall be a member of 11
4988+a registered futures association. 12
4989+‘‘(4) R
4990+EGISTRATION REQUIRED.—Any person re-13
4991+quired to be registered as a digital commodity broker 14
4992+or digital commodity dealer under this section shall 15
4993+register with the Commission as such regardless of 16
4994+whether the person is registered with another State or 17
4995+Federal regulator. 18
43324996 ‘‘(d) R
4333-EGISTRATION REQUIRED .—A per-17
4334-son required to be registered as a digital com-18
4335-modity exchange under this section shall reg-19
4336-ister with the Commission as such regardless of 20
4337-whether the person is registered with another 21
4338-State or Federal regulator. 22
4339-‘‘(b) T
4340-RADING.— 23
4341-‘‘(1) P
4342-ROHIBITION ON CERTAIN TRADING PRAC -24
4343-TICES.— 25 155
4344-•HR 4763 EH
4345-‘‘(A) Section 4b shall apply to any agree-1
4346-ment, contract, or transaction in a digital com-2
4347-modity as if the agreement, contract, or trans-3
4348-action were a contract of sale of a commodity 4
4349-for future delivery. 5
4350-‘‘(B) Section 4c shall apply to any agree-6
4351-ment, contract, or transaction in a digital com-7
4352-modity as if the agreement, contract, or trans-8
4353-action were a transaction involving the purchase 9
4354-or sale of a commodity for future delivery. 10
4355-‘‘(C) Section 4b-1 shall apply to any agree-11
4356-ment, contract, or transaction in a digital com-12
4357-modity as if the agreement, contract, or trans-13
4358-action were a contract of sale of a commodity 14
4359-for future delivery. 15
4360-‘‘(2) P
4361-ROHIBITION ON ACTING AS A 16
4362-COUNTERPARTY.— 17
4997+ULEMAKING.— 19
4998+‘‘(1) I
4999+N GENERAL.—The Commission shall pre-20
5000+scribe such rules applicable to registered digital com-21
5001+modity brokers and registered digital commodity deal-22
5002+ers as are appropriate to carry out this section, in-23
5003+cluding rules in the public interest that limit the ac-24
5004+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00165 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
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5006+•HR 4763 RH
5007+tivities of digital commodity brokers and digital com-1
5008+modity dealers. 2
5009+‘‘(2) M
5010+ULTIPLE REGISTRANTS.—The Commission 3
5011+shall prescribe rules or regulations permitting, or 4
5012+may otherwise authorize, exemptions or additional re-5
5013+quirements applicable to persons with multiple reg-6
5014+istrations under this Act, including as futures com-7
5015+mission merchants, introducing brokers, digital com-8
5016+modity brokers, digital commodity dealers, or swap 9
5017+dealers, as may be in the public interest to reduce 10
5018+compliance costs and promote customer protection. 11
5019+‘‘(e) C
5020+APITALREQUIREMENTS.— 12
5021+‘‘(1) I
5022+N GENERAL.—Each digital commodity 13
5023+broker and digital commodity dealer shall meet such 14
5024+minimum capital requirements as the Commission 15
5025+may prescribe to address the risks associated with 16
5026+digital commodity trading and to ensure that the dig-17
5027+ital commodity broker or digital commodity dealer, 18
5028+respectively, is able to— 19
5029+‘‘(A) meet, and continue to meet, at all 20
5030+times, the obligations of such registrant; and 21
5031+‘‘(B) in the case of a digital commodity 22
5032+dealer, fulfill the counterparty obligations of the 23
5033+digital commodity dealer for any margined, le-24
5034+veraged, or financed transactions. 25
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5036+rfrederick on LAP8M3WLY3PROD with BILLS 167
5037+•HR 4763 RH
5038+‘‘(2) RULE OF CONSTRUCTION.—Nothing in this 1
5039+section shall limit, or be construed to limit, the au-2
5040+thority of the Securities and Exchange Commission to 3
5041+set financial responsibility rules for a broker or dealer 4
5042+registered pursuant to section 15(b) of the Securities 5
5043+Exchange Act of 1934 (15 U.S.C. 78o(b)) (except for 6
5044+section 15(b)(11) of such Act (15 U.S.C. 78o(b)(11)) 7
5045+in accordance with section 15(c)(3) of such Act (15 8
5046+U.S.C. 78o(c)(3)). 9
5047+‘‘(3) F
5048+UTURES COMMISSION MERCHANTS AND 10
5049+OTHER DEALERS.— 11
43635050 ‘‘(A) I
4364-N GENERAL.—A digital commodity 18
4365-exchange or any affiliate of such an exchange 19
4366-shall not trade on or subject to the rules of the 20
4367-digital commodity exchange for its own account. 21
4368-‘‘(B) E
4369-XCEPTIONS.—The Commission 22
4370-shall, by rule, permit a digital commodity ex-23
4371-change or any affiliate of a digital commodity 24
4372-exchange to engage in trading on an affiliated 25 156
4373-•HR 4763 EH
4374-exchange so long as the trading is not solely for 1
4375-the purpose of the profit of the exchange, in-2
4376-cluding the following: 3
4377-‘‘(i) C
4378-USTOMER DIRECTION.—A trans-4
4379-action for, or entered into at the direction 5
4380-of, or for the benefit of, an unaffiliated 6
4381-customer. 7
4382-‘‘(ii) R
4383-ISK MANAGEMENT .—A trans-8
4384-action to manage the risks associated with 9
4385-the digital commodity business of the ex-10
4386-change. 11
4387-‘‘(iii) F
4388-UNCTIONAL USE .—A trans-12
4389-action related to the functional operation 13
4390-of a blockchain network. 14
4391-‘‘(C) N
4392-OTICE REQUIREMENT .—In order for 15
4393-a digital commodity exchange or any affiliate of 16
4394-a digital commodity exchange to engage in trad-17
4395-ing on the affiliated exchange pursuant to sub-18
4396-section (B), notice must be given to the Com-19
4397-mission that shall enumerate how any proposed 20
4398-activity is consistent with the exceptions in sub-21
4399-section (B) and the principles of the Act. 22
4400-‘‘(D) D
4401-ELEGATION.—The Commission 23
4402-may, by rule, delegate authority to the Director 24
4403-of the Division of Market Oversight, or such 25 157
4404-•HR 4763 EH
4405-other employee or employees as the Director of 1
4406-the Division of Market Oversight may designate 2
4407-from time to time, to carry out these provisions. 3
4408-‘‘(3) T
4409-RADING SECURITIES.—A registered dig-4
4410-ital commodity exchange that is also registered with 5
4411-the Securities and Exchange Commission may offer 6
4412-a contract of sale of a restricted digital asset. 7
4413-‘‘(4) R
4414-ULES FOR CERTAIN DIGITAL ASSET 8
4415-SALES.—The digital commodity exchange shall have 9
4416-in place such rules as may be necessary to reason-10
4417-ably ensure the orderly sale of any unit of a digital 11
4418-commodity sold by a related person or an affiliated 12
4419-person. 13
4420-‘‘(c) C
4421-OREPRINCIPLES FORDIGITALCOMMODITY 14
4422-E
4423-XCHANGES.— 15
4424-‘‘(1) C
4425-OMPLIANCE WITH CORE PRINCIPLES .— 16
4426-‘‘(A) I
4427-N GENERAL.—To be registered, and 17
4428-maintain registration, as a digital commodity 18
4429-exchange, a digital commodity exchange shall 19
4430-comply with— 20
4431-‘‘(i) the core principles described in 21
4432-this subsection; and 22
4433-‘‘(ii) any requirement that the Com-23
4434-mission may impose by rule or regulation 24
4435-pursuant to section 8a(5). 25 158
4436-•HR 4763 EH
4437-‘‘(B) REASONABLE DISCRETION OF A DIG -1
4438-ITAL COMMODITY EXCHANGE .—Unless other-2
4439-wise determined by the Commission by rule or 3
4440-regulation, a digital commodity exchange de-4
4441-scribed in subparagraph (A) shall have reason-5
4442-able discretion in establishing the manner in 6
4443-which the digital commodity exchange complies 7
4444-with the core principles described in this sub-8
4445-section. 9
4446-‘‘(2) C
4447-OMPLIANCE WITH RULES .—A digital 10
4448-commodity exchange shall— 11
4449-‘‘(A) establish and enforce compliance with 12
4450-any rule of the digital commodity exchange, in-13
4451-cluding— 14
4452-‘‘(i) the terms and conditions of the 15
4453-trades traded or processed on or through 16
4454-the digital commodity exchange; and 17
4455-‘‘(ii) any limitation on access to the 18
4456-digital commodity exchange; 19
4457-‘‘(B) establish and enforce trading, trade 20
4458-processing, and participation rules that will 21
4459-deter abuses and have the capacity to detect, 22
4460-investigate, and enforce those rules, including 23
4461-means— 24 159
4462-•HR 4763 EH
4463-‘‘(i) to provide market participants 1
4464-with impartial access to the market; and 2
4465-‘‘(ii) to capture information that may 3
4466-be used in establishing whether rule viola-4
4467-tions have occurred; and 5
4468-‘‘(C) establish rules governing the oper-6
4469-ation of the exchange, including rules specifying 7
4470-trading procedures to be used in entering and 8
4471-executing orders traded or posted on the facil-9
4472-ity. 10
4473-‘‘(3) L
4474-ISTING STANDARDS FOR DIGITAL COM -11
4475-MODITIES.— 12
4476-‘‘(A) I
4477-N GENERAL.—A digital commodity 13
4478-exchange shall permit trading only in a digital 14
4479-commodity that is not readily susceptible to ma-15
4480-nipulation. 16
4481-‘‘(B) P
4482-UBLIC INFORMATION REQUIRE -17
4483-MENTS.— 18
4484-‘‘(i) I
4485-N GENERAL.—A digital com-19
4486-modity exchange shall permit trading only 20
4487-in a digital commodity if the information 21
4488-required in clause (ii) is correct, current, 22
4489-and available to the public. 23
4490-‘‘(ii) R
4491-EQUIRED INFORMATION .— 24
4492-With respect to a digital commodity and 25 160
4493-•HR 4763 EH
4494-each blockchain system to which the digital 1
4495-commodity relates for which the digital 2
4496-commodity exchange will make the digital 3
4497-commodity available to the customers of 4
4498-the digital commodity exchange, the infor-5
4499-mation required in this clause is as follows: 6
4500-‘‘(I) S
4501-OURCE CODE.—The source 7
4502-code for any blockchain system to 8
4503-which the digital commodity relates. 9
4504-‘‘(II) T
4505-RANSACTION HISTORY.—A 10
4506-narrative description of the steps nec-11
4507-essary to independently access, search, 12
4508-and verify the transaction history of 13
4509-any blockchain system to which the 14
4510-digital commodity relates. 15
4511-‘‘(III) D
4512-IGITAL ASSET ECONOM -16
4513-ICS.—A narrative description of the 17
4514-purpose of any blockchain system to 18
4515-which the digital asset relates and the 19
4516-operation of any such blockchain sys-20
4517-tem, including— 21
4518-‘‘(aa) information explaining 22
4519-the launch and supply process, 23
4520-including the number of digital 24
4521-assets to be issued in an initial 25 161
4522-•HR 4763 EH
4523-allocation, the total number of 1
4524-digital assets to be created, the 2
4525-release schedule for the digital 3
4526-assets, and the total number of 4
4527-digital assets then outstanding; 5
4528-‘‘(bb) information detailing 6
4529-any applicable consensus mecha-7
4530-nism or process for validating 8
4531-transactions, method of gener-9
4532-ating or mining digital assets, 10
4533-and any process for burning or 11
4534-destroying digital assets on the 12
4535-blockchain system; 13
4536-‘‘(cc) an explanation of gov-14
4537-ernance mechanisms for imple-15
4538-menting changes to the 16
4539-blockchain system or forming 17
4540-consensus among holders of the 18
4541-digital assets; and 19
4542-‘‘(dd) sufficient information 20
4543-for a third party to create a tool 21
4544-for verifying the transaction his-22
4545-tory of the digital asset. 23
4546-‘‘(IV) T
4547-RADING VOLUME AND 24
4548-VOLATILITY.—The trading volume 25 162
4549-•HR 4763 EH
4550-and volatility of the digital com-1
4551-modity. 2
4552-‘‘(V) A
4553-DDITIONAL INFORMA -3
4554-TION.—Such additional information 4
4555-as the Commission may, by rule, de-5
4556-termine to be necessary for a cus-6
4557-tomer to understand the financial and 7
4558-operational risks of a digital com-8
4559-modity, and to be in the public inter-9
4560-est or in furtherance of the require-10
4561-ments of this Act. 11
4562-‘‘(iii) F
4563-ORMAT.—The Commission 12
4564-shall prescribe rules and regulations for 13
4565-the standardization and simplification of 14
4566-disclosures under clause (ii), including re-15
4567-quiring that disclosures— 16
4568-‘‘(I) be conspicuous; 17
4569-‘‘(II) use plain language com-18
4570-prehensible to customers; and 19
4571-‘‘(III) succinctly explain the in-20
4572-formation that is required to be com-21
4573-municated to the customer. 22
4574-‘‘(C) A
4575-DDITIONAL LISTING CONSIDER -23
4576-ATIONS.—In addition to the requirements of 24 163
4577-•HR 4763 EH
4578-subparagraphs (A) and (B), a digital com-1
4579-modity exchange shall consider— 2
4580-‘‘(i) if a sufficient percentage of the 3
4581-units of the digital asset are units of a dig-4
4582-ital commodity to permit robust price dis-5
4583-covery; 6
4584-‘‘(ii) if it is reasonably unlikely that 7
4585-the transaction history can be fraudulently 8
4586-altered by any person or group of persons 9
4587-acting collectively; 10
4588-‘‘(iii) if the operating structure and 11
4589-system of the digital commodity is secure 12
4590-from cybersecurity threats; 13
4591-‘‘(iv) if the functionality of the digital 14
4592-commodity will protect holders from oper-15
4593-ational failures; 16
4594-‘‘(v) if sufficient public information 17
4595-about the operation, functionality, and use 18
4596-of the digital commodity is available; and 19
4597-‘‘(vi) any other factor which the Com-20
4598-mission has, by rule, determined to be in 21
4599-the public interest or in furtherance of the 22
4600-requirements of this Act. 23
4601-‘‘(D) R
4602-ESTRICTED DIGITAL ASSETS .—A 24
4603-digital commodity exchange shall not permit the 25 164
4604-•HR 4763 EH
4605-trading of a unit of a digital asset that is a re-1
4606-stricted digital asset. 2
4607-‘‘(4) T
4608-REATMENT OF CUSTOMER ASSETS .—A 3
4609-digital commodity exchange shall establish standards 4
4610-and procedures that are designed to protect and en-5
4611-sure the safety of customer money, assets, and prop-6
4612-erty. 7
4613-‘‘(5) M
4614-ONITORING OF TRADING AND TRADE 8
4615-PROCESSING.— 9
4616-‘‘(A) I
4617-N GENERAL.—A digital commodity 10
4618-exchange shall provide a competitive, open, and 11
4619-efficient market and mechanism for executing 12
4620-transactions that protects the price discovery 13
4621-process of trading on the exchange. 14
4622-‘‘(B) P
4623-ROTECTION OF MARKETS AND MAR -15
4624-KET PARTICIPANTS.—A digital commodity ex-16
4625-change shall establish and enforce rules— 17
4626-‘‘(i) to protect markets and market 18
4627-participants from abusive practices com-19
4628-mitted by any party, including abusive 20
4629-practices committed by a party acting as 21
4630-an agent for a participant; and 22
4631-‘‘(ii) to promote fair and equitable 23
4632-trading on the exchange. 24 165
4633-•HR 4763 EH
4634-‘‘(C) TRADING PROCEDURES .—A digital 1
4635-commodity exchange shall— 2
4636-‘‘(i) establish and enforce rules or 3
4637-terms and conditions defining, or specifica-4
4638-tions detailing— 5
4639-‘‘(I) trading procedures to be 6
4640-used in entering and executing orders 7
4641-traded on or through the facilities of 8
4642-the digital commodity exchange; and 9
4643-‘‘(II) procedures for trade proc-10
4644-essing of digital commodities on or 11
4645-through the facilities of the digital 12
4646-commodity exchange; and 13
4647-‘‘(ii) monitor trading in digital com-14
4648-modities to prevent manipulation, price 15
4649-distortion, and disruptions of the delivery 16
4650-or cash settlement process through surveil-17
4651-lance, compliance, and disciplinary prac-18
4652-tices and procedures, including methods 19
4653-for conducting real-time monitoring of 20
4654-trading and comprehensive and accurate 21
4655-trade reconstructions. 22
4656-‘‘(6) A
4657-BILITY TO OBTAIN INFORMATION .—A 23
4658-digital commodity exchange shall— 24 166
4659-•HR 4763 EH
4660-‘‘(A) establish and enforce rules that will 1
4661-allow the facility to obtain any necessary infor-2
4662-mation to perform any of the functions de-3
4663-scribed in this section; 4
4664-‘‘(B) provide the information to the Com-5
4665-mission on request; and 6
4666-‘‘(C) have the capacity to carry out such 7
4667-international information-sharing agreements as 8
4668-the Commission may require. 9
4669-‘‘(7) E
4670-MERGENCY AUTHORITY .—A digital com-10
4671-modity exchange shall adopt rules to provide for the 11
4672-exercise of emergency authority, in consultation or 12
4673-cooperation with the Commission or a registered en-13
4674-tity, as is necessary and appropriate, including the 14
4675-authority to facilitate the liquidation or transfer of 15
4676-open positions in any digital commodity or to sus-16
4677-pend or curtail trading in a digital commodity. 17
4678-‘‘(8) T
4679-IMELY PUBLICATION OF TRADING INFOR -18
4680-MATION.— 19
4681-‘‘(A) I
4682-N GENERAL.—A digital commodity 20
4683-exchange shall make public timely information 21
4684-on price, trading volume, and other trading 22
4685-data on digital commodities to the extent pre-23
4686-scribed by the Commission. 24 167
4687-•HR 4763 EH
4688-‘‘(B) CAPACITY OF DIGITAL COMMODITY 1
4689-EXCHANGE.—A digital commodity exchange 2
4690-shall have the capacity to electronically capture 3
4691-and transmit trade information with respect to 4
4692-transactions executed on the exchange. 5
4693-‘‘(9) R
4694-ECORDKEEPING AND REPORTING .— 6
4695-‘‘(A) I
4696-N GENERAL.—A digital commodity 7
4697-exchange shall— 8
4698-‘‘(i) maintain records of all activities 9
4699-relating to the business of the facility, in-10
4700-cluding a complete audit trail, in a form 11
4701-and manner acceptable to the Commission 12
4702-for a period of 5 years; 13
4703-‘‘(ii) report to the Commission, in a 14
4704-form and manner acceptable to the Com-15
4705-mission, such information as the Commis-16
4706-sion determines to be necessary or appro-17
4707-priate for the Commission to perform the 18
4708-duties of the Commission under this Act; 19
4709-and 20
4710-‘‘(iii) keep any such records of digital 21
4711-commodities which relate to a security 22
4712-open to inspection and examination by the 23
4713-Securities and Exchange Commission. 24 168
4714-•HR 4763 EH
4715-‘‘(B) INFORMATION-SHARING.—Subject to 1
4716-section 8, and on request, the Commission shall 2
4717-share information collected under subparagraph 3
4718-(A) with— 4
4719-‘‘(i) the Board; 5
4720-‘‘(ii) the Securities and Exchange 6
4721-Commission; 7
4722-‘‘(iii) each appropriate Federal bank-8
4723-ing agency; 9
4724-‘‘(iv) each appropriate State bank su-10
4725-pervisor (within the meaning of section 3 11
4726-of the Federal Deposit Insurance Act); 12
4727-‘‘(v) the Financial Stability Oversight 13
4728-Council; 14
4729-‘‘(vi) the Department of Justice; and 15
4730-‘‘(vii) any other person that the Com-16
4731-mission determines to be appropriate, in-17
4732-cluding— 18
4733-‘‘(I) foreign financial supervisors 19
4734-(including foreign futures authorities); 20
4735-‘‘(II) foreign central banks; and 21
4736-‘‘(III) foreign ministries. 22
4737-‘‘(C) C
4738-ONFIDENTIALITY AGREEMENT .—Be-23
4739-fore the Commission may share information 24
4740-with any entity described in subparagraph (B), 25 169
4741-•HR 4763 EH
4742-the Commission shall receive a written agree-1
4743-ment from the entity stating that the entity 2
4744-shall abide by the confidentiality requirements 3
4745-described in section 8 relating to the informa-4
4746-tion on digital commodities that is provided. 5
4747-‘‘(D) P
4748-ROVIDING INFORMATION .—A digital 6
4749-commodity exchange shall provide to the Com-7
4750-mission (including any designee of the Commis-8
4751-sion) information under subparagraph (A) in 9
4752-such form and at such frequency as is required 10
4753-by the Commission. 11
4754-‘‘(10) A
4755-NTITRUST CONSIDERATIONS .—Unless 12
4756-necessary or appropriate to achieve the purposes of 13
4757-this Act, a digital commodity exchange shall not— 14
4758-‘‘(A) adopt any rules or take any actions 15
4759-that result in any unreasonable restraint of 16
4760-trade; or 17
4761-‘‘(B) impose any material anticompetitive 18
4762-burden on trading. 19
4763-‘‘(11) C
4764-ONFLICTS OF INTEREST .—A registered 20
4765-digital commodity exchange shall implement conflict- 21
4766-of-interest systems and procedures that— 22
5051+N GENERAL.—Each futures commis-12
5052+sion merchant, introducing broker, digital com-13
5053+modity broker, digital commodity dealer, broker, 14
5054+and dealer shall maintain sufficient capital to 15
5055+comply with the stricter of any applicable cap-16
5056+ital requirements to which the futures commis-17
5057+sion merchant, introducing broker, digital com-18
5058+modity broker, digital commodity dealer, broker, 19
5059+or dealer, respectively, is subject under this Act 20
5060+or the Securities Exchange Act of 1934 (15 21
5061+U.S.C. 78a et seq.). 22
5062+‘‘(B) C
5063+OORDINATION OF CAPITAL REQUIRE -23
5064+MENTS.— 24
5065+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00167 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5066+rfrederick on LAP8M3WLY3PROD with BILLS 168
5067+•HR 4763 RH
5068+‘‘(i) COMMISSION RULE.—The Commis-1
5069+sion shall, by rule, provide appropriate off-2
5070+sets to any applicable capital requirement 3
5071+for a person with multiple registrations as 4
5072+a digital commodity dealer, digital com-5
5073+modity broker, futures commission mer-6
5074+chant, or introducing broker. 7
5075+‘‘(ii) J
5076+OINT RULE.—The Commission 8
5077+and the Securities and Exchange Commis-9
5078+sion shall jointly, by rule, provide appro-10
5079+priate offsets to any applicable capital re-11
5080+quirement for a person with multiple reg-12
5081+istrations as a digital commodity dealer, 13
5082+digital commodity broker, futures commis-14
5083+sion merchant, introducing broker, broker, 15
5084+or dealer. 16
5085+‘‘(f) R
5086+EPORTING ANDRECORDKEEPING.—Each digital 17
5087+commodity broker and digital commodity dealer— 18
5088+‘‘(1) shall make such reports as are required by 19
5089+the Commission by rule or regulation regarding the 20
5090+transactions, positions, and financial condition of the 21
5091+digital commodity broker or digital commodity deal-22
5092+er, respectively; 23
5093+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00168 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5094+rfrederick on LAP8M3WLY3PROD with BILLS 169
5095+•HR 4763 RH
5096+‘‘(2) shall keep books and records in such form 1
5097+and manner and for such period as may be prescribed 2
5098+by the Commission by rule or regulation; and 3
5099+‘‘(3) shall keep the books and records open to in-4
5100+spection and examination by any representative of 5
5101+the Commission. 6
5102+‘‘(g) D
5103+AILYTRADINGRECORDS.— 7
5104+‘‘(1) I
5105+N GENERAL.—Each digital commodity 8
5106+broker and digital commodity dealer shall maintain 9
5107+daily trading records of the transactions of the digital 10
5108+commodity broker or digital commodity dealer, re-11
5109+spectively, and all related records (including related 12
5110+forward or derivatives transactions) and recorded 13
5111+communications, including electronic mail, instant 14
5112+messages, and recordings of telephone calls, for such 15
5113+period as the Commission may require by rule or reg-16
5114+ulation. 17
5115+‘‘(2) I
5116+NFORMATION REQUIREMENTS .—The daily 18
5117+trading records shall include such information as the 19
5118+Commission shall require by rule or regulation. 20
5119+‘‘(3) C
5120+OUNTERPARTY RECORDS .—Each digital 21
5121+commodity broker and digital commodity dealer shall 22
5122+maintain daily trading records for each customer or 23
5123+counterparty in a manner and form that is identifi-24
5124+able with each digital commodity transaction. 25
5125+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00169 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5126+rfrederick on LAP8M3WLY3PROD with BILLS 170
5127+•HR 4763 RH
5128+‘‘(4) AUDIT TRAIL.—Each digital commodity 1
5129+broker and digital commodity dealer shall maintain 2
5130+a complete audit trail for conducting comprehensive 3
5131+and accurate trade reconstructions. 4
5132+‘‘(h) B
5133+USINESSCONDUCTSTANDARDS.— 5
5134+‘‘(1) I
5135+N GENERAL.—Each digital commodity 6
5136+broker and digital commodity dealer shall conform 7
5137+with such business conduct standards as the Commis-8
5138+sion, by rule or regulation, prescribes related to— 9
5139+‘‘(A) fraud, manipulation, and other abu-10
5140+sive practices involving spot or margined, lever-11
5141+aged, or financed digital commodity transactions 12
5142+(including transactions that are offered but not 13
5143+entered into); 14
5144+‘‘(B) diligent supervision of the business of 15
5145+the registered digital commodity broker or dig-16
5146+ital commodity dealer, respectively; and 17
5147+‘‘(C) such other matters as the Commission 18
5148+deems appropriate. 19
5149+‘‘(2) B
5150+USINESS CONDUCT REQUIREMENTS .—The 20
5151+Commission shall, by rule, prescribe business conduct 21
5152+requirements which— 22
5153+‘‘(A) require disclosure by a registered dig-23
5154+ital commodity broker and registered digital 24
5155+commodity dealer to any counterparty to the 25
5156+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00170 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5157+rfrederick on LAP8M3WLY3PROD with BILLS 171
5158+•HR 4763 RH
5159+transaction (other than an eligible contract par-1
5160+ticipant) of— 2
5161+‘‘(i) information about the material 3
5162+risks and characteristics of the digital com-4
5163+modity; 5
5164+‘‘(ii) information about the material 6
5165+risks and characteristics of the transaction; 7
5166+‘‘(B) establish a duty for such a digital 8
5167+commodity broker and such a digital commodity 9
5168+dealer to communicate in a fair and balanced 10
5169+manner based on principles of fair dealing and 11
5170+good faith; 12
5171+‘‘(C) establish standards governing digital 13
5172+commodity broker and digital commodity dealer 14
5173+marketing and advertising, including 15
5174+testimonials and endorsements; and 16
5175+‘‘(D) establish such other standards and re-17
5176+quirements as the Commission may determine 18
5177+are— 19
5178+‘‘(i) in the public interest; 20
5179+‘‘(ii) appropriate for the protection of 21
5180+customers; or 22
5181+‘‘(iii) otherwise in furtherance of the 23
5182+purposes of this Act. 24
5183+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00171 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5184+rfrederick on LAP8M3WLY3PROD with BILLS 172
5185+•HR 4763 RH
5186+‘‘(3) PROHIBITION ON FRAUDULENT PRAC -1
5187+TICES.—It shall be unlawful for a digital commodity 2
5188+broker or digital commodity dealer to— 3
5189+‘‘(A) employ any device, scheme, or artifice 4
5190+to defraud any customer or counterparty; 5
5191+‘‘(B) engage in any transaction, practice, or 6
5192+course of business that operates as a fraud or de-7
5193+ceit on any customer or counterparty; or 8
5194+‘‘(C) engage in any act, practice, or course 9
5195+of business that is fraudulent, deceptive, or ma-10
5196+nipulative. 11
5197+‘‘(i) D
5198+UTIES.— 12
5199+‘‘(1) R
5200+ISK MANAGEMENT PROCEDURES .—Each 13
5201+digital commodity broker and digital commodity 14
5202+dealer shall establish robust and professional risk 15
5203+management systems adequate for managing the day- 16
5204+to-day business of the digital commodity broker or 17
5205+digital commodity dealer, respectively. 18
5206+‘‘(2) D
5207+ISCLOSURE OF GENERAL INFORMATION .— 19
5208+Each digital commodity broker and digital com-20
5209+modity dealer shall disclose to the Commission infor-21
5210+mation concerning— 22
5211+‘‘(A) the terms and conditions of the trans-23
5212+actions of the digital commodity broker or dig-24
5213+ital commodity dealer, respectively; 25
5214+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00172 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5215+rfrederick on LAP8M3WLY3PROD with BILLS 173
5216+•HR 4763 RH
5217+‘‘(B) the trading operations, mechanisms, 1
5218+and practices of the digital commodity broker or 2
5219+digital commodity dealer, respectively; 3
5220+‘‘(C) financial integrity protections relating 4
5221+to the activities of the digital commodity broker 5
5222+or digital commodity dealer, respectively; and 6
5223+‘‘(D) other information relevant to trading 7
5224+in digital commodities by the digital commodity 8
5225+broker or digital commodity dealer, respectively. 9
5226+‘‘(3) A
5227+BILITY TO OBTAIN INFORMATION .—Each 10
5228+digital commodity broker and digital commodity 11
5229+dealer shall— 12
5230+‘‘(A) establish and enforce internal systems 13
5231+and procedures to obtain any necessary informa-14
5232+tion to perform any of the functions described in 15
5233+this section; and 16
5234+‘‘(B) provide the information to the Com-17
5235+mission, on request. 18
5236+‘‘(4) C
5237+ONFLICTS OF INTEREST .—Each digital 19
5238+commodity broker and digital commodity dealer shall 20
5239+implement conflict-of-interest systems and procedures 21
5240+that— 22
47675241 ‘‘(A) establish structural and institutional 23
4768-safeguards— 24 170
4769-•HR 4763 EH
5242+safeguards— 24
5243+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00173 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5244+rfrederick on LAP8M3WLY3PROD with BILLS 174
5245+•HR 4763 RH
47705246 ‘‘(i) to minimize conflicts of interest 1
47715247 that might potentially bias the judgment or 2
4772-supervision of the digital commodity ex-3
4773-change and contravene the principles of 4
4774-fair and equitable trading and the business 5
4775-conduct standards described in this Act, 6
4776-including conflicts arising out of trans-7
4777-actions or arrangements with affiliates (in-8
4778-cluding affiliates engaging in digital com-9
4779-modity activities) or between self-regu-10
4780-latory obligations and commercial inter-11
4781-ests, which may include information parti-12
4782-tions, restrictions on employees and direc-13
4783-tors, and the legal separation of different 14
4784-persons or entities involved in digital com-15
4785-modity activities; and 16
4786-‘‘(ii) to ensure that the activities of 17
4787-any person within the digital commodity 18
4788-exchange or any affiliated entity relating to 19
4789-research or analysis of the price or market 20
4790-for any digital commodity or acting in a 21
4791-role of providing dealing, brokering, or ad-22
4792-vising activities are separated by appro-23
5248+supervision of the digital commodity broker 3
5249+or digital commodity dealer, respectively, 4
5250+and contravene the principles of fair and 5
5251+equitable trading and the business conduct 6
5252+standards described in this Act, including 7
5253+conflicts arising out of transactions or ar-8
5254+rangements with affiliates (including affili-9
5255+ates acting as digital asset issuers, digital 10
5256+commodity dealers, or qualified digital com-11
5257+modity custodians), which may include in-12
5258+formation partitions and the legal separa-13
5259+tion of different persons involved in digital 14
5260+commodity activities; and 15
5261+‘‘(ii) to ensure that the activities of 16
5262+any person within the digital commodity 17
5263+broker or digital commodity dealer relating 18
5264+to research or analysis of the price or mar-19
5265+ket for any digital commodity or acting in 20
5266+a role of providing exchange activities or 21
5267+making determinations as to accepting ex-22
5268+change customers are separated by appro-23
47935269 priate informational partitions within the 24
4794-digital commodity exchange or any affili-25 171
4795-•HR 4763 EH
4796-ated entity from the review, pressure, or 1
5270+digital commodity broker or digital com-25
5271+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00174 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5272+rfrederick on LAP8M3WLY3PROD with BILLS 175
5273+•HR 4763 RH
5274+modity dealer from the review, pressure, or 1
47975275 oversight of persons whose involvement in 2
47985276 pricing, trading, exchange, or clearing ac-3
47995277 tivities might potentially bias their judg-4
4800-ment or supervision and contravene the 5
4801-core principles of open access and the busi-6
4802-ness conduct standards described in this 7
4803-Act; and 8
4804-‘‘(B) address such other issues as the 9
4805-Commission determines to be appropriate. 10
5278+ment or supervision and contravene the core 5
5279+principles of open access and the business 6
5280+conduct standards described in this Act; 7
5281+and 8
5282+‘‘(B) address such other issues as the Com-9
5283+mission determines to be appropriate. 10
5284+‘‘(5) A
5285+NTITRUST CONSIDERATIONS .—Unless nec-11
5286+essary or appropriate to achieve the purposes of this 12
5287+Act, a digital commodity broker or digital commodity 13
5288+dealer shall not— 14
5289+‘‘(A) adopt any process or take any action 15
5290+that results in any unreasonable restraint of 16
5291+trade; or 17
5292+‘‘(B) impose any material anticompetitive 18
5293+burden on trading or clearing. 19
5294+‘‘(j) D
5295+ESIGNATION OFCHIEFCOMPLIANCEOFFICER.— 20
5296+‘‘(1) I
5297+N GENERAL.—Each digital commodity 21
5298+broker and digital commodity dealer shall designate 22
5299+an individual to serve as a chief compliance officer. 23
5300+‘‘(2) D
5301+UTIES.—The chief compliance officer 24
5302+shall— 25
5303+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00175 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5304+rfrederick on LAP8M3WLY3PROD with BILLS 176
5305+•HR 4763 RH
5306+‘‘(A) report directly to the board or to the 1
5307+senior officer of the registered digital commodity 2
5308+broker or registered digital commodity dealer; 3
5309+‘‘(B) review the compliance of the registered 4
5310+digital commodity broker or registered digital 5
5311+commodity dealer with respect to the registered 6
5312+digital commodity broker and registered digital 7
5313+commodity dealer requirements described in this 8
5314+section; 9
5315+‘‘(C) in consultation with the board of di-10
5316+rectors, a body performing a function similar to 11
5317+the board, or the senior officer of the organiza-12
5318+tion, resolve any conflicts of interest that may 13
5319+arise; 14
5320+‘‘(D) be responsible for administering each 15
5321+policy and procedure that is required to be estab-16
5322+lished pursuant to this section; 17
5323+‘‘(E) ensure compliance with this Act (in-18
5324+cluding regulations), including each rule pre-19
5325+scribed by the Commission under this section; 20
5326+‘‘(F) establish procedures for the remedi-21
5327+ation of noncompliance issues identified by the 22
5328+chief compliance officer through any— 23
5329+‘‘(i) compliance office review; 24
5330+‘‘(ii) look-back; 25
5331+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00176 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5332+rfrederick on LAP8M3WLY3PROD with BILLS 177
5333+•HR 4763 RH
5334+‘‘(iii) internal or external audit find-1
5335+ing; 2
5336+‘‘(iv) self-reported error; or 3
5337+‘‘(v) validated complaint; and 4
5338+‘‘(G) establish and follow appropriate proce-5
5339+dures for the handling, management response, re-6
5340+mediation, retesting, and closing of noncompli-7
5341+ance issues. 8
5342+‘‘(3) A
5343+NNUAL REPORTS.— 9
5344+‘‘(A) I
5345+N GENERAL.—In accordance with 10
5346+rules prescribed by the Commission, the chief 11
5347+compliance officer shall annually prepare and 12
5348+sign a report that contains a description of— 13
5349+‘‘(i) the compliance of the registered 14
5350+digital commodity broker or registered dig-15
5351+ital commodity dealer with respect to this 16
5352+Act (including regulations); and 17
5353+‘‘(ii) each policy and procedure of the 18
5354+registered digital commodity broker or reg-19
5355+istered digital commodity dealer of the chief 20
5356+compliance officer (including the code of 21
5357+ethics and conflict of interest policies). 22
5358+‘‘(B) R
5359+EQUIREMENTS.—The chief compli-23
5360+ance officer shall ensure that a compliance report 24
5361+under subparagraph (A)— 25
5362+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00177 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5363+rfrederick on LAP8M3WLY3PROD with BILLS 178
5364+•HR 4763 RH
5365+‘‘(i) accompanies each appropriate fi-1
5366+nancial report of the registered digital com-2
5367+modity broker or registered digital com-3
5368+modity dealer that is required to be fur-4
5369+nished to the Commission pursuant to this 5
5370+section; and 6
5371+‘‘(ii) includes a certification that, 7
5372+under penalty of law, the compliance report 8
5373+is accurate and complete. 9
5374+‘‘(k) S
5375+EGREGATION OFDIGITALCOMMODITIES.— 10
5376+‘‘(1) H
5377+OLDING OF CUSTOMER ASSETS .— 11
5378+‘‘(A) I
5379+N GENERAL.—Each digital com-12
5380+modity broker and digital commodity dealer 13
5381+shall hold customer money, assets, and property 14
5382+in a manner to minimize the risk of loss to the 15
5383+customer or unreasonable delay in customer ac-16
5384+cess to the money, assets, and property of the 17
5385+customer. 18
5386+‘‘(B) Q
5387+UALIFIED DIGITAL COMMODITY CUS -19
5388+TODIAN.—Each digital commodity broker and 20
5389+digital commodity dealer shall hold in a quali-21
5390+fied digital commodity custodian each unit of a 22
5391+digital commodity that is— 23
5392+‘‘(i) the property of a customer or 24
5393+counterparty of the digital commodity 25
5394+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00178 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5395+rfrederick on LAP8M3WLY3PROD with BILLS 179
5396+•HR 4763 RH
5397+broker or digital commodity dealer, respec-1
5398+tively; 2
5399+‘‘(ii) required to be held by the digital 3
5400+commodity broker or digital commodity 4
5401+dealer under subsection (e); or 5
5402+‘‘(iii) otherwise so required by the 6
5403+Commission to reasonably protect customers 7
5404+or promote the public interest. 8
5405+‘‘(2) S
5406+EGREGATION OF FUNDS.— 9
5407+‘‘(A) I
5408+N GENERAL.—Each digital com-10
5409+modity broker and digital commodity dealer 11
5410+shall treat and deal with all money, assets, and 12
5411+property that is received by the registered digital 13
5412+commodity broker or registered digital com-14
5413+modity dealer, or accrues to a customer as the 15
5414+result of trading in digital commodities, as be-16
5415+longing to the customer. 17
5416+‘‘(B) C
5417+OMMINGLING PROHIBITED.— 18
5418+‘‘(i) I
5419+N GENERAL.—Except as provided 19
5420+in clause (ii), each digital commodity 20
5421+broker and digital commodity dealer shall 21
5422+separately account for money, assets, and 22
5423+property of a digital commodity customer, 23
5424+and shall not commingle any such money, 24
5425+assets, or property with the funds of the dig-25
5426+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00179 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5427+rfrederick on LAP8M3WLY3PROD with BILLS 180
5428+•HR 4763 RH
5429+ital commodity broker or digital commodity 1
5430+dealer, respectively, or use any such money, 2
5431+assets, or property to margin, secure, or 3
5432+guarantee any trades or accounts of any 4
5433+customer or person other than the person for 5
5434+whom the money, assets, or property are 6
5435+held. 7
5436+‘‘(ii) E
5437+XCEPTIONS.— 8
5438+‘‘(I) U
5439+SE OF FUNDS.— 9
5440+‘‘(aa) I
5441+N GENERAL.—A dig-10
5442+ital commodity broker or digital 11
5443+commodity dealer may, for con-12
5444+venience, commingle and deposit 13
5445+in the same account or accounts 14
5446+with any bank, trust company, 15
5447+derivatives clearing organization, 16
5448+or qualified digital commodity 17
5449+custodian money, assets, and 18
5450+property of customers. 19
5451+‘‘(bb) W
5452+ITHDRAWAL.—The 20
5453+share of the money, assets, and 21
5454+property described in item (aa) as 22
5455+in the normal course of business 23
5456+shall be necessary to margin, 24
5457+guarantee, secure, transfer, adjust, 25
5458+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00180 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5459+rfrederick on LAP8M3WLY3PROD with BILLS 181
5460+•HR 4763 RH
5461+or settle a contract of sale of a 1
5462+digital commodity with a reg-2
5463+istered entity may be withdrawn 3
5464+and applied to such purposes, in-4
5465+cluding the payment of commis-5
5466+sions, brokerage, interest, taxes, 6
5467+storage, and other charges, law-7
5468+fully accruing in connection with 8
5469+the contract. 9
5470+‘‘(II) C
5471+OMMISSION ACTION.—In 10
5472+accordance with such terms and condi-11
5473+tions as the Commission may prescribe 12
5474+by rule, regulation, or order, any 13
5475+money, assets, or property of the cus-14
5476+tomers of a digital commodity broker 15
5477+or digital commodity dealer may be 16
5478+commingled and deposited in customer 17
5479+accounts with any other money, assets, 18
5480+or property received by the digital 19
5481+commodity broker or digital com-20
5482+modity dealer, respectively, and re-21
5483+quired by the Commission to be sepa-22
5484+rately accounted for and treated and 23
5485+dealt with as belonging to the customer 24
5486+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00181 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5487+rfrederick on LAP8M3WLY3PROD with BILLS 182
5488+•HR 4763 RH
5489+of the digital commodity broker or dig-1
5490+ital commodity dealer, respectively. 2
5491+‘‘(3) P
5492+ERMITTED INVESTMENTS .—Money de-3
5493+scribed in paragraph (2) may be invested in obliga-4
5494+tions of the United States, in general obligations of 5
5495+any State or of any political subdivision of a State, 6
5496+in obligations fully guaranteed as to principal and 7
5497+interest by the United States, or in any other invest-8
5498+ment that the Commission may by rule or regulation 9
5499+allow. 10
5500+‘‘(4) C
5501+USTOMER PROTECTION DURING BANK -11
5502+RUPTCY.— 12
5503+‘‘(A) C
5504+USTOMER PROPERTY .—All money, 13
5505+assets, or property described in paragraph (2) 14
5506+shall be considered customer property for pur-15
5507+poses of section 761 of title 11, United States 16
5508+Code. 17
5509+‘‘(B) T
5510+RANSACTIONS.—A transaction in-18
5511+volving a unit of a digital commodity occurring 19
5512+with a digital commodity dealer shall be consid-20
5513+ered a ‘contract for the purchase or sale of a 21
5514+commodity for future delivery, on or subject to 22
5515+the rules of, a contract market or board of trade’ 23
5516+for purposes of the definition of a ‘commodity 24
5517+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00182 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5518+rfrederick on LAP8M3WLY3PROD with BILLS 183
5519+•HR 4763 RH
5520+contract’ in section 761 of title 11, United States 1
5521+Code. 2
5522+‘‘(C) B
5523+ROKERS AND DEALERS .—A digital 3
5524+commodity dealer and a digital commodity 4
5525+broker shall be considered a futures commission 5
5526+merchant for purposes of section 761 of title 11, 6
5527+United States Code. 7
5528+‘‘(D) A
5529+SSETS REMOVED FROM SEGREGA -8
5530+TION.—Assets removed from segregation due to a 9
5531+customer election under paragraph (5) shall not 10
5532+be considered customer property for purposes of 11
5533+section 761 of title 11, United States Code. 12
5534+‘‘(5) M
5535+ISUSE OF CUSTOMER PROPERTY .— 13
5536+‘‘(A) I
5537+N GENERAL.—It shall be unlawful— 14
5538+‘‘(i) for any digital commodity broker 15
5539+or digital commodity dealer that has re-16
5540+ceived any customer money, assets, or prop-17
5541+erty for custody to dispose of, or use any 18
5542+such money, assets, or property as belonging 19
5543+to the digital commodity broker or digital 20
5544+commodity dealer, respectively; or 21
5545+‘‘(ii) for any other person, including 22
5546+any depository, digital commodity ex-23
5547+change, other digital commodity broker, 24
5548+other digital commodity dealer, or digital 25
5549+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00183 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5550+rfrederick on LAP8M3WLY3PROD with BILLS 184
5551+•HR 4763 RH
5552+commodity custodian that has received any 1
5553+customer money, assets, or property for de-2
5554+posit, to hold, dispose of, or use any such 3
5555+money, assets, or property, as belonging to 4
5556+the depositing digital commodity broker or 5
5557+digital commodity dealer or any person 6
5558+other than the customers of the digital com-7
5559+modity broker or digital commodity dealer, 8
5560+respectively. 9
5561+‘‘(B) U
5562+SE FURTHER DEFINED .—For pur-10
5563+poses of this section, ‘use’ of a digital commodity 11
5564+includes utilizing any unit of a digital asset to 12
5565+participate in a blockchain service defined in 13
5566+paragraph (6) or a decentralized governance sys-14
5567+tem associated with the digital commodity or the 15
5568+blockchain system to which the digital com-16
5569+modity relates in any manner other than that 17
5570+expressly directed by the customer from whom 18
5571+the unit of a digital commodity was received. 19
5572+‘‘(6) P
5573+ARTICIPATION IN BLOCKCHAIN SERV -20
5574+ICES.— 21
5575+‘‘(A) I
5576+N GENERAL.—A customer shall have 22
5577+the right to waive the restrictions in paragraph 23
5578+(1) for any unit of a digital commodity to be 24
5579+used under subparagraph (B), by affirmatively 25
5580+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00184 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5581+rfrederick on LAP8M3WLY3PROD with BILLS 185
5582+•HR 4763 RH
5583+electing, in writing to the digital commodity 1
5584+broker or digital commodity dealer, to waive the 2
5585+restrictions. 3
5586+‘‘(B) U
5587+SE OF FUNDS.—Customer digital 4
5588+commodities removed from segregation under 5
5589+subparagraph (A) may be pooled and used by the 6
5590+digital commodity broker or digital commodity 7
5591+dealer, or one of their designees, to provide a 8
5592+blockchain service for a blockchain system to 9
5593+which the unit of the digital asset removed from 10
5594+segregation in subparagraph (A) relates. 11
5595+‘‘(C) L
5596+IMITATIONS.— 12
5597+‘‘(i) I
5598+N GENERAL.—The Commission 13
5599+may, by rule, establish notice and disclosure 14
5600+requirements, and any other limitations 15
5601+and rules related to the waiving of any re-16
5602+strictions under this paragraph that are 17
5603+reasonably necessary to protect customers, 18
5604+including eligible contract participants, 19
5605+non-eligible contract participants, or any 20
5606+other class of customers. 21
5607+‘‘(ii) C
5608+USTOMER CHOICE.—A digital 22
5609+commodity broker or digital commodity 23
5610+dealer may not require a waiver from a 24
5611+customer described in subparagraph (A) as 25
5612+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00185 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5613+rfrederick on LAP8M3WLY3PROD with BILLS 186
5614+•HR 4763 RH
5615+a condition of doing business with the 1
5616+broker or dealer. 2
5617+‘‘(D) B
5618+LOCKCHAIN SERVICE DEFINED .—In 3
5619+this subparagraph, the term ‘blockchain service’ 4
5620+means any activity relating to validating trans-5
5621+actions on a blockchain system, providing secu-6
5622+rity for a blockchain system, or other similar ac-7
5623+tivity required for the ongoing operation of a 8
5624+blockchain system. 9
5625+‘‘(l) F
5626+EDERALPREEMPTION.—Notwithstanding any 10
5627+other provision of law, the Commission shall have exclusive 11
5628+jurisdiction over any digital commodity broker or digital 12
5629+commodity dealer registered under this section. 13
5630+‘‘(m) E
5631+XEMPTIONS.—In order to promote responsible 14
5632+economic or financial innovation and fair competition, or 15
5633+protect customers, the Commission may (on its own initia-16
5634+tive or on application of the registered digital commodity 17
5635+broker or registered digital commodity dealer) exempt, un-18
5636+conditionally or on stated terms or conditions, or for stated 19
5637+periods, and retroactively or prospectively, or both, a reg-20
5638+istered digital commodity broker or registered digital com-21
5639+modity dealer from the requirements of this section, if the 22
5640+Commission determines that— 23
5641+‘‘(1)(A) the exemption would be consistent with 24
5642+the public interest and the purposes of this Act; and 25
5643+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00186 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5644+rfrederick on LAP8M3WLY3PROD with BILLS 187
5645+•HR 4763 RH
5646+‘‘(B) the exemption will not have a material ad-1
5647+verse effect on the ability of the Commission to dis-2
5648+charge regulatory duties under this Act; or 3
5649+‘‘(2) the registered digital commodity broker or 4
5650+registered digital commodity dealer is subject to com-5
5651+parable, comprehensive supervision and regulation by 6
5652+the appropriate government authorities in the home 7
5653+country of the registered digital commodity broker or 8
5654+registered digital commodity dealer, respectively. 9
5655+‘‘(n) T
5656+REATMENTUNDER THEBANKSECRECYACT.— 10
5657+A registered digital commodity broker and a registered dig-11
5658+ital commodity dealer shall be treated as a financial insti-12
5659+tution for purposes of the Bank Secrecy Act.’’. 13
5660+SEC. 407. REGISTRATION OF ASSOCIATED PERSONS. 14
5661+(a) I
5662+NGENERAL.—Section 4k of the Commodity Ex-15
5663+change Act (7 U.S.C. 6k) is amended— 16
5664+(1) by redesignating subsections (4) through (6) 17
5665+as subsections (5) through (7), respectively; and 18
5666+(2) by inserting after subsection (3) the fol-19
5667+lowing: 20
5668+‘‘(4) It shall be unlawful for any person to act as an 21
5669+associated person of a digital commodity broker or an asso-22
5670+ciated person of a digital commodity dealer unless the per-23
5671+son is registered with the Commission under this Act and 24
5672+such registration shall not have expired, been suspended 25
5673+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00187 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5674+rfrederick on LAP8M3WLY3PROD with BILLS 188
5675+•HR 4763 RH
5676+(and the period of suspension has not expired), or been re-1
5677+voked. It shall be unlawful for a digital commodity broker 2
5678+or a digital commodity dealer to permit such a person to 3
5679+become or remain associated with the digital commodity 4
5680+broker or digital commodity dealer if the digital commodity 5
5681+broker or digital commodity dealer knew or should have 6
5682+known that the person was not so registered or that the reg-7
5683+istration had expired, been suspended (and the period of 8
5684+suspension has not expired), or been revoked.’’; and 9
5685+(3) in subsection (5) (as so redesignated), by 10
5686+striking ‘‘or of a commodity trading advisor’’ and in-11
5687+serting ‘‘of a commodity trading advisor, of a digital 12
5688+commodity broker, or of a digital commodity dealer’’. 13
5689+(b) C
5690+ONFORMINGAMENDMENTS.—The Commodity Ex-14
5691+change Act (7 U.S.C. 1a et seq.) is amended by striking 15
5692+‘‘section 4k(6)’’ each place it appears and inserting ‘‘section 16
5693+4k(7)’’. 17
5694+SEC. 408. REGISTRATION OF COMMODITY POOL OPERATORS 18
5695+AND COMMODITY TRADING ADVISORS. 19
5696+Section 4m(3) of the Commodity Exchange Act (7 20
5697+U.S.C. 6m(3)) is amended— 21
5698+(1) in subparagraph (A)— 22
5699+(A) by striking ‘‘any commodity trading 23
5700+advisor’’ and inserting ‘‘a commodity pool oper-24
5701+ator or commodity trading advisor’’; and 25
5702+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00188 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5703+rfrederick on LAP8M3WLY3PROD with BILLS 189
5704+•HR 4763 RH
5705+(B) by striking ‘‘acting as a commodity 1
5706+trading advisor’’ and inserting ‘‘acting as a 2
5707+commodity pool operator or commodity trading 3
5708+advisor’’; and 4
5709+(2) in subparagraph (C), by inserting ‘‘digital 5
5710+commodities,’’ after ‘‘physical commodities,’’. 6
5711+SEC. 409. EXCLUSION FOR ANCILLARY ACTIVITIES. 7
5712+The Commodity Exchange Act (7 U.S.C. 1 et seq.), as 8
5713+amended by the preceding provisions of this Act, is amended 9
5714+by inserting after section 4u the following: 10
5715+‘‘SEC. 4v. EXCLUSION FOR ANCILLARY ACTIVITIES. 11
5716+‘‘(a) I
5717+NGENERAL.—Notwithstanding any other provi-12
5718+sion of this Act, a person shall not be subject to this Act 13
5719+and the regulations promulgated under this Act solely based 14
5720+on the person undertaking any ancillary activities. 15
5721+‘‘(b) E
5722+XCEPTIONS.—Subsection (a) shall not be con-16
5723+strued to apply to the anti-fraud, anti-manipulation, or 17
5724+false reporting enforcement authorities of the Commission. 18
5725+‘‘(c) A
5726+NCILLARYACTIVITIESDEFINED.—In this sec-19
5727+tion, the term ‘ancillary activities’ means any of the fol-20
5728+lowing activities related to the operation of a blockchain 21
5729+system: 22
5730+‘‘(1) Compiling network transactions, operating 23
5731+or participating in a pool, relaying, searching, se-24
5732+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00189 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5733+rfrederick on LAP8M3WLY3PROD with BILLS 190
5734+•HR 4763 RH
5735+quencing, validating, or acting in a similar capacity 1
5736+with respect to contract of sale of a digital asset. 2
5737+‘‘(2) Providing computational work, operating a 3
5738+node, or procuring, offering, or utilizing network 4
5739+bandwidth, or other similar incidental services with 5
5740+respect to a contract of sale of a digital asset. 6
5741+‘‘(3) Providing a user-interface that enables a 7
5742+user to read, and access data about a blockchain sys-8
5743+tem, send messages, or otherwise interact with a 9
5744+blockchain system. 10
5745+‘‘(4) Developing, publishing, constituting, ad-11
5746+ministering, maintaining, or otherwise distributing a 12
5747+blockchain system. 13
5748+‘‘(5) Developing, publishing, constituting, ad-14
5749+ministering, maintaining, or otherwise distributing 15
5750+software or systems that create or deploy hardware or 16
5751+software, including wallets or other systems, facili-17
5752+tating an individual user’s own personal ability to 18
5753+keep, safeguard, or custody a user’s digital commod-19
5754+ities or related private keys.’’. 20
5755+SEC. 410. FUNDING FOR IMPLEMENTATION, ADMINISTRA-21
5756+TION, AND ENFORCEMENT. 22
5757+Out of any money in the Treasury of the United States 23
5758+not otherwise appropriated, there are appropriated 24
5759+$120,000,000 to the Commodity Futures Trading Commis-25
5760+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00190 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5761+rfrederick on LAP8M3WLY3PROD with BILLS 191
5762+•HR 4763 RH
5763+sion for the implementation, administration, and enforce-1
5764+ment of the provisions of this Act to be administered by 2
5765+the Commodity Futures Trading Commission, which 3
5766+amounts shall remain available through the 5-year period 4
5767+that begins with the date of the enactment of this Act. 5
5768+SEC. 411. EFFECTIVE DATE. 6
5769+Unless otherwise provided in this title, this title and 7
5770+the amendments made by this title shall take effect 360 days 8
5771+after the date of enactment of this Act, except that, to the 9
5772+extent a provision of this title requires a rulemaking, the 10
5773+provision shall take effect on the later of— 11
5774+(1) 360 days after the date of enactment of this 12
5775+Act; or 13
5776+(2) 60 days after the publication in the Federal 14
5777+Register of the final rule implementing the provision. 15
5778+TITLE V.—INNOVATION AND 16
5779+TECHNOLOGY IMPROVEMENTS 17
5780+SEC. 501. CODIFICATION OF THE SEC STRATEGIC HUB FOR 18
5781+INNOVATION AND FINANCIAL TECHNOLOGY. 19
5782+Section 4 of the Securities Exchange Act of 1934 (15 20
5783+U.S.C. 78d) is amended by adding at the end the following: 21
5784+‘‘(l) S
5785+TRATEGICHUB FORINNOVATION ANDFINANCIAL 22
5786+T
5787+ECHNOLOGY.— 23
5788+‘‘(1) O
5789+FFICE ESTABLISHED.—There is established 24
5790+within the Commission the Strategic Hub for Innova-25
5791+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00191 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5792+rfrederick on LAP8M3WLY3PROD with BILLS 192
5793+•HR 4763 RH
5794+tion and Financial Technology (referred to in this 1
5795+section as the ‘FinHub’). 2
5796+‘‘(2) P
5797+URPOSES.—The purposes of FinHub are 3
5798+as follows: 4
5799+‘‘(A) To assist in shaping the approach of 5
5800+the Commission to technological advancements in 6
5801+the financial industry. 7
5802+‘‘(B) To examine financial technology inno-8
5803+vations within capital markets, market partici-9
5804+pants, and investors. 10
5805+‘‘(C) To coordinate the response of the Com-11
5806+mission to emerging technologies in financial, 12
5807+regulatory, and supervisory systems. 13
5808+‘‘(3) D
5809+IRECTOR OF FINHUB.—FinHub shall have 14
5810+a Director who shall be appointed by the Commission, 15
5811+from among individuals having experience in both 16
5812+emerging technologies and Federal securities law and 17
5813+serve at the pleasure of the Commission. The Director 18
5814+shall report directly to the Commission and perform 19
5815+such functions and duties as the Commission may 20
5816+prescribe. 21
5817+‘‘(4) R
5818+ESPONSIBILITIES.—FinHub shall— 22
5819+‘‘(A) foster responsible technological innova-23
5820+tion and fair competition within the Commis-24
5821+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00192 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5822+rfrederick on LAP8M3WLY3PROD with BILLS 193
5823+•HR 4763 RH
5824+sion, including around financial technology, reg-1
5825+ulatory technology, and supervisory technology; 2
5826+‘‘(B) provide internal education and train-3
5827+ing to the Commission regarding financial tech-4
5828+nology; 5
5829+‘‘(C) advise the Commission regarding fi-6
5830+nancial technology that would serve the Commis-7
5831+sion’s oversight functions; 8
5832+‘‘(D) analyze technological advancements 9
5833+and the impact of regulatory requirements on fi-10
5834+nancial technology companies; 11
5835+‘‘(E) advise the Commission with respect to 12
5836+rulemakings or other agency or staff action re-13
5837+garding financial technology; 14
5838+‘‘(F) provide businesses working in emerg-15
5839+ing financial technology fields with information 16
5840+on the Commission, its rules and regulations; 17
5841+and 18
5842+‘‘(G) encourage firms working in emerging 19
5843+technology fields to engage with the Commission 20
5844+and obtain feedback from the Commission on po-21
5845+tential regulatory issues. 22
5846+‘‘(5) A
5847+CCESS TO DOCUMENTS .—The Commission 23
5848+shall ensure that FinHub has full access to the docu-24
5849+ments and information of the Commission and any 25
5850+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00193 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5851+rfrederick on LAP8M3WLY3PROD with BILLS 194
5852+•HR 4763 RH
5853+self-regulatory organization, as necessary to carry out 1
5854+the functions of FinHub. 2
5855+‘‘(6) R
5856+EPORT TO CONGRESS.— 3
5857+‘‘(A) I
5858+N GENERAL.—Not later than October 4
5859+31 of each year after 2024, FinHub shall submit 5
5860+to the Committee on Banking, Housing, and 6
5861+Urban Affairs of the Senate and the Committee 7
5862+on Financial Services of the House of Represent-8
5863+atives a report on the activities of FinHub dur-9
5864+ing the immediately preceding fiscal year. 10
5865+‘‘(B) C
5866+ONTENTS.—Each report required 11
5867+under subparagraph (A) shall include— 12
5868+‘‘(i) the total number of persons that 13
5869+met with FinHub; 14
5870+‘‘(ii) the total number of market par-15
5871+ticipants FinHub met with, including the 16
5872+classification of those participants; 17
5873+‘‘(iii) a summary of general issues dis-18
5874+cussed during meetings with persons; 19
5875+‘‘(iv) information on steps FinHub has 20
5876+taken to improve Commission services, in-21
5877+cluding responsiveness to the concerns of 22
5878+persons; 23
5879+‘‘(v) recommendations— 24
5880+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00194 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5881+rfrederick on LAP8M3WLY3PROD with BILLS 195
5882+•HR 4763 RH
5883+‘‘(I) with respect to the regula-1
5884+tions of the Commission and the guid-2
5885+ance and orders of the Commission; 3
5886+and 4
5887+‘‘(II) for such legislative actions 5
5888+as the FinHub determines appropriate; 6
5889+and 7
5890+‘‘(vi) any other information, as deter-8
5891+mined appropriate by the Director of 9
5892+FinHub. 10
5893+‘‘(C) C
5894+ONFIDENTIALITY.—A report under 11
5895+subparagraph (A) may not contain confidential 12
5896+information. 13
5897+‘‘(7) S
5898+YSTEMS OF RECORDS.— 14
5899+‘‘(A) I
5900+N GENERAL.—The Commission shall 15
5901+establish a detailed system of records (as defined 16
5902+under section 552a of title 5, United States 17
5903+Code) to assist FinHub in communicating with 18
5904+interested parties. 19
5905+‘‘(B) E
5906+NTITIES COVERED BY THE SYS -20
5907+TEM.—Entities covered by the system required 21
5908+under subparagraph (A) include entities or per-22
5909+sons submitting requests or inquiries and other 23
5910+information to Commission through FinHub. 24
5911+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00195 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5912+rfrederick on LAP8M3WLY3PROD with BILLS 196
5913+•HR 4763 RH
5914+‘‘(C) SECURITY AND STORAGE OF 1
5915+RECORDS.—FinHub shall store— 2
5916+‘‘(i) electronic records— 3
5917+‘‘(I) in the system required under 4
5918+subparagraph (A); or 5
5919+‘‘(II) on the secure network or 6
5920+other electronic medium, such as 7
5921+encrypted hard drives or back-up 8
5922+media, of the Commission; and 9
5923+‘‘(ii) paper records in secure facilities. 10
5924+‘‘(8) E
5925+FFECTIVE DATE.—This subsection shall 11
5926+take effect on the date that is 180 days after the date 12
5927+of the enactment of this subsection.’’. 13
5928+SEC. 502. CODIFICATION OF LABCFTC. 14
5929+(a) I
5930+NGENERAL.—Section 18 of the Commodity Ex-15
5931+change Act (7 U.S.C. 22) is amended by adding at the end 16
5932+the following: 17
5933+‘‘(c) L
5934+ABCFTC.— 18
5935+‘‘(1) E
5936+STABLISHMENT.—There is established in 19
5937+the Commission LabCFTC. 20
5938+‘‘(2) P
5939+URPOSE.—The purposes of LabCFTC are 21
5940+to— 22
5941+‘‘(A) promote responsible financial tech-23
5942+nology innovation and fair competition for the 24
5943+benefit of the American public; 25
5944+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00196 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5945+rfrederick on LAP8M3WLY3PROD with BILLS 197
5946+•HR 4763 RH
5947+‘‘(B) serve as an information platform to 1
5948+inform the Commission about new financial 2
5949+technology innovation; and 3
5950+‘‘(C) provide outreach to financial tech-4
5951+nology innovators to discuss their innovations 5
5952+and the regulatory framework established by this 6
5953+Act and the regulations promulgated thereunder. 7
5954+‘‘(3) D
5955+IRECTOR.—LabCFTC shall have a Direc-8
5956+tor, who shall be appointed by the Commission and 9
5957+serve at the pleasure of the Commission. Notwith-10
5958+standing section 2(a)(6)(A), the Director shall report 11
5959+directly to the Commission and perform such func-12
5960+tions and duties as the Commission may prescribe. 13
5961+‘‘(4) D
5962+UTIES.—LabCFTC shall— 14
5963+‘‘(A) advise the Commission with respect to 15
5964+rulemakings or other agency or staff action re-16
5965+garding financial technology; 17
5966+‘‘(B) provide internal education and train-18
5967+ing to the Commission regarding financial tech-19
5968+nology; 20
5969+‘‘(C) advise the Commission regarding fi-21
5970+nancial technology that would bolster the Com-22
5971+mission’s oversight functions; 23
5972+‘‘(D) engage with academia, students, and 24
5973+professionals on financial technology issues, 25
5974+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00197 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
5975+rfrederick on LAP8M3WLY3PROD with BILLS 198
5976+•HR 4763 RH
5977+ideas, and technology relevant to activities under 1
5978+this Act; 2
5979+‘‘(E) provide persons working in emerging 3
5980+technology fields with information on the Com-4
5981+mission, its rules and regulations, and the role 5
5982+of a registered futures association; and 6
5983+‘‘(F) encourage persons working in emerg-7
5984+ing technology fields to engage with the Commis-8
5985+sion and obtain feedback from the Commission 9
5986+on potential regulatory issues. 10
5987+‘‘(5) A
5988+CCESS TO DOCUMENTS .—The Commission 11
5989+shall ensure that LabCFTC has full access to the doc-12
5990+uments and information of the Commission and any 13
5991+self-regulatory organization or registered futures asso-14
5992+ciation, as necessary to carry out the functions of 15
5993+LabCFTC. 16
5994+‘‘(6) R
5995+EPORT TO CONGRESS.— 17
5996+‘‘(A) I
5997+N GENERAL.—Not later than October 18
5998+31 of each year after 2024, LabCFTC shall sub-19
5999+mit to the Committee on Agriculture of the 20
6000+House of Representatives and the Committee on 21
6001+Agriculture, Nutrition, and Forestry of the Sen-22
6002+ate a report on its activities. 23
6003+‘‘(B) C
6004+ONTENTS.—Each report required 24
6005+under paragraph (1) shall include— 25
6006+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00198 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
6007+rfrederick on LAP8M3WLY3PROD with BILLS 199
6008+•HR 4763 RH
6009+‘‘(i) the total number of persons that 1
6010+met with LabCFTC; 2
6011+‘‘(ii) a summary of general issues dis-3
6012+cussed during meetings with the person; 4
6013+‘‘(iii) information on steps LabCFTC 5
6014+has taken to improve Commission services, 6
6015+including responsiveness to the concerns of 7
6016+persons; 8
6017+‘‘(iv) recommendations made to the 9
6018+Commission with respect to the regulations, 10
6019+guidance, and orders of the Commission 11
6020+and such legislative actions as may be ap-12
6021+propriate; and 13
6022+‘‘(v) any other information determined 14
6023+appropriate by the Director of LabCFTC. 15
6024+‘‘(C) C
6025+ONFIDENTIALITY.—A report under 16
6026+paragraph (A) shall abide by the confidentiality 17
6027+requirements in section 8. 18
6028+‘‘(7) S
6029+YSTEMS OF RECORDS.— 19
6030+‘‘(A) I
6031+N GENERAL.—The Commission shall 20
6032+establish a detailed system of records (as defined 21
6033+in section 552a of title 5, United States Code) to 22
6034+assist LabCFTC in communicating with inter-23
6035+ested parties. 24
6036+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00199 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
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6038+•HR 4763 RH
6039+‘‘(B) PERSONS COVERED BY THE SYSTEM .— 1
6040+The persons covered by the system of records 2
6041+shall include persons submitting requests or in-3
6042+quiries and other information to the Commission 4
6043+through LabCFTC. 5
6044+‘‘(C) S
6045+ECURITY AND STORAGE OF 6
6046+RECORDS.—The system of records shall store 7
6047+records electronically or on paper in secure fa-8
6048+cilities, and shall store electronic records on the 9
6049+secure network of the Commission and on other 10
6050+electronic media, such as encrypted hard drives 11
6051+and back-up media, as needed.’’. 12
6052+(b) C
6053+ONFORMINGAMENDMENTS.—Section 2(a)(6)(A) 13
6054+of such Act (7 U.S.C. 2(a)(6)(A)) is amended— 14
6055+(1) by striking ‘‘paragraph and in’’ and insert-15
6056+ing ‘‘paragraph,’’; and 16
6057+(2) by inserting ‘‘and section 18(c)(3),’’ before 17
6058+‘‘the executive’’. 18
6059+(c) E
6060+FFECTIVEDATE.—The Commodity Futures Trad-19
6061+ing Commission shall implement the amendments made by 20
6062+this section (including complying with section 18(c)(7) of 21
6063+the Commodity Exchange Act) within 180 days after the 22
6064+date of the enactment of this Act. 23
6065+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00200 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
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6067+•HR 4763 RH
6068+SEC. 503. CFTC-SEC JOINT ADVISORY COMMITTEE ON DIG-1
6069+ITAL ASSETS. 2
6070+(a) E
6071+STABLISHMENT.—The Commodity Futures Trad-3
6072+ing Commission and the Securities and Exchange Commis-4
6073+sion (in this section referred to as the ‘‘Commissions’’) shall 5
6074+jointly establish the Joint Advisory Committee on Digital 6
6075+Assets (in this section referred to as the ‘‘Committee’’). 7
6076+(b) P
6077+URPOSE.— 8
6078+(1) I
6079+N GENERAL.—The Committee shall— 9
6080+(A) provide the Commissions with advice on 10
6081+the rules, regulations, and policies of the Com-11
6082+missions related to digital assets; 12
6083+(B) further the regulatory harmonization of 13
6084+digital asset policy between the Commissions; 14
6085+(C) examine and disseminate methods for 15
6086+describing, measuring, and quantifying digital 16
6087+asset— 17
6088+(i) decentralization; 18
6089+(ii) functionality; 19
6090+(iii) information asymmetries; and 20
6091+(iv) transaction and network security; 21
6092+(D) examine the potential for digital assets, 22
6093+blockchain systems, and distributed ledger tech-23
6094+nology to improve efficiency in the operation of 24
6095+financial market infrastructure and better pro-25
6096+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00201 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
6097+rfrederick on LAP8M3WLY3PROD with BILLS 202
6098+•HR 4763 RH
6099+tect financial market participants, including 1
6100+services and systems which provide— 2
6101+(i) improved customer protections; 3
6102+(ii) public availability of information; 4
6103+(iii) greater transparency regarding 5
6104+customer funds; 6
6105+(iv) reduced transaction cost; and 7
6106+(v) increased access to financial mar-8
6107+ket services; and 9
6108+(E) discuss the implementation by the Com-10
6109+missions of this Act and the amendments made 11
6110+by this Act. 12
6111+(2) R
6112+EVIEW BY AGENCIES.—Each Commission 13
6113+shall— 14
6114+(A) review the findings and recommenda-15
6115+tions of the Committee; 16
6116+(B) each time the Committee submits a 17
6117+finding or recommendation to a Commission, 18
6118+promptly issue a public statement— 19
6119+(i) assessing the finding or rec-20
6120+ommendation of the Committee; 21
6121+(ii) disclosing the action or decision 22
6122+not to take action made by the Commission 23
6123+in response to a finding or recommendation; 24
6124+and 25
6125+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00202 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
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6127+•HR 4763 RH
6128+(iii) the reasons for the action or deci-1
6129+sion not to take action; and 2
6130+(C) each time the Committee submits a 3
6131+finding or recommendation to a Commission, 4
6132+provide the Committee with a formal response to 5
6133+the finding or recommendation not later than 3 6
6134+months after the date of the submission of the 7
6135+finding or recommendation. 8
6136+(c) M
6137+EMBERSHIP ANDLEADERSHIP.— 9
6138+(1) N
6139+ON-FEDERAL MEMBERS.— 10
6140+(A) I
6141+N GENERAL.—The Commissions shall 11
6142+appoint at least 20 nongovernmental stake-12
6143+holders with a wide diversity of opinion and who 13
6144+represent a broad spectrum of interests rep-14
6145+resenting the digital asset ecosystem, equally di-15
6146+vided between the Commissions, to serve as mem-16
6147+bers of the Committee. The appointees shall in-17
6148+clude— 18
6149+(i) digital asset issuers; 19
6150+(ii) persons registered with the Com-20
6151+missions and engaged in digital asset re-21
6152+lated activities; 22
6153+(iii) individuals engaged in academic 23
6154+research relating to digital assets; and 24
6155+(iv) digital asset users. 25
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6158+•HR 4763 RH
6159+(B) MEMBERS NOT COMMISSION EMPLOY -1
6160+EES.—Members appointed under subparagraph 2
6161+(A) shall not be deemed to be employees or agents 3
6162+of a Commission solely by reason of membership 4
6163+on the Committee. 5
6164+(2) C
6165+O-DESIGNATED FEDERAL OFFICERS .— 6
6166+(A) N
6167+UMBER; APPOINTMENT.—There shall 7
6168+be 2 co-designated Federal officers of the Com-8
6169+mittee, as follows: 9
6170+(i) The Director of LabCFTC of the 10
6171+Commodity Futures Trading Commission. 11
6172+(ii) The Director of the Strategic Hub 12
6173+for Innovation and Financial Technology of 13
6174+the Securities and Exchange Commission. 14
6175+(B) D
6176+UTIES.—The duties required by chap-15
6177+ter 10 of title 5, United States Code, to be car-16
6178+ried out by a designated Federal officer with re-17
6179+spect to the Committee shall be shared by the co- 18
6180+designated Federal officers of the Committee. 19
6181+(3) C
6182+OMMITTEE LEADERSHIP .— 20
6183+(A) C
6184+OMPOSITION; ELECTION.—The Com-21
6185+mittee members shall elect, from among the Com-22
6186+mittee members— 23
6187+(i) a chair; 24
6188+(ii) a vice chair; 25
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6190+rfrederick on LAP8M3WLY3PROD with BILLS 205
6191+•HR 4763 RH
6192+(iii) a secretary; and 1
6193+(iv) an assistant secretary. 2
6194+(B) T
6195+ERM OF OFFICE.—Each member elect-3
6196+ed under subparagraph (A) in a 2-year period 4
6197+referred to in section 1013(b)(2) of title 5, 5
6198+United States Code, shall serve in the capacity 6
6199+for which the member was so elected, until the 7
6200+end of the 2-year period. 8
6201+(d) N
6202+OCOMPENSATION FORCOMMITTEEMEMBERS.— 9
6203+(1) N
6204+ON-FEDERAL MEMBERS .—All Committee 10
6205+members appointed under subsection (d)(1) shall— 11
6206+(A) serve without compensation; and 12
6207+(B) while away from the home or regular 13
6208+place of business of the member in the perform-14
6209+ance of services for the Committee, be allowed 15
6210+travel expenses, including per diem in lieu of 16
6211+subsistence, in the same manner as persons em-17
6212+ployed intermittently in the Government service 18
6213+are allowed expenses under section 5703(b) of 19
6214+title 5, United States Code. 20
6215+(2) N
6216+O COMPENSATION FOR CO -DESIGNATED 21
6217+FEDERAL OFFICERS.—The co-designated Federal offi-22
6218+cers shall serve without compensation in addition to 23
6219+that received for their services as officers or employees 24
6220+of the United States. 25
6221+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00205 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
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6223+•HR 4763 RH
6224+(e) FREQUENCY OFMEETINGS.—The Committee shall 1
6225+meet— 2
6226+(1) not less frequently than twice annually; and 3
6227+(2) at such other times as either Commission 4
6228+may request. 5
6229+(f) D
6230+URATION.—Section 1013(a)(2) of title 5, United 6
6231+States Code, shall not apply to the Committee. 7
6232+(g) T
6233+IMELIMITS.—The Commissions shall— 8
6234+(1) adopt a joint charter for the Committee with-9
6235+in 90 days after the date of the enactment of this sec-10
6236+tion; 11
6237+(2) appoint members to the Committee within 12
6238+120 days after such date of enactment; and 13
6239+(3) hold the initial meeting of the Committee 14
6240+within 180 days after such date of enactment. 15
6241+(h) F
6242+UNDING.—The Commissions shall jointly fund the 16
6243+Committee. 17
6244+SEC. 504. MODERNIZATION OF THE SECURITIES AND EX-18
6245+CHANGE COMMISSION MISSION. 19
6246+(a) S
6247+ECURITIESACT OF1933.—Section 2(b) of the Se-20
6248+curities Act of 1933 (15 U.S.C. 77(b)) is amended— 21
6249+(1) in the heading, by inserting ‘‘I
6250+NNOVATION,’’ 22
6251+after ‘‘E
6252+FFICIENCY,’’; and 23
6253+(2) by inserting ‘‘innovation,’’ after ‘‘efficiency,’’. 24
6254+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00206 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
6255+rfrederick on LAP8M3WLY3PROD with BILLS 207
6256+•HR 4763 RH
6257+(b) SECURITIESEXCHANGEACT OF1934.—Section 1
6258+3(f) of the Securities Exchange Act of 1934 (15 U.S.C. 2
6259+78(c)) is amended— 3
6260+(1) in the heading, by inserting ‘‘I
6261+NNOVATION,’’ 4
6262+after ‘‘E
6263+FFICIENCY,’’; and 5
6264+(2) by inserting ‘‘innovation,’’ after ‘‘efficiency,’’. 6
6265+(c) I
6266+NVESTMENTADVISERSACT OF1940.—Section 7
6267+202(c) of the Investment Advisers Act of 1940 (15 U.S.C. 8
6268+80b–2) is amended— 9
6269+(1) in the heading, by inserting ‘‘I
6270+NNOVATION,’’ 10
6271+after ‘‘E
6272+FFICIENCY,’’; and 11
6273+(2) by inserting ‘‘innovation,’’ after ‘‘efficiency,’’. 12
6274+(d) I
6275+NVESTMENTCOMPANYACT OF1940.—Section 13
6276+2(c) of the Investment Company Act of 1940 (15 U.S.C. 14
6277+80a–2) is amended— 15
6278+(1) in the heading, by inserting ‘‘I
6279+NNOVATION,’’ 16
6280+after ‘‘E
6281+FFICIENCY,’’; and 17
6282+(2) by inserting ‘‘innovation,’’ after ‘‘efficiency,’’. 18
6283+SEC. 505. STUDY ON DECENTRALIZED FINANCE. 19
6284+(a) I
6285+NGENERAL.—The Commodity Futures Trading 20
6286+Commission and the Securities and Exchange Commission 21
6287+shall jointly carry out a study on decentralized finance that 22
6288+analyzes— 23
6289+(1) the nature, size, role, and use of decentralized 24
6290+finance blockchain protocols; 25
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6292+rfrederick on LAP8M3WLY3PROD with BILLS 208
6293+•HR 4763 RH
6294+(2) the operation of blockchain protocols that 1
6295+comprise decentralized finance; 2
6296+(3) the interoperability of blockchain protocols 3
6297+and blockchain systems; 4
6298+(4) the interoperability of blockchain protocols 5
6299+and software-based systems, including websites and 6
6300+wallets; 7
6301+(5) the decentralized governance systems through 8
6302+which blockchain protocols may be developed, pub-9
6303+lished, constituted, administered, maintained, or oth-10
6304+erwise distributed, including— 11
6305+(A) whether the systems enhance or detract 12
6306+from— 13
6307+(i) the decentralization of the decen-14
6308+tralized finance; and 15
6309+(ii) the inherent risks of the decentral-16
6310+ized governance system; and 17
6311+(B) any procedures or requirements that 18
6312+would mitigate the risks identified in subpara-19
6313+graph (A)(ii); 20
6314+(6) the benefits of decentralized finance, includ-21
6315+ing— 22
6316+(A) operational resilience and interoper-23
6317+ability of blockchain-based systems; 24
6318+(B) market competition and innovation; 25
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6320+rfrederick on LAP8M3WLY3PROD with BILLS 209
6321+•HR 4763 RH
6322+(C) transaction efficiency; 1
6323+(D) transparency and traceability of trans-2
6324+actions; and 3
6325+(E) disintermediation; and 4
6326+(7) the risks of decentralized finance, includ-5
6327+ing— 6
6328+(A) pseudonymity of users and transactions; 7
6329+(B) disintermediation; and 8
6330+(C) cybersecurity vulnerabilities; 9
6331+(8) the extent to which decentralized finance has 10
6332+integrated with the traditional financial markets and 11
6333+any potential risks to stability of the markets; 12
6334+(9) how the levels of illicit activity in decentral-13
6335+ized finance compare with the levels of illicit activity 14
6336+in traditional financial markets; 15
6337+(10) how decentralized finance may increase the 16
6338+accessibility of cross-border transactions; and 17
6339+(11) the feasibility of embedding self-executing 18
6340+compliance and risk controls into decentralized fi-19
6341+nance. 20
6342+(b) R
6343+EPORT.—Not later than 1 year after the date of 21
6344+enactment of this Act, the Commodity Futures Trading 22
6345+Commission and the Securities and Exchange Commission 23
6346+shall jointly submit to the relevant congressional committees 24
6347+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00209 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
6348+rfrederick on LAP8M3WLY3PROD with BILLS 210
6349+•HR 4763 RH
6350+a report that includes the results of the study required by 1
6351+subsection (a). 2
6352+(c) GAO S
6353+TUDY.—The Comptroller General of the 3
6354+United States shall— 4
6355+(1) carry out a study on decentralized finance 5
6356+that analyzes the information described under para-6
6357+graphs (1) through (11) of subsection (a); and 7
6358+(2) not later than 1 year after the date of enact-8
6359+ment of this Act, submit to the relevant congressional 9
6360+committees a report that includes the results of the 10
6361+study required by paragraph (1). 11
6362+(d) D
6363+EFINITIONS.—In this section: 12
6364+(1) D
6365+ECENTRALIZED FINANCE.— 13
6366+(A) I
6367+N GENERAL.—The term ‘‘decentralized 14
6368+finance’’ means blockchain protocols that allow 15
6369+users to engage in financial transactions in a 16
6370+self-directed manner so that a third-party inter-17
6371+mediary does not effectuate the transactions or 18
6372+take custody of digital assets of a user during 19
6373+any part of the transactions. 20
6374+(B) R
6375+ELATIONSHIP TO ANCILLARY ACTIVI -21
6376+TIES.—The term ‘‘decentralized finance’’ shall 22
6377+not be interpreted to limit or exclude any activ-23
6378+ity from the meaning of ‘‘ancillary activities’’, 24
6379+as defined in section 15H(c) of the Securities Ex-25
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6381+rfrederick on LAP8M3WLY3PROD with BILLS 211
6382+•HR 4763 RH
6383+change Act of 1934 or section 4v(c) of the Com-1
6384+modity Exchange Act. 2
6385+(2) R
6386+ELEVANT CONGRESSIONAL COMMITTEES .— 3
6387+The term ‘‘relevant congressional committees’’ 4
6388+means— 5
6389+(A) the Committees on Financial Services 6
6390+and Agriculture of the House of Representatives; 7
6391+and 8
6392+(B) the Committees on Banking, Housing, 9
6393+and Urban Affairs and Agriculture, Nutrition, 10
6394+and Forestry of the Senate. 11
6395+SEC. 506. STUDY ON NON-FUNGIBLE DIGITAL ASSETS. 12
6396+(a) The Comptroller General of the United States shall 13
6397+carry out a study of non-fungible digital assets that ana-14
6398+lyzes— 15
6399+(1) the nature, size, role, purpose, and use of 16
6400+non-fungible digital assets; 17
6401+(2) the similarities and differences between non- 18
6402+fungible digital assets and other digital assets, includ-19
6403+ing digital commodities and payments stablecoins, 20
6404+and how the markets for those digital assets intersect 21
6405+with each other; 22
6406+(3) how non-fungible digital assets are minted by 23
6407+issuers and subsequently administered to purchasers; 24
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6410+•HR 4763 RH
6411+(4) how non-fungible digital assets are stored 1
6412+after being purchased by a consumer; 2
6413+(5) the interoperability of non-fungible digital 3
6414+assets between different blockchain systems; 4
6415+(6) the scalability of different non-fungible dig-5
6416+ital asset marketplaces; 6
6417+(7) the benefits of non-fungible digital assets, in-7
6418+cluding verifiable digital ownership; 8
6419+(8) the risks of non-fungible tokens, including— 9
6420+(A) intellectual property rights; 10
6421+(B) cybersecurity risks; and 11
6422+(C) market risks; 12
6423+(9) whether and how non-fungible digital assets 13
6424+have integrated with traditional marketplaces, includ-14
6425+ing those for music, real estate, gaming, events, and 15
6426+travel; 16
6427+(10) whether non-fungible tokens can be used to 17
6428+facilitate commerce or other activities through the 18
6429+representation of documents, identification, contracts, 19
6430+licenses, and other commercial, government, or per-20
6431+sonal records; 21
6432+(11) any potential risks to traditional markets 22
6433+from such integration; and 23
6434+(12) the levels and types of illicit activity in 24
6435+non-fungible digital asset markets. 25
6436+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00212 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
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6438+•HR 4763 RH
6439+(b) REPORT.—Not later than 1 year after the date of 1
6440+the enactment of this Act, the Secretary of Commerce, shall 2
6441+make publicly available a report that includes the results 3
6442+of the study required by subsection (a). 4
6443+SEC. 507. STUDY ON FINANCIAL MARKET INFRASTRUCTURE 5
6444+IMPROVEMENTS. 6
6445+(a) I
6446+NGENERAL.—The Commodity Futures Trading 7
6447+Commission and the Securities and Exchange Commission 8
6448+shall jointly conduct a study to assess whether additional 9
6449+guidance or rules are necessary to facilitate the development 10
6450+of tokenized securities and derivatives products, and to the 11
6451+extent such guidance or rules would foster the development 12
6452+of fair and orderly financial markets, be necessary or ap-13
6453+propriate in the public interest, and be consistent with the 14
6454+protection of investors and customers. 15
6455+(b) R
6456+EPORT.— 16
6457+(1) T
6458+IME LIMIT.—Not later than 1 year after the 17
6459+date of enactment of this Act, the Commodity Futures 18
6460+Trading Commission and the Securities and Ex-19
6461+change Commission shall jointly submit to the rel-20
6462+evant congressional committees a report that includes 21
6463+the results of the study required by subsection (a). 22
6464+(2) R
6465+ELEVANT CONGRESSIONAL COMMITTEES DE -23
6466+FINED.—In this section, the term ‘‘relevant congres-24
6467+sional committees’’ means— 25
6468+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00213 Fmt 6652 Sfmt 6203 E:\BILLS\H4763.RH H4763
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6470+•HR 4763 RH
6471+(A) the Committees on Financial Services 1
6472+and on Agriculture of the House of Representa-2
6473+tives; and 3
6474+(B) the Committees on Banking, Housing, 4
6475+and Urban Affairs and on Agriculture, Nutri-5
6476+tion, and Forestry of the Senate. 6
6477+SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 7
6478+(a) S
6479+HORTTITLE.—This Act may be cited as 8
6480+the ‘‘Financial Innovation and Technology for 9
6481+the 21st Century Act’’. 10
6482+(b) T
6483+ABLE OFCONTENTS.—The table of con-11
6484+tents for this Act is as follows: 12
6485+Sec. 1. Short title; table of contents.
6486+TITLE I—DEFINITIONS; RULEMAKING; NOTICE OF INTENT
6487+TO REGISTER
6488+Sec. 101. Definitions under the Securities Act of 1933.
6489+Sec. 102. Definitions under the Securities Exchange Act of
6490+1934.
6491+Sec. 103. Definitions under the Commodity Exchange Act.
6492+Sec. 104. Definitions under this Act.
6493+Sec. 105. Joint rulemakings.
6494+Sec. 106. Notice of intent to register for digital commodity ex-
6495+changes, brokers, and dealers.
6496+Sec. 107. Notice of intent to register for digital asset brokers,
6497+dealers, and trading systems.
6498+Sec. 108. Commodity Exchange Act savings provisions.
6499+Sec. 109. International harmonization.
6500+Sec. 110. Implementation.
6501+TITLE II— OFFERS AND SALES OF DIGITAL ASSETS
6502+Sec. 201. Exempted transactions in digital assets.
6503+Sec. 202. Requirements for offers and sales of certain digital
6504+assets.
6505+Sec. 203. Enhanced disclosure requirements.
6506+Sec. 204. Certification of certain digital assets.
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6509+•HR 4763 RH
6510+Sec. 205. Effective date.
6511+TITLE III—REGISTRATION FOR DIGITAL ASSET INTER-
6512+MEDIARIES AT THE SECURITIES AND EXCHANGE COM-
6513+MISSION
6514+Sec. 301. Treatment of digital commodities and other digital
6515+assets.
6516+Sec. 302. Anti-fraud authority over permitted payment
6517+stablecoins.
6518+Sec. 303. Registration of digital asset trading systems.
6519+Sec. 304. Requirements for digital asset trading systems.
6520+Sec. 305. Registration of digital asset brokers and digital asset
6521+dealers.
6522+Sec. 306. Requirements of digital asset brokers and digital
6523+asset dealers.
6524+Sec. 307. Rules related to conflicts of interest.
6525+Sec. 308. Treatment of certain digital assets in connection with
6526+federally regulated intermediaries.
6527+Sec. 309. Exclusion for ancillary activities.
6528+Sec. 310. Registration and requirements for notice-registered
6529+digital asset clearing agencies.
6530+Sec. 311. Treatment of custody activities by banking institu-
6531+tions.
6532+Sec. 312. Effective date; administration.
6533+TITLE IV—REGISTRATION FOR DIGITAL ASSET INTER-
6534+MEDIARIES AT THE COMMODITY FUTURES TRADING
6535+COMMISSION
6536+Sec. 401. Commission jurisdiction over digital commodity
6537+transactions.
6538+Sec. 402. Requiring futures commission merchants to use
6539+qualified digital commodity custodians.
6540+Sec. 403. Trading certification and approval for digital com-
6541+modities.
6542+Sec. 404. Registration of digital commodity exchanges.
6543+Sec. 405. Qualified digital commodity custodians.
6544+Sec. 406. Registration and regulation of digital commodity bro-
6545+kers and dealers.
6546+Sec. 407. Registration of associated persons.
6547+Sec. 408. Registration of commodity pool operators and com-
6548+modity trading advisors.
6549+Sec. 409. Exclusion for ancillary activities.
6550+Sec. 410. Effective date.
6551+TITLE V—INNOVATION AND TECHNOLOGY
6552+IMPROVEMENTS
6553+Sec. 501. Codification of the SEC Strategic Hub for Innovation
6554+and Financial Technology.
6555+Sec. 502. Codification of LabCFTC.
6556+Sec. 503. CFTC-SEC Joint Advisory Committee on Digital As-
6557+sets.
6558+Sec. 504. Study on decentralized finance.
6559+Sec. 505. Study on non-fungible digital assets.
6560+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00215 Fmt 6652 Sfmt 6212 E:\BILLS\H4763.RH H4763
6561+rfrederick on LAP8M3WLY3PROD with BILLS 216
6562+•HR 4763 RH
6563+Sec. 506. Study on expanding financial literacy amongst digital
6564+asset holders.
6565+Sec. 507. Study on financial market infrastructure improve-
6566+ments.
6567+TITLE VI—MISCELLANEOUS
6568+Sec. 601. Findings; sense of Congress.
6569+TITLE I—DEFINITIONS; RULE-1
6570+MAKING; NOTICE OF INTENT 2
6571+TO REGISTER 3
6572+SEC. 101. DEFINITIONS UNDER THE SECURITIES ACT OF 4
6573+1933. 5
6574+Section 2(a) of the Securities Act of 1933 6
6575+(15 U.S.C. 77b(a)) is amended by adding at the 7
6576+end the following: 8
6577+‘‘(20) A
6578+FFILIATED PERSON .—The term 9
6579+‘affiliated person’ means a person (includ-10
6580+ing a related person) that— 11
6581+‘‘(A) with respect to a digital asset 12
6582+issuer— 13
6583+‘‘(i) directly, or indirectly 14
6584+through one or more inter-15
6585+mediaries, controls, or is con-16
6586+trolled by, or is under common 17
6587+control with, such digital asset 18
6588+issuer; and 19
6589+‘‘(ii) was described under 20
6590+clause (i) at any point in the pre-21
6591+vious 3-month period; or 22
6592+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00216 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
6593+rfrederick on LAP8M3WLY3PROD with BILLS 217
6594+•HR 4763 RH
6595+‘‘(B) with respect to any digital 1
6596+asset— 2
6597+‘‘(i) beneficially owns 5 per-3
6598+cent or more of the units of such 4
6599+digital asset that are then out-5
6600+standing; and 6
6601+‘‘(ii) was described under 7
6602+clause (i) at any point in the pre-8
6603+vious 3-month period. 9
6604+‘‘(21) B
6605+LOCKCHAIN.—The term 10
6606+‘blockchain’ means any technology— 11
6607+‘‘(A) where data is— 12
6608+‘‘(i) shared across a network 13
6609+to create a public ledger of 14
6610+verified transactions or informa-15
6611+tion among network participants; 16
6612+‘‘(ii) linked using cryptog-17
6613+raphy to maintain the integrity of 18
6614+the public ledger and to execute 19
6615+other functions; and 20
6616+‘‘(iii) distributed among net-21
6617+work participants in an auto-22
6618+mated fashion to concurrently up-23
6619+date network participants on the 24
6620+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00217 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
6621+rfrederick on LAP8M3WLY3PROD with BILLS 218
6622+•HR 4763 RH
6623+state of the public ledger and any 1
6624+other functions; and 2
6625+‘‘(B) composed of source code that 3
6626+is publicly available. 4
6627+‘‘(22) B
6628+LOCKCHAIN PROTOCOL .—The 5
6629+term ‘blockchain protocol’ means any 6
6630+executable software deployed to a 7
6631+blockchain composed of source code that 8
6632+is publicly available and accessible, in-9
6633+cluding a smart contract or any network 10
6634+of smart contracts. 11
6635+‘‘(23) B
6636+LOCKCHAIN SYSTEM .—The term 12
6637+‘blockchain system’ means any 13
6638+blockchain or blockchain protocol. 14
6639+‘‘(24) D
6640+ECENTRALIZED NETWORK .—With 15
6641+respect to a blockchain system to which a 16
6642+digital asset relates, the term ‘decentral-17
6643+ized network’ means the following condi-18
6644+tions are met: 19
6645+‘‘(A) During the previous 12- 20
6646+month period, no person— 21
6647+‘‘(i) had the unilateral author-22
6648+ity, directly or indirectly, through 23
6649+any contract, arrangement, un-24
6650+derstanding, relationship, or oth-25
6651+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00218 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
6652+rfrederick on LAP8M3WLY3PROD with BILLS 219
6653+•HR 4763 RH
6654+erwise, to control or materially 1
6655+alter the functionality or oper-2
6656+ation of the blockchain system; or 3
6657+‘‘(ii) had the unilateral au-4
6658+thority to restrict or prohibit any 5
6659+person who is not a digital asset 6
6660+issuer, related person, or an affili-7
6661+ated person from— 8
6662+‘‘(I) using, earning, or 9
6663+transmitting the digital asset; 10
6664+‘‘(II) deploying software 11
6665+that uses or integrates with 12
6666+the blockchain system; 13
6667+‘‘(III) participating in a 14
6668+decentralized governance sys-15
6669+tem with respect to the 16
6670+blockchain system; or 17
6671+‘‘(IV) operating a node, 18
6672+validator, or other form of 19
6673+computational infrastructure 20
6674+with respect to the blockchain 21
6675+system. 22
6676+‘‘(B) During the previous 12- 23
6677+month period— 24
6678+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00219 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
6679+rfrederick on LAP8M3WLY3PROD with BILLS 220
6680+•HR 4763 RH
6681+‘‘(i) no digital asset issuer or 1
6682+affiliated person beneficially 2
6683+owned, in the aggregate, 20 per-3
6684+cent or more of the total amount 4
6685+of units of such digital asset 5
6686+that— 6
6687+‘‘(I) can be created, issued, 7
6688+or distributed in such 8
6689+blockchain system; and 9
6690+‘‘(II) were freely 10
6691+transferrable or otherwise 11
6692+used or available to be used 12
6693+for the purposes of such 13
6694+blockchain system; 14
6695+‘‘(ii) no digital asset issuer or 15
6696+affiliated person had the unilat-16
6697+eral authority to direct the vot-17
6698+ing, in the aggregate, of 20 per-18
6699+cent or more of the outstanding 19
6700+voting power of such digital asset 20
6701+or related decentralized govern-21
6702+ance system; or 22
6703+‘‘(iii) the digital asset did not 23
6704+include voting power with respect 24
6705+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00220 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
6706+rfrederick on LAP8M3WLY3PROD with BILLS 221
6707+•HR 4763 RH
6708+to any decentralized governance 1
6709+system of the blockchain system. 2
6710+‘‘(C) During the previous 3-month 3
6711+period, the digital asset issuer, any 4
6712+affiliated person, or any related per-5
6713+son has not implemented or contrib-6
6714+uted any intellectual property to the 7
6715+source code of the blockchain system 8
6716+that materially alters the 9
6717+functionality or operation of the 10
6718+blockchain system, unless such imple-11
6719+mentation or contribution to the 12
6720+source code— 13
6721+‘‘(i) addressed vulnerabilities, 14
6722+errors, regular maintenance, cy-15
6723+bersecurity risks, or other tech-16
6724+nical changes to the blockchain 17
6725+system; or 18
6726+‘‘(ii) were adopted through 19
6727+the consensus or agreement of a 20
6728+decentralized governance system. 21
6729+‘‘(D) During the previous 3-month 22
6730+period, neither any digital asset 23
6731+issuer nor any affiliated person de-24
6732+scribed under paragraph (20)(A) has 25
6733+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00221 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
6734+rfrederick on LAP8M3WLY3PROD with BILLS 222
6735+•HR 4763 RH
6736+marketed to the public the digital as-1
6737+sets as an investment. 2
6738+‘‘(E) During the previous 12- 3
6739+month period, all issuances of units of 4
6740+such digital asset through the pro-5
6741+grammatic functioning of the 6
6742+blockchain system were end user dis-7
6743+tributions. 8
6744+‘‘(25) D
6745+ECENTRALIZED GOVERNANCE SYS -9
6746+TEM.— 10
6747+‘‘(A) I
6748+N GENERAL .—The term ‘de-11
6749+centralized governance system’ 12
6750+means, with respect to a blockchain 13
6751+system, any rules-based system per-14
6752+mitting persons using the blockchain 15
6753+system or the digital assets related to 16
6754+such blockchain system to form con-17
6755+sensus or reach agreement in the de-18
6756+velopment, provision, publication, 19
6757+management, or administration of 20
6758+such blockchain system. 21
6759+‘‘(B) R
6760+ELATIONSHIP OF PERSONS TO 22
6761+DECENTRALIZED GOVERNANCE SYS -23
6762+TEMS.—Persons acting through a de-24
6763+centralized governance system shall 25
6764+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00222 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
6765+rfrederick on LAP8M3WLY3PROD with BILLS 223
6766+•HR 4763 RH
6767+be treated as separate persons unless 1
6768+such persons are under common con-2
6769+trol. 3
6770+‘‘(C) E
6771+XCLUSION.—The term ‘decen-4
6772+tralized governance system’ does not 5
6773+include a system in which— 6
6774+‘‘(i) a person or group of per-7
6775+sons under common control have 8
6776+the ability to— 9
6777+‘‘(I) unilaterally alter the 10
6778+rules of consensus or agree-11
6779+ment for the blockchain sys-12
6780+tem; or 13
6781+‘‘(II) determine the final 14
6782+outcome of decisions related 15
6783+to the development, provision, 16
6784+publication, management, or 17
6785+administration of such 18
6786+blockchain system; 19
6787+‘‘(ii) a person or group of per-20
6788+sons is directly engaging in an ac-21
6789+tivity that requires registration 22
6790+with the Commission or the Com-23
6791+modity Futures Trading Commis-24
6792+sion other than— 25
6793+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00223 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
6794+rfrederick on LAP8M3WLY3PROD with BILLS 224
6795+•HR 4763 RH
6796+‘‘(I) developing, providing, 1
6797+publishing, managing, or ad-2
6798+ministering a blockchain sys-3
6799+tem; or 4
6800+‘‘(II) an activity with re-5
6801+spect to which the organiza-6
6802+tion is exempt from such reg-7
6803+istration; or 8
6804+‘‘(iii) a person or group of per-9
6805+sons seeking to knowingly evade 10
6806+the requirements imposed on a 11
6807+digital asset issuer, a related per-12
6808+son, an affiliated person, or any 13
6809+other person registered (or re-14
6810+quired to be registered) under the 15
6811+securities laws, the Financial In-16
6812+novation and Technology for the 17
6813+21st Century Act, or the Com-18
6814+modity Exchange Act. 19
6815+‘‘(26) D
6816+IGITAL ASSET.— 20
6817+‘‘(A) I
6818+N GENERAL .—The term ‘dig-21
6819+ital asset’ means any fungible digital 22
6820+representation of value that can be 23
6821+exclusively possessed and trans-24
6822+ferred, person to person, without nec-25
6823+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00224 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
6824+rfrederick on LAP8M3WLY3PROD with BILLS 225
6825+•HR 4763 RH
6826+essary reliance on an intermediary, 1
6827+and is recorded on a cryptographi-2
6828+cally secured public distributed ledg-3
6829+er. 4
6830+‘‘(B) E
6831+XCLUSIONS.—The term ‘dig-5
6832+ital asset’ does not include— 6
6833+‘‘(i) any note, stock, treasury 7
6834+stock, security future, security- 8
6835+based swap, bond, debenture, evi-9
6836+dence of indebtedness, certificate 10
6837+of interest or participation in any 11
6838+profit-sharing agreement, collat-12
6839+eral-trust certificate, 13
6840+preorganization certificate or 14
6841+subscription, or transferable 15
6842+share; or 16
6843+‘‘(ii) any asset, which based on 17
6844+its terms and other characteris-18
6845+tics, is, represents, or is function-19
6846+ally equivalent to an agreement, 20
6847+contract, or transaction that is— 21
6848+‘‘(I) a contract of sale of a 22
6849+commodity (as defined under 23
6850+section 1a of the Commodity 24
6851+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00225 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
6852+rfrederick on LAP8M3WLY3PROD with BILLS 226
6853+•HR 4763 RH
6854+Exchange Act) for future de-1
6855+livery or an option thereon; 2
6856+‘‘(II) a security futures 3
6857+product; 4
6858+‘‘(III) a swap; 5
6859+‘‘(IV) an agreement, con-6
6860+tract, or transaction de-7
6861+scribed in section 2(c)(2)(C)(i) 8
6862+or 2(c)(2)(D)(i) of the Com-9
6863+modity Exchange Act; 10
6864+‘‘(V) a commodity option 11
6865+authorized under section 4c of 12
6866+the Commodity Exchange Act; 13
6867+or 14
6868+‘‘(VI) a leverage trans-15
6869+action authorized under sec-16
6870+tion 19 of the Commodity Ex-17
6871+change Act. 18
6872+‘‘(C) R
6873+ULE OF CONSTRUCTION .— 19
6874+Nothing in this paragraph shall be 20
6875+construed to create a presumption 21
6876+that a digital asset is a representation 22
6877+of any type of security not excluded 23
6878+from the definition of digital asset. 24
6879+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00226 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
6880+rfrederick on LAP8M3WLY3PROD with BILLS 227
6881+•HR 4763 RH
6882+‘‘(D) R ELATIONSHIP TO A 1
6883+BLOCKCHAIN SYSTEM .—A digital asset is 2
6884+considered to relate to a blockchain 3
6885+system if the digital asset is intrinsi-4
6886+cally linked to the blockchain system, 5
6887+including— 6
6888+‘‘(i) where the digital asset’s 7
6889+value is reasonably expected to be 8
6890+generated by the programmatic 9
6891+functioning of the blockchain sys-10
6892+tem; 11
6893+‘‘(ii) where the digital asset 12
6894+has voting rights with respect to 13
6895+the decentralized governance sys-14
6896+tem of the blockchain system; or 15
6897+‘‘(iii) where the digital asset is 16
6898+issued through the programmatic 17
6899+functioning of the blockchain sys-18
6900+tem. 19
6901+‘‘(E) T
6902+REATMENT OF CERTAIN DIG -20
6903+ITAL ASSETS SOLD PURSUANT TO AN IN -21
6904+VESTMENT CONTRACT .—A digital asset 22
6905+offered or sold or intended to be of-23
6906+fered or sold pursuant to an invest-24
6907+ment contract is not and does not be-25
6908+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00227 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
6909+rfrederick on LAP8M3WLY3PROD with BILLS 228
6910+•HR 4763 RH
6911+come a security as a result of being 1
6912+sold or otherwise transferred pursu-2
6913+ant to that investment contract. 3
6914+‘‘(27) D
6915+IGITAL ASSET ISSUER .— 4
6916+‘‘(A) I
6917+N GENERAL.—With respect to 5
6918+a digital asset, the term ‘digital asset 6
6919+issuer’ means any person that, in ex-7
6920+change for any consideration— 8
6921+‘‘(i) issues or causes to be 9
6922+issued a unit of such digital asset 10
6923+to a person; or 11
6924+‘‘(ii) offers or sells a right to a 12
6925+future issuance of a unit of such 13
6926+digital asset to a person. 14
6927+‘‘(B) E
6928+XCLUSION.—The term ‘digital 15
6929+asset issuer’ does not include any per-16
6930+son solely because such person de-17
6931+ploys source code that creates or 18
6932+issues units of a digital asset that are 19
6933+only distributed in end user distribu-20
6934+tions. 21
6935+‘‘(C) P
6936+ROHIBITION ON EVASION .—It 22
6937+shall be unlawful for any person to 23
6938+knowingly evade classification as a 24
6939+‘digital asset issuer’ and facilitate an 25
6940+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00228 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
6941+rfrederick on LAP8M3WLY3PROD with BILLS 229
6942+•HR 4763 RH
6943+arrangement for the primary purpose 1
6944+of effecting a sale, distribution, or 2
6945+other issuance of a digital asset. 3
6946+‘‘(28) D
6947+IGITAL ASSET MATURITY DATE .— 4
6948+The term ‘digital asset maturity date’ 5
6949+means, with respect to any digital asset, 6
6950+the first date on which 20 percent or 7
6951+more of the total units of such digital 8
6952+asset that are then outstanding as of such 9
6953+date are— 10
6954+‘‘(A) digital commodities; or 11
6955+‘‘(B) digital assets that have been 12
6956+registered with the Commission. 13
6957+‘‘(29) D
6958+IGITAL COMMODITY .—The term 14
6959+‘digital commodity’ has the meaning 15
6960+given that term under section 1a of the 16
6961+Commodity Exchange Act (7 U.S.C. 1a). 17
6962+‘‘(30) E
6963+ND USER DISTRIBUTION .— 18
6964+‘‘(A) I
6965+N GENERAL .—The term ‘end 19
6966+user distribution’ means an issuance 20
6967+of a unit of a digital asset that— 21
6968+‘‘(i) does not involve an ex-22
6969+change of more than a nominal 23
6970+value of cash, property, or other 24
6971+assets; and 25
6972+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00229 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
6973+rfrederick on LAP8M3WLY3PROD with BILLS 230
6974+•HR 4763 RH
6975+‘‘(ii) is distributed in a broad, 1
6976+equitable, and non-discretionary 2
6977+manner based on conditions capa-3
6978+ble of being satisfied by any par-4
6979+ticipant in the blockchain system, 5
6980+including as incentive-based re-6
6981+wards— 7
6982+‘‘(I) to users of the digital 8
6983+asset or any blockchain sys-9
6984+tem to which the digital asset 10
6985+relates; 11
6986+‘‘(II) for activities directly 12
6987+related to the operation of the 13
6988+blockchain system, such as 14
6989+mining, validating, staking, or 15
6990+other activity directly tied to 16
6991+the operation of the 17
6992+blockchain system; or 18
6993+‘‘(III) to the existing hold-19
6994+ers of another digital asset, in 20
6995+proportion to the total units 21
6996+of such other digital asset as 22
6997+are held by each person. 23
6998+‘‘(B) P
6999+ROHIBITION ON EVASION .—It 24
7000+shall be unlawful for any person to 25
7001+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00230 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7002+rfrederick on LAP8M3WLY3PROD with BILLS 231
7003+•HR 4763 RH
7004+facilitate an end user distribution to 1
7005+knowingly evade classification as a 2
7006+digital asset issuer, related person, or 3
7007+an affiliated person, or the require-4
7008+ments related to a digital asset 5
7009+issuance. 6
7010+‘‘(31) F
7011+UNCTIONAL NETWORK .—With re-7
7012+spect to a blockchain system to which a 8
7013+digital asset relates, the term ‘functional 9
7014+network’ means the network allows net-10
7015+work participants to use such digital 11
7016+asset for— 12
7017+‘‘(A) the transmission and storage 13
7018+of value on the blockchain system; 14
7019+‘‘(B) the participation in services 15
7020+provided by or an application run-16
7021+ning on the blockchain system; or 17
7022+‘‘(C) the participation in the de-18
7023+centralized governance system of the 19
7024+blockchain system. 20
7025+‘‘(32) P
7026+ERMITTED PAYMENT 21
7027+STABLECOIN.—The term ‘permitted pay-22
7028+ment stablecoin’— 23
7029+‘‘(A) means a digital asset— 24
7030+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00231 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7031+rfrederick on LAP8M3WLY3PROD with BILLS 232
7032+•HR 4763 RH
7033+‘‘(i) that is or is designed to be 1
7034+used as a means of payment or 2
7035+settlement; 3
7036+‘‘(ii) the issuer of which— 4
7037+‘‘(I) is obligated to con-5
7038+vert, redeem, or repurchase 6
7039+for a fixed amount of mone-7
7040+tary value; or 8
7041+‘‘(II) represents will main-9
7042+tain or creates the reasonable 10
7043+expectation that it will main-11
7044+tain a stable value relative to 12
7045+the value of a fixed amount of 13
7046+monetary value; and 14
7047+‘‘(iii) that is subject to regula-15
7048+tion by a Federal or State regu-16
7049+lator with authority over entities 17
7050+that issue payment stablecoins; 18
7051+and 19
7052+‘‘(B) that is not— 20
7053+‘‘(i) a national currency; or 21
7054+‘‘(ii) a security issued by an 22
7055+investment company registered 23
7056+under section 8(a) of the Invest-24
7057+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00232 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7058+rfrederick on LAP8M3WLY3PROD with BILLS 233
7059+•HR 4763 RH
7060+ment Company Act of 1940 (15 1
7061+U.S.C. 80a–8(a)). 2
7062+‘‘(33) R
7063+ELATED PERSON .—With respect 3
7064+to a digital asset issuer, the term ‘related 4
7065+person’ means— 5
7066+‘‘(A) a founder, promoter, em-6
7067+ployee, consultant, advisor, or person 7
7068+serving in a similar capacity; 8
7069+‘‘(B) any person that is or was in 9
7070+the previous 6-month period an exec-10
7071+utive officer, director, trustee, gen-11
7072+eral partner, advisory board member, 12
7073+or person serving in a similar capac-13
7074+ity; 14
7075+‘‘(C) any equity holder or other se-15
7076+curity holder; or 16
7077+‘‘(D) any other person that re-17
7078+ceived a unit of digital asset from 18
7079+such digital asset issuer through— 19
7080+‘‘(i) an exempt offering, other 20
7081+than an offering made in reliance 21
7082+on section 4(a)(8); or 22
7083+‘‘(ii) a distribution that is not 23
7084+an end user distribution de-24
7085+scribed under section 42(d)(1) of 25
7086+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00233 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7087+rfrederick on LAP8M3WLY3PROD with BILLS 234
7088+•HR 4763 RH
7089+the Securities Exchange Act of 1
7090+1934. 2
7091+‘‘(34) R
7092+ESTRICTED DIGITAL ASSET .— 3
7093+‘‘(A) I
7094+N GENERAL .—The term ‘re-4
7095+stricted digital asset’ means— 5
7096+‘‘(i) any unit of a digital asset 6
7097+held by a person, other than the 7
7098+digital asset issuer, a related per-8
7099+son, or an affiliated person, prior 9
7100+to the first date on which each 10
7101+blockchain system to which the 11
7102+digital asset relates is a func-12
7103+tional network and certified to be 13
7104+a decentralized network under 14
7105+section 44 of the Securities Ex-15
7106+change Act of 1934, that was— 16
7107+‘‘(I) issued to such person 17
7108+through a distribution, other 18
7109+than an end user distribution 19
7110+described under section 20
7111+42(d)(1) of the Securities Ex-21
7112+change Act of 1934; or 22
7113+‘‘(II) acquired by such per-23
7114+son in a transaction that was 24
7115+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00234 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7116+rfrederick on LAP8M3WLY3PROD with BILLS 235
7117+•HR 4763 RH
7118+not executed on a digital com-1
7119+modity exchange; 2
7120+‘‘(ii) any digital asset held by 3
7121+a related person or an affiliated 4
7122+person during any period when 5
7123+any blockchain system to which 6
7124+the digital asset relates is not a 7
7125+functional network or not cer-8
7126+tified to be a decentralized net-9
7127+work under section 44 of the Se-10
7128+curities Exchange Act of 1934; or 11
7129+‘‘(iii) any unit of a digital 12
7130+asset held by the digital asset 13
7131+issuer. 14
7132+‘‘(B) E
7133+XCLUSION.—The term ‘re-15
7134+stricted digital asset’ does not include 16
7135+a permitted payment stablecoin. 17
7136+‘‘(35) S
7137+ECURITIES LAWS .—The term ‘se-18
7138+curities laws’ has the meaning given that 19
7139+term under section 3(a) of the Securities 20
7140+Exchange Act of 1934 (15 U.S.C. 78c(a)). 21
7141+‘‘(36) S
7142+OURCE CODE .—With respect to a 22
7143+blockchain system, the term ‘source code’ 23
7144+means a listing of commands to be com-24
7145+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00235 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7146+rfrederick on LAP8M3WLY3PROD with BILLS 236
7147+•HR 4763 RH
7148+piled or assembled into an executable 1
7149+computer program.’’. 2
7150+SEC. 102. DEFINITIONS UNDER THE SECURITIES EX-3
7151+CHANGE ACT OF 1934. 4
7152+Section 3(a) of the Securities Exchange 5
7153+Act of 1934 (15 U.S.C. 78c(a)) is amended— 6
7154+(8) by redesignating the second para-7
7155+graph (80) (relating to funding portals) as 8
7156+paragraph (81); and 9
7157+(9) by adding at the end the fol-10
7158+lowing: 11
7159+‘‘(82) B
7160+ANK SECRECY ACT .—The term 12
7161+‘Bank Secrecy Act’ means— 13
7162+‘‘(A) section 21 of the Federal De-14
7163+posit Insurance Act (12 U.S.C. 1829b); 15
7164+‘‘(B) chapter 2 of title I of Public 16
7165+Law 91–508 (12 U.S.C. 1951 et seq.); 17
7166+and 18
7167+‘‘(C) subchapter II of chapter 53 of 19
7168+title 31, United States Code. 20
7169+‘‘(83) D
7170+IGITAL ASSET BROKER .—The 21
7171+term ‘digital asset broker’— 22
7172+‘‘(A) means any person engaged in 23
7173+the business of effecting transactions 24
7174+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00236 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7175+rfrederick on LAP8M3WLY3PROD with BILLS 237
7176+•HR 4763 RH
7177+in restricted digital assets for the ac-1
7178+count of others; and 2
7179+‘‘(B) does not include a blockchain 3
7180+protocol or a person or group of per-4
7181+sons solely because of their develop-5
7182+ment of a blockchain protocol. 6
7183+‘‘(84) D
7184+IGITAL ASSET CUSTODIAN .—The 7
7185+term ‘digital asset custodian’ means an 8
7186+entity in the business of providing custo-9
7187+dial or safekeeping services for restricted 10
7188+digital assets. 11
7189+‘‘(85) D
7190+IGITAL ASSET DEALER .—The 12
7191+term ‘digital asset dealer’— 13
7192+‘‘(A) means any person engaged in 14
7193+the business of buying and selling re-15
7194+stricted digital assets for such per-16
7195+son’s own account through a broker 17
7196+or otherwise; and 18
7197+‘‘(B) does not include— 19
7198+‘‘(i) a person that buys or sells 20
7199+restricted digital assets for such 21
7200+person’s own account, either indi-22
7201+vidually or in a fiduciary capac-23
7202+ity, but not as a part of a regular 24
7203+business; or 25
7204+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00237 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7205+rfrederick on LAP8M3WLY3PROD with BILLS 238
7206+•HR 4763 RH
7207+‘‘(ii) a blockchain protocol or 1
7208+a person or group of persons sole-2
7209+ly because of their development 3
7210+of a blockchain protocol. 4
7211+‘‘(86) D
7212+IGITAL ASSET TRADING SYSTEM .— 5
7213+The term ‘digital asset trading system’— 6
7214+‘‘(A) means any organization, as-7
7215+sociation, person, or group of per-8
7216+sons, whether incorporated or unin-9
7217+corporated, that constitutes, main-10
7218+tains, or provides a market place or 11
7219+facilities for bringing together pur-12
7220+chasers and sellers of restricted dig-13
7221+ital assets or for otherwise per-14
7222+forming with respect to digital assets 15
7223+the functions commonly performed 16
7224+by a stock exchange within the mean-17
7225+ing of section 240.3b–16 of title 17, 18
7226+Code of Federal Regulations, as in ef-19
7227+fect on the date of enactment of this 20
7228+paragraph; and 21
7229+‘‘(B) does not include a blockchain 22
7230+protocol or a person or group of per-23
7231+sons solely because of their develop-24
7232+ment of a blockchain protocol. 25
7233+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00238 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7234+rfrederick on LAP8M3WLY3PROD with BILLS 239
7235+•HR 4763 RH
7236+‘‘(87) MIXED DIGITAL ASSET TRANS -1
7237+ACTION.—The term ‘mixed digital asset 2
7238+transaction’ means an agreement, con-3
7239+tract, or transaction involving a re-4
7240+stricted digital asset and a digital com-5
7241+modity. 6
7242+‘‘(88) N
7243+OTICE-REGISTERED DIGITAL ASSET 7
7244+CLEARING AGENCY .—The term ‘notice-reg-8
7245+istered digital asset clearing agency’ 9
7246+means a clearing agency that has reg-10
7247+istered with the Commission pursuant to 11
7248+section 17A(b)(9). 12
7249+‘‘(89) A
7250+DDITIONAL DIGITAL ASSET -RE-13
7251+LATED TERMS .— 14
7252+‘‘(A) S
7253+ECURITIES ACT OF 1933 .—The 15
7254+terms ‘affiliated person’, ‘blockchain 16
7255+system’, ‘decentralized governance 17
7256+system’, ‘decentralized network’, ‘dig-18
7257+ital asset’, ‘digital asset issuer’, ‘dig-19
7258+ital asset maturity date’, ‘end user 20
7259+distribution’, ‘functional network’, 21
7260+‘mixed digital asset transaction’, ‘per-22
7261+mitted payment stablecoin’, ‘related 23
7262+person’, ‘restricted digital asset’, and 24
7263+‘source code’ have the meaning given 25
7264+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00239 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7265+rfrederick on LAP8M3WLY3PROD with BILLS 240
7266+•HR 4763 RH
7267+those terms, respectively, under sec-1
7268+tion 2(a) of the Securities Act of 1933 2
7269+(15 U.S.C. 77b(a)). 3
7270+‘‘(B) C
7271+OMMODITY EXCHANGE ACT .— 4
7272+The terms ‘digital commodity’, ‘digital 5
7273+commodity broker’, ‘digital com-6
7274+modity dealer’, and ‘digital com-7
7275+modity exchange’ have the meaning 8
7276+given those terms, respectively, under 9
7277+section 1a of the Commodity Ex-10
7278+change Act (7 U.S.C. 1a).’’. 11
7279+SEC. 103. DEFINITIONS UNDER THE COMMODITY EX-12
7280+CHANGE ACT. 13
7281+Section 1a of the Commodity Exchange 14
7282+Act (7 U.S.C. 1a) is amended— 15
7283+(1) in paragraph (10)(A)— 16
7284+(A) by redesignating clauses (iii) 17
7285+and (iv) as clauses (iv) and (v), re-18
7286+spectively; and 19
7287+(B) by inserting after clause (ii) 20
7288+the following: 21
7289+‘‘(iii) digital commodity;’’; 22
7290+(2) in paragraph (11)— 23
7291+(A) in subparagraph (A)(i)— 24
7292+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00240 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7293+rfrederick on LAP8M3WLY3PROD with BILLS 241
7294+•HR 4763 RH
7295+(i) by redesignating sub-1
7296+clauses (III) and (IV) as sub-2
7297+clauses (IV) and (V), respectively; 3
7298+and 4
7299+(ii) by inserting after sub-5
7300+clause (II) the following: 6
7301+‘‘(III) digital commodity;’’; 7
7302+and 8
7303+(B) by redesignating subpara-9
7304+graph (B) as subparagraph (C) and in-10
7305+serting after subparagraph (A) the 11
7306+following: 12
7307+‘‘(B) E
7308+XCLUSION.—The term ‘com-13
7309+modity pool operator’ does not in-14
7310+clude— 15
7311+‘‘(i) a decentralized govern-16
7312+ance system; or 17
7313+‘‘(ii) ancillary activities, as de-18
7314+fined in section 4v.’’; 19
7315+(3) in paragraph (12)(A)(i)— 20
7316+(A) in subclause (II), by adding at 21
7317+the end a semicolon; 22
7318+(B) by redesignating subclauses 23
7319+(III) and (IV) as subclauses (IV) and 24
7320+(V), respectively; and 25
7321+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00241 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7322+rfrederick on LAP8M3WLY3PROD with BILLS 242
7323+•HR 4763 RH
7324+(C) by inserting after subclause 1
7325+(II) the following: 2
7326+‘‘(III) a digital com-3
7327+modity;’’; 4
7328+(4) in paragraph (40)— 5
7329+(A) by striking ‘‘and’’ at the end of 6
7330+subparagraph (E); 7
7331+(B) by striking the period at the 8
7332+end of subparagraph (F) and insert-9
7333+ing ‘‘; and’’; and 10
7334+(C) by adding at the end the fol-11
7335+lowing: 12
7336+‘‘(G) a digital commodity ex-13
7337+change registered under section 5i.’’; 14
7338+and 15
7339+(5) by adding at the end the fol-16
7340+lowing: 17
7341+‘‘(52) A
7342+SSOCIATED PERSON OF A DIGITAL 18
7343+COMMODITY BROKER .— 19
7344+‘‘(A) I
7345+N GENERAL .—Except as pro-20
7346+vided in subparagraph (B), the term 21
7347+‘associated person of a digital com-22
7348+modity broker’ means a person who is 23
7349+associated with a digital commodity 24
7350+broker as a partner, officer, em-25
7351+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00242 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7352+rfrederick on LAP8M3WLY3PROD with BILLS 243
7353+•HR 4763 RH
7354+ployee, or agent (or any person occu-1
7355+pying a similar status or performing 2
7356+similar functions) in any capacity 3
7357+that involves— 4
7358+‘‘(i) the solicitation or accept-5
7359+ance of a contract for sale of a 6
7360+digital commodity; or 7
7361+‘‘(ii) the supervision of any 8
7362+person engaged in the solicitation 9
7363+or acceptance of a contract for 10
7364+sale of a digital commodity. 11
7365+‘‘(B) E
7366+XCLUSION.—The term ‘associ-12
7367+ated person of a digital commodity 13
7368+broker’ does not include any person 14
7369+associated with a digital commodity 15
7370+broker the functions of which are 16
7371+solely clerical or ministerial. 17
7372+‘‘(53) A
7373+SSOCIATED PERSON OF A DIGITAL 18
7374+COMMODITY DEALER .— 19
7375+‘‘(A) I
7376+N GENERAL .—Except as pro-20
7377+vided in subparagraph (B), the term 21
7378+‘associated person of a digital com-22
7379+modity dealer’ means a person who is 23
7380+associated with a digital commodity 24
7381+dealer as a partner, officer, employee, 25
7382+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00243 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7383+rfrederick on LAP8M3WLY3PROD with BILLS 244
7384+•HR 4763 RH
7385+or agent (or any person occupying a 1
7386+similar status or performing similar 2
7387+functions) in any capacity that in-3
7388+volves— 4
7389+‘‘(i) the solicitation or accept-5
7390+ance of a contract for sale of a 6
7391+digital commodity; or 7
7392+‘‘(ii) the supervision of any 8
7393+person engaged in the solicitation 9
7394+or acceptance of a contract for 10
7395+sale of a digital commodity. 11
7396+‘‘(B) E
7397+XCLUSION.—The term ‘associ-12
7398+ated person of a digital commodity 13
7399+dealer’ does not include any person 14
7400+associated with a digital commodity 15
7401+dealer the functions of which are 16
7402+solely clerical or ministerial. 17
7403+‘‘(54) B
7404+ANK SECRECY ACT .—The term 18
7405+‘Bank Secrecy Act’ means— 19
7406+‘‘(A) section 21 of the Federal De-20
7407+posit Insurance Act (12 U.S.C. 1829b); 21
7408+‘‘(B) chapter 2 of title I of Public 22
7409+Law 91–508 (12 U.S.C. 1951 et seq.); 23
7410+and 24
7411+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00244 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7412+rfrederick on LAP8M3WLY3PROD with BILLS 245
7413+•HR 4763 RH
7414+‘‘(C) subchapter II of chapter 53 of 1
7415+title 31, United States Code. 2
7416+‘‘(55) D
7417+IGITAL COMMODITY .— 3
7418+‘‘(A) I
7419+N GENERAL .—The term ‘dig-4
7420+ital commodity’ means— 5
7421+‘‘(i) any unit of a digital asset 6
7422+held by a person, other than a 7
7423+digital asset issuer, a related per-8
7424+son, or an affiliated person, be-9
7425+fore the first date on which each 10
7426+blockchain system to which the 11
7427+digital asset relates is a func-12
7428+tional network and certified to be 13
7429+a decentralized network under 14
7430+section 44 of the Securities Ex-15
7431+change Act of 1934, that was— 16
7432+‘‘(I) issued to the person 17
7433+through an end user distribu-18
7434+tion described under section 19
7435+42(d)(1) of the Securities Ex-20
7436+change Act of 1934; or 21
7437+‘‘(II) acquired by such per-22
7438+son in a transaction that was 23
7439+executed on a digital com-24
7440+modity exchange; or 25
7441+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00245 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7442+rfrederick on LAP8M3WLY3PROD with BILLS 246
7443+•HR 4763 RH
7444+‘‘(ii) any unit of a digital asset 1
7445+held by a person, other than a 2
7446+digital asset issuer, a related per-3
7447+son, or an affiliated person, after 4
7448+the first date on which each 5
7449+blockchain system to which the 6
7450+digital asset relates is a func-7
7451+tional network and certified to be 8
7452+a decentralized network under 9
7453+section 44 of the Securities Ex-10
7454+change Act of 1934; and 11
7455+‘‘(iii) any unit of a digital 12
7456+asset held by a related person or 13
7457+an affiliated person during any 14
7458+period when any blockchain sys-15
7459+tem to which the digital asset re-16
7460+lates is a functional network and 17
7461+certified to be a decentralized 18
7462+network under section 44 of the 19
7463+Securities Exchange Act of 1934. 20
7464+‘‘(B) E
7465+XCLUSION.—The term ‘digital 21
7466+commodity’ does not include a per-22
7467+mitted payment stablecoin. 23
7468+‘‘(56) D
7469+IGITAL COMMODITY BROKER .— 24
7470+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00246 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7471+rfrederick on LAP8M3WLY3PROD with BILLS 247
7472+•HR 4763 RH
7473+‘‘(A) IN GENERAL .—The term ‘dig-1
7474+ital commodity broker’ means any 2
7475+person who, in a digital commodity 3
7476+cash or spot market, is— 4
7477+‘‘(i) engaged in soliciting or 5
7478+accepting orders for the purchase 6
7479+or sale of a unit of a digital com-7
7480+modity from a customer that is 8
7481+not an eligible contract partici-9
7482+pant; 10
7483+‘‘(ii) engaged in soliciting or 11
7484+accepting orders for the purchase 12
7485+or sale of a unit of a digital com-13
7486+modity from a customer on or 14
7487+subject to the rules of a reg-15
7488+istered entity; or 16
7489+‘‘(iii) registered with the Com-17
7490+mission as a digital commodity 18
7491+broker. 19
7492+‘‘(B) E
7493+XCEPTIONS.—The term ‘dig-20
7494+ital commodity broker’ does not in-21
7495+clude a person solely because the per-22
7496+son— 23
7497+‘‘(i) enters into a digital com-24
7498+modity transaction the primary 25
7499+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00247 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7500+rfrederick on LAP8M3WLY3PROD with BILLS 248
7501+•HR 4763 RH
7502+purpose of which is to make, 1
7503+send, receive, or facilitate pay-2
7504+ments, whether involving a pay-3
7505+ment service provider or on a 4
7506+peer-to-peer basis; or 5
7507+‘‘(ii) validates a digital com-6
7508+modity transaction, operates a 7
7509+node, or engages in similar activ-8
7510+ity to participate in facilitating, 9
7511+operating, or securing a 10
7512+blockchain system. 11
7513+‘‘(57) D
7514+IGITAL COMMODITY CUSTODIAN .— 12
7515+The term ‘digital commodity custodian’ 13
7516+means a bank or trust company in the 14
7517+business of holding, maintaining, or safe-15
7518+guarding digital commodities. 16
7519+‘‘(58) D
7520+IGITAL COMMODITY DEALER .— 17
7521+‘‘(A) I
7522+N GENERAL .—The term ‘dig-18
7523+ital commodity dealer’ means any 19
7524+person who— 20
7525+‘‘(i) in digital commodity cash 21
7526+or spot markets— 22
7527+‘‘(I) holds itself out as a 23
7528+dealer in a digital commodity; 24
7529+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00248 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7530+rfrederick on LAP8M3WLY3PROD with BILLS 249
7531+•HR 4763 RH
7532+‘‘(II) makes a market in a 1
7533+digital commodity; 2
7534+‘‘(III) regularly enters into 3
7535+digital commodity trans-4
7536+actions with counterparties as 5
7537+an ordinary course of busi-6
7538+ness for its own account; or 7
7539+‘‘(IV) engages in any activ-8
7540+ity causing the person to be 9
7541+commonly known in the trade 10
7542+as a dealer or market maker 11
7543+in a digital commodity; 12
7544+‘‘(ii) regularly enters into any 13
7545+agreement, contract, or trans-14
7546+action described in subsection 15
7547+(c)(2)(D)(i) involving a digital 16
7548+commodity; or 17
7549+‘‘(iii) is registered with the 18
7550+Commission as a digital com-19
7551+modity dealer. 20
7552+‘‘(B) E
7553+XCEPTION.—The term ‘digital 21
7554+commodity dealer’ does not include a 22
7555+person solely because the person— 23
7556+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00249 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7557+rfrederick on LAP8M3WLY3PROD with BILLS 250
7558+•HR 4763 RH
7559+‘‘(i) enters into a digital com-1
7560+modity transaction with an eligi-2
7561+ble contract participant; 3
7562+‘‘(ii) enters into a digital com-4
7563+modity transaction on or through 5
7564+a registered digital commodity ex-6
7565+change; 7
7566+‘‘(iii) enters into a digital com-8
7567+modity transaction for the per-9
7568+son’s own account, either individ-10
7569+ually or in a fiduciary capacity, 11
7570+but not as a part of a regular 12
7571+business; 13
7572+‘‘(iv) enters into a digital com-14
7573+modity transaction the primary 15
7574+purpose of which is to make, 16
7575+send, receive, or facilitate pay-17
7576+ments, whether involving a pay-18
7577+ment service provider or on a 19
7578+peer-to-peer basis; or 20
7579+‘‘(v) validates a digital com-21
7580+modity transaction, operates a 22
7581+node, or engages in similar activ-23
7582+ity to participate in facilitating, 24
7583+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00250 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7584+rfrederick on LAP8M3WLY3PROD with BILLS 251
7585+•HR 4763 RH
7586+operating, or securing a 1
7587+blockchain system. 2
7588+‘‘(59) D
7589+IGITAL COMMODITY EXCHANGE .— 3
7590+The term ‘digital commodity exchange’ 4
7591+means a trading facility that offers or 5
7592+seeks to offer a cash or spot market in at 6
7593+least 1 digital commodity. 7
7594+‘‘(60) D
7595+IGITAL ASSET -RELATED DEFINI -8
7596+TIONS.— 9
7597+‘‘(A) S
7598+ECURITIES ACT OF 1933 .—The 10
7599+terms ‘affiliated person’, ‘blockchain 11
7600+system’, ‘decentralized governance 12
7601+system’, ‘decentralized network’, ‘dig-13
7602+ital asset’, ‘digital asset issuer’, ‘end 14
7603+user distribution’, ‘functional net-15
7604+work’, ‘permitted payment 16
7605+stablecoin’, ‘related person’, and ‘re-17
7606+stricted digital asset’ have the mean-18
7607+ing given the terms, respectively, 19
7608+under section 2(a) of the Securities 20
7609+Act of 1933 (15 U.S.C. 77b(a)). 21
7610+‘‘(B) S
7611+ECURITIES EXCHANGE ACT OF 22
7612+1934.—The terms ‘digital asset broker’ 23
7613+and ‘digital asset dealer’ have the 24
7614+meaning given those terms, respec-25
7615+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00251 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7616+rfrederick on LAP8M3WLY3PROD with BILLS 252
7617+•HR 4763 RH
7618+tively, under section 3(a) of the Secu-1
7619+rities Exchange Act of 1934 (15 U.S.C. 2
7620+78c(a)). 3
7621+‘‘(61) M
7622+IXED DIGITAL ASSET TRANS -4
7623+ACTION.—The term ‘mixed digital asset 5
7624+transaction’ has the meaning given that 6
7625+term under section 3(a) of the Securities 7
7626+Exchange Act of 1934 (15 U.S.C. 78c(a)).’’. 8
7627+SEC. 104. DEFINITIONS UNDER THIS ACT. 9
7628+In this Act: 10
7629+(1) D
7630+EFINITIONS UNDER THE COMMODITY 11
7631+EXCHANGE ACT .—The terms ‘‘digital com-12
7632+modity’’, ‘‘digital commodity broker’’, 13
7633+‘‘digital commodity dealer’’, and ‘‘digital 14
7634+commodity exchange’’ have the meaning 15
7635+given those terms, respectively, under 16
7636+section 1a of the Commodity Exchange 17
7637+Act (7 U.S.C. 1a). 18
7638+(2) D
7639+EFINITIONS UNDER THE SECURITIES 19
7640+ACT OF 1933.—The terms ‘‘affiliated per-20
7641+son’’, ‘‘blockchain’’, ‘‘blockchain system’’, 21
7642+‘‘blockchain protocol’’, ‘‘decentralized net-22
7643+work’’, ‘‘digital asset’’, ‘‘digital asset 23
7644+issuer’’, ‘‘digital asset maturity date’’, 24
7645+‘‘digital asset trading system’’, ‘‘end user 25
7646+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00252 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7647+rfrederick on LAP8M3WLY3PROD with BILLS 253
7648+•HR 4763 RH
7649+distribution’’, ‘‘functional network’’, ‘‘per-1
7650+mitted payment stablecoin’’, ‘‘restricted 2
7651+digital asset’’, ‘‘securities laws’’, and 3
7652+‘‘source code’’ have the meaning given 4
7653+those terms, respectively, under section 5
7654+2(a) of the Securities Act of 1933 (15 6
7655+U.S.C. 77b(a)). 7
7656+(3) D
7657+EFINITIONS UNDER THE SECURITIES 8
7658+EXCHANGE ACT OF 1934 .—The terms ‘‘Bank 9
7659+Secrecy Act’’, ‘‘digital asset broker’’, ‘‘dig-10
7660+ital asset dealer’’, ‘‘digital asset trading 11
7661+system’’, ‘‘mixed digital asset trans-12
7662+action’’, and ‘‘self-regulatory organiza-13
7663+tion’’ have the meaning given those 14
7664+terms, respectively, under section 3(a) of 15
7665+the Securities Exchange Act of 1934 (15 16
7666+U.S.C. 78c(a)). 17
7667+SEC. 105. JOINT RULEMAKINGS. 18
7668+(a) D
7669+EFINITIONS.—The Commodity Futures 19
7670+Trading Commission and the Securities and 20
7671+Exchange Commission shall jointly issue rules 21
7672+to further define the following terms: 22
7673+(1) The terms ‘‘affiliated person’’, 23
7674+‘‘blockchain’’, ‘‘blockchain system’’, 24
7675+‘‘blockchain protocol’’, ‘‘decentralized net-25
7676+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00253 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7677+rfrederick on LAP8M3WLY3PROD with BILLS 254
7678+•HR 4763 RH
7679+work’’, ‘‘decentralized governance sys-1
7680+tem’’, ‘‘digital asset’’, ‘‘digital asset 2
7681+issuer’’, ‘‘digital asset maturity date’’, 3
7682+‘‘end user distribution’’, ‘‘functional net-4
7683+work’’, ‘‘related person’’, ‘‘restricted dig-5
7684+ital asset’’, and ‘‘source code’’, as defined 6
7685+under section 2(a) of the Securities Act of 7
7686+1933. 8
7687+(2) The term ‘‘mixed digital asset 9
7688+transaction’’, as defined under section 10
7689+3(a) of the Securities Exchange Act of 11
7690+1934. 12
7691+(3) The term ‘‘digital commodity’’, as 13
7692+defined under section 1a of the Com-14
7693+modity Exchange Act. 15
7694+(b) J
7695+OINTRULEMAKING FOR EXCHANGES.— 16
7696+The Commodity Futures Trading Commission 17
7697+and the Securities and Exchange Commission 18
7698+shall jointly issue rules to exempt persons du-19
7699+ally registered with the Commodity Futures 20
7700+Trading Commission as a digital commodity 21
7701+exchange and with the Securities and Ex-22
7702+change Commission as a digital asset trading 23
7703+system from duplicative, conflicting, or un-24
7704+duly burdensome provisions of this Act, the 25
7705+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00254 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7706+rfrederick on LAP8M3WLY3PROD with BILLS 255
7707+•HR 4763 RH
7708+securities laws, and the Commodity Exchange 1
7709+Act and the rules thereunder, to the extent 2
7710+such exemption would foster the development 3
7711+of fair and orderly markets in digital assets, 4
7712+be necessary or appropriate in the public in-5
7713+terest, and be consistent with the protection 6
7714+of investors. 7
7715+(c) J
7716+OINTRULEMAKING FOR MIXEDDIGITAL 8
7717+A
7718+SSETTRANSACTIONS .—The Commodity Fu-9
7719+tures Trading Commission and the Securities 10
7720+and Exchange Commission shall jointly issue 11
7721+rules applicable to mixed digital asset trans-12
7722+actions under this Act and the amendments 13
7723+made by this Act. 14
7724+(d) P
7725+ROTECTION OF SELF-CUSTODY.— 15
7726+(1) I
7727+N GENERAL .—The Financial 16
7728+Crimes Enforcement Network may not 17
7729+issue any rule or order that would pro-18
7730+hibit a U.S. individual from— 19
7731+(A) maintaining a hardware wal-20
7732+let, software wallet, or other means to 21
7733+facilitate such individual’s own cus-22
7734+tody of digital assets; or 23
7735+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00255 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7736+rfrederick on LAP8M3WLY3PROD with BILLS 256
7737+•HR 4763 RH
7738+(B) conducting transactions and 1
7739+self-custody digital assets for any law-2
7740+ful purpose. 3
7741+(2) R
7742+ULE OF CONSTRUCTION .—Para-4
7743+graph (1) may not be construed to limit 5
7744+the ability of Financial Crimes Enforce-6
7745+ment Network to carry out any enforce-7
7746+ment authority. 8
7747+(e) J
7748+OINTRULEMAKING, PROCEDURES , OR 9
7749+G
7750+UIDANCE FOR DELISTING.—Not later than 30 10
7751+days after the date of the enactment of this 11
7752+Act, the Commodity Futures Trading Commis-12
7753+sion and the Securities and Exchange Com-13
7754+mission shall jointly issue rules, procedures, 14
7755+or guidance (as determined appropriate by 15
7756+the Commissions) regarding the process to 16
7757+delist an asset for trading under sections 106 17
7758+and 107 of this Act if the Commissions deter-18
7759+mine that the listing is inconsistent with the 19
7760+Commodity Exchange Act, the securities laws 20
7761+(including regulations under those laws), or 21
7762+this Act. 22
7763+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00256 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7764+rfrederick on LAP8M3WLY3PROD with BILLS 257
7765+•HR 4763 RH
7766+SEC. 106. NOTICE OF INTENT TO REGISTER FOR DIGITAL 1
7767+COMMODITY EXCHANGES, BROKERS, AND 2
7768+DEALERS. 3
7769+(a) I
7770+NGENERAL.— 4
7771+(1) N
7772+OTICE OF INTENT TO REGISTER .— 5
7773+Any person may file a notice of intent to 6
7774+register with the Commodity Futures 7
7775+Trading Commission (in this subsection 8
7776+referred to as the ‘‘Commission’’) as a— 9
7777+(A) digital commodity exchange, 10
7778+for a person intending to register as a 11
7779+digital commodity exchange under 12
7780+section 5i of the Commodity Ex-13
7781+change Act; 14
7782+(B) digital commodity broker, for 15
7783+a person intending to register as a 16
7784+digital commodity broker under sec-17
7785+tion 4u of such Act; or 18
7786+(C) digital commodity dealer, for 19
7787+a person intending to register as a 20
7788+digital commodity dealer under sec-21
7789+tion 4u of such Act. 22
7790+(2) F
7791+ILING.—A person desiring to file a 23
7792+notice of intent to register under para-24
7793+graph (1) shall be in compliance with this 25
7794+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00257 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7795+rfrederick on LAP8M3WLY3PROD with BILLS 258
7796+•HR 4763 RH
7797+section if the person submits to the Com-1
7798+mission— 2
7799+(A) a statement of the nature of 3
7800+the registrations the filer intends to 4
7801+pursue; 5
7802+(B) the information required by 6
7803+subsections (b) and (c). 7
7804+(b) D
7805+ISCLOSURE OF GENERAL INFORMA-8
7806+TION.—A person filing a notice of intent to reg-9
7807+ister under subsection (a) shall disclose to the 10
7808+Commission the following: 11
7809+(1) Information concerning the man-12
7810+agement of the person, including infor-13
7811+mation describing— 14
7812+(A) the ownership and manage-15
7813+ment of the person; 16
7814+(B) the financial condition of the 17
7815+person; 18
7816+(C) affiliated entities; and 19
7817+(D) potential conflicts of interest. 20
7818+(2) Information concerning the oper-21
7819+ations of the person, including— 22
7820+(A) any rulebook or other cus-23
7821+tomer order fulfilment rules; 24
7822+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00258 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7823+rfrederick on LAP8M3WLY3PROD with BILLS 259
7824+•HR 4763 RH
7825+(B) risk management procedures; 1
7826+and 2
7827+(C) a description of the product 3
7828+listing process. 4
7829+(c) L
7830+ISTINGINFORMATION .—A person filing 5
7831+a notice of intent to register under subsection 6
7832+(a) shall provide to the Commission and the 7
7833+Securities and Exchange Commission a de-8
7834+tailed description of the product listing deter-9
7835+mination made by the person for each asset 10
7836+listed or offered for trading by the person. 11
7837+(d) R
7838+EQUIREMENTS .—A person filing a no-12
7839+tice of intent to register under subsection (a) 13
7840+shall comply with the following requirements: 14
7841+(1) B
7842+OOKS AND RECORDS .—The person 15
7843+shall keep their books and records open 16
7844+to inspection and examination by the 17
7845+Commission. 18
7846+(2) C
7847+USTOMER DISCLOSURES .—The per-19
7848+son shall disclose to consumers— 20
7849+(A) information about the mate-21
7850+rial risks and characteristics of the 22
7851+assets listed for trading on the per-23
7852+son; and 24
7853+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00259 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7854+rfrederick on LAP8M3WLY3PROD with BILLS 260
7855+•HR 4763 RH
7856+(B) information about the mate-1
7857+rial risks and characteristics of the 2
7858+transactions facilitated by the person. 3
7859+(3) C
7860+USTOMER ASSETS .— 4
7861+(A) I
7862+N GENERAL .—The person 5
7863+shall— 6
7864+(i) hold customer money, as-7
7865+sets, and property in a manner to 8
7866+minimize the risk of loss to the 9
7867+customer or unreasonable delay 10
7868+in customer access to money, as-11
7869+sets, and property of the cus-12
7870+tomer; 13
7871+(ii) treat and deal with all 14
7872+money, assets, and property, in-15
7873+cluding any rights associated 16
7874+with any such money, assets, or 17
7875+property, of any customer re-18
7876+ceived as belonging to the cus-19
7877+tomer; 20
7878+(iii) segregate all money, as-21
7879+sets, and property received from 22
7880+any customer of the person from 23
7881+the funds of the person, except 24
7882+that— 25
7883+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00260 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7884+rfrederick on LAP8M3WLY3PROD with BILLS 261
7885+•HR 4763 RH
7886+(I) the money, assets, and 1
7887+property of any customer may 2
7888+be commingled with that of 3
7889+any other customer, if sepa-4
7890+rately accounted for; and 5
7891+(II) the share of the 6
7892+money, assets, and property, 7
7893+as in the normal course of 8
7894+business are necessary to 9
7895+margin, guarantee, secure, 10
7896+transfer, adjust, or settle a 11
7897+contract of sale of a com-12
7898+modity asset, may be with-13
7899+drawn and applied to do so, 14
7900+including the payment of com-15
7901+missions, brokerage, interest, 16
7902+taxes, storage, and other 17
7903+charges lawfully accruing in 18
7904+connection with the contract 19
7905+of sale of a digital commodity. 20
7906+(B) A
7907+DDITIONAL RESOURCES .— 21
7908+(i) I
7909+N GENERAL .—This section 22
7910+shall not prevent or be construed 23
7911+to prevent the person from add-24
7912+ing to the customer money, assets, 25
7913+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00261 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7914+rfrederick on LAP8M3WLY3PROD with BILLS 262
7915+•HR 4763 RH
7916+and property required to be seg-1
7917+regated under subparagraph (A), 2
7918+additional amounts of money, as-3
7919+sets, or property from the account 4
7920+of the person as the person deter-5
7921+mines necessary to prevent the 6
7922+account of a customer from be-7
7923+coming under-segregated. 8
7924+(ii) T
7925+REATMENT AS CUSTOMER 9
7926+FUNDS.—Any money, assets, or 10
7927+property deposited pursuant to 11
7928+clause (i) shall be considered cus-12
7929+tomer property within the mean-13
7930+ing of this subsection. 14
7931+(e) C
7932+OMPLIANCE AND ENFORCEMENT .— 15
7933+(1) I
7934+N GENERAL .—A person who has 16
7935+filed a notice of intent to register under 17
7936+this section and is in compliance with 18
7937+this section shall not be subject to an en-19
7938+forcement action by the Securities and 20
7939+Exchange Commission for— 21
7940+(A) listing or offering a digital 22
7941+asset deemed a security; or 23
7942+(B) failing to register as a na-24
7943+tional securities exchange, broker, 25
7944+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00262 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7945+rfrederick on LAP8M3WLY3PROD with BILLS 263
7946+•HR 4763 RH
7947+dealer, or clearing agency, for activi-1
7948+ties related to digital assets deemed a 2
7949+security. 3
7950+(2) N
7951+ONCOMPLIANCE .—Paragraph (1) 4
7952+shall not apply if, after notice from the 5
7953+Commission and a reasonable oppor-6
7954+tunity to correct the deficiency, a person 7
7955+who has submitted a notice of intent to 8
7956+register is not in compliance with this 9
7957+section. 10
7958+(3) A
7959+NTI-FRAUD AND ANTI -MANIPULA-11
7960+TION.—Paragraph (1) shall not be con-12
7961+strued to limit any anti-manipulation, 13
7962+anti-fraud, or false reporting enforcement 14
7963+authority of the Commission or the Secu-15
7964+rities and Exchange Commission. 16
7965+(4) D
7966+ELISTING.—Paragraph (1) shall 17
7967+not be construed to limit the authority of 18
7968+the Commission or the Securities and Ex-19
7969+change Commission to require a person 20
7970+to delist an asset for trading if the Com-21
7971+mission or the Securities and Exchange 22
7972+Commission determines that the listing is 23
7973+inconsistent with the Commodity Ex-24
7974+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00263 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
7975+rfrederick on LAP8M3WLY3PROD with BILLS 264
7976+•HR 4763 RH
7977+change Act, the securities laws (including 1
7978+regulations under those laws), or this Act. 2
7979+(f) F
7980+INALREGISTRATION.— 3
7981+(1) I
7982+N GENERAL .—A person may not 4
7983+file a notice of intent to register with the 5
7984+Commission after the Commission has fi-6
7985+nalized its rules for the registration of 7
7986+digital commodity exchanges, digital 8
7987+commodity brokers, or digital commodity 9
7988+dealers, as appropriate. 10
7989+(2) T
7990+RANSITION TO FINAL REGISTRA -11
7991+TION.— 12
7992+(A) O
7993+NGOING DEFERRAL FOR ENTI -13
7994+TIES REGISTERED WITH THE COMMIS -14
7995+SION.—Subsection (e)(1) shall con-15
7996+tinue to apply to a person who has 16
7997+submitted a notice of intent to reg-17
7998+ister while the person is registered 18
7999+with the Commission as a digital com-19
8000+modity exchange, a digital commodity 20
8001+broker, or a digital commodity dealer, 21
8002+as appropriate. 22
8003+(B) E
8004+ND OF DEFERRAL .—Subsection 23
8005+(e)(1) shall not apply to a person who 24
8006+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00264 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8007+rfrederick on LAP8M3WLY3PROD with BILLS 265
8008+•HR 4763 RH
8009+has submitted a notice of intent to 1
8010+register if— 2
8011+(i) the Commission— 3
8012+(I) determines that the 4
8013+person has failed to comply 5
8014+with the requirements of this 6
8015+section; or 7
8016+(II) denies the application 8
8017+of the person to register; or 9
8018+(ii) the digital commodity ex-10
8019+change, digital commodity broker, 11
8020+or digital commodity dealer that 12
8021+filed a notice of intent to register 13
8022+failed to register as such with the 14
8023+Commission within 180 days after 15
8024+the Commission finalized the 16
8025+rules of the Commission for the 17
8026+registration of digital commodity 18
8027+exchanges, digital commodity bro-19
8028+kers, or digital commodity deal-20
8029+ers, as appropriate. 21
8030+(g) L
8031+IABILITY OF THE FILER.—It shall be un-22
8032+lawful for any person to provide false infor-23
8033+mation in support of a filing under this sec-24
8034+tion if the person knowingly or reasonably 25
8035+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00265 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8036+rfrederick on LAP8M3WLY3PROD with BILLS 266
8037+•HR 4763 RH
8038+should have known that the information was 1
8039+false. 2
8040+SEC. 107. NOTICE OF INTENT TO REGISTER FOR DIGITAL 3
8041+ASSET BROKERS, DEALERS, AND TRADING 4
8042+SYSTEMS. 5
8043+(a) I
8044+NGENERAL.— 6
8045+(1) N
8046+OTICE OF INTENT TO REGISTER .— 7
8047+Any person may file a notice of intent to 8
8048+register with the Securities and Ex-9
8049+change Commission (in this section re-10
8050+ferred to as the ‘‘Commission’’) as— 11
8051+(A) a digital asset trading system, 12
8052+for a person intending to register as a 13
8053+digital asset trading system under 14
8054+section 6(m) of the Securities Ex-15
8055+change Act of 1934; 16
8056+(B) a digital asset broker, for a 17
8057+person intending to register as a dig-18
8058+ital asset broker under section 15H of 19
8059+the Securities Exchange Act of 1934; 20
8060+or 21
8061+(C) a digital asset dealer, for a 22
8062+person intending to register as a dig-23
8063+ital asset dealer under section 15H of 24
8064+the Securities Exchange Act of 1934. 25
8065+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00266 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8066+rfrederick on LAP8M3WLY3PROD with BILLS 267
8067+•HR 4763 RH
8068+(2) FILING.—A person desiring to file a 1
8069+notice of intent to register under para-2
8070+graph (1) shall be in compliance with this 3
8071+section if the person submits to the Com-4
8072+mission— 5
8073+(A) a statement of the nature of 6
8074+the registrations the filer intends to 7
8075+pursue; and 8
8076+(B) the information required by 9
8077+subsections (b) and (c). 10
8078+(b) D
8079+ISCLOSURE OF GENERAL INFORMA-11
8080+TION.—A person filing a notice of intent to reg-12
8081+ister under subsection (a) shall disclose to the 13
8082+Commission the following: 14
8083+(1) Information concerning the man-15
8084+agement of the person, including infor-16
8085+mation describing— 17
8086+(A) the ownership and manage-18
8087+ment of the person; 19
8088+(B) the financial condition of the 20
8089+person; 21
8090+(C) affiliated entities; and 22
8091+(D) potential conflicts of interest. 23
8092+(2) Information concerning the oper-24
8093+ations of the person, including— 25
8094+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00267 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8095+rfrederick on LAP8M3WLY3PROD with BILLS 268
8096+•HR 4763 RH
8097+(A) any rulebook or other cus-1
8098+tomer order fulfilment rules; 2
8099+(B) risk management procedures; 3
8100+and 4
8101+(C) a description of the product 5
8102+listing process. 6
8103+(c) L
8104+ISTINGINFORMATION .—A person filing 7
8105+a notice of intent to register under subsection 8
8106+(a) shall provide to the Commission and the 9
8107+Commodity Futures Trading Commission a 10
8108+detailed description of the product listing de-11
8109+termination made by the person for each 12
8110+asset listed or offered for trading by the per-13
8111+son. 14
8112+(d) R
8113+EQUIREMENTS .—A person filing a no-15
8114+tice of intent to register under subsection (a) 16
8115+shall comply with the following requirements: 17
8116+(1) N
8117+ATIONAL SECURITIES ASSOCIA -18
8118+TION.—The person shall be a member of a 19
8119+national securities association registered 20
8120+under section 15A of the Securities Ex-21
8121+change Act of 1934 (15 U.S.C. 78o–3), and 22
8122+shall comply with the rules of the asso-23
8123+ciation, including the rules of the associa-24
8124+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00268 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8125+rfrederick on LAP8M3WLY3PROD with BILLS 269
8126+•HR 4763 RH
8127+tion pertaining to customer disclosures 1
8128+and protection of customer assets. 2
8129+(2) B
8130+OOKS AND RECORDS .—The person 3
8131+shall keep their books and records open 4
8132+to inspection and examination by the 5
8133+Commission. 6
8134+(3) C
8135+USTOMER DISCLOSURES .—The per-7
8136+son shall disclose to customers— 8
8137+(A) information about the mate-9
8138+rial risks and characteristics of the 10
8139+assets listed for trading on the per-11
8140+son; 12
8141+(B) information about the mate-13
8142+rial risks and characteristics of the 14
8143+transactions facilitated by the person; 15
8144+and 16
8145+(C) in their disclosure documents, 17
8146+offering documents, and promotional 18
8147+material, in a prominent manner, that 19
8148+they are not registered with or regu-20
8149+lated by the Commission. 21
8150+(4) C
8151+USTOMER ASSETS .— 22
8152+(A) I
8153+N GENERAL .—The person 23
8154+shall— 24
8155+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00269 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8156+rfrederick on LAP8M3WLY3PROD with BILLS 270
8157+•HR 4763 RH
8158+(i) hold customer money, as-1
8159+sets, and property in a manner to 2
8160+minimize the risk of loss to the 3
8161+customer or unreasonable delay 4
8162+in customer access to money, as-5
8163+sets, and property of the cus-6
8164+tomer; 7
8165+(ii) treat and deal with all 8
8166+money, assets, and property, in-9
8167+cluding any rights associated 10
8168+with any such money, assets, or 11
8169+property, of any customer re-12
8170+ceived as belonging to the cus-13
8171+tomer; 14
8172+(iii) segregate all money, as-15
8173+sets, and property received from 16
8174+any customer of the person from 17
8175+the funds of the person, except 18
8176+that— 19
8177+(I) the money, assets, and 20
8178+property of any customer may 21
8179+be commingled with that of 22
8180+any other customer, if sepa-23
8181+rately accounted for; and 24
8182+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00270 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8183+rfrederick on LAP8M3WLY3PROD with BILLS 271
8184+•HR 4763 RH
8185+(II) the share of the 1
8186+money, assets, and property, 2
8187+as in the normal course of 3
8188+business are necessary to 4
8189+margin, guarantee, secure, 5
8190+transfer, adjust, or settle a 6
8191+contract of sale of a digital 7
8192+asset, may be withdrawn and 8
8193+applied to do so, including the 9
8194+payment of commissions, bro-10
8195+kerage, interest, taxes, stor-11
8196+age, and other charges law-12
8197+fully accruing in connection 13
8198+with the contract of sale of a 14
8199+digital asset. 15
8200+(B) A
8201+DDITIONAL RESOURCES .— 16
8202+(i) I
8203+N GENERAL .—This section 17
8204+shall not prevent or be construed 18
8205+to prevent the person from add-19
8206+ing to the customer money, assets, 20
8207+and property required to be seg-21
8208+regated under subparagraph (A) 22
8209+additional amounts of money, as-23
8210+sets, or property from the account 24
8211+of the person as the person deter-25
8212+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00271 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8213+rfrederick on LAP8M3WLY3PROD with BILLS 272
8214+•HR 4763 RH
8215+mines necessary to hold money, 1
8216+assets, or property equal to or in 2
8217+excess of the total digital asset 3
8218+obligation of the person. 4
8219+(ii) T
8220+REATMENT AS CUSTOMER 5
8221+FUNDS.—Any money, assets, or 6
8222+property deposited pursuant to 7
8223+clause (i) shall be considered cus-8
8224+tomer property within the mean-9
8225+ing of this subsection. 10
8226+(e) C
8227+OMPLIANCE.— 11
8228+(1) I
8229+N GENERAL .—A person who has 12
8230+filed a notice of intent to register under 13
8231+this section and is in compliance with 14
8232+this section shall be exempt from Com-15
8233+mission rules and regulations pertaining 16
8234+to registering as a national securities ex-17
8235+change, broker, dealer, or clearing agen-18
8236+cy, for activities related to a digital asset 19
8237+deemed a security. 20
8238+(2) N
8239+ONCOMPLIANCE .—Paragraph (1) 21
8240+shall not apply if, after notice from the 22
8241+Commission and a reasonable oppor-23
8242+tunity to correct the deficiency, a person 24
8243+who has submitted a notice of intent to 25
8244+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00272 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8245+rfrederick on LAP8M3WLY3PROD with BILLS 273
8246+•HR 4763 RH
8247+register is not in compliance with this 1
8248+section. 2
8249+(3) A
8250+NTI-FRAUD AND ANTI -MANIPULA-3
8251+TION.—Paragraph (1) shall not be con-4
8252+strued to limit any fraud, anti-manipula-5
8253+tion, or false reporting enforcement au-6
8254+thority of the Commission or the Com-7
8255+modity Futures Trading Commission. 8
8256+(4) D
8257+ELISTING.—Paragraph (1) shall 9
8258+not be construed to limit the authority of 10
8259+the Commission and the Commodity Fu-11
8260+tures Trading Commission to jointly re-12
8261+quire a person to delist an asset for trad-13
8262+ing if the Commission and the Com-14
8263+modity Futures Trading Commission de-15
8264+termines that the listing is inconsistent 16
8265+with the Commodity Exchange Act, the 17
8266+securities laws (including regulations 18
8267+under those laws), or this Act. 19
8268+(f) F
8269+INALREGISTRATION.— 20
8270+(1) I
8271+N GENERAL .—A person may not 21
8272+file a notice of intent to register with the 22
8273+Commission after the Commission has fi-23
8274+nalized its rules for the registration of 24
8275+digital asset brokers, digital asset deal-25
8276+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00273 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8277+rfrederick on LAP8M3WLY3PROD with BILLS 274
8278+•HR 4763 RH
8279+ers, digital asset trading systems, and no-1
8280+tice-registered clearing agencies, as ap-2
8281+propriate. 3
8282+(2) T
8283+RANSITION TO FINAL REGISTRA -4
8284+TION.—Subsection (e)(1) shall not apply to 5
8285+a person who has submitted a notice of 6
8286+intent to register if— 7
8287+(A) the Commission— 8
8288+(i) determines that the person 9
8289+has failed to comply with the re-10
8290+quirements of this section; or 11
8291+(ii) denies the application of 12
8292+the person to register; or 13
8293+(B) the digital asset broker, dig-14
8294+ital asset dealer, or digital asset trad-15
8295+ing system that filed a notice of in-16
8296+tent to register failed to apply for 17
8297+registration as such with the Commis-18
8298+sion within 180 days after the effec-19
8299+tive date of the Commission’s final 20
8300+rules for the registration of digital 21
8301+asset brokers, digital asset dealers, 22
8302+and digital asset trading systems, as 23
8303+appropriate. 24
8304+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00274 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8305+rfrederick on LAP8M3WLY3PROD with BILLS 275
8306+•HR 4763 RH
8307+(g) LIABILITY OF THE FILER.—It shall be un-1
8308+lawful for any person to provide false infor-2
8309+mation in support of a filing under this sec-3
8310+tion if the person knew or reasonably should 4
8311+have known that the information was false. 5
8312+(h) N
8313+ATIONALSECURITIESASSOCIATION.—A 6
8314+national securities association shall adopt 7
8315+rules for membership with such association 8
8316+for persons required to be members of such 9
8317+association under subsection (d)(1) within 180 10
8318+days after the date of enactment of this Act. 11
8319+SEC. 108. COMMODITY EXCHANGE ACT SAVINGS PROVI-12
8320+SIONS. 13
8321+(a) I
8322+NGENERAL.—Nothing in this Act shall 14
8323+affect or apply to, or be interpreted to affect 15
8324+or apply to— 16
8325+(1) any agreement, contract, or trans-17
8326+action that is subject to regulation under 18
8327+the Commodity Exchange Act as— 19
8328+(A) a contract of sale of a com-20
8329+modity for future delivery or an op-21
8330+tion on such a contract; 22
8331+(B) a swap; 23
8332+(C) a security futures product; 24
8333+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00275 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8334+rfrederick on LAP8M3WLY3PROD with BILLS 276
8335+•HR 4763 RH
8336+(D) an option authorized under 1
8337+section 4c of such Act; 2
8338+(E) an agreement, contract, or 3
8339+transaction described in section 4
8340+2(c)(2)(C)(i) of such Act; or 5
8341+(F) a leverage transaction author-6
8342+ized under section 19 of such Act; or 7
8343+(2) the activities of any person with 8
8344+respect to any such agreement, contract, 9
8345+or transaction. 10
8346+(b) P
8347+ROHIBITIONS ON SPOTDIGITALCOM-11
8348+MODITYENTITIES.—Nothing in this Act author-12
8349+izes, or shall be interpreted to authorize, a 13
8350+digital commodity exchange, digital com-14
8351+modity broker, or digital commodity dealer to 15
8352+engage in any activities involving any trans-16
8353+action, contract, or agreement described in 17
8354+subsection (a)(1), solely by virtue of being reg-18
8355+istered or filing notice of intent to register as 19
8356+a digital commodity exchange, digital com-20
8357+modity broker, or digital commodity dealer. 21
8358+(c) D
8359+EFINITIONS.—In this section, each 22
8360+term shall have the meaning provided in the 23
8361+Commodity Exchange Act or the regulations 24
8362+prescribed under such Act. 25
8363+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00276 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8364+rfrederick on LAP8M3WLY3PROD with BILLS 277
8365+•HR 4763 RH
8366+SEC. 109. INTERNATIONAL HARMONIZATION. 1
8367+In order to promote effective and con-2
8368+sistent global regulation of digital assets, the 3
8369+Commodity Futures Trading Commission and 4
8370+the Securities and Exchange Commission, as 5
8371+appropriate— 6
8372+(1) shall consult and coordinate with 7
8373+foreign regulatory authorities on the es-8
8374+tablishment of consistent international 9
8375+standards with respect to the regulation 10
8376+of digital assets, restricted digital assets, 11
8377+and digital commodities; and 12
8378+(2) may agree to such information- 13
8379+sharing arrangements as may be deemed 14
8380+to be necessary or appropriate in the 15
8381+public interest or for the protection of in-16
8382+vestors, customers, and users of digital 17
8383+assets. 18
8384+SEC. 110. IMPLEMENTATION. 19
8385+(a) G
8386+LOBALRULEMAKING TIMEFRAME.—Un-20
8387+less otherwise provided in this Act or an 21
8388+amendment made by this Act, the Commodity 22
8389+Futures Trading Commission and the Securi-23
8390+ties and Exchange Commission, or both, shall 24
8391+individually, and jointly where required, pro-25
8392+mulgate rules and regulations required of 26
8393+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00277 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8394+rfrederick on LAP8M3WLY3PROD with BILLS 278
8395+•HR 4763 RH
8396+each Commission under this Act or an amend-1
8397+ment made by this Act not later than 360 days 2
8398+after the date of enactment of this Act. 3
8399+(b) R
8400+ULES ANDREGISTRATION BEFOREFINAL 4
8401+E
8402+FFECTIVEDATES.— 5
8403+(1) I
8404+N GENERAL.—In order to prepare 6
8405+for the implementation of this Act, the 7
8406+Commodity Futures Trading Commission 8
8407+and the Securities and Exchange Com-9
8408+mission may, before any effective date 10
8409+provided in this Act— 11
8410+(A) promulgate rules, regulations, 12
8411+or orders permitted or required by 13
8412+this Act; 14
8413+(B) conduct studies and prepare 15
8414+reports and recommendations re-16
8415+quired by this Act; 17
8416+(C) register persons under this 18
8417+Act; and 19
8418+(D) exempt persons, agreements, 20
8419+contracts, or transactions from provi-21
8420+sions of this Act, under the terms con-22
8421+tained in this Act. 23
8422+(2) L
8423+IMITATION ON EFFECTIVENESS .—An 24
8424+action by the Commodity Futures Trad-25
8425+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00278 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8426+rfrederick on LAP8M3WLY3PROD with BILLS 279
8427+•HR 4763 RH
8428+ing Commission or the Securities and Ex-1
8429+change Commission under paragraph (1) 2
8430+shall not become effective before the ef-3
8431+fective date otherwise applicable to the 4
8432+action under this Act. 5
8433+TITLE II— OFFERS AND SALES 6
8434+OF DIGITAL ASSETS 7
8435+SEC. 201. EXEMPTED TRANSACTIONS IN DIGITAL ASSETS. 8
8436+(a) I
8437+NGENERAL.—The Securities Act of 9
8438+1933 (15 U.S.C. 77a et seq.) is amended— 10
8439+(1) in section 4(a), by adding at the 11
8440+end the following: 12
8441+‘‘(8) transactions involving the offer 13
8442+or sale of units of a digital asset by a dig-14
8443+ital asset issuer, if— 15
8444+‘‘(A) the aggregate amount of 16
8445+units of the digital asset sold by the 17
8446+digital asset issuer in reliance on the 18
8447+exemption provided under this para-19
8448+graph, during the 12-month period 20
8449+preceding the date of such trans-21
8450+action, including the amount sold in 22
8451+such transaction, is not more than 23
8452+$75,000,000 (as such amount is annu-24
8453+ally adjusted by the Commission to 25
8454+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00279 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8455+rfrederick on LAP8M3WLY3PROD with BILLS 280
8456+•HR 4763 RH
8457+reflect the change in the Consumer 1
8458+Price Index for All Urban Consumers 2
8459+published by the Bureau of Labor 3
8460+Statistics of the Department of 4
8461+Labor); 5
8462+‘‘(B) with respect to a transaction 6
8463+involving the purchase of units of a 7
8464+digital asset by a person who is not 8
8465+an accredited investor, the aggregate 9
8466+amount of all units of digital assets 10
8467+purchased by such person during the 11
8468+12-month period preceding the date 12
8469+of such transaction, including the 13
8470+unit of a digital asset purchased in 14
8471+such transaction, does not exceed the 15
8472+greater of— 16
8473+‘‘(i) 10 percent of the person’s 17
8474+annual income or joint income 18
8475+with that person’s spouse or 19
8476+spousal equivalent; or 20
8477+‘‘(ii) 10 percent of the person’s 21
8478+net worth or joint net worth with 22
8479+the person’s spouse or spousal 23
8480+equivalent; 24
8481+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00280 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8482+rfrederick on LAP8M3WLY3PROD with BILLS 281
8483+•HR 4763 RH
8484+‘‘(C) after the completion of the 1
8485+transaction, the purchaser does not 2
8486+own more than 10 percent of the total 3
8487+amount of the units of the digital 4
8488+asset sold in reliance on the exemp-5
8489+tion under this paragraph; 6
8490+‘‘(D) the transaction does not in-7
8491+volve the offer or sale of any digital 8
8492+asset not offered as part of an invest-9
8493+ment contract; 10
8494+‘‘(E) the transaction does not in-11
8495+volve the offer or sale of a unit of a 12
8496+digital asset by a digital asset issuer 13
8497+that— 14
8498+‘‘(i) is not organized under the 15
8499+laws of a State, a territory of the 16
8500+United States, or the District of 17
8501+Columbia; 18
8502+‘‘(ii) is a development stage 19
8503+company that either— 20
8504+‘‘(I) has no specific busi-21
8505+ness plan or purpose; or 22
8506+‘‘(II) has indicated that 23
8507+the business plan of the com-24
8508+pany is to merge with or ac-25
8509+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00281 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8510+rfrederick on LAP8M3WLY3PROD with BILLS 282
8511+•HR 4763 RH
8512+quire an unidentified com-1
8513+pany; 2
8514+‘‘(iii) is an investment com-3
8515+pany, as defined in section 3 of 4
8516+the Investment Company Act of 5
8517+1940 (15 U.S.C. 80a-3), or is ex-6
8518+cluded from the definition of in-7
8519+vestment company by section 3(b) 8
8520+or section 3(c) of that Act (15 9
8521+U.S.C. 80a–3(b) or 80a–3(c)); 10
8522+‘‘(iv) is issuing fractional un-11
8523+divided interests in oil or gas 12
8524+rights, or a similar interest in 13
8525+other mineral rights; 14
8526+‘‘(v) is, or has been, subject to 15
8527+any order of the Commission en-16
8528+tered pursuant to section 12(j) of 17
8529+the Securities Exchange Act of 18
8530+1934 during the 5-year period be-19
8531+fore the filing of the offering 20
8532+statement; or 21
8533+‘‘(vi) is disqualified pursuant 22
8534+to section 230.262 of title 17, Code 23
8535+of Federal Regulations; and 24
8536+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00282 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8537+rfrederick on LAP8M3WLY3PROD with BILLS 283
8538+•HR 4763 RH
8539+‘‘(F) the issuer meets the require-1
8540+ments of section 4B(a).’’; and 2
8541+(2) by inserting after section 4A the 3
8542+following: 4
8543+‘‘SEC. 4B. REQUIREMENTS WITH RESPECT TO CERTAIN DIG-5
8544+ITAL ASSET TRANSACTIONS. 6
8545+‘‘(a) R
8546+EQUIREMENTS FOR DIGITALASSET 7
8547+I
8548+SSUERS.— 8
8549+‘‘(1) I
8550+NFORMATION REQUIRED IN STATE -9
8551+MENT.—A digital asset issuer offering or 10
8552+selling a unit of digital asset in reliance 11
8553+on section 4(a)(8) shall file with the Com-12
8554+mission a statement containing the fol-13
8555+lowing information: 14
8556+‘‘(A) The name, legal status (in-15
8557+cluding the jurisdiction in which the 16
8558+issuer is organized and the date of or-17
8559+ganization), and website of the digital 18
8560+asset issuer. 19
8561+‘‘(B) The address and telephone 20
8562+number of the issuer or a legal rep-21
8563+resentative of the issuer. 22
8564+‘‘(C) A certification that the dig-23
8565+ital asset issuer meets the relevant re-24
8566+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00283 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8567+rfrederick on LAP8M3WLY3PROD with BILLS 284
8568+•HR 4763 RH
8569+quirements described under section 1
8570+4(a)(8). 2
8571+‘‘(D) An overview of the material 3
8572+aspects of the offering. 4
8573+‘‘(E) A description of the purpose 5
8574+and intended use of the offering pro-6
8575+ceeds. 7
8576+‘‘(F) A description of the plan of 8
8577+distribution of any unit of a digital 9
8578+asset that is to be offered. 10
8579+‘‘(G) A description of the material 11
8580+risks surrounding ownership of a 12
8581+unit of a digital asset. 13
8582+‘‘(H) A description of the material 14
8583+aspects of the digital asset issuer’s 15
8584+business. 16
8585+‘‘(I) A description of exempt offer-17
8586+ings conducted within the past three 18
8587+years by the digital asset issuer. 19
8588+‘‘(J) A description of the digital 20
8589+asset issuer and the current number 21
8590+of employees of the digital asset 22
8591+issuer. 23
8592+‘‘(K) A description of any material 24
8593+transactions or relationships between 25
8594+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00284 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8595+rfrederick on LAP8M3WLY3PROD with BILLS 285
8596+•HR 4763 RH
8597+the digital asset issuer and affiliated 1
8598+persons. 2
8599+‘‘(L) A description of exempt offer-3
8600+ings conducted within the past three 4
8601+years. 5
8602+‘‘(2) I
8603+NFORMATION REQUIRED FOR PUR -6
8604+CHASERS.—A digital asset issuer shall dis-7
8605+close the information described under 8
8606+section 43 of the Securities Exchange Act 9
8607+of 1934 on a freely accessible public 10
8608+website. 11
8609+‘‘(3) O
8610+NGOING DISCLOSURE REQUIRE -12
8611+MENTS.—A digital asset issuer that has 13
8612+filed a statement under paragraph (1) to 14
8613+offer and sell a unit of a digital asset in 15
8614+reliance on section 4(a)(8) shall file the 16
8615+following with the Commission: 17
8616+‘‘(A) A
8617+NNUAL REPORTS .—An annual 18
8618+report that includes any material 19
8619+changes to the information described 20
8620+under paragraph (2) for the current 21
8621+fiscal year and for any fiscal year 22
8622+thereafter, unless the issuer is no 23
8623+longer obligated to file such annual 24
8624+report pursuant to paragraph (4). 25
8625+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00285 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8626+rfrederick on LAP8M3WLY3PROD with BILLS 286
8627+•HR 4763 RH
8628+‘‘(B) SEMIANNUAL REPORTS .—Along 1
8629+with each annual report required 2
8630+under subparagraph (A), and sepa-3
8631+rately six months thereafter, a report 4
8632+containing— 5
8633+‘‘(i) an updated description of 6
8634+the current state and timeline for 7
8635+the development of the 8
8636+blockchain system to which the 9
8637+digital asset relates, showing how 10
8638+and when the blockchain system 11
8639+intends or intended to be consid-12
8640+ered a functional network and a 13
8641+decentralized network; 14
8642+‘‘(ii) the amount of money 15
8643+raised by the digital asset issuer 16
8644+in reliance on section 4(a)(8), how 17
8645+much of that money has been 18
8646+spent, and the general categories 19
8647+and amounts on which that 20
8648+money has been spent; and 21
8649+‘‘(iii) any material changes to 22
8650+the information in the most re-23
8651+cent annual report. 24
8652+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00286 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8653+rfrederick on LAP8M3WLY3PROD with BILLS 287
8654+•HR 4763 RH
8655+‘‘(C) CURRENT REPORTS .—A current 1
8656+report shall be filed with the Commis-2
8657+sion reflecting any material changes 3
8658+to the information previously re-4
8659+ported to the Commission by the dig-5
8660+ital asset issuer. 6
8661+‘‘(4) T
8662+ERMINATION OF REPORTING RE -7
8663+QUIREMENTS .— 8
8664+‘‘(A) I
8665+N GENERAL.—The ongoing re-9
8666+porting requirements under para-10
8667+graph (3) shall not apply to a digital 11
8668+asset issuer 180 days after the end of 12
8669+the covered fiscal year. 13
8670+‘‘(B) C
8671+OVERED FISCAL YEAR DE -14
8672+FINED.—In this paragraph, the term 15
8673+‘covered fiscal year’ means the first 16
8674+fiscal year of an issuer in which the 17
8675+blockchain system to which the dig-18
8676+ital asset relates is a functional net-19
8677+work and certified to be a decentral-20
8678+ized network under section 44 of the 21
8679+Securities Exchange Act of 1934. 22
8680+‘‘(b) R
8681+EQUIREMENTS FOR INTERMEDIARIES .— 23
8682+‘‘(1) I
8683+N GENERAL.—A person acting as 24
8684+an intermediary in a transaction involv-25
8685+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00287 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8686+rfrederick on LAP8M3WLY3PROD with BILLS 288
8687+•HR 4763 RH
8688+ing the offer or sale of a unit of a digital 1
8689+asset in reliance on section 4(a)(8) shall— 2
8690+‘‘(A) register with the Commission 3
8691+as a digital asset broker; and 4
8692+‘‘(B) be a member of a national se-5
8693+curities association registered under 6
8694+section 15A of the Securities Ex-7
8695+change Act of 1934 (15 U.S.C. 78o–3). 8
8696+‘‘(2) P
8697+URCHASER QUALIFICATION .— 9
8698+‘‘(A) I
8699+N GENERAL .—Each time, be-10
8700+fore accepting any commitment (in-11
8701+cluding any additional commitment 12
8702+from the same person), an inter-13
8703+mediary or digital asset issuer shall 14
8704+have a reasonable basis for believing 15
8705+that the purchaser satisfies the re-16
8706+quirements of section 4(a)(8). 17
8707+‘‘(B) R
8708+ELIANCE ON PURCHASER ’S 18
8709+REPRESENTATIONS .—For purposes of 19
8710+subparagraph (A), an intermediary or 20
8711+digital asset issuer may rely on a pur-21
8712+chaser’s representations concerning 22
8713+the purchaser’s annual income and 23
8714+net worth and the amount of the pur-24
8715+chaser’s other investments made, un-25
8716+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00288 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8717+rfrederick on LAP8M3WLY3PROD with BILLS 289
8718+•HR 4763 RH
8719+less the intermediary or digital asset 1
8720+issuer has reason to question the reli-2
8721+ability of the representation. 3
8722+‘‘(C) R
8723+ELIANCE ON INTERMEDIARY .— 4
8724+For purposes of determining whether 5
8725+a transaction meets the requirements 6
8726+described under subparagraph (A) 7
8727+through (C) of section 4(a)(8), a dig-8
8728+ital asset issuer may rely on the ef-9
8729+forts of an intermediary. 10
8730+‘‘(c) A
8731+DDITIONALPROVISIONS.— 11
8732+‘‘(1) A
8733+CCEPTANCE OF WRITTEN OFFERS ; 12
8734+SALES.—After an issuer files a statement 13
8735+under paragraph (1) to offer and sell a 14
8736+digital asset in reliance on section 15
8737+4(a)(8)— 16
8738+‘‘(A) written offers of the digital 17
8739+asset may be made; and 18
8740+‘‘(B) the issuer may sell the digital 19
8741+assets in reliance on section 4(a)(8), if 20
8742+such sales meet all other require-21
8743+ments. 22
8744+‘‘(2) S
8745+OLICITATION OF INTEREST .— 23
8746+‘‘(A) I
8747+N GENERAL.—At any time be-24
8748+fore the filing of a statement under 25
8749+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00289 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8750+rfrederick on LAP8M3WLY3PROD with BILLS 290
8751+•HR 4763 RH
8752+paragraph (1), a digital asset issuer 1
8753+may communicate orally or in writing 2
8754+to determine whether there is any in-3
8755+terest in a contemplated offering. 4
8756+Such communications are deemed to 5
8757+be an offer of a unit of a digital asset 6
8758+for sale for purposes of the anti-fraud 7
8759+provisions of the Federal securities 8
8760+laws. No solicitation or acceptance of 9
8761+money or other consideration, nor of 10
8762+any commitment, binding or other-11
8763+wise, from any person is permitted 12
8764+until the statement is filed. 13
8765+‘‘(B) C
8766+ONDITIONS.—In any commu-14
8767+nication described under subpara-15
8768+graph (A), the digital asset issuer 16
8769+shall— 17
8770+‘‘(i) state that no money or 18
8771+other consideration is being solic-19
8772+ited, and if sent in response, will 20
8773+not be accepted; 21
8774+‘‘(ii) state that no offer to buy 22
8775+a unit of a digital asset can be ac-23
8776+cepted and no part of the pur-24
8777+chase price can be received until 25
8778+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00290 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8779+rfrederick on LAP8M3WLY3PROD with BILLS 291
8780+•HR 4763 RH
8781+the statement is filed and then 1
8782+only through an intermediary; 2
8783+and 3
8784+‘‘(iii) state that a person’s in-4
8785+dication of interest involves no 5
8786+obligation or commitment of any 6
8787+kind. 7
8788+‘‘(C) I
8789+NDICATIONS OF INTEREST .— 8
8790+Any written communication de-9
8791+scribed under subparagraph (A) may 10
8792+include a means by which a person 11
8793+may indicate to the digital asset 12
8794+issuer that such person is interested 13
8795+in a potential offering. A digital asset 14
8796+issuer may require a name, address, 15
8797+telephone number, or email address 16
8798+in any response form included with a 17
8799+communication described under sub-18
8800+paragraph (A). 19
8801+‘‘(3) D
8802+ISQUALIFICATION PROVISIONS .— 20
8803+The Commission shall issue rules to 21
8804+apply the disqualification provisions 22
8805+under section 230.262 of title 17, Code of 23
8806+Federal Regulations, to the exemption 24
8807+provided under section 4(a)(8). 25
8808+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00291 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8809+rfrederick on LAP8M3WLY3PROD with BILLS 292
8810+•HR 4763 RH
8811+‘‘(4) DIGITAL ASSETS DEEMED RE -1
8812+STRICTED DIGITAL ASSET .—A unit of a dig-2
8813+ital asset acquired directly or indirectly 3
8814+from the digital asset issuer in reliance 4
8815+on the exemption provided under section 5
8816+4(a)(8) is deemed a restricted digital 6
8817+asset.’’. 7
8818+(b) A
8819+DDITIONALEXEMPTIONS.— 8
8820+(1) C
8821+ERTAIN REGISTRATION REQUIRE -9
8822+MENTS.—Section 12(g)(6) of the Securities 10
8823+Exchange Act of 1934 (15 U.S.C. 78l(g)(6)) 11
8824+is amended by striking ‘‘under section 12
8825+4(6)’’ and inserting ‘‘under section 4(a)(6) 13
8826+or 4(a)(8)’’. 14
8827+(2) E
8828+XEMPTION FROM STATE REGULA -15
8829+TION.—Section 18(b)(4) of the Securities 16
8830+Act of 1933 (15 U.S.C. 77r(b)(4)) is amend-17
8831+ed— 18
8832+(A) in section (B), by striking ‘‘sec-19
8833+tion 4(4)’’ and inserting ‘‘section 20
8834+4(a)(4)’’; 21
8835+(B) in section (C), by striking ‘‘sec-22
8836+tion 4(6)’’ and inserting ‘‘section 23
8837+4(a)(6)’’; 24
8838+(C) in subparagraph (F)— 25
8839+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00292 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8840+rfrederick on LAP8M3WLY3PROD with BILLS 293
8841+•HR 4763 RH
8842+(i) by striking ‘‘section 4(2)’’ 1
8843+each place such term appears and 2
8844+inserting ‘‘section 4(a)(2)’’; 3
8845+(ii) by striking ‘‘or’’ at the end; 4
8846+(D) in subparagraph (G), by strik-5
8847+ing the period and inserting ‘‘; or’’; 6
8848+and 7
8849+(E) by adding at the end the fol-8
8850+lowing: 9
8851+‘‘(H) section 4(a)(8).’’. 10
8852+SEC. 202. REQUIREMENTS FOR OFFERS AND SALES OF CER-11
8853+TAIN DIGITAL ASSETS. 12
8854+Title I of the Securities Exchange Act of 13
8855+1934 (15 U.S.C. 78a et seq.) is amended by add-14
8856+ing at the end the following: 15
8857+‘‘SEC. 42. REQUIREMENTS FOR OFFERS AND SALES OF CER-16
8858+TAIN DIGITAL ASSETS. 17
8859+‘‘(a) O
8860+FFERS AND SALES OF CERTAINRE-18
8861+STRICTEDDIGITALASSETS.— 19
8862+‘‘(1) I
8863+N GENERAL .—Notwithstanding 20
8864+any other provision of law, subject to 21
8865+paragraph (2), a restricted digital asset 22
8866+may be offered and sold on a digital asset 23
8867+trading system by any person other than 24
8868+a digital asset issuer if, at the time of 25
8869+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00293 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8870+rfrederick on LAP8M3WLY3PROD with BILLS 294
8871+•HR 4763 RH
8872+such offer or sale, any blockchain system 1
8873+to which the restricted digital asset re-2
8874+lates is a functional network and the in-3
8875+formation described in section 43 has 4
8876+been certified and made publicly avail-5
8877+able for any blockchain system to which 6
8878+the restricted digital asset relates. 7
8879+‘‘(2) A
8880+DDITIONAL RULES FOR RELATED 8
8881+PERSONS AND AFFILIATED PERSONS .—Except 9
8882+as provided under subsection (c), a re-10
8883+stricted digital asset owned by a related 11
8884+person or an affiliated person may only 12
8885+be offered or sold after 12 months after 13
8886+the later of— 14
8887+‘‘(A) the date on which such re-15
8888+stricted digital asset was acquired; or 16
8889+‘‘(B) the digital asset maturity 17
8890+date. 18
8891+‘‘(b) O
8892+FFERS ANDSALES OFCERTAINDIGITAL 19
8893+C
8894+OMMODITIES.— 20
8895+‘‘(1) I
8896+N GENERAL .—Subject to para-21
8897+graph (2), a digital commodity may be of-22
8898+fered and sold by any person. 23
8899+‘‘(2) R
8900+ULES FOR RELATED AND AFFILI -24
8901+ATED PERSONS .—Except as provided under 25
8902+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00294 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8903+rfrederick on LAP8M3WLY3PROD with BILLS 295
8904+•HR 4763 RH
8905+subsection (c), a digital commodity may 1
8906+only be offered or sold by a related per-2
8907+son or an affiliated person if— 3
8908+‘‘(A) the holder of the digital com-4
8909+modity owned the digital commodity 5
8910+while it was a restricted digital asset 6
8911+for 12 months after the later of— 7
8912+‘‘(i) the date on which such re-8
8913+stricted digital asset was ac-9
8914+quired; or 10
8915+‘‘(ii) the digital asset maturity 11
8916+date; 12
8917+‘‘(B) any blockchain system to 13
8918+which the digital commodity relates 14
8919+is certified to be a decentralized net-15
8920+work under section 44; and 16
8921+‘‘(C) the digital commodity is of-17
8922+fered or sold on or subject to the 18
8923+rules of a digital commodity exchange 19
8924+registered under section 5i of the 20
8925+Commodity Exchange Act. 21
8926+‘‘(3) N
8927+OT AN INVESTMENT CONTRACT .— 22
8928+For purposes of the securities laws, an 23
8929+offer or sale of a digital commodity that 24
8930+does not violate paragraph (2) shall not 25
8931+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00295 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8932+rfrederick on LAP8M3WLY3PROD with BILLS 296
8933+•HR 4763 RH
8934+be a transaction in an investment con-1
8935+tract. 2
8936+‘‘(c) S
8937+ALESRESTRICTIONS FOR AFFILIATED 3
8938+P
8939+ERSONS.—A digital asset may be offered and 4
8940+sold by an affiliated person under subsection 5
8941+(a) or (b) if— 6
8942+‘‘(1) the aggregate amount of such 7
8943+digital assets sold in any 3-month period 8
8944+by the affiliated person is not greater 9
8945+than one percent of the digital assets 10
8946+then outstanding; or 11
8947+‘‘(2) the affiliated person promptly, 12
8948+following the placement of an order to 13
8949+sell one percent or more of the digital as-14
8950+sets then outstanding during any 3- 15
8951+month period, reports the sale to— 16
8952+‘‘(A) the Commodity Futures Trad-17
8953+ing Commission, in the case of an 18
8954+order to sell a digital commodity on 19
8955+or subject to the rules of a digital 20
8956+commodity exchange; or 21
8957+‘‘(B) the Securities and Exchange 22
8958+Commission, in the case of a sell 23
8959+order for a restricted digital asset 24
8960+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00296 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8961+rfrederick on LAP8M3WLY3PROD with BILLS 297
8962+•HR 4763 RH
8963+placed with a digital asset trading 1
8964+system. 2
8965+‘‘(d) T
8966+REATMENT OF CERTAINENDUSERDIS-3
8967+TRIBUTIONSUNDER THESECURITIESLAWS.— 4
8968+‘‘(1) I
8969+N GENERAL .—With respect to a 5
8970+digital asset, an end user distribution is 6
8971+described under this paragraph if— 7
8972+‘‘(A) each blockchain system to 8
8973+which such digital asset relates is a 9
8974+functional network; and 10
8975+‘‘(B) with respect to the digital 11
8976+asset and each blockchain system to 12
8977+which such digital asset relates, the 13
8978+information described in section 43 14
8979+has been certified and made publicly 15
8980+available. 16
8981+‘‘(2) N
8982+OT AN INVESTMENT CONTRACT .— 17
8983+For purposes of the securities laws, an 18
8984+end user distribution described under 19
8985+paragraph (1) shall not be a transaction 20
8986+in an investment contract. 21
8987+‘‘(3) E
8988+XEMPTION.—Section 5 of the Se-22
8989+curities Act of 1933 (15 U.S.C. 77e) shall 23
8990+not apply to an end user distribution de-24
8991+scribed under paragraph (1) or a trans-25
8992+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00297 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
8993+rfrederick on LAP8M3WLY3PROD with BILLS 298
8994+•HR 4763 RH
8995+action in a unit of digital asset issued in 1
8996+such a distribution.’’. 2
8997+SEC. 203. ENHANCED DISCLOSURE REQUIREMENTS. 3
8998+Title I of the Securities Exchange Act of 4
8999+1934 (15 U.S.C. 78a et seq.), as amended by sec-5
9000+tion 202, is further amended by adding at the 6
9001+end the following: 7
9002+‘‘SEC. 43. ENHANCED DISCLOSURE REQUIREMENTS WITH 8
9003+RESPECT TO DIGITAL ASSETS. 9
9004+‘‘(a) D
9005+ISCLOSURE INFORMATION .—With re-10
9006+spect to a digital asset and any blockchain 11
9007+system to which the digital asset relates, the 12
9008+information described under this section is as 13
9009+follows: 14
9010+‘‘(1) S
9011+OURCE CODE .—The source code 15
9012+for any blockchain system to which the 16
9013+digital asset relates. 17
9014+‘‘(2) T
9015+RANSACTION HISTORY .—A descrip-18
9016+tion of the steps necessary to independ-19
9017+ently access, search, and verify the trans-20
9018+action history of any blockchain system 21
9019+to which the digital asset relates. 22
9020+‘‘(3) D
9021+IGITAL ASSET ECONOMICS .—A de-23
9022+scription of the purpose of any 24
9023+blockchain system to which the digital 25
9024+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00298 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9025+rfrederick on LAP8M3WLY3PROD with BILLS 299
9026+•HR 4763 RH
9027+asset relates and the operation of any 1
9028+such blockchain system, including— 2
9029+‘‘(A) information explaining the 3
9030+launch and supply process, including 4
9031+the number of digital assets to be 5
9032+issued in an initial allocation, the 6
9033+total number of digital assets to be 7
9034+created, the release schedule for the 8
9035+digital assets, and the total number of 9
9036+digital assets then outstanding; 10
9037+‘‘(B) information on any applica-11
9038+ble consensus mechanism or process 12
9039+for validating transactions, method of 13
9040+generating or mining digital assets, 14
9041+and any process for burning or de-15
9042+stroying digital assets on the 16
9043+blockchain system; 17
9044+‘‘(C) an explanation of governance 18
9045+mechanisms for implementing 19
9046+changes to the blockchain system or 20
9047+forming consensus among holders of 21
9048+such digital assets; and 22
9049+‘‘(D) sufficient information for a 23
9050+third party to create a tool for 24
9051+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00299 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9052+rfrederick on LAP8M3WLY3PROD with BILLS 300
9053+•HR 4763 RH
9054+verifying the transaction history of 1
9055+the digital asset. 2
9056+‘‘(4) P
9057+LAN OF DEVELOPMENT .—The cur-3
9058+rent state and timeline for the develop-4
9059+ment of any blockchain system to which 5
9060+the digital asset relates, showing how 6
9061+and when the blockchain system intends 7
9062+or intended to be considered a functional 8
9063+network and decentralized network. 9
9064+‘‘(5) D
9065+EVELOPMENT DISCLOSURES .—A 10
9066+list of all persons who are related persons 11
9067+or affiliated persons who have been 12
9068+issued a unit of a digital asset by a digital 13
9069+asset issuer or have a right to a unit of a 14
9070+digital asset from a digital asset issuer. 15
9071+‘‘(6) R
9072+ISK FACTOR DISCLOSURES .—Where 16
9073+appropriate, provide under the caption 17
9074+‘Risk Factors’ a description of the mate-18
9075+rial risks surrounding ownership of a 19
9076+unit of a digital asset. This discussion 20
9077+shall be organized logically with relevant 21
9078+headings and each risk factor shall be set 22
9079+forth under a subcaption that adequately 23
9080+describes the risk. 24
9081+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00300 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9082+rfrederick on LAP8M3WLY3PROD with BILLS 301
9083+•HR 4763 RH
9084+‘‘(b) CERTIFICATION.—With respect to a dig-1
9085+ital asset and any blockchain system to which 2
9086+the digital asset relates, the information re-3
9087+quired to be made available under this sec-4
9088+tion has been certified if the digital asset 5
9089+issuer, an affiliated person, a decentralized 6
9090+governance system, or a digital commodity ex-7
9091+change certifies on a quarterly basis to the 8
9092+Commodity Futures Trading Commission and 9
9093+the Securities and Exchange Commission that 10
9094+the information is true and correct.’’. 11
9095+SEC. 204. CERTIFICATION OF CERTAIN DIGITAL ASSETS. 12
9096+Title I of the Securities Exchange Act of 13
9097+1934 (15 U.S.C. 78a et seq.), as amended by sec-14
9098+tion 203, is further amended by adding at the 15
9099+end the following: 16
9100+‘‘SEC. 44. CERTIFICATION OF CERTAIN DIGITAL ASSETS. 17
9101+‘‘(a) C
9102+ERTIFICATION.—Any person may cer-18
9103+tify to the Securities and Exchange Commis-19
9104+sion that the blockchain system to which a 20
9105+digital asset relates is a decentralized net-21
9106+work. 22
9107+‘‘(b) F
9108+ILINGREQUIREMENTS .—A certifi-23
9109+cation described under subsection (a) shall be 24
9110+filed with the Commission, and include— 25
9111+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00301 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9112+rfrederick on LAP8M3WLY3PROD with BILLS 302
9113+•HR 4763 RH
9114+‘‘(1) information regarding the person 1
9115+making the certification; 2
9116+‘‘(2) a description of the blockchain 3
9117+system and the digital asset which relates 4
9118+to such blockchain system, including— 5
9119+‘‘(A) the operation of the 6
9120+blockchain system; 7
9121+‘‘(B) the functionality of the re-8
9122+lated digital asset; 9
9123+‘‘(C) any decentralized govern-10
9124+ance system which relates to the 11
9125+blockchain system; and 12
9126+‘‘(D) the process to develop con-13
9127+sensus or agreement within such de-14
9128+centralized governance system; 15
9129+‘‘(3) a description of the development 16
9130+of the blockchain system and the digital 17
9131+asset which relates to the blockchain sys-18
9132+tem, including— 19
9133+‘‘(A) a history of the development 20
9134+of the blockchain system and the dig-21
9135+ital asset which relates to such 22
9136+blockchain system; 23
9137+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00302 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9138+rfrederick on LAP8M3WLY3PROD with BILLS 303
9139+•HR 4763 RH
9140+‘‘(B) a description of the issuance 1
9141+process for the digital asset which re-2
9142+lates to the blockchain system; 3
9143+‘‘(C) information identifying the 4
9144+digital asset issuer of the digital asset 5
9145+which relates to the blockchain sys-6
9146+tem; and 7
9147+‘‘(D) a list of any affiliated person 8
9148+related to the digital asset issuer; 9
9149+‘‘(4) an analysis of the factors on 10
9150+which such person based the certification 11
9151+that the blockchain system is a decentral-12
9152+ized network, including— 13
9153+‘‘(A) an explanation of the protec-14
9154+tions and prohibitions available dur-15
9155+ing the previous 12 months against 16
9156+any one person being able to— 17
9157+‘‘(i) control or materially alter 18
9158+the blockchain system; 19
9159+‘‘(ii) exclude any other person 20
9160+from using or participating on the 21
9161+blockchain system; and 22
9162+‘‘(iii) exclude any other person 23
9163+from participating in a decentral-24
9164+ized governance system; 25
9165+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00303 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9166+rfrederick on LAP8M3WLY3PROD with BILLS 304
9167+•HR 4763 RH
9168+‘‘(B) information regarding the 1
9169+beneficial ownership of the digital 2
9170+asset which relates to such 3
9171+blockchain system and the distribu-4
9172+tion of voting power in any decentral-5
9173+ized governance system during the 6
9174+previous 12 months; 7
9175+‘‘(C) information regarding the 8
9176+history of upgrades to the source 9
9177+code for such blockchain system dur-10
9178+ing the previous 3 months, includ-11
9179+ing— 12
9180+‘‘(i) a description of any con-13
9181+sensus or agreement process uti-14
9182+lized to process or approve 15
9183+changes to the source code; 16
9184+‘‘(ii) a list of any material 17
9185+changes to the source code, the 18
9186+purpose and effect of the changes, 19
9187+and the contributor of the 20
9188+changes, if known; and 21
9189+‘‘(iii) any changes to the 22
9190+source code made by the digital 23
9191+asset issuer, a related person, or 24
9192+an affiliated person; 25
9193+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00304 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9194+rfrederick on LAP8M3WLY3PROD with BILLS 305
9195+•HR 4763 RH
9196+‘‘(D) information regarding any 1
9197+activities conducted to market the 2
9198+digital asset which relates to the 3
9199+blockchain system during the pre-4
9200+vious 3 months by the digital asset 5
9201+issuer or an affiliated person of the 6
9202+digital asset issuer; and 7
9203+‘‘(E) information regarding any 8
9204+issuance of a unit of the digital asset 9
9205+which relates to such blockchain sys-10
9206+tem during the previous 12 months; 11
9207+and 12
9208+‘‘(5) with respect to a blockchain sys-13
9209+tem for which a certification has pre-14
9210+viously been rebutted under this section 15
9211+or withdrawn under section 5i(m) of the 16
9212+Commodity Exchange Act, specific infor-17
9213+mation relating to the analysis provided 18
9214+in subsection (f)(2) in connection with 19
9215+such rebuttal or such section 5i(m)(1)(C) 20
9216+in connection with such withdrawal. 21
9217+‘‘(c) R
9218+EBUTTABLE PRESUMPTION .—The Com-22
9219+mission may rebut a certification described 23
9220+under subsection (a) with respect to a 24
9221+blockchain system if the Commission, within 25
9222+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00305 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9223+rfrederick on LAP8M3WLY3PROD with BILLS 306
9224+•HR 4763 RH
9225+60 days of receiving such certification, deter-1
9226+mines that the blockchain system is not a de-2
9227+centralized network. 3
9228+‘‘(d) C
9229+ERTIFICATION REVIEW.— 4
9230+‘‘(1) I
9231+N GENERAL.—Any blockchain sys-5
9232+tem that relates to a digital asset for 6
9233+which a certification has been made 7
9234+under subsection (a) shall be considered 8
9235+a decentralized network 60 days after the 9
9236+date on which the Commission receives a 10
9237+certification under subsection (a), unless 11
9238+the Commission notifies the person who 12
9239+made the certification within such time 13
9240+that the Commission is staying the cer-14
9241+tification due to— 15
9242+‘‘(A) an inadequate explanation by 16
9243+the person making the certification; 17
9244+or 18
9245+‘‘(B) any novel or complex issues 19
9246+which require additional time to con-20
9247+sider. 21
9248+‘‘(2) P
9249+UBLIC NOTICE .—The Commission 22
9250+shall make the following available to the 23
9251+public and provide a copy to the Com-24
9252+modity Futures Trading Commission: 25
9253+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00306 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9254+rfrederick on LAP8M3WLY3PROD with BILLS 307
9255+•HR 4763 RH
9256+‘‘(A) Each certification received 1
9257+under subsection (a). 2
9258+‘‘(B) Each stay of the Commission 3
9259+under this section, and the reasons 4
9260+therefore. 5
9261+‘‘(C) Any response from a person 6
9262+making a certification under sub-7
9263+section (a) to a stay of the certifi-8
9264+cation by the Commission. 9
9265+‘‘(3) C
9266+ONSOLIDATION .—The Commission 10
9267+may consolidate and treat as one submis-11
9268+sion multiple certifications made under 12
9269+subsection (a) for the same blockchain 13
9270+system which relates to a digital asset 14
9271+which are received during the review pe-15
9272+riod provided under this subsection. 16
9273+‘‘(e) S
9274+TAY OFCERTIFICATION.— 17
9275+‘‘(1) I
9276+N GENERAL .—A notification by 18
9277+the Commission pursuant to subsection 19
9278+(d)(1) shall stay the certification once for 20
9279+up to an additional 120 days from the 21
9280+date of the notification. 22
9281+‘‘(2) P
9282+UBLIC COMMENT PERIOD .—Before 23
9283+the end of the 60-day period described 24
9284+under subsection (d)(1), the Commission 25
9285+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00307 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9286+rfrederick on LAP8M3WLY3PROD with BILLS 308
9287+•HR 4763 RH
9288+may begin a public comment period of at 1
9289+least 30 days in conjunction with a stay 2
9290+under this section. 3
9291+‘‘(f) D
9292+ISPOSITION OFCERTIFICATION.— 4
9293+‘‘(1) I
9294+N GENERAL.—A certification made 5
9295+under subsection (a) shall— 6
9296+‘‘(A) become effective— 7
9297+‘‘(i) upon the publication of a 8
9298+notification from the Commission 9
9299+to the person who made the cer-10
9300+tification that the Commission 11
9301+does not object to the certifi-12
9302+cation; or 13
9303+‘‘(ii) at the expiration of the 14
9304+certification review period; and 15
9305+‘‘(B) not become effective upon 16
9306+the publication of a notification from 17
9307+the Commission to the person who 18
9308+made the certification that the Com-19
9309+mission has rebutted the certifi-20
9310+cation. 21
9311+‘‘(2) D
9312+ETAILED ANALYSIS INCLUDED WITH 22
9313+REBUTTAL.—The Commission shall in-23
9314+clude, with each publication of a notifica-24
9315+tion of rebuttal described under para-25
9316+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00308 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9317+rfrederick on LAP8M3WLY3PROD with BILLS 309
9318+•HR 4763 RH
9319+graph (1)(B), a detailed analysis of the 1
9320+factors on which the decision was based. 2
9321+‘‘(g) R
9322+ECERTIFICATION .—With respect to a 3
9323+blockchain system for which a certification 4
9324+has been rebutted under this section, no per-5
9325+son may make a certification under sub-6
9326+section (a) with respect to such blockchain 7
9327+system during the 90-day period beginning on 8
9328+the date of such rebuttal. 9
9329+‘‘(h) A
9330+PPEAL OFREBUTTAL.— 10
9331+‘‘(1) I
9332+N GENERAL.—If a certification is 11
9333+rebutted under this section, the person 12
9334+making such certification may appeal the 13
9335+decision to the United States Court of Ap-14
9336+peals for the District of Columbia, not 15
9337+later than 60 days after the notice of re-16
9338+buttal is made. 17
9339+‘‘(2) R
9340+EVIEW.—In an appeal under 18
9341+paragraph (1), the court shall have de 19
9342+novo review of the determination to 20
9343+rebut the certification. 21
9344+‘‘(i) L
9345+IABILITY FORPROVIDINGFALSEINFOR-22
9346+MATION.—It shall be unlawful for any person 23
9347+to provide false information in support of a 24
9348+certification under this section if such person 25
9349+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00309 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9350+rfrederick on LAP8M3WLY3PROD with BILLS 310
9351+•HR 4763 RH
9352+knew or reasonably should have known such 1
9353+information was false.’’. 2
9354+SEC. 205. EFFECTIVE DATE. 3
9355+Unless otherwise provided in this title, 4
9356+this title and the amendments made by this 5
9357+title shall take effect 360 days after the date 6
9358+of enactment of this Act, except that, to the 7
9359+extent a provision of this title requires a rule-8
9360+making, the provision shall take effect on the 9
9361+later of— 10
9362+(1) 360 days after the date of enact-11
9363+ment of this Act; or 12
9364+(2) 60 days after the publication in 13
9365+the Federal Register of the final rule im-14
9366+plementing the provision. 15
9367+TITLE III—REGISTRATION FOR 16
9368+DIGITAL ASSET INTER-17
9369+MEDIARIES AT THE SECURI-18
9370+TIES AND EXCHANGE COM-19
9371+MISSION 20
9372+SEC. 301. TREATMENT OF DIGITAL COMMODITIES AND 21
9373+OTHER DIGITAL ASSETS. 22
9374+(a) S
9375+ECURITIES ACT OF 1933.—Section 23
9376+2(a)(1) of the Securities Act of 1933 (15 U.S.C. 24
9377+77b(a)(1)) is amended by adding at the end the 25
9378+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00310 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9379+rfrederick on LAP8M3WLY3PROD with BILLS 311
9380+•HR 4763 RH
9381+following: ‘‘The term does not include a digital 1
9382+commodity or permitted payment 2
9383+stablecoin.’’. 3
9384+(b) S
9385+ECURITIESEXCHANGE ACT OF1934.— 4
9386+Section 3(a) of the Securities Exchange Act of 5
9387+1934 (15 U.S.C. 78c(a)) is amended— 6
9388+(1) in paragraph (1), by adding at the 7
9389+end the following: ‘‘The term ‘exchange’ 8
9390+does not include a digital asset trading 9
9391+system, blockchain protocol, or any per-10
9392+son or group of persons solely because of 11
9393+their development of a blockchain pro-12
9394+tocol.’’; 13
9395+(2) in paragraph (2), by adding at the 14
9396+end the following: ‘‘A digital asset trading 15
9397+system is not a ‘facility’ of an exchange.’’; 16
9398+(3) in paragraph (4)(A), by inserting ‘‘, 17
9399+other than restricted digital assets,’’ after 18
9400+‘‘securities’’; 19
9401+(4) in paragraph (5)(A), by inserting 20
9402+‘‘restricted digital assets or’’ after ‘‘not in-21
9403+cluding’’; 22
9404+(5) in paragraph (26) by inserting 23
9405+‘‘(other than a notice-registered digital 24
9406+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00311 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9407+rfrederick on LAP8M3WLY3PROD with BILLS 312
9408+•HR 4763 RH
9409+asset clearing agency)’’ after ‘‘or reg-1
9410+istered clearing agency’’; 2
9411+(6) in paragraph (28) by inserting 3
9412+‘‘(other than a notice-registered digital 4
9413+asset clearing agency)’’ after ‘‘registered 5
9414+clearing agency’’; and 6
9415+(7) in paragraph (10), by adding at 7
9416+the end the following: ‘‘Subject to sub-8
9417+section (i), the term does not include a 9
9418+digital commodity or permitted payment 10
9419+stablecoin.’’. 11
9420+(c) I
9421+NVESTMENT ADVISERSACT OF1940.— 12
9422+Section 202(a) of the Investment Advisers Act 13
9423+of 1940 (15 U.S.C. 80b–2) is amended— 14
9424+(1) in paragraph (18), by adding at 15
9425+the end the following: ‘‘The term does not 16
9426+include a digital commodity or permitted 17
9427+payment stablecoin.’’; 18
9428+(2) by redesignating the second para-19
9429+graph (29) (relating to commodity pools) 20
9430+as paragraph (31); 21
9431+(3) by adding at the end, the fol-22
9432+lowing: 23
9433+‘‘(32) D
9434+IGITAL ASSET-RELATED TERMS .— 24
9435+The terms ‘digital commodity’ and ‘per-25
9436+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00312 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9437+rfrederick on LAP8M3WLY3PROD with BILLS 313
9438+•HR 4763 RH
9439+mitted payment stablecoin’ have the 1
9440+meaning given those terms, respectively, 2
9441+under section 2(a) of the Securities Act of 3
9442+1933 (15 U.S.C. 77b(a)).’’. 4
9443+(d) I
9444+NVESTMENT COMPANY ACT OF1940.— 5
9445+Section 2(a) of the Investment Company Act 6
9446+of 1940 (15 U.S.C. 80a–2) is amended— 7
9447+(1) in paragraph (36), by adding at 8
9448+the end the following: ‘‘The term does not 9
9449+include a digital commodity or permitted 10
9450+payment stablecoin.’’; and 11
9451+(2) by adding at the end, the fol-12
9452+lowing: 13
9453+‘‘(55) D
9454+IGITAL ASSET-RELATED TERMS .— 14
9455+The terms ‘digital commodity’ and ‘per-15
9456+mitted payment stablecoin’ have the 16
9457+meaning given those terms, respectively, 17
9458+under section 2(a) of the Securities Act of 18
9459+1933 (15 U.S.C. 77b(a)).’’. 19
9460+SEC. 302. ANTI-FRAUD AUTHORITY OVER PERMITTED PAY-20
9461+MENT STABLECOINS. 21
9462+(a) I
9463+NGENERAL.—Section 10 of the Securi-22
9464+ties Exchange Act of 1934 (15 U.S.C. 78j) is 23
9465+amended— 24
9466+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00313 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9467+rfrederick on LAP8M3WLY3PROD with BILLS 314
9468+•HR 4763 RH
9469+(1) by moving subsection (c) so as to 1
9470+appear after subsection (b); 2
9471+(2) by designating the undesignated 3
9472+matter at the end of that section as sub-4
9473+section (d); and 5
9474+(3) by adding at the end the fol-6
9475+lowing: 7
9476+‘‘(e)(1) Rules promulgated under sub-8
9477+section (b) that prohibit fraud, manipulation, 9
9478+or insider trading (but not rules imposing or 10
9479+specifying reporting or recordkeeping re-11
9480+quirements, procedures, or standards as pro-12
9481+phylactic measures against fraud, manipula-13
9482+tion, or insider trading), and judicial prece-14
9483+dents decided under subsection (b) and rules 15
9484+promulgated thereunder that prohibit fraud, 16
9485+manipulation, or insider trading, shall apply 17
9486+to permitted payment stablecoins with re-18
9487+spect to those circumstances in which the per-19
9488+mitted payment stablecoins are brokered, 20
9489+traded, or custodied by a broker, dealer, dig-21
9490+ital asset broker, or digital asset dealer or 22
9491+through an alternative trading system or dig-23
9492+ital asset trading platform to the same extent 24
9493+as they apply to securities. 25
9494+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00314 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9495+rfrederick on LAP8M3WLY3PROD with BILLS 315
9496+•HR 4763 RH
9497+‘‘(2) Judicial precedents decided under 1
9498+section 17(a) of the Securities Act of 1933 and 2
9499+sections 9, 15, 16, 20, and 21A of this title, and 3
9500+judicial precedents decided under applicable 4
9501+rules promulgated under such sections, shall 5
9502+apply to permitted payment stablecoins with 6
9503+respect to those circumstances in which the 7
9504+permitted payment stablecoins are brokered, 8
9505+traded, or custodied by a digital asset broker, 9
9506+digital asset dealer, or digital asset trading 10
9507+system to the same extent as they apply to se-11
9508+curities. 12
9509+‘‘(3) Nothing in this subsection may be 13
9510+construed to provide the Commission author-14
9511+ity to make any rule, regulation, requirement, 15
9512+or obligation on a permitted payment 16
9513+stablecoin issuer regarding the operations of 17
9514+a permitted payment stablecoin issuer or a 18
9515+permitted payment stablecoin, including any 19
9516+aspect of the operation of a permitted pay-20
9517+ment stablecoin issuer or permitted payment 21
9518+stablecoin.’’. 22
9519+(b) T
9520+REATMENT OF PERMITTED PAYMENT 23
9521+S
9522+TABLECOINS.—Title I of the Securities Ex-24
9523+change Act of 1934 (15 U.S.C. 78a et seq.), as 25
9524+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00315 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9525+rfrederick on LAP8M3WLY3PROD with BILLS 316
9526+•HR 4763 RH
9527+amended by section 304, is amended by insert-1
9528+ing after section 6B the following 2
9529+‘‘SEC. 6C. TREATMENT OF TRANSACTIONS IN PERMITTED 3
9530+PAYMENT STABLECOINS. 4
9531+‘‘(a) A
9532+UTHORITY TO BROKER, TRADE, AND 5
9533+C
9534+USTODYPERMITTED PAYMENTSTABLECOINS.— 6
9535+Permitted payment stablecoins may be bro-7
9536+kered, traded, or custodied by a broker, deal-8
9537+er, digital asset broker, or digital asset dealer 9
9538+or through an alternative trading system or 10
9539+digital asset trading platform. 11
9540+‘‘(b) C
9541+OMMISSION JURISDICTION.—The Com-12
9542+mission shall have jurisdiction over a trans-13
9543+action in a permitted payment stablecoin with 14
9544+respect to those circumstances in which a 15
9545+permitted payment stablecoin is brokered, 16
9546+traded, or custodied— 17
9547+‘‘(1) by a broker, dealer, digital asset 18
9548+broker, or digital asset dealer; or 19
9549+‘‘(2) through an alternative trading 20
9550+system or digital asset trading system. 21
9551+‘‘(c) L
9552+IMITATION.—Subsection (b) shall only 22
9553+apply to a transaction described in subsection 23
9554+(b) for the purposes of regulating the offer, 24
9555+execution, solicitation, or acceptance of a per-25
9556+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00316 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9557+rfrederick on LAP8M3WLY3PROD with BILLS 317
9558+•HR 4763 RH
9559+mitted payment stablecoin in those cir-1
9560+cumstances in which the permitted payment 2
9561+stablecoin is brokered, traded, or custodied— 3
9562+‘‘(1) by a broker, dealer, digital asset 4
9563+broker, or digital asset dealer; or 5
9564+‘‘(2) through an alternative trading 6
9565+system or digital asset trading system.’’. 7
9566+SEC. 303. REGISTRATION OF DIGITAL ASSET TRADING SYS-8
9567+TEMS. 9
9568+Section 6 of the Securities Exchange Act 10
9569+of 1934 (15 U.S.C. 78f) is amended by adding 11
9570+at the end the following: 12
9571+‘‘(m) D
9572+IGITALASSETTRADINGSYSTEM.— 13
9573+‘‘(1) I
9574+N GENERAL.—It shall be unlawful 14
9575+for any digital asset trading system to 15
9576+make use of the mails or any means or in-16
9577+strumentality of interstate commerce 17
9578+within or subject to the jurisdiction of 18
9579+the United States to effect any trans-19
9580+action in a restricted digital asset, unless 20
9581+such digital asset trading system is reg-21
9582+istered with the Commission. 22
9583+‘‘(2) A
9584+PPLICATION.—A person desiring 23
9585+to register as a digital asset trading sys-24
9586+tem shall submit to the Commission an 25
9587+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00317 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9588+rfrederick on LAP8M3WLY3PROD with BILLS 318
9589+•HR 4763 RH
9590+application in such form and containing 1
9591+such information as the Commission may 2
9592+require for the purpose of making the de-3
9593+terminations required for approval. 4
9594+‘‘(3) E
9595+XEMPTIONS.—A digital asset trad-5
9596+ing system that offers or seeks to offer at 6
9597+least one restricted digital asset shall not 7
9598+be required to register under this section 8
9599+(and subparagraph (A) shall not apply to 9
9600+such digital asset trading system) if the 10
9601+trading system satisfies any exemption 11
9602+contained on a list of exemptions pre-12
9603+pared by the Commission to be as close 13
9604+as practicable to those exemptions set 14
9605+forth in section 240.3b–16(b) of title 17, 15
9606+Code of Federal Regulations, applicable 16
9607+to the definition of an exchange. 17
9608+‘‘(4) A
9609+DDITIONAL REGISTRATIONS .— 18
9610+‘‘(A) W
9611+ITH THE COMMISSION .— 19
9612+‘‘(i) I
9613+N GENERAL.—A registered 20
9614+digital asset trading system shall 21
9615+be permitted to maintain any 22
9616+other registration with the Com-23
9617+mission relating to the other ac-24
9618+tivities of the registered digital 25
9619+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00318 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9620+rfrederick on LAP8M3WLY3PROD with BILLS 319
9621+•HR 4763 RH
9622+asset trading system, including as 1
9623+a— 2
9624+‘‘(I) national securities ex-3
9625+change; 4
9626+‘‘(II) broker; 5
9627+‘‘(III) dealer; 6
9628+‘‘(IV) alternative trading 7
9629+system, pursuant to part 242 8
9630+of title 17, Code of Federal 9
9631+Regulations, as in effect on 10
9632+the date of enactment of this 11
9633+subsection; 12
9634+‘‘(V) digital asset broker; 13
9635+or 14
9636+‘‘(VI) digital asset dealer. 15
9637+‘‘(ii) R
9638+ULEMAKING.—The Com-16
9639+mission shall prescribe rules for 17
9640+an entity with multiple registra-18
9641+tions described under subpara-19
9642+graph (A) to exempt the entity 20
9643+from duplicative, conflicting, or 21
9644+unduly burdensome provisions of 22
9645+this Act and the rules under this 23
9646+Act, to the extent such an exemp-24
9647+tion would protect investors, 25
9648+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00319 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9649+rfrederick on LAP8M3WLY3PROD with BILLS 320
9650+•HR 4763 RH
9651+maintain fair, orderly, and effi-1
9652+cient markets, and facilitate cap-2
9653+ital formation. 3
9654+‘‘(B) W
9655+ITH THE COMMODITY FUTURES 4
9656+TRADING COMMISSION .—A registered 5
9657+digital asset trading system shall be 6
9658+permitted to maintain a registration 7
9659+with the Commodity Futures Trading 8
9660+Commission as a digital commodity 9
9661+exchange to offer contracts of sale for 10
9662+digital commodities.’’. 11
9663+SEC. 304. REQUIREMENTS FOR DIGITAL ASSET TRADING 12
9664+SYSTEMS. 13
9665+Title I of the Securities Exchange Act of 14
9666+1934 (15 U.S.C. 78a et seq.) is amended by in-15
9667+serting after section 6 the following: 16
9668+‘‘SEC. 6A. REQUIREMENTS FOR DIGITAL ASSET TRADING 17
9669+SYSTEMS. 18
9670+‘‘(a) H
9671+OLDING OFCUSTOMERASSETS.— 19
9672+‘‘(1) I
9673+N GENERAL.—A digital asset trad-20
9674+ing system shall hold customer money, 21
9675+assets, and property in a manner to mini-22
9676+mize the risk of loss to the customer or 23
9677+unreasonable delay in the access to the 24
9678+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00320 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9679+rfrederick on LAP8M3WLY3PROD with BILLS 321
9680+•HR 4763 RH
9681+money, assets, and property of the cus-1
9682+tomer. 2
9683+‘‘(2) Q
9684+UALIFIED DIGITAL ASSET CUSTO -3
9685+DIAN REQUIRED .—A digital asset trading 4
9686+system shall hold customer restricted dig-5
9687+ital assets described in paragraph (1) 6
9688+with a qualified digital asset custodian 7
9689+described under section 6B. 8
9690+‘‘(3) C
9691+USTODY PROHIBITED .—A digital 9
9692+asset trading system, in its capacity as 10
9693+such, may not hold custody of customer 11
9694+money, assets, or property. 12
9695+‘‘(b) R
9696+ULEMAKING.—The Commission shall 13
9697+prescribe rules for digital asset trading sys-14
9698+tems relating to the following: 15
9699+‘‘(1) N
9700+OTICE.—Notice to the Commis-16
9701+sion of the initial operation of a digital 17
9702+asset trading system or any material 18
9703+change to the operation of the digital 19
9704+asset trading system. 20
9705+‘‘(2) O
9706+RDER DISPLAY .—The thresholds 21
9707+at which a digital asset trading system is 22
9708+required to display the orders of the dig-23
9709+ital asset trading system, and the manner 24
9710+of such display. 25
9711+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00321 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9712+rfrederick on LAP8M3WLY3PROD with BILLS 322
9713+•HR 4763 RH
9714+‘‘(3) FAIR ACCESS.—The thresholds at 1
9715+which a digital asset trading system is re-2
9716+quired to have policies regarding pro-3
9717+viding fair access to the digital asset 4
9718+trading system. 5
9719+‘‘(4) C
9720+APACITY, INTEGRITY, AND SECU-6
9721+RITY OF AUTOMATED SYSTEMS .—Policies and 7
9722+procedures reasonably designed to en-8
9723+sure the capacity, integrity, and security 9
9724+of the digital asset trading system, taking 10
9725+into account the particular nature of dig-11
9726+ital asset trading systems. 12
9727+‘‘(5) E
9728+XAMINATIONS, INSPECTIONS, AND 13
9729+INVESTIGATIONS .—The examination and in-14
9730+spection of the premises, systems, and 15
9731+records of the digital asset trading sys-16
9732+tem by the Commission or by a self-regu-17
9733+latory organization of which such digital 18
9734+asset trading system is a member. 19
9735+‘‘(6) R
9736+ECORDKEEPING .—The making, 20
9737+keeping current, and preservation of 21
9738+records related to trading activity on the 22
9739+digital asset trading system. 23
9740+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00322 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9741+rfrederick on LAP8M3WLY3PROD with BILLS 323
9742+•HR 4763 RH
9743+‘‘(7) REPORTING.—The reporting of 1
9744+transactions in digital assets that occur 2
9745+through the digital asset trading system. 3
9746+‘‘(8) P
9747+ROCEDURES .—The establishment 4
9748+of adequate written safeguards and writ-5
9749+ten procedures to protect confidential 6
9750+trading information. 7
9751+‘‘(c) N
9752+AMEREQUIREMENT .—A digital asset 8
9753+trading system may not use the word ‘ex-9
9754+change’ in the name of the digital asset trad-10
9755+ing system, unless the digital asset trading 11
9756+system— 12
9757+‘‘(1) is operated by a registered na-13
9758+tional securities exchange; and 14
9759+‘‘(2) is clearly indicated as being pro-15
9760+vided outside of the system’s capacity as 16
9761+a national securities exchange. 17
9762+‘‘(d) T
9763+REATMENT UNDER THE BANKSECRECY 18
9764+A
9765+CT.—A digital asset trading system shall be 19
9766+treated as a financial institution for purposes 20
9767+of the Bank Secrecy Act. 21
9768+‘‘SEC. 6B. REQUIREMENTS FOR QUALIFIED DIGITAL ASSET 22
9769+CUSTODIANS. 23
9770+‘‘(a) I
9771+NGENERAL.—A digital asset custo-24
9772+dian is a qualified digital asset custodian if 25
9773+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00323 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9774+rfrederick on LAP8M3WLY3PROD with BILLS 324
9775+•HR 4763 RH
9776+the digital asset custodian complies with the 1
9777+requirements of this section. 2
9778+‘‘(b) S
9779+UPERVISIONREQUIREMENT .— 3
9780+‘‘(1) I
9781+N GENERAL.—A digital asset cus-4
9782+todian shall— 5
9783+‘‘(A) be subject to adequate super-6
9784+vision and appropriate regulation 7
9785+by— 8
9786+‘‘(i) the Board of Governors of 9
9787+the Federal Reserve System; 10
9788+‘‘(ii) the Comptroller of the 11
9789+Currency; 12
9790+‘‘(iii) the Federal Deposit In-13
9791+surance Corporation; 14
9792+‘‘(iv) the Commodity Futures 15
9793+Trading Commission; 16
9794+‘‘(v) the Securities and Ex-17
9795+change Commission; 18
9796+‘‘(vi) a State bank supervisor 19
9797+(within the meaning of section 3 20
9798+of the Federal Deposit Insurance 21
9799+Act); or 22
9800+‘‘(vii) an appropriate foreign 23
9801+governmental authority in the 24
9802+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00324 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9803+rfrederick on LAP8M3WLY3PROD with BILLS 325
9804+•HR 4763 RH
9805+home country of the digital asset 1
9806+custodian; and 2
9807+‘‘(B) not be prohibited by the ap-3
9808+plicable supervisor from engaging in 4
9809+an activity with respect to the cus-5
9810+tody and safekeeping of digital assets. 6
9811+‘‘(2) A
9812+DEQUATE SUPERVISION AND APPRO -7
9813+PRIATE REGULATION .—For purposes of 8
9814+paragraph (1), the terms ‘adequate super-9
9815+vision’ and ‘appropriate regulation’ mean 10
9816+such minimum standards for supervision 11
9817+and regulation as are reasonably nec-12
9818+essary to protect the digital assets of cus-13
9819+tomers of an entity registered with the 14
9820+Commission, including minimum stand-15
9821+ards relating to— 16
9822+‘‘(A) accessibility of customer as-17
9823+sets; 18
9824+‘‘(B) financial resources; 19
9825+‘‘(C) risk management require-20
9826+ments; 21
9827+‘‘(D) governance arrangements; 22
9828+‘‘(E) fitness standards for officers 23
9829+and directors; 24
9830+‘‘(F) recordkeeping; 25
9831+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00325 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9832+rfrederick on LAP8M3WLY3PROD with BILLS 326
9833+•HR 4763 RH
9834+‘‘(G) information sharing; and 1
9835+‘‘(H) conflicts of interest. 2
9836+‘‘(3) D
9837+EEMED COMPLIANCE .—A digital 3
9838+asset custodian shall be deemed to be 4
9839+subject to adequate supervision and ap-5
9840+propriate regulation, if— 6
9841+‘‘(A) it is supervised by an agency 7
9842+described under any of clauses (i) 8
9843+through (v) of paragraph (1)(A); or 9
9844+‘‘(B) it is a bank supervised by a 10
9845+State bank supervisor (within the 11
9846+meaning of section 3 of the Federal 12
9847+Deposit Insurance Act). 13
9848+‘‘(4) R
9849+ULEMAKING WITH RESPECT TO 14
9850+DEFINITIONS.—For purposes of this sub-15
9851+section, the Commission may, by rule, 16
9852+further define the terms ‘adequate super-17
9853+vision’ and ‘appropriate regulation’ as 18
9854+necessary in the public interest, as appro-19
9855+priate for the protection of investors, and 20
9856+consistent with the purposes of this Act. 21
9857+‘‘(c) I
9858+NFORMATION SHARING.—Each digital 22
9859+asset custodian shall periodically share of in-23
9860+formation with the Commission, as the Com-24
9861+mission determines by rule to be reasonably 25
9862+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00326 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9863+rfrederick on LAP8M3WLY3PROD with BILLS 327
9864+•HR 4763 RH
9865+necessary to effectuate any of the provisions, 1
9866+or to accomplish any of the purposes, of this 2
9867+Act.’’. 3
9868+SEC. 305. REGISTRATION OF DIGITAL ASSET BROKERS AND 4
9869+DIGITAL ASSET DEALERS. 5
9870+The Securities Exchange Act of 1934 (15 6
9871+U.S.C. 78a et seq.) is amended by inserting 7
9872+after section 15G the following: 8
9873+‘‘SEC. 15H. REGISTRATION OF DIGITAL ASSET BROKERS 9
9874+AND DIGITAL ASSET DEALERS. 10
9875+‘‘(a) R
9876+EGISTRATION.— 11
9877+‘‘(1) I
9878+N GENERAL.—It shall be unlawful 12
9879+for any digital asset broker or digital 13
9880+asset dealer (other than a natural person 14
9881+associated with a digital asset broker or 15
9882+digital asset dealer, and other than such 16
9883+a digital asset broker or digital asset 17
9884+dealer whose business is exclusively 18
9885+intrastate and who does not make use of 19
9886+any facility of a digital asset trading plat-20
9887+form) to make use of the mails or any 21
9888+means or instrumentality of interstate 22
9889+commerce to effect any transactions in, 23
9890+or to induce or attempt to induce the 24
9891+purchase or sale of, any restricted digital 25
9892+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00327 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9893+rfrederick on LAP8M3WLY3PROD with BILLS 328
9894+•HR 4763 RH
9895+asset unless such digital asset broker or 1
9896+digital asset dealer is registered in ac-2
9897+cordance with this section. 3
9898+‘‘(2) A
9899+PPLICATION.—A person desiring 4
9900+to register as a digital asset broker or 5
9901+digital asset dealer shall submit to the 6
9902+Commission an application in such form 7
9903+and containing such information as the 8
9904+Commission may require for the purpose 9
9905+of making the determinations required 10
9906+for approval. 11
9907+‘‘(b) N
9908+ATIONAL SECURITIES ASSOCIATION 12
9909+M
9910+EMBERSHIP.— 13
9911+‘‘(1) I
9912+N GENERAL .—A digital asset 14
9913+broker or digital asset dealer may not 15
9914+register or maintain registration under 16
9915+this section unless such digital asset 17
9916+broker or digital asset dealer is a mem-18
9917+ber of a national securities association 19
9918+registered under section 15A. 20
9919+‘‘(2) T
9920+REATMENT UNDER SECTION 15A .— 21
9921+‘‘(A) I
9922+N GENERAL.—For purposes of 22
9923+section 15A— 23
9924+‘‘(i) the term ‘broker’ includes 24
9925+a digital asset broker; 25
9926+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00328 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9927+rfrederick on LAP8M3WLY3PROD with BILLS 329
9928+•HR 4763 RH
9929+‘‘(ii) the term ‘dealer’ includes 1
9930+a digital asset dealer; and 2
9931+‘‘(iii) the term ‘security’ in-3
9932+cludes a restricted digital asset. 4
9933+‘‘(B) C
9934+LARIFICATION.—Notwith-5
9935+standing subparagraph (A), a national 6
9936+securities association shall only ex-7
9937+amine for and enforce against a dig-8
9938+ital asset broker and digital asset 9
9939+dealer rules of such national securi-10
9940+ties association written specifically 11
9941+for digital asset brokers and a digital 12
9942+asset dealers. 13
9943+‘‘(3) E
9944+XCEPTION.—A digital asset 14
9945+broker or digital asset dealer may reg-15
9946+ister under this section without obtaining 16
9947+membership in a national securities asso-17
9948+ciation until the end of the 360-day pe-18
9949+riod beginning on the date the first na-19
9950+tional securities association adopts rules 20
9951+to admit digital asset brokers or digital 21
9952+asset dealers as members. 22
9953+‘‘(c) A
9954+DDITIONAL REGISTRATIONS WITH THE 23
9955+C
9956+OMMISSION.— 24
9957+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00329 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9958+rfrederick on LAP8M3WLY3PROD with BILLS 330
9959+•HR 4763 RH
9960+‘‘(1) IN GENERAL.—A registered digital 1
9961+asset broker or registered digital asset 2
9962+dealer shall be permitted to maintain any 3
9963+other registration with the Commission 4
9964+relating to the other activities of the reg-5
9965+istered digital asset broker or registered 6
9966+digital asset dealer, including as— 7
9967+‘‘(A) a national securities ex-8
9968+change; 9
9969+‘‘(B) a broker; 10
9970+‘‘(C) a dealer; 11
9971+‘‘(D) an alternative trading sys-12
9972+tem, pursuant to part 242 of title 17, 13
9973+Code of Federal Regulations, as in ef-14
9974+fect on the date of enactment of this 15
9975+section; or 16
9976+‘‘(E) a digital asset trading sys-17
9977+tem. 18
9978+‘‘(2) R
9979+ULEMAKING.—The Commission 19
9980+shall prescribe rules for an entity with 20
9981+multiple registrations described under 21
9982+paragraph (1) to exempt the entity from 22
9983+duplicative, conflicting, or unduly bur-23
9984+densome provisions of this Act and the 24
9985+rules under this Act, to the extent such 25
9986+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00330 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
9987+rfrederick on LAP8M3WLY3PROD with BILLS 331
9988+•HR 4763 RH
9989+an exemption would protect investors, 1
9990+maintain fair, orderly, and efficient mar-2
9991+kets, and facilitate capital formation. 3
9992+‘‘(3) S
9993+ELF-REGULATORY ORGANIZA -4
9994+TIONS.—The Commission shall require 5
9995+any self-regulatory organization with a 6
9996+registered digital asset broker or reg-7
9997+istered digital asset dealer as a member 8
9998+to provide such rules as may be nec-9
9999+essary to further compliance with this 10
10000+section, protect investors, maintain fair, 11
10001+orderly, and efficient markets, and facili-12
10002+tate capital formation. 13
10003+‘‘(d) A
10004+DDITIONAL REGISTRATIONS WITH THE 14
10005+C
10006+OMMODITY FUTURESTRADINGCOMMISSION.—A 15
10007+registered digital asset broker or registered 16
10008+digital asset dealer shall be permitted to 17
10009+maintain a registration with the Commodity 18
10010+Futures Trading Commission as a digital com-19
10011+modity broker or digital commodity dealer, to 20
10012+list or trade contracts of sale for digital com-21
10013+modities.’’. 22
10014+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00331 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10015+rfrederick on LAP8M3WLY3PROD with BILLS 332
10016+•HR 4763 RH
10017+SEC. 306. REQUIREMENTS OF DIGITAL ASSET BROKERS 1
10018+AND DIGITAL ASSET DEALERS. 2
10019+Section 15H of the Securities Exchange 3
10020+Act of 1934, as added by section 305, is amend-4
10021+ed by adding at the end the following: 5
10022+‘‘(e) A
10023+NTI-FRAUD.—No digital asset broker 6
10024+or digital asset dealer shall make use of the 7
10025+mails or any means or instrumentality of 8
10026+interstate commerce to effect any transaction 9
10027+in, or to induce or attempt to induce the pur-10
10028+chase or sale of, any restricted digital asset by 11
10029+means of any manipulative, deceptive, or 12
10030+other fraudulent device or contrivance. 13
10031+‘‘(f) H
10032+OLDING OFCUSTOMERASSETS.— 14
10033+‘‘(1) I
10034+N GENERAL .—A digital asset 15
10035+broker or digital asset dealer shall hold 16
10036+customer money, assets, and property in 17
10037+a manner to minimize the risk of loss to 18
10038+the customer or unreasonable delay in 19
10039+the access to the money, assets, and prop-20
10040+erty of the customer. 21
10041+‘‘(2) Q
10042+UALIFIED DIGITAL ASSET CUSTO -22
10043+DIAN REQUIRED .—A digital asset broker or 23
10044+digital asset dealer shall hold customer 24
10045+restricted digital assets described in 25
10046+paragraph (1) with a qualified digital 26
10047+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00332 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10048+rfrederick on LAP8M3WLY3PROD with BILLS 333
10049+•HR 4763 RH
10050+asset custodian described under section 1
10051+6B. 2
10052+‘‘(3) S
10053+EGREGATION OF FUNDS .— 3
10054+‘‘(A) I
10055+N GENERAL .—A digital asset 4
10056+broker or digital asset dealer shall 5
10057+treat and deal with all money, assets, 6
10058+and property held for a customer of 7
10059+the digital asset broker or digital 8
10060+asset dealer, or that accrues to a cus-9
10061+tomer as a result of trading in re-10
10062+stricted digital assets, as belonging to 11
10063+the customer. 12
10064+‘‘(B) C
10065+OMMINGLING PROHIBITED .— 13
10066+Money, assets, and property of a cus-14
10067+tomer described in subparagraph (A) 15
10068+shall be separately accounted for and 16
10069+shall not be commingled with the 17
10070+funds of the digital asset broker or 18
10071+digital asset dealer or be used to mar-19
10072+gin, secure, or guarantee any trades 20
10073+of any person other than the cus-21
10074+tomer of the digital asset broker or 22
10075+digital asset dealer for whom the 23
10076+same are held. 24
10077+‘‘(4) E
10078+XCEPTIONS.— 25
10079+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00333 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10080+rfrederick on LAP8M3WLY3PROD with BILLS 334
10081+•HR 4763 RH
10082+‘‘(A) USE OF FUNDS.— 1
10083+‘‘(i) I
10084+N GENERAL .—Notwith-2
10085+standing paragraph (3), money, 3
10086+assets, and property of customers 4
10087+of a digital asset broker or digital 5
10088+asset dealer described in para-6
10089+graph (3) may be maintained and 7
10090+deposited in the same account or 8
10091+accounts with any bank, trust 9
10092+company, or qualified digital 10
10093+asset custodian described under 11
10094+section 6B, if the money, assets, 12
10095+and property remain segregated 13
10096+from the money, assets, and prop-14
10097+erty of the digital asset broker or 15
10098+digital asset dealer. 16
10099+‘‘(ii) W
10100+ITHDRAWAL.—Notwith-17
10101+standing paragraph (3), such 18
10102+share of the money, assets, and 19
10103+property described in paragraph 20
10104+(3) as in the normal course of 21
10105+business shall be necessary to 22
10106+transfer, adjust, or settle a re-23
10107+stricted digital asset transaction 24
10108+pursuant to a customer’s instruc-25
10109+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00334 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10110+rfrederick on LAP8M3WLY3PROD with BILLS 335
10111+•HR 4763 RH
10112+tion (standing or otherwise) may 1
10113+be withdrawn and applied to such 2
10114+purposes, including the with-3
10115+drawal and payment of commis-4
10116+sions, brokerage, interest, taxes, 5
10117+storage, and other charges law-6
10118+fully accruing in connection with 7
10119+a restricted digital asset trans-8
10120+action. 9
10121+‘‘(iii) C
10122+OMMISSION ACTION .—In 10
10123+accordance with such terms and 11
10124+conditions as the Commission 12
10125+may prescribe by rule, regulation, 13
10126+or order, any money, assets, or 14
10127+property of a customer of a dig-15
10128+ital asset broker or digital asset 16
10129+dealer described in paragraph (3) 17
10130+may be commingled and depos-18
10131+ited as provided in this section 19
10132+with any other money, assets, or 20
10133+property received by the digital 21
10134+asset broker or digital asset deal-22
10135+er and required by the Commis-23
10136+sion to be separately accounted 24
10137+for and treated and dealt with as 25
10138+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00335 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10139+rfrederick on LAP8M3WLY3PROD with BILLS 336
10140+•HR 4763 RH
10141+belonging to the customer of the 1
10142+digital asset broker or digital 2
10143+asset dealer. 3
10144+‘‘(B) P
10145+ARTICIPATION IN BLOCKCHAIN 4
10146+SERVICES.— 5
10147+‘‘(i) I
10148+N GENERAL .—A customer 6
10149+shall have the right to waive the 7
10150+restrictions in paragraph (3) for 8
10151+any unit of a digital asset to be 9
10152+used under clause (ii), by affirma-10
10153+tively electing, in writing to the 11
10154+digital asset broker or digital 12
10155+asset dealer, to waive the restric-13
10156+tions. 14
10157+‘‘(ii) U
10158+SE OF FUNDS.—Customer 15
10159+digital assets removed from seg-16
10160+regation under clause (i) may be 17
10161+pooled and used by the digital 18
10162+asset broker or digital asset deal-19
10163+er or its designee to provide a 20
10164+blockchain service for a 21
10165+blockchain system to which the 22
10166+unit of the digital asset removed 23
10167+from segregation under clause (i) 24
10168+relates. 25
10169+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00336 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10170+rfrederick on LAP8M3WLY3PROD with BILLS 337
10171+•HR 4763 RH
10172+‘‘(iii) LIMITATIONS.—The Com-1
10173+mission may, by rule, establish 2
10174+notice and disclosure require-3
10175+ments, and any other limitations 4
10176+and rules related to the waiving 5
10177+of any restrictions under this sub-6
10178+paragraph that are reasonably 7
10179+necessary to protect customers. 8
10180+‘‘(iv) B
10181+LOCKCHAIN SERVICE DE -9
10182+FINED.—In this subparagraph, the 10
10183+term ‘blockchain service’ means 11
10184+any activity relating to validating 12
10185+transactions on a blockchain sys-13
10186+tem, providing security for a 14
10187+blockchain system, or other simi-15
10188+lar activity required for the ongo-16
10189+ing operation of a blockchain sys-17
10190+tem. 18
10191+‘‘(5) F
10192+URTHER LIMITATIONS .—No person 19
10193+shall treat or deal with a restricted dig-20
10194+ital asset held on behalf of any customer 21
10195+pursuant to paragraph (3) by utilizing 22
10196+any unit of such restricted digital asset to 23
10197+participate in a blockchain service (as de-24
10198+fined in paragraph (4)(B)(iv) or a decen-25
10199+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00337 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10200+rfrederick on LAP8M3WLY3PROD with BILLS 338
10201+•HR 4763 RH
10202+tralized governance system associated 1
10203+with the restricted digital asset or the 2
10204+blockchain system to which the restricted 3
10205+digital asset relates in any manner other 4
10206+than that which is expressly directed by 5
10207+the customer from which such unit of a 6
10208+restricted digital asset was received. 7
10209+‘‘(g) C
10210+APITALREQUIREMENTS .— 8
10211+‘‘(1) I
10212+N GENERAL.—Each registered dig-9
10213+ital asset broker and registered digital 10
10214+asset dealer shall meet such minimum 11
10215+capital requirements as the Commission 12
10216+may prescribe to ensure that the digital 13
10217+asset broker or digital asset dealer is able 14
10218+to— 15
10219+‘‘(A) conduct an orderly wind- 16
10220+down of the activities of the digital 17
10221+asset broker or digital asset dealer; 18
10222+and 19
10223+‘‘(B) fulfill the customer obliga-20
10224+tions of the digital asset broker or 21
10225+digital asset dealer. 22
10226+‘‘(2) C
10227+ALCULATION.—For purposes of 23
10228+any Commission rule or order adopted 24
10229+under this section or any interpretation 25
10230+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00338 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10231+rfrederick on LAP8M3WLY3PROD with BILLS 339
10232+•HR 4763 RH
10233+thereof regulating a digital asset broker 1
10234+or digital asset dealer’s financial respon-2
10235+sibility obligations and capital require-3
10236+ments, a registered digital asset broker 4
10237+or digital asset dealer that maintains con-5
10238+trol of customer digital assets in a man-6
10239+ner that satisfies the rules issued by the 7
10240+Commission under subsection (f)(2) shall 8
10241+not be required to include the value of 9
10242+such digital assets as assets or liabilities 10
10243+of the digital asset broker or digital asset 11
10244+dealer. 12
10245+‘‘(3) C
10246+OORDINATION OF CAPITAL RE -13
10247+QUIREMENTS .— 14
10248+‘‘(A) C
10249+OMMISSION RULE .—The Com-15
10250+mission shall, by rule, provide appro-16
10251+priate offsets to any applicable cap-17
10252+ital requirement for a person with 18
10253+multiple registrations, including as a 19
10254+broker, dealer, digital asset broker, 20
10255+or digital asset dealer. 21
10256+‘‘(B) J
10257+OINT RULE .—The Commis-22
10258+sion and the Commodity Futures 23
10259+Trading Commission shall jointly, by 24
10260+rule, provide appropriate offsets to 25
10261+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00339 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10262+rfrederick on LAP8M3WLY3PROD with BILLS 340
10263+•HR 4763 RH
10264+any applicable capital requirement 1
10265+for a person with multiple registra-2
10266+tions, including as a digital asset 3
10267+broker, digital asset dealer, digital 4
10268+asset trading system, digital com-5
10269+modity broker, digital commodity 6
10270+dealer, or digital commodity ex-7
10271+change. 8
10272+‘‘(h) R
10273+EPORTING AND RECORDKEEPING .— 9
10274+Each registered digital asset broker and dig-10
10275+ital asset dealer— 11
10276+‘‘(1) shall make such reports as are re-12
10277+quired by the Commission by rule or reg-13
10278+ulation regarding the transactions, posi-14
10279+tions, and financial condition of the dig-15
10280+ital asset broker or digital asset dealer; 16
10281+‘‘(2) shall keep books and records in 17
10282+such form and manner and for such pe-18
10283+riod as may be prescribed by the Com-19
10284+mission by rule or regulation; and 20
10285+‘‘(3) shall keep the books and records 21
10286+open to inspection and examination by 22
10287+any representative of the Commission. 23
10288+‘‘(i) T
10289+REATMENT UNDER THE BANKSECRECY 24
10290+A
10291+CT.—A digital asset broker and a digital 25
10292+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00340 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10293+rfrederick on LAP8M3WLY3PROD with BILLS 341
10294+•HR 4763 RH
10295+asset dealer shall be treated as a financial in-1
10296+stitution for purposes of the Bank Secrecy 2
10297+Act.’’. 3
10298+SEC. 307. RULES RELATED TO CONFLICTS OF INTEREST. 4
10299+The Securities Exchange Act of 1934 (15 5
10300+U.S.C. 78a et seq.) is amended by inserting 6
10301+after section 10D the following: 7
10302+‘‘SEC. 10E. CONFLICTS OF INTEREST RELATED TO DIGITAL 8
10303+ASSETS. 9
10304+‘‘Each registered digital asset trading sys-10
10305+tem, registered digital asset broker, reg-11
10306+istered digital asset dealer, and notice-reg-12
10307+istered digital asset clearing agency shall es-13
10308+tablish, maintain, and enforce written policies 14
10309+and procedures reasonably designed, taking 15
10310+into consideration the nature of such person’s 16
10311+business, to mitigate any conflicts of interest 17
10312+and transactions or arrangements with affili-18
10313+ates.’’. 19
10314+SEC. 308. TREATMENT OF CERTAIN DIGITAL ASSETS IN 20
10315+CONNECTION WITH FEDERALLY REGULATED 21
10316+INTERMEDIARIES. 22
10317+Section 18(b) of the Securities Act of 1933 23
10318+(15 U.S.C. 77r(b)) is amended by adding at the 24
10319+end the following: 25
10320+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00341 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10321+rfrederick on LAP8M3WLY3PROD with BILLS 342
10322+•HR 4763 RH
10323+‘‘(5) EXEMPTION FOR CERTAIN DIGITAL 1
10324+ASSETS IN CONNECTION WITH FEDERALLY 2
10325+REGULATED INTERMEDIARIES .—A restricted 3
10326+digital asset is a covered security with re-4
10327+spect to a transaction that is exempt from 5
10328+registration under this Act when— 6
10329+‘‘(A) it is brokered, traded, 7
10330+custodied, or cleared by a digital 8
10331+asset broker or digital asset dealer 9
10332+registered under section 15H of the 10
10333+Securities Exchange Act of 1934; or 11
10334+‘‘(B) traded through a digital asset 12
10335+trading system.’’. 13
10336+SEC. 309. EXCLUSION FOR ANCILLARY ACTIVITIES. 14
10337+The Securities Exchange Act of 1934 (15 15
10338+U.S.C. 78a et seq.), as amended by section 305, 16
10339+is further amended by inserting after section 17
10340+15H the following: 18
10341+‘‘SEC. 15I. EXCLUSION FOR ANCILLARY ACTIVITIES. 19
10342+‘‘(a) I
10343+NGENERAL.—Notwithstanding any 20
10344+other provision of this Act, a person shall not 21
10345+be subject to this Act and the regulations 22
10346+thereunder solely based on the person under-23
10347+taking any ancillary activities. 24
10348+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00342 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10349+rfrederick on LAP8M3WLY3PROD with BILLS 343
10350+•HR 4763 RH
10351+‘‘(b) EXCEPTIONS.—Subsection (a) shall not 1
10352+be construed to apply to the anti-fraud and 2
10353+anti-manipulation authorities of the Commis-3
10354+sion. 4
10355+‘‘(c) A
10356+NCILLARY ACTIVITIESDEFINED.—In 5
10357+this section, the term ‘ancillary activities’ 6
10358+means any of the following activities related 7
10359+to the operation of a blockchain system: 8
10360+‘‘(1) Compiling network transactions, 9
10361+operating or participating in a liquidity 10
10362+pool, relaying, searching, sequencing, 11
10363+validating, or acting in a similar capacity 12
10364+with respect to a digital asset. 13
10365+‘‘(2) Providing computational work, 14
10366+operating a node, or procuring, offering, 15
10367+or utilizing network bandwidth, or other 16
10368+similar incidental services with respect 17
10369+to a digital asset. 18
10370+‘‘(3) Providing a user-interface that 19
10371+enables a user to read and access data 20
10372+about a blockchain system, send mes-21
10373+sages, or otherwise interact with a 22
10374+blockchain system. 23
10375+‘‘(4) Developing, publishing, consti-24
10376+tuting, administering, maintaining, or 25
10377+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00343 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10378+rfrederick on LAP8M3WLY3PROD with BILLS 344
10379+•HR 4763 RH
10380+otherwise distributing a blockchain sys-1
10381+tem. 2
10382+‘‘(5) Developing, publishing, consti-3
10383+tuting, administering, maintaining, or 4
10384+otherwise distributing software or sys-5
10385+tems that create or deploy a hardware or 6
10386+software wallet or other system facili-7
10387+tating an individual user’s own personal 8
10388+ability to keep, safeguard, or custody the 9
10389+user’s digital assets or related private 10
10390+keys.’’. 11
10391+SEC. 310. REGISTRATION AND REQUIREMENTS FOR NO-12
10392+TICE-REGISTERED DIGITAL ASSET CLEARING 13
10393+AGENCIES. 14
10394+Section 17A(b) of the Securities Exchange 15
10395+Act of 1934 (15 U.S.C. 78q-1(b)) is amended— 16
10396+(1) in subsection (1), by inserting 17
10397+‘‘(other than a notice-registered digital 18
10398+asset clearing agency)’’ after ‘‘unlawful 19
10399+for any clearing agency’’; and 20
10400+(2) by adding at the end the fol-21
10401+lowing: 22
10402+‘‘(9) R
10403+EGISTRATION AND REQUIREMENTS 23
10404+FOR NOTICE -REGISTERED DIGITAL ASSET 24
10405+CLEARING AGENCY .— 25
10406+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00344 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10407+rfrederick on LAP8M3WLY3PROD with BILLS 345
10408+•HR 4763 RH
10409+‘‘(A) ELIGIBILITY.—A person may 1
10410+register with the Commission as a no-2
10411+tice-registered digital asset clearing 3
10412+agency if the person— 4
10413+‘‘(i) is otherwise registered as 5
10414+a digital asset broker or digital 6
10415+asset dealer with the Commission 7
10416+and is engaging in a business in-8
10417+volving restricted digital assets, 9
10418+in compliance with Commission 10
10419+rules pursuant to section 15H(f); 11
10420+or 12
10421+‘‘(ii) is a bank engaging in a 13
10422+business involving digital assets, 14
10423+in compliance with applicable 15
10424+banking law and regulation relat-16
10425+ing to the custody and safe-17
10426+keeping of such assets. 18
10427+‘‘(B) R
10428+EGISTRATION.—A person may 19
10429+register with the Commission as a no-20
10430+tice-registered digital asset clearing 21
10431+agency by providing the Commission 22
10432+with notice of the activities of the 23
10433+person or planned activities in such 24
10434+form as the Commission determines 25
10435+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00345 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10436+rfrederick on LAP8M3WLY3PROD with BILLS 346
10437+•HR 4763 RH
10438+appropriate. Such notice shall in-1
10439+clude information describing the per-2
10440+son’s policies and procedures relating 3
10441+to the holding of customer assets. 4
10442+‘‘(C) R
10443+ULEMAKING.—The Commis-5
10444+sion may adopt rules, which may not 6
10445+take effect until at least 360 days fol-7
10446+lowing the date of enactment of this 8
10447+paragraph, with regard to the activi-9
10448+ties of notice-registered digital asset 10
10449+clearing agencies, taking into account 11
10450+the nature of restricted digital as-12
10451+sets.’’. 13
10452+SEC. 311. TREATMENT OF CUSTODY ACTIVITIES BY BANK-14
10453+ING INSTITUTIONS. 15
10454+(a) T
10455+REATMENT OF CUSTODYACTIVITIES.— 16
10456+The appropriate Federal banking agency (as 17
10457+defined under section 3 of the Federal Deposit 18
10458+Insurance Act (12 U.S.C. 1813)), the National 19
10459+Credit Union Administration (in the case of a 20
10460+credit union), and the Securities and Ex-21
10461+change Commission may not require, or take 22
10462+supervisory action that would cause, a deposi-23
10463+tory institution, national bank, Federal credit 24
10464+union, State credit union, or trust company, 25
10465+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00346 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10466+rfrederick on LAP8M3WLY3PROD with BILLS 347
10467+•HR 4763 RH
10468+or any affiliate (as such term is defined under 1
10469+section 2 of the Bank Holding Company Act 2
10470+of 1956) thereof— 3
10471+(1) to include assets held in custody 4
10472+or safekeeping, or the assets associated 5
10473+with a cryptographic key held in custody 6
10474+or safekeeping, as a liability on such in-7
10475+stitution’s financial statement or balance 8
10476+sheet, except that cash held for a third 9
10477+party by such institution that is commin-10
10478+gled with the general assets of such insti-11
10479+tution may be reflected as a liability on a 12
10480+financial statement or balance sheet; 13
10481+(2) to hold additional regulatory cap-14
10482+ital against assets in custody or safe-15
10483+keeping, or the assets associated with a 16
10484+cryptographic key held in custody or 17
10485+safekeeping, except as necessary to miti-18
10486+gate against operational risks inherent 19
10487+with the custody or safekeeping services, 20
10488+as determined by— 21
10489+(A) the appropriate Federal bank-22
10490+ing agency; 23
10491+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00347 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10492+rfrederick on LAP8M3WLY3PROD with BILLS 348
10493+•HR 4763 RH
10494+(B) the National Credit Union Ad-1
10495+ministration (in the case of a credit 2
10496+union); 3
10497+(C) a State bank supervisor (as 4
10498+defined under section 3 of the Fed-5
10499+eral Deposit Insurance Act (12 U.S.C. 6
10500+1813)); or 7
10501+(D) a State credit union super-8
10502+visor (as defined under section 6003 9
10503+of the Anti-Money Laundering Act of 10
10504+2020); 11
10505+(3) to recognize a liability for any ob-12
10506+ligations related to activities or services 13
10507+performed for digital assets with respect 14
10508+to which such institution does not have 15
10509+beneficial ownership if that liability 16
10510+would exceed the expense recognized in 17
10511+the income statement as a result of the 18
10512+corresponding obligation. 19
10513+(b) D
10514+EFINITIONS.—In this section: 20
10515+(1) D
10516+EPOSITORY INSTITUTION .—The 21
10517+term ‘‘depository institution’’ has the 22
10518+meaning given that term under section 3 23
10519+of the Federal Deposit Insurance Act. 24
10520+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00348 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10521+rfrederick on LAP8M3WLY3PROD with BILLS 349
10522+•HR 4763 RH
10523+(2) CREDIT UNION TERMS .—The terms 1
10524+‘‘Federal credit union’’ and ‘‘State credit 2
10525+union’’ have the meaning given those 3
10526+terms, respectively, under section 101 of 4
10527+the Federal Credit Union Act. 5
10528+SEC. 312. EFFECTIVE DATE; ADMINISTRATION. 6
10529+(a) I
10530+NGENERAL.—Except as otherwise pro-7
10531+vided under this title, this title and the 8
10532+amendments made by this title shall take ef-9
10533+fect 360 days after the date of enactment of 10
10534+this Act, except that, to the extent a provision 11
10535+of this title requires a rulemaking, the provi-12
10536+sion shall take effect on the later of— 13
10537+(1) 360 days after the date of enact-14
10538+ment of this Act; or 15
10539+(2) 60 days after the publication in 16
10540+the Federal Register of the final rule im-17
10541+plementing the provision. 18
10542+(b) L
10543+IMITATION.—During fiscal years 2024, 19
10544+2025, and 2026, registration fees collected by 20
10545+the Securities and Exchange Commission 21
10546+shall not be deposited in the Securities and 22
10547+Exchange Commission Reserve Fund. 23
10548+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00349 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10549+rfrederick on LAP8M3WLY3PROD with BILLS 350
10550+•HR 4763 RH
10551+TITLE IV—REGISTRATION FOR 1
10552+DIGITAL ASSET INTER-2
10553+MEDIARIES AT THE COM-3
10554+MODITY FUTURES TRADING 4
10555+COMMISSION 5
10556+SEC. 401. COMMISSION JURISDICTION OVER DIGITAL COM-6
10557+MODITY TRANSACTIONS. 7
10558+(a) I
10559+NGENERAL.—Section 2(a)(1) of the 8
10560+Commodity Exchange Act (7 U.S.C. 2(a)(1)) is 9
10561+amended by adding at the end the following: 10
10562+‘‘(J) Except as expressly provided 11
10563+in this Act, nothing in the Financial 12
10564+Innovation and Technology for the 13
10565+21st Century Act shall affect or apply 14
10566+to, or be interpreted to affect or apply 15
10567+to— 16
10568+‘‘(i) any agreement, contract, 17
10569+or transaction that is subject to 18
10570+regulation under this Act as— 19
10571+‘‘(I) a contract of sale of a 20
10572+commodity for future delivery 21
10573+or an option on such a con-22
10574+tract; 23
10575+‘‘(II) a swap; 24
10576+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00350 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10577+rfrederick on LAP8M3WLY3PROD with BILLS 351
10578+•HR 4763 RH
10579+‘‘(III) a security futures 1
10580+product; 2
10581+‘‘(IV) an option authorized 3
10582+under section 4c of this Act; 4
10583+‘‘(V) an agreement, con-5
10584+tract, or transaction de-6
10585+scribed in subparagraph (C)(i) 7
10586+or (D)(i) of subsection (c)(2) of 8
10587+this section; or 9
10588+‘‘(VI) a leverage trans-10
10589+action authorized under sec-11
10590+tion 19 of this Act; or 12
10591+‘‘(ii) the activities of any per-13
10592+son with respect to any such an 14
10593+agreement, contract, or trans-15
10594+action.’’. 16
10595+(b) I
10596+NGENERAL.—Section 2(c)(1) of the 17
10597+Commodity Exchange Act (7 U.S.C. 2(c)(1)) is 18
10598+amended— 19
10599+(1) in subparagraph (F), by striking 20
10600+‘‘or’’ at the end; 21
10601+(2) in subparagraph (G), by striking 22
10602+the period and inserting ‘‘; or’’; and 23
10603+(3) by adding at the end the fol-24
10604+lowing: 25
10605+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00351 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10606+rfrederick on LAP8M3WLY3PROD with BILLS 352
10607+•HR 4763 RH
10608+‘‘(H) permitted payment 1
10609+stablecoins.’’. 2
10610+(c) I
10611+NGENERAL.—Section 2(c)(2) of the 3
10612+Commodity Exchange Act (7 U.S.C. 2(c)(2)) is 4
10613+amended— 5
10614+(1) in subparagraph (D)(ii)— 6
10615+(A) in subclause (III), in the mat-7
10616+ter that precedes item (aa), by insert-8
10617+ing ‘‘of a commodity, other than a dig-9
10618+ital commodity,’’ before ‘‘that’’; and 10
10619+(B) by redesignating subclauses 11
10620+(IV) and (V) as subclauses (V) and (VI) 12
10621+and inserting after subclause (III) the 13
10622+following: 14
10623+‘‘(IV) a contract of sale of 15
10624+a digital commodity that— 16
10625+‘‘(aa) results in actual 17
10626+delivery, as the Commis-18
10627+sion shall by rule deter-19
10628+mine, within 2 days or 20
10629+such other period as the 21
10630+Commission may deter-22
10631+mine by rule or regulation 23
10632+based upon the typical 24
10633+commercial practice in 25
10634+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00352 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10635+rfrederick on LAP8M3WLY3PROD with BILLS 353
10636+•HR 4763 RH
10637+cash or spot markets for 1
10638+the digital commodity in-2
10639+volved; or 3
10640+‘‘(bb) is executed with 4
10641+a registered digital com-5
10642+modity dealer— 6
10643+‘‘(AA) directly; 7
10644+‘‘(BB) through a 8
10645+registered digital com-9
10646+modity broker; or 10
10647+‘‘(CC) on or subject 11
10648+to the rules of a reg-12
10649+istered digital com-13
10650+modity exchange;’’; 14
10651+and 15
10652+(2) by adding at the end the fol-16
10653+lowing: 17
10654+‘‘(F) C
10655+OMMISSION JURISDICTION WITHRE-18
10656+SPECT TODIGITALCOMMODITY TRANSACTIONS .— 19
10657+‘‘(i) I
10658+N GENERAL .—Subject to sections 20
10659+6d and 12(e), the Commission shall have 21
10660+exclusive jurisdiction with respect to any 22
10661+account, agreement, contract, or trans-23
10662+action involving a contract of sale of a 24
10663+digital commodity in interstate com-25
10664+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00353 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10665+rfrederick on LAP8M3WLY3PROD with BILLS 354
10666+•HR 4763 RH
10667+merce, including in a digital commodity 1
10668+cash or spot market, that is offered, solic-2
10669+ited, traded, facilitated, executed, 3
10670+cleared, reported, or otherwise dealt in— 4
10671+‘‘(I) on or subject to the rules of a 5
10672+registered entity or an entity that is 6
10673+required to be registered as a reg-7
10674+istered entity; or 8
10675+‘‘(II) by any other entity reg-9
10676+istered, or required to be registered, 10
10677+with the Commission. 11
10678+‘‘(ii) L
10679+IMITATIONS.—Clause (i) shall not 12
10680+apply with respect to custodial or deposi-13
10681+tory activities for a digital commodity, or 14
10682+custodial or depository activities for any 15
10683+promise or right to a future digital com-16
10684+modity, of an entity regulated by an ap-17
10685+propriate Federal banking agency or a 18
10686+State bank supervisor (within the mean-19
10687+ing of section 3 of the Federal Deposit In-20
10688+surance Act). 21
10689+‘‘(iii) M
10690+IXED DIGITAL ASSET TRANS -22
10691+ACTIONS.— 23
10692+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00354 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10693+rfrederick on LAP8M3WLY3PROD with BILLS 355
10694+•HR 4763 RH
10695+‘‘(I) IN GENERAL .—Clause (i) shall 1
10696+not apply to a mixed digital asset 2
10697+transaction. 3
10698+‘‘(II) O
10699+VERSIGHT OF MIXED DIGITAL 4
10700+ASSET TRANSACTIONS .— 5
10701+‘‘(aa) O
10702+N A CFTC REGULATED 6
10703+PLATFORM.—A mixed digital asset 7
10704+transaction that occurs on or sub-8
10705+ject to the rules of a registered 9
10706+entity or by any other entity reg-10
10707+istered with the Commission— 11
10708+‘‘(AA) shall not occur ex-12
10709+cept on or subject to the rules 13
10710+of a registered entity or by 14
10711+any other entity that is dually 15
10712+registered with the Commis-16
10713+sion and the Securities and 17
10714+Exchange Commission; and 18
10715+‘‘(BB) shall be subject to 19
10716+the jurisdiction of the Com-20
10717+mission and the Securities 21
10718+and Exchange Commission. 22
10719+‘‘(bb) O
10720+FF EXCHANGE .—A mixed 23
10721+digital asset transaction that does 24
10722+not occur on or subject to the 25
10723+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00355 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10724+rfrederick on LAP8M3WLY3PROD with BILLS 356
10725+•HR 4763 RH
10726+rules of a registered entity or by 1
10727+any other entity registered with 2
10728+the Commission shall be subject 3
10729+to the exclusive jurisdiction of the 4
10730+Securities and Exchange Commis-5
10731+sion. 6
10732+‘‘(III) R
10733+EPORTS ON MIXED DIGITAL 7
10734+ASSET TRANSACTIONS .—A digital asset 8
10735+issuer, related person, affiliated per-9
10736+son, or other person registered with 10
10737+the Securities and Exchange Commis-11
10738+sion that engages in a mixed digital 12
10739+asset transaction, shall, on request, 13
10740+open to inspection and examination 14
10741+by the Commodity Futures Trading 15
10742+Commission all books and records re-16
10743+lating to the mixed digital asset 17
10744+transaction, subject to the confiden-18
10745+tiality and disclosure requirements of 19
10746+section 8. 20
10747+‘‘(G) A
10748+GREEMENTS , CONTRACTS, ANDTRANS-21
10749+ACTIONS INSTABLECOINS.— 22
10750+‘‘(i) T
10751+REATMENT OF PERMITTED PAYMENT 23
10752+STABLECOINS ON COMMISSION -REGISTERED 24
10753+ENTITIES.—Except as provided in clauses 25
10754+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00356 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10755+rfrederick on LAP8M3WLY3PROD with BILLS 357
10756+•HR 4763 RH
10757+(ii) and (iii), the Commission shall only 1
10758+have jurisdiction over a cash or spot 2
10759+agreement, contract, or transaction in a 3
10760+permitted payment stablecoin that is of-4
10761+fered, offered to enter into, entered into, 5
10762+executed, confirmed the execution of, so-6
10763+licited, or accepted— 7
10764+‘‘(I) on or subject to the rules of a 8
10765+registered entity; or 9
10766+‘‘(II) by any other entity reg-10
10767+istered by the Commission. 11
10768+‘‘(ii) P
10769+ERMITTED PAYMENT STABLECOIN 12
10770+TRANSACTION RULES .—This Act shall only 13
10771+apply to a transaction described in clause 14
10772+(i) for the purposes of regulating the 15
10773+offer, execution, solicitation, or accept-16
10774+ance of a cash or spot permitted payment 17
10775+stablecoin transaction on a registered en-18
10776+tity or other entity registered by the 19
10777+Commission with respect to requirements 20
10778+imposed with respect to— 21
10779+‘‘(I) recordkeeping; 22
10780+‘‘(II) custody; 23
10781+‘‘(III) segregation; 24
10782+‘‘(IV) reporting; 25
10783+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00357 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10784+rfrederick on LAP8M3WLY3PROD with BILLS 358
10785+•HR 4763 RH
10786+‘‘(V) trading procedures and trade 1
10787+processing requirements; 2
10788+‘‘(VI) information sharing; 3
10789+‘‘(VII) conflicts of interest; 4
10790+‘‘(VIII) antifraud, 5
10791+antimanipulation, or false reporting; 6
10792+or 7
10793+‘‘(IX) any other transaction level 8
10794+requirement imposed on the reg-9
10795+istered entity or other entity reg-10
10796+istered by the Commission that the 11
10797+Commission by rule determines 12
10798+would foster the development of fair 13
10799+and orderly cash or spot markets in 14
10800+digital commodities, be necessary or 15
10801+appropriate in the public interest, 16
10802+and be consistent with the protection 17
10803+of customers. 18
10804+‘‘(iii) N
10805+O AUTHORITY OVER PERMITTED 19
10806+PAYMENT STABLECOINS .—Notwithstanding 20
10807+clause (ii), the Commission shall not 21
10808+make a rule or regulation, impose a re-22
10809+quirement or obligation on a registered 23
10810+entity or other entity registered by the 24
10811+Commission, or impose a requirement or 25
10812+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00358 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10813+rfrederick on LAP8M3WLY3PROD with BILLS 359
10814+•HR 4763 RH
10815+obligation on a permitted payment 1
10816+stablecoin issuer, regarding the oper-2
10817+ation of a permitted payment stablecoin 3
10818+issuer or a permitted payment stablecoin, 4
10819+including a requirement or obligation re-5
10820+garding— 6
10821+‘‘(I) design; 7
10822+‘‘(II) structure; 8
10823+‘‘(III) issuance; 9
10824+‘‘(IV) redemption; 10
10825+‘‘(V) financial resources; 11
10826+‘‘(VI) collateral; or 12
10827+‘‘(VII) any other aspect of such an 13
10828+operation or such a stablecoin.’’. 14
10829+(d) C
10830+ONFORMING AMENDMENT .—Section 15
10831+2(a)(1)(A) of such Act (7 U.S.C. 2(a)(1)(A)) is 16
10832+amended in the 1st sentence by inserting 17
10833+‘‘subsection (c)(2)(F) of this section or’’ before 18
10834+‘‘section 19’’. 19
10835+SEC. 402. REQUIRING FUTURES COMMISSION MERCHANTS 20
10836+TO USE QUALIFIED DIGITAL COMMODITY 21
10837+CUSTODIANS. 22
10838+Section 4d of the Commodity Exchange 23
10839+Act (7 U.S.C. 6d) is amended— 24
10840+(1) in subsection (a)(2)— 25
10841+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00359 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10842+rfrederick on LAP8M3WLY3PROD with BILLS 360
10843+•HR 4763 RH
10844+(A) in the 1st proviso, by striking 1
10845+‘‘any bank or trust company’’ and in-2
10846+serting ‘‘any bank, trust company, or 3
10847+qualified digital commodity custo-4
10848+dian’’; and 5
10849+(B) by inserting ‘‘: Provided fur-6
10850+ther, That any such property that is a 7
10851+digital commodity shall be held in a 8
10852+qualified digital commodity custo-9
10853+dian’’ before the period at the end; 10
10854+and 11
10855+(2) in subsection (f)(3)(A)(i), by strik-12
10856+ing ‘‘any bank or trust company’’ and in-13
10857+serting ‘‘any bank, trust company, or 14
10858+qualified digital commodity custodian’’. 15
10859+SEC. 403. TRADING CERTIFICATION AND APPROVAL FOR 16
10860+DIGITAL COMMODITIES. 17
10861+Section 5c of the Commodity Exchange 18
10862+Act (7 U.S.C. 7a–2) is amended— 19
10863+(1) in subsection (a), by striking ‘‘5(d) 20
10864+and 5b(c)(2)’’ and inserting ‘‘5(d), 5b(c)(2), 21
10865+and 5i(c)’’; 22
10866+(2) in subsection (b)— 23
10867+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00360 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10868+rfrederick on LAP8M3WLY3PROD with BILLS 361
10869+•HR 4763 RH
10870+(A) in each of paragraphs (1) and 1
10871+(2), by inserting ‘‘digital commodity 2
10872+exchange,’’ before ‘‘derivatives’’; and 3
10873+(B) in paragraph (3), by inserting 4
10874+‘‘digital commodity exchange,’’ before 5
10875+‘‘derivatives’’ each place it appears; 6
10876+(3) in subsection (c)— 7
10877+(A) in paragraph (2), by inserting 8
10878+‘‘or participants’’ before ‘‘(in’’; 9
10879+(B) in paragraph (4)(B), by strik-10
10880+ing ‘‘1a(10)’’ and inserting ‘‘1a(9)’’; and 11
10881+(C) in paragraph (5), by adding at 12
10882+the end the following: 13
10883+‘‘(D) S
10884+PECIAL RULES FOR DIGITAL 14
10885+COMMODITY CONTRACTS .—In certifying 15
10886+any new rule or rule amendment, or 16
10887+listing any new contract or instru-17
10888+ment, in connection with a contract 18
10889+of sale of a commodity for future de-19
10890+livery, option, swap, or other agree-20
10891+ment, contract, or transaction, that is 21
10892+based on or references a digital com-22
10893+modity, a registered entity shall make 23
10894+or rely on a certification under sub-24
10895+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00361 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10896+rfrederick on LAP8M3WLY3PROD with BILLS 362
10897+•HR 4763 RH
10898+section (d) for the digital com-1
10899+modity.’’; and 2
10900+(4) by inserting after subsection (c) 3
10901+the following: 4
10902+‘‘(d) C
10903+ERTIFICATIONS FOR DIGITALCOM-5
10904+MODITYTRADING.— 6
10905+‘‘(1) I
10906+N GENERAL .—Notwithstanding 7
10907+subsection (c), for the purposes of listing 8
10908+or offering a digital commodity for trad-9
10909+ing in a digital commodity cash or spot 10
10910+market, an eligible entity shall issue a 11
10911+written certification that the digital com-12
10912+modity meets the requirements of this 13
10913+Act (including regulations thereunder). 14
10914+‘‘(2) C
10915+ONTENTS OF THE CERTIFICATION .— 15
10916+‘‘(A) I
10917+N GENERAL .—In making a 16
10918+written certification under this para-17
10919+graph, the eligible entity shall furnish 18
10920+to the Commission— 19
10921+‘‘(i) an analysis of how the dig-20
10922+ital commodity meets the require-21
10923+ments of section 5i(c)(3); 22
10924+‘‘(ii) information about the 23
10925+digital commodity regarding— 24
10926+‘‘(I) its purpose and use; 25
10927+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00362 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10928+rfrederick on LAP8M3WLY3PROD with BILLS 363
10929+•HR 4763 RH
10930+‘‘(II) its unit creation or 1
10931+release process; 2
10932+‘‘(III) its consensus mecha-3
10933+nism; 4
10934+‘‘(IV) its governance struc-5
10935+ture; 6
10936+‘‘(V) its participation and 7
10937+distribution; and 8
10938+‘‘(VI) its current and pro-9
10939+posed functionality; and 10
10940+‘‘(iii) any other information, 11
10941+analysis, or documentation the 12
10942+Commission may, by rule, require. 13
10943+‘‘(B) R
10944+ELIANCE ON PRIOR DISCLO -14
10945+SURES.—In making a certification 15
10946+under this subsection, an eligible en-16
10947+tity may rely on the records and dis-17
10948+closures of any relevant person reg-18
10949+istered with the Securities and Ex-19
10950+change Commission or other State or 20
10951+Federal agency. 21
10952+‘‘(3) M
10953+ODIFICATIONS.— 22
10954+‘‘(A) I
10955+N GENERAL.—An eligible enti-23
10956+ty shall modify a certification made 24
10957+under paragraph (1) to— 25
10958+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00363 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10959+rfrederick on LAP8M3WLY3PROD with BILLS 364
10960+•HR 4763 RH
10961+‘‘(i) account for significant 1
10962+changes in any information pro-2
10963+vided to the Commission under 3
10964+paragraph (2)(A)(ii); or 4
10965+‘‘(ii) permit or restrict trading 5
10966+in units of a digital commodity 6
10967+asset held by a related person or 7
10968+an affiliated person. 8
10969+‘‘(B) R
10970+ECERTIFICATION .—Modifica-9
10971+tions required by this subsection 10
10972+shall be subject to the same dis-11
10973+approval and review process as a new 12
10974+certification under paragraphs (4) 13
10975+and (5). 14
10976+‘‘(4) D
10977+ISAPPROVAL.— 15
10978+‘‘(A) I
10979+N GENERAL.—The written cer-16
10980+tification described in paragraph (1) 17
10981+shall become effective unless the 18
10982+Commission finds that the digital 19
10983+asset does not meet the requirements 20
10984+of this Act or the rules and regula-21
10985+tions thereunder. 22
10986+‘‘(B) A
10987+NALYSIS REQUIRED .—The 23
10988+Commission shall include, with any 24
10989+findings referred to in subparagraph 25
10990+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00364 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
10991+rfrederick on LAP8M3WLY3PROD with BILLS 365
10992+•HR 4763 RH
10993+(A), a detailed analysis of the factors 1
10994+on which the decision was based. 2
10995+‘‘(C) P
10996+UBLIC FINDINGS .—The Com-3
10997+mission shall make public any dis-4
10998+approval decision, and any related 5
10999+findings and analysis, made under 6
11000+this paragraph. 7
11001+‘‘(5) R
11002+EVIEW.— 8
11003+‘‘(A) I
11004+N GENERAL.—Unless the Com-9
11005+mission makes a disapproval decision 10
11006+under paragraph (4), the written cer-11
11007+tification described in paragraph (1) 12
11008+shall become effective, pursuant to 13
11009+the certification by the eligible entity 14
11010+and notice of the certification to the 15
11011+public (in a manner determined by 16
11012+the Commission) on the date that is— 17
11013+‘‘(i) 20 business days after the 18
11014+date the Commission receives the 19
11015+certification (or such shorter pe-20
11016+riod as determined by the Com-21
11017+mission by rule or regulation), in 22
11018+the case of a digital commodity 23
11019+that has not been certified under 24
11020+this section or for which a certifi-25
11021+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00365 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11022+rfrederick on LAP8M3WLY3PROD with BILLS 366
11023+•HR 4763 RH
11024+cation is being modified under 1
11025+paragraph (3); or 2
11026+‘‘(ii) 2 business days after the 3
11027+date the Commission receives the 4
11028+certification (or such shorter pe-5
11029+riod as determined by the Com-6
11030+mission by rule or regulation) for 7
11031+any digital commodity that has 8
11032+been certified under this section. 9
11033+‘‘(B) E
11034+XTENSIONS.—The time for 10
11035+consideration under subparagraph 11
11036+(A) may be extended through notice 12
11037+to the eligible entity that there are 13
11038+novel or complex issues that require 14
11039+additional time to analyze, that the 15
11040+explanation by the submitting eligible 16
11041+entity is inadequate, or of a potential 17
11042+inconsistency with this Act— 18
11043+‘‘(i) once, for 30 business days, 19
11044+through written notice to the eli-20
11045+gible entity by the Chairman; and 21
11046+‘‘(ii) once, for an additional 30 22
11047+business days, through written 23
11048+notice to the digital commodity 24
11049+exchange from the Commission 25
11050+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00366 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11051+rfrederick on LAP8M3WLY3PROD with BILLS 367
11052+•HR 4763 RH
11053+that includes a description of any 1
11054+deficiencies with the certification, 2
11055+including any— 3
11056+‘‘(I) novel or complex 4
11057+issues which require addi-5
11058+tional time to analyze; 6
11059+‘‘(II) missing information 7
11060+or inadequate explanations; 8
11061+or 9
11062+‘‘(III) potential inconsist-10
11063+encies with this Act. 11
11064+‘‘(6) C
11065+ERTIFICATION REQUIRED .—Not-12
11066+withstanding any other requirement of 13
11067+this Act, a registered entity or other enti-14
11068+ty registered with the Commission shall 15
11069+not list for trading, accept for clearing, 16
11070+offer to enter into, enter into, execute, 17
11071+confirm the execution of, or conduct any 18
11072+office or business anywhere in the United 19
11073+States, its territories or possessions, for 20
11074+the purpose of soliciting, or accepting 21
11075+any order for, or otherwise dealing in, 22
11076+any transaction in, or in connection with, 23
11077+a digital asset, unless a certification has 24
11078+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00367 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11079+rfrederick on LAP8M3WLY3PROD with BILLS 368
11080+•HR 4763 RH
11081+been made under this section for the dig-1
11082+ital asset. 2
11083+‘‘(7) E
11084+LIGIBLE ENTITY DEFINED .—In this 3
11085+subsection, the term ‘eligible entity’ 4
11086+means a registered entity or group of reg-5
11087+istered entities acting jointly.’’. 6
11088+SEC. 404. REGISTRATION OF DIGITAL COMMODITY EX-7
11089+CHANGES. 8
11090+The Commodity Exchange Act (7 U.S.C. 1 9
11091+et seq.) is amended by inserting after section 10
11092+5h the following: 11
11093+‘‘SEC. 5i. REGISTRATION OF DIGITAL COMMODITY EX-12
11094+CHANGES. 13
11095+‘‘(a) I
11096+NGENERAL.— 14
11097+‘‘(1) R
11098+EGISTRATION.— 15
11099+‘‘(A) I
11100+N GENERAL.—A trading facil-16
11101+ity that offers or seeks to offer a cash 17
11102+or spot market in at least 1 digital 18
11103+commodity shall register with the 19
11104+Commission as a digital commodity 20
11105+exchange. 21
11106+‘‘(B) A
11107+PPLICATION.—A person desir-22
11108+ing to register as a digital commodity 23
11109+exchange shall submit to the Commis-24
11110+sion an application in such form and 25
11111+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00368 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11112+rfrederick on LAP8M3WLY3PROD with BILLS 369
11113+•HR 4763 RH
11114+containing such information as the 1
11115+Commission may require for the pur-2
11116+pose of making the determinations re-3
11117+quired for approval. 4
11118+‘‘(C) E
11119+XEMPTIONS.—A trading facil-5
11120+ity that offers or seeks to offer a cash 6
11121+or spot market in at least 1 digital 7
11122+commodity shall not be required to 8
11123+register under this section if the trad-9
11124+ing facility— 10
11125+‘‘(i) permits no more than a de 11
11126+minimis amount of trading activ-12
11127+ity; or 13
11128+‘‘(ii) serves only customers in 14
11129+a single State or territory. 15
11130+‘‘(2) A
11131+DDITIONAL REGISTRATIONS .— 16
11132+‘‘(A) W
11133+ITH THE COMMISSION .— 17
11134+‘‘(i) I
11135+N GENERAL.—A registered 18
11136+digital commodity exchange may 19
11137+also register as— 20
11138+‘‘(I) a designated contract 21
11139+market; or 22
11140+‘‘(II) a swap execution fa-23
11141+cility. 24
11142+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00369 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11143+rfrederick on LAP8M3WLY3PROD with BILLS 370
11144+•HR 4763 RH
11145+‘‘(ii) RULES.—For an entity 1
11146+with multiple registrations under 2
11147+clause (i), the Commission— 3
11148+‘‘(I) shall prescribe rules 4
11149+to exempt the entity from du-5
11150+plicative, conflicting, or un-6
11151+duly burdensome provisions 7
11152+of this Act and the rules 8
11153+under this Act, to the extent 9
11154+such an exemption would fos-10
11155+ter the development of fair 11
11156+and orderly cash or spot mar-12
11157+kets in digital commodities, 13
11158+be necessary or appropriate 14
11159+in the public interest, and be 15
11160+consistent with the protection 16
11161+of customers; and 17
11162+‘‘(II) may, after an analysis 18
11163+of the risks and benefits, pre-19
11164+scribe rules to provide for 20
11165+portfolio margining, as may 21
11166+be necessary to protect mar-22
11167+ket participants, promote fair 23
11168+and equitable trading in dig-24
11169+ital commodity markets, and 25
11170+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00370 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11171+rfrederick on LAP8M3WLY3PROD with BILLS 371
11172+•HR 4763 RH
11173+promote responsible economic 1
11174+or financial innovation. 2
11175+‘‘(B) W
11176+ITH THE SECURITIES AND EX -3
11177+CHANGE COMMISSION .—A registered 4
11178+digital commodity exchange may reg-5
11179+ister with the Securities and Ex-6
11180+change Commission as a digital asset 7
11181+trading system to list or trade con-8
11182+tracts of sale for digital assets 9
11183+deemed securities. 10
11184+‘‘(C) W
11185+ITH A REGISTERED FUTURES 11
11186+ASSOCIATION.— 12
11187+‘‘(i) I
11188+N GENERAL.—A registered 13
11189+digital commodity exchange shall 14
11190+also be a member of a registered 15
11191+futures association and comply 16
11192+with rules related to such activ-17
11193+ity, if the registered digital com-18
11194+modity exchange accepts cus-19
11195+tomer funds required to be seg-20
11196+regated under subsection (d). 21
11197+‘‘(ii) R
11198+ULEMAKING REQUIRED .— 22
11199+The Commission shall require any 23
11200+registered futures association 24
11201+with a digital commodity ex-25
11202+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00371 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11203+rfrederick on LAP8M3WLY3PROD with BILLS 372
11204+•HR 4763 RH
11205+change as a member to provide 1
11206+such rules as may be necessary to 2
11207+further compliance with sub-3
11208+section (d), protect customers, 4
11209+and promote the public interest. 5
11210+‘‘(D) R
11211+EGISTRATION REQUIRED .—A 6
11212+person required to be registered as a 7
11213+digital commodity exchange under 8
11214+this section shall register with the 9
11215+Commission as such regardless of 10
11216+whether the person is registered as 11
11217+such with another State or Federal 12
11218+regulator. 13
11219+‘‘(b) T
11220+RADING.— 14
11221+‘‘(1) P
11222+ROHIBITION ON CERTAIN TRADING 15
11223+PRACTICES.— 16
11224+‘‘(A) Section 4b shall apply to any 17
11225+agreement, contract, or transaction in 18
11226+a digital commodity as if the agree-19
11227+ment, contract, or transaction were a 20
11228+contract of sale of a commodity for 21
11229+future delivery. 22
11230+‘‘(B) Section 4c shall apply to any 23
11231+agreement, contract, or transaction in 24
11232+a digital commodity as if the agree-25
11233+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00372 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11234+rfrederick on LAP8M3WLY3PROD with BILLS 373
11235+•HR 4763 RH
11236+ment, contract, or transaction were a 1
11237+transaction involving the purchase or 2
11238+sale of a commodity for future deliv-3
11239+ery. 4
11240+‘‘(2) P
11241+ROHIBITION ON ACTING AS A 5
11242+COUNTERPARTY .—A registered digital com-6
11243+modity exchange or any affiliate of such 7
11244+an exchange shall not act as counterparty 8
11245+to any transaction executed on or subject 9
11246+to the rules of the registered digital com-10
11247+modity exchange. 11
11248+‘‘(3) T
11249+RADING SECURITIES .—A reg-12
11250+istered digital commodity exchange that 13
11251+is also registered with the Securities and 14
11252+Exchange Commission may offer a con-15
11253+tract of sale of a digital asset deemed a 16
11254+security. 17
11255+‘‘(4) R
11256+ULES FOR CERTAIN DIGITAL ASSET 18
11257+SALES.—The digital commodity exchange 19
11258+shall have in place such rules as may be 20
11259+necessary to reasonably ensure the or-21
11260+derly sale of any unit of a digital com-22
11261+modity sold by a related person or an af-23
11262+filiated person. 24
11263+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00373 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11264+rfrederick on LAP8M3WLY3PROD with BILLS 374
11265+•HR 4763 RH
11266+‘‘(c) COREPRINCIPLES FOR DIGITALCOM-1
11267+MODITYEXCHANGES.— 2
11268+‘‘(1) C
11269+OMPLIANCE WITH CORE PRIN -3
11270+CIPLES.— 4
11271+‘‘(A) I
11272+N GENERAL .—To be reg-5
11273+istered, and maintain registration, as 6
11274+a digital commodity exchange, a dig-7
11275+ital commodity exchange shall com-8
11276+ply with— 9
11277+‘‘(i) the core principles de-10
11278+scribed in this subsection; and 11
11279+‘‘(ii) any requirement that the 12
11280+Commission may impose by rule 13
11281+or regulation pursuant to section 14
11282+8a(5). 15
11283+‘‘(B) R
11284+EASONABLE DISCRETION OF A 16
11285+DIGITAL COMMODITY EXCHANGE .—Unless 17
11286+otherwise determined by the Commis-18
11287+sion by rule or regulation, a digital 19
11288+commodity exchange described in 20
11289+subparagraph (A) shall have reason-21
11290+able discretion in establishing the 22
11291+manner in which the digital com-23
11292+modity exchange complies with the 24
11293+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00374 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11294+rfrederick on LAP8M3WLY3PROD with BILLS 375
11295+•HR 4763 RH
11296+core principles described in this sub-1
11297+section. 2
11298+‘‘(2) C
11299+OMPLIANCE WITH RULES .—A dig-3
11300+ital commodity exchange shall— 4
11301+‘‘(A) establish and enforce compli-5
11302+ance with any rule of the digital com-6
11303+modity exchange, including— 7
11304+‘‘(i) the terms and conditions 8
11305+of the trades traded or processed 9
11306+on or through the digital com-10
11307+modity exchange; and 11
11308+‘‘(ii) any limitation on access 12
11309+to the digital commodity ex-13
11310+change; 14
11311+‘‘(B) establish and enforce trad-15
11312+ing, trade processing, and participa-16
11313+tion rules that will deter abuses and 17
11314+have the capacity to detect, inves-18
11315+tigate, and enforce those rules, in-19
11316+cluding means— 20
11317+‘‘(i) to provide market partici-21
11318+pants with impartial access to the 22
11319+market; and 23
11320+‘‘(ii) to capture information 24
11321+that may be used in establishing 25
11322+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00375 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11323+rfrederick on LAP8M3WLY3PROD with BILLS 376
11324+•HR 4763 RH
11325+whether rule violations have oc-1
11326+curred; and 2
11327+‘‘(C) establish rules governing the 3
11328+operation of the exchange, including 4
11329+rules specifying trading procedures 5
11330+to be used in entering and executing 6
11331+orders traded or posted on the facil-7
11332+ity. 8
11333+‘‘(3) L
11334+ISTING STANDARDS FOR DIGITAL 9
11335+COMMODITIES .— 10
11336+‘‘(A) I
11337+N GENERAL .—A digital com-11
11338+modity exchange shall permit trading 12
11339+only in a digital commodity that is 13
11340+not readily susceptible to manipula-14
11341+tion. 15
11342+‘‘(B) P
11343+UBLIC INFORMATION REQUIRE -16
11344+MENTS.— 17
11345+‘‘(i) I
11346+N GENERAL .—A digital 18
11347+commodity exchange shall permit 19
11348+trading only in a digital com-20
11349+modity if the information re-21
11350+quired in clause (ii) is correct, 22
11351+current, and available to the pub-23
11352+lic. 24
11353+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00376 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11354+rfrederick on LAP8M3WLY3PROD with BILLS 377
11355+•HR 4763 RH
11356+‘‘(ii) REQUIRED INFORMATION .— 1
11357+With respect to a digital com-2
11358+modity and each blockchain sys-3
11359+tem to which the digital com-4
11360+modity relates for which the dig-5
11361+ital commodity exchange will 6
11362+make the digital commodity avail-7
11363+able to the customers of the dig-8
11364+ital commodity exchange, the in-9
11365+formation required in this clause 10
11366+is as follows: 11
11367+‘‘(I) S
11368+OURCE CODE .—The 12
11369+source code for any 13
11370+blockchain system to which 14
11371+the digital commodity relates. 15
11372+‘‘(II) T
11373+RANSACTION HIS -16
11374+TORY.—A narrative descrip-17
11375+tion of the steps necessary to 18
11376+independently access, search, 19
11377+and verify the transaction his-20
11378+tory of any blockchain system 21
11379+to which the digital com-22
11380+modity relates. 23
11381+‘‘(III) D
11382+IGITAL ASSET ECO -24
11383+NOMICS.—A narrative descrip-25
11384+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00377 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11385+rfrederick on LAP8M3WLY3PROD with BILLS 378
11386+•HR 4763 RH
11387+tion of the purpose of any 1
11388+blockchain system to which 2
11389+the digital asset relates and 3
11390+the operation of any such 4
11391+blockchain system, includ-5
11392+ing— 6
11393+‘‘(aa) information ex-7
11394+plaining the launch and 8
11395+supply process, including 9
11396+the number of digital as-10
11397+sets to be issued in an ini-11
11398+tial allocation, the total 12
11399+number of digital assets to 13
11400+be created, the release 14
11401+schedule for the digital as-15
11402+sets, and the total number 16
11403+of digital assets then out-17
11404+standing; 18
11405+‘‘(bb) information de-19
11406+tailing any applicable con-20
11407+sensus mechanism or 21
11408+process for validating 22
11409+transactions, method of 23
11410+generating or mining dig-24
11411+ital assets, and any proc-25
11412+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00378 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11413+rfrederick on LAP8M3WLY3PROD with BILLS 379
11414+•HR 4763 RH
11415+ess for burning or destroy-1
11416+ing digital assets on the 2
11417+blockchain system; 3
11418+‘‘(cc) an explanation of 4
11419+governance mechanisms 5
11420+for implementing changes 6
11421+to the blockchain system 7
11422+or forming consensus 8
11423+among holders of the dig-9
11424+ital assets; and 10
11425+‘‘(dd) sufficient infor-11
11426+mation for a third party to 12
11427+create a tool for verifying 13
11428+the transaction history of 14
11429+the digital asset. 15
11430+‘‘(IV) A
11431+DDITIONAL INFORMA -16
11432+TION.—Such additional infor-17
11433+mation as the Commission 18
11434+may, by rule, determine to be 19
11435+necessary for a customer to 20
11436+understand the financial and 21
11437+operational risks of a digital 22
11438+commodity, and to be in the 23
11439+public interest or in further-24
11440+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00379 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11441+rfrederick on LAP8M3WLY3PROD with BILLS 380
11442+•HR 4763 RH
11443+ance of the requirements of 1
11444+this Act. 2
11445+‘‘(C) A
11446+DDITIONAL LISTING CONSIDER -3
11447+ATIONS.—In addition to the require-4
11448+ments of subparagraphs (A) and (B), a 5
11449+digital commodity exchange shall 6
11450+consider— 7
11451+‘‘(i) if a sufficient percentage 8
11452+of the units of the digital asset 9
11453+are units of a digital commodity 10
11454+to permit robust price discovery; 11
11455+‘‘(ii) if it is reasonably un-12
11456+likely that the transaction history 13
11457+can be fraudulently altered by 14
11458+any person or group of persons 15
11459+acting collectively; 16
11460+‘‘(iii) if the operating struc-17
11461+ture and system of the digital 18
11462+commodity is secure from cyber-19
11463+security threats; 20
11464+‘‘(iv) if the functionality of the 21
11465+digital commodity will protect 22
11466+holders from operational failures; 23
11467+‘‘(v) if sufficient public infor-24
11468+mation about the operation, 25
11469+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00380 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11470+rfrederick on LAP8M3WLY3PROD with BILLS 381
11471+•HR 4763 RH
11472+functionality, and use of the dig-1
11473+ital commodity is available; and 2
11474+‘‘(vi) any other factor which 3
11475+the Commission has, by rule, de-4
11476+termined to be in the public inter-5
11477+est or in furtherance of the re-6
11478+quirements of this Act. 7
11479+‘‘(D) R
11480+ESTRICTED DIGITAL ASSETS .— 8
11481+A digital commodity exchange shall 9
11482+not permit the trading of a unit of a 10
11483+digital asset that is a restricted dig-11
11484+ital asset. 12
11485+‘‘(4) T
11486+REATMENT OF CUSTOMER ASSETS .— 13
11487+A digital commodity exchange shall es-14
11488+tablish standards and procedures that 15
11489+are designed to protect and ensure the 16
11490+safety of customer money, assets, and 17
11491+property. 18
11492+‘‘(5) M
11493+ONITORING OF TRADING AND 19
11494+TRADE PROCESSING .— 20
11495+‘‘(A) I
11496+N GENERAL .—A digital com-21
11497+modity exchange shall provide a com-22
11498+petitive, open, and efficient market 23
11499+and mechanism for executing trans-24
11500+actions that protects the price dis-25
11501+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00381 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11502+rfrederick on LAP8M3WLY3PROD with BILLS 382
11503+•HR 4763 RH
11504+covery process of trading on the ex-1
11505+change. 2
11506+‘‘(B) P
11507+ROTECTION OF MARKETS AND 3
11508+MARKET PARTICIPANTS .—A digital com-4
11509+modity exchange shall establish and 5
11510+enforce rules— 6
11511+‘‘(i) to protect markets and 7
11512+market participants from abusive 8
11513+practices committed by any party, 9
11514+including abusive practices com-10
11515+mitted by a party acting as an 11
11516+agent for a participant; and 12
11517+‘‘(ii) to promote fair and equi-13
11518+table trading on the exchange. 14
11519+‘‘(C) T
11520+RADING PROCEDURES .—A dig-15
11521+ital commodity exchange shall— 16
11522+‘‘(i) establish and enforce 17
11523+rules or terms and conditions de-18
11524+fining, or specifications detail-19
11525+ing— 20
11526+‘‘(I) trading procedures to 21
11527+be used in entering and exe-22
11528+cuting orders traded on or 23
11529+through the facilities of the 24
11530+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00382 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11531+rfrederick on LAP8M3WLY3PROD with BILLS 383
11532+•HR 4763 RH
11533+digital commodity exchange; 1
11534+and 2
11535+‘‘(II) procedures for trade 3
11536+processing of digital commod-4
11537+ities on or through the facili-5
11538+ties of the digital commodity 6
11539+exchange; and 7
11540+‘‘(ii) monitor trading in digital 8
11541+commodities to prevent manipula-9
11542+tion, price distortion, and disrup-10
11543+tions of the delivery or cash set-11
11544+tlement process through surveil-12
11545+lance, compliance, and discipli-13
11546+nary practices and procedures, 14
11547+including methods for conducting 15
11548+real-time monitoring of trading 16
11549+and comprehensive and accurate 17
11550+trade reconstructions. 18
11551+‘‘(6) A
11552+BILITY TO OBTAIN INFORMATION .— 19
11553+A digital commodity exchange shall— 20
11554+‘‘(A) establish and enforce rules 21
11555+that will allow the facility to obtain 22
11556+any necessary information to perform 23
11557+any of the functions described in this 24
11558+section; 25
11559+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00383 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11560+rfrederick on LAP8M3WLY3PROD with BILLS 384
11561+•HR 4763 RH
11562+‘‘(B) provide the information to 1
11563+the Commission on request; and 2
11564+‘‘(C) have the capacity to carry 3
11565+out such international information- 4
11566+sharing agreements as the Commis-5
11567+sion may require. 6
11568+‘‘(7) E
11569+MERGENCY AUTHORITY .—A digital 7
11570+commodity exchange shall adopt rules to 8
11571+provide for the exercise of emergency au-9
11572+thority, in consultation or cooperation 10
11573+with the Commission or a registered enti-11
11574+ty, as is necessary and appropriate, in-12
11575+cluding the authority to facilitate the liq-13
11576+uidation or transfer of open positions in 14
11577+any digital commodity or to suspend or 15
11578+curtail trading in a digital commodity. 16
11579+‘‘(8) T
11580+IMELY PUBLICATION OF TRADING 17
11581+INFORMATION .— 18
11582+‘‘(A) I
11583+N GENERAL .—A digital com-19
11584+modity exchange shall make public 20
11585+timely information on price, trading 21
11586+volume, and other trading data on 22
11587+digital commodities to the extent pre-23
11588+scribed by the Commission. 24
11589+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00384 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11590+rfrederick on LAP8M3WLY3PROD with BILLS 385
11591+•HR 4763 RH
11592+‘‘(B) CAPACITY OF DIGITAL COM -1
11593+MODITY EXCHANGE .—A digital com-2
11594+modity exchange shall have the ca-3
11595+pacity to electronically capture and 4
11596+transmit trade information with re-5
11597+spect to transactions executed on the 6
11598+exchange. 7
11599+‘‘(9) R
11600+ECORDKEEPING AND REPORTING .— 8
11601+‘‘(A) I
11602+N GENERAL .—A digital com-9
11603+modity exchange shall— 10
11604+‘‘(i) maintain records of all ac-11
11605+tivities relating to the business of 12
11606+the facility, including a complete 13
11607+audit trail, in a form and manner 14
11608+acceptable to the Commission for 15
11609+a period of 5 years; 16
11610+‘‘(ii) report to the Commission, 17
11611+in a form and manner acceptable 18
11612+to the Commission, such informa-19
11613+tion as the Commission deter-20
11614+mines to be necessary or appro-21
11615+priate for the Commission to per-22
11616+form the duties of the Commis-23
11617+sion under this Act; and 24
11618+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00385 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11619+rfrederick on LAP8M3WLY3PROD with BILLS 386
11620+•HR 4763 RH
11621+‘‘(iii) keep any such records of 1
11622+digital commodities which relate 2
11623+to a security open to inspection 3
11624+and examination by the Securities 4
11625+and Exchange Commission. 5
11626+‘‘(B) I
11627+NFORMATION SHARING .—Sub-6
11628+ject to section 8, and on request, the 7
11629+Commission shall share information 8
11630+collected under subparagraph (A) 9
11631+with— 10
11632+‘‘(i) the Board; 11
11633+‘‘(ii) the Securities and Ex-12
11634+change Commission; 13
11635+‘‘(iii) each appropriate Fed-14
11636+eral banking agency; 15
11637+‘‘(iv) each appropriate State 16
11638+bank supervisor (within the 17
11639+meaning of section 3 of the Fed-18
11640+eral Deposit Insurance Act); 19
11641+‘‘(v) the Financial Stability 20
11642+Oversight Council; 21
11643+‘‘(vi) the Department of Jus-22
11644+tice; and 23
11645+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00386 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11646+rfrederick on LAP8M3WLY3PROD with BILLS 387
11647+•HR 4763 RH
11648+‘‘(vii) any other person that 1
11649+the Commission determines to be 2
11650+appropriate, including— 3
11651+‘‘(I) foreign financial su-4
11652+pervisors (including foreign 5
11653+futures authorities); 6
11654+‘‘(II) foreign central 7
11655+banks; and 8
11656+‘‘(III) foreign ministries. 9
11657+‘‘(C) C
11658+ONFIDENTIALITY AGREE -10
11659+MENT.—Before the Commission may 11
11660+share information with any entity de-12
11661+scribed in subparagraph (B), the 13
11662+Commission shall receive a written 14
11663+agreement from the entity stating 15
11664+that the entity shall abide by the con-16
11665+fidentiality requirements described 17
11666+in section 8 relating to the informa-18
11667+tion on digital commodities that is 19
11668+provided. 20
11669+‘‘(D) P
11670+ROVIDING INFORMATION .—A 21
11671+digital commodity exchange shall 22
11672+provide to the Commission (including 23
11673+any designee of the Commission) in-24
11674+formation under subparagraph (A) in 25
11675+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00387 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11676+rfrederick on LAP8M3WLY3PROD with BILLS 388
11677+•HR 4763 RH
11678+such form and at such frequency as is 1
11679+required by the Commission. 2
11680+‘‘(10) A
11681+NTITRUST CONSIDERATIONS .—Un-3
11682+less necessary or appropriate to achieve 4
11683+the purposes of this Act, a digital com-5
11684+modity exchange shall not— 6
11685+‘‘(A) adopt any rules or take any 7
11686+actions that result in any unreason-8
11687+able restraint of trade; or 9
11688+‘‘(B) impose any material anti-10
11689+competitive burden on trading. 11
11690+‘‘(11) C
11691+ONFLICTS OF INTEREST .—A reg-12
11692+istered digital commodity exchange shall 13
11693+implement conflict-of-interest systems 14
11694+and procedures that— 15
11695+‘‘(A) establish structural and insti-16
11696+tutional safeguards— 17
11697+‘‘(i) to minimize conflicts of in-18
11698+terest that might potentially bias 19
11699+the judgment or supervision of 20
11700+the digital commodity exchange 21
11701+and contravene the principles of 22
11702+fair and equitable trading and the 23
11703+business conduct standards de-24
11704+scribed in this Act, including con-25
11705+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00388 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11706+rfrederick on LAP8M3WLY3PROD with BILLS 389
11707+•HR 4763 RH
11708+flicts arising out of transactions 1
11709+or arrangements with affiliates 2
11710+(including affiliates engaging in 3
11711+digital commodity activities) 4
11712+which may include information 5
11713+partitions and the legal separa-6
11714+tion of different persons or enti-7
11715+ties involved in digital commodity 8
11716+activities; and 9
11717+‘‘(ii) to ensure that the activi-10
11718+ties of any person within the dig-11
11719+ital commodity exchange or any 12
11720+affiliated entity relating to re-13
11721+search or analysis of the price or 14
11722+market for any digital commodity 15
11723+or acting in a role of providing 16
11724+dealing, brokering, or advising 17
11725+activities are separated by appro-18
11726+priate informational partitions 19
11727+within the digital commodity ex-20
11728+change or any affiliated entity 21
11729+from the review, pressure, or 22
11730+oversight of persons whose in-23
11731+volvement in pricing, trading, ex-24
11732+change, or clearing activities 25
11733+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00389 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11734+rfrederick on LAP8M3WLY3PROD with BILLS 390
11735+•HR 4763 RH
11736+might potentially bias their judg-1
11737+ment or supervision and con-2
11738+travene the core principles of 3
11739+open access and the business con-4
11740+duct standards described in this 5
11741+Act; and 6
11742+‘‘(B) address such other issues as 7
11743+the Commission determines to be ap-8
11744+propriate. 9
480611745 ‘‘(12) F
4807-INANCIAL RESOURCES.— 11
11746+INANCIAL RESOURCES .— 10
480811747 ‘‘(A) I
4809-N GENERAL.—A digital commodity 12
4810-exchange shall have adequate financial, oper-13
4811-ational, and managerial resources, as deter-14
4812-mined by the Commission, to discharge each re-15
4813-sponsibility of the digital commodity exchange. 16
11748+N GENERAL .—A digital com-11
11749+modity exchange shall have adequate 12
11750+financial, operational, and manage-13
11751+rial resources, as determined by the 14
11752+Commission, to discharge each re-15
11753+sponsibility of the digital commodity 16
11754+exchange. 17
481411755 ‘‘(B) M
4815-INIMUM AMOUNT OF FINANCIAL RE -17
4816-SOURCES.—A digital commodity exchange shall 18
4817-possess financial resources that, at a minimum, 19
4818-exceed the greater of— 20
4819-‘‘(i) the total amount that would en-21
4820-able the digital commodity exchange to 22
4821-conduct an orderly wind-down of its activi-23
4822-ties or 24 172
4823-•HR 4763 EH
4824-‘‘(ii) the total amount that would en-1
4825-able the digital commodity exchange to 2
4826-cover the operating costs of the digital 3
4827-commodity exchange for a 1-year period, 4
4828-as calculated on a rolling basis. 5
4829-‘‘(13) D
4830-ISCIPLINARY PROCEDURES .—A digital 6
4831-commodity exchange shall establish and enforce dis-7
4832-ciplinary procedures that authorize the digital com-8
4833-modity exchange to discipline, suspend, or expel 9
4834-members or market participants that violate the 10
4835-rules of the digital commodity exchange, or similar 11
4836-methods for performing the same functions, includ-12
4837-ing delegation of the functions to third parties. 13
11756+INIMUM AMOUNT OF FINAN -18
11757+CIAL RESOURCES .—A digital commodity 19
11758+exchange shall possess financial re-20
11759+sources that, at a minimum, exceed 21
11760+the total amount that would enable 22
11761+the digital commodity exchange to 23
11762+conduct an orderly wind-down of its 24
11763+activities. 25
11764+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00390 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11765+rfrederick on LAP8M3WLY3PROD with BILLS 391
11766+•HR 4763 RH
11767+‘‘(13) DISCIPLINARY PROCEDURES .—A 1
11768+digital commodity exchange shall estab-2
11769+lish and enforce disciplinary procedures 3
11770+that authorize the digital commodity ex-4
11771+change to discipline, suspend, or expel 5
11772+members or market participants that vio-6
11773+late the rules of the digital commodity ex-7
11774+change, or similar methods for per-8
11775+forming the same functions, including 9
11776+delegation of the functions to third par-10
11777+ties. 11
483811778 ‘‘(14) G
4839-OVERNANCE FITNESS STANDARDS .— 14
11779+OVERNANCE FITNESS STAND -12
11780+ARDS.— 13
484011781 ‘‘(A) G
4841-OVERNANCE ARRANGEMENTS .—A 15
4842-digital commodity exchange shall establish gov-16
4843-ernance arrangements that are transparent to 17
11782+OVERNANCE ARRANGE -14
11783+MENTS.—A digital commodity ex-15
11784+change shall establish governance ar-16
11785+rangements that are transparent to 17
484411786 fulfill public interest requirements. 18
484511787 ‘‘(B) F
484611788 ITNESS STANDARDS .—A digital 19
4847-commodity exchange shall establish and enforce 20
4848-appropriate fitness standards for— 21
4849-‘‘(i) directors; and 22
4850-‘‘(ii) any individual or entity with di-23
4851-rect access to, or control of, customer as-24
4852-sets. 25 173
4853-•HR 4763 EH
4854-‘‘(15) SYSTEM SAFEGUARDS .—A digital com-1
4855-modity exchange shall— 2
4856-‘‘(A) establish and maintain a program of 3
4857-risk analysis and oversight to identify and mini-4
4858-mize sources of operational and security risks, 5
4859-through the development of appropriate controls 6
4860-and procedures, and automated systems, that— 7
4861-‘‘(i) are reliable and secure; and 8
4862-‘‘(ii) have adequate scalable capacity; 9
4863-‘‘(B) establish and maintain emergency 10
4864-procedures, backup facilities, and a plan for dis-11
4865-aster recovery that allow for— 12
4866-‘‘(i) the timely recovery and resump-13
4867-tion of operations; and 14
4868-‘‘(ii) the fulfillment of the responsibil-15
4869-ities and obligations of the digital com-16
4870-modity exchange; and 17
4871-‘‘(C) periodically conduct tests to verify 18
4872-that the backup resources of the digital com-19
4873-modity exchange are sufficient to ensure contin-20
4874-ued— 21
4875-‘‘(i) order processing and trade 22
4876-matching; 23
4877-‘‘(ii) price reporting; 24
4878-‘‘(iii) market surveillance; and 25 174
4879-•HR 4763 EH
4880-‘‘(iv) maintenance of a comprehensive 1
4881-and accurate audit trail. 2
11789+commodity exchange shall establish 20
11790+and enforce appropriate fitness 21
11791+standards for— 22
11792+‘‘(i) directors; and 23
11793+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00391 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11794+rfrederick on LAP8M3WLY3PROD with BILLS 392
11795+•HR 4763 RH
11796+‘‘(ii) any individual or entity 1
11797+with direct access to, or control 2
11798+of, customer assets. 3
11799+‘‘(15) S
11800+YSTEM SAFEGUARDS .—A digital 4
11801+commodity exchange shall— 5
11802+‘‘(A) establish and maintain a pro-6
11803+gram of risk analysis and oversight to 7
11804+identify and minimize sources of 8
11805+operational and security risks, 9
11806+through the development of appro-10
11807+priate controls and procedures, and 11
11808+automated systems, that— 12
11809+‘‘(i) are reliable and secure; 13
11810+and 14
11811+‘‘(ii) have adequate scalable 15
11812+capacity; 16
11813+‘‘(B) establish and maintain emer-17
11814+gency procedures, backup facilities, 18
11815+and a plan for disaster recovery that 19
11816+allow for— 20
11817+‘‘(i) the timely recovery and 21
11818+resumption of operations; and 22
11819+‘‘(ii) the fulfillment of the re-23
11820+sponsibilities and obligations of 24
11821+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00392 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11822+rfrederick on LAP8M3WLY3PROD with BILLS 393
11823+•HR 4763 RH
11824+the digital commodity exchange; 1
11825+and 2
11826+‘‘(C) periodically conduct tests to 3
11827+verify that the backup resources of 4
11828+the digital commodity exchange are 5
11829+sufficient to ensure continued— 6
11830+‘‘(i) order processing and 7
11831+trade matching; 8
11832+‘‘(ii) price reporting; 9
11833+‘‘(iii) market surveillance; and 10
11834+‘‘(iv) maintenance of a com-11
11835+prehensive and accurate audit 12
11836+trail. 13
488211837 ‘‘(d) H
4883-OLDING OFCUSTOMERASSETS.— 3
11838+OLDING OFCUSTOMERASSETS.— 14
488411839 ‘‘(1) I
4885-N GENERAL.—A digital commodity ex-4
4886-change shall hold customer money, assets, and prop-5
4887-erty in a manner to minimize the risk of loss to the 6
4888-customer or unreasonable delay in the access to the 7
4889-money, assets, and property of the customer. 8
11840+N GENERAL.—A digital commodity 15
11841+exchange shall hold customer money, as-16
11842+sets, and property in a manner to mini-17
11843+mize the risk of loss to the customer or 18
11844+unreasonable delay in the access to the 19
11845+money, assets, and property of the cus-20
11846+tomer. 21
489011847 ‘‘(A) S
4891-EGREGATION OF FUNDS .— 9
11848+EGREGATION OF FUNDS .— 22
489211849 ‘‘(i) I
4893-N GENERAL.—A digital com-10
4894-modity exchange shall treat and deal with 11
4895-all money, assets, and property that is re-12
4896-ceived by the digital commodity exchange, 13
4897-or accrues to a customer as the result of 14
4898-trading in digital commodities, as belong-15
4899-ing to the customer. 16
11850+N GENERAL .—A digital 23
11851+commodity exchange shall treat 24
11852+and deal with all money, assets, 25
11853+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00393 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11854+rfrederick on LAP8M3WLY3PROD with BILLS 394
11855+•HR 4763 RH
11856+and property that is received by 1
11857+the digital commodity exchange, 2
11858+or accrues to a customer as the 3
11859+result of trading in digital com-4
11860+modities, as belonging to the cus-5
11861+tomer. 6
490011862 ‘‘(ii) C
4901-OMMINGLING PROHIBITED .— 17
4902-Money, assets, and property of a customer 18
4903-described in clause (i) shall be separately 19
4904-accounted for and shall not be commingled 20
4905-with the funds of the digital commodity ex-21
4906-change or be used to margin, secure, or 22
4907-guarantee any trades or accounts of any 23
4908-customer or person other than the person 24
4909-for whom the same are held. 25 175
4910-•HR 4763 EH
4911-‘‘(B) EXCEPTIONS.— 1
11863+OMMINGLING PROHIB -7
11864+ITED.—Money, assets, and prop-8
11865+erty of a customer described in 9
11866+clause (i) shall be separately ac-10
11867+counted for and shall not be com-11
11868+mingled with the funds of the dig-12
11869+ital commodity exchange or be 13
11870+used to margin, secure, or guar-14
11871+antee any trades or accounts of 15
11872+any customer or person other 16
11873+than the person for whom the 17
11874+same are held. 18
11875+‘‘(B) E
11876+XCEPTIONS.— 19
491211877 ‘‘(i) U
4913-SE OF FUNDS.— 2
11878+SE OF FUNDS.— 20
491411879 ‘‘(I) I
4915-N GENERAL .—Notwith-3
4916-standing subparagraph (A), money, 4
4917-assets, and property of customers of a 5
4918-digital commodity exchange described 6
4919-in subparagraph (A) may, for conven-7
4920-ience, be commingled and deposited in 8
4921-the same account or accounts with 9
4922-any bank, trust company, derivatives 10
4923-clearing organization, or qualified dig-11
4924-ital commodity custodian. 12
11880+N GENERAL.—Notwith-21
11881+standing subparagraph (A), 22
11882+money, assets, and property of 23
11883+customers of a digital com-24
11884+modity exchange described in 25
11885+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00394 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11886+rfrederick on LAP8M3WLY3PROD with BILLS 395
11887+•HR 4763 RH
11888+subparagraph (A) may, for 1
11889+convenience, be commingled 2
11890+and deposited in the same ac-3
11891+count or accounts with any 4
11892+bank, trust company, deriva-5
11893+tives clearing organization, or 6
11894+qualified digital commodity 7
11895+custodian. 8
492511896 ‘‘(II) W
4926-ITHDRAWAL.—Notwith-13
4927-standing subparagraph (A), such 14
4928-share of the money, assets, and prop-15
4929-erty described in item (aa) as in the 16
4930-normal course of business shall be 17
4931-necessary to margin, guarantee, se-18
4932-cure, transfer, adjust, or settle a con-19
4933-tract of sale of a digital commodity 20
4934-with a registered entity may be with-21
4935-drawn and applied to such purposes, 22
4936-including the payment of commis-23
4937-sions, brokerage, interest, taxes, stor-24
4938-age, and other charges, lawfully ac-25 176
4939-•HR 4763 EH
4940-cruing in connection with the contract 1
4941-of sale of a digital commodity. 2
11897+ITHDRAWAL.—Not-9
11898+withstanding subparagraph 10
11899+(A), such share of the money, 11
11900+assets, and property de-12
11901+scribed in item (aa) as in the 13
11902+normal course of business 14
11903+shall be necessary to margin, 15
11904+guarantee, secure, transfer, 16
11905+adjust, or settle a contract of 17
11906+sale of a digital commodity 18
11907+with a registered entity may 19
11908+be withdrawn and applied to 20
11909+such purposes, including the 21
11910+payment of commissions, bro-22
11911+kerage, interest, taxes, stor-23
11912+age, and other charges, law-24
11913+fully accruing in connection 25
11914+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00395 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11915+rfrederick on LAP8M3WLY3PROD with BILLS 396
11916+•HR 4763 RH
11917+with the contract of sale of a 1
11918+digital commodity. 2
494211919 ‘‘(ii) C
4943-OMMISSION ACTION.—Notwith-3
4944-standing subparagraph (A), in accordance 4
4945-with such terms and conditions as the 5
4946-Commission may prescribe by rule, regula-6
4947-tion, or order, any money, assets, or prop-7
4948-erty of the customers of a digital com-8
4949-modity exchange described in subpara-9
4950-graph (A) may be commingled and depos-10
4951-ited in customer accounts with any other 11
4952-money, assets, or property received by the 12
4953-digital commodity exchange and required 13
4954-by the Commission to be separately ac-14
4955-counted for and treated and dealt with as 15
4956-belonging to the customer of the digital 16
4957-commodity exchange. 17
11920+OMMISSION ACTION .—Not-3
11921+withstanding subparagraph (A), 4
11922+in accordance with such terms 5
11923+and conditions as the Commission 6
11924+may prescribe by rule, regulation, 7
11925+or order, any money, assets, or 8
11926+property of the customers of a 9
11927+digital commodity exchange de-10
11928+scribed in subparagraph (A) may 11
11929+be commingled and deposited in 12
11930+customer accounts with any other 13
11931+money, assets, or property re-14
11932+ceived by the digital commodity 15
11933+exchange and required by the 16
11934+Commission to be separately ac-17
11935+counted for and treated and dealt 18
11936+with as belonging to the customer 19
11937+of the digital commodity ex-20
11938+change. 21
495811939 ‘‘(2) P
4959-ERMITTED INVESTMENTS .—Money de-18
4960-scribed in subparagraph (A) may be invested in obli-19
4961-gations of the United States, in general obligations 20
4962-of any State or of any political subdivision of a 21
4963-State, and in obligations fully guaranteed as to prin-22
4964-cipal and interest by the United States, or in any 23
4965-other investment that the Commission may by rule 24
4966-or regulation prescribe, and such investments shall 25 177
4967-•HR 4763 EH
4968-be made in accordance with such rules and regula-1
4969-tions and subject to such conditions as the Commis-2
4970-sion may prescribe. 3
11940+ERMITTED INVESTMENTS .—Money 22
11941+described in subparagraph (A) may be in-23
11942+vested in obligations of the United States, 24
11943+in general obligations of any State or of 25
11944+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00396 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11945+rfrederick on LAP8M3WLY3PROD with BILLS 397
11946+•HR 4763 RH
11947+any political subdivision of a State, and 1
11948+in obligations fully guaranteed as to prin-2
11949+cipal and interest by the United States, 3
11950+or in any other investment that the Com-4
11951+mission may by rule or regulation pre-5
11952+scribe, and such investments shall be 6
11953+made in accordance with such rules and 7
11954+regulations and subject to such condi-8
11955+tions as the Commission may prescribe. 9
497111956 ‘‘(3) C
4972-USTOMER PROTECTION DURING BANK -4
4973-RUPTCY.— 5
11957+USTOMER PROTECTION DURING 10
11958+BANKRUPTCY .— 11
497411959 ‘‘(A) C
4975-USTOMER PROPERTY .—All assets 6
4976-held on behalf of a customer by a digital com-7
4977-modity exchange, and all money, assets, and 8
4978-property of any customer received by a digital 9
4979-commodity exchange for trading or custody, or 10
4980-to facilitate, margin, guarantee, or secure con-11
4981-tracts of sale of a digital commodity (including 12
4982-money, assets, or property accruing to the cus-13
4983-tomer as the result of the transactions), shall 14
4984-be considered customer property for purposes of 15
4985-section 761 of title 11, United States Code. 16
11960+USTOMER PROPERTY .—All as-12
11961+sets held on behalf of a customer by a 13
11962+digital commodity exchange, and all 14
11963+money, assets, and property of any 15
11964+customer received by a digital com-16
11965+modity exchange registered under 17
11966+section 5i of this Act for trading or 18
11967+custody, or to facilitate, margin, guar-19
11968+antee, or secure contracts of sale of a 20
11969+digital commodity (including money, 21
11970+assets, or property accruing to the 22
11971+customer as the result of the trans-23
11972+actions), shall be considered cus-24
11973+tomer property for purposes of sec-25
11974+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00397 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
11975+rfrederick on LAP8M3WLY3PROD with BILLS 398
11976+•HR 4763 RH
11977+tion 761 of title 11, United States 1
11978+Code. 2
498611979 ‘‘(B) T
4987-RANSACTIONS.—A transaction in-17
4988-volving a unit of a digital commodity occurring 18
4989-on or subject to the rules of a digital com-19
4990-modity exchange shall be considered a ‘contract 20
4991-for the purchase or sale of a commodity for fu-21
4992-ture delivery, on or subject to the rules of, a 22
4993-contract market or board of trade’ for the pur-23
4994-poses of the definition of a ‘commodity con-24 178
4995-•HR 4763 EH
4996-tract’ in section 761 of title 11, United States 1
4997-Code. 2
11980+RANSACTIONS .—A transaction 3
11981+involving a unit of a digital com-4
11982+modity occurring on or subject to the 5
11983+rules of a digital commodity exchange 6
11984+shall be considered a ‘contract for the 7
11985+purchase or sale of a commodity for 8
11986+future delivery, on or subject to the 9
11987+rules of, a contract market or board 10
11988+of trade’ for the purposes of the defi-11
11989+nition of a ‘commodity contract’ in 12
11990+section 761 of title 11, United States 13
11991+Code. 14
499811992 ‘‘(C) E
4999-XCHANGES.—A digital commodity 3
5000-exchange shall be considered a futures commis-4
5001-sion merchant for purposes of section 761 of 5
5002-title 11, United States Code. 6
5003-‘‘(D) A
5004-SSETS REMOVED FROM SEGREGA -7
5005-TION.—Assets removed from segregation due to 8
5006-a customer election under paragraph (5) shall 9
5007-not be considered customer property for pur-10
5008-poses of section 761 of title 11, United States 11
5009-Code. 12
11993+XCHANGES.—A digital com-15
11994+modity exchange shall be considered 16
11995+a futures commission merchant for 17
11996+purposes of section 761 of title 11, 18
11997+United States Code. 19
501011998 ‘‘(4) M
5011-ISUSE OF CUSTOMER PROPERTY .— 13
11999+ISUSE OF CUSTOMER PROPERTY .— 20
501212000 ‘‘(A) I
5013-N GENERAL.—It shall be unlawful— 14
5014-‘‘(i) for any digital commodity ex-15
5015-change that has received any customer 16
5016-money, assets, or property for custody to 17
5017-dispose of, or use any such money, assets, 18
5018-or property as belonging to the digital 19
5019-commodity exchange or any person other 20
5020-than a customer of the digital commodity 21
5021-exchange; or 22
5022-‘‘(ii) for any other person, including 23
5023-any depository, other digital commodity ex-24
5024-change, or digital commodity custodian 25 179
5025-•HR 4763 EH
5026-that has received any customer money, as-1
5027-sets, or property for deposit, to hold, dis-2
5028-pose of, or use any such money, assets, or 3
5029-property, or property, as belonging to the 4
5030-depositing digital commodity exchange or 5
5031-any person other than the customers of the 6
5032-digital commodity exchange. 7
12001+N GENERAL .—It shall be un-21
12002+lawful— 22
12003+‘‘(i) for any digital commodity 23
12004+exchange that has received any 24
12005+customer money, assets, or prop-25
12006+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00398 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12007+rfrederick on LAP8M3WLY3PROD with BILLS 399
12008+•HR 4763 RH
12009+erty for custody to dispose of, or 1
12010+use any such money, assets, or 2
12011+property as belonging to the dig-3
12012+ital commodity exchange; or 4
12013+‘‘(ii) for any other person, in-5
12014+cluding any depository, other dig-6
12015+ital commodity exchange, or dig-7
12016+ital commodity custodian that has 8
12017+received any customer money, as-9
12018+sets, or property for deposit, to 10
12019+hold, dispose of, or use any such 11
12020+money, assets, or property, or 12
12021+property, as belonging to the de-13
12022+positing digital commodity ex-14
12023+change or any person other than 15
12024+the customers of the digital com-16
12025+modity exchange. 17
503312026 ‘‘(B) U
5034-SE FURTHER DEFINED .—For pur-8
5035-poses of this section, ‘use’ of a digital com-9
5036-modity includes utilizing any unit of a digital 10
5037-asset to participate in a blockchain service de-11
5038-fined in paragraph (5) or a decentralized gov-12
5039-ernance system associated with the digital com-13
5040-modity or the blockchain system to which the 14
5041-digital commodity relates in any manner other 15
5042-than that expressly directed by the customer 16
5043-from whom the unit of a digital commodity was 17
5044-received. 18
12027+SE FURTHER DEFINED .—For 18
12028+purposes of this section, ‘use’ of a dig-19
12029+ital commodity includes utilizing any 20
12030+unit of a digital asset to participate in 21
12031+a blockchain service defined in para-22
12032+graph (5) or a decentralized govern-23
12033+ance system associated with the dig-24
12034+ital commodity or the blockchain sys-25
12035+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00399 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12036+rfrederick on LAP8M3WLY3PROD with BILLS 400
12037+•HR 4763 RH
12038+tem to which the digital commodity 1
12039+relates in any manner other than that 2
12040+expressly directed by the customer 3
12041+from whom the unit of a digital com-4
12042+modity was received. 5
504512043 ‘‘(5) P
5046-ARTICIPATION IN BLOCKCHAIN SERV -19
5047-ICES.— 20
12044+ARTICIPATION IN BLOCKCHAIN 6
12045+SERVICES.— 7
504812046 ‘‘(A) I
5049-N GENERAL.—A customer shall have 21
5050-the right to waive the restrictions in paragraph 22
5051-(1) for any unit of a digital commodity to be 23
5052-used under subparagraph (B), by affirmatively 24 180
5053-•HR 4763 EH
5054-electing, in writing to the digital commodity ex-1
5055-change, to waive the restrictions. 2
12047+N GENERAL .—A customer 8
12048+shall have the right to waive the re-9
12049+strictions in paragraph (1) for any 10
12050+unit of a digital commodity, by af-11
12051+firmatively electing, in writing to the 12
12052+digital commodity exchange, to waive 13
12053+the restrictions. 14
505612054 ‘‘(B) U
5057-SE OF FUNDS.—Customer digital 3
5058-commodities removed from segregation under 4
5059-subparagraph (A) may be pooled and used by 5
5060-the digital commodity exchange or its designee 6
5061-to provide a blockchain service for a blockchain 7
5062-system to which the unit of the digital asset re-8
5063-moved from segregation in subparagraph (A) 9
5064-relates. 10
12055+SE OF FUNDS.—Customer dig-15
12056+ital commodities removed from seg-16
12057+regation under subparagraph (A) may 17
12058+be pooled and used by the digital 18
12059+commodity exchange or its designee 19
12060+to provide a blockchain service for a 20
12061+blockchain system to which the unit 21
12062+of the digital asset removed from seg-22
12063+regation in subparagraph (A) relates. 23
506512064 ‘‘(C) L
5066-IMITATIONS.— 11
5067-‘‘(i) I
5068-N GENERAL.—The Commission 12
5069-may, by rule, establish notice and disclo-13
5070-sure requirements, and any other limita-14
5071-tions and rules related to the waiving of 15
5072-any restrictions under this paragraph that 16
5073-are reasonably necessary to protect cus-17
5074-tomers, including eligible contract partici-18
5075-pants, non-eligible contract participants, or 19
5076-any other class of customers. 20
5077-‘‘(ii) C
5078-USTOMER CHOICE .—A digital 21
5079-commodity exchange may not require a 22
5080-waiver from a customer described in sub-23
5081-paragraph (A) as a condition of doing 24
5082-business on the exchange. 25 181
5083-•HR 4763 EH
5084-‘‘(D) BLOCKCHAIN SERVICE DEFINED .—In 1
5085-this subparagraph, the term ‘blockchain service’ 2
5086-means any activity relating to validating trans-3
5087-actions on a blockchain system, providing secu-4
5088-rity for a blockchain system, or other similar 5
5089-activity required for the ongoing operation of a 6
5090-blockchain system. 7
12065+IMITATIONS.—The Commis-24
12066+sion may, by rule, establish notice 25
12067+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00400 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12068+rfrederick on LAP8M3WLY3PROD with BILLS 401
12069+•HR 4763 RH
12070+and disclosure requirements, and any 1
12071+other limitations and rules related to 2
12072+the waiving of any restrictions under 3
12073+this paragraph that are reasonably 4
12074+necessary to protect customers, in-5
12075+cluding eligible contract participants, 6
12076+non-eligible contract participants, or 7
12077+any other class of customers. 8
12078+‘‘(D) B
12079+LOCKCHAIN SERVICE DE -9
12080+FINED.—In this subparagraph, the 10
12081+term ‘blockchain service’ means any 11
12082+activity relating to validating trans-12
12083+actions on a blockchain system, pro-13
12084+viding security for a blockchain sys-14
12085+tem, or other similar activity re-15
12086+quired for the ongoing operation of a 16
12087+blockchain system. 17
509112088 ‘‘(e) M
5092-ARKETACCESSREQUIREMENTS.— 8
12089+ARKETACCESSREQUIREMENTS .— 18
509312090 ‘‘(1) I
5094-N GENERAL.—A digital commodity ex-9
5095-change shall require any person who is not an eligi-10
5096-ble contract participant to access trading on the ex-11
5097-change through a digital commodity broker. 12
12091+N GENERAL.—A digital commodity 19
12092+exchange shall require any person who is 20
12093+not an eligible contract participant to ac-21
12094+cess trading on the exchange through a 22
12095+digital commodity broker. 23
509812096 ‘‘(2) A
5099-FFILIATED COMMODITY BROKERS .—A 13
5100-registered digital commodity exchange may permit 14
5101-an affiliated digital commodity broker to facilitate 15
5102-access to the digital commodity exchange. 16
12097+FFILIATED COMMODITY BROKERS .— 24
12098+A registered digital commodity exchange 25
12099+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00401 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12100+rfrederick on LAP8M3WLY3PROD with BILLS 402
12101+•HR 4763 RH
12102+may maintain an affiliated digital com-1
12103+modity broker to facilitate access to the 2
12104+digital commodity exchange, if— 3
12105+‘‘(A) no other digital commodity 4
12106+brokers are permitted to facilitate ac-5
12107+cess to the exchange; 6
12108+‘‘(B) the affiliated digital com-7
12109+modity broker limits its activities 8
12110+only to providing customer access to 9
12111+the digital commodity exchange; and 10
12112+‘‘(C) the affiliated digital com-11
12113+modity broker is not also registered 12
12114+as a digital commodity dealer. 13
510312115 ‘‘(3) D
5104-IRECT ACCESS FOR ELIGIBLE CONTRACT 17
5105-PARTICIPANTS.—Nothing in this section shall pro-18
5106-hibit a digital commodity exchange in compliance 19
5107-with this section from permitting direct access for 20
5108-eligible contract participants. 21
12116+IRECT ACCESS FOR ELIGIBLE CON -14
12117+TRACT PARTICIPANTS .—Nothing in this sec-15
12118+tion shall prohibit a digital commodity 16
12119+exchange in compliance with this section 17
12120+from permitting direct access for eligible 18
12121+contract participants. 19
510912122 ‘‘(4) A
5110-DDITIONAL REQUIREMENTS .—The Com-22
5111-mission may, by rule, impose any additional require-23
5112-ments related to the operations and activities of the 24
5113-digital commodity exchange and an affiliated digital 25 182
5114-•HR 4763 EH
5115-commodity broker necessary to protect market par-1
5116-ticipants, promote fair and equitable trading on the 2
5117-digital commodity exchange, and promote respon-3
5118-sible economic or financial innovation. 4
12123+DDITIONAL REQUIREMENTS .— 20
12124+‘‘(A) I
12125+N GENERAL .—The Commis-21
12126+sion may, by rule, impose any addi-22
12127+tional requirements related to the op-23
12128+erations and activities of the digital 24
12129+commodity exchange and the affili-25
12130+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00402 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12131+rfrederick on LAP8M3WLY3PROD with BILLS 403
12132+•HR 4763 RH
12133+ated digital commodity broker nec-1
12134+essary to protect market participants, 2
12135+promote fair and equitable trading on 3
12136+the digital commodity exchange, and 4
12137+promote responsible economic or fi-5
12138+nancial innovation. 6
12139+‘‘(B) D
12140+ELEGATION OF AUTHORITY .— 7
12141+The Commission may delegate to a 8
12142+registered futures association such 9
12143+oversight and regulatory require-10
12144+ments as the Commission determines 11
12145+are necessary to— 12
12146+‘‘(i) supervise the activities of 13
12147+the digital commodity exchange 14
12148+and an affiliated digital com-15
12149+modity broker; and 16
12150+‘‘(ii) protect market partici-17
12151+pants, promote fair and equitable 18
12152+trading on the digital commodity 19
12153+exchange, and promote respon-20
12154+sible economic or financial inno-21
12155+vation. 22
511912156 ‘‘(f) D
5120-ESIGNATION OF CHIEFCOMPLIANCEOFFI-5
5121-CER.— 6
12157+ESIGNATION OF CHIEFCOMPLIANCE OF-23
12158+FICER.— 24
12159+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00403 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12160+rfrederick on LAP8M3WLY3PROD with BILLS 404
12161+•HR 4763 RH
12162+‘‘(1) IN GENERAL.—A digital commodity 1
12163+exchange shall designate an individual to 2
12164+serve as a chief compliance officer. 3
12165+‘‘(2) D
12166+UTIES.—The chief compliance of-4
12167+ficer shall— 5
12168+‘‘(A) report directly to the board 6
12169+or to the senior officer of the ex-7
12170+change; 8
12171+‘‘(B) review compliance with the 9
12172+core principles in this subsection; 10
12173+‘‘(C) in consultation with the 11
12174+board of the exchange, a body per-12
12175+forming a function similar to that of a 13
12176+board, or the senior officer of the ex-14
12177+change, resolve any conflicts of inter-15
12178+est that may arise; 16
12179+‘‘(D) establish and administer the 17
12180+policies and procedures required to 18
12181+be established pursuant to this sec-19
12182+tion; 20
12183+‘‘(E) ensure compliance with this 21
12184+Act and the rules and regulations 22
12185+issued under this Act, including rules 23
12186+prescribed by the Commission pursu-24
12187+ant to this section; and 25
12188+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00404 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12189+rfrederick on LAP8M3WLY3PROD with BILLS 405
12190+•HR 4763 RH
12191+‘‘(F) establish procedures for the 1
12192+remediation of noncompliance issues 2
12193+found during compliance office re-3
12194+views, look backs, internal or exter-4
12195+nal audit findings, self-reported er-5
12196+rors, or through validated com-6
12197+plaints. 7
12198+‘‘(3) R
12199+EQUIREMENTS FOR PROCEDURES .— 8
12200+In establishing procedures under para-9
12201+graph (2)(F), the chief compliance officer 10
12202+shall design the procedures to establish 11
12203+the handling, management response, re-12
12204+mediation, retesting, and closing of non-13
12205+compliance issues. 14
12206+‘‘(4) A
12207+NNUAL REPORTS .— 15
12208+‘‘(A) I
12209+N GENERAL .—In accordance 16
12210+with rules prescribed by the Commis-17
12211+sion, the chief compliance officer 18
12212+shall annually prepare and sign a re-19
12213+port that contains a description of— 20
12214+‘‘(i) the compliance of the dig-21
12215+ital commodity exchange with 22
12216+this Act; and 23
12217+‘‘(ii) the policies and proce-24
12218+dures, including the code of eth-25
12219+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00405 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12220+rfrederick on LAP8M3WLY3PROD with BILLS 406
12221+•HR 4763 RH
12222+ics and conflict of interest poli-1
12223+cies, of the digital commodity ex-2
12224+change. 3
12225+‘‘(B) R
12226+EQUIREMENTS .—The chief 4
12227+compliance officer shall— 5
12228+‘‘(i) submit each report de-6
12229+scribed in subparagraph (A) with 7
12230+the appropriate financial report 8
12231+of the digital commodity ex-9
12232+change that is required to be sub-10
12233+mitted to the Commission pursu-11
12234+ant to this section; and 12
12235+‘‘(ii) include in the report a 13
12236+certification that, under penalty 14
12237+of law, the report is accurate and 15
12238+complete. 16
12239+‘‘(g) A
12240+PPOINTMENT OF TRUSTEE.— 17
512212241 ‘‘(1) I
5123-N GENERAL.—A digital commodity ex-7
5124-change shall designate an individual to serve as a 8
5125-chief compliance officer. 9
12242+N GENERAL .—If a proceeding 18
12243+under section 5e results in the suspen-19
12244+sion or revocation of the registration of a 20
12245+digital commodity exchange, or if a dig-21
12246+ital commodity exchange withdraws from 22
12247+registration, the Commission, on notice 23
12248+to the digital commodity exchange, may 24
12249+apply to the appropriate United States 25
12250+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00406 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12251+rfrederick on LAP8M3WLY3PROD with BILLS 407
12252+•HR 4763 RH
12253+district court where the digital com-1
12254+modity exchange is located for the ap-2
12255+pointment of a trustee. 3
12256+‘‘(2) A
12257+SSUMPTION OF JURISDICTION .—If 4
12258+the Commission applies for appointment 5
12259+of a trustee under paragraph (1)— 6
12260+‘‘(A) the court may take exclusive 7
12261+jurisdiction over the digital com-8
12262+modity exchange and the records and 9
12263+assets of the digital commodity ex-10
12264+change, wherever located; and 11
12265+‘‘(B) if the court takes jurisdiction 12
12266+under subparagraph (A), the court 13
12267+shall appoint the Commission, or a 14
12268+person designated by the Commis-15
12269+sion, as trustee with power to take 16
12270+possession and continue to operate or 17
12271+terminate the operations of the dig-18
12272+ital commodity exchange in an or-19
12273+derly manner for the protection of 20
12274+customers subject to such terms and 21
12275+conditions as the court may pre-22
12276+scribe. 23
12277+‘‘(h) Q
12278+UALIFIEDDIGITALCOMMODITY CUSTO-24
12279+DIAN.—A digital commodity exchange shall 25
12280+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00407 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12281+rfrederick on LAP8M3WLY3PROD with BILLS 408
12282+•HR 4763 RH
12283+hold in a qualified digital commodity custo-1
12284+dian each unit of a digital commodity that is— 2
12285+‘‘(1) the property of a customer of the 3
12286+digital commodity exchange; 4
12287+‘‘(2) required to be held by the digital 5
12288+commodity exchange under subsection 6
12289+(c)(12) of this section; or 7
12290+‘‘(3) otherwise so required by the 8
12291+Commission to reasonably protect cus-9
12292+tomers or promote the public interest. 10
12293+‘‘(i) E
12294+XEMPTIONS.—In order to promote re-11
12295+sponsible economic or financial innovation 12
12296+and fair competition, or protect customers, 13
12297+the Commission may (on its own initiative or 14
12298+on application of the registered digital com-15
12299+modity exchange) exempt, either uncondition-16
12300+ally or on stated terms or conditions or for 17
12301+stated periods and either retroactively or pro-18
12302+spectively, or both, a registered digital com-19
12303+modity exchange from the requirements of 20
12304+this section, if the Commission determines 21
12305+that— 22
12306+‘‘(1)(A) the exemption would be con-23
12307+sistent with the public interest and the 24
12308+purposes of this Act; and 25
12309+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00408 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12310+rfrederick on LAP8M3WLY3PROD with BILLS 409
12311+•HR 4763 RH
12312+‘‘(B) the exemption will not have a 1
12313+material adverse effect on the ability of 2
12314+the Commission or the digital commodity 3
12315+exchange to discharge regulatory or self- 4
12316+regulatory duties under this Act; or 5
12317+‘‘(2) the digital commodity exchange 6
12318+is subject to comparable, comprehensive 7
12319+supervision and regulation by the appro-8
12320+priate government authorities in the 9
12321+home country of the exchange. 10
12322+‘‘(j) C
12323+USTOMER DEFINED.—In this section, 11
12324+the term ‘customer’ means any person that 12
12325+maintains an account for the trading of dig-13
12326+ital commodities directly with a digital com-14
12327+modity exchange (other than a person that is 15
12328+owned or controlled, directly or indirectly, by 16
12329+the digital commodity exchange) for its own 17
12330+behalf or on behalf of other any person. 18
12331+‘‘(k) F
12332+EDERAL PREEMPTION.—Notwith-19
12333+standing any other provision of law, the Com-20
12334+mission shall have exclusive jurisdiction over 21
12335+any digital commodity exchange registered 22
12336+under this section. 23
12337+‘‘(l) T
12338+REATMENT UNDER THE BANKSECRECY 24
12339+A
12340+CT.—A registered digital commodity ex-25
12341+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00409 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12342+rfrederick on LAP8M3WLY3PROD with BILLS 410
12343+•HR 4763 RH
12344+change shall be treated as a financial institu-1
12345+tion for purposes of the Bank Secrecy Act.’’. 2
12346+SEC. 405. QUALIFIED DIGITAL COMMODITY CUSTODIANS. 3
12347+The Commodity Exchange Act (7 U.S.C. 1 4
12348+et seq.), as amended by the preceding provi-5
12349+sions of this Act, is amended by inserting after 6
12350+section 5i the following: 7
12351+‘‘SEC. 5j. QUALIFIED DIGITAL COMMODITY CUSTODIANS. 8
12352+‘‘(a) I
12353+NGENERAL.—For purposes of this 9
12354+Act, a qualified digital commodity custodian 10
12355+is a digital commodity custodian who meets 11
12356+the following conditions: 12
12357+‘‘(1) S
12358+UPERVISION.—The digital com-13
12359+modity custodian is subject to adequate 14
12360+supervision and appropriate regulation. 15
12361+‘‘(2) N
12362+O PROHIBITION .—The digital com-16
12363+modity custodian is— 17
12364+‘‘(A) subject to the supervision 18
12365+of— 19
12366+‘‘(i) an appropriate Federal 20
12367+banking agency; 21
12368+‘‘(ii) a State bank supervisor 22
12369+(within the meaning of section 3 23
12370+of the Federal Deposit Insurance 24
12371+Act); or 25
12372+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00410 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12373+rfrederick on LAP8M3WLY3PROD with BILLS 411
12374+•HR 4763 RH
12375+‘‘(iii) an appropriate foreign 1
12376+governmental authority in the 2
12377+home country of the digital com-3
12378+modity custodian; and 4
12379+‘‘(B) not prohibited by the appli-5
12380+cable supervisor referred to in sub-6
12381+paragraph (A) from engaging in any 7
12382+activity with respect to the holding of 8
12383+digital commodities. 9
12384+‘‘(3) I
12385+NFORMATION SHARING .— 10
12386+‘‘(A) I
12387+N GENERAL.—The digital com-11
12388+modity custodian agrees to such peri-12
12389+odic sharing of information regarding 13
12390+customer accounts the digital com-14
12391+modity custodian holds on behalf of 15
12392+an entity registered with the Commis-16
12393+sion, as the Commission determines 17
12394+by rule shall be reasonably necessary 18
12395+to effectuate any of the provisions, or 19
12396+to accomplish any of the purposes, of 20
12397+this Act. 21
12398+‘‘(B) P
12399+ROVISION OF INFORMATION .— 22
12400+Any person that is subject to regula-23
12401+tion and examination by a prudential 24
12402+regulator may satisfy any information 25
12403+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00411 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12404+rfrederick on LAP8M3WLY3PROD with BILLS 412
12405+•HR 4763 RH
12406+request described in subparagraph 1
12407+(A), by providing the Commission 2
12408+with a detailed listing, in writing, of 3
12409+the digital commodities of a customer 4
12410+within the custody or use of the per-5
12411+son. 6
12412+‘‘(b) A
12413+DEQUATE SUPERVISION AND APPRO-7
12414+PRIATEREGULATION FURTHERDEFINED.— 8
12415+‘‘(1) I
12416+N GENERAL .—In subsection (a), 9
12417+the terms ‘adequate supervision’ and ‘ap-10
12418+propriate regulation’ mean such min-11
12419+imum standards for supervision and reg-12
12420+ulation as are reasonably necessary to 13
12421+protect the digital commodities of cus-14
12422+tomers of an entity registered with the 15
12423+Commission, including minimum stand-16
12424+ards relating to— 17
12425+‘‘(A) accessibility of customer as-18
12426+sets; 19
12427+‘‘(B) financial resources; 20
12428+‘‘(C) risk management require-21
12429+ments; 22
12430+‘‘(D) governance arrangements; 23
12431+‘‘(E) fitness standards; 24
12432+‘‘(F) recordkeeping; 25
12433+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00412 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12434+rfrederick on LAP8M3WLY3PROD with BILLS 413
12435+•HR 4763 RH
12436+‘‘(G) information sharing; and 1
12437+‘‘(H) conflicts of interest. 2
512612438 ‘‘(2) D
5127-UTIES.—The chief compliance officer 10
5128-shall— 11
5129-‘‘(A) report directly to the board or to the 12
5130-senior officer of the exchange; 13
5131-‘‘(B) review compliance with the core prin-14
5132-ciples in this subsection; 15
5133-‘‘(C) in consultation with the board of the 16
5134-exchange, a body performing a function similar 17
5135-to that of a board, or the senior officer of the 18
5136-exchange, resolve any conflicts of interest that 19
5137-may arise; 20
5138-‘‘(D) establish and administer the policies 21
5139-and procedures required to be established pur-22
5140-suant to this section; 23
5141-‘‘(E) ensure compliance with this Act and 24
5142-the rules and regulations issued under this Act, 25 183
5143-•HR 4763 EH
5144-including rules prescribed by the Commission 1
5145-pursuant to this section; and 2
5146-‘‘(F) establish procedures for the remedi-3
5147-ation of noncompliance issues found during 4
5148-compliance office reviews, look backs, internal 5
5149-or external audit findings, self-reported errors, 6
5150-or through validated complaints. 7
12439+EEMED COMPLIANCE .—For pur-3
12440+poses of subsection (a), a bank subject to 4
12441+the supervision of an appropriate Federal 5
12442+banking agency or a State bank super-6
12443+visor (within the meaning of section 3 of 7
12444+the Federal Deposit Insurance Act) is 8
12445+deemed to be subject to adequate super-9
12446+vision and appropriate regulation. 10
515112447 ‘‘(3) R
5152-EQUIREMENTS FOR PROCEDURES .—In 8
5153-establishing procedures under paragraph (2)(F), the 9
5154-chief compliance officer shall design the procedures 10
5155-to establish the handling, management response, re-11
5156-mediation, retesting, and closing of noncompliance 12
5157-issues. 13
5158-‘‘(4) A
5159-NNUAL REPORTS.— 14
12448+ULEMAKING AUTHORITY .—For pur-11
12449+poses of subsection (a), the Commission, 12
12450+by rule or order, may further define the 13
12451+terms ‘adequate supervision’ and ‘appro-14
12452+priate regulation’ as necessary in the 15
12453+public interest, as appropriate for the 16
12454+protection of customers, and consistent 17
12455+with the purposes of this Act. 18
12456+‘‘(c) A
12457+UTHORITY TOTEMPORARILY SUSPEND 19
12458+S
12459+TANDARDS.—The Commission may, by rule or 20
12460+order, temporarily suspend, in whole or in 21
12461+part, any requirement imposed under, or any 22
12462+standard referred to in, this section if the 23
12463+Commission determines that the suspension 24
12464+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00413 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12465+rfrederick on LAP8M3WLY3PROD with BILLS 414
12466+•HR 4763 RH
12467+would be consistent with the public interest 1
12468+and the purposes of this Act.’’. 2
12469+SEC. 406. REGISTRATION AND REGULATION OF DIGITAL 3
12470+COMMODITY BROKERS AND DEALERS. 4
12471+The Commodity Exchange Act (7 U.S.C. 1 5
12472+et seq.), as amended by the preceding provi-6
12473+sions of this Act, is amended by inserting after 7
12474+section 4t the following: 8
12475+‘‘SEC. 4u. REGISTRATION AND REGULATION OF DIGITAL 9
12476+COMMODITY BROKERS AND DEALERS. 10
12477+‘‘(a) R
12478+EGISTRATION.—It shall be unlawful 11
12479+for any person to act as a digital commodity 12
12480+broker or digital commodity dealer unless the 13
12481+person is registered as such with the Commis-14
12482+sion. 15
12483+‘‘(b) R
12484+EQUIREMENTS .— 16
12485+‘‘(1) I
12486+N GENERAL.—A person shall reg-17
12487+ister as a digital commodity broker or 18
12488+digital commodity dealer by filing a reg-19
12489+istration application with the Commis-20
12490+sion. 21
12491+‘‘(2) C
12492+ONTENTS.— 22
516012493 ‘‘(A) I
5161-N GENERAL.—In accordance with 15
5162-rules prescribed by the Commission, the chief 16
5163-compliance officer shall annually prepare and 17
5164-sign a report that contains a description of— 18
5165-‘‘(i) the compliance of the digital com-19
5166-modity exchange with this Act; and 20
5167-‘‘(ii) the policies and procedures, in-21
5168-cluding the code of ethics and conflict of 22
5169-interest policies, of the digital commodity 23
5170-exchange. 24 184
5171-•HR 4763 EH
5172-‘‘(B) REQUIREMENTS.—The chief compli-1
5173-ance officer shall— 2
5174-‘‘(i) submit each report described in 3
5175-subparagraph (A) with the appropriate fi-4
5176-nancial report of the digital commodity ex-5
5177-change that is required to be submitted to 6
5178-the Commission pursuant to this section; 7
5179-and 8
5180-‘‘(ii) include in the report a certifi-9
5181-cation that, under penalty of law, the re-10
5182-port is accurate and complete. 11
5183-‘‘(g) A
5184-PPOINTMENT OFTRUSTEE.— 12
12494+N GENERAL.—The application 23
12495+shall be made in such form and man-24
12496+ner as is prescribed by the Commis-25
12497+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00414 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12498+rfrederick on LAP8M3WLY3PROD with BILLS 415
12499+•HR 4763 RH
12500+sion, and shall contain such informa-1
12501+tion as the Commission considers 2
12502+necessary concerning the business in 3
12503+which the applicant is or will be en-4
12504+gaged. 5
12505+‘‘(B) C
12506+ONTINUAL REPORTING .—A 6
12507+person that is registered as a digital 7
12508+commodity broker or digital com-8
12509+modity dealer shall continue to sub-9
12510+mit to the Commission reports that 10
12511+contain such information pertaining 11
12512+to the business of the person as the 12
12513+Commission may require. 13
12514+‘‘(3) T
12515+RANSITION.—Within 180 days 14
12516+after the date of the enactment of this 15
12517+section, the Commission shall prescribe 16
12518+rules providing for the registration of 17
12519+digital commodity brokers and digital 18
12520+commodity dealers under this section. 19
12521+‘‘(4) S
12522+TATUTORY DISQUALIFICATION .—Ex-20
12523+cept to the extent otherwise specifically 21
12524+provided by rule, regulation, or order, it 22
12525+shall be unlawful for a digital commodity 23
12526+broker or digital commodity dealer to 24
12527+permit any person who is associated with 25
12528+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00415 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12529+rfrederick on LAP8M3WLY3PROD with BILLS 416
12530+•HR 4763 RH
12531+a digital commodity broker or a digital 1
12532+commodity dealer and who is subject to a 2
12533+statutory disqualification to effect or be 3
12534+involved in effecting a contract for sale of 4
12535+a digital commodity on behalf of the dig-5
12536+ital commodity broker or the digital com-6
12537+modity dealer, respectively, if the digital 7
12538+commodity broker or digital commodity 8
12539+dealer, respectively, knew, or in the exer-9
12540+cise of reasonable care should have 10
12541+known, of the statutory disqualification. 11
12542+‘‘(5) L
12543+IMITATIONS ON CERTAIN ASSETS .— 12
12544+A registered digital commodity broker or 13
12545+registered digital commodity dealer shall 14
12546+not offer, offer to enter into, enter into, 15
12547+or facilitate any contract for sale of a dig-16
12548+ital commodity that has not been cer-17
12549+tified under section 5c(d). 18
12550+‘‘(c) A
12551+DDITIONALREGISTRATIONS.— 19
12552+‘‘(1) W
12553+ITH THE COMMISSION .—Any per-20
12554+son required to be registered as a digital 21
12555+commodity broker or digital commodity 22
12556+dealer may also be registered as a futures 23
12557+commission merchant, introducing 24
12558+broker, or swap dealer. 25
12559+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00416 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12560+rfrederick on LAP8M3WLY3PROD with BILLS 417
12561+•HR 4763 RH
12562+‘‘(2) WITH THE SECURITIES AND EX -1
12563+CHANGE COMMISSION .—Any person re-2
12564+quired to be registered as a digital com-3
12565+modity broker or digital commodity deal-4
12566+er under this section may register with 5
12567+the Securities and Exchange Commission 6
12568+as a digital asset broker or digital asset 7
12569+dealer, pursuant to section 15(b) of the 8
12570+Securities Exchange Act of 1934, as appli-9
12571+cable, if the digital asset broker or digital 10
12572+asset dealer limits its solicitation of or-11
12573+ders, acceptance of orders, or execution 12
12574+of orders, or placing of orders on behalf 13
12575+of others involving any contract of sale of 14
12576+digital assets. 15
12577+‘‘(3) W
12578+ITH MEMBERSHIP IN A REGISTERED 16
12579+FUTURES ASSOCIATION .—Any person re-17
12580+quired to be registered as a digital com-18
12581+modity broker or digital commodity deal-19
12582+er under this section shall be a member 20
12583+of a registered futures association. 21
12584+‘‘(4) R
12585+EGISTRATION REQUIRED .—Any 22
12586+person required to be registered as a dig-23
12587+ital commodity broker or digital com-24
12588+modity dealer under this section shall 25
12589+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00417 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12590+rfrederick on LAP8M3WLY3PROD with BILLS 418
12591+•HR 4763 RH
12592+register with the Commission as such re-1
12593+gardless of whether the person is reg-2
12594+istered as such with another State or 3
12595+Federal regulator. 4
12596+‘‘(d) R
12597+ULEMAKING.— 5
518512598 ‘‘(1) I
5186-N GENERAL.—If a proceeding under sec-13
5187-tion 5e results in the suspension or revocation of the 14
5188-registration of a digital commodity exchange, or if a 15
5189-digital commodity exchange withdraws from registra-16
5190-tion, the Commission, on notice to the digital com-17
5191-modity exchange, may apply to the appropriate 18
5192-United States district court where the digital com-19
5193-modity exchange is located for the appointment of a 20
5194-trustee. 21
5195-‘‘(2) A
5196-SSUMPTION OF JURISDICTION .—If the 22
5197-Commission applies for appointment of a trustee 23
5198-under paragraph (1)— 24 185
5199-•HR 4763 EH
5200-‘‘(A) the court may take exclusive jurisdic-1
5201-tion over the digital commodity exchange and 2
5202-the records and assets of the digital commodity 3
5203-exchange, wherever located; and 4
5204-‘‘(B) if the court takes jurisdiction under 5
5205-subparagraph (A), the court shall appoint the 6
5206-Commission, or a person designated by the 7
5207-Commission, as trustee with power to take pos-8
5208-session and continue to operate or terminate 9
5209-the operations of the digital commodity ex-10
5210-change in an orderly manner for the protection 11
5211-of customers subject to such terms and condi-12
5212-tions as the court may prescribe. 13
5213-‘‘(h) Q
5214-UALIFIEDDIGITALCOMMODITY CUSTO-14
5215-DIAN.—A digital commodity exchange shall hold in a 15
5216-qualified digital commodity custodian each unit of a digital 16
5217-commodity that is— 17
5218-‘‘(1) the property of a customer of the digital 18
5219-commodity exchange; 19
5220-‘‘(2) required to be held by the digital com-20
5221-modity exchange under subsection (c)(12) of this 21
5222-section; or 22
5223-‘‘(3) otherwise so required by the Commission 23
5224-to reasonably protect customers or promote the pub-24
5225-lic interest. 25 186
5226-•HR 4763 EH
5227-‘‘(i) EXEMPTIONS.— 1
5228-‘‘(1) In order to promote responsible economic 2
5229-or financial innovation and fair competition, or pro-3
5230-tect customers, the Commission may (on its own ini-4
5231-tiative or on application of the registered digital 5
5232-commodity exchange) exempt, either unconditionally 6
5233-or on stated terms or conditions or for stated peri-7
5234-ods and either retroactively or prospectively, or both, 8
5235-a registered digital commodity exchange from the re-9
5236-quirements of this section, if the Commission deter-10
5237-mines that— 11
5238-‘‘(A) the exemption would be consistent 12
5239-with the public interest and the purposes of this 13
5240-Act; and 14
5241-‘‘(B) the exemption will not have a mate-15
5242-rial adverse effect on the ability of the Commis-16
5243-sion or the digital commodity exchange to dis-17
5244-charge regulatory or self-regulatory duties 18
5245-under this Act. 19
5246-‘‘(2) The Commission may exempt, condi-20
5247-tionally or unconditionally, a digital commodity ex-21
5248-change from registration under this section if the 22
5249-Commission finds that the digital commodity ex-23
5250-change is subject to comparable, comprehensive su-24
5251-pervision and regulation on a consolidated basis by 25 187
5252-•HR 4763 EH
5253-the appropriate governmental authorities in the 1
5254-home country of the facility. 2
5255-‘‘(j) C
5256-USTOMERDEFINED.—In this section, the term 3
5257-‘customer’ means any person that maintains an account 4
5258-for the trading of digital commodities directly with a dig-5
5259-ital commodity exchange (other than a person that is 6
5260-owned or controlled, directly or indirectly, by the digital 7
5261-commodity exchange) for its own behalf or on behalf of 8
5262-any other person. 9
5263-‘‘(k) F
5264-EDERALPREEMPTION.—Notwithstanding any 10
5265-other provision of law, the Commission shall have exclusive 11
5266-jurisdiction over any digital commodity exchange reg-12
5267-istered under this section. 13
5268-‘‘(l) W
5269-ITHDRAWAL OF CERTIFICATION OF A 14
5270-B
5271-LOCKCHAINSYSTEM.— 15
12599+N GENERAL .—The Commission 6
12600+shall prescribe such rules applicable to 7
12601+registered digital commodity brokers and 8
12602+registered digital commodity dealers as 9
12603+are appropriate to carry out this section, 10
12604+including rules in the public interest that 11
12605+limit the activities of digital commodity 12
12606+brokers and digital commodity dealers. 13
12607+‘‘(2) M
12608+ULTIPLE REGISTRANTS .—The 14
12609+Commission shall prescribe rules or regu-15
12610+lations permitting, or may otherwise au-16
12611+thorize, exemptions or additional re-17
12612+quirements applicable to persons with 18
12613+multiple registrations under this Act, in-19
12614+cluding as futures commission mer-20
12615+chants, introducing brokers, digital com-21
12616+modity brokers, digital commodity deal-22
12617+ers, or swap dealers, as may be in the 23
12618+public interest to reduce compliance 24
12619+costs and promote customer protection. 25
12620+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00418 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12621+rfrederick on LAP8M3WLY3PROD with BILLS 419
12622+•HR 4763 RH
12623+‘‘(e) CAPITALREQUIREMENTS .— 1
527212624 ‘‘(1) I
5273-N GENERAL.— 16
5274-‘‘(A) D
5275-ETERMINATION BY A DIGITAL COM -17
5276-MODITY EXCHANGE .—With respect to a certifi-18
5277-cation of a blockchain system that becomes ef-19
5278-fective pursuant to section 44(f) of the Securi-20
5279-ties Exchange Act of 1934, if a digital com-21
5280-modity exchange determines that the blockchain 22
5281-system may not be a decentralized system, the 23
5282-digital commodity exchange shall notify the 24
5283-Commission of such determination. 25 188
5284-•HR 4763 EH
5285-‘‘(B) WITHDRAWAL PROCESS .—With re-1
5286-spect to each notification received under sub-2
5287-paragraph (A), the Commission shall initiate a 3
5288-withdrawal process under which the Commis-4
5289-sion shall— 5
5290-‘‘(i) publish a notice announcing the 6
5291-proposed withdrawal; 7
5292-‘‘(ii) provide a 30 day comment period 8
5293-with respect to the proposed withdrawal; 9
5294-and 10
5295-‘‘(iii) after the end of the 30-day com-11
5296-ment required under clause (ii), publish ei-12
5297-ther— 13
5298-‘‘(I) a notification of withdrawal 14
5299-of the applicable certification; or 15
5300-‘‘(II) a notice that the Commis-16
5301-sion is not withdrawing the certifi-17
5302-cation. 18
5303-‘‘(C) D
5304-ETAILED ANALYSIS REQUIRED .— 19
5305-The Commission shall include, with each publi-20
5306-cation of a notification of withdrawal described 21
5307-under subparagraph (B)(iii)(I), a detailed anal-22
5308-ysis of the factors on which the decision was 23
5309-based. 24 189
5310-•HR 4763 EH
5311-‘‘(2) RECERTIFICATION.—With respect to a 1
5312-blockchain system for which a certification has been 2
5313-withdrawn under this subsection, no person may 3
5314-make a certification under section 44(a) of the Secu-4
5315-rities Exchange Act of 1934 with respect to such 5
5316-blockchain system during the 90-day period begin-6
5317-ning on the date of such withdrawal. 7
5318-‘‘(3) A
5319-PPEAL OF WITHDRAWAL .— 8
12625+N GENERAL.—Each registered dig-2
12626+ital commodity broker and registered dig-3
12627+ital commodity dealer shall meet such 4
12628+minimum capital requirements as the 5
12629+Commission may prescribe to ensure that 6
12630+the digital commodity broker or digital 7
12631+commodity dealer, respectively, is able 8
12632+to— 9
12633+‘‘(A) meet, and continue to meet, 10
12634+at all times, the obligations of such a 11
12635+registrant; 12
12636+‘‘(B) conduct an orderly wind- 13
12637+down of the activities of the digital 14
12638+commodity broker or digital com-15
12639+modity dealer, respectively; and 16
12640+‘‘(C) in the case of a digital com-17
12641+modity dealer, fulfill the customer ob-18
12642+ligations of the digital commodity 19
12643+dealer for any margined, leveraged, 20
12644+or financed transactions. 21
12645+‘‘(2) R
12646+ULE OF CONSTRUCTION .—Nothing 22
12647+in this section shall limit, or be construed 23
12648+to limit, the authority of the Securities 24
12649+and Exchange Commission to set finan-25
12650+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00419 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12651+rfrederick on LAP8M3WLY3PROD with BILLS 420
12652+•HR 4763 RH
12653+cial responsibility rules for a broker or 1
12654+dealer registered pursuant to section 2
12655+15(b) of the Securities Exchange Act of 3
12656+1934 (15 U.S.C. 78o(b)) (except for section 4
12657+15(b)(11) of such Act (15 U.S.C. 78o(b)(11)) 5
12658+in accordance with section 15(c)(3) of 6
12659+such Act (15 U.S.C. 78o(c)(3)). 7
12660+‘‘(3) F
12661+UTURES COMMISSION MERCHANTS 8
12662+AND OTHER DEALERS .— 9
532012663 ‘‘(A) I
5321-N GENERAL.—If a certification is 9
5322-withdrawn under this subsection, a person mak-10
5323-ing may appeal the decision to the United 11
5324-States Court of Appeals for the District of Co-12
5325-lumbia, not later than 60 days after the notice 13
5326-of withdrawal is made. 14
5327-‘‘(B) R
5328-EVIEW.—In an appeal under sub-15
5329-paragraph (A), the court shall have de novo re-16
5330-view of the determination to withdraw the cer-17
5331-tification.’’. 18
5332-SEC. 505. QUALIFIED DIGITAL COMMODITY CUSTODIANS. 19
5333-The Commodity Exchange Act (7 U.S.C. 1 et seq.), 20
5334-as amended by the preceding provisions of this Act, is 21
5335-amended by inserting after section 5i the following: 22
5336-‘‘SEC. 5j. QUALIFIED DIGITAL COMMODITY CUSTODIANS. 23
5337-‘‘(a) I
5338-NGENERAL.—A digital commodity custodian 24
5339-is a qualified digital commodity custodian if the digital 25 190
5340-•HR 4763 EH
5341-commodity custodian complies with the requirements of 1
5342-this section. 2
5343-‘‘(b) S
5344-UPERVISIONREQUIREMENT.—A digital com-3
5345-modity custodian that is not subject to supervision and 4
5346-examination by an appropriate Federal banking agency, 5
5347-the National Credit Union Administration, the Commis-6
5348-sion, or the Securities and Exchange Commission shall be 7
5349-subject to adequate supervision and appropriate regulation 8
5350-by— 9
5351-‘‘(1) a State bank supervisor (within the mean-10
5352-ing of section 3 of the Federal Deposit Insurance 11
5353-Act); 12
5354-‘‘(2) a State credit union supervisor, as defined 13
5355-under section 6003 of the Anti-Money Laundering 14
5356-Act of 2020; or 15
5357-‘‘(3) an appropriate foreign governmental au-16
5358-thority in the home country of the digital commodity 17
5359-custodian. 18
5360-‘‘(c) O
5361-THERREQUIREMENTS.— 19
5362-‘‘(1) N
5363-OT OTHERWISE PROHIBITED .—The dig-20
5364-ital commodity custodian has not been prohibited by 21
5365-a supervisor of the digital commodity custodian from 22
5366-engaging in an activity with respect to the custody 23
5367-and safekeeping of digital commodities. 24
5368-‘‘(2) I
5369-NFORMATION SHARING .— 25 191
5370-•HR 4763 EH
5371-‘‘(A) IN GENERAL.—A digital commodity 1
5372-custodian shall share information with the 2
5373-Commission on request and comply with such 3
5374-requirements for periodic sharing of informa-4
5375-tion regarding customer accounts that the dig-5
5376-ital commodity custodian holds on behalf of an 6
5377-entity registered with the Commission as the 7
5378-Commission determines by rule are reasonably 8
5379-necessary to effectuate any of the provisions, or 9
5380-to accomplish any of the purposes, of this Act. 10
5381-‘‘(B) P
5382-ROVISION OF INFORMATION .—Any 11
5383-entity that is subject to regulation and exam-12
5384-ination by an appropriate Federal banking 13
5385-agency may satisfy any information request de-14
5386-scribed in subparagraph (A) by providing the 15
5387-Commission with a detailed listing, in writing, 16
5388-of the digital commodities of a customer within 17
5389-the custody or use of the entity. 18
5390-‘‘(d) A
5391-DEQUATESUPERVISION AND APPROPRIATE 19
5392-R
5393-EGULATION.— 20
5394-‘‘(1) I
5395-N GENERAL.—For purposes of subsection 21
5396-(b), the terms ‘adequate supervision’ and ‘appro-22
5397-priate regulation’ mean such minimum standards for 23
5398-supervision and regulation as are reasonably nec-24
5399-essary to protect the digital commodities of cus-25 192
5400-•HR 4763 EH
5401-tomers of an entity registered with the Commission, 1
5402-including standards relating to the licensing, exam-2
5403-ination, and supervisory processes that require the 3
5404-digital commodity custodian to, at a minimum— 4
5405-‘‘(A) receive a review and evaluation of 5
5406-ownership, character and fitness, conflicts of in-6
5407-terest, business model, financial statements, 7
5408-funding resources, and policies and procedures 8
5409-of the digital commodity custodian; 9
5410-‘‘(B) hold capital sufficient for the finan-10
5411-cial integrity of the digital commodity custo-11
5412-dian; 12
5413-‘‘(C) protect customer assets; 13
5414-‘‘(D) establish and maintain books and 14
5415-records regarding the business of the digital 15
5416-commodity custodian; 16
5417-‘‘(E) submit financial statements and au-17
5418-dited financial statements to the applicable su-18
5419-pervisor described in subsection (b); 19
5420-‘‘(F) provide disclosures to the applicable 20
5421-supervisor described in subsection (b) regarding 21
5422-actions, proceedings, and other items as deter-22
5423-mined by the supervisor; 23
5424-‘‘(G) maintain and enforce policies and 24
5425-procedures for compliance with applicable State 25 193
5426-•HR 4763 EH
5427-and Federal laws, including those related to 1
5428-anti-money laundering and cybersecurity; 2
5429-‘‘(H) establish a business continuity plan 3
5430-to ensure functionality in cases of disruption; 4
5431-and 5
5432-‘‘(I) establish policies and procedures to re-6
5433-solve complaints. 7
5434-‘‘(2) R
5435-ULEMAKING WITH RESPECT TO DEFINI -8
5436-TIONS.— 9
5437-‘‘(A) I
5438-N GENERAL.—For purposes of this 10
5439-section, the Commission may, by rule, further 11
5440-define the terms ‘adequate supervision’ and ‘ap-12
5441-propriate regulation’ as necessary in the public 13
5442-interest, as appropriate for the protection of in-14
5443-vestors, and consistent with the purposes of this 15
5444-Act. 16
12664+N GENERAL .—Each futures 10
12665+commission merchant, introducing 11
12666+broker, digital commodity broker, 12
12667+digital commodity dealer, broker, and 13
12668+dealer shall maintain sufficient cap-14
12669+ital to comply with the stricter of any 15
12670+applicable capital requirements to 16
12671+which the futures commission mer-17
12672+chant, introducing broker, digital 18
12673+commodity broker, digital commodity 19
12674+dealer, broker, or dealer, respec-20
12675+tively, is subject under this Act or the 21
12676+Securities Exchange Act of 1934 (15 22
12677+U.S.C. 78a et seq.). 23
544512678 ‘‘(B) C
5446-ONDITIONAL TREATMENT OF CER -17
5447-TAIN CUSTODIANS BEFORE RULEMAKING .—Be-18
5448-fore the effective date of a rulemaking under 19
5449-subparagraph (A), a trust company is deemed 20
5450-subject to adequate supervision and appropriate 21
5451-regulation if— 22
5452-‘‘(i) the trust company is expressly 23
5453-permitted by a State bank supervisor to 24 194
5454-•HR 4763 EH
5455-engage in the custody and safekeeping of 1
5456-digital commodities; 2
5457-‘‘(ii) the State bank supervisor has es-3
5458-tablished licensing, examination, and su-4
5459-pervisory processes that require the trust 5
5460-company to, at a minimum, meet the con-6
5461-ditions described in subparagraphs (A) 7
5462-through (I) of paragraph (1); and 8
5463-‘‘(iii) the trust company is in good 9
5464-standing with its State bank supervisor. 10
5465-‘‘(C) T
5466-RANSITION PERIOD FOR CERTAIN 11
5467-CUSTODIANS.—In implementing the rulemaking 12
5468-under subparagraph (A), the Commission shall 13
5469-provide a transition period of not less than 2 14
5470-years for any trust company that is deemed 15
5471-subject to adequate supervision and appropriate 16
5472-regulation under subparagraph (B) on the ef-17
5473-fective date of the rulemaking. 18
5474-‘‘(e) A
5475-UTHORITY TOTEMPORARILYSUSPENDSTAND-19
5476-ARDS.—The Commission may, by rule or order, tempo-20
5477-rarily suspend, in whole or in part, any requirement im-21
5478-posed under, or any standard referred to in, this section 22
5479-if the Commission determines that the suspension would 23
5480-be consistent with the public interest and the purposes of 24
5481-this Act.’’. 25 195
5482-•HR 4763 EH
5483-SEC. 506. REGISTRATION AND REGULATION OF DIGITAL 1
5484-COMMODITY BROKERS AND DEALERS. 2
5485-The Commodity Exchange Act (7 U.S.C. 1 et seq.), 3
5486-as amended by the preceding provisions of this Act, is 4
5487-amended by inserting after section 4t the following: 5
5488-‘‘SEC. 4u. REGISTRATION AND REGULATION OF DIGITAL 6
5489-COMMODITY BROKERS AND DEALERS. 7
5490-‘‘(a) R
5491-EGISTRATION.—It shall be unlawful for any 8
5492-person to act as a digital commodity broker or digital com-9
5493-modity dealer unless the person is registered as such with 10
5494-the Commission. 11
5495-‘‘(b) R
5496-EQUIREMENTS.— 12
5497-‘‘(1) I
5498-N GENERAL.—A person shall register as 13
5499-a digital commodity broker or digital commodity 14
5500-dealer by filing a registration application with the 15
5501-Commission. 16
5502-‘‘(2) C
5503-ONTENTS.— 17
5504-‘‘(A) I
5505-N GENERAL.—The application shall 18
5506-be made in such form and manner as is pre-19
5507-scribed by the Commission, and shall contain 20
5508-such information as the Commission considers 21
5509-necessary concerning the business in which the 22
5510-applicant is or will be engaged. 23
5511-‘‘(B) C
5512-ONTINUAL REPORTING .—A person 24
5513-that is registered as a digital commodity broker 25
5514-or digital commodity dealer shall continue to 26 196
5515-•HR 4763 EH
5516-submit to the Commission reports that contain 1
5517-such information pertaining to the business of 2
5518-the person as the Commission may require. 3
5519-‘‘(3) S
5520-TATUTORY DISQUALIFICATION .—Except 4
5521-to the extent otherwise specifically provided by rule, 5
5522-regulation, or order, it shall be unlawful for a digital 6
5523-commodity broker or digital commodity dealer to 7
5524-permit any person who is associated with a digital 8
5525-commodity broker or a digital commodity dealer and 9
5526-who is subject to a statutory disqualification to ef-10
5527-fect or be involved in effecting a contract of sale of 11
5528-a digital commodity on behalf of the digital com-12
5529-modity broker or the digital commodity dealer, re-13
5530-spectively, if the digital commodity broker or digital 14
5531-commodity dealer, respectively, knew, or in the exer-15
5532-cise of reasonable care should have known, of the 16
5533-statutory disqualification. 17
5534-‘‘(4) L
5535-IMITATIONS ON CERTAIN ASSETS .—A 18
5536-digital commodity broker or digital commodity deal-19
5537-er shall not offer, offer to enter into, enter into, or 20
5538-facilitate any contract of sale of a digital commodity 21
5539-that has not been certified under section 5c(d). 22
5540-‘‘(c) A
5541-DDITIONALREGISTRATIONS.— 23
5542-‘‘(1) W
5543-ITH THE COMMISSION .—Any person re-24
5544-quired to be registered as a digital commodity 25 197
5545-•HR 4763 EH
5546-broker or digital commodity dealer may also be reg-1
5547-istered as a futures commission merchant, intro-2
5548-ducing broker, or swap dealer. 3
5549-‘‘(2) W
5550-ITH THE SECURITIES AND EXCHANGE 4
5551-COMMISSION.—Any person required to be registered 5
5552-as a digital commodity broker or digital commodity 6
5553-dealer under this section may register with the Secu-7
5554-rities and Exchange Commission as a digital asset 8
5555-broker or digital asset dealer, pursuant to section 9
5556-15(b) of the Securities Exchange Act of 1934. 10
5557-‘‘(3) W
5558-ITH MEMBERSHIP IN A REGISTERED FU -11
5559-TURES ASSOCIATION.—Any person required to be 12
5560-registered as a digital commodity broker or digital 13
5561-commodity dealer under this section shall be a mem-14
5562-ber of a registered futures association. 15
5563-‘‘(4) R
5564-EGISTRATION REQUIRED .—Any person 16
5565-required to be registered as a digital commodity 17
5566-broker or digital commodity dealer under this sec-18
5567-tion shall register with the Commission as such re-19
5568-gardless of whether the person is registered with an-20
5569-other State or Federal regulator. 21
5570-‘‘(d) R
5571-ULEMAKING.— 22
5572-‘‘(1) I
5573-N GENERAL.—The Commission shall pre-23
5574-scribe such rules applicable to registered digital com-24
5575-modity brokers and registered digital commodity 25 198
5576-•HR 4763 EH
5577-dealers as are appropriate to carry out this section, 1
5578-including rules in the public interest that limit the 2
5579-activities of digital commodity brokers and digital 3
5580-commodity dealers. 4
5581-‘‘(2) M
5582-ULTIPLE REGISTRANTS .—The Commis-5
5583-sion shall prescribe rules or regulations permitting, 6
5584-or may otherwise authorize, exemptions or additional 7
5585-requirements applicable to persons with multiple reg-8
5586-istrations under this Act, including as futures com-9
5587-mission merchants, introducing brokers, digital com-10
5588-modity brokers, digital commodity dealers, or swap 11
5589-dealers, as may be in the public interest to reduce 12
5590-compliance costs and promote customer protection. 13
5591-‘‘(e) C
5592-APITALREQUIREMENTS.— 14
5593-‘‘(1) I
5594-N GENERAL.—Each digital commodity 15
5595-broker and digital commodity dealer shall meet such 16
5596-minimum capital requirements as the Commission 17
5597-may prescribe to address the risks associated with 18
5598-digital commodity trading and to ensure that the 19
5599-digital commodity broker or digital commodity deal-20
5600-er, respectively, is able to— 21
5601-‘‘(A) meet, and continue to meet, at all 22
5602-times, the obligations of such a registrant; and 23
5603-‘‘(B) in the case of a digital commodity 24
5604-dealer, fulfill the counterparty obligations of the 25 199
5605-•HR 4763 EH
5606-digital commodity dealer for any margined, le-1
5607-veraged, or financed transactions. 2
5608-‘‘(2) R
5609-ULE OF CONSTRUCTION .—Nothing in 3
5610-this section shall limit, or be construed to limit, the 4
5611-authority of the Securities and Exchange Commis-5
5612-sion to set financial responsibility rules for a broker 6
5613-or dealer registered pursuant to section 15(b) of the 7
5614-Securities Exchange Act of 1934 (15 U.S.C. 78o(b)) 8
5615-(except for section 15(b)(11) of such Act (15 U.S.C. 9
5616-78o(b)(11)) in accordance with section 15(c)(3) of 10
5617-such Act (15 U.S.C. 78o(c)(3)). 11
5618-‘‘(3) F
5619-UTURES COMMISSION MERCHANTS AND 12
5620-OTHER DEALERS .—Each futures commission mer-13
5621-chant, introducing broker, digital commodity broker, 14
5622-digital commodity dealer, broker, and dealer shall 15
5623-maintain sufficient capital to comply with the strict-16
5624-er of any applicable capital requirements to which 17
5625-the futures commission merchant, introducing 18
5626-broker, digital commodity broker, digital commodity 19
5627-dealer, broker, or dealer, respectively, is subject 20
5628-under this Act or the Securities Exchange Act of 21
5629-1934 (15 U.S.C. 78a et seq.). 22
12679+OORDINATION OF CAPITAL RE -24
12680+QUIREMENTS .— 25
12681+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00420 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12682+rfrederick on LAP8M3WLY3PROD with BILLS 421
12683+•HR 4763 RH
12684+‘‘(i) COMMISSION RULE .—The 1
12685+Commission shall, by rule, pro-2
12686+vide appropriate offsets to any 3
12687+applicable capital requirement 4
12688+for a person with multiple reg-5
12689+istrations as a digital commodity 6
12690+dealer, digital commodity broker, 7
12691+futures commission merchant, or 8
12692+introducing broker. 9
12693+‘‘(ii) J
12694+OINT RULE .—The Com-10
12695+mission and the Securities and 11
12696+Exchange Commission shall joint-12
12697+ly, by rule, provide appropriate 13
12698+offsets to any applicable capital 14
12699+requirement for a person with 15
12700+multiple registrations as a digital 16
12701+commodity dealer, digital com-17
12702+modity broker, futures commis-18
12703+sion merchant, introducing 19
12704+broker, broker, or dealer. 20
563012705 ‘‘(f) R
5631-EPORTING ANDRECORDKEEPING.—Each dig-23
5632-ital commodity broker and digital commodity dealer— 24 200
5633-•HR 4763 EH
5634-‘‘(1) shall make such reports as are required by 1
5635-the Commission by rule or regulation regarding the 2
5636-transactions, positions, and financial condition of the 3
5637-digital commodity broker or digital commodity deal-4
5638-er, respectively; 5
5639-‘‘(2) shall keep books and records in such form 6
5640-and manner and for such period as may be pre-7
5641-scribed by the Commission by rule or regulation; and 8
5642-‘‘(3) shall keep the books and records open to 9
5643-inspection and examination by any representative of 10
5644-the Commission. 11
12706+EPORTING AND RECORDKEEPING .— 21
12707+Each registered digital commodity broker and 22
12708+registered digital commodity dealer— 23
12709+‘‘(1) shall make such reports as are re-24
12710+quired by the Commission by rule or reg-25
12711+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00421 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12712+rfrederick on LAP8M3WLY3PROD with BILLS 422
12713+•HR 4763 RH
12714+ulation regarding the transactions, posi-1
12715+tions, and financial condition of the dig-2
12716+ital commodity broker or digital com-3
12717+modity dealer, respectively; 4
12718+‘‘(2) shall keep books and records in 5
12719+such form and manner and for such pe-6
12720+riod as may be prescribed by the Com-7
12721+mission by rule or regulation; and 8
12722+‘‘(3) shall keep the books and records 9
12723+open to inspection and examination by 10
12724+any representative of the Commission. 11
564512725 ‘‘(g) D
564612726 AILYTRADINGRECORDS.— 12
564712727 ‘‘(1) I
5648-N GENERAL.—Each digital commodity 13
5649-broker and digital commodity dealer shall maintain 14
5650-daily trading records of the transactions of the dig-15
5651-ital commodity broker or digital commodity dealer, 16
5652-respectively, and all related records (including re-17
5653-lated forward or derivatives transactions) and re-18
5654-corded communications, including electronic mail, in-19
5655-stant messages, and recordings of telephone calls, 20
5656-for such period as the Commission may require by 21
5657-rule or regulation. 22
5658-‘‘(2) I
5659-NFORMATION REQUIREMENTS .—The daily 23
5660-trading records shall include such information as the 24
5661-Commission shall require by rule or regulation. 25 201
5662-•HR 4763 EH
5663-‘‘(3) COUNTERPARTY RECORDS .—Each digital 1
5664-commodity broker and digital commodity dealer shall 2
5665-maintain daily trading records for each customer or 3
5666-counterparty in a manner and form that is identifi-4
5667-able with each digital commodity transaction. 5
12728+N GENERAL.—Each registered dig-13
12729+ital commodity broker and registered dig-14
12730+ital commodity dealer shall maintain 15
12731+daily trading records of the transactions 16
12732+of the digital commodity broker or digital 17
12733+commodity dealer, respectively, and all 18
12734+related records (including related for-19
12735+ward or derivatives transactions) and re-20
12736+corded communications, including elec-21
12737+tronic mail, instant messages, and record-22
12738+ings of telephone calls, for such period as 23
12739+the Commission may require by rule or 24
12740+regulation. 25
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12742+rfrederick on LAP8M3WLY3PROD with BILLS 423
12743+•HR 4763 RH
12744+‘‘(2) INFORMATION REQUIREMENTS .—The 1
12745+daily trading records shall include such 2
12746+information as the Commission shall re-3
12747+quire by rule or regulation. 4
12748+‘‘(3) C
12749+OUNTERPARTY RECORDS .—Each 5
12750+registered digital commodity broker and 6
12751+registered digital commodity dealer shall 7
12752+maintain daily trading records for each 8
12753+customer or counterparty in a manner 9
12754+and form that is identifiable with each 10
12755+digital commodity transaction. 11
566812756 ‘‘(4) A
5669-UDIT TRAIL.—Each digital commodity 6
5670-broker and digital commodity dealer shall maintain 7
5671-a complete audit trail for conducting comprehensive 8
5672-and accurate trade reconstructions. 9
12757+UDIT TRAIL .—Each registered 12
12758+digital commodity broker and registered 13
12759+digital commodity dealer shall maintain a 14
12760+complete audit trail for conducting com-15
12761+prehensive and accurate trade recon-16
12762+structions. 17
567312763 ‘‘(h) B
5674-USINESSCONDUCTSTANDARDS.— 10
12764+USINESSCONDUCTSTANDARDS.— 18
567512765 ‘‘(1) I
5676-N GENERAL.—Each digital commodity 11
5677-broker and digital commodity dealer shall conform 12
5678-with such business conduct standards as the Com-13
5679-mission, by rule or regulation, prescribes related 14
5680-to— 15
5681-‘‘(A) fraud, manipulation, and other abu-16
5682-sive practices involving spot or margined, lever-17
5683-aged, or financed digital commodity trans-18
5684-actions (including transactions that are offered 19
5685-but not entered into); 20
5686-‘‘(B) diligent supervision of the business of 21
5687-the registered digital commodity broker or dig-22
5688-ital commodity dealer, respectively; and 23
5689-‘‘(C) such other matters as the Commis-24
5690-sion deems appropriate. 25 202
5691-•HR 4763 EH
5692-‘‘(2) BUSINESS CONDUCT REQUIREMENTS .— 1
5693-The Commission shall, by rule, prescribe business 2
5694-conduct requirements which— 3
5695-‘‘(A) require disclosure by a registered dig-4
5696-ital commodity broker and registered digital 5
5697-commodity dealer to any counterparty to the 6
5698-transaction (other than an eligible contract par-7
5699-ticipant) of— 8
5700-‘‘(i) information about the material 9
5701-risks and characteristics of the digital com-10
5702-modity; 11
5703-‘‘(ii) information about the material 12
5704-risks and characteristics of the transaction; 13
5705-‘‘(B) establish a duty for such a digital 14
5706-commodity broker and such a digital commodity 15
5707-dealer to communicate in a fair and balanced 16
5708-manner based on principles of fair dealing and 17
5709-good faith; 18
5710-‘‘(C) establish standards governing digital 19
5711-commodity broker and digital commodity dealer 20
5712-marketing and advertising, including 21
5713-testimonials and endorsements; and 22
5714-‘‘(D) establish such other standards and 23
5715-requirements as the Commission may determine 24
5716-are— 25 203
5717-•HR 4763 EH
5718-‘‘(i) in the public interest; 1
5719-‘‘(ii) appropriate for the protection of 2
5720-customers; or 3
5721-‘‘(iii) otherwise in furtherance of the 4
5722-purposes of this Act. 5
12766+N GENERAL.—Each registered dig-19
12767+ital commodity broker and registered dig-20
12768+ital commodity dealer shall conform with 21
12769+such business conduct standards as the 22
12770+Commission, by rule or regulation, pre-23
12771+scribes related to— 24
12772+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00423 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
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12774+•HR 4763 RH
12775+‘‘(A) fraud, manipulation, and 1
12776+other abusive practices involving 2
12777+spot or margined, leveraged, or fi-3
12778+nanced digital commodity trans-4
12779+actions (including transactions that 5
12780+are offered but not entered into); 6
12781+‘‘(B) diligent supervision of the 7
12782+business of the registered digital com-8
12783+modity broker or digital commodity 9
12784+dealer, respectively; and 10
12785+‘‘(C) such other matters as the 11
12786+Commission deems appropriate. 12
12787+‘‘(2) B
12788+USINESS CONDUCT REQUIRE -13
12789+MENTS.—The Commission shall, by rule, 14
12790+prescribe business conduct requirements 15
12791+which— 16
12792+‘‘(A) require disclosure by a reg-17
12793+istered digital commodity broker and 18
12794+registered digital commodity dealer 19
12795+to any counterparty to the trans-20
12796+action (other than an eligible con-21
12797+tract participant) of— 22
12798+‘‘(i) information about the ma-23
12799+terial risks and characteristics of 24
12800+the digital commodity; and 25
12801+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00424 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12802+rfrederick on LAP8M3WLY3PROD with BILLS 425
12803+•HR 4763 RH
12804+‘‘(ii) information about the 1
12805+material risks and characteristics 2
12806+of the transaction; 3
12807+‘‘(B) establish a duty for such a 4
12808+digital commodity broker and such a 5
12809+digital commodity dealer to commu-6
12810+nicate in a fair and balanced manner 7
12811+based on principles of fair dealing 8
12812+and good faith; 9
12813+‘‘(C) establish standards gov-10
12814+erning digital commodity platform 11
12815+marketing and advertising, including 12
12816+testimonials and endorsements; and 13
12817+‘‘(D) establish such other stand-14
12818+ards and requirements as the Com-15
12819+mission may determine are— 16
12820+‘‘(i) in the public interest; 17
12821+‘‘(ii) appropriate for the pro-18
12822+tection of customers; or 19
12823+‘‘(iii) otherwise in furtherance 20
12824+of the purposes of this Act. 21
572312825 ‘‘(3) P
5724-ROHIBITION ON FRAUDULENT PRAC -6
5725-TICES.—It shall be unlawful for a digital commodity 7
5726-broker or digital commodity dealer to— 8
5727-‘‘(A) employ any device, scheme, or artifice 9
5728-to defraud any customer or counterparty; 10
5729-‘‘(B) engage in any transaction, practice, 11
5730-or course of business that operates as a fraud 12
5731-or deceit on any customer or counterparty; or 13
5732-‘‘(C) engage in any act, practice, or course 14
5733-of business that is fraudulent, deceptive, or ma-15
5734-nipulative. 16
12826+ROHIBITION ON FRAUDULENT PRAC -22
12827+TICES.—It shall be unlawful for a reg-23
12828+istered digital commodity broker or reg-24
12829+istered digital commodity dealer to— 25
12830+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00425 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12831+rfrederick on LAP8M3WLY3PROD with BILLS 426
12832+•HR 4763 RH
12833+‘‘(A) employ any device, scheme, 1
12834+or artifice to defraud any customer or 2
12835+counterparty; 3
12836+‘‘(B) engage in any transaction, 4
12837+practice, or course of business that 5
12838+operates as a fraud or deceit on any 6
12839+customer or counterparty; or 7
12840+‘‘(C) engage in any act, practice, 8
12841+or course of business that is fraudu-9
12842+lent, deceptive, or manipulative. 10
573512843 ‘‘(i) D
5736-UTIES.— 17
12844+UTIES.— 11
573712845 ‘‘(1) R
5738-ISK MANAGEMENT PROCEDURES .—Each 18
5739-digital commodity broker and digital commodity 19
5740-dealer shall establish robust and professional risk 20
5741-management systems adequate for managing the 21
5742-day-to-day business of the digital commodity broker 22
5743-or digital commodity dealer, respectively. 23
12846+ISK MANAGEMENT PROCEDURES .— 12
12847+Each registered digital commodity broker 13
12848+and registered digital commodity dealer 14
12849+shall establish robust and professional 15
12850+risk management systems adequate for 16
12851+managing the day-to-day business of the 17
12852+digital commodity broker or digital com-18
12853+modity dealer, respectively. 19
574412854 ‘‘(2) D
5745-ISCLOSURE OF GENERAL INFORMA -24
5746-TION.—Each digital commodity broker and digital 25 204
5747-•HR 4763 EH
5748-commodity dealer shall disclose to the Commission 1
5749-information concerning— 2
5750-‘‘(A) the terms and conditions of the trans-3
5751-actions of the digital commodity broker or dig-4
5752-ital commodity dealer, respectively; 5
5753-‘‘(B) the trading operations, mechanisms, 6
5754-and practices of the digital commodity broker 7
5755-or digital commodity dealer, respectively; 8
5756-‘‘(C) financial integrity protections relating 9
5757-to the activities of the digital commodity broker 10
5758-or digital commodity dealer, respectively; and 11
5759-‘‘(D) other information relevant to trading 12
5760-in digital commodities by the digital commodity 13
5761-broker or digital commodity dealer, respectively. 14
12855+ISCLOSURE OF GENERAL INFORMA -20
12856+TION.—Each registered digital commodity 21
12857+broker and registered digital commodity 22
12858+dealer shall disclose to the Commission 23
12859+information concerning— 24
12860+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00426 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12861+rfrederick on LAP8M3WLY3PROD with BILLS 427
12862+•HR 4763 RH
12863+‘‘(A) the terms and conditions of 1
12864+the transactions of the digital com-2
12865+modity broker or digital commodity 3
12866+dealer, respectively; 4
12867+‘‘(B) the trading operations, mech-5
12868+anisms, and practices of the digital 6
12869+commodity broker or digital com-7
12870+modity dealer, respectively; 8
12871+‘‘(C) financial integrity protec-9
12872+tions relating to the activities of the 10
12873+digital commodity broker or digital 11
12874+commodity dealer, respectively; and 12
12875+‘‘(D) other information relevant to 13
12876+trading in digital commodities by the 14
12877+digital commodity broker or digital 15
12878+commodity dealer, respectively. 16
576212879 ‘‘(3) A
5763-BILITY TO OBTAIN INFORMATION .—Each 15
5764-digital commodity broker and digital commodity 16
5765-dealer shall— 17
5766-‘‘(A) establish and enforce internal systems 18
5767-and procedures to obtain any necessary infor-19
5768-mation to perform any of the functions de-20
5769-scribed in this section; and 21
5770-‘‘(B) provide the information to the Com-22
5771-mission, on request. 23
12880+BILITY TO OBTAIN INFORMATION .— 17
12881+Each registered digital commodity broker 18
12882+and registered digital commodity dealer 19
12883+shall— 20
12884+‘‘(A) establish and enforce inter-21
12885+nal systems and procedures to obtain 22
12886+any necessary information to perform 23
12887+any of the functions described in this 24
12888+section; and 25
12889+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00427 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12890+rfrederick on LAP8M3WLY3PROD with BILLS 428
12891+•HR 4763 RH
12892+‘‘(B) provide the information to 1
12893+the Commission, on request. 2
577212894 ‘‘(4) C
5773-ONFLICTS OF INTEREST .—Each digital 24
5774-commodity broker and digital commodity dealer shall 25 205
5775-•HR 4763 EH
5776-implement conflict-of-interest systems and proce-1
5777-dures that— 2
5778-‘‘(A) establish structural and institutional 3
5779-safeguards— 4
5780-‘‘(i) to minimize conflicts of interest 5
5781-that might potentially bias the judgment or 6
5782-supervision of the digital commodity broker 7
5783-or digital commodity dealer, respectively, 8
5784-and contravene the principles of fair and 9
5785-equitable trading and the business conduct 10
5786-standards described in this Act, including 11
5787-conflicts arising out of transactions or ar-12
5788-rangements with affiliates (including affili-13
5789-ates acting as digital asset issuers, digital 14
5790-commodity dealers, or qualified digital 15
5791-commodity custodians), which may include 16
5792-information partitions and the legal sepa-17
5793-ration of different persons involved in dig-18
5794-ital commodity activities; and 19
5795-‘‘(ii) to ensure that the activities of 20
5796-any person within the digital commodity 21
5797-broker or digital commodity dealer relating 22
5798-to research or analysis of the price or mar-23
5799-ket for any digital commodity or acting in 24
5800-a role of providing exchange activities or 25 206
5801-•HR 4763 EH
5802-making determinations as to accepting ex-1
5803-change customers are separated by appro-2
5804-priate informational partitions within the 3
5805-digital commodity broker or digital com-4
5806-modity dealer from the review, pressure, or 5
5807-oversight of persons whose involvement in 6
5808-pricing, trading, exchange, or clearing ac-7
5809-tivities might potentially bias their judg-8
5810-ment or supervision and contravene the 9
5811-core principles of open access and the busi-10
5812-ness conduct standards described in this 11
5813-Act; and 12
5814-‘‘(B) address such other issues as the 13
5815-Commission determines to be appropriate. 14
12895+ONFLICTS OF INTEREST .—Each 3
12896+registered digital commodity broker and 4
12897+digital commodity dealer shall implement 5
12898+conflict-of-interest systems and proce-6
12899+dures that— 7
12900+‘‘(A) establish structural and insti-8
12901+tutional safeguards— 9
12902+‘‘(i) to minimize conflicts of in-10
12903+terest that might potentially bias 11
12904+the judgment or supervision of 12
12905+the digital commodity broker or 13
12906+digital commodity dealer, respec-14
12907+tively, and contravene the prin-15
12908+ciples of fair and equitable trad-16
12909+ing and the business conduct 17
12910+standards described in this Act, 18
12911+including conflicts arising out of 19
12912+transactions or arrangements 20
12913+with affiliates (including affiliates 21
12914+acting as digital asset issuers, dig-22
12915+ital commodity dealers, or quali-23
12916+fied digital commodity 24
12917+custodians), which may include 25
12918+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00428 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12919+rfrederick on LAP8M3WLY3PROD with BILLS 429
12920+•HR 4763 RH
12921+information partitions and the 1
12922+legal separation of different dig-2
12923+ital commodity transaction inter-3
12924+mediaries; and 4
12925+‘‘(ii) to ensure that the activi-5
12926+ties of any person within the dig-6
12927+ital commodity broker or digital 7
12928+commodity dealer relating to re-8
12929+search or analysis of the price or 9
12930+market for any digital commodity 10
12931+or acting in a role of providing 11
12932+exchange activities or making de-12
12933+terminations as to accepting ex-13
12934+change customers are separated 14
12935+by appropriate informational par-15
12936+titions within the digital com-16
12937+modity broker or digital com-17
12938+modity dealer from the review, 18
12939+pressure, or oversight of persons 19
12940+whose involvement in pricing, 20
12941+trading, exchange, or clearing ac-21
12942+tivities might potentially bias 22
12943+their judgment or supervision 23
12944+and contravene the core prin-24
12945+ciples of open access and the 25
12946+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00429 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12947+rfrederick on LAP8M3WLY3PROD with BILLS 430
12948+•HR 4763 RH
12949+business conduct standards de-1
12950+scribed in this Act; and 2
12951+‘‘(B) address such other issues as 3
12952+the Commission determines to be ap-4
12953+propriate. 5
581612954 ‘‘(5) A
5817-NTITRUST CONSIDERATIONS .—Unless 15
5818-necessary or appropriate to achieve the purposes of 16
5819-this Act, a digital commodity broker or digital com-17
5820-modity dealer shall not— 18
5821-‘‘(A) adopt any process or take any action 19
5822-that results in any unreasonable restraint of 20
5823-trade; or 21
5824-‘‘(B) impose any material anticompetitive 22
5825-burden on trading or clearing. 23
12955+NTITRUST CONSIDERATIONS .—Un-6
12956+less necessary or appropriate to achieve 7
12957+the purposes of this Act, a digital com-8
12958+modity broker or digital commodity deal-9
12959+er shall not— 10
12960+‘‘(A) adopt any process or take 11
12961+any action that results in any unrea-12
12962+sonable restraint of trade; or 13
12963+‘‘(B) impose any material anti-14
12964+competitive burden on trading or 15
12965+clearing. 16
582612966 ‘‘(j) D
5827-ESIGNATION OF CHIEFCOMPLIANCEOFFI-24
5828-CER.— 25 207
5829-•HR 4763 EH
5830-‘‘(1) IN GENERAL.—Each digital commodity 1
5831-broker and digital commodity dealer shall designate 2
5832-an individual to serve as a chief compliance officer. 3
12967+ESIGNATION OF CHIEFCOMPLIANCE OF-17
12968+FICER.— 18
12969+‘‘(1) I
12970+N GENERAL.—Each registered dig-19
12971+ital commodity broker and registered dig-20
12972+ital commodity dealer shall designate an 21
12973+individual to serve as a chief compliance 22
12974+officer. 23
583312975 ‘‘(2) D
5834-UTIES.—The chief compliance officer 4
5835-shall— 5
5836-‘‘(A) report directly to the board or to the 6
5837-senior officer of the registered digital com-7
5838-modity broker or registered digital commodity 8
5839-dealer; 9
5840-‘‘(B) review the compliance of the reg-10
5841-istered digital commodity broker or registered 11
5842-digital commodity dealer with respect to the 12
5843-registered digital commodity broker and reg-13
5844-istered digital commodity dealer requirements 14
5845-described in this section; 15
5846-‘‘(C) in consultation with the board of di-16
5847-rectors, a body performing a function similar to 17
5848-the board, or the senior officer of the organiza-18
5849-tion, resolve any conflicts of interest that may 19
5850-arise; 20
5851-‘‘(D) be responsible for administering each 21
5852-policy and procedure that is required to be es-22
5853-tablished pursuant to this section; 23 208
5854-•HR 4763 EH
5855-‘‘(E) ensure compliance with this Act (in-1
5856-cluding regulations), including each rule pre-2
5857-scribed by the Commission under this section; 3
5858-‘‘(F) establish procedures for the remedi-4
5859-ation of noncompliance issues identified by the 5
5860-chief compliance officer through any— 6
5861-‘‘(i) compliance office review; 7
5862-‘‘(ii) look-back; 8
5863-‘‘(iii) internal or external audit find-9
5864-ing; 10
5865-‘‘(iv) self-reported error; or 11
5866-‘‘(v) validated complaint; and 12
5867-‘‘(G) establish and follow appropriate pro-13
5868-cedures for the handling, management response, 14
5869-remediation, retesting, and closing of non-15
5870-compliance issues. 16
12976+UTIES.—The chief compliance of-24
12977+ficer shall— 25
12978+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00430 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
12979+rfrederick on LAP8M3WLY3PROD with BILLS 431
12980+•HR 4763 RH
12981+‘‘(A) report directly to the board 1
12982+or to the senior officer of the reg-2
12983+istered digital commodity broker or 3
12984+registered digital commodity dealer; 4
12985+‘‘(B) review the compliance of the 5
12986+registered digital commodity broker 6
12987+or registered digital commodity deal-7
12988+er with respect to the registered dig-8
12989+ital commodity broker and registered 9
12990+digital commodity dealer require-10
12991+ments described in this section; 11
12992+‘‘(C) in consultation with the 12
12993+board of directors, a body performing 13
12994+a function similar to the board, or the 14
12995+senior officer of the organization, re-15
12996+solve any conflicts of interest that 16
12997+may arise; 17
12998+‘‘(D) be responsible for admin-18
12999+istering each policy and procedure 19
13000+that is required to be established pur-20
13001+suant to this section; 21
13002+‘‘(E) ensure compliance with this 22
13003+Act (including regulations), including 23
13004+each rule prescribed by the Commis-24
13005+sion under this section; 25
13006+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00431 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13007+rfrederick on LAP8M3WLY3PROD with BILLS 432
13008+•HR 4763 RH
13009+‘‘(F) establish procedures for the 1
13010+remediation of noncompliance issues 2
13011+identified by the chief compliance of-3
13012+ficer through any— 4
13013+‘‘(i) compliance office review; 5
13014+‘‘(ii) look-back; 6
13015+‘‘(iii) internal or external 7
13016+audit finding; 8
13017+‘‘(iv) self-reported error; or 9
13018+‘‘(v) validated complaint; and 10
13019+‘‘(G) establish and follow appro-11
13020+priate procedures for the handling, 12
13021+management response, remediation, 13
13022+retesting, and closing of noncompli-14
13023+ance issues. 15
587113024 ‘‘(3) A
5872-NNUAL REPORTS.— 17
13025+NNUAL REPORTS .— 16
587313026 ‘‘(A) I
5874-N GENERAL.—In accordance with 18
5875-rules prescribed by the Commission, the chief 19
5876-compliance officer shall annually prepare and 20
5877-sign a report that contains a description of— 21
5878-‘‘(i) the compliance of the registered 22
5879-digital commodity broker or registered dig-23
5880-ital commodity dealer with respect to this 24
5881-Act (including regulations); and 25 209
5882-•HR 4763 EH
5883-‘‘(ii) each policy and procedure of the 1
5884-registered digital commodity broker or reg-2
5885-istered digital commodity dealer of the 3
5886-chief compliance officer (including the code 4
5887-of ethics and conflict of interest policies). 5
13027+N GENERAL .—In accordance 17
13028+with rules prescribed by the Commis-18
13029+sion, the chief compliance officer 19
13030+shall annually prepare and sign a re-20
13031+port that contains a description of— 21
13032+‘‘(i) the compliance of the reg-22
13033+istered digital commodity broker 23
13034+or registered digital commodity 24
13035+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00432 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13036+rfrederick on LAP8M3WLY3PROD with BILLS 433
13037+•HR 4763 RH
13038+dealer with respect to this Act (in-1
13039+cluding regulations); and 2
13040+‘‘(ii) each policy and proce-3
13041+dure of the registered digital com-4
13042+modity broker or registered dig-5
13043+ital commodity dealer of the chief 6
13044+compliance officer (including the 7
13045+code of ethics and conflict of in-8
13046+terest policies). 9
588813047 ‘‘(B) R
5889-EQUIREMENTS.—The chief compli-6
5890-ance officer shall ensure that a compliance re-7
5891-port under subparagraph (A)— 8
5892-‘‘(i) accompanies each appropriate fi-9
5893-nancial report of the registered digital 10
5894-commodity broker or registered digital 11
5895-commodity dealer that is required to be 12
5896-furnished to the Commission pursuant to 13
5897-this section; and 14
5898-‘‘(ii) includes a certification that, 15
5899-under penalty of law, the compliance re-16
5900-port is accurate and complete. 17
5901-‘‘(k) S
5902-EGREGATION OFDIGITALCOMMODITIES.— 18
13048+EQUIREMENTS .—The chief 10
13049+compliance officer shall ensure that a 11
13050+compliance report under subpara-12
13051+graph (A)— 13
13052+‘‘(i) accompanies each appro-14
13053+priate financial report of the reg-15
13054+istered digital commodity broker 16
13055+or registered digital commodity 17
13056+dealer that is required to be fur-18
13057+nished to the Commission pursu-19
13058+ant to this section; and 20
13059+‘‘(ii) includes a certification 21
13060+that, under penalty of law, the 22
13061+compliance report is accurate and 23
13062+complete. 24
13063+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00433 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13064+rfrederick on LAP8M3WLY3PROD with BILLS 434
13065+•HR 4763 RH
13066+‘‘(k) SEGREGATION OF DIGITALCOMMOD-1
13067+ITIES.— 2
590313068 ‘‘(1) H
5904-OLDING OF CUSTOMER ASSETS .— 19
13069+OLDING OF CUSTOMER ASSETS .— 3
590513070 ‘‘(A) I
5906-N GENERAL.—Each digital com-20
5907-modity broker and digital commodity dealer 21
5908-shall hold customer money, assets, and property 22
5909-in a manner to minimize the risk of loss to the 23
5910-customer or unreasonable delay in customer ac-24 210
5911-•HR 4763 EH
5912-cess to the money, assets, and property of the 1
5913-customer. 2
13071+N GENERAL.—Each registered 4
13072+digital commodity broker and reg-5
13073+istered digital commodity dealer shall 6
13074+hold customer money, assets, and 7
13075+property in a manner to minimize the 8
13076+risk of loss to the customer or unrea-9
13077+sonable delay in customer access to 10
13078+the money, assets, and property of 11
13079+the customer. 12
591413080 ‘‘(B) Q
5915-UALIFIED DIGITAL COMMODITY 3
5916-CUSTODIAN.—Each digital commodity broker 4
5917-and digital commodity dealer shall hold in a 5
5918-qualified digital commodity custodian each unit 6
5919-of a digital commodity that is— 7
5920-‘‘(i) the property of a customer or 8
5921-counterparty of the digital commodity 9
5922-broker or digital commodity dealer, respec-10
5923-tively; 11
5924-‘‘(ii) required to be held by the digital 12
5925-commodity broker or digital commodity 13
5926-dealer under subsection (e); or 14
5927-‘‘(iii) otherwise so required by the 15
5928-Commission to reasonably protect cus-16
5929-tomers or promote the public interest. 17
13081+UALIFIED DIGITAL COMMODITY 13
13082+CUSTODIAN.—Each registered digital 14
13083+commodity broker and registered dig-15
13084+ital commodity dealer shall hold in a 16
13085+qualified digital commodity custodian 17
13086+each unit of a digital commodity that 18
13087+is— 19
13088+‘‘(i) the property of a customer 20
13089+or counterparty of the digital 21
13090+commodity broker or digital com-22
13091+modity dealer, respectively; or 23
13092+‘‘(ii) otherwise so required by 24
13093+the Commission to reasonably 25
13094+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00434 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13095+rfrederick on LAP8M3WLY3PROD with BILLS 435
13096+•HR 4763 RH
13097+protect customers or promote the 1
13098+public interest. 2
593013099 ‘‘(2) S
5931-EGREGATION OF FUNDS .— 18
13100+EGREGATION OF FUNDS .— 3
593213101 ‘‘(A) I
5933-N GENERAL.—Each digital com-19
5934-modity broker and digital commodity dealer 20
5935-shall treat and deal with all money, assets, and 21
5936-property that is received by the digital com-22
5937-modity broker or digital commodity dealer, or 23
5938-accrues to a customer as the result of trading 24 211
5939-•HR 4763 EH
5940-in digital commodities, as belonging to the cus-1
5941-tomer. 2
13102+N GENERAL.—Each registered 4
13103+digital commodity broker and reg-5
13104+istered digital commodity dealer shall 6
13105+treat and deal with all money, assets, 7
13106+and property that is received by the 8
13107+registered digital commodity broker 9
13108+or registered digital commodity deal-10
13109+er, or accrues to a customer as the re-11
13110+sult of trading in digital commodities, 12
13111+as belonging to the customer. 13
594213112 ‘‘(B) C
5943-OMMINGLING PROHIBITED .— 3
13113+OMMINGLING PROHIBITED .— 14
594413114 ‘‘(i) I
5945-N GENERAL.—Except as pro-4
5946-vided in clause (ii), each digital commodity 5
5947-broker and digital commodity dealer shall 6
5948-separately account for money, assets, and 7
5949-property of a digital commodity customer, 8
5950-and shall not commingle any such money, 9
5951-assets, or property with the funds of the 10
5952-digital commodity broker or digital com-11
5953-modity dealer, respectively, or use any such 12
5954-money, assets, or property to margin, se-13
5955-cure, or guarantee any trades or accounts 14
5956-of any customer or person other than the 15
5957-person for whom the money, assets, or 16
5958-property are held. 17
13115+N GENERAL .—Except as 15
13116+provided in clause (ii), each reg-16
13117+istered digital commodity broker 17
13118+and registered digital commodity 18
13119+dealer shall separately account 19
13120+for money, assets, and property of 20
13121+a digital commodity customer, 21
13122+and shall not commingle any such 22
13123+money, assets, or property with 23
13124+the funds of the digital com-24
13125+modity broker or digital com-25
13126+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00435 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13127+rfrederick on LAP8M3WLY3PROD with BILLS 436
13128+•HR 4763 RH
13129+modity dealer, respectively, or 1
13130+use any such money, assets, or 2
13131+property to margin, secure, or 3
13132+guarantee any trades or accounts 4
13133+of any customer or person other 5
13134+than the person for whom the 6
13135+money, assets, or property are 7
13136+held. 8
595913137 ‘‘(ii) E
5960-XCEPTIONS.— 18
13138+XCEPTIONS.— 9
596113139 ‘‘(I) U
5962-SE OF FUNDS.— 19
13140+SE OF FUNDS.— 10
596313141 ‘‘(aa) I
5964-N GENERAL.—A dig-20
5965-ital commodity broker or digital 21
5966-commodity dealer may, for con-22
5967-venience, commingle and deposit 23
5968-in the same account or accounts 24
5969-with any bank, trust company, 25 212
5970-•HR 4763 EH
5971-derivatives clearing organization, 1
5972-or qualified digital commodity 2
5973-custodian money, assets, and 3
5974-property of customers. 4
5975-‘‘(bb) W
5976-ITHDRAWAL.—The 5
5977-share of the money, assets, and 6
5978-property described in item (aa) 7
5979-as in the normal course of busi-8
5980-ness shall be necessary to mar-9
5981-gin, guarantee, secure, transfer, 10
5982-adjust, or settle a contract of sale 11
5983-of a digital commodity with a 12
5984-registered entity may be with-13
5985-drawn and applied to such pur-14
5986-poses, including the payment of 15
5987-commissions, brokerage, interest, 16
5988-taxes, storage, and other charges, 17
5989-lawfully accruing in connection 18
5990-with the contract. 19
13142+N GENERAL .—A 11
13143+registered digital com-12
13144+modity broker or reg-13
13145+istered digital commodity 14
13146+dealer may, for conven-15
13147+ience, commingle and de-16
13148+posit in the same account 17
13149+or accounts with any 18
13150+bank, trust company, de-19
13151+rivatives clearing organi-20
13152+zation, or qualified digital 21
13153+commodity custodian 22
13154+money, assets, and prop-23
13155+erty of customers. 24
13156+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00436 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13157+rfrederick on LAP8M3WLY3PROD with BILLS 437
13158+•HR 4763 RH
13159+‘‘(bb) WITHDRAWAL.— 1
13160+The share of the money, 2
13161+assets, and property de-3
13162+scribed in item (aa) as in 4
13163+the normal course of busi-5
13164+ness shall be necessary to 6
13165+margin, guarantee, secure, 7
13166+transfer, adjust, or settle a 8
13167+contract for sale of a dig-9
13168+ital commodity with a reg-10
13169+istered entity may be 11
13170+withdrawn and applied to 12
13171+such purposes, including 13
13172+the payment of commis-14
13173+sions, brokerage, interest, 15
13174+taxes, storage, and other 16
13175+charges, lawfully accruing 17
13176+in connection with the 18
13177+contract. 19
599113178 ‘‘(II) C
5992-OMMISSION ACTION.—In 20
5993-accordance with such terms and con-21
5994-ditions as the Commission may pre-22
5995-scribe by rule, regulation, or order, 23
5996-any money, assets, or property of the 24
5997-customers of a digital commodity 25 213
5998-•HR 4763 EH
5999-broker or digital commodity dealer 1
6000-may be commingled and deposited in 2
6001-customer accounts with any other 3
6002-money, assets, or property received by 4
6003-the digital commodity broker or dig-5
6004-ital commodity dealer, respectively, 6
6005-and required by the Commission to be 7
6006-separately accounted for and treated 8
6007-and dealt with as belonging to the 9
6008-customer of the digital commodity 10
6009-broker or digital commodity dealer, 11
6010-respectively. 12
13179+OMMISSION ACTION .— 20
13180+In accordance with such 21
13181+terms and conditions as the 22
13182+Commission may prescribe by 23
13183+rule, regulation, or order, any 24
13184+money, assets, or property of 25
13185+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00437 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13186+rfrederick on LAP8M3WLY3PROD with BILLS 438
13187+•HR 4763 RH
13188+the customers of a registered 1
13189+digital commodity broker or 2
13190+registered digital commodity 3
13191+dealer may be commingled 4
13192+and deposited in customer ac-5
13193+counts with any other money, 6
13194+assets, or property received 7
13195+by the digital commodity 8
13196+broker or digital commodity 9
13197+dealer, respectively, and re-10
13198+quired by the Commission to 11
13199+be separately accounted for 12
13200+and treated and dealt with as 13
13201+belonging to the customer of 14
13202+the digital commodity broker 15
13203+or digital commodity dealer, 16
13204+respectively. 17
601113205 ‘‘(3) P
6012-ERMITTED INVESTMENTS .—Money de-13
6013-scribed in paragraph (2) may be invested in obliga-14
6014-tions of the United States, in general obligations of 15
6015-any State or of any political subdivision of a State, 16
6016-in obligations fully guaranteed as to principal and 17
6017-interest by the United States, or in any other invest-18
6018-ment that the Commission may by rule or regulation 19
6019-allow. 20
13206+ERMITTED INVESTMENTS .—Money 18
13207+described in paragraph (2) may be in-19
13208+vested in obligations of the United States, 20
13209+in general obligations of any State or of 21
13210+any political subdivision of a State, in ob-22
13211+ligations fully guaranteed as to principal 23
13212+and interest by the United States, or in 24
13213+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00438 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13214+rfrederick on LAP8M3WLY3PROD with BILLS 439
13215+•HR 4763 RH
13216+any other investment that the Commis-1
13217+sion may by rule or regulation allow. 2
602013218 ‘‘(4) C
6021-USTOMER PROTECTION DURING BANK -21
6022-RUPTCY.— 22
13219+USTOMER PROTECTION DURING 3
13220+BANKRUPTCY .— 4
602313221 ‘‘(A) C
6024-USTOMER PROPERTY .—All money, 23
6025-assets, or property described in paragraph (2) 24
6026-shall be considered customer property for pur-25 214
6027-•HR 4763 EH
6028-poses of section 761 of title 11, United States 1
6029-Code. 2
13222+USTOMER PROPERTY .—All 5
13223+money, assets, or property described 6
13224+in paragraph (2) shall be considered 7
13225+customer property for purposes of 8
13226+section 761 of title 11, United States 9
13227+Code. 10
603013228 ‘‘(B) T
6031-RANSACTIONS.—A transaction in-3
6032-volving a unit of a digital commodity occurring 4
6033-with a digital commodity dealer shall be consid-5
6034-ered a ‘contract for the purchase or sale of a 6
6035-commodity for future delivery, on or subject to 7
6036-the rules of, a contract market or board of 8
6037-trade’ for purposes of the definition of a ‘com-9
6038-modity contract’ in section 761 of title 11, 10
6039-United States Code. 11
13229+RANSACTIONS .—A transaction 11
13230+involving a unit of a digital com-12
13231+modity occurring with a digital com-13
13232+modity dealer shall be considered a 14
13233+‘contract for the purchase or sale of a 15
13234+commodity for future delivery, on or 16
13235+subject to the rules of, a contract 17
13236+market or board of trade’ for pur-18
13237+poses of the definition of a ‘com-19
13238+modity contract’ in section 761 of title 20
13239+11, United States Code. 21
604013240 ‘‘(C) B
6041-ROKERS AND DEALERS .—A digital 12
6042-commodity dealer and a digital commodity 13
6043-broker shall be considered a futures commission 14
6044-merchant for purposes of section 761 of title 15
6045-11, United States Code. 16
13241+ROKERS AND DEALERS .—A 22
13242+registered digital commodity dealer 23
13243+and a registered digital commodity 24
13244+broker shall be considered a futures 25
13245+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00439 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13246+rfrederick on LAP8M3WLY3PROD with BILLS 440
13247+•HR 4763 RH
13248+commission merchant for purposes of 1
13249+section 761 of title 11, United States 2
13250+Code. 3
604613251 ‘‘(D) A
6047-SSETS REMOVED FROM SEGREGA -17
6048-TION.—Assets removed from segregation due to 18
6049-a customer election under paragraph (6) shall 19
6050-not be considered customer property for pur-20
6051-poses of section 761 of title 11, United States 21
6052-Code. 22
13252+SSETS REMOVED FROM SEG -4
13253+REGATION.—Assets removed from seg-5
13254+regation due to a customer election 6
13255+under paragraph (5) shall not be con-7
13256+sidered customer property for pur-8
13257+poses of section 761 of title 11, United 9
13258+States Code. 10
605313259 ‘‘(5) M
6054-ISUSE OF CUSTOMER PROPERTY .— 23
13260+ISUSE OF CUSTOMER PROPERTY .— 11
605513261 ‘‘(A) I
6056-N GENERAL.—It shall be unlawful— 24 215
6057-•HR 4763 EH
6058-‘‘(i) for any digital commodity broker 1
6059-or digital commodity dealer that has re-2
6060-ceived any customer money, assets, or 3
6061-property for custody to dispose of, or use 4
6062-any such money, assets, or property as be-5
6063-longing to the digital commodity broker or 6
6064-digital commodity dealer, respectively, or 7
6065-any person other than a customer of the 8
6066-digital commodity broker or digital com-9
6067-modity dealer, respectively; or 10
6068-‘‘(ii) for any other person, including 11
6069-any depository, digital commodity ex-12
6070-change, other digital commodity broker, 13
6071-other digital commodity dealer, or digital 14
6072-commodity custodian that has received any 15
6073-customer money, assets, or property for 16
6074-deposit, to hold, dispose of, or use any 17
6075-such money, assets, or property, as belong-18
6076-ing to the depositing digital commodity 19
6077-broker or digital commodity dealer or any 20
6078-person other than the customers of the 21
6079-digital commodity broker or digital com-22
6080-modity dealer, respectively. 23
13262+N GENERAL .—It shall be un-12
13263+lawful— 13
13264+‘‘(i) for any digital commodity 14
13265+broker or digital commodity deal-15
13266+er that has received any customer 16
13267+money, assets, or property for 17
13268+custody to dispose of, or use any 18
13269+such money, assets, or property 19
13270+as belonging to the digital com-20
13271+modity broker or digital com-21
13272+modity dealer, respectively; or 22
13273+‘‘(ii) for any other person, in-23
13274+cluding any depository, digital 24
13275+commodity exchange, other dig-25
13276+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00440 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13277+rfrederick on LAP8M3WLY3PROD with BILLS 441
13278+•HR 4763 RH
13279+ital commodity broker, other dig-1
13280+ital commodity dealer, or digital 2
13281+commodity custodian that has re-3
13282+ceived any customer money, as-4
13283+sets, or property for deposit, to 5
13284+hold, dispose of, or use any such 6
13285+money, assets, or property, as be-7
13286+longing to the depositing digital 8
13287+commodity broker or digital com-9
13288+modity dealer or any person other 10
13289+than the customers of the digital 11
13290+commodity broker or digital com-12
13291+modity dealer, respectively. 13
608113292 ‘‘(B) U
6082-SE FURTHER DEFINED .—For pur-24
6083-poses of this section, ‘use’ of a digital com-25 216
6084-•HR 4763 EH
6085-modity includes utilizing any unit of a digital 1
6086-asset to participate in a blockchain service de-2
6087-fined in paragraph (6) or a decentralized gov-3
6088-ernance system associated with the digital com-4
6089-modity or the blockchain system to which the 5
6090-digital commodity relates in any manner other 6
6091-than that expressly directed by the customer 7
6092-from whom the unit of a digital commodity was 8
6093-received. 9
13293+SE FURTHER DEFINED .—For 14
13294+purposes of this section, ‘use’ of a dig-15
13295+ital commodity includes utilizing any 16
13296+unit of a digital asset to participate in 17
13297+a blockchain service defined in para-18
13298+graph (5) or a decentralized govern-19
13299+ance system associated with the dig-20
13300+ital commodity or the blockchain sys-21
13301+tem to which the digital commodity 22
13302+relates in any manner other than that 23
13303+expressly directed by the customer 24
13304+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00441 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13305+rfrederick on LAP8M3WLY3PROD with BILLS 442
13306+•HR 4763 RH
13307+from whom the unit of a digital com-1
13308+modity was received. 2
609413309 ‘‘(6) P
6095-ARTICIPATION IN BLOCKCHAIN SERV -10
6096-ICES.— 11
13310+ARTICIPATION IN BLOCKCHAIN 3
13311+SERVICES.— 4
609713312 ‘‘(A) I
6098-N GENERAL.—A customer shall have 12
6099-the right to waive the restrictions in paragraph 13
6100-(1) for any unit of a digital commodity to be 14
6101-used under subparagraph (B), by affirmatively 15
6102-electing, in writing to the digital commodity 16
6103-broker or digital commodity dealer, to waive the 17
6104-restrictions. 18
13313+N GENERAL .—A customer 5
13314+shall have the right to waive the re-6
13315+strictions in paragraph (1) for any 7
13316+unit of a digital commodity, by af-8
13317+firmatively electing, in writing to the 9
13318+digital commodity broker or digital 10
13319+commodity dealer, to waive the re-11
13320+strictions. 12
610513321 ‘‘(B) U
6106-SE OF FUNDS.—Customer digital 19
6107-commodities removed from segregation under 20
6108-subparagraph (A) may be pooled and used by 21
6109-the digital commodity broker or digital com-22
6110-modity dealer, or one of their designees, to pro-23
6111-vide a blockchain service for a blockchain sys-24
6112-tem to which the unit of the digital asset re-25 217
6113-•HR 4763 EH
6114-moved from segregation in subparagraph (A) 1
6115-relates. 2
13322+SE OF FUNDS.—Customer dig-13
13323+ital commodities removed from seg-14
13324+regation under subparagraph (A) may 15
13325+be pooled and used by the digital 16
13326+commodity broker or digital com-17
13327+modity dealer, or one of their des-18
13328+ignees, to provide a blockchain serv-19
13329+ice for a blockchain system to which 20
13330+the unit of the digital asset removed 21
13331+from segregation in subparagraph (A) 22
13332+relates. 23
611613333 ‘‘(C) L
6117-IMITATIONS.— 3
6118-‘‘(i) I
6119-N GENERAL.—The Commission 4
6120-may, by rule, establish notice and disclo-5
6121-sure requirements, and any other limita-6
6122-tions and rules related to the waiving of 7
6123-any restrictions under this paragraph that 8
6124-are reasonably necessary to protect cus-9
6125-tomers, including eligible contract partici-10
6126-pants, non-eligible contract participants, or 11
6127-any other class of customers. 12
6128-‘‘(ii) C
6129-USTOMER CHOICE .—A digital 13
6130-commodity broker or digital commodity 14
6131-dealer may not require a waiver from a 15
6132-customer described in subparagraph (A) as 16
6133-a condition of doing business with the 17
6134-broker or dealer. 18
13334+IMITATIONS.—The Commis-24
13335+sion may, by rule, establish notice 25
13336+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00442 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13337+rfrederick on LAP8M3WLY3PROD with BILLS 443
13338+•HR 4763 RH
13339+and disclosure requirements, and any 1
13340+other limitations and rules related to 2
13341+the waiving of any restrictions under 3
13342+this paragraph that are reasonably 4
13343+necessary to protect customers, in-5
13344+cluding eligible contract participants, 6
13345+non-eligible contract participants, or 7
13346+any other class of customers. 8
613513347 ‘‘(D) B
6136-LOCKCHAIN SERVICE DEFINED .—In 19
6137-this subparagraph, the term ‘blockchain service’ 20
6138-means any activity relating to validating trans-21
6139-actions on a blockchain system, providing secu-22
6140-rity for a blockchain system, or other similar 23
6141-activity required for the ongoing operation of a 24
6142-blockchain system. 25 218
6143-•HR 4763 EH
6144-‘‘(l) FEDERALPREEMPTION.—Notwithstanding any 1
6145-other provision of law, the Commission shall have exclusive 2
6146-jurisdiction over any digital commodity broker or digital 3
6147-commodity dealer registered under this section. 4
13348+LOCKCHAIN SERVICE DE -9
13349+FINED.—In this subparagraph, the 10
13350+term ‘blockchain service’ means any 11
13351+activity relating to validating trans-12
13352+actions on a blockchain system, pro-13
13353+viding security for a blockchain sys-14
13354+tem, or other similar activity re-15
13355+quired for the ongoing operation of a 16
13356+blockchain system. 17
13357+‘‘(l) F
13358+EDERAL PREEMPTION.—Notwith-18
13359+standing any other provision of law, the Com-19
13360+mission shall have exclusive jurisdiction over 20
13361+any digital commodity broker or digital com-21
13362+modity dealer registered under this section. 22
614813363 ‘‘(m) E
6149-XEMPTIONS.—In order to promote responsible 5
6150-economic or financial innovation and fair competition, or 6
6151-protect customers, the Commission may (on its own initia-7
6152-tive or on application of the registered digital commodity 8
6153-broker or registered digital commodity dealer) exempt, un-9
6154-conditionally or on stated terms or conditions, or for stat-10
6155-ed periods, and retroactively or prospectively, or both, a 11
6156-registered digital commodity broker or registered digital 12
6157-commodity dealer from the requirements of this section, 13
6158-if the Commission determines that— 14
6159-‘‘(1)(A) the exemption would be consistent with 15
6160-the public interest and the purposes of this Act; and 16
6161-‘‘(B) the exemption will not have a material ad-17
6162-verse effect on the ability of the Commission to dis-18
6163-charge regulatory duties under this Act; or 19
6164-‘‘(2) the registered digital commodity broker or 20
6165-registered digital commodity dealer is subject to 21
6166-comparable, comprehensive supervision and regula-22
6167-tion by the appropriate government authorities in 23
6168-the home country of the registered digital commodity 24 219
6169-•HR 4763 EH
6170-broker or registered digital commodity dealer, re-1
6171-spectively.’’. 2
6172-SEC. 507. REGISTRATION OF ASSOCIATED PERSONS. 3
13364+XEMPTIONS.—In order to promote re-23
13365+sponsible economic or financial innovation 24
13366+and fair competition, or protect customers, 25
13367+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00443 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13368+rfrederick on LAP8M3WLY3PROD with BILLS 444
13369+•HR 4763 RH
13370+the Commission may (on its own initiative or 1
13371+on application of the registered digital com-2
13372+modity broker or registered digital com-3
13373+modity dealer) exempt, unconditionally or on 4
13374+stated terms or conditions, or for stated peri-5
13375+ods, and retroactively or prospectively, or 6
13376+both, a registered digital commodity broker 7
13377+or registered digital commodity dealer from 8
13378+the requirements of this section, if the Com-9
13379+mission determines that— 10
13380+‘‘(1)(A) the exemption would be con-11
13381+sistent with the public interest and the 12
13382+purposes of this Act; and 13
13383+‘‘(B) the exemption will not have a 14
13384+material adverse effect on the ability of 15
13385+the Commission or the digital commodity 16
13386+broker or digital commodity dealer to 17
13387+discharge regulatory duties under this 18
13388+Act; or 19
13389+‘‘(2) the registered digital commodity 20
13390+broker or registered digital commodity 21
13391+dealer is subject to comparable, com-22
13392+prehensive supervision and regulation by 23
13393+the appropriate government authorities 24
13394+in the home country of the registered dig-25
13395+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00444 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13396+rfrederick on LAP8M3WLY3PROD with BILLS 445
13397+•HR 4763 RH
13398+ital commodity broker or registered dig-1
13399+ital commodity dealer, respectively. 2
13400+‘‘(n) T
13401+REATMENT UNDER THE BANKSECRECY 3
13402+A
13403+CT.—A registered digital commodity broker 4
13404+and a registered digital commodity dealer 5
13405+shall be treated as a financial institution for 6
13406+purposes of the Bank Secrecy Act.’’. 7
13407+SEC. 407. REGISTRATION OF ASSOCIATED PERSONS. 8
617313408 (a) I
6174-NGENERAL.—Section 4k of the Commodity Ex-4
6175-change Act (7 U.S.C. 6k) is amended— 5
6176-(1) by redesignating subsections (4) through 6
6177-(6) as subsections (5) through (7), respectively; and 7
6178-(2) by inserting after subsection (3) the fol-8
6179-lowing: 9
6180-‘‘(4) It shall be unlawful for any person to act as an 10
6181-associated person of a digital commodity broker or an as-11
6182-sociated person of a digital commodity dealer unless the 12
6183-person is registered with the Commission under this Act 13
6184-and such registration shall not have expired, been sus-14
6185-pended (and the period of suspension has not expired), 15
6186-or been revoked. It shall be unlawful for a digital com-16
6187-modity broker or a digital commodity dealer to permit 17
6188-such a person to become or remain associated with the 18
6189-digital commodity broker or digital commodity dealer if 19
6190-the digital commodity broker or digital commodity dealer 20
6191-knew or should have known that the person was not so 21
6192-registered or that the registration had expired, been sus-22
6193-pended (and the period of suspension has not expired), 23
6194-or been revoked.’’; and 24 220
6195-•HR 4763 EH
6196-(3) in subsection (5) (as so redesignated), by 1
6197-striking ‘‘or of a commodity trading advisor’’ and in-2
6198-serting ‘‘of a commodity trading advisor, of a digital 3
6199-commodity broker, or of a digital commodity deal-4
6200-er’’. 5
13409+NGENERAL.—Section 4k of the Com-9
13410+modity Exchange Act (7 U.S.C. 6k) is amend-10
13411+ed— 11
13412+(1) by redesignating subsections (4) 12
13413+through (6) as subsections (5) through (7), 13
13414+respectively; and 14
13415+(2) by inserting after subsection (3) 15
13416+the following: 16
13417+‘‘(4) It shall be unlawful for any person to 17
13418+act as an associated person of a digital com-18
13419+modity broker or an associated person of a 19
13420+digital commodity dealer unless the person is 20
13421+registered with the Commission under this 21
13422+Act and such registration shall not have ex-22
13423+pired, been suspended (and the period of sus-23
13424+pension has not expired), or been revoked. It 24
13425+shall be unlawful for a digital commodity 25
13426+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00445 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13427+rfrederick on LAP8M3WLY3PROD with BILLS 446
13428+•HR 4763 RH
13429+broker or a digital commodity dealer to per-1
13430+mit such a person to become or remain associ-2
13431+ated with the digital commodity broker or 3
13432+digital commodity dealer if the digital com-4
13433+modity broker or digital commodity dealer 5
13434+knew or should have known that the person 6
13435+was not so registered or that the registration 7
13436+had expired, been suspended (and the period 8
13437+of suspension has not expired), or been re-9
13438+voked.’’; and 10
13439+(3) in subsection (5) (as so redesig-11
13440+nated), by striking ‘‘or of a commodity 12
13441+trading advisor’’ and inserting ‘‘of a com-13
13442+modity trading advisor, of a digital com-14
13443+modity broker, or of a digital commodity 15
13444+dealer’’. 16
620113445 (b) C
6202-ONFORMINGAMENDMENTS.—The Commodity 6
6203-Exchange Act (7 U.S.C. 1a et seq.) is amended by striking 7
6204-‘‘section 4k(6)’’ each place it appears and inserting ‘‘sec-8
6205-tion 4k(7)’’. 9
6206-SEC. 508. REGISTRATION OF COMMODITY POOL OPERA-10
6207-TORS AND COMMODITY TRADING ADVISORS. 11
13446+ONFORMING AMENDMENTS .—The Com-17
13447+modity Exchange Act (7 U.S.C. 1a et seq.) is 18
13448+amended by striking ‘‘section 4k(6)’’ each 19
13449+place it appears and inserting ‘‘section 4k(7)’’. 20
13450+SEC. 408. REGISTRATION OF COMMODITY POOL OPERA-21
13451+TORS AND COMMODITY TRADING ADVISORS. 22
13452+Section 4m(3) of the Commodity Exchange 23
13453+Act (7 U.S.C. 6m(3)) is amended— 24
13454+(1) in subparagraph (A)— 25
13455+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00446 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13456+rfrederick on LAP8M3WLY3PROD with BILLS 447
13457+•HR 4763 RH
13458+(A) by striking ‘‘any commodity 1
13459+trading advisor’’ and inserting ‘‘a 2
13460+commodity pool operator or com-3
13461+modity trading advisor’’; and 4
13462+(B) by striking ‘‘acting as a com-5
13463+modity trading advisor’’ and inserting 6
13464+‘‘acting as a commodity pool operator 7
13465+or commodity trading advisor’’; and 8
13466+(2) in subparagraph (C), by inserting 9
13467+‘‘digital commodities,’’ after ‘‘physical 10
13468+commodities,’’. 11
13469+SEC. 409. EXCLUSION FOR ANCILLARY ACTIVITIES. 12
13470+The Commodity Exchange Act (7 U.S.C. 1 13
13471+et seq.), as amended by the preceding provi-14
13472+sions of this Act, is amended by inserting after 15
13473+section 4u the following: 16
13474+‘‘SEC. 4v. EXCLUSION FOR ANCILLARY ACTIVITIES. 17
13475+‘‘(a) I
13476+NGENERAL.—Notwithstanding any 18
13477+other provision of this Act, a person shall not 19
13478+be subject to this Act and the regulations pro-20
13479+mulgated under this Act solely based on the 21
13480+person undertaking any ancillary activities. 22
13481+‘‘(b) E
13482+XCEPTIONS.—Subsection (a) shall not 23
13483+be construed to apply to the 24
13484+antimanipulation, antifraud, or false report-25
13485+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00447 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13486+rfrederick on LAP8M3WLY3PROD with BILLS 448
13487+•HR 4763 RH
13488+ing enforcement authorities of the Commis-1
13489+sion. 2
13490+‘‘(c) A
13491+NCILLARY ACTIVITIESDEFINED.—In 3
13492+this section, the term ‘ancillary activities’ 4
13493+means any of the following activities related 5
13494+to the operation of a blockchain system: 6
13495+‘‘(1) Compiling network transactions, 7
13496+operating a pool, relaying, searching, se-8
13497+quencing, validating, or acting in a simi-9
13498+lar capacity with respect to a digital com-10
13499+modity transaction. 11
13500+‘‘(2) Providing computational work, 12
13501+operating a node, or procuring, offering, 13
13502+or utilizing network bandwidth, or other 14
13503+similar incidental services with respect 15
13504+to a digital commodity transaction. 16
13505+‘‘(3) Providing a user interface that 17
13506+enables a user to read, and access data 18
13507+about a blockchain system, send mes-19
13508+sages, or otherwise interact with a 20
13509+blockchain system. 21
13510+‘‘(4) Developing, publishing, consti-22
13511+tuting, administering, maintaining, or 23
13512+otherwise distributing a blockchain sys-24
13513+tem. 25
13514+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00448 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13515+rfrederick on LAP8M3WLY3PROD with BILLS 449
13516+•HR 4763 RH
13517+‘‘(5) Developing, publishing, consti-1
13518+tuting, administering, maintaining, or 2
13519+otherwise distributing software or sys-3
13520+tems that create or deploy hardware or 4
13521+software, including wallets or other sys-5
13522+tems, facilitating an individual user’s 6
13523+own personal ability to keep, safeguard, 7
13524+or custody a user’s digital commodities or 8
13525+related private keys.’’. 9
13526+SEC. 410. EFFECTIVE DATE. 10
13527+Unless otherwise provided in this title, 11
13528+this title and the amendments made by this 12
13529+title shall take effect 360 days after the date 13
13530+of enactment of this Act, except that, to the 14
13531+extent a provision of this title requires a rule-15
13532+making, the provision shall take effect on the 16
13533+later of— 17
13534+(1) 360 days after the date of enact-18
13535+ment of this Act; or 19
13536+(2) 60 days after the publication in 20
13537+the Federal Register of the final rule im-21
13538+plementing the provision. 22
13539+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00449 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13540+rfrederick on LAP8M3WLY3PROD with BILLS 450
13541+•HR 4763 RH
13542+TITLE V—INNOVATION AND 1
13543+TECHNOLOGY IMPROVEMENTS 2
13544+SEC. 501. CODIFICATION OF THE SEC STRATEGIC HUB FOR 3
13545+INNOVATION AND FINANCIAL TECHNOLOGY. 4
13546+Section 4 of the Securities Exchange Act 5
13547+of 1934 (15 U.S.C. 78d) is amended by adding 6
13548+at the end the following: 7
13549+‘‘(l) S
13550+TRATEGICHUB FORINNOVATION AND FI-8
13551+NANCIALTECHNOLOGY .— 9
13552+‘‘(1) O
13553+FFICE ESTABLISHED .—There is es-10
13554+tablished within the Commission the 11
13555+Strategic Hub for Innovation and Finan-12
13556+cial Technology (referred to in this sec-13
13557+tion as the ‘FinHub’). 14
13558+‘‘(2) P
13559+URPOSES.—The purposes of 15
13560+FinHub are as follows: 16
13561+‘‘(A) To assist in shaping the ap-17
13562+proach of the Commission to techno-18
13563+logical advancements in the financial 19
13564+industry. 20
13565+‘‘(B) To examine financial tech-21
13566+nology innovations within capital 22
13567+markets, market participants, and in-23
13568+vestors. 24
13569+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00450 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13570+rfrederick on LAP8M3WLY3PROD with BILLS 451
13571+•HR 4763 RH
13572+‘‘(C) To coordinate the response of 1
13573+the Commission to emerging tech-2
13574+nologies in financial, regulatory, and 3
13575+supervisory systems. 4
13576+‘‘(3) D
13577+IRECTOR OF FINHUB .—FinHub 5
13578+shall have a Director who shall be ap-6
13579+pointed by the Commission, from among 7
13580+individuals having experience in both 8
13581+emerging technologies and Federal secu-9
13582+rities law and serve at the pleasure of the 10
13583+Commission. The Director shall report di-11
13584+rectly to the Commission and perform 12
13585+such functions and duties as the Commis-13
13586+sion may prescribe. 14
13587+‘‘(4) R
13588+ESPONSIBILITIES.—FinHub 15
13589+shall— 16
13590+‘‘(A) foster responsible techno-17
13591+logical innovation and fair competi-18
13592+tion within the Commission, includ-19
13593+ing around financial technology, reg-20
13594+ulatory technology, and supervisory 21
13595+technology; 22
13596+‘‘(B) provide internal education 23
13597+and training to the Commission re-24
13598+garding financial technology; 25
13599+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00451 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13600+rfrederick on LAP8M3WLY3PROD with BILLS 452
13601+•HR 4763 RH
13602+‘‘(C) advise the Commission re-1
13603+garding financial technology that 2
13604+would serve the Commission’s over-3
13605+sight functions; 4
13606+‘‘(D) analyze technological ad-5
13607+vancements and the impact of regu-6
13608+latory requirements on financial tech-7
13609+nology companies; 8
13610+‘‘(E) advise the Commission with 9
13611+respect to rulemakings or other agen-10
13612+cy or staff action regarding financial 11
13613+technology; 12
13614+‘‘(F) provide businesses working 13
13615+in emerging financial technology 14
13616+fields with information on the Com-15
13617+mission, its rules and regulations; and 16
13618+‘‘(G) encourage firms working in 17
13619+emerging technology fields to engage 18
13620+with the Commission and obtain feed-19
13621+back from the Commission on poten-20
13622+tial regulatory issues. 21
13623+‘‘(5) A
13624+CCESS TO DOCUMENTS .—The Com-22
13625+mission shall ensure that FinHub has full 23
13626+access to the documents and information 24
13627+of the Commission and any self-regu-25
13628+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00452 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13629+rfrederick on LAP8M3WLY3PROD with BILLS 453
13630+•HR 4763 RH
13631+latory organization, as necessary to carry 1
13632+out the functions of FinHub. 2
13633+‘‘(6) R
13634+EPORT TO CONGRESS .— 3
13635+‘‘(A) I
13636+N GENERAL .—Not later than 4
13637+October 31 of each year after 2024, 5
13638+FinHub shall submit to the Com-6
13639+mittee on Banking, Housing, and 7
13640+Urban Affairs of the Senate and the 8
13641+Committee on Financial Services of 9
13642+the House of Representatives a report 10
13643+on the activities of FinHub during the 11
13644+immediately preceding fiscal year. 12
13645+‘‘(B) C
13646+ONTENTS.—Each report re-13
13647+quired under subparagraph (A) shall 14
13648+include— 15
13649+‘‘(i) the total number of per-16
13650+sons that met with FinHub; 17
13651+‘‘(ii) the total number of mar-18
13652+ket participants FinHub met with, 19
13653+including the classification of 20
13654+those participants; 21
13655+‘‘(iii) a summary of general 22
13656+issues discussed during meetings 23
13657+with persons; 24
13658+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00453 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13659+rfrederick on LAP8M3WLY3PROD with BILLS 454
13660+•HR 4763 RH
13661+‘‘(iv) information on steps 1
13662+FinHub has taken to improve 2
13663+Commission services, including 3
13664+responsiveness to the concerns of 4
13665+persons; 5
13666+‘‘(v) recommendations— 6
13667+‘‘(I) with respect to the 7
13668+regulations of the Commission 8
13669+and the guidance and orders 9
13670+of the Commission; and 10
13671+‘‘(II) for such legislative 11
13672+actions as the FinHub deter-12
13673+mines appropriate; and 13
13674+‘‘(vi) any other information, as 14
13675+determined appropriate by the 15
13676+Director of FinHub. 16
13677+‘‘(C) C
13678+ONFIDENTIALITY .—A report 17
13679+under subparagraph (A) may not con-18
13680+tain confidential information. 19
13681+‘‘(7) S
13682+YSTEMS OF RECORDS .— 20
13683+‘‘(A) I
13684+N GENERAL .—The Commis-21
13685+sion shall establish a detailed system 22
13686+of records (as defined under section 23
13687+552a of title 5, United States Code) to 24
13688+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00454 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13689+rfrederick on LAP8M3WLY3PROD with BILLS 455
13690+•HR 4763 RH
13691+assist FinHub in communicating with 1
13692+interested parties. 2
13693+‘‘(B) E
13694+NTITIES COVERED BY THE SYS -3
13695+TEM.—Entities covered by the system 4
13696+required under subparagraph (A) in-5
13697+clude entities or persons submitting 6
13698+requests or inquiries and other infor-7
13699+mation to Commission through 8
13700+FinHub. 9
13701+‘‘(C) S
13702+ECURITY AND STORAGE OF 10
13703+RECORDS.—FinHub shall store— 11
13704+‘‘(i) electronic records— 12
13705+‘‘(I) in the system required 13
13706+under subparagraph (A); or 14
13707+‘‘(II) on the secure net-15
13708+work or other electronic me-16
13709+dium, such as encrypted hard 17
13710+drives or back-up media, of 18
13711+the Commission; and 19
13712+‘‘(ii) paper records in secure 20
13713+facilities. 21
13714+‘‘(8) E
13715+FFECTIVE DATE .—This subsection 22
13716+shall take effect on the date that is 180 23
13717+days after the date of the enactment of 24
13718+this subsection.’’. 25
13719+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00455 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13720+rfrederick on LAP8M3WLY3PROD with BILLS 456
13721+•HR 4763 RH
13722+SEC. 502. CODIFICATION OF LABCFTC. 1
620813723 (a) I
6209-NGENERAL.—Section 4m(3) of the Commodity 12
6210-Exchange Act (7 U.S.C. 6m(3)) is amended— 13
6211-(1) in subparagraph (A)— 14
6212-(A) by striking ‘‘any commodity trading 15
6213-advisor’’ and inserting ‘‘a commodity pool oper-16
6214-ator or commodity trading advisor’’; and 17
6215-(B) by striking ‘‘acting as a commodity 18
6216-trading advisor’’ and inserting ‘‘acting as a 19
6217-commodity pool operator or commodity trading 20
6218-advisor’’; and 21
6219-(2) in subparagraph (C), by inserting ‘‘digital 22
6220-commodities,’’ after ‘‘physical commodities,’’. 23 221
6221-•HR 4763 EH
6222-(b) EXEMPTIVEAUTHORITY.—Section 4m of such 1
6223-Act (7 U.S.C. 6m) is amended by adding at the end the 2
6224-following: 3
6225-‘‘(4) E
6226-XEMPTIVEAUTHORITY.—The Commission 4
6227-shall promulgate rules to provide appropriate exemptions 5
6228-for commodity pool operators and commodity trading advi-6
6229-sors, to provide relief from duplicative, conflicting, or un-7
6230-duly burdensome requirements or to promote responsible 8
6231-innovation, to the extent the exemptions foster the devel-9
6232-opment of fair and orderly cash or spot digital commodity 10
6233-markets, are necessary or appropriate in the public inter-11
6234-est, and are consistent with the protection of customers.’’. 12
6235-SEC. 509. EXCLUSION FOR DECENTRALIZED FINANCE AC-13
6236-TIVITIES. 14
6237-The Commodity Exchange Act (7 U.S.C. 1 et seq.), 15
6238-as amended by the preceding provisions of this Act, is 16
6239-amended by inserting after section 4u the following: 17
6240-‘‘SEC. 4v. DECENTRALIZED FINANCE ACTIVITIES NOT SUB-18
6241-JECT TO THIS ACT. 19
13724+NGENERAL.—Section 18 of the Com-2
13725+modity Exchange Act (7 U.S.C. 22) is amended 3
13726+by adding at the end the following: 4
13727+‘‘(c) L
13728+ABCFTC.— 5
13729+‘‘(1) E
13730+STABLISHMENT .—There is estab-6
13731+lished in the Commission LabCFTC. 7
13732+‘‘(2) P
13733+URPOSE.—The purposes of 8
13734+LabCFTC are to— 9
13735+‘‘(A) promote responsible finan-10
13736+cial technology innovation and fair 11
13737+competition for the benefit of the 12
13738+American public; 13
13739+‘‘(B) serve as an information plat-14
13740+form to inform the Commission about 15
13741+new financial technology innovation; 16
13742+and 17
13743+‘‘(C) provide outreach to financial 18
13744+technology innovators to discuss 19
13745+their innovations and the regulatory 20
13746+framework established by this Act 21
13747+and the regulations promulgated 22
13748+thereunder. 23
13749+‘‘(3) D
13750+IRECTOR.—LabCFTC shall have a 24
13751+Director, who shall be appointed by the 25
13752+Commission and serve at the pleasure of 26
13753+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00456 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13754+rfrederick on LAP8M3WLY3PROD with BILLS 457
13755+•HR 4763 RH
13756+the Commission. Notwithstanding section 1
13757+2(a)(6)(A), the Director shall report di-2
13758+rectly to the Commission and perform 3
13759+such functions and duties as the Commis-4
13760+sion may prescribe. 5
13761+‘‘(4) D
13762+UTIES.—LabCFTC shall— 6
13763+‘‘(A) advise the Commission with 7
13764+respect to rulemakings or other agen-8
13765+cy or staff action regarding financial 9
13766+technology; 10
13767+‘‘(B) provide internal education 11
13768+and training to the Commission re-12
13769+garding financial technology; 13
13770+‘‘(C) advise the Commission re-14
13771+garding financial technology that 15
13772+would bolster the Commission’s over-16
13773+sight functions; 17
13774+‘‘(D) engage with academia, stu-18
13775+dents, and professionals on financial 19
13776+technology issues, ideas, and tech-20
13777+nology relevant to activities under 21
13778+this Act; 22
13779+‘‘(E) provide persons working in 23
13780+emerging technology fields with in-24
13781+formation on the Commission, its 25
13782+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00457 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13783+rfrederick on LAP8M3WLY3PROD with BILLS 458
13784+•HR 4763 RH
13785+rules and regulations, and the role of 1
13786+a registered futures association; and 2
13787+‘‘(F) encourage persons working 3
13788+in emerging technology fields to en-4
13789+gage with the Commission and obtain 5
13790+feedback from the Commission on po-6
13791+tential regulatory issues. 7
13792+‘‘(5) A
13793+CCESS TO DOCUMENTS .—The Com-8
13794+mission shall ensure that LabCFTC has 9
13795+full access to the documents and informa-10
13796+tion of the Commission and any self-regu-11
13797+latory organization or registered futures 12
13798+association, as necessary to carry out the 13
13799+functions of LabCFTC. 14
13800+‘‘(6) R
13801+EPORT TO CONGRESS .— 15
624213802 ‘‘(A) I
6243-NGENERAL.—Notwithstanding any other pro-20
6244-vision of this Act, a person shall not be subject to this 21
6245-Act and the regulations promulgated under this Act based 22
6246-on the person directly or indirectly engaging in any of the 23
6247-following activities, whether singly or in combination, in 24
6248-relation to the operation of a blockchain system or in rela-25 222
6249-•HR 4763 EH
6250-tion to decentralized finance (as defined in section 605(d) 1
6251-of the Financial Innovation and Technology for the 21st 2
6252-Century Act): 3
6253-‘‘(1) Compiling network transactions, operating 4
6254-or participating in a liquidity pool, relaying, search-5
6255-ing, sequencing, validating, or acting in a similar ca-6
6256-pacity with respect to contract of sale of a digital 7
6257-asset. 8
6258-‘‘(2) Providing computational work, operating a 9
6259-node, or procuring, offering, or utilizing network 10
6260-bandwidth, or other similar incidental services with 11
6261-respect to a contract of sale of a digital asset. 12
6262-‘‘(3) Providing a user-interface that enables a 13
6263-user to read, and access data about a blockchain 14
6264-system, send messages, or otherwise interact with a 15
6265-blockchain system. 16
6266-‘‘(4) Developing, publishing, constituting, ad-17
6267-ministering, maintaining, or otherwise distributing a 18
6268-blockchain system. 19
6269-‘‘(5) Developing, publishing, constituting, ad-20
6270-ministering, maintaining, or otherwise distributing 21
6271-software or systems that create or deploy hardware 22
6272-or software, including wallets or other systems, fa-23
6273-cilitating an individual user’s own personal ability to 24 223
6274-•HR 4763 EH
6275-keep, safeguard, or custody the user’s digital com-1
6276-modities or related private keys. 2
6277-‘‘(b) E
6278-XCEPTIONS.—Subsection (a) shall not be inter-3
6279-preted to apply to the anti-fraud, anti-manipulation, or 4
6280-false reporting enforcement authorities of the Commis-5
6281-sion.’’. 6
6282-SEC. 510. FUNDING FOR IMPLEMENTATION AND ENFORCE-7
6283-MENT. 8
13803+N GENERAL .—Not later than 16
13804+October 31 of each year after 2024, 17
13805+LabCFTC shall submit to the Com-18
13806+mittee on Agriculture of the House of 19
13807+Representatives and the Committee 20
13808+on Agriculture, Nutrition, and For-21
13809+estry of the Senate a report on its ac-22
13810+tivities. 23
13811+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00458 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13812+rfrederick on LAP8M3WLY3PROD with BILLS 459
13813+•HR 4763 RH
13814+‘‘(B) CONTENTS.—Each report re-1
13815+quired under paragraph (1) shall in-2
13816+clude— 3
13817+‘‘(i) the total number of per-4
13818+sons that met with LabCFTC; 5
13819+‘‘(ii) a summary of general 6
13820+issues discussed during meetings 7
13821+with the person; 8
13822+‘‘(iii) information on steps 9
13823+LabCFTC has taken to improve 10
13824+Commission services, including 11
13825+responsiveness to the concerns of 12
13826+persons; 13
13827+‘‘(iv) recommendations made 14
13828+to the Commission with respect to 15
13829+the regulations, guidance, and or-16
13830+ders of the Commission and such 17
13831+legislative actions as may be ap-18
13832+propriate; and 19
13833+‘‘(v) any other information de-20
13834+termined appropriate by the Di-21
13835+rector of LabCFTC. 22
13836+‘‘(C) C
13837+ONFIDENTIALITY .—A report 23
13838+under paragraph (A) shall abide by 24
13839+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00459 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13840+rfrederick on LAP8M3WLY3PROD with BILLS 460
13841+•HR 4763 RH
13842+the confidentiality requirements in 1
13843+section 8. 2
13844+‘‘(7) S
13845+YSTEMS OF RECORDS .— 3
13846+‘‘(A) I
13847+N GENERAL .—The Commis-4
13848+sion shall establish a detailed system 5
13849+of records (as defined in section 552a 6
13850+of title 5, United States Code) to as-7
13851+sist LabCFTC in communicating with 8
13852+interested parties. 9
13853+‘‘(B) P
13854+ERSONS COVERED BY THE SYS -10
13855+TEM.—The persons covered by the sys-11
13856+tem of records shall include persons 12
13857+submitting requests or inquiries and 13
13858+other information to the Commission 14
13859+through LabCFTC. 15
13860+‘‘(C) S
13861+ECURITY AND STORAGE OF 16
13862+RECORDS.—The system of records shall 17
13863+store records electronically or on 18
13864+paper in secure facilities, and shall 19
13865+store electronic records on the secure 20
13866+network of the Commission and on 21
13867+other electronic media, such as 22
13868+encrypted hard drives and back-up 23
13869+media, as needed.’’. 24
13870+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00460 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13871+rfrederick on LAP8M3WLY3PROD with BILLS 461
13872+•HR 4763 RH
13873+(b) CONFORMING AMENDMENTS .—Section 1
13874+2(a)(6)(A) of such Act (7 U.S.C. 2(a)(6)(A)) is 2
13875+amended— 3
13876+(1) by striking ‘‘paragraph and in’’ 4
13877+and inserting ‘‘paragraph,’’; and 5
13878+(2) by inserting ‘‘and section 18(c)(3),’’ 6
13879+before ‘‘the executive’’. 7
13880+(c) E
13881+FFECTIVEDATE.—The Commodity Fu-8
13882+tures Trading Commission shall implement 9
13883+the amendments made by this section (includ-10
13884+ing complying with section 18(c)(7) of the 11
13885+Commodity Exchange Act) within 180 days 12
13886+after the date of the enactment of this Act. 13
13887+SEC. 503. CFTC-SEC JOINT ADVISORY COMMITTEE ON DIG-14
13888+ITAL ASSETS. 15
13889+(a) E
13890+STABLISHMENT .—The Commodity Fu-16
13891+tures Trading Commission and the Securities 17
13892+and Exchange Commission (in this section re-18
13893+ferred to as the ‘‘Commissions’’) shall jointly 19
13894+establish the Joint Advisory Committee on 20
13895+Digital Assets (in this section referred to as 21
13896+the ‘‘Committee’’). 22
13897+(b) P
13898+URPOSE.— 23
13899+(1) I
13900+N GENERAL .—The Committee 24
13901+shall— 25
13902+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00461 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13903+rfrederick on LAP8M3WLY3PROD with BILLS 462
13904+•HR 4763 RH
13905+(A) provide the Commissions with 1
13906+advice on the rules, regulations, and 2
13907+policies of the Commissions related to 3
13908+digital assets; 4
13909+(B) further the regulatory harmo-5
13910+nization of digital asset policy be-6
13911+tween the Commissions; 7
13912+(C) examine and disseminate 8
13913+methods for describing, measuring, 9
13914+and quantifying digital asset— 10
13915+(i) decentralization; 11
13916+(ii) functionality; 12
13917+(iii) information asymmetries; 13
13918+and 14
13919+(iv) transaction and network 15
13920+security; 16
13921+(D) examine the potential for dig-17
13922+ital assets, blockchain systems, and 18
13923+distributed ledger technology to im-19
13924+prove efficiency in the operation of fi-20
13925+nancial market infrastructure and 21
13926+better protect financial market par-22
13927+ticipants, including services and sys-23
13928+tems which provide— 24
13929+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00462 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13930+rfrederick on LAP8M3WLY3PROD with BILLS 463
13931+•HR 4763 RH
13932+(i) improved customer protec-1
13933+tions; 2
13934+(ii) public availability of infor-3
13935+mation; 4
13936+(iii) greater transparency re-5
13937+garding customer funds; 6
13938+(iv) reduced transaction cost; 7
13939+and 8
13940+(v) increased access to finan-9
13941+cial market services; and 10
13942+(E) discuss the implementation by 11
13943+the Commissions of this Act and the 12
13944+amendments made by this Act. 13
13945+(2) R
13946+EVIEW BY AGENCIES .—Each Com-14
13947+mission shall— 15
13948+(A) review the findings and rec-16
13949+ommendations of the Committee; 17
13950+(B) promptly issue a public state-18
13951+ment each time the Committee sub-19
13952+mits a finding or recommendation to 20
13953+a Commission— 21
13954+(i) assessing the finding or 22
13955+recommendation of the Com-23
13956+mittee; 24
13957+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00463 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13958+rfrederick on LAP8M3WLY3PROD with BILLS 464
13959+•HR 4763 RH
13960+(ii) disclosing the action or 1
13961+decision not to take action made 2
13962+by the Commission in response to 3
13963+a finding or recommendation; and 4
13964+(iii) explaining the reasons for 5
13965+the action or decision not to take 6
13966+action; and 7
13967+(C) each time the Committee sub-8
13968+mits a finding or recommendation to 9
13969+a Commission, provide the Committee 10
13970+with a formal response to the finding 11
13971+or recommendation not later than 3 12
13972+months after the date of the submis-13
13973+sion of the finding or recommenda-14
13974+tion. 15
13975+(c) M
13976+EMBERSHIP AND LEADERSHIP.— 16
13977+(1) N
13978+ON-FEDERAL MEMBERS .— 17
13979+(A) I
13980+N GENERAL .—The Commis-18
13981+sions shall appoint at least 20 non-19
13982+governmental stakeholders with a 20
13983+wide diversity of opinion and who 21
13984+represent a broad spectrum of inter-22
13985+ests representing the digital asset 23
13986+ecosystem, equally divided between 24
13987+the Commissions, to serve as mem-25
13988+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00464 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
13989+rfrederick on LAP8M3WLY3PROD with BILLS 465
13990+•HR 4763 RH
13991+bers of the Committee. The ap-1
13992+pointees shall include— 2
13993+(i) digital asset issuers; 3
13994+(ii) persons registered with 4
13995+the Commissions and engaged in 5
13996+digital asset related activities; 6
13997+(iii) individuals engaged in 7
13998+academic research relating to dig-8
13999+ital assets; and 9
14000+(iv) digital asset users. 10
14001+(B) M
14002+EMBERS NOT COMMISSION EM -11
14003+PLOYEES.—Members appointed under 12
14004+subparagraph (A) shall not be deemed 13
14005+to be employees or agents of a Com-14
14006+mission solely by reason of member-15
14007+ship on the Committee. 16
14008+(2) C
14009+O-DESIGNATED FEDERAL OFFI -17
14010+CERS.— 18
14011+(A) N
14012+UMBER; APPOINTMENT .—There 19
14013+shall be 2 co-designated Federal offi-20
14014+cers of the Committee, as follows: 21
14015+(i) The Director of LabCFTC 22
14016+of the Commodity Futures Trad-23
14017+ing Commission. 24
14018+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00465 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
14019+rfrederick on LAP8M3WLY3PROD with BILLS 466
14020+•HR 4763 RH
14021+(ii) The Director of the Stra-1
14022+tegic Hub for Innovation and Fi-2
14023+nancial Technology of the Securi-3
14024+ties and Exchange Commission. 4
14025+(B) D
14026+UTIES.—The duties required 5
14027+by chapter 10 of title 5, United States 6
14028+Code, to be carried out by a des-7
14029+ignated Federal officer with respect 8
14030+to the Committee shall be shared by 9
14031+the co-designated Federal officers of 10
14032+the Committee. 11
14033+(3) C
14034+OMMITTEE LEADERSHIP .— 12
628414035 (A) C
6285-OLLECTION OFFEES.— 9
6286-(1) I
6287-N GENERAL.—The Commodity Futures 10
6288-Trading Commission (in this section referred to as 11
6289-the ‘‘Commission’’) shall charge and collect a filing 12
6290-fee from each person who files with the Commission 13
6291-a notice of intent to register as a digital commodity 14
6292-exchange, digital commodity broker, or digital com-15
6293-modity dealer pursuant to section 106. 16
6294-(2) A
6295-MOUNT.—The fees authorized under para-17
6296-graph (1) may be collected and available for obliga-18
6297-tion only in the amounts provided in advance in an 19
6298-appropriation Act. 20
6299-(3) A
6300-UTHORITY TO ADJUST FEES .—Notwith-21
6301-standing the preceding provisions of this subsection, 22
6302-to promote fair competition or innovation, the Com-23
6303-mission, in its sole discretion, may reduce or elimi-24 224
6304-•HR 4763 EH
6305-nate any fee otherwise required to be paid by a small 1
6306-or medium filer under this subsection. 2
6307-(b) F
6308-EESCHEDULE.— 3
6309-(1) I
6310-N GENERAL.—The Commission shall pub-4
6311-lish in the Federal Register a schedule of the fees 5
6312-to be charged and collected under this section. 6
6313-(2) C
6314-ONTENT.—The fee schedule for a fiscal 7
6315-year shall include a written analysis of the estimate 8
6316-of the Commission of the total costs of carrying out 9
6317-the functions of the Commission under this Act dur-10
6318-ing the fiscal year. 11
6319-(3) S
6320-UBMISSION TO CONGRESS .—Before pub-12
6321-lishing the fee schedule for a fiscal year, the Com-13
6322-mission shall submit a copy of the fee schedule to 14
6323-the Congress. 15
6324-(4) T
6325-IMING.— 16
6326-(A) 1
6327-ST FISCAL YEAR.—The Commission 17
6328-shall publish the fee schedule for the fiscal year 18
6329-in which this Act is enacted, within 30 days 19
6330-after the date of the enactment of this Act. 20
14036+OMPOSITION; ELECTION.—The 13
14037+Committee members shall elect, from 14
14038+among the Committee members— 15
14039+(i) a chair; 16
14040+(ii) a vice chair; 17
14041+(iii) a secretary; and 18
14042+(iv) an assistant secretary. 19
14043+(B) T
14044+ERM OF OFFICE .—Each mem-20
14045+ber elected under subparagraph (A) 21
14046+in a 2-year period referred to in sec-22
14047+tion 1013(b)(2) of title 5, United States 23
14048+Code, shall serve in the capacity for 24
14049+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00466 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
14050+rfrederick on LAP8M3WLY3PROD with BILLS 467
14051+•HR 4763 RH
14052+which the member was so elected, 1
14053+until the end of the 2-year period. 2
14054+(d) N
14055+OCOMPENSATION FOR COMMITTEE 3
14056+M
14057+EMBERS.— 4
14058+(1) N
14059+ON-FEDERAL MEMBERS .—All Com-5
14060+mittee members appointed under sub-6
14061+section (c)(1) shall— 7
14062+(A) serve without compensation; 8
14063+and 9
14064+(B) while away from the home or 10
14065+regular place of business of the mem-11
14066+ber in the performance of services for 12
14067+the Committee, be allowed travel ex-13
14068+penses, including per diem in lieu of 14
14069+subsistence, in the same manner as 15
14070+persons employed intermittently in 16
14071+the Government service are allowed 17
14072+expenses under section 5703(b) of 18
14073+title 5, United States Code. 19
14074+(2) N
14075+O COMPENSATION FOR CO -DES-20
14076+IGNATED FEDERAL OFFICERS .—The co-des-21
14077+ignated Federal officers shall serve with-22
14078+out compensation in addition to that re-23
14079+ceived for their services as officers or em-24
14080+ployees of the United States. 25
14081+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00467 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
14082+rfrederick on LAP8M3WLY3PROD with BILLS 468
14083+•HR 4763 RH
14084+(e) FREQUENCY OF MEETINGS.—The Com-1
14085+mittee shall meet— 2
14086+(1) not less frequently than twice an-3
14087+nually; and 4
14088+(2) at such other times as either Com-5
14089+mission may request. 6
14090+(f) D
14091+URATION.—Section 1013(a)(2) of title 5, 7
14092+United States Code, shall not apply to the 8
14093+Committee. 9
14094+(g) T
14095+IMELIMITS.—The Commissions shall— 10
14096+(1) adopt a joint charter for the Com-11
14097+mittee within 90 days after the date of 12
14098+the enactment of this section; 13
14099+(2) appoint members to the Com-14
14100+mittee within 120 days after such date of 15
14101+enactment; and 16
14102+(3) hold the initial meeting of the 17
14103+Committee within 180 days after such 18
14104+date of enactment. 19
14105+(h) F
14106+UNDING.—The Commissions shall 20
14107+jointly fund the Committee. 21
14108+SEC. 504. STUDY ON DECENTRALIZED FINANCE. 22
14109+(a) I
14110+NGENERAL.—The Commodity Futures 23
14111+Trading Commission and the Securities and 24
14112+Exchange Commission shall jointly carry out 25
14113+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00468 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
14114+rfrederick on LAP8M3WLY3PROD with BILLS 469
14115+•HR 4763 RH
14116+a study on decentralized finance that ana-1
14117+lyzes— 2
14118+(1) the nature, size, role, and use of 3
14119+decentralized finance blockchain proto-4
14120+cols; 5
14121+(2) the operation of blockchain proto-6
14122+cols that comprise decentralized finance; 7
14123+(3) the interoperability of blockchain 8
14124+protocols and blockchain systems; 9
14125+(4) the interoperability of blockchain 10
14126+protocols and software-based systems, in-11
14127+cluding websites and wallets; 12
14128+(5) the decentralized governance sys-13
14129+tems through which blockchain protocols 14
14130+may be developed, published, constituted, 15
14131+administered, maintained, or otherwise 16
14132+distributed, including— 17
14133+(A) whether the systems enhance 18
14134+or detract from— 19
14135+(i) the decentralization of the 20
14136+decentralized finance; and 21
14137+(ii) the inherent risks of the 22
14138+decentralized governance system; 23
14139+and 24
14140+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00469 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
14141+rfrederick on LAP8M3WLY3PROD with BILLS 470
14142+•HR 4763 RH
14143+(B) any procedures or require-1
14144+ments that would mitigate the risks 2
14145+identified in subparagraph (A)(ii); 3
14146+(6) the benefits of decentralized fi-4
14147+nance, including— 5
14148+(A) operational resilience and 6
14149+interoperability of blockchain-based 7
14150+systems; 8
14151+(B) market competition and inno-9
14152+vation; 10
14153+(C) transaction efficiency; 11
14154+(D) transparency and traceability 12
14155+of transactions; and 13
14156+(E) disintermediation; 14
14157+(7) the risks of decentralized finance, 15
14158+including— 16
14159+(A) pseudonymity of users and 17
14160+transactions; 18
14161+(B) disintermediation; and 19
14162+(C) cybersecurity vulnerabilities; 20
14163+(8) the extent to which decentralized 21
14164+finance has integrated with the tradi-22
14165+tional financial markets and any poten-23
14166+tial risks to stability of the markets; 24
14167+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00470 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
14168+rfrederick on LAP8M3WLY3PROD with BILLS 471
14169+•HR 4763 RH
14170+(9) how the levels of illicit activity in 1
14171+decentralized finance compare with the 2
14172+levels of illicit activity in traditional fi-3
14173+nancial markets; 4
14174+(10) how decentralized finance may 5
14175+increase the accessibility of cross-border 6
14176+transactions; and 7
14177+(11) the feasibility of embedding self- 8
14178+executing compliance and risk controls 9
14179+into decentralized finance. 10
14180+(b) R
14181+EPORT.—Not later than 1 year after 11
14182+the date of enactment of this Act, the Com-12
14183+modity Futures Trading Commission and the 13
14184+Securities and Exchange Commission shall 14
14185+jointly submit to the relevant congressional 15
14186+committees a report that includes the results 16
14187+of the study required by subsection (a). 17
14188+(c) GAO S
14189+TUDY.—The Comptroller General 18
14190+of the United States shall— 19
14191+(1) carry out a study on decentralized 20
14192+finance that analyzes the information de-21
14193+scribed under paragraphs (1) through 22
14194+(11) of subsection (a); and 23
14195+(2) not later than 1 year after the date 24
14196+of enactment of this Act, submit to the 25
14197+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00471 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
14198+rfrederick on LAP8M3WLY3PROD with BILLS 472
14199+•HR 4763 RH
14200+relevant congressional committees a re-1
14201+port that includes the results of the study 2
14202+required by paragraph (1). 3
14203+(d) D
14204+EFINITIONS.—In this section: 4
14205+(1) D
14206+ECENTRALIZED FINANCE .— 5
14207+(A) I
14208+N GENERAL.—The term ‘‘decen-6
14209+tralized finance’’ means blockchain 7
14210+protocols that allow users to engage 8
14211+in financial transactions in a self-di-9
14212+rected manner so that a third-party 10
14213+intermediary does not effectuate the 11
14214+transactions or take custody of dig-12
14215+ital assets of a user during any part 13
14216+of the transactions. 14
14217+(B) R
14218+ELATIONSHIP TO ANCILLARY AC -15
14219+TIVITIES.—The term ‘‘decentralized fi-16
14220+nance’’ shall not be interpreted to 17
14221+limit or exclude any activity from the 18
14222+meaning of ‘‘ancillary activities’’, as 19
14223+defined in section 15H(c) of the Secu-20
14224+rities Exchange Act of 1934 or section 21
14225+4v(c) of the Commodity Exchange Act. 22
14226+(2) R
14227+ELEVANT CONGRESSIONAL COMMIT -23
14228+TEES.—The term ‘‘relevant congressional 24
14229+committees’’ means— 25
14230+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00472 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
14231+rfrederick on LAP8M3WLY3PROD with BILLS 473
14232+•HR 4763 RH
14233+(A) the Committees on Financial 1
14234+Services and Agriculture of the House 2
14235+of Representatives; and 3
14236+(B) the Committees on Banking, 4
14237+Housing, and Urban Affairs and Agri-5
14238+culture, Nutrition, and Forestry of 6
14239+the Senate. 7
14240+SEC. 505. STUDY ON NON-FUNGIBLE DIGITAL ASSETS. 8
14241+(a) The Comptroller General of the United 9
14242+States shall carry out a study of non-fungible 10
14243+digital assets that analyzes— 11
14244+(1) the nature, size, role, purpose, and 12
14245+use of non-fungible digital assets; 13
14246+(2) the similarities and differences be-14
14247+tween non-fungible digital assets and 15
14248+other digital assets, including digital 16
14249+commodities and payment stablecoins, 17
14250+and how the markets for those digital as-18
14251+sets intersect with each other; 19
14252+(3) how non-fungible digital assets 20
14253+are minted by issuers and subsequently 21
14254+administered to purchasers; 22
14255+(4) how non-fungible digital assets 23
14256+are stored after being purchased by a 24
14257+consumer; 25
14258+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00473 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
14259+rfrederick on LAP8M3WLY3PROD with BILLS 474
14260+•HR 4763 RH
14261+(5) the interoperability of non-fun-1
14262+gible digital assets between different 2
14263+blockchain systems; 3
14264+(6) the scalability of different non- 4
14265+fungible digital asset marketplaces; 5
14266+(7) the benefits of non-fungible digital 6
14267+assets, including verifiable digital owner-7
14268+ship; 8
14269+(8) the risks of non-fungible tokens, 9
14270+including— 10
14271+(A) intellectual property rights; 11
14272+(B) cybersecurity risks; and 12
14273+(C) market risks; 13
14274+(9) whether and how non-fungible 14
14275+digital assets have integrated with tradi-15
14276+tional marketplaces, including those for 16
14277+music, real estate, gaming, events, and 17
14278+travel; 18
14279+(10) whether non-fungible tokens can 19
14280+be used to facilitate commerce or other 20
14281+activities through the representation of 21
14282+documents, identification, contracts, li-22
14283+censes, and other commercial, govern-23
14284+ment, or personal records; 24
14285+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00474 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
14286+rfrederick on LAP8M3WLY3PROD with BILLS 475
14287+•HR 4763 RH
14288+(11) any potential risks to traditional 1
14289+markets from such integration; and 2
14290+(12) the levels and types of illicit ac-3
14291+tivity in non-fungible digital asset mar-4
14292+kets. 5
14293+(b) R
14294+EPORT.—Not later than 1 year after 6
14295+the date of the enactment of this Act, the Sec-7
14296+retary of Commerce, shall make publicly 8
14297+available a report that includes the results of 9
14298+the study required by subsection (a). 10
14299+SEC. 506. STUDY ON EXPANDING FINANCIAL LITERACY 11
14300+AMONGST DIGITAL ASSET HOLDERS. 12
14301+(a) I
14302+NGENERAL.— The Commodity Futures 13
14303+Trading Commission with the Securities and 14
14304+Exchange Commission shall jointly conduct a 15
14305+study to identify— 16
14306+(1) the existing level of financial lit-17
14307+eracy among retail digital asset holders, 18
14308+including subgroups of investors identi-19
14309+fied by the Commodity Futures Trading 20
14310+Commission with the Securities and Ex-21
14311+change Commission; 22
14312+(2) methods to improve the timing, 23
14313+content, and format of financial literacy 24
14314+materials regarding digital assets pro-25
14315+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00475 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
14316+rfrederick on LAP8M3WLY3PROD with BILLS 476
14317+•HR 4763 RH
14318+vided by the Commodity Futures Trading 1
14319+Commission and the Securities and Ex-2
14320+change Commission; 3
14321+(3) methods to improve coordination 4
14322+between the Securities and Exchange 5
14323+Commission and the Commodity Futures 6
14324+Trading Commission with other agencies, 7
14325+including the Financial Literacy and 8
14326+Education Commission as well as non-9
14327+profit organizations and State and local 10
14328+jurisdictions, to better disseminate finan-11
14329+cial literacy materials; 12
14330+(4) the efficacy of current financial 13
14331+literacy efforts with a focus on rural com-14
14332+munities and communities with majority 15
14333+minority populations; 16
14334+(5) the most useful and understand-17
14335+able relevant information that retail dig-18
14336+ital asset holders need to make informed 19
14337+financial decisions before engaging with 20
14338+or purchasing a digital asset or service 21
14339+that is typically sold to retail investors of 22
14340+digital assets; 23
14341+(6) the most effective public-private 24
14342+partnerships in providing financial lit-25
14343+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00476 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
14344+rfrederick on LAP8M3WLY3PROD with BILLS 477
14345+•HR 4763 RH
14346+eracy regarding digital assets to con-1
14347+sumers; 2
14348+(7) the most relevant metrics to meas-3
14349+ure successful improvement of the finan-4
14350+cial literacy of an individual after engag-5
14351+ing with financial literacy efforts; and 6
14352+(8) in consultation with the Financial 7
14353+Literacy and Education Commission, a 8
14354+strategy (including to the extent prac-9
14355+ticable, measurable goals and objectives) 10
14356+to increase financial literacy of investors 11
14357+regarding digital assets. 12
14358+(b) R
14359+EPORT.—Not later than 1 year after 13
14360+the date of the enactment of this Act, the Com-14
14361+modity Futures Trading Commission and the 15
14362+Securities and Exchange Commission shall 16
14363+jointly submit a written report on the study 17
14364+required by subsection (a) to the Committees 18
14365+on Financial Services and on Agriculture of 19
14366+the House of Representatives and the Com-20
14367+mittees on Banking, Housing, and Urban Af-21
14368+fairs and on Agriculture, Nutrition, and For-22
14369+estry of the Senate. 23
14370+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00477 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
14371+rfrederick on LAP8M3WLY3PROD with BILLS 478
14372+•HR 4763 RH
14373+SEC. 507. STUDY ON FINANCIAL MARKET INFRASTRUCTURE 1
14374+IMPROVEMENTS. 2
14375+(a) I
14376+NGENERAL.—The Commodity Futures 3
14377+Trading Commission and the Securities and 4
14378+Exchange Commission shall jointly conduct a 5
14379+study to assess whether additional guidance 6
14380+or rules are necessary to facilitate the devel-7
14381+opment of tokenized securities and deriva-8
14382+tives products, and to the extent such guid-9
14383+ance or rules would foster the development of 10
14384+fair and orderly financial markets, be nec-11
14385+essary or appropriate in the public interest, 12
14386+and be consistent with the protection of in-13
14387+vestors and customers. 14
14388+(b) R
14389+EPORT.— 15
14390+(1) T
14391+IME LIMIT.—Not later than 1 year 16
14392+after the date of enactment of this Act, 17
14393+the Commodity Futures Trading Commis-18
14394+sion and the Securities and Exchange 19
14395+Commission shall jointly submit to the 20
14396+relevant congressional committees a re-21
14397+port that includes the results of the study 22
14398+required by subsection (a). 23
14399+(2) R
14400+ELEVANT CONGRESSIONAL COMMIT -24
14401+TEES DEFINED .—In this section, the term 25
14402+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00478 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
14403+rfrederick on LAP8M3WLY3PROD with BILLS 479
14404+•HR 4763 RH
14405+‘‘relevant congressional committees’’ 1
14406+means— 2
14407+(A) the Committees on Financial 3
14408+Services and on Agriculture of the 4
14409+House of Representatives; and 5
14410+(B) the Committees on Banking, 6
14411+Housing, and Urban Affairs and on 7
14412+Agriculture, Nutrition, and Forestry 8
14413+of the Senate. 9
14414+TITLE VI—MISCELLANEOUS 10
14415+SEC. 601. FINDINGS; SENSE OF CONGRESS. 11
14416+(a) F
14417+INDINGS.—Congress finds the fol-12
14418+lowing: 13
14419+(1) Entrepreneurs and innovators are 14
14420+building and deploying this next genera-15
14421+tion of the internet. 16
14422+(2) Digital asset networks represent a 17
14423+new way for people to join together and 18
14424+cooperate with one another to undertake 19
14425+certain activities. 20
14426+(3) Digital assets have the potential to 21
14427+be the foundational building blocks of 22
14428+these networks, aligning the economic in-23
14429+centive for individuals to cooperate with 24
14430+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00479 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
14431+rfrederick on LAP8M3WLY3PROD with BILLS 480
14432+•HR 4763 RH
14433+one another to achieve a common pur-1
14434+pose. 2
14435+(4) The digital asset ecosystem has 3
14436+the potential to grow our economy and 4
14437+improve everyday lives of Americans by 5
14438+facilitating collaboration through the use 6
14439+of technology to manage activities, allo-7
14440+cate resources, and facilitate decision 8
14441+making. 9
14442+(5) Blockchain networks and the dig-10
14443+ital assets they empower provide creator 11
14444+control, enhance transparency, reduce 12
14445+transaction costs, and increase efficiency 13
14446+if proper protections are put in place for 14
14447+investors, consumers, our financial sys-15
14448+tem, and our national security. 16
14449+(6) Blockchain technology facilitates 17
14450+new types of network participation 18
14451+which businesses in the United States 19
14452+may utilize in innovative ways. 20
14453+(7) Other digital asset companies are 21
14454+setting up their operations outside of the 22
14455+United States, where countries are estab-23
14456+lishing frameworks to embrace the poten-24
14457+tial of blockchain technology and digital 25
14458+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00480 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
14459+rfrederick on LAP8M3WLY3PROD with BILLS 481
14460+•HR 4763 RH
14461+assets and provide safeguards for con-1
14462+sumers. 2
14463+(8) Digital assets, despite the pur-3
14464+ported anonymity, provide law enforce-4
14465+ment with an exceptional tracing tool to 5
14466+identify illicit activity and bring crimi-6
14467+nals to justice. 7
14468+(9) The Financial Services Committee 8
14469+of the House of Representatives has held 9
14470+multiple hearings highlighting various 10
14471+risks that digital assets can pose to the fi-11
14472+nancial markets, consumers, and inves-12
14473+tors that must be addressed as we seek to 13
14474+harness the benefits of these innovations. 14
633114475 (b) S
6332-UBSEQUENT FISCAL YEARS .—The 21
6333-Commission shall publish the fee schedule for 22
6334-each subsequent fiscal year, not less than 90 23
6335-days before the due date prescribed by the 24 225
6336-•HR 4763 EH
6337-Commission for payment of the annual fee for 1
6338-the fiscal year. 2
6339-(c) L
6340-ATEPAYMENTPENALTY.— 3
6341-(1) I
6342-N GENERAL.—The Commission may im-4
6343-pose a penalty against a person that fails to pay an 5
6344-annual fee charged under this section, within 30 6
6345-days after the due date prescribed by the Commis-7
6346-sion for payment of the fee. 8
6347-(2) A
6348-MOUNT.—The amount of the penalty shall 9
6349-be— 10
6350-(A) 5 percent of the amount of the fee due; 11
6351-multiplied by 12
6352-(B) the whole number of consecutive 30- 13
6353-day periods that have elapsed since the due 14
6354-date. 15
6355-(d) R
6356-EIMBURSEMENT OF EXCESSFEES.—To the ex-16
6357-tent that the total amount of fees collected under this sec-17
6358-tion during a fiscal year that begins after the date of the 18
6359-enactment of this Act exceeds the amount provided under 19
6360-subsection (a)(2) with respect to the fiscal year, the Com-20
6361-mission shall reimburse the excess amount to the persons 21
6362-who have timely paid their annual fees, on a pro-rata basis 22
6363-that excludes penalties, and shall do so within 60 days 23
6364-after the end of the fiscal year. 24 226
6365-•HR 4763 EH
6366-(e) DEPOSIT OFFEESINTO THETREASURY.—All 1
6367-amounts collected under this section shall be credited to 2
6368-the currently applicable appropriation, account, or fund of 3
6369-the Commission as discretionary offsetting collections, and 4
6370-shall be available for the purposes authorized in subsection 5
6371-(f) only to the extent and in the amounts provided in ad-6
6372-vance in appropriations Acts. 7
6373-(f) A
6374-UTHORIZATION OF APPROPRIATIONS.—In addi-8
6375-tion to amounts otherwise authorized to be appropriated 9
6376-to the Commission, there is authorized to be appropriated 10
6377-to the Commission amounts collected under this section 11
6378-to cover the costs the costs of carrying out the functions 12
6379-of the Commission under this Act. 13
6380-(g) S
6381-UNSET.—The authority to charge and collect 14
6382-fees under this section shall expire at the end of the 4th 15
6383-fiscal year that begins after the date of the enactment of 16
6384-this Act. 17
6385-SEC. 511. EFFECTIVE DATE. 18
6386-Unless otherwise provided in this title, this title and 19
6387-the amendments made by this title shall take effect 360 20
6388-days after the date of enactment of this Act, except that, 21
6389-to the extent a provision of this title requires a rule-22
6390-making, the provision shall take effect on the later of— 23
6391-(1) 360 days after the date of enactment of this 24
6392-Act; or 25 227
6393-•HR 4763 EH
6394-(2) 60 days after the publication in the Federal 1
6395-Register of the final rule implementing the provision. 2
6396-SEC. 512. SENSE OF THE CONGRESS. 3
6397-It is the sense of the Congress that nothing in this 4
6398-Act or any amendment made by this Act should be inter-5
6399-preted to authorize any entity to regulate any commodity, 6
6400-other than a digital commodity, on any spot market. 7
6401-TITLE VI—INNOVATION AND 8
6402-TECHNOLOGY IMPROVEMENTS 9
6403-SEC. 601. FINDINGS; SENSE OF CONGRESS. 10
6404-(a) F
6405-INDINGS.—Congress finds the following: 11
6406-(1) Entrepreneurs and innovators are building 12
6407-and deploying this next generation of the internet. 13
6408-(2) Digital asset networks represent a new way 14
6409-for people to join together and cooperate with one 15
6410-another to undertake certain activities. 16
6411-(3) Digital assets have the potential to be the 17
6412-foundational building blocks of these networks, 18
6413-aligning the economic incentive for individuals to co-19
6414-operate with one another to achieve a common pur-20
6415-pose. 21
6416-(4) The digital asset ecosystem has the poten-22
6417-tial to grow our economy and improve everyday lives 23
6418-of Americans by facilitating collaboration through 24 228
6419-•HR 4763 EH
6420-the use of technology to manage activities, allocate 1
6421-resources, and facilitate decision making. 2
6422-(5) Blockchain networks and the digital assets 3
6423-they empower provide creator control, enhance 4
6424-transparency, reduce transaction costs, and increase 5
6425-efficiency if proper protections are put in place for 6
6426-investors, consumers, our financial system, and our 7
6427-national security. 8
6428-(6) Blockchain technology facilitates new types 9
6429-of network participation which businesses in the 10
6430-United States may utilize in innovative ways. 11
6431-(7) Other digital asset companies are setting up 12
6432-their operations outside of the United States, where 13
6433-countries are establishing frameworks to embrace 14
6434-the potential of blockchain technology and digital as-15
6435-sets and provide safeguards for consumers. 16
6436-(8) Digital assets, despite the purported ano-17
6437-nymity, provide law enforcement with an exceptional 18
6438-tracing tool to identify illicit activity and bring 19
6439-criminals to justice. 20
6440-(9) The Financial Services Committee of the 21
6441-House of Representatives has held multiple hearings 22
6442-highlighting various risks that digital assets can 23
6443-pose to the financial markets, consumers, and inves-24 229
6444-•HR 4763 EH
6445-tors that must be addressed as we seek to harness 1
6446-the benefits of these innovations. 2
6447-(b) S
6448-ENSE OFCONGRESS.—It is the sense of Con-3
6449-gress that— 4
6450-(1) the United States should seek to prioritize 5
6451-understanding the potential opportunities of the next 6
6452-generation of the internet; 7
6453-(2) the United States should seek to foster ad-8
6454-vances in technology that have robust evidence indi-9
6455-cating they can improve our financial system and 10
6456-create more fair and equitable access to financial 11
6457-services for everyday Americans while protecting our 12
6458-financial system, investors, and consumers; 13
6459-(3) the United States must support the respon-14
6460-sible development of digital assets and the under-15
6461-lying technology in the United States or risk the 16
6462-shifting of the development of such assets and tech-17
6463-nology outside of the United States, to less regulated 18
6464-countries; 19
6465-(4) Congress should consult with public and 20
6466-private sector stakeholders to understand how to 21
6467-enact a functional framework tailored to the specific 22
6468-risks and unique benefits of different digital asset- 23
6469-related activities, distributed ledger technology, dis-24
6470-tributed networks, and decentralized systems; and 25 230
6471-•HR 4763 EH
6472-(5) Congress should enact a functional frame-1
6473-work tailored to the specific risks of different digital 2
6474-asset-related activities and unique benefits of distrib-3
6475-uted ledger technology, distributed networks, and de-4
6476-centralized systems; and 5
6477-(6) consumers and market participants will ben-6
6478-efit from a framework for digital assets consistent 7
6479-with longstanding investor protections in securities 8
6480-and commodities markets, yet tailored to the unique 9
6481-benefits and risks of the digital asset ecosystem. 10
6482-SEC. 602. CODIFICATION OF THE SEC STRATEGIC HUB FOR 11
6483-INNOVATION AND FINANCIAL TECHNOLOGY. 12
6484-Section 4 of the Securities Exchange Act of 1934 (15 13
6485-U.S.C. 78d) is amended by adding at the end the fol-14
6486-lowing: 15
6487-‘‘(l) S
6488-TRATEGICHUB FORINNOVATION AND FINAN-16
6489-CIALTECHNOLOGY.— 17
6490-‘‘(1) O
6491-FFICE ESTABLISHED .—There is estab-18
6492-lished within the Commission the Strategic Hub for 19
6493-Innovation and Financial Technology (referred to in 20
6494-this section as the ‘FinHub’). 21
6495-‘‘(2) P
6496-URPOSES.—The purposes of FinHub are 22
6497-as follows: 23
6498-‘‘(A) To assist in shaping the approach of 24
6499-the Commission to technological advancements. 25 231
6500-•HR 4763 EH
6501-‘‘(B) To examine financial technology inno-1
6502-vations among market participants. 2
6503-‘‘(C) To coordinate the response of the 3
6504-Commission to emerging technologies in finan-4
6505-cial, regulatory, and supervisory systems. 5
6506-‘‘(3) D
6507-IRECTOR OF FINHUB .—FinHub shall 6
6508-have a Director who shall be appointed by the Com-7
6509-mission, from among individuals having experience 8
6510-in both emerging technologies and Federal securities 9
6511-laws and serve at the pleasure of the Commission. 10
6512-The Director shall report directly to the Commission 11
6513-and perform such functions and duties as the Com-12
6514-mission may prescribe. 13
6515-‘‘(4) R
6516-ESPONSIBILITIES.—FinHub shall— 14
6517-‘‘(A) foster responsible technological inno-15
6518-vation and fair competition within the Commis-16
6519-sion, including around financial technology, reg-17
6520-ulatory technology, and supervisory technology; 18
6521-‘‘(B) provide internal education and train-19
6522-ing to the Commission regarding financial tech-20
6523-nology; 21
6524-‘‘(C) advise the Commission regarding fi-22
6525-nancial technology that would serve the Com-23
6526-mission’s functions; 24 232
6527-•HR 4763 EH
6528-‘‘(D) analyze technological advancements 1
6529-and the impact of regulatory requirements on 2
6530-financial technology companies; 3
6531-‘‘(E) advise the Commission with respect 4
6532-to rulemakings or other agency or staff action 5
6533-regarding financial technology; 6
6534-‘‘(F) provide businesses working in emerg-7
6535-ing financial technology fields with information 8
6536-on the Commission, its rules and regulations; 9
6537-and 10
6538-‘‘(G) encourage firms working in emerging 11
6539-technology fields to engage with the Commis-12
6540-sion and obtain feedback from the Commission 13
6541-on potential regulatory issues. 14
6542-‘‘(5) A
6543-CCESS TO DOCUMENTS .—The Commis-15
6544-sion shall ensure that FinHub has full access to the 16
6545-documents and information of the Commission and 17
6546-any self-regulatory organization, as necessary to 18
6547-carry out the functions of FinHub. 19
6548-‘‘(6) R
6549-EPORT TO CONGRESS.— 20
6550-‘‘(A) I
6551-N GENERAL.—Not later than Octo-21
6552-ber 31 of each year after 2024, FinHub shall 22
6553-submit to the Committee on Banking, Housing, 23
6554-and Urban Affairs of the Senate and the Com-24
6555-mittee on Financial Services of the House of 25 233
6556-•HR 4763 EH
6557-Representatives a report on the activities of 1
6558-FinHub during the immediately preceding fiscal 2
6559-year. 3
6560-‘‘(B) C
6561-ONTENTS.—Each report required 4
6562-under subparagraph (A) shall include— 5
6563-‘‘(i) the total number of persons that 6
6564-met with FinHub; 7
6565-‘‘(ii) the total number of market par-8
6566-ticipants FinHub met with, including the 9
6567-classification of those participants; 10
6568-‘‘(iii) a summary of general issues dis-11
6569-cussed during meetings with persons; 12
6570-‘‘(iv) information on steps FinHub 13
6571-has taken to improve Commission services, 14
6572-including responsiveness to the concerns of 15
6573-persons; 16
6574-‘‘(v) recommendations— 17
6575-‘‘(I) with respect to the regula-18
6576-tions of the Commission and the guid-19
6577-ance and orders of the Commission; 20
6578-and 21
6579-‘‘(II) for such legislative actions 22
6580-as FinHub determines appropriate; 23
6581-and 24 234
6582-•HR 4763 EH
6583-‘‘(vi) any other information, as deter-1
6584-mined appropriate by the Director of 2
6585-FinHub. 3
6586-‘‘(C) C
6587-ONFIDENTIALITY.—A report under 4
6588-subparagraph (A) may not contain confidential 5
6589-information. 6
6590-‘‘(7) S
6591-YSTEMS OF RECORDS.— 7
6592-‘‘(A) I
6593-N GENERAL.—The Commission shall 8
6594-establish a detailed system of records (as de-9
6595-fined under section 552a of title 5, United 10
6596-States Code) to assist FinHub in commu-11
6597-nicating with interested parties. 12
6598-‘‘(B) E
6599-NTITIES COVERED BY THE SYS -13
6600-TEM.—Entities covered by the system required 14
6601-under subparagraph (A) include entities or per-15
6602-sons submitting requests or inquiries and other 16
6603-information to Commission through FinHub. 17
6604-‘‘(C) S
6605-ECURITY AND STORAGE OF 18
6606-RECORDS.—FinHub shall store— 19
6607-‘‘(i) electronic records— 20
6608-‘‘(I) in the system required under 21
6609-subparagraph (A); or 22
6610-‘‘(II) on the secure network or 23
6611-other electronic medium, such as 24 235
6612-•HR 4763 EH
6613-encrypted hard drives or back-up 1
6614-media, of the Commission; and 2
6615-‘‘(ii) paper records in secure facilities. 3
6616-‘‘(8) E
6617-FFECTIVE DATE.—This subsection shall 4
6618-take effect on the date that is 180 days after the 5
6619-date of the enactment of this subsection.’’. 6
6620-SEC. 603. CODIFICATION OF LABCFTC. 7
6621-(a) I
6622-NGENERAL.—Section 18 of the Commodity Ex-8
6623-change Act (7 U.S.C. 22) is amended by adding at the 9
6624-end the following: 10
6625-‘‘(c) L
6626-ABCFTC.— 11
6627-‘‘(1) E
6628-STABLISHMENT.—There is established in 12
6629-the Commission LabCFTC. 13
6630-‘‘(2) P
6631-URPOSE.—The purposes of LabCFTC 14
6632-are to— 15
6633-‘‘(A) promote responsible financial tech-16
6634-nology innovation and fair competition for the 17
6635-benefit of the American public; 18
6636-‘‘(B) serve as an information platform to 19
6637-inform the Commission about new financial 20
6638-technology innovation; and 21
6639-‘‘(C) provide outreach to financial tech-22
6640-nology innovators to discuss their innovations 23
6641-and the regulatory framework established by 24 236
6642-•HR 4763 EH
6643-this Act and the regulations promulgated there-1
6644-under. 2
6645-‘‘(3) D
6646-IRECTOR.—LabCFTC shall have a Direc-3
6647-tor, who shall be appointed by the Commission and 4
6648-serve at the pleasure of the Commission. Notwith-5
6649-standing section 2(a)(6)(A), the Director shall re-6
6650-port directly to the Commission and perform such 7
6651-functions and duties as the Commission may pre-8
6652-scribe. 9
6653-‘‘(4) D
6654-UTIES.—LabCFTC shall— 10
6655-‘‘(A) advise the Commission with respect 11
6656-to rulemakings or other agency or staff action 12
6657-regarding financial technology; 13
6658-‘‘(B) provide internal education and train-14
6659-ing to the Commission regarding financial tech-15
6660-nology; 16
6661-‘‘(C) advise the Commission regarding fi-17
6662-nancial technology that would bolster the Com-18
6663-mission’s oversight functions; 19
6664-‘‘(D) engage with academia, students, and 20
6665-professionals on financial technology issues, 21
6666-ideas, and technology relevant to activities 22
6667-under this Act; 23
6668-‘‘(E) provide persons working in emerging 24
6669-technology fields with information on the Com-25 237
6670-•HR 4763 EH
6671-mission, its rules and regulations, and the role 1
6672-of a registered futures association; and 2
6673-‘‘(F) encourage persons working in emerg-3
6674-ing technology fields to engage with the Com-4
6675-mission and obtain feedback from the Commis-5
6676-sion on potential regulatory issues. 6
6677-‘‘(5) A
6678-CCESS TO DOCUMENTS .—The Commis-7
6679-sion shall ensure that LabCFTC has full access to 8
6680-the documents and information of the Commission 9
6681-and any self-regulatory organization or registered fu-10
6682-tures association, as necessary to carry out the func-11
6683-tions of LabCFTC. 12
6684-‘‘(6) R
6685-EPORT TO CONGRESS.— 13
6686-‘‘(A) I
6687-N GENERAL.—Not later than Octo-14
6688-ber 31 of each year after 2024, LabCFTC shall 15
6689-submit to the Committee on Agriculture of the 16
6690-House of Representatives and the Committee 17
6691-on Agriculture, Nutrition, and Forestry of the 18
6692-Senate a report on its activities. 19
6693-‘‘(B) C
6694-ONTENTS.—Each report required 20
6695-under paragraph (1) shall include— 21
6696-‘‘(i) the total number of persons that 22
6697-met with LabCFTC; 23
6698-‘‘(ii) a summary of general issues dis-24
6699-cussed during meetings with the person; 25 238
6700-•HR 4763 EH
6701-‘‘(iii) information on steps LabCFTC 1
6702-has taken to improve Commission services, 2
6703-including responsiveness to the concerns of 3
6704-persons; 4
6705-‘‘(iv) recommendations made to the 5
6706-Commission with respect to the regula-6
6707-tions, guidance, and orders of the Commis-7
6708-sion and such legislative actions as may be 8
6709-appropriate; and 9
6710-‘‘(v) any other information determined 10
6711-appropriate by the Director of LabCFTC. 11
6712-‘‘(C) C
6713-ONFIDENTIALITY.—A report under 12
6714-paragraph (A) shall abide by the confidentiality 13
6715-requirements in section 8. 14
6716-‘‘(7) S
6717-YSTEMS OF RECORDS.— 15
6718-‘‘(A) I
6719-N GENERAL.—The Commission shall 16
6720-establish a detailed system of records (as de-17
6721-fined in section 552a of title 5, United States 18
6722-Code) to assist LabCFTC in communicating 19
6723-with interested parties. 20
6724-‘‘(B) P
6725-ERSONS COVERED BY THE SYS -21
6726-TEM.—The persons covered by the system of 22
6727-records shall include persons submitting re-23
6728-quests or inquiries and other information to the 24
6729-Commission through LabCFTC. 25 239
6730-•HR 4763 EH
6731-‘‘(C) SECURITY AND STORAGE OF 1
6732-RECORDS.—The system of records shall store 2
6733-records electronically or on paper in secure fa-3
6734-cilities, and shall store electronic records on the 4
6735-secure network of the Commission and on other 5
6736-electronic media, such as encrypted hard drives 6
6737-and back-up media, as needed.’’. 7
6738-(b) C
6739-ONFORMING AMENDMENTS.—Section 8
6740-2(a)(6)(A) of such Act (7 U.S.C. 2(a)(6)(A)) is amend-9
6741-ed— 10
6742-(1) by striking ‘‘paragraph and in’’ and insert-11
6743-ing ‘‘paragraph,’’; and 12
6744-(2) by inserting ‘‘and section 18(c)(3),’’ before 13
6745-‘‘the executive’’. 14
6746-(c) E
6747-FFECTIVEDATE.—The Commodity Futures 15
6748-Trading Commission shall implement the amendments 16
6749-made by this section (including complying with section 17
6750-18(c)(7) of the Commodity Exchange Act) within 180 18
6751-days after the date of the enactment of this Act. 19
6752-SEC. 604. CFTC-SEC JOINT ADVISORY COMMITTEE ON DIG-20
6753-ITAL ASSETS. 21
6754-(a) E
6755-STABLISHMENT.—The Commodity Futures 22
6756-Trading Commission and the Securities and Exchange 23
6757-Commission (in this section referred to as the ‘‘Commis-24
6758-sions’’) shall jointly establish the Joint Advisory Com-25 240
6759-•HR 4763 EH
6760-mittee on Digital Assets (in this section referred to as the 1
6761-‘‘Committee’’). 2
6762-(b) P
6763-URPOSE.— 3
6764-(1) I
6765-N GENERAL.—The Committee shall— 4
6766-(A) provide the Commissions with advice 5
6767-on the rules, regulations, and policies of the 6
6768-Commissions related to digital assets; 7
6769-(B) further the regulatory harmonization 8
6770-of digital asset policy between the Commissions; 9
6771-(C) examine and disseminate methods for 10
6772-describing, measuring, and quantifying digital 11
6773-asset— 12
6774-(i) decentralization; 13
6775-(ii) functionality; 14
6776-(iii) information asymmetries; and 15
6777-(iv) transaction and network security; 16
6778-(D) examine the potential for digital as-17
6779-sets, blockchain systems, and distributed ledger 18
6780-technology to improve efficiency in the oper-19
6781-ation of financial market infrastructure and 20
6782-better protect financial market participants, in-21
6783-cluding services and systems which provide— 22
6784-(i) improved customer protections; 23
6785-(ii) public availability of information; 24 241
6786-•HR 4763 EH
6787-(iii) greater transparency regarding 1
6788-customer funds; 2
6789-(iv) reduced transaction cost; and 3
6790-(v) increased access to financial mar-4
6791-ket services; and 5
6792-(E) discuss the implementation by the 6
6793-Commissions of this Act and the amendments 7
6794-made by this Act. 8
6795-(2) R
6796-EVIEW BY AGENCIES.—Each Commission 9
6797-shall— 10
6798-(A) review the findings and recommenda-11
6799-tions of the Committee; 12
6800-(B) promptly issue a public statement each 13
6801-time the Committee submits a finding or rec-14
6802-ommendation to a Commission— 15
6803-(i) assessing the finding or rec-16
6804-ommendation of the Committee; 17
6805-(ii) disclosing the action or decision 18
6806-not to take action made by the Commis-19
6807-sion in response to a finding or rec-20
6808-ommendation; and 21
6809-(iii) explaining the reasons for the ac-22
6810-tion or decision not to take action; and 23
6811-(C) each time the Committee submits a 24
6812-finding or recommendation to a Commission, 25 242
6813-•HR 4763 EH
6814-provide the Committee with a formal response 1
6815-to the finding or recommendation not later than 2
6816-3 months after the date of the submission of 3
6817-the finding or recommendation. 4
6818-(c) M
6819-EMBERSHIP ANDLEADERSHIP.— 5
6820-(1) N
6821-ON-FEDERAL MEMBERS .— 6
6822-(A) I
6823-N GENERAL.—The Commissions shall 7
6824-appoint at least 20 nongovernmental stake-8
6825-holders who represent a broad spectrum of in-9
6826-terests, equally divided between the Commis-10
6827-sions, to serve as members of the Committee. 11
6828-The appointees shall include— 12
6829-(i) digital asset issuers; 13
6830-(ii) persons registered with the Com-14
6831-missions and engaged in digital asset re-15
6832-lated activities; 16
6833-(iii) individuals engaged in academic 17
6834-research relating to digital assets; and 18
6835-(iv) digital asset users. 19
6836-(B) M
6837-EMBERS NOT COMMISSION EMPLOY -20
6838-EES.—Members appointed under subparagraph 21
6839-(A) shall not be deemed to be employees or 22
6840-agents of a Commission solely by reason of 23
6841-membership on the Committee. 24
6842-(2) C
6843-O-DESIGNATED FEDERAL OFFICERS .— 25 243
6844-•HR 4763 EH
6845-(A) NUMBER; APPOINTMENT.—There shall 1
6846-be 2 co-designated Federal officers of the Com-2
6847-mittee, as follows: 3
6848-(i) The Director of LabCFTC of the 4
6849-Commodity Futures Trading Commission. 5
6850-(ii) The Director of the Strategic Hub 6
6851-for Innovation and Financial Technology 7
6852-of the Securities and Exchange Commis-8
6853-sion. 9
6854-(B) D
6855-UTIES.—The duties required by 10
6856-chapter 10 of title 5, United States Code, to be 11
6857-carried out by a designated Federal officer with 12
6858-respect to the Committee shall be shared by the 13
6859-co-designated Federal officers of the Com-14
6860-mittee. 15
6861-(3) C
6862-OMMITTEE LEADERSHIP .— 16
6863-(A) C
6864-OMPOSITION; ELECTION.—The Com-17
6865-mittee members shall elect, from among the 18
6866-Committee members— 19
6867-(i) a chair; 20
6868-(ii) a vice chair; 21
6869-(iii) a secretary; and 22
6870-(iv) an assistant secretary. 23
6871-(B) T
6872-ERM OF OFFICE .—Each member 24
6873-elected under subparagraph (A) in a 2-year pe-25 244
6874-•HR 4763 EH
6875-riod referred to in section 1013(b)(2) of title 5, 1
6876-United States Code, shall serve in the capacity 2
6877-for which the member was so elected, until the 3
6878-end of the 2-year period. 4
6879-(d) N
6880-OCOMPENSATION FOR COMMITTEEMEM-5
6881-BERS.— 6
6882-(1) N
6883-ON-FEDERAL MEMBERS .—All Committee 7
6884-members appointed under subsection (c)(1) shall— 8
6885-(A) serve without compensation; and 9
6886-(B) while away from the home or regular 10
6887-place of business of the member in the perform-11
6888-ance of services for the Committee, be allowed 12
6889-travel expenses, including per diem in lieu of 13
6890-subsistence, in the same manner as persons em-14
6891-ployed intermittently in the Government service 15
6892-are allowed expenses under section 5703(b) of 16
6893-title 5, United States Code. 17
6894-(2) N
6895-O COMPENSATION FOR CO -DESIGNATED 18
6896-FEDERAL OFFICERS.—The co-designated Federal of-19
6897-ficers shall serve without compensation in addition 20
6898-to that received for their services as officers or em-21
6899-ployees of the United States. 22
6900-(e) F
6901-REQUENCY OF MEETINGS.—The Committee 23
6902-shall meet— 24
6903-(1) not less frequently than twice annually; and 25 245
6904-•HR 4763 EH
6905-(2) at such other times as either Commission 1
6906-may request. 2
6907-(f) D
6908-URATION.—Section 1013(a)(2) of title 5, United 3
6909-States Code, shall not apply to the Committee. 4
6910-(g) T
6911-IMELIMITS.—The Commissions shall— 5
6912-(1) adopt a joint charter for the Committee 6
6913-within 90 days after the date of the enactment of 7
6914-this section; 8
6915-(2) appoint members to the Committee within 9
6916-120 days after such date of enactment; and 10
6917-(3) hold the initial meeting of the Committee 11
6918-within 180 days after such date of enactment. 12
6919-(h) F
6920-UNDING.—Subject to the availability of funds, 13
6921-the Commissions shall jointly fund the Committee. 14
6922-SEC. 605. STUDY ON DECENTRALIZED FINANCE. 15
6923-(a) I
6924-NGENERAL.—The Commodity Futures Trading 16
6925-Commission and the Securities and Exchange Commission 17
6926-shall jointly carry out a study on decentralized finance 18
6927-that analyzes— 19
6928-(1) the nature, size, role, and use of decentral-20
6929-ized finance blockchain protocols; 21
6930-(2) the operation of blockchain protocols that 22
6931-comprise decentralized finance; 23
6932-(3) the interoperability of blockchain protocols 24
6933-and blockchain systems; 25 246
6934-•HR 4763 EH
6935-(4) the interoperability of blockchain protocols 1
6936-and software-based systems, including websites and 2
6937-wallets; 3
6938-(5) the decentralized governance systems 4
6939-through which blockchain protocols may be devel-5
6940-oped, published, constituted, administered, main-6
6941-tained, or otherwise distributed, including— 7
6942-(A) whether the systems enhance or de-8
6943-tract from— 9
6944-(i) the decentralization of the decen-10
6945-tralized finance; and 11
6946-(ii) the inherent benefits and risks of 12
6947-the decentralized governance system; and 13
6948-(B) any procedures, requirements, or best 14
6949-practices that would mitigate the risks identi-15
6950-fied in subparagraph (A)(ii); 16
6951-(6) the benefits of decentralized finance, includ-17
6952-ing— 18
6953-(A) operational resilience and availability 19
6954-of blockchain systems; 20
6955-(B) interoperability of blockchain systems; 21
6956-(C) market competition and innovation; 22
6957-(D) transaction efficiency; 23
6958-(E) transparency and traceability of trans-24
6959-actions; and 25 247
6960-•HR 4763 EH
6961-(F) disintermediation; 1
6962-(7) the risks of decentralized finance, includ-2
6963-ing— 3
6964-(A) pseudonymity of users and trans-4
6965-actions; 5
6966-(B) disintermediation; and 6
6967-(C) cybersecurity vulnerabilities; 7
6968-(8) the extent to which decentralized finance 8
6969-has integrated with the traditional financial markets 9
6970-and any potential risks or improvements to the sta-10
6971-bility of the markets; 11
6972-(9) how the levels of illicit activity in decentral-12
6973-ized finance compare with the levels of illicit activity 13
6974-in traditional financial markets; 14
6975-(10) methods for addressing illicit activity in 15
6976-decentralized finance and traditional markets that 16
6977-are tailored to the unique attributes of each; 17
6978-(11) how decentralized finance may increase the 18
6979-accessibility of cross-border transactions; and 19
6980-(12) the feasibility of embedding self-executing 20
6981-compliance and risk controls into decentralized fi-21
6982-nance. 22
6983-(b) C
6984-ONSULTATION.—In carrying out the study re-23
6985-quired under subsection (a), the Commodity Futures 24
6986-Trading Commission and the Securities and Exchange 25 248
6987-•HR 4763 EH
6988-Commission shall consult with the Secretary of the Treas-1
6989-ury on the factors described under paragraphs (7) through 2
6990-(10) of subsection (a). 3
6991-(c) R
6992-EPORT.—Not later than 1 year after the date 4
6993-of enactment of this Act, the Commodity Futures Trading 5
6994-Commission and the Securities and Exchange Commission 6
6995-shall jointly submit to the relevant congressional commit-7
6996-tees a report that includes the results of the study re-8
6997-quired by subsection (a). 9
6998-(d) GAO S
6999-TUDY.—The Comptroller General of the 10
7000-United States shall— 11
7001-(1) carry out a study on decentralized finance 12
7002-that analyzes the information described under para-13
7003-graphs (1) through (12) of subsection (a); and 14
7004-(2) not later than 1 year after the date of en-15
7005-actment of this Act, submit to the relevant congres-16
7006-sional committees a report that includes the results 17
7007-of the study required by paragraph (1). 18
7008-(e) D
7009-EFINITIONS.—In this section: 19
7010-(1) D
7011-ECENTRALIZED FINANCE .— 20
7012-(A) I
7013-N GENERAL.—The term ‘‘decentral-21
7014-ized finance’’ means blockchain protocols that 22
7015-allow users to engage in financial transactions 23
7016-in a self-directed manner so that a third-party 24
7017-intermediary does not effectuate the trans-25 249
7018-•HR 4763 EH
7019-actions or take custody of digital assets of a 1
7020-user during any part of the transactions. 2
7021-(B) R
7022-ELATIONSHIP TO EXCLUDED ACTIVI -3
7023-TIES.—The term ‘‘decentralized finance’’ shall 4
7024-not be interpreted to limit or exclude any activ-5
7025-ity from the activities described in section 6
7026-15I(a) of the Securities Exchange Act of 1934 7
7027-or section 4v(a) of the Commodity Exchange 8
7028-Act. 9
7029-(2) R
7030-ELEVANT CONGRESSIONAL COMMIT -10
7031-TEES.—The term ‘‘relevant congressional commit-11
7032-tees’’ means— 12
7033-(A) the Committees on Financial Services 13
7034-and Agriculture of the House of Representa-14
7035-tives; and 15
7036-(B) the Committees on Banking, Housing, 16
7037-and Urban Affairs and Agriculture, Nutrition, 17
7038-and Forestry of the Senate. 18
7039-SEC. 606. STUDY ON NON-FUNGIBLE DIGITAL ASSETS. 19
7040-(a) I
7041-NGENERAL.—The Comptroller General of the 20
7042-United States shall carry out a study of non-fungible dig-21
7043-ital assets that analyzes— 22
7044-(1) the nature, size, role, purpose, and use of 23
7045-non-fungible digital assets; 24 250
7046-•HR 4763 EH
7047-(2) the similarities and differences between non- 1
7048-fungible digital assets and other digital assets, in-2
7049-cluding digital commodities and payment stablecoins, 3
7050-and how the markets for those digital assets inter-4
7051-sect with each other; 5
7052-(3) how non-fungible digital assets are minted 6
7053-by issuers and subsequently administered to pur-7
7054-chasers; 8
7055-(4) how non-fungible digital assets are stored 9
7056-after being purchased by a consumer; 10
7057-(5) the interoperability of non-fungible digital 11
7058-assets between different blockchain systems; 12
7059-(6) the scalability of different non-fungible dig-13
7060-ital asset marketplaces; 14
7061-(7) the benefits of non-fungible digital assets, 15
7062-including verifiable digital ownership; 16
7063-(8) the risks of non-fungible tokens, including— 17
7064-(A) intellectual property rights; 18
7065-(B) cybersecurity risks; and 19
7066-(C) market risks; 20
7067-(9) whether and how non-fungible digital assets 21
7068-have integrated with traditional marketplaces, in-22
7069-cluding those for music, real estate, gaming, events, 23
7070-and travel; 24 251
7071-•HR 4763 EH
7072-(10) whether non-fungible tokens can be used 1
7073-to facilitate commerce or other activities through the 2
7074-representation of documents, identification, con-3
7075-tracts, licenses, and other commercial, government, 4
7076-or personal records; 5
7077-(11) any potential risks to traditional markets 6
7078-from such integration; and 7
7079-(12) the levels and types of illicit activity in 8
7080-non-fungible digital asset markets. 9
7081-(b) R
7082-EPORT.—Not later than 1 year after the date 10
7083-of the enactment of this Act, the Comptroller General, 11
7084-shall make publicly available a report that includes the re-12
7085-sults of the study required by subsection (a). 13
7086-SEC. 607. STUDY ON EXPANDING FINANCIAL LITERACY 14
7087-AMONGST DIGITAL ASSET HOLDERS. 15
7088-(a) I
7089-NGENERAL.— The Commodity Futures Trading 16
7090-Commission with the Securities and Exchange Commis-17
7091-sion shall jointly conduct a study to identify— 18
7092-(1) the existing level of financial literacy among 19
7093-retail digital asset holders, including subgroups of 20
7094-investors identified by the Commodity Futures Trad-21
7095-ing Commission with the Securities and Exchange 22
7096-Commission; 23
7097-(2) methods to improve the timing, content, and 24
7098-format of financial literacy materials regarding dig-25 252
7099-•HR 4763 EH
7100-ital assets provided by the Commodity Futures 1
7101-Trading Commission and the Securities and Ex-2
7102-change Commission; 3
7103-(3) methods to improve coordination between 4
7104-the Securities and Exchange Commission and the 5
7105-Commodity Futures Trading Commission with other 6
7106-agencies, including the Financial Literacy and Edu-7
7107-cation Commission as well as nonprofit organizations 8
7108-and State and local jurisdictions, to better dissemi-9
7109-nate financial literacy materials; 10
7110-(4) the efficacy of current financial literacy ef-11
7111-forts with a focus on rural communities and commu-12
7112-nities with majority minority populations; 13
7113-(5) the most useful and understandable relevant 14
7114-information that retail digital asset holders need to 15
7115-make informed financial decisions before engaging 16
7116-with or purchasing a digital asset or service that is 17
7117-typically sold to retail investors of digital assets; 18
7118-(6) the most effective public-private partner-19
7119-ships in providing financial literacy regarding digital 20
7120-assets to consumers; 21
7121-(7) the most relevant metrics to measure suc-22
7122-cessful improvement of the financial literacy of an 23
7123-individual after engaging with financial literacy ef-24
7124-forts; and 25 253
7125-•HR 4763 EH
7126-(8) in consultation with the Financial Literacy 1
7127-and Education Commission, a strategy (including to 2
7128-the extent practicable, measurable goals and objec-3
7129-tives) to increase financial literacy of investors re-4
7130-garding digital assets. 5
7131-(b) R
7132-EPORT.—Not later than 1 year after the date 6
7133-of the enactment of this Act, the Commodity Futures 7
7134-Trading Commission and the Securities and Exchange 8
7135-Commission shall jointly submit a written report on the 9
7136-study required by subsection (a) to the Committees on Fi-10
7137-nancial Services and on Agriculture of the House of Rep-11
7138-resentatives and the Committees on Banking, Housing, 12
7139-and Urban Affairs and on Agriculture, Nutrition, and 13
7140-Forestry of the Senate. 14
7141-SEC. 608. STUDY ON FINANCIAL MARKET INFRASTRUCTURE 15
7142-IMPROVEMENTS. 16
7143-(a) I
7144-NGENERAL.—The Commodity Futures Trading 17
7145-Commission and the Securities and Exchange Commission 18
7146-shall jointly conduct a study to assess whether additional 19
7147-guidance or rules are necessary to facilitate the develop-20
7148-ment of tokenized securities and derivatives products, and 21
7149-to the extent such guidance or rules would foster the devel-22
7150-opment of fair and orderly financial markets, be necessary 23
7151-or appropriate in the public interest, and be consistent 24
7152-with the protection of investors and customers. 25 254
7153-•HR 4763 EH
7154-(b) REPORT.— 1
7155-(1) T
7156-IME LIMIT.—Not later than 1 year after 2
7157-the date of enactment of this Act, the Commodity 3
7158-Futures Trading Commission and the Securities and 4
7159-Exchange Commission shall jointly submit to the rel-5
7160-evant congressional committees a report that in-6
7161-cludes the results of the study required by sub-7
7162-section (a). 8
7163-(2) R
7164-ELEVANT CONGRESSIONAL COMMITTEES 9
7165-DEFINED.—In this section, the term ‘‘relevant con-10
7166-gressional committees’’ means— 11
7167-(A) the Committees on Financial Services 12
7168-and on Agriculture of the House of Representa-13
7169-tives; and 14
7170-(B) the Committees on Banking, Housing, 15
7171-and Urban Affairs and on Agriculture, Nutri-16
7172-tion, and Forestry of the Senate. 17
7173-Passed the House of Representatives May 22, 2024.
7174-Attest:
7175-Clerk. 118
14476+ENSE OFCONGRESS.—It is the sense of 15
14477+Congress that— 16
14478+(1) the United States should seek to 17
14479+prioritize understanding the potential op-18
14480+portunities of the next generation of the 19
14481+internet; 20
14482+(2) the United States should seek to 21
14483+foster advances in technology that have 22
14484+robust evidence indicating they can im-23
14485+prove our financial system and create 24
14486+more fair and equitable access to finan-25
14487+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00481 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
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14489+•HR 4763 RH
14490+cial services for everyday Americans 1
14491+while protecting our financial system, in-2
14492+vestors, and consumers; 3
14493+(3) the United States must support 4
14494+the responsible development of digital as-5
14495+sets and the underlying technology in the 6
14496+United States or risk the shifting of the 7
14497+development of such assets and tech-8
14498+nology outside of the United States, to 9
14499+less regulated countries; 10
14500+(4) Congress should consult with pub-11
14501+lic and private sector stakeholders to un-12
14502+derstand how to enact a functional 13
14503+framework tailored to the specific risks 14
14504+and unique benefits of different digital 15
14505+asset-related activities, distributed ledger 16
14506+technology, distributed networks, and de-17
14507+centralized systems; and 18
14508+(5) enact a functional framework tai-19
14509+lored to the specific risks of different dig-20
14510+ital asset-related activities and unique 21
14511+benefits of distributed ledger technology, 22
14512+distributed networks, and decentralized 23
14513+systems; and 24
14514+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00482 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
14515+rfrederick on LAP8M3WLY3PROD with BILLS 483
14516+•HR 4763 RH
14517+(6) consumers and market partici-1
14518+pants will benefit from a framework for 2
14519+digital assets consistent with long-3
14520+standing investor protections in securi-4
14521+ties and commodities markets, yet tai-5
14522+lored to the unique benefits and risks of 6
14523+the digital asset ecosystem. 7
14524+VerDate Sep 11 2014 00:52 May 09, 2024 Jkt 049200 PO 00000 Frm 00483 Fmt 6652 Sfmt 6202 E:\BILLS\H4763.RH H4763
14525+rfrederick on LAP8M3WLY3PROD with BILLS Union Calendar No.
14526+401
14527+118
717614528 TH
717714529 CONGRESS
717814530 2
717914531 D
718014532 S
718114533 ESSION
718214534
718314535 H. R. 4763
7184-AN ACT
14536+[Report No. 118–484, Parts I and II]
14537+A BILL
718514538 To provide for a system of regulation of digital as-
718614539 sets by the Commodity Futures Trading Com-
718714540 mission and the Securities and Exchange Com-
718814541 mission, and for other purposes.
14542+M
14543+AY
14544+6, 2024
14545+Reported from the Committee on Agriculture with an
14546+amendment
14547+M
14548+AY
14549+6, 2024
14550+Reported from the Committee on Financial Services with
14551+an amendment; committed to the Committee of the
14552+Whole House on the State of the Union and ordered
14553+to be printed
14554+VerDate Sep 11 2014 00:55 May 09, 2024 Jkt 049200 PO 00000 Frm 00484 Fmt 6651 Sfmt 6651 E:\BILLS\H4763.RH H4763
14555+rfrederick on LAP8M3WLY3PROD with BILLS