119 HR 3633 RH: CLARITY Act of 2025 U.S. House of Representatives 2025-06-23 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
IB Union Calendar No. 134 119th CONGRESS1st Session H. R. 3633 [Report No. 119–168, Parts I and II] IN THE HOUSE OF REPRESENTATIVES May 29, 2025 Mr. Hill of Arkansas (for himself, Mr. Thompson of Pennsylvania, Ms. Craig, Mr. Emmer, Mr. Johnson of South Dakota, Mr. Davis of North Carolina, Mr. Steil, Mr. Torres of New York, and Mr. Davidson) introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on Agriculture, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned June 23, 2025 Additional sponsors: Mr. Gottheimer, Mr. Huizenga, Mr. Nunn of Iowa, Mr. Lawler, Mr. Meuser, Mr. Carter of Georgia, Mr. Moore of West Virginia, Mr. Begich, Ms. McDonald Rivet, Mr. Thanedar, Mr. Messmer, Mr. Bresnahan, and Ms. Stevens June 23, 2025 Reported from the Committee on Agriculture with an amendment Strike out all after the enacting clause and insert the part printed in italic June 23, 2025 Reported from the Committee on Financial Services with an amendment; committed to the Committee of the Whole House on the State of the Union and ordered to be printed Strike out all after the enacting clause and insert the part printed in boldface roman For text of introduced bill, see copy of bill as introduced on May 29, 2025 A BILL To provide for a system of regulation of the offer and sale of digital commodities by the Securities and Exchange Commission and the Commodity Futures Trading Commission, and for other purposes.
1.
Short title; table of contents
(a)
Short title
This Act may be cited as the Digital Asset Market Clarity Act of 2025 or the CLARITY Act of 2025. (b)
Table of contents
The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. Title I—Definitions; Rulemaking; Provisional registration Sec. 101. Definitions under the Securities Act of 1933. Sec. 102. Definitions under the Securities Exchange Act of 1934. Sec. 103. Definitions under the Commodity Exchange Act. Sec. 104. Definitions under this Act. Sec. 105. Rulemakings. Sec. 106. Registration for digital commodity exchanges, brokers, and dealers; provisional status. Sec. 107. Commodity Exchange Act and securities laws savings provisions. Sec. 108. Administrative requirements. Sec. 109. International cooperation. Sec. 110. Application of the Bank Secrecy Act. Sec. 111. Implementation. Title II—Offers and Sales of Digital Commodities Sec. 201. Treatment of investment contract assets. Sec. 202. Exempted primary transactions in digital commodities. Sec. 203. Treatment of secondary transactions in digital commodities that originally involved investment contracts. Sec. 204. Requirements for offers and sales of digital commodities by digital commodity related persons and digital commodity affiliated persons. Sec. 205. Mature blockchain system requirements. Sec. 206. Effective date. Title III—Registration for Intermediaries at the Securities and Exchange Commission Sec. 301. Treatment of digital commodities and permitted payment stablecoins. Sec. 302. Anti-fraud authority over permitted payment stablecoins and certain digital commodity transactions. Sec. 303. Eligibility of alternative trading systems. Sec. 304. Operation of alternative trading systems. Sec. 305. Modernization of recordkeeping requirements. Sec. 306. Exemptive authority. Sec. 307. Additional registrations with the Commodity Futures Trading Commission. Sec. 308. Exempting digital commodities from State securities laws. Sec. 309. Exclusion for decentralized finance activities. Sec. 310. Treatment of custody activities by banking institutions. Sec. 311. Digital commodity activities that are financial in nature. Sec. 312. Effective date; administration. Sec. 313. Studies on foreign adversary participation. Title IV—Registration for Digital Commodity Intermediaries at the Commodity Futures Trading Commission Sec. 401. Commission jurisdiction over digital commodity transactions. Sec. 402. Requiring futures commission merchants to use qualified digital asset custodians. Sec. 403. Trading certification and approval for digital commodities. Sec. 404. Registration of digital commodity exchanges. Sec. 405. Qualified digital asset custodians. Sec. 406. Registration and regulation of digital commodity brokers and dealers. Sec. 407. Registration of associated persons. Sec. 408. Registration of commodity pool operators and commodity trading advisors. Sec. 409. Exclusion for decentralized finance activities. Sec. 410. Resources for implementation and enforcement. Sec. 411. Digital commodity activities by SEC-registered entities. Sec. 412. Requirements related to control persons. Sec. 413. Other tradable assets. Sec. 414. Effective date. Sec. 415. Sense of Congress. Title V—Innovation and Technology Improvements Sec. 501. Findings; sense of Congress. Sec. 502. Modernization of the Securities and Exchange Commission mission. Sec. 503. Strategic Hub for Innovation and Financial Technology. Sec. 504. Codification of LabCFTC. Sec. 505. Study on decentralized finance. Sec. 506. Study on non-fungible tokens. Sec. 507. Study on expanding financial literacy amongst digital commodity holders. Sec. 508. Study on financial market infrastructure improvements. Sec. 509. Study on illicit use of digital assets. Sec. 510. Conflict of interest rulemaking.
<enum>I</enum><header>Definitions; Rulemaking; Provisional registration</header> <section id="H07BF88997659491796EA96C9779B8FC1"><enum>101.</enum><header>Definitions under the Securities Act of 1933</header><text display-inline="no-display-inline">Section 2(a) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77b">15 U.S.C. 77b(a)</external-xref>) is amended by adding at the end the following:</text> <quoted-block style="OLC" id="H20F91A7EDA0747F69701A2354902CD62" display-inline="no-display-inline"> <paragraph id="HC6FA75D1AE674833BDD6CF77F20F0D52"><enum>(20)</enum><header>Blockchain</header><text display-inline="yes-display-inline">The term <term>blockchain</term> means—</text> <subparagraph id="HDB819BCE39E641C8B3403C4D55CADEFD"><enum>(A)</enum><text>any technology—</text> <clause id="H80EC1D281CB54788BF16D188FDD3190A"><enum>(i)</enum><text>where data is—</text> <subclause id="HCC323822C7E44FA192848DBA4790A328"><enum>(I)</enum><text display-inline="yes-display-inline">shared across a network to create a distributed ledger of independently verifiable transactions or information among network participants;</text></subclause> <subclause id="HB670F0268A9B4F38ABF3EEDEE5EADE3D"><enum>(II)</enum><text>linked using cryptography to maintain the integrity of the distributed ledger and to execute other functions; and</text></subclause> <subclause id="HDAFE0254EDBB425A89C41C086BF5A048" display-inline="no-display-inline"><enum>(III)</enum><text display-inline="yes-display-inline">propagated among network participants to reach consensus on the state of the distributed ledger and any other functions; and</text></subclause></clause> <clause id="H1FFBE626D77A40498484C7C65CE0D63D"><enum>(ii)</enum><text>composed of source code that is publicly available; and</text></clause></subparagraph> <subparagraph id="H4B6862FCC34A46E29D04EE15D0CB3ECE"><enum>(B)</enum><text>any similar technology to the technology described in subparagraph (A).</text></subparagraph></paragraph> <paragraph id="HA1D25CB4AA2F499DA8F62A7F289CDB3D"><enum>(21)</enum><header>Blockchain application</header><text display-inline="yes-display-inline">The term <term>blockchain application</term> means any executable software deployed to a blockchain composed of source code that is publicly available, including a smart contract or any network of smart contracts, or other similar technology.</text></paragraph> <paragraph id="H72E9322163024E2BAE5ABCA92ECE031F"><enum>(22)</enum><header>Blockchain protocol</header><text display-inline="yes-display-inline">The term ‘blockchain protocol’ means the freely and publicly available source code of a blockchain that is executed by the network participants of a blockchain to facilitate its functioning, or other similar technology.</text></paragraph> <paragraph id="HB3BABAF64CE1414BBA4378D179D3B908"><enum>(23)</enum><header>Blockchain system</header><text display-inline="yes-display-inline">The term <term>blockchain system</term> means any blockchain, together with its blockchain protocol or any blockchain application or network of blockchain applications.</text></paragraph> <paragraph id="HA74210BFC7AC4D1FAD82E355F5701BE3" commented="no"><enum>(24)</enum><header>Decentralized governance system</header> <subparagraph id="H0902500AA9F4412CB117A3C2609748D2"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The term <term>decentralized governance system</term> means, with respect to a blockchain system, any transparent, rules-based system permitting persons to form consensus or reach agreement in the development, provision, publication, management, or administration of such blockchain system, where participation is not limited to, or under the effective control of, any person or group of persons under common control.</text></subparagraph> <subparagraph id="H695A11EAAF7A43E3857177A8E31E1F59"><enum>(B)</enum><header>Relationship of persons to decentralized governance systems</header><text display-inline="yes-display-inline">With respect to a decentralized governance system, the decentralized governance system and any persons participating in the decentralized governance system shall be treated as separate persons unless such persons are under common control.</text></subparagraph> <subparagraph id="H610BFADFD92F45E9868CA4D80362E505"><enum>(C)</enum><header>Legal entities for decentralized governance systems</header><text display-inline="yes-display-inline">The term <term>decentralized governance system</term> shall include a legal entity used to implement the rules-based system described in subparagraph (A), provided that the organizing and governing laws of such legal entity do not create or require centralized and hierarchical management of such legal entity. For the purposes of this subparagraph, the delegation of ministerial or administrative authority at the direction of the participants in a decentralized governance system shall not be construed to be centralized and hierarchical management.</text></subparagraph></paragraph> <paragraph id="HBD479FB3CB7F4C9A9A06E9A0B4CCFFCA"><enum>(25)</enum><header>Digital asset</header><text display-inline="yes-display-inline">The term <term>digital asset</term> means any digital representation of value which is recorded on a cryptographically-secured distributed ledger or other similar technology.</text></paragraph> <paragraph id="H07CCADA095C64E6A97D37C60AAA96220"><enum>(26)</enum><header>Digital commodity</header><text display-inline="yes-display-inline">The term <term>digital commodity</term> has the meaning given that term under section 1a of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1a">7 U.S.C. 1a</external-xref>).</text></paragraph> <paragraph id="HF789CAB126C2432085B9B2CA4A4CAF56"><enum>(27)</enum><header>Digital commodity affiliated person</header><text display-inline="yes-display-inline">The term <term>digital commodity affiliated person</term> means a person (including a digital commodity related person) that, with respect to any digital commodity—</text> <subparagraph id="H1DE90126A091480B8911789656516B61"><enum>(A)</enum><text display-inline="yes-display-inline">acquires 5 percent or more of the total outstanding units of such digital commodity from a digital commodity issuer;</text></subparagraph> <subparagraph id="H93FA1A1872A34A109EFE6870386C75D4"><enum>(B)</enum><text display-inline="yes-display-inline">is a founder of the digital commodity issuer; or</text></subparagraph> <subparagraph id="HB8F15A11DD8F4FD38080BEC1FC04BEA1"><enum>(C)</enum><text display-inline="yes-display-inline">is an executive director, director, trustee, or general partner of the digital commodity issuer or held such role at any point in the previous 12-month period.</text></subparagraph></paragraph> <paragraph id="HE02E4D6EC4164F9EB2B14E7812FB5A99"><enum>(28)</enum><header>Digital commodity issuer</header><text display-inline="yes-display-inline">With respect to a digital commodity, the term <term>digital commodity issuer</term> means any person that—</text> <subparagraph id="H3CA01AE55B464F608A06E44C37AE8625"><enum>(A)</enum><text display-inline="yes-display-inline">proposes, issues, or causes to be issued a unit of such digital commodity to a person; or</text></subparagraph> <subparagraph id="HB45D477806BB48629E5AB6111C859197"><enum>(B)</enum><text>offers or sells a right to a future issuance of a unit of such digital commodity to a person.</text></subparagraph></paragraph> <paragraph id="H57528035A19143339699CC8162A436E0"><enum>(29)</enum><header>Digital commodity related person</header> <subparagraph id="HCA5AF6A5A8C74EA699310D9CF5C15433"><enum>(A)</enum><header>In general</header><text>With respect to a digital commodity issuer, the term <term>digital commodity related person</term> means—</text> <clause id="H1B57C8958DA54F6C86049B28464083D4"><enum>(i)</enum><text display-inline="yes-display-inline">a person that is or was in the previous 6-month period a promoter, senior employee, advisory board member, consultant, advisor, or person serving in a similar capacity; and</text></clause> <clause id="H73DE2124F19849D2A406425C286D0C78"><enum>(ii)</enum><text display-inline="yes-display-inline">a person that acquires 1 percent or more of the total outstanding units of such digital commodity from a digital commodity issuer.</text></clause></subparagraph> <subparagraph id="H758D5BB6D44248E09724E19BE90AE7DA"><enum>(B)</enum><header>Senior employee defined</header><text display-inline="yes-display-inline">In this paragraph and with respect to a digital commodity issuer, the term <term>senior employee</term> means any employee materially involved in the management or planning of the digital commodity issuer or the development of the blockchain system to which the digital commodity relates.</text></subparagraph></paragraph> <paragraph id="H90CC7BFD611E4D30ADDBBB170FF59DC6"><enum>(30)</enum><header>End user distribution</header><text>The term <term>end user distribution</term> means a distribution of a unit of a digital commodity that—</text> <subparagraph id="HEFAF504F802048E788A5F7A01D70A4DE"><enum>(A)</enum><text display-inline="yes-display-inline">does not involve an exchange of more than a nominal value of cash, property, or other assets; and</text></subparagraph> <subparagraph id="H2DFC2568656E47B99CDA7597D9D568EC"><enum>(B)</enum><text display-inline="yes-display-inline">is distributed in a broad and equitable manner based on conditions capable of being satisfied by any participant in the blockchain system, including, as incentive-based rewards—</text> <clause id="HEFB7F7744BE9400599057D75E1E0C4B1"><enum>(i)</enum><text display-inline="yes-display-inline">to users of the digital commodity or any blockchain system to which the digital commodity relates;</text></clause> <clause id="HC877BC4D799748129DA423CA4D43732A"><enum>(ii)</enum><text>for activities directly related to the operation of the blockchain system, such as mining, validating, staking, or other activity directly tied to the operation of the blockchain system; or</text></clause> <clause id="H9B6E6F1FEEFF4B1E966C15E994707456"><enum>(iii)</enum><text display-inline="yes-display-inline">to the existing holders of another digital commodity, in proportion to the total units of such other digital commodity as are held by each person.</text></clause></subparagraph></paragraph> <paragraph id="HD993A39DE54F4658AD0FBC4C153C3B37"><enum>(31)</enum><header>Mature blockchain system</header><text display-inline="yes-display-inline">The term ‘mature blockchain system’ means a blockchain system, together with its related digital commodity, that is not controlled by any person or group of persons under common control.</text></paragraph> <paragraph id="H8162D36F6EC54D81B31115BC91C1D8D8" commented="no"><enum>(32)</enum><header>Permitted payment stablecoin</header> <subparagraph id="H3378242137A946DCA32AD94721362255"><enum>(A)</enum><header>In general</header><text>The term <term>permitted payment stablecoin</term> means a digital asset—</text> <clause id="H74C6FAF6AD554FCBA56A623967CF9AE7" commented="no"><enum>(i)</enum><text>that is or is designed to be used as a means of payment or settlement;</text></clause> <clause id="H80D2EFC35E0E4516A570E52CBFCDAC66"><enum>(ii)</enum><text>that is denominated in a national currency;</text></clause> <clause id="HD3DDA287785C4956B905EC89B02EE54F"><enum>(iii)</enum><text display-inline="yes-display-inline">the issuer of which is subject to the regulatory and supervisory authority of a State or Federal agency;</text></clause> <clause id="HFB9879BF9FB645D9BA876AD6CB44FE5D" commented="no"><enum>(iv)</enum><text>the issuer of which—</text> <subclause id="HA3D91E3AB02245829C665659357E2FC3" commented="no"><enum>(I)</enum><text>is obligated to convert, redeem, or repurchase for a fixed amount of monetary value; or</text></subclause> <subclause id="HB77A8F25D54348C1A643FC63C5FC8D2B" commented="no"><enum>(II)</enum><text display-inline="yes-display-inline">represents that the digital asset will maintain or creates the reasonable expectation that the digital asset will maintain a stable value relative to the value of a fixed amount of monetary value; and</text></subclause></clause> <clause id="HE8B28ADB326C4D67857A5A9E5E35FB89" commented="no"><enum>(v)</enum><text>that is not—</text> <subclause id="HF5347EA986364D78847C4C16D380315E" commented="no"><enum>(I)</enum><text>a national currency;</text></subclause> <subclause id="HFFAF166C065945DEB673F3C6E781720F" commented="no"><enum>(II)</enum><text>a security issued by—</text> <item id="HFC4EDA694C204F24A0DA1E0CA6D83A67"><enum>(aa)</enum><text>an investment company registered under section 8(a) of the Investment Company Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80a-8">15 U.S.C. 80a–8(a)</external-xref>); or</text></item> <item id="HB8DBC0A3C7B44ECEBE13AA861EC707D7"><enum>(bb)</enum><text display-inline="yes-display-inline">a person that would be an investment company under the Investment Company Act of 1940 but for paragraphs (1) and (7) of section 3(c) of that Act (<external-xref legal-doc="usc" parsable-cite="usc/15/80a-3">15 U.S.C. 80a–3(c)</external-xref>);</text></item></subclause> <subclause id="H54059707911A48E49ECD8011D7A96E04"><enum>(III)</enum><text display-inline="yes-display-inline">a deposit (as defined under section 3 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813</external-xref>)), regardless of the technology used to record such deposit; or</text></subclause> <subclause id="HFFB32029C0EC4C5BBA7E52D9D498A543"><enum>(IV)</enum><text display-inline="yes-display-inline">an account (as defined in section 101 of the Federal Credit Union Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1752">12 U.S.C. 1752</external-xref>)), regardless of the technology used to record such account.</text></subclause></clause></subparagraph> <subparagraph id="H97B888F6DA394CC998D0D7CA07120CD1" display-inline="no-display-inline"><enum>(B)</enum><header>Monetary value defined</header><text>The term <term>monetary value</term>—</text> <clause id="H7BC366DA9DA8420AA026F77A15AC1E0B"><enum>(i)</enum><text display-inline="yes-display-inline">means—</text> <subclause id="H3B4B6EFA50BD4099B3CDA4B40E9E5B0B"><enum>(I)</enum><text>a national currency;</text></subclause> <subclause id="H49002414DF484F9EA75CE6D5C7DFC555"><enum>(II)</enum><text>a deposit (as defined in section 3 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813</external-xref>)) that is denominated in a national currency; or</text></subclause> <subclause id="H745EF52C0717402EB359ACB9C7E7D1CE"><enum>(III)</enum><text display-inline="yes-display-inline">an account (as defined in section 101 of the Federal Credit Union Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1752">12 U.S.C. 1752</external-xref>)); and</text></subclause></clause> <clause id="H8CF10D244B064BFF9CAFF1FB06759BC9"><enum>(ii)</enum><text display-inline="yes-display-inline">does not include any agricultural or other physical commodity (as defined in section 1a of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1a">7 U.S.C. 1a</external-xref>)).</text></clause></subparagraph></paragraph> <paragraph id="HBC7AFCD0168A48C0879BD8B4F593917D"><enum>(33)</enum><header>Securities laws</header><text display-inline="yes-display-inline">The term <term>securities laws</term> has the meaning given that term under section 3(a) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78c">15 U.S.C. 78c(a)</external-xref>).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="HFF4506F259204161A53E7D44BC92CA65"><enum>102.</enum><header>Definitions under the Securities Exchange Act of 1934</header><text display-inline="no-display-inline">Section 3(a) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78c">15 U.S.C. 78c(a)</external-xref>) is amended—</text> <paragraph id="H7AE038B30B1A41B0AEFA663D2447DACE"><enum>(1)</enum><text>by redesignating the second paragraph (80) (relating to funding portals) as paragraph (81); and</text></paragraph> <paragraph id="H18CCF7A5F3914E8CA8C621DF3C7FC9A0"><enum>(2)</enum><text>by adding at the end the following:</text> <quoted-block id="HC6F7032A29654343BC49C229A3E387C5" style="OLC"> <paragraph id="HC1682E8B15F94D0397D3DB2652697638" display-inline="no-display-inline"><enum>(82)</enum><header>Bank Secrecy Act</header><text>The term <term>Bank Secrecy Act</term> means—</text> <subparagraph id="H71B6DCD7AF064FAC818A92E7B2922720"><enum>(A)</enum><text>section 21 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1829b">12 U.S.C. 1829b</external-xref>);</text></subparagraph> <subparagraph id="H3D389DC8CBD344BA8536845E577AA31D"><enum>(B)</enum><text>chapter 2 of title I of <external-xref legal-doc="public-law" parsable-cite="pl/91/508">Public Law 91–508</external-xref> (<external-xref legal-doc="usc" parsable-cite="usc/12/1951">12 U.S.C. 1951 et seq.</external-xref>); and</text></subparagraph> <subparagraph id="H5E8CCFEFAF3E4BA1893BC0A898BDA1F6"><enum>(C)</enum><text>subchapter II of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/31/53">chapter 53</external-xref> of title 31, United States Code.</text></subparagraph></paragraph> <paragraph id="H605255E199EC4B6C877C5F634F14B4D6"><enum>(83)</enum><header>Additional digital commodity-related terms</header> <subparagraph id="HD357F2AC07764E38A38FD12FFAB7AC99"><enum>(A)</enum><header>Securities Act of 1933</header><text display-inline="yes-display-inline">The terms <term>blockchain system</term>, <term>decentralized governance system</term>, <term>digital asset</term>, <term>digital commodity affiliated person</term>, <term>digital commodity issuer</term>, <term>digital commodity related person</term>, <term>end user distribution</term>, <term>mature blockchain system</term>, and <term>permitted payment stablecoin</term>, have the meaning given those terms, respectively, under section 2(a) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77b">15 U.S.C. 77b(a)</external-xref>).</text></subparagraph> <subparagraph id="HAF9B3481D59F4F63A3CCF15AB0B97E4D"><enum>(B)</enum><header>Commodity Exchange Act</header><text display-inline="yes-display-inline">The terms <term>digital commodity</term>, <term>digital commodity broker</term>, <term>digital commodity dealer</term>, <term>digital commodity exchange</term>, <term>decentralized finance messaging system</term>, and <term>decentralized finance trading protocol</term> have the meaning given those terms, respectively, under section 1a of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1a">7 U.S.C. 1a</external-xref>).</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section> <section id="H7CF4A21DDE064EDF8565CB161440C8B6" display-inline="no-display-inline" section-type="subsequent-section"><enum>103.</enum><header>Definitions under the Commodity Exchange Act</header> <subsection id="H8A17CDE777074C17A0504B0754E123B5"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 1a of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1a">7 U.S.C. 1a</external-xref>) is amended—</text> <paragraph id="H7ADA8CCD8F5041A197AD30F9ED1FC51D"><enum>(1)</enum><text>in paragraph (10)—</text> <subparagraph id="HC2B2262A4B4845A88D1BB8E4F2096905"><enum>(A)</enum><text>in subparagraph (A)—</text> <clause id="HB6C57B26928D4BCEB7FEEF3CCC274C5A"><enum>(i)</enum><text display-inline="yes-display-inline">by redesignating clauses (iii) and (iv) as clauses (iv) and (v), respectively; and</text></clause> <clause id="H81D5B496A1C04998BA02E9A07AD25656"><enum>(ii)</enum><text>by inserting after clause (ii) the following:</text> <quoted-block style="OLC" id="H3792957A1C884B30905B2C9CCA798F73" display-inline="no-display-inline"> <clause id="HB2AA7C4F2D18447496460BB3AD30BDA7"><enum>(iii)</enum><text display-inline="yes-display-inline">digital commodity;</text></clause><after-quoted-block>; and</after-quoted-block></quoted-block></clause></subparagraph> <subparagraph id="H49A7B31FED694ADAB23FDB95C9D269E7"><enum>(B)</enum><text>by redesignating subparagraph (B) as subparagraph (C) and inserting after subparagraph (A) the following:</text> <quoted-block style="OLC" id="HE66B7ED7C5464D9D9EA7C95B31175C3C" display-inline="no-display-inline"> <subparagraph id="HFD1C7ED125544B018B95C18E8E98CD97"><enum>(B)</enum><header>Exclusion</header><text display-inline="yes-display-inline">For purposes of this paragraph, the term <term>trading in commodity interests</term> shall not include transacting in digital commodities for the purpose of—</text> <clause id="H4073A29BF7F74B8A9FE5493D5538FF02"><enum>(i)</enum><text>acting as a digital commodity custodian;</text></clause> <clause id="H29376CA8B0244AB9882330F40A636C11"><enum>(ii)</enum><text>establishing, maintaining, or managing inventory or payment instruments for commercial purposes; or</text></clause> <clause id="H051BDC6643724507B06F84A3827AABF8"><enum>(iii)</enum><text>maintaining or supporting the operation of, or validating transactions on, a blockchain system.</text></clause></subparagraph><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph></paragraph> <paragraph id="H8CA9F7DFC6F744E984742B5FC138B47D"><enum>(2)</enum><text>in paragraph (11)—</text> <subparagraph id="H34EC89B0BCDE4E6E876E9B9DECC1C897"><enum>(A)</enum><text>in subparagraph (A)(i)—</text> <clause id="HD54AB5A5238E4D05BB50600468FB78F5"><enum>(i)</enum><text display-inline="yes-display-inline">by redesignating subclauses (III) and (IV) as subclauses (IV) and (V), respectively; and</text></clause> <clause id="H81A9B67B2EA942B382CF9BCEF61B4D69"><enum>(ii)</enum><text>by inserting after subclause (II) the following:</text> <quoted-block style="OLC" id="HDA7A2B3B350D4648867FB892452D9052" display-inline="no-display-inline"> <subclause id="H4B3BF88A141A43BF8127C588FB015185"><enum>(III)</enum><text display-inline="yes-display-inline">digital commodity;</text></subclause><after-quoted-block>; and</after-quoted-block></quoted-block></clause></subparagraph> <subparagraph id="H50CE1C2F0056487593F5EA2B7F487CEC"><enum>(B)</enum><text>by redesignating subparagraph (B) as subparagraph (C) and inserting after subparagraph (A) the following:</text> <quoted-block style="OLC" id="HC0209032E38645F9B9608F93F65B2101" display-inline="no-display-inline"> <subparagraph id="HCB128AC6D53B46549E82946E70083289"><enum>(B)</enum><header>Exclusion</header><text display-inline="yes-display-inline">For purposes of this paragraph, the term <term>trading in commodity interests</term> shall not include transacting in digital commodities for the purpose of—</text> <clause id="HD9DD1D557AB543B1A83557FA293CDD79"><enum>(i)</enum><text>acting as a digital commodity custodian;</text></clause> <clause id="HC2DB080E4257435ABE211FC9DF943B5B"><enum>(ii)</enum><text>establishing, maintaining, or managing inventory or payment instruments for commercial purposes; or</text></clause> <clause id="HFFF7856952584A3E850807E20258C4D1"><enum>(iii)</enum><text>maintaining or supporting the operation of, or validating transactions on, a blockchain system.</text></clause></subparagraph><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph></paragraph> <paragraph id="H00EBB318F4DE4B7EB948235679BA88EE"><enum>(3)</enum><text>in paragraph (12)(A)(i)—</text> <subparagraph id="HE50B5BF88DE44574AA6EE237DA9A3FE3"><enum>(A)</enum><text>in subclause (II), by adding at the end a semicolon;</text></subparagraph> <subparagraph id="H9B77A68966154657BB7FF07A1B51C5EA"><enum>(B)</enum><text display-inline="yes-display-inline">by redesignating subclauses (III) and (IV) as subclauses (IV) and (V), respectively; and</text></subparagraph> <subparagraph id="H8AD36562C69C43199AEAD56D019A628A"><enum>(C)</enum><text>by inserting after subclause (II) the following:</text> <quoted-block style="OLC" id="HFF13F87C1967486FB1D74CB7E1AA7038" display-inline="no-display-inline"> <subclause id="H40393296EAE04BC5B397EEF6F3C439E0"><enum>(III)</enum><text display-inline="yes-display-inline">a digital commodity;</text></subclause><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph></paragraph> <paragraph id="HA245880C59CC480D949244DB76D71ED4"><enum>(4)</enum><text display-inline="yes-display-inline">by redesignating paragraphs (16) through (51) as paragraphs (17) through (52), respectively, and inserting after paragraph (15) the following:</text> <quoted-block style="OLC" id="H7FC526C7F9004921B5E8BD97A1BD7976" display-inline="no-display-inline"> <paragraph id="H501A480BE6C1470A8CE86CC5635A6EED"><enum>(16)</enum><header>Terms related to digital commodities</header> <subparagraph id="H689187097F124DA396A34AC7ABAF0C04" commented="no"><enum>(A)</enum><header>Associated person of a digital commodity broker</header> <clause id="H24633FA5F49346518B6C083FEA4D6B8A" commented="no"><enum>(i)</enum><header>In general</header><text>Except as provided in clause (ii), the term <term>associated person of a digital commodity broker</term> means a person who is associated with a digital commodity broker as a partner, officer, employee, or agent (or any person occupying a similar status or performing similar functions) in any capacity that involves—</text> <subclause id="H2FE40FAC37C74AB1884BECB1736C9E75" commented="no"><enum>(I)</enum><text>the solicitation or acceptance of an order for the purchase or sale of a digital commodity; or</text></subclause> <subclause id="HD01E4A4F96F944DFA850BFD24C6FFF79" commented="no"><enum>(II)</enum><text>the supervision of any person engaged in the solicitation or acceptance of an order for the purchase or sale of a digital commodity.</text></subclause></clause> <clause id="H7981238BFCD845A68541E55014C1DDBF" commented="no"><enum>(ii)</enum><header>Exclusion</header><text>The term <term>associated person of a digital commodity broker</term> does not include any person associated with a digital commodity broker the functions of which are solely clerical or ministerial.</text></clause></subparagraph> <subparagraph id="H87B127B31D854EC982FDB33B1B22E89A" commented="no"><enum>(B)</enum><header>Associated person of a digital commodity dealer</header> <clause id="H668D7A4CC8754E65982BC7631D90CE05" commented="no"><enum>(i)</enum><header>In general</header><text>Except as provided in clause (ii), the term <term>associated person of a digital commodity dealer</term> means a person who is associated with a digital commodity dealer as a partner, officer, employee, or agent (or any person occupying a similar status or performing similar functions) in any capacity that involves—</text> <subclause id="H06BA0F8ACEB945DFA2E3C63E951A9A6C" commented="no"><enum>(I)</enum><text>the solicitation or acceptance of a contract for the purchase or sale of a digital commodity; or</text></subclause> <subclause id="HA6F3450593E94FDF933160437AC5384C" commented="no"><enum>(II)</enum><text>the supervision of any person engaged in the solicitation or acceptance of a contract for the purchase or sale of a digital commodity.</text></subclause></clause> <clause id="HA26432CC95A644509020B988A621AAC1" commented="no"><enum>(ii)</enum><header>Exclusion</header><text>The term <term>associated person of a digital commodity dealer</term> does not include any person associated with a digital commodity dealer the functions of which are solely clerical or ministerial.</text></clause></subparagraph> <subparagraph id="H177747122AE74DC5BC34149B1B58CC49" display-inline="no-display-inline"><enum>(C)</enum><header>Bank Secrecy Act</header><text>The term <term>Bank Secrecy Act</term> means—</text> <clause id="H5744F0DB97A84E999C98092EB467B14D"><enum>(i)</enum><text>section 21 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1829b">12 U.S.C. 1829b</external-xref>);</text></clause> <clause id="H77FF7E68B43D44DCAB116C0757EA569F"><enum>(ii)</enum><text>chapter 2 of title I of <external-xref legal-doc="public-law" parsable-cite="pl/91/508">Public Law 91–508</external-xref> (<external-xref legal-doc="usc" parsable-cite="usc/12/1951">12 U.S.C. 1951 et seq.</external-xref>); and</text></clause> <clause id="H1A019F17E8944FAAA73E662A407AEFCB"><enum>(iii)</enum><text>subchapter II of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/31/53">chapter 53</external-xref> of title 31, United States Code.</text></clause></subparagraph> <subparagraph id="H83EDCD7BD1BA4BF2A2E4521228D2458F"><enum>(D)</enum><header>Decentralized finance messaging system</header> <clause id="H9394C4F33FA04558B9F0330A42A3D498"><enum>(i)</enum><header>In general</header><text>The term <term>decentralized finance messaging system</term> means a software application that provides a user with the ability to create or submit an instruction, communication, or message to a decentralized finance trading protocol for the purpose of executing a transaction by the user.</text></clause> <clause id="H2E95A85E386F45E58953AB7838F9E29E"><enum>(ii)</enum><header>Additional requirements</header><text>The term <term>decentralized finance messaging system</term> does not include any system that provides any person other than the user with control over—</text> <subclause id="H47D08312C3D043BFBA23CB7147FC4C02"><enum>(I)</enum><text>the funds of the user; or</text></subclause> <subclause id="HD469CB82A77A40F5B2BFEC0B824EDE1F"><enum>(II)</enum><text>the execution of the transaction of the user.</text></subclause></clause></subparagraph> <subparagraph id="HDB053AF3AFCC40BD94CBFA0A5450D860"><enum>(E)</enum><header>Decentralized finance trading protocol</header> <clause id="HAE94D1394F5340F381530A89E66F16AF"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">The term <term>decentralized finance trading protocol</term> means a blockchain system through which multiple participants can execute a financial transaction—</text> <subclause id="H23E57938FD9541C1A1F9BFAD2180AD63"><enum>(I)</enum><text>in accordance with an automated rule or algorithm that is predetermined and non-discretionary; and</text></subclause> <subclause id="H4FDEE7FB9141408CAB9D52D5219F6C43"><enum>(II)</enum><text>without reliance on any other person to maintain control of the digital assets of the user during any part of the financial transaction.</text></subclause></clause> <clause id="H730D9501612B4305B380316DD35698B1"><enum>(ii)</enum><header>Exclusions</header> <subclause id="H127FBF6557CD49078A515783C7B5AAC2"><enum>(I)</enum><header>In general</header><text>The term <term>decentralized finance trading protocol</term> does not include a blockchain system if—</text> <item id="H7FE18782A7B94FB99AFC76B675BEADA1"><enum>(aa)</enum><text display-inline="yes-display-inline">a person or group of persons under common control or acting pursuant to an agreement to act in concert has the authority, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, to control or materially alter the functionality, operation, or rules of consensus or agreement of the blockchain system; or</text></item> <item id="H60BA6760AD9141E39D38972ECFC3F1B5"><enum>(bb)</enum><text>the blockchain system does not operate, execute, and enforce its operations and transactions based solely on pre-established, transparent rules encoded directly within the source code of the blockchain system.</text></item></subclause> <subclause id="HEFC53A1881FC4A49A1DBF4F570A81B3A"><enum>(II)</enum><header>Special rule</header><text display-inline="yes-display-inline">For purposes of subclause (I), a decentralized governance system shall not be considered to be a person or a group of persons under common control or acting pursuant to an agreement to act in concert.</text></subclause></clause></subparagraph> <subparagraph id="HAE6AA4A32B034390966EF96C7DCE00C1" commented="no"><enum>(F)</enum><header>Digital commodity</header> <clause id="H2FEA3F26DE8840B89A5251B7D696F9F0"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">The term <term>digital commodity</term> means a digital asset that is intrinsically linked to a blockchain system, and the value of which is derived from or is reasonably expected to be derived from the use of the blockchain system.</text></clause> <clause id="H2F7BB41FD1464093BA5B2231A115189C"><enum>(ii)</enum><header>Relationship to a blockchain system</header><text>For purposes of this subparagraph, a digital asset is intrinsically linked to a blockchain system if the digital asset is directly related to the functionality or operation of the blockchain system or to the activities or services for which the blockchain system is created or utilized, including where the digital asset is—</text> <subclause id="HA77F330854CA4108974C475ACD991D0C"><enum>(I)</enum><text>issued or generated by the programmatic functioning of the blockchain system;</text></subclause> <subclause id="HB77BD3B2473E4773ADF4B819B9664F3E"><enum>(II)</enum><text>used to transfer value between participants in the blockchain system;</text></subclause> <subclause id="HB7D4FAA611484A77B1FDA2A4DCB4E6E1"><enum>(III)</enum><text>used to access the activities or services of the blockchain system;</text></subclause> <subclause id="H90AB55BF930E46C49070A59E7F9A6A52"><enum>(IV)</enum><text>used to participate in the decentralized governance system of the blockchain system;</text></subclause> <subclause id="H0D3D4582ACF34D9C8A071C757E4B4A55"><enum>(V)</enum><text>used or removed from circulation in whole or in part to pay fees or otherwise verify or validate transactions on the blockchain system;</text></subclause> <subclause id="HC967D696755645A9A0A2B5202590628D"><enum>(VI)</enum><text>used as payment or incentive to participants in the blockchain system to engage in the activities of the blockchain system, provide services to other participants in the blockchain system, or otherwise participate in the functionality of the blockchain system; or</text></subclause> <subclause id="HCD84357B457548A685C446F3EE77B20C"><enum>(VII)</enum><text>used as payment or incentive to participants in the blockchain system to validate transactions, secure the blockchain system, provide computational services, maintain or distribute information, or otherwise participate in the operations of the blockchain system.</text></subclause></clause> <clause id="HC3A3BF4AD48D46DDAFA7C2026E401E86"><enum>(iii)</enum><header>Exclusion</header><text>The term <term>digital commodity</term> does not include any of the following:</text> <subclause id="HF17E8A19C491438BACE08375A522FC5B" commented="no"><enum>(I)</enum><header>Security</header> <item id="H0EBA585E1CDF4DF79774976435D0F23D" commented="no"><enum>(aa)</enum><text display-inline="yes-display-inline">Any security, other than a note, an investment contract, or a certificate of interest or participation in any profit-sharing agreement.</text></item> <item id="H795D962B76B4424F9737EC8EA04E4A47" commented="no"><enum>(bb)</enum><text>A note, an investment contract, or a certificate of interest or participation in any profit-sharing agreement that—</text> <subitem id="H85909E8D833E4E8B81955BFEC7FB8BE1"><enum>(AA)</enum><text>represents or gives the holder an ownership interest or other interest in the revenues, profits, obligations, debts, assets, or assets or debts to be acquired of the issuer of the digital asset or another person (other than a decentralized governance system);</text></subitem> <subitem id="HD53C7B07E8654D47973E945715A9D337"><enum>(BB)</enum><text display-inline="yes-display-inline">makes the holder a creditor of the issuer of the digital asset or another person; or</text></subitem> <subitem id="HAF6E9C87CEA24F40A830DE90D7C169A3"><enum>(CC)</enum><text>represents or gives the holder the right to receive interest or the return of principal from the issuer of the digital asset or another person. </text></subitem></item></subclause> <subclause id="H2A415236E64B4E84AD0715D04D18C2F0"><enum>(II)</enum><header>Security derivative</header><text>A digital asset that, based on its terms and other characteristics, is, represents, or is functionally equivalent to an agreement, contract, or transaction that is—</text> <item id="HC5845AA20C6C446BB85F85EA90237007"><enum>(aa)</enum><text>a security future, as defined in section 2a of the Securities Act of 1933;</text></item> <item id="H91F81E105F2F4D72B7916455D1D7B6D0"><enum>(bb)</enum><text>a security-based swap, as defined in section 2a of the Securities Act of 1933;</text></item> <item id="HDEEC038DDA9F438990008D2B2FE3D627"><enum>(cc)</enum><text>a put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), as defined in section 2a of the Securities Act of 1933; or</text></item> <item id="H89B20C67060D42568CC9B9FFB191AE2A"><enum>(dd)</enum><text>a put, call, straddle, option, or privilege on any security, as defined in section 2a of the Securities Act of 1933.</text></item></subclause> <subclause id="HE42B32C0F9C949C7BE913E3B8B0DA47A"><enum>(III)</enum><header>Permitted payment stablecoin</header><text>A digital asset that is a permitted payment stablecoin.</text></subclause> <subclause id="HE16AC93750684AF484A796BDC0C3B3D1"><enum>(IV)</enum><header>Banking deposit</header> <item id="H7E8D9582450B40328084BA4B4489DEC8"><enum>(aa)</enum><text>A deposit (as defined under section 3 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813</external-xref>)), regardless of the technology used to record the deposit.</text></item> <item id="H773CCADD240F43FCA10732C75EBC9FAB"><enum>(bb)</enum><text display-inline="yes-display-inline">An account (as defined in section 101 of the Federal Credit Union Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1752">12 U.S.C. 1752</external-xref>)), regardless of the technology used to record the account.</text></item></subclause> <subclause id="H3A05D00ECF6C46C388569468E2035CB6"><enum>(V)</enum><header>Commodity</header><text>A digital asset that references, represents an interest in, or is functionally equivalent to—</text> <item id="H8C8AB76D02BF46189973F0D23BD12089"><enum>(aa)</enum><text>an agricultural commodity;</text></item> <item id="H9239F93B41EA4AC0B799733A901B4886"><enum>(bb)</enum><text>an excluded commodity, other than a security; or</text></item> <item id="HA27B1043BAEA4F239DF4C558E8308554"><enum>(cc)</enum><text>an exempt commodity, other than the digital commodity itself, as shall be further defined by the Commission.</text></item></subclause> <subclause id="H17C59F2347114E0895B34262F2EEC6C6"><enum>(VI)</enum><header>Commodity derivative</header><text>A digital asset that, based on its terms and other characteristics, is, represents, or is functionally equivalent to an agreement, contract, or transaction that is—</text> <item id="H44E9E1FA6435402EA5119C6333AD3E7E"><enum>(aa)</enum><text>a contract of sale of a commodity for future delivery or an option thereon;</text></item> <item id="HA0FE2F25796846E79BA55A5E3E2BDBBF"><enum>(bb)</enum><text>a security futures product;</text></item> <item id="H4787AF709D5543DD8878365A543644BD"><enum>(cc)</enum><text>a swap;</text></item> <item id="H211C5AFD054E4B9D9E7E1A8AFFAC7D6F"><enum>(dd)</enum><text>an agreement, contract, or transaction described in section 2(c)(2)(C)(i) or 2(c)(2)(D)(i);</text></item> <item id="HA775AFC50D3043D88B0A8745B0A228BC"><enum>(ee)</enum><text>a commodity option authorized under section 4c; or</text></item> <item id="HCE863ACFE1814D7C9CE48E6C7AE206F3"><enum>(ff)</enum><text>a leverage transaction authorized under section 19.</text></item></subclause> <subclause id="HDE9A60E739974A17900DA8CA730AD7B1"><enum>(VII)</enum><header>Pooled investment vehicle</header> <item id="HC09D245EC2E74173A9D899096096EBBC"><enum>(aa)</enum><header>In general</header><text>A digital asset that, based on its terms and other characteristics, is, represents, or is functionally equivalent to—</text> <subitem id="HFF205FD1213F400E9B76A623664A533F"><enum>(AA)</enum><text>a commodity pool, as defined in this Act; or</text></subitem> <subitem id="H0D176B78BEB24B5B8180C058F946BA8F"><enum>(BB)</enum><text>a pooled investment vehicle.</text></subitem></item> <item id="HE922AD5D5D5F42508646D7F668344DFD"><enum>(bb)</enum><header>Pooled investment vehicle defined</header><text display-inline="yes-display-inline">In this subclause, the term <term>pooled investment vehicle</term> means—</text> <subitem id="HC445D789F8D6499B85095DC742B59ABD"><enum>(AA)</enum><text>any investment company as defined in section 3(a) of the Investment Company Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80a-3">15 U.S.C. 80a–3(a)</external-xref>);</text></subitem> <subitem id="H6C7E727B16ED4CF3AC30C99B2AFB6FF9"><enum>(BB)</enum><text>any company that would be an investment company under section 3(a) of such Act but for the exclusion provided from that definition by paragraph (1), (7), or (9) of section 3(c) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/15/80a-3">15 U.S.C. 80a–3(c)(1)</external-xref>, (7), or (9)); or</text></subitem> <subitem id="H638ACD7D96714F319820A4CB0F62A87E"><enum>(CC)</enum><text display-inline="yes-display-inline">any entity or person that is not an investment company but holds or will hold assets other than securities.</text></subitem></item></subclause> <subclause id="H40C22B9E7CD04DF98EB869D0890C145B"><enum>(VIII)</enum><header>Good, collectible, and other non-commodity asset</header><text display-inline="yes-display-inline">A digital asset that has value, utility, or significance beyond its mere existence as a digital asset, including the digital equivalent of a tangible or intangible good, such as—</text> <item id="H5FF2B0EBAEB44C0CBA261C719B622088"><enum>(aa)</enum><text>a work of art, a musical composition, a literary work, or other intellectual property;</text></item> <item id="H1D5A8DA1EE394B4CB98AA5FB3BF4FC64"><enum>(bb)</enum><text>collectibles, merchandise, virtual land, and video game assets;</text></item> <item id="H1430AFCA1F2D4D2CA504739E26ECF62E"><enum>(cc)</enum><text>affinity, rewards, or loyalty points, including airline miles or credit card points, that are not primarily speculative in nature; or</text></item> <item id="H377623F15FD34EFDB1E1D4614C68F97E"><enum>(dd)</enum><text>rights, licenses, and tickets.</text></item></subclause></clause> <clause id="HAFC52C5B194F44A6824C0254DB6EDD58"><enum>(iv)</enum><header>Rule of construction</header><text display-inline="yes-display-inline">No presumption shall exist that a digital asset is a security, nor shall a digital asset be excluded from being a digital commodity pursuant to clause (iii)(I), solely due to—</text> <subclause id="H354B4D8DD3454D38ACD7207F715EE7F3"><enum>(I)</enum><text display-inline="yes-display-inline">the digital asset providing voting or economic rights with respect to the blockchain system to which the digital asset relates or the decentralized governance system of the blockchain system to which the digital asset relates;</text></subclause> <subclause id="H13340A26A1664515B4F1E33CA98DA023"><enum>(II)</enum><text display-inline="yes-display-inline">the value of the digital asset having the potential to appreciate or depreciate in response to the efforts, operations, or financial performance of the blockchain system to which the digital asset relates or the decentralized governance system of the blockchain system to which the digital asset relates; or</text></subclause> <subclause id="HAAFF7517FFA74F85AB4B860DFFCEF72A"><enum>(III)</enum><text display-inline="yes-display-inline">the value of the digital asset appreciating or depreciating due to the use of the blockchain system to which the digital asset relates or the decentralized governance system of the blockchain system to which the digital asset relates.</text></subclause></clause></subparagraph> <subparagraph id="H634E6A7486D54257B30D4D42626C5692" commented="no"><enum>(G)</enum><header>Digital commodity broker</header> <clause id="H2DF4D4EF6CF14D7089FB7749C0E9D8F2" commented="no"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">The term <term>digital commodity broker</term> means any person who, as a regular business—</text> <subclause id="H55A73256CE02488BB6CB46336E0C887D" commented="no"><enum>(I)</enum><text>is engaged in—</text> <item id="H332506AF6BC04451B148949961D59A63" commented="no"><enum>(aa)</enum><text>soliciting or accepting an order from a customer for—</text> <subitem id="H9708BB900F5A4700847FD21FDFE9175F" commented="no"><enum>(AA)</enum><text>the purchase or sale of a digital commodity; or</text></subitem> <subitem id="HDFAD12B779304761AE040737EDB29120" commented="no"><enum>(BB)</enum><text>an agreement, contract, or transaction described in section 2(c)(2)(D)(iv); and</text></subitem></item> <item id="H12C0DFFA8A3C481DBBB8979727A3DD48" commented="no"><enum>(bb)</enum><text>in conjunction with the activities in item (aa), accepts or maintains control over—</text> <subitem id="HAE0F2D3C24084D1CAD1DCC49EBB4A798" commented="no"><enum>(AA)</enum><text>the funds of any customer; or</text></subitem> <subitem id="H3DB96F43BF21481B8707413011602A30" commented="no"><enum>(BB)</enum><text>the execution of any transaction of a customer;</text></subitem></item></subclause> <subclause id="H15ED069426774BDD84DE8AACB56AD7A1" commented="no"><enum>(II)</enum><text>is engaged in soliciting or accepting orders from a customer for the purchase or sale of a unit of a digital commodity on or subject to the rules of a registered entity; or</text></subclause> <subclause id="HA6148BEF1C684299AE84C766C55601EE" commented="no"><enum>(III)</enum><text>is registered with the Commission as a digital commodity broker.</text></subclause></clause> <clause id="H770B2C1B385D436FA0BA641E12426AE6" commented="no"><enum>(ii)</enum><header>Exceptions</header><text>The term ‘digital commodity broker’ does not include a person solely because the person—</text> <subclause id="H8F91F2F5ED584C97A12461060B6CB735"><enum>(I)</enum><text display-inline="yes-display-inline">solicits or accepts an order described in clause (i)(I)(aa)(AA) from a customer who is an eligible contract participant;</text></subclause> <subclause id="H482A59B2DC8C434D8F5A42439E8EC31E" commented="no"><enum>(II)</enum><text display-inline="yes-display-inline">enters into 1 or more digital commodity transactions that are attributable or solely incidental to making, sending, receiving, or facilitating payments, whether involving a payment service provider or on a peer-to-peer basis; or</text></subclause> <subclause id="H0CC09B0ECEB94C5E9D84BF78E7533861" commented="no"><enum>(III)</enum><text>is a bank (as defined under section 3(a) of the Securities Exchange Act of 1934) engaging in certain banking activities with respect to a digital commodity in the same or a similar manner as a bank is excluded from the definition of a broker under such section, as determined by the Commission.</text></subclause></clause> <clause id="H5F48CB15B0BC46B2ACD92932DD3126EB" commented="no"><enum>(iii)</enum><header>Further definition</header><text>The Commission, by rule or regulation, may exclude from the term <term>digital commodity broker</term> any person or class of persons if the Commission determines that the rule or regulation will effectuate the purposes of this Act.</text></clause></subparagraph> <subparagraph id="HFFEE79C74D3944A487FDA64605B1DDC1" commented="no"><enum>(H)</enum><header>Digital commodity dealer</header> <clause id="H34D036A8D53E49F98A79F73646CDE147" commented="no"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">The term <term>digital commodity dealer</term> means any person who, as a regular business—</text> <subclause id="H3959F184B2824A87A07C75271B8FEA3E" commented="no"><enum>(I)</enum><text>is, or offers to be a counterparty to a person for the purchase or sale of a digital commodity as a regular business, and in conjunction with the activities, accepts or maintains control over the funds of any counterparty; or</text></subclause> <subclause id="H4D496698699348FCB24409CC0555DA28" commented="no"><enum>(II)</enum><text>is registered with the Commission as a digital commodity dealer.</text></subclause></clause> <clause id="H1E61AD6512B84525A389ADA0529B75FF" commented="no"><enum>(ii)</enum><header>Exception</header><text>The term <term>digital commodity dealer</term> does not include a person solely because the person—</text> <subclause id="HA076F2EF08F94EA5BFD64DB5F6D995B5"><enum>(I)</enum><text display-inline="yes-display-inline">is or offers to be a counterparty to a person who is an eligible contract participant;</text></subclause> <subclause id="HB544D0C8C3BC4192B366CC7DFC9FFCE1" commented="no"><enum>(II)</enum><text>enters into a digital commodity transaction with an eligible contract participant;</text></subclause> <subclause id="H0822A96732D24A38B966497B2C8B5CC2" commented="no"><enum>(III)</enum><text display-inline="yes-display-inline">enters into a digital commodity transaction on or through a registered digital commodity exchange, with a registered digital commodity broker, or through a decentralized finance trading protocol;</text></subclause> <subclause id="H4238109C8D5D4208972FA265F64DEA95" commented="no"><enum>(IV)</enum><text>enters into a digital commodity transaction for the person’s own account, either individually or in a fiduciary capacity, but not as a part of a regular business;</text></subclause> <subclause id="H4AADBB9010CE429691C8085B3F2959A7" commented="no"><enum>(V)</enum><text display-inline="yes-display-inline">enters into 1 or more digital commodity transactions that are attributable or solely incidental to making, sending, receiving, or facilitating payments, whether involving a payment service provider or on a peer-to-peer basis; or</text></subclause> <subclause id="H79909FBDB8F3475D9C4C228F6E0DE58B" commented="no"><enum>(VI)</enum><text>is a bank (as defined under section 3(a) of the Securities Exchange Act of 1934) engaging in certain banking activities with respect to a digital commodity in the same or a similar manner as a bank is excluded from the definition of a dealer under section 3(a)(5) of such Act, as determined by the Commission.</text></subclause></clause> <clause id="HEFF53513C10A4122A08F1903416EDC64" commented="no"><enum>(iii)</enum><header>Further definition</header><text>The Commission, by rule or regulation, may exclude from the term <term>digital commodity dealer</term> any person or class of persons if the Commission determines that the rule or regulation will effectuate the purposes of this Act.</text></clause></subparagraph> <subparagraph id="HA02D1A90365F4D75B654CC7F254A3D60"><enum>(I)</enum><header>Digital commodity exchange</header><text display-inline="yes-display-inline">The term <term>digital commodity exchange</term> means a trading facility that offers or seeks to offer a cash or spot market in at least 1 digital commodity.</text></subparagraph> <subparagraph id="HDC64DE5521E94DB4A71E3C8FF62DE086"><enum>(J)</enum><header>Mixed digital asset transaction</header><text display-inline="yes-display-inline">The term <term>mixed digital asset transaction</term> means a transaction in which a digital commodity is traded for a security.</text></subparagraph> <subparagraph id="H172E88959C1248658B259547A92711EA"><enum>(K)</enum><header>Terms defined under the Securities Act of <enum-in-header>1933</enum-in-header></header><text display-inline="yes-display-inline">The terms <term>blockchain system</term>, <term>decentralized governance system</term>, <term>digital asset</term>, <term>digital commodity issuer</term>, <term>digital commodity affiliated person</term>, <term>digital commodity related person</term>, <term>end user distribution</term>, <term>mature blockchain system</term>, and <term>permitted payment stablecoin</term> have the meaning given those terms, respectively, under section 2(a) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77b">15 U.S.C. 77b(a)</external-xref>).</text></subparagraph></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph> <paragraph id="H0B308733C07B4FBDB23DFCAE1A757704"><enum>(5)</enum><text>in paragraph (41) (as so redesignated by paragraph (4) of this subsection)—</text> <subparagraph id="H335C7BEA9E204B968A63936891F6937C"><enum>(A)</enum><text>by striking <quote>and</quote> at the end of subparagraph (E);</text></subparagraph> <subparagraph id="H154D3716CB4A459AA904F0AFD58D789D"><enum>(B)</enum><text>by striking the period at the end of subparagraph (F) and inserting <quote>; and</quote>; and</text></subparagraph> <subparagraph id="H8B257CD45BFE453E854630A145BF53EE"><enum>(C)</enum><text>by adding at the end the following:</text> <quoted-block style="OLC" id="H4756027C3D594F0A937E427B7DBC666F" display-inline="no-display-inline"> <subparagraph id="H5C5A5C3A0F7A42C0884C70A404F353B4"><enum>(G)</enum><text display-inline="yes-display-inline">a digital commodity exchange registered under section 5i.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph></subsection> <subsection id="H15561199B6314F08AAFDD1D55376B5D0"><enum>(b)</enum><header>Conforming amendments</header> <paragraph id="H16C5E3158B784C39BD68059536CAABCE"><enum>(1)</enum><text>Each of the following provisions of law is amended by striking <quote>1a(18)</quote> and inserting <quote>1a(19)</quote>:</text> <subparagraph id="H43DD64DA81234D2F96AE16354833698B"><enum>(A)</enum><text>Section 4s(h)(5)(A)(i) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/6s">7 U.S.C. 6s(h)(5)(A)(i)</external-xref>).</text></subparagraph> <subparagraph id="H967241D6AA4840E3BA09AE55B5EF7C8D"><enum>(B)</enum><text>Section 5(e) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77e">15 U.S.C. 77e(e)</external-xref>).</text></subparagraph> <subparagraph id="H693D20F45C2A4A79831D7D96470F4C2D"><enum>(C)</enum><text>Section 6(g)(5)(B) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78f">15 U.S.C. 78f(g)(5)(B)</external-xref>).</text></subparagraph> <subparagraph id="H21A60C173A0E4E07A27B0FED57BA37ED"><enum>(D)</enum><text display-inline="yes-display-inline">Section 15F(h)(5)(A)(i) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78o-10">15 U.S.C. 78o–10(h)(5)(A)(i)</external-xref>).</text></subparagraph></paragraph> <paragraph id="H61CCF1BE78C247CAB7813D99B8D8D248"><enum>(2)</enum><text>Section 752 of the Wall Street Transparency and Accountability Act of 2010 (<external-xref legal-doc="usc" parsable-cite="usc/15/8325">15 U.S.C. 8325</external-xref>) is amended by striking <quote>1a(39)</quote> and inserting <quote>1a(40)</quote>.</text></paragraph> <paragraph id="H9DCFE34ED6654C3C98950F1D090071C0"><enum>(3)</enum><text display-inline="yes-display-inline">Section 4s(f)(1)(D) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/6s">7 U.S.C. 6s(f)(1)(D)</external-xref>) is amended by striking <quote>1a(47)(A)</quote> and inserting <quote>1a(48)(A)</quote>.</text></paragraph> <paragraph id="H8D92F61FF6224AA0BA414642022B7036"><enum>(4)</enum><text>Each of the following provisions of the Commodity Exchange Act is amended by striking <quote>1a(47)(A)(v)</quote> and inserting <quote>1a(48)(A)(v)</quote>:</text> <subparagraph id="H1DADAC7090C644CFB395D308648E86CB"><enum>(A)</enum><text>Section 4t(b)(1)(C) (<external-xref legal-doc="usc" parsable-cite="usc/7/6t">7 U.S.C. 6t(b)(1)(C)</external-xref>).</text></subparagraph> <subparagraph id="H07E3B601FC2E4A08911EF43C015FDBB1"><enum>(B)</enum><text>Section 5(d)(23) (<external-xref legal-doc="usc" parsable-cite="usc/7/7">7 U.S.C. 7(d)(23)</external-xref>).</text></subparagraph> <subparagraph id="H8BF693827D45485F92310442AABEB210"><enum>(C)</enum><text display-inline="yes-display-inline">Section 5b(k)(3) (<external-xref legal-doc="usc" parsable-cite="usc/7/7a-1">7 U.S.C. 7a–1(k)(3)</external-xref>).</text></subparagraph> <subparagraph id="H7CFCCA4923124B73843021E8F21FFB72"><enum>(D)</enum><text display-inline="yes-display-inline">Section 5h(f)(10)(A)(iii) (<external-xref legal-doc="usc" parsable-cite="usc/7/7b-3">7 U.S.C. 7b–3(f)(10)(A)(iii)</external-xref>).</text></subparagraph></paragraph> <paragraph id="H136889C91B614C6D9881E2481816243E"><enum>(5)</enum><text>Section 21(f)(4)(C) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/24a">7 U.S.C. 24a(f)(4)(C)</external-xref>) is amended by striking <quote>1a(48)</quote> and inserting <quote>1a(49)</quote>.</text></paragraph> <paragraph id="H1A58390C005646BDAC93212CE2E40E8E"><enum>(6)</enum><text>Section 403 of the Legal Certainty for Bank Products Act of 2000 (<external-xref legal-doc="usc" parsable-cite="usc/7/27a">7 U.S.C. 27a</external-xref>) is amended—</text> <subparagraph id="H3E7EB8C8E84C422FA4F12EE8DC832546"><enum>(A)</enum><text>in subsection (a)(2), by striking <quote>1a(47)(A)(v)</quote> and inserting <quote>1a(48)(A)(v)</quote>; and</text></subparagraph> <subparagraph id="H955DD969E07642D29B45E610D260882A"><enum>(B)</enum><text>in each of subsections (b)(1) and (c)(2), by striking <quote>1a(47)</quote> and inserting <quote>1a(48)</quote>.</text></subparagraph></paragraph> <paragraph id="H802FD341CEF2441AA32C6CD170B4A95D"><enum>(7)</enum><text>Section 712 of the Wall Street Transparency and Accountability Act of 2010 (<external-xref legal-doc="usc" parsable-cite="usc/15/8302">15 U.S.C. 8302</external-xref>) is amended—</text> <subparagraph id="HA67F8BBF9373411DB81E45249924E4BD"><enum>(A)</enum><text>in subsection (a)(8), by striking <quote>1a(47)(D)</quote> each place it appears and inserting <quote>1a(48)(D)</quote>; and</text></subparagraph> <subparagraph id="H1A4847194C5C4A30A2D7B0BC1E687D65"><enum>(B)</enum><text>in subsection (d)(1), by striking <quote>1a(47)(A)(v)</quote> each place it appears and inserting <quote>1a(48)(A)(v)</quote>.</text></subparagraph></paragraph></subsection></section> <section id="HD9C42205CD77451FBED45DFCAD09A425" commented="no" display-inline="no-display-inline" section-type="subsequent-section"><enum>104.</enum><header>Definitions under this Act</header><text display-inline="no-display-inline">In this Act:</text> <paragraph id="H707E1CACC4D4491BA9E7537BFDCCFD9F" commented="no"><enum>(1)</enum><header>Definitions under the Commodity Exchange Act</header><text display-inline="yes-display-inline">The terms <term>decentralized finance messaging system</term>, <term>decentralized finance trading protocol</term>, <term>digital commodity</term>, <term>digital commodity broker</term>, <term>digital commodity dealer</term>, <term>digital commodity exchange</term>, and <term>mixed digital asset transaction</term> have the meaning given those terms, respectively, under section 1a of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1a">7 U.S.C. 1a</external-xref>).</text></paragraph> <paragraph id="HDD0C9E7123544E638B47B8F37AA1F746" commented="no"><enum>(2)</enum><header>Definitions under the Securities Act of 1933</header><text display-inline="yes-display-inline">The terms <term>blockchain</term>, <term>blockchain system</term>, <term>blockchain protocol</term>, <term>decentralized governance system</term>, <term>digital asset</term>, <term>digital commodity issuer</term>, <term>end user distribution</term>, <term>mature blockchain system</term>, <term>permitted payment stablecoin</term>, and <term>securities laws</term> have the meaning given those terms, respectively, under section 2(a) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77b">15 U.S.C. 77b(a)</external-xref>).</text></paragraph> <paragraph id="HDB09FAA7292E4623B685486300815A7E"><enum>(3)</enum><header>Definitions under the Securities Exchange Act of 1934</header><text display-inline="yes-display-inline">The terms <term>Bank Secrecy Act</term>, <term>securities laws</term>, and <term>self-regulatory organization</term> have the meaning given those terms, respectively, under section 3(a) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78c">15 U.S.C. 78c(a)</external-xref>).</text></paragraph></section> <section id="H1834B322716A466F8AEA7C41647CD1EA"><enum>105.</enum><header>Rulemakings</header> <subsection id="H08D53434A6494D5198FF618BD95D40F5"><enum>(a)</enum><header>Definitions</header><text display-inline="yes-display-inline">The Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly issue rules to further define the following terms:</text> <paragraph id="H699FC369EEB74642A8E0046F65169EA8"><enum>(1)</enum><text display-inline="yes-display-inline">The terms—</text> <subparagraph id="HEA2BAF3DA6E74D6F915115083603199B"><enum>(A)</enum><text><quote>blockchain</quote>, <quote>blockchain application</quote>, <quote>blockchain system</quote>, <quote>blockchain protocol</quote>, <quote>decentralized governance system</quote>, <quote>digital commodity affiliated person</quote>, <quote>digital commodity issuer</quote>, <quote>digital commodity related person</quote>, <quote>end user distribution</quote>, and <quote>mature blockchain system</quote>, as defined under section 2(a) of the Securities Act of 1933;</text></subparagraph> <subparagraph id="HB93DB56209634C4AAA488AD8733CB3D9"><enum>(B)</enum><text display-inline="yes-display-inline"><quote>unilateral authority</quote>, as such term is used in section 42 of the Securities Exchange Act of 1934 and section 1a of the Commodity Exchange Act; and</text></subparagraph> <subparagraph id="HEA4678B0BF524C9B9F884E6EECE20B80"><enum>(C)</enum><text display-inline="yes-display-inline"><quote>programmatic functioning</quote>, as such term is used in sections 4C of the Securities Act of 1933, section 42 of the Securities Exchange Act of 1934, and section 1a of the Commodity Exchange Act.</text></subparagraph></paragraph> <paragraph id="H3D3D275BD6C443D8AB67B2EC5D872E0A"><enum>(2)</enum><text display-inline="yes-display-inline">The terms <term>digital commodity</term>, <term>decentralized finance messaging system</term>, and <term>decentralized finance trading protocol</term> as defined under section 1a of the Commodity Exchange Act.</text></paragraph></subsection> <subsection id="HDF23A2A113C64CE388A504B78E03E5D9"><enum>(b)</enum><header>Joint rulemaking for mixed digital asset transactions</header><text display-inline="yes-display-inline">The Securities and Exchange Commission and the Commodity Futures Trading Commission shall jointly issue rules applicable to mixed digital asset transactions under this Act and the amendments made by this Act, including by further defining such term.</text></subsection> <subsection id="H5F8EC3EBAB654B5593EBD43DA93D6007"><enum>(c)</enum><header>Protection of self-Custody</header> <paragraph id="HBD4E7D6B5C224F6E9AE73B1B07DC4F43"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">A United States individual shall retain the right to—</text> <subparagraph id="H7A19FD8C979444E7B2C1BF02B62C2EAC"><enum>(A)</enum><text>maintain a hardware wallet or software wallet for the purpose of facilitating the individual’s own lawful custody of digital assets; and</text></subparagraph> <subparagraph id="H50827708915246CFA3B4641E4F7BAF30"><enum>(B)</enum><text>engage in direct, peer-to-peer transactions in digital assets with another individual or entity for the individual’s own lawful purposes using a hardware wallet or software wallet, if—</text> <clause id="H56FA00E252204030BC5B8F0D13A4BF63"><enum>(i)</enum><text display-inline="yes-display-inline">such other individual or entity is not a financial institution (as defined in section 5312 of title 31, United States Code); and</text></clause> <clause id="H111ED7FD368F48ECA30CA87EE5AD459F"><enum>(ii)</enum><text>the transactions do not involve any property or interests in property that are blocked pursuant to, or are otherwise prohibited by, United States sanctions.</text></clause></subparagraph></paragraph> <paragraph id="H3C91A271D1A3451683CCD0E8BF1B00DB"><enum>(2)</enum><header>Application</header><text>This subsection—</text> <subparagraph id="HEA56AC071C4141399B47AAE870FE4CBD"><enum>(A)</enum><text>applies solely to personal use by individuals; and</text></subparagraph> <subparagraph id="H96A1A717694E40A5BB529EF9AB6D9DE9"><enum>(B)</enum><text>does not apply to individuals acting in a custodial or fiduciary capacity for others.</text></subparagraph></paragraph> <paragraph id="HD7DE4AAA963C4E819F51789DFC8DBA4A"><enum>(3)</enum><header>Rule of construction</header><text>Nothing in this subsection shall be construed to limit the authority of the Secretary of the Treasury, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, or the National Credit Union Administration to carry out any enforcement action or special measure authorized under applicable law, including—</text> <subparagraph id="H0A0BF112F15F4D1490FEE2177AD0787F"><enum>(A)</enum><text display-inline="yes-display-inline">the Bank Secrecy Act, section 9714 of the Combating Russian Money Laundering Act (<external-xref legal-doc="usc" parsable-cite="usc/31/5318A">31 U.S.C. 5318A</external-xref> note), and section 7213A of the Fentanyl Sanctions Act (<external-xref legal-doc="usc" parsable-cite="usc/21/2313a">21 U.S.C. 2313a</external-xref>); or</text></subparagraph> <subparagraph id="H26C1298BDE8E441F9B4C369CD27D565B"><enum>(B)</enum><text>any other law relating to illicit finance, money laundering, terrorism financing, or United States sanctions.</text></subparagraph></paragraph></subsection> <subsection id="H4298860C5AB841AC8DA5704EBB43664B" display-inline="no-display-inline"><enum>(d)</enum><header>Joint rulemaking, procedures, or guidance for delisting</header><text display-inline="yes-display-inline">Not later than 180 days after the date of the enactment of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly issue rules, procedures, or guidance (as determined appropriate by the Commissions) regarding the process to delist an asset for trading under section 106 of this Act if the Commissions determine that the listing is inconsistent with the Commodity Exchange Act, the securities laws (including regulations under those laws), or this Act.</text></subsection> <subsection id="H2AB6C94DD9D549C8B96C027164C8D751" commented="no"><enum>(e)</enum><header>Joint rules for portfolio margining determinations</header> <paragraph id="HBC3B00E3E67A4CCD912A66B15D0F3F07" commented="no"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Not later than 360 days after the date of the enactment of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly issue rules describing the process for persons registered with either such Commission to seek a joint order or determination with respect to margin, customer protection, segregation, or other requirements as necessary to facilitate portfolio margining of securities (including related extensions of credit), security-based swaps, contracts for future delivery, options on a contract for future delivery, swaps, and digital commodities, or any subset thereof, in—</text> <subparagraph id="HBEDDBE2215B641A09993DA69DF5C794D" commented="no"><enum>(A)</enum><text>a securities account carried by a registered broker or dealer or a security-based swap account carried by a registered security-based swap dealer;</text></subparagraph> <subparagraph id="HD438CEF7653144C19B370494B53D172C" commented="no"><enum>(B)</enum><text>a futures or cleared swap account carried by a registered futures commission merchant;</text></subparagraph> <subparagraph id="H4E28A3FA20FA4546866A5CE1D82F946E" commented="no"><enum>(C)</enum><text>a swap account carried by a swap dealer; or</text></subparagraph> <subparagraph id="H672523DC51B6438CB3BD67B77D4804F0" commented="no"><enum>(D)</enum><text>a digital commodity account carried by a registered digital commodity broker or digital commodity dealer that is also registered in such other capacity as is necessary to also carry the other customer or counterparty positions being held in the account.</text></subparagraph></paragraph> <paragraph id="H867EB813BBB84ABD900F6B7ED46B60A5" commented="no"><enum>(2)</enum><header>Process</header><text display-inline="yes-display-inline">With respect to a joint order or determination described in paragraph (1), the rules required to be issued pursuant to paragraph (1) shall require—</text> <subparagraph id="HE124F5971A9140E8AC5A83B8DD8D790A" commented="no"><enum>(A)</enum><text display-inline="yes-display-inline">the joint order or determination to be issued only if the order or determination is in the public interest and provides for the appropriate protection of customers;</text></subparagraph> <subparagraph id="HFE8F7E18574046688C99B240B8B5C603" commented="no"><enum>(B)</enum><text display-inline="yes-display-inline">applicants to file a standard application, in a form and manner determined by the Securities and Exchange Commission and the Commodity Futures Trading Commission, which shall include the information necessary to make the joint order or determination;</text></subparagraph> <subparagraph id="H95AD2DC836D84A1D88B8FDD8A158C85C" commented="no"><enum>(C)</enum><text display-inline="yes-display-inline">the Securities and Exchange Commission and the Commodity Futures Trading Commission to make a final determination not later than 270 days after the filing of a completed application;</text></subparagraph> <subparagraph id="HF16224A83D4C4BC7A77242931248771A" commented="no"><enum>(D)</enum><text display-inline="yes-display-inline">the Securities and Exchange Commission and the Commodity Futures Trading Commission to consider the public interest of the joint order or determination through the solicitation of public comments; and</text></subparagraph> <subparagraph id="HE4AEAA72350646D38C3940D01317C3C9" commented="no"><enum>(E)</enum><text display-inline="yes-display-inline">the Securities and Exchange Commission and the Commodity Futures Trading Commission to consult with other relevant foreign or domestic regulators, including the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, as appropriate.</text></subparagraph></paragraph></subsection></section> <section id="H20A29D6A1B674C7EABC4D9D45E4A9114" display-inline="no-display-inline" section-type="subsequent-section"><enum>106.</enum><header>Registration for digital commodity exchanges, brokers, and dealers; provisional status</header> <subsection id="HBEE8007C4DED4A6BAFE2481DE01E7199"><enum>(a)</enum><header>Registration</header> <paragraph id="HE86C0ACBF8274D7591E138C85B660B1E" commented="no"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Unless exempted from registration under section 5k of the Commodity Exchange Act, a person shall not act as a digital commodity broker, digital commodity dealer, or digital commodity exchange after the end of the 270-day period beginning on the date of the enactment of this Act, unless, as the case may be, the person is registered as a—</text> <subparagraph id="HC459A93E2D444CF0AF4A9BC960C4AE70" commented="no"><enum>(A)</enum><text>digital commodity broker pursuant to section 4u of the Commodity Exchange Act;</text></subparagraph> <subparagraph id="H8E3F92C7681D4162AB238AE78863DFEC" commented="no"><enum>(B)</enum><text display-inline="yes-display-inline">digital commodity dealer pursuant to section 4u of the Commodity Exchange Act; or</text></subparagraph> <subparagraph id="H396E296A0D674960BDF7F91C6CCFABEE" commented="no"><enum>(C)</enum><text>digital commodity exchange pursuant to section 5i of the Commodity Exchange Act.</text></subparagraph></paragraph> <paragraph id="H235DBEA495114B8F93625B0AD7A6B71F"><enum>(2)</enum><header>Expedited process</header><text display-inline="yes-display-inline">Not less than 270 days after the date of the enactment of this Act, the Commodity Futures Trading Commission shall adopt, by rule, regulation, or order, a process for expedited registration of persons in provisional status pursuant to subsection (b). </text></paragraph></subsection> <subsection id="HF6F20B66DF2D40E68CBD8ED519ACC80A" commented="no"><enum>(b)</enum><header>Provisional status</header> <paragraph id="HA32D7B50637C40D2AECBA58D39FFA435" commented="no"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">A person who is registered in accordance with subsection (a) of this section shall be in provisional status until—</text> <subparagraph id="H3F3A6F2B24FB4920ADE4B2F7CB06C244" commented="no"><enum>(A)</enum><text>in the case of a digital commodity broker or dealer, 270 days after the final effective date of the rulemakings required under section 4u of the Commodity Exchange Act; or</text></subparagraph> <subparagraph id="H836FF751914845188D25F88838EACDA6" commented="no"><enum>(B)</enum><text>in the case of a digital commodity exchange, 270 days after the final effective date of the rulemakings required under section 5i of such Act.</text></subparagraph></paragraph> <paragraph id="H57D4530459B449D79F891FC86039D5AD" commented="no"><enum>(2)</enum><header>Payment of fees</header><text>A person in provisional status shall pay all fees and penalties required under section 410.</text></paragraph></subsection> <subsection id="H0FFF942F9D0D4A8EA51887A9219911B9"><enum>(c)</enum><header>Operations prior to regulations</header> <paragraph id="HA9D977A297604FFF8CB6F3B6B6F71AA3"><enum>(1)</enum><header>Requirements</header><text display-inline="yes-display-inline">A person in provisional status shall apply and be subject to the statutory requirements of this Act and any rules or regulations promulgated under this Act, as applicable.</text></paragraph> <paragraph id="H8023088E92C74BB99B721EA1EEFAA99A"><enum>(2)</enum><header>Listings</header> <subparagraph id="H981F57511DDB4FC292544B713D4707B3"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">Except as provided in subparagraph (B), a person in provisional status may continue to offer, solicit, trade, facilitate, execute, clear, report, or otherwise deal in any digital asset offered on or through the facilities of the person before the date of registration under this section, until such time as the joint rulemaking on definitions required under section 105(a) is effective.</text></subparagraph> <subparagraph id="HE89C02FDFE8740078400090ED13E775E"><enum>(B)</enum><header>Delisting</header><text>Before the effective date of the joint rulemaking on definitions under section 105(a), person in provisional status shall cease offering, soliciting, trading, facilitating, executing, clearing, reporting, or otherwise dealing in any digital asset required to be delisted pursuant to a joint delisting process established under section 105(d).</text></subparagraph></paragraph> <paragraph id="HAEE24C5500AB4B389D7125518E3C0CE8"><enum>(3)</enum><header>Exemptive authority</header><text display-inline="yes-display-inline">In order to promote responsible innovation and fair competition, or protect customers, the Commodity Futures Trading Commission may exempt any persons or class of persons registered pursuant to subsection (a) and in provisional status pursuant to subsection (b) from any requirements of this Act and any rules and regulations promulgated under this Act.</text></paragraph></subsection> <subsection id="HF879791934B34230A5BD5CD19FFC2FA3"><enum>(d)</enum><header>Customer disclosure before registration</header> <paragraph id="H9BED0EB1E7CC49C8A88344416D49DB21"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Beginning 30 days after the date of the enactment of this Act, any person acting as a digital commodity exchange, digital commodity broker, or digital commodity dealer shall disclose to the customers of the person so acting, in the disclosure documents, offering documents, and promotional material of the person so acting, in a prominent manner, that the person is not registered with or regulated by the Commodity Futures Trading Commission.</text></paragraph> <paragraph id="H4881F2DF58A24282BCF9C7171F9A244B"><enum>(2)</enum><header>Expiration</header><text>Paragraph (1) of this subsection shall not apply to any person who registers pursuant to subsection (a).</text></paragraph></subsection></section> <section id="H8BE67174572D48D28D78F34D150E42FA" display-inline="no-display-inline" section-type="subsequent-section"><enum>107.</enum><header>Commodity Exchange Act and securities laws savings provisions</header> <subsection id="H5183315A66C54A938E6E2AC0D7BD374C"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Nothing in this Act shall affect or apply to, or be interpreted to affect or apply to—</text> <paragraph id="HF3B8CB58DFED45628238FA2C5E010ED7"><enum>(1)</enum><text>any agreement, contract, or transaction that is subject to the Commodity Exchange Act as—</text> <subparagraph id="H6A89853D9C22485E8A96DB1881AB1260"><enum>(A)</enum><text>a contract of sale of a commodity for future delivery or an option on such a contract;</text></subparagraph> <subparagraph id="HA7E97FFF79584AE1960DFFCCE0CEF679"><enum>(B)</enum><text>a swap;</text></subparagraph> <subparagraph id="H8512792E2B43445DAA2C11972CD7D840"><enum>(C)</enum><text>a security futures product;</text></subparagraph> <subparagraph id="H6AA3EF7AA7474D7584570B8E19CA1A77"><enum>(D)</enum><text>an option authorized under section 4c of such Act;</text></subparagraph> <subparagraph id="HBA1635E6374E45F795C63E1961BC6856"><enum>(E)</enum><text>an agreement, contract, or transaction described in section 2(c)(2)(C)(i) of such Act; or</text></subparagraph> <subparagraph id="H688C48AEB6FB42189BAD7C5D7CAAC00F"><enum>(F)</enum><text>a leverage transaction authorized under section 19 of such Act;</text></subparagraph></paragraph> <paragraph id="H3924A64135384403ADDFCEB53C1A8348"><enum>(2)</enum><text display-inline="yes-display-inline">any agreement, contract, or transaction that is subject to the securities laws as—</text> <subparagraph id="H01E796D2A963405D9B79353C500A1F12"><enum>(A)</enum><text>a security-based swap;</text></subparagraph> <subparagraph id="H870CDE5E8BCD45B7A33D591F3F287C24"><enum>(B)</enum><text>a security futures product; or</text></subparagraph> <subparagraph id="HF1850B0A5659430EBBF428187BBD9EC5"><enum>(C)</enum><text>an option on or based on the value of a security; or</text></subparagraph></paragraph> <paragraph id="H00F56185F2B94AAF84A1EC04A272F276"><enum>(3)</enum><text>the activities of any person with respect to any such agreement, contract, or transaction.</text></paragraph></subsection> <subsection id="H22B10D86B0FD4E5FB5243D8D9EDADF00"><enum>(b)</enum><header>Prohibitions on spot digital commodity entities</header><text>Nothing in this Act authorizes, or shall be interpreted to authorize, a digital commodity exchange, digital commodity broker, or digital commodity dealer to engage in any activities involving any transaction, contract, or agreement described in subsection (a)(1), solely by virtue of being registered as a digital commodity exchange, digital commodity broker, or digital commodity dealer.</text></subsection> <subsection id="HB60D39541C8B4FEA8EC832721818AC40"><enum>(c)</enum><header>Definitions</header><text>In this section, each term shall have the meaning provided in the Commodity Exchange Act or the regulations prescribed under such Act.</text></subsection></section> <section id="H311157AF913A42D08685922A46C530BE"><enum>108.</enum><header>Administrative requirements</header><text display-inline="no-display-inline">Section 4c(a) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/6c">7 U.S.C. 6c(a)</external-xref>) is amended—</text> <paragraph id="HD2D62FDCA66646698E3BEEDC0442ABE2"><enum>(1)</enum><text>in paragraph (3)—</text> <subparagraph id="H0336B8E3D47B48D9B5AAA2AD139B7B41"><enum>(A)</enum><text>in subparagraph (B), by striking <quote>or</quote> at the end;</text></subparagraph> <subparagraph id="H38CE41FB155E456499A69E1FAC71384D"><enum>(B)</enum><text>in subparagraph (C), by striking the period and inserting <quote>; or</quote>; and</text></subparagraph> <subparagraph id="H76FFBB3F3A6448AFB3E8C0F73EBED592"><enum>(C)</enum><text>by adding at the end the following:</text> <quoted-block style="OLC" id="HCFC37C602A344386A85C364933CE761F" display-inline="no-display-inline"> <subparagraph id="H4B8CDAFF9FC04D98974F8D8C35C600BE"><enum>(D)</enum><text display-inline="yes-display-inline">a contract of sale of a digital commodity.</text></subparagraph><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph></paragraph> <paragraph id="H453A3CB0DB7A42A38DE2EE7886C19509" display-inline="no-display-inline"><enum>(2)</enum><text>in paragraph (4)—</text> <subparagraph id="H3A3A95CC36AD4267B708298A7958B537"><enum>(A)</enum><text>in subparagraph (A)—</text> <clause id="HD86AF36EA335462F9CE9FCD452A92EF6"><enum>(i)</enum><text>in clause (ii), by striking <quote>or</quote> at the end;</text></clause> <clause id="H70F1FF3FF8934404A129347F87679E8E"><enum>(ii)</enum><text>in clause (iii), by striking the period and inserting <quote>; or</quote>; and</text></clause> <clause id="HC8E65039CD38493988B89526EC9FB63A"><enum>(iii)</enum><text>by adding at the end the following:</text> <quoted-block style="OLC" display-inline="no-display-inline" id="HBA79EEEF7BF84EB9A24B3D9151906A29"> <clause id="H3B8EE29E67CA4C4FA7AC08FA28DB7DA7"><enum>(iv)</enum><text display-inline="yes-display-inline">a contract of sale of a digital commodity.</text></clause><after-quoted-block>;</after-quoted-block></quoted-block></clause></subparagraph> <subparagraph id="H15FA490882E34184A9FB4D8176AD6B96" display-inline="no-display-inline"><enum>(B)</enum><text>in subparagraph (B)—</text> <clause id="HDBC31A73C544467EA4ED1D1F1E68BAFD"><enum>(i)</enum><text>in clause (ii), by striking <quote>or</quote> at the end;</text></clause> <clause id="H54FC412A578446E89EA60BE4C003CB28"><enum>(ii)</enum><text>in clause (iii), by striking the period and inserting <quote>; or</quote>; and</text></clause> <clause id="H8B0E5951CF44476E82175F2AC67FB117"><enum>(iii)</enum><text>by adding at the end the following:</text> <quoted-block style="OLC" display-inline="no-display-inline" id="HCFE2DBF9FBB7482195993F5EA446AEF4"> <clause id="H93755FB5757F4C7C94E6F264E6EFCF1C"><enum>(iv)</enum><text display-inline="yes-display-inline">a contract of sale of a digital commodity.</text></clause><after-quoted-block>; and</after-quoted-block></quoted-block></clause></subparagraph> <subparagraph id="HB288C49A12394FB8A2A1B1908FEFFFCC" display-inline="no-display-inline"><enum>(C)</enum><text>in subparagraph (C)—</text> <clause id="H068852F5835B45509F5D557F08896E6E"><enum>(i)</enum><text>in clause (ii), by striking <quote>or</quote> at the end;</text></clause> <clause id="HA3FF260DC2D544C8910E1593212481A9"><enum>(ii)</enum><text>by striking <quote>(iii) a swap, provided however,</quote> and inserting the following:</text> <quoted-block style="OLC" display-inline="no-display-inline" id="HCCBC4FE88FE44F7F967D0230CDC94C6E"> <clause id="H3C430B8BE437406D9395CFE891D701C2"><enum>(iii)</enum><text>a swap; or</text></clause> <clause id="HEB83D20702CF429A9DEA6A5F86D55038"><enum>(iv)</enum><text display-inline="yes-display-inline">a contract of sale of a digital commodity,</text></clause> <quoted-block-continuation-text quoted-block-continuation-text-level="subparagraph">provided, however,</quoted-block-continuation-text><after-quoted-block>; and</after-quoted-block></quoted-block></clause> <clause id="H5603BB838F90493092FBE8EF64BD994B"><enum>(iii)</enum><text>by striking <quote>clauses (i), (ii), or (iii)</quote> and insert <quote>any of clauses (i) through (iv)</quote>.</text></clause></subparagraph></paragraph></section> <section id="H78B55829A89F414E87DD25AD65F98F0C" display-inline="no-display-inline" section-type="subsequent-section"><enum>109.</enum><header>International cooperation</header><text display-inline="no-display-inline">In order to promote greater consistency in effective and consistent global regulation of digital assets, the Commodity Futures Trading Commission and the Securities and Exchange Commission, as appropriate—</text> <paragraph id="H256F4784D8E44FFE8357579D41EB4E1E"><enum>(1)</enum><text>shall consult and coordinate with foreign regulatory authorities on the application of consistent international standards with respect to the regulation of digital assets; and</text></paragraph> <paragraph id="H6C3565DC04724AD096E2AA64C6609408"><enum>(2)</enum><text display-inline="yes-display-inline">may enter into such information-sharing arrangements as may be deemed to be necessary or appropriate in the public interest or for the protection of investors, customers, and users of digital assets.</text></paragraph></section> <section id="H4CC9608641F74430A74DF5012C7E9869" section-type="subsequent-section" display-inline="no-display-inline"><enum>110.</enum><header>Application of the Bank Secrecy Act</header> <subsection id="HED3FD57A298B42C0917084F226C123EC"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 5312(c)(1)(A) of title 31, United States Code, is amended—</text> <paragraph id="H483A40FB2431466A929DED024F3826B3"><enum>(1)</enum><text>by inserting <quote>digital commodity broker, digital commodity dealer,</quote> after <quote>futures commission merchant,</quote>; and</text></paragraph> <paragraph id="H5C6139D8036D421D874AFF800DC319D6"><enum>(2)</enum><text>by inserting before the period the following: <quote>and any digital commodity exchange registered, or required to register, under the Commodity Exchange Act which permits direct customer access</quote>.</text></paragraph></subsection> <subsection id="H13CFC32450294D6D9417B65F38AFC0A2"><enum>(b)</enum><header>GAO study</header> <paragraph id="H3FA762400A684B6BB344DC88A4F05B0F"><enum>(1)</enum><header>In general</header><text>The Comptroller General of the United States, in consultation with the Secretary of the Treasury, shall conduct a study to—</text> <subparagraph id="HD75953B406564E1E97C1C1C92F88E370"><enum>(A)</enum><text display-inline="yes-display-inline">assess the risks posed by centralized intermediaries that are primarily located in foreign jurisdictions that provide services to U.S. persons without regulatory requirements that are substantially similar to the requirements of the Bank Secrecy Act; and</text></subparagraph> <subparagraph id="HDBD592B3F70F4F77965DC83FCC41BF1B"><enum>(B)</enum><text>provide any regulatory or legislative recommendations to address these risks under subparagraph (A).</text></subparagraph></paragraph> <paragraph id="H38FEC881064349A3B16DB34E69A95ACA"><enum>(2)</enum><header>Report</header><text display-inline="yes-display-inline">Not later than 1 year after the date of enactment of this Act, the Comptroller General shall issue a report to Congress containing all findings and determinations made in carrying out the study required under paragraph (1).</text></paragraph></subsection></section> <section id="HB814DF80A1D74F909A7A7AF9D548A50C"><enum>111.</enum><header>Implementation</header> <subsection id="H7CEF4CC88F62414F810DB345B6594D68"><enum>(a)</enum><header>Global rulemaking timeframe</header><text display-inline="yes-display-inline">Unless otherwise provided in this Act or an amendment made by this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission, or both, shall individually, and jointly where required, promulgate rules and regulations required of each Commission under this Act or an amendment made by this Act not later than 360 days after the date of enactment of this Act.</text></subsection> <subsection id="H5D6DDC86C6134CF8A6C5BA0CC0AE726B"><enum>(b)</enum><header>Rules and registration before final effective dates</header> <paragraph id="H68424965846C4D2BBEADF3F27FC0C3FF"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">In order to prepare for the implementation of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission may, before any effective date provided in this Act—</text> <subparagraph id="H7A143D565C0A46618086927D69283622"><enum>(A)</enum><text>promulgate rules, regulations, or orders permitted or required by this Act;</text></subparagraph> <subparagraph id="H5D0CDEE1B1724591B3770DC0934E88A1"><enum>(B)</enum><text>conduct studies and prepare reports and recommendations required by this Act;</text></subparagraph> <subparagraph id="HA00586458B6A4CD18A6E930B6CC17C64"><enum>(C)</enum><text>register persons under this Act; and</text></subparagraph> <subparagraph id="HCD1FADE9EB3048569C3DB7C462ED4955"><enum>(D)</enum><text>exempt persons, agreements, contracts, or transactions from provisions of this Act, under the terms contained in this Act.</text></subparagraph></paragraph> <paragraph id="H4F889E55A47A45379FEEAF6AA2A974AA"><enum>(2)</enum><header>Limitation on effectiveness</header><text>An action by the Commodity Futures Trading Commission or the Securities and Exchange Commission under paragraph (1) shall not become effective before the effective date otherwise applicable to the action under this Act.</text></paragraph></subsection></section> <enum>II</enum><header>Offers and Sales of Digital Commodities</header> <section id="H1ECC639E1FEB47A3B2202A198A73A76A" commented="no" display-inline="no-display-inline" section-type="subsequent-section"><enum>201.</enum><header>Treatment of investment contract assets</header> <subsection id="HB93CA0784781468EA11F77A8CB671D95" commented="no"><enum>(a)</enum><header>Securities Act of 1933</header><text display-inline="yes-display-inline">Section 2(a) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77b">15 U.S.C. 77b(a)</external-xref>), as amended by section 101, is further amended—</text> <paragraph id="H82A2A09638F64F738BDEE1B00CFECF7D" commented="no"><enum>(1)</enum><text>in paragraph (1), by adding at the end the following: <quote>The term <term>investment contract</term> does not include an investment contract asset.</quote>; and</text></paragraph> <paragraph id="HE99E0EA98A9D4E3796127C96C48006BC" commented="no"><enum>(2)</enum><text>by adding at the end the following:</text> <quoted-block style="OLC" display-inline="no-display-inline" id="HF0B28646BB2447EF8647143F262EEF1C"> <paragraph id="H583BCAA27CA540A7A22E45E4A4B7F88E" commented="no"><enum>(36)</enum><text display-inline="yes-display-inline">The term <term>investment contract asset</term> means a digital commodity—</text> <subparagraph id="H1E3412835E16413E832DB99FECD727BB" commented="no"><enum>(A)</enum><text display-inline="yes-display-inline">that can be exclusively possessed and transferred, person to person, without necessary reliance on an intermediary, and is recorded on a blockchain; and</text></subparagraph> <subparagraph id="H01F68CCF42094348B3C64A97810FA646" commented="no"><enum>(B)</enum><text display-inline="yes-display-inline">sold or otherwise transferred, or intended to be sold or otherwise transferred, pursuant to an investment contract.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H6A6F99088BEC47BD9EF3B8E24B6AA957" commented="no"><enum>(b)</enum><header>Investment Advisers Act of 1940</header><text display-inline="yes-display-inline">Section 202(a)(18) of the Investment Advisers Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80b-2">15 U.S.C. 80b–2(a)(18)</external-xref>) is amended by adding at the end the following: <quote>The term <term>investment contract</term> does not include an investment contract asset (as such term is defined under section 2(a) of the Securities Act of 1933).</quote>.</text></subsection> <subsection id="H2F94749D7B7244DE92A8184CCC94991C" commented="no"><enum>(c)</enum><header>Investment Company Act of 1940</header><text display-inline="yes-display-inline">Section 2(a)(36) of the Investment Company Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80a-2">15 U.S.C. 80a–2(a)(36)</external-xref>) is amended by adding at the end the following: <quote>The term <term>investment contract</term> does not include an investment contract asset (as such term is defined under section 2(a) of the Securities Act of 1933).</quote>.</text></subsection> <subsection id="H66F183F1CDE2452FB762968B85FBCD8B" commented="no"><enum>(d)</enum><header>Securities Exchange Act of 1934</header><text display-inline="yes-display-inline">Section 3(a)(10) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78c">15 U.S.C. 78c(a)(10)</external-xref>) is amended by adding at the end the following: <quote>The term <term>investment contract</term> does not include an investment contract asset (as such term is defined under section 2(a) of the Securities Act of 1933).</quote>.</text></subsection> <subsection id="H4F3D9F97DC5E414C9A452432E8816FDE" commented="no"><enum>(e)</enum><header>Securities Investor Protection Act of 1970</header><text display-inline="yes-display-inline">Section 16(14) of the Securities Investor Protection Act of 1970 (<external-xref legal-doc="usc" parsable-cite="usc/15/78lll">15 U.S.C. 78lll(14)</external-xref>) is amended by adding at the end the following: <quote>The term <term>investment contract</term> does not include an investment contract asset (as such term is defined under section 2(a) of the Securities Act of 1933).</quote>.</text></subsection></section> <section id="H5B53C67CDAA74733B113E396DD97C81C"><enum>202.</enum><header>Exempted primary transactions in digital commodities</header> <subsection id="HF8180C406A7C4515903BC96A9AEC6EA9"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77a">15 U.S.C. 77a et seq.</external-xref>) is amended—</text> <paragraph id="H932CADAFCDB54B54AE4F77E6F5B36A41"><enum>(1)</enum><text>in section 4(a), by adding at the end the following:</text> <quoted-block style="OLC" id="HCC2CBAA26095413DBEFE677DEDB5A146" display-inline="no-display-inline"> <paragraph id="H7D12A8E480EC45B4BCF7129165C85BF7"><enum>(8)</enum><text display-inline="yes-display-inline">the offer or sale of an investment contract involving units of a digital commodity by its digital commodity issuer (including all entities controlled by or under common control with the issuer), if—</text> <subparagraph id="H70B70A6BEC51427CB07646D13B566ED9"><enum>(A)</enum><text display-inline="yes-display-inline">the blockchain system to which the digital commodity relates, together with the digital commodity, is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934 or the issuer intends for the blockchain system to which the digital commodity relates to be a mature blockchain system by the later of—</text> <clause id="H199EC6FF81CD4B21931AEED18A1B208F"><enum>(i)</enum><text display-inline="yes-display-inline">the date that is four years after the first sale of the investment contract involving such digital commodity; or</text></clause> <clause id="HA4D3F1C648024C20BC481E5CBD0FE2A3"><enum>(ii)</enum><text>the date that is four years after the effective date of this paragraph;</text></clause></subparagraph> <subparagraph id="HA4B3E1AA80524906B2511EBD9ACB4A96"><enum>(B)</enum><text display-inline="yes-display-inline">the sum of all cash and other consideration to be received by the digital commodity issuer in reliance on the exemption provided under this paragraph, during the 12-month period preceding the date of such offering, including the amount received in such offering, is not more than $75,000,000 (as such amount is annually adjusted by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor);</text></subparagraph> <subparagraph id="H09B370681566422F88DB1FB9CE1DC065"><enum>(C)</enum><text display-inline="yes-display-inline">after the completion of the transaction, a purchaser does not own more than 10 percent of the total amount of the outstanding units of the digital commodity;</text></subparagraph> <subparagraph id="H1221F3FF719D467A928C500E5820A3D0"><enum>(D)</enum><text display-inline="yes-display-inline">the transaction does not involve the offer or sale of an investment contract involving units of a digital commodity by its digital commodity issuer that—</text> <clause id="H4D8843EDF13649A6A45D6BE5560C75BA"><enum>(i)</enum><text display-inline="yes-display-inline">is not organized under the laws of a State, a territory of the United States, or the District of Columbia;</text></clause> <clause id="H784D24289DBE48AE8394C020D657A7CE"><enum>(ii)</enum><text>is a development stage company that either—</text> <subclause id="H24F9C8F5770A482FAEA8B5D638B1A946"><enum>(I)</enum><text>has no specific business plan or purpose; or</text></subclause> <subclause id="H00D4E057BD0A41E0B04BC03A27698997"><enum>(II)</enum><text>has indicated that the business plan of the company is to merge with or acquire an unidentified company;</text></subclause></clause> <clause id="HEE6EE70201394F2D815AEB4A31E67103"><enum>(iii)</enum><text>is an investment company, as defined in section 3 of the Investment Company Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80a-3">15 U.S.C. 80a–3</external-xref>), or is excluded from the definition of investment company by section 3(b) or section 3(c) of that Act (<external-xref legal-doc="usc" parsable-cite="usc/15/80a-3">15 U.S.C. 80a–3(b)</external-xref> or 80a–3(c));</text></clause> <clause id="H2A4DD93B1BEC4E0DA72F3C69C6B2F405"><enum>(iv)</enum><text>is issuing fractional undivided interests in oil or gas rights, or a similar interest in other mineral rights;</text></clause> <clause id="HF42F2005C6BF4289933F5F78336A729D"><enum>(v)</enum><text>is, or has been, subject to any order of the Commission entered pursuant to section 12(j) of the Securities Exchange Act of 1934 during the 5-year period before the filing of the offering statement; or</text></clause> <clause id="HF8EC91C5B6FF485DB49E22D617E1BABC"><enum>(vi)</enum><text>is disqualified pursuant to section 230.262 of title 17, Code of Federal Regulations; and</text></clause></subparagraph> <subparagraph id="H01AF843C1EF244E2BE1291C18421E6B5"><enum>(E)</enum><text>the issuer meets the requirements of section 4B(b).</text></subparagraph></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph> <paragraph id="H86F10D934AA44628AD714667706C329F"><enum>(2)</enum><text>by inserting after section 4A the following:</text> <quoted-block style="OLC" id="HCDE1E4A4BBF8421682BEF65C65B4C3EC" display-inline="no-display-inline"> <section id="H14C314B79593490E8170512D3E562879"><enum>4B.</enum><header>Requirements with respect to certain digital commodity transactions</header> <subsection id="H51DC52415F914E07A50D2D6D05916ADA"><enum>(a)</enum><header>Commission jurisdiction</header><text display-inline="yes-display-inline">For the purposes of this section:</text> <paragraph id="H66910601F0F844049E401586F0636431"><enum>(1)</enum><text>The Commission shall have jurisdiction and enforcement authority with respect to disclosures described in this section.</text></paragraph> <paragraph id="H547132EF325C45B19C6EC8D266173214"><enum>(2)</enum><text display-inline="yes-display-inline">Section 17 shall apply to a statement made in an offering statement, disclosure, or report filed under this section to the same extent as such section 17 applies to a statement made in any other offering statement, disclosure, or report filed under this Act. </text></paragraph></subsection> <subsection id="H00419FAC6027471ABE3672A281D0FB5A"><enum>(b)</enum><header>Requirements for digital commodity issuers</header> <paragraph id="HD1A1A05C10FF4EAB92F50C7C8D00DA82"><enum>(1)</enum><header>Terms and conditions</header><text display-inline="yes-display-inline">A digital commodity issuer offering or selling an investment contract involving units of a digital commodity in reliance on section 4(a)(8) shall file with the Commission an offering statement and any related documents, in such form and with such content as prescribed by the Commission, including financial information, a description of the issuer and the operations of the issuer, the financial condition of the issuer, a description of the plan of distribution of any unit of a digital commodity that is to be offered as well as the intended use of the offering proceeds, and a description of the development plan for the blockchain system, and the related digital commodity, to become a mature blockchain system, if such blockchain system is not already certified as a mature blockchain system pursuant to section 42 of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78a">15 U.S.C. 78a et seq.</external-xref>).</text></paragraph> <paragraph id="HB59A9525A2924E14BC0C60F69A1664B6"><enum>(2)</enum><header>Information required for purchasers</header><text display-inline="yes-display-inline">A digital commodity issuer that has filed a statement under paragraph (1) to offer and sell an investment contract involving a unit of a digital commodity in reliance on section 4(a)(8) shall include in such statement the following information:</text> <subparagraph id="HB909FE86DAB14BEFAE5D987D54A06A06"><enum>(A)</enum><header>Maturity status</header><text display-inline="yes-display-inline">Whether the blockchain system to which the digital commodity relates has been certified as a mature blockchain system pursuant to section 42 of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78a">15 U.S.C. 78a et seq.</external-xref>) and, where such blockchain system is not so certified, a statement of the digital commodity issuer’s intent for the blockchain system to which the digital commodity relates to be a mature blockchain system within the time period described in section 4(a)(8)(A).</text></subparagraph> <subparagraph id="HF5B199FFF9D745D3B6D7E889FCF5925F"><enum>(B)</enum><header>Source code</header><text display-inline="yes-display-inline">The source code, or a publicly accessible webpage displaying such source code, for any blockchain system to which the digital commodity relates, and whether the source code was sourced from an external third party, whether there are any existing external dependencies, and whether the code underwent a third-party security audit.</text></subparagraph> <subparagraph id="HF69558BB1F2F4EEFB86CCF208CB015AD"><enum>(C)</enum><header>Transaction history</header><text display-inline="yes-display-inline">A description of the steps necessary to independently access, search, and verify the transaction history of any blockchain system to which the digital commodity relates, to the extent any such independent access, search, and verification activities are technically feasible with respect to such blockchain system.</text></subparagraph> <subparagraph id="H72476ADCB53343AD990569721FE96846"><enum>(D)</enum><header>Digital commodity economics</header><text>A description of the purpose of any blockchain system to which the digital commodity relates and the operation of any such blockchain system, including—</text> <clause id="HC46EC9AFC7394BCB9EF11F7DC0F14CBA"><enum>(i)</enum><text>information explaining the launch and supply process, including the number of units of the digital commodity to be issued in an initial allocation, the total number of units of the digital commodity to be created, the release schedule for the units of the digital commodity, and the total number of units of the digital commodity outstanding;</text></clause> <clause id="H9486533F410B4718ADA9564A927FEC1E"><enum>(ii)</enum><text>information explaining the technical requirements for holding, accessing, and transferring the digital commodity;</text></clause> <clause id="HC7816425DE064DB6A93D01AF52042AC5"><enum>(iii)</enum><text>information on any applicable consensus mechanism or process for validating transactions, method of generating or mining digital commodities, and any process for burning or destroying units of the digital commodity on the blockchain system;</text></clause> <clause id="H4A978218BB2D442FAE9EA5FE7B178616"><enum>(iv)</enum><text display-inline="yes-display-inline">an explanation of any mechanism for driving value to the digital commodity of such blockchain system; and</text></clause> <clause id="HE1540865904846E48775A38AE451B853"><enum>(v)</enum><text>an explanation of governance mechanisms for implementing changes to the blockchain system or forming consensus among holders of units of such digital commodity.</text></clause></subparagraph> <subparagraph id="HDE88C943D9074FC29AACF8172EF9FEFA"><enum>(E)</enum><header>Plan of development</header><text display-inline="yes-display-inline">The current state and timeline for the development of any blockchain system to which the digital commodity relates, detailing how and when the blockchain system is intended to be a mature blockchain system, if the blockchain system is not yet certified as a mature blockchain system, and the various roles that exist or are intended to exist in connection with the blockchain system, such as users, service providers, developers, transaction validators, and governance participants, including a discussion of any mechanisms by which control or authority are exerted with respect to the blockchain system or its related digital commodity, and any critical operational dependencies of the blockchain system or its related digital commodity.</text></subparagraph> <subparagraph id="H6D2FCD5BCBE247288AB18BD0388CA4A2" display-inline="no-display-inline"><enum>(F)</enum><header>Ownership disclosures</header> <clause id="H02541C6DDDEC423EB064C7CC08AEDE12"><enum>(i)</enum><header>In general</header><text>A list of all persons who are digital commodity related persons or digital commodity affiliated persons who have been issued a unit of the digital commodity by the digital commodity issuer or have a right to a unit of the digital commodity from the digital commodity issuer.</text></clause> <clause id="H0946414EB9474433B1A96FE43DC7C4F6"><enum>(ii)</enum><header>Confidentiality</header><text display-inline="yes-display-inline">The Commission shall keep each list described under clause (i) confidential, consistent with what is necessary or appropriate in the public interest or for the protection of investors.</text></clause></subparagraph> <subparagraph id="H3A177C9DEBE340D4850E4E2B7538482A"><enum>(G)</enum><header>Risk factor disclosures</header><text>A description of the material risks surrounding ownership of a unit of a digital commodity.</text></subparagraph></paragraph> <paragraph id="HBEC3C3DB91EB4E34A94A063012852178"><enum>(3)</enum><header>Ongoing disclosure requirements for maturing blockchain systems</header><text display-inline="yes-display-inline">Subject to paragraph (5), the issuer of a digital commodity related to a blockchain system that is not yet certified as a mature blockchain system that has filed a statement under paragraph (1) to offer and sell an investment contract involving a unit of a digital commodity in reliance on section 4(a)(8) shall file the following with the Commission:</text> <subparagraph id="H862FF5BF41E44DBE9CD69DF665F34911"><enum>(A)</enum><header>Semiannual reports</header><text display-inline="yes-display-inline">Every 6 months, a report containing—</text> <clause id="H13CC66B6BB75457C996906D855A4B1AF"><enum>(i)</enum><text display-inline="yes-display-inline">an updated description of the current state and timeline for the development of the blockchain system to which the digital commodity relates, showing how and when the blockchain is intended to be a mature blockchain system;</text></clause> <clause id="H34FCF3B95A25426898B7F01A323F4135"><enum>(ii)</enum><text display-inline="yes-display-inline">a description of the efforts of the issuer and digital commodity related persons in developing the blockchain system to which the digital commodity relates; and</text></clause> <clause id="H6414401846A843F389A72B0F57A48B43"><enum>(iii)</enum><text display-inline="yes-display-inline">the amount of money raised by the digital commodity issuer in reliance on section 4(a)(8), how much of that money has been spent, and the general categories of activities for which that money has been spent and amounts spent per category.</text></clause></subparagraph> <subparagraph id="HCA0CFAAE63AC4FD390F0168275C5A7E0" commented="no"><enum>(B)</enum><header>Current reports</header><text display-inline="yes-display-inline">A current report reflecting any material changes relevant to the information previously reported to the Commission by the digital commodity issuer, which shall be filed as soon as practicable after the material change occurred, in accordance with such rules as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.</text></subparagraph></paragraph> <paragraph id="H9181048E67E842C5AF59A2CC46906DDD" commented="no"><enum>(4)</enum><header>Rulemaking</header><text display-inline="yes-display-inline">Not later than 360 days after the date of the enactment of this section, the Commission shall prescribe rules on requirements applicable to issuers of digital commodities in reliance on section 4(a)(8).</text></paragraph> <paragraph id="HE4C5F31626CA45B2B2D06E60B23B1C1A" display-inline="no-display-inline"><enum>(5)</enum><header>Termination of certain reporting requirements; post-maturity reporting requirements</header> <subparagraph id="HC5E4FA785CAB4DC792CDE97DE096805B"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The ongoing reporting requirements under paragraph (3) shall not apply to a digital commodity issuer 180 days after the end of the covered fiscal year, if the information with respect to the digital commodity and the blockchain system to which it relates described in subparagraphs (A) through (C) of paragraph (2) is made publicly available and the disclosure requirements under subparagraph (C) of this paragraph are satisfied.</text></subparagraph> <subparagraph id="H7EC953A30E654FAE917B90DD9C123C41"><enum>(B)</enum><header>Covered fiscal year defined</header><text display-inline="yes-display-inline">In this paragraph, the term <term>covered fiscal year</term> means, with respect to a digital commodity, the first fiscal year of a digital commodity issuer in which the blockchain system to which such digital commodity relates is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934.</text></subparagraph> <subparagraph id="H76A95158923F4364A82643D7296906B2"><enum>(C)</enum><header>Post-maturity reporting requirements</header><text display-inline="yes-display-inline">After the blockchain system to which a digital commodity relates is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934, any digital commodity issuer that has filed a statement under paragraph (1) to offer and sell an investment contract involving a unit of a digital commodity in reliance on section 4(a)(8) and is engaged in material ongoing efforts related to the mature blockchain system shall disclose, in a manner reasonably calculated to inform the public, and at such frequency as the Commission may prescribe, by rule, a description of such efforts, including—</text> <clause id="H5B6CA919B71F465F91DBD85A0B90EFFB"><enum>(i)</enum><text>any participation in a decentralized governance system of such blockchain system;</text></clause> <clause id="HDFCE7904AAEA4791969A841B539D510A"><enum>(ii)</enum><text>any participation in alterations or proposed alterations to the functionality or operation of such blockchain system;</text></clause> <clause id="H477B980B77574414B83F3D40ACC07261"><enum>(iii)</enum><text display-inline="yes-display-inline">the use or planned use of any funds raised in reliance on section 4(a)(8) or any rulemaking pursuant to section 202(d) of the CLARITY Act of 2025 in such efforts;</text></clause> <clause id="H6BC1AD0BFAC54C1A8622595ABCF632E1"><enum>(iv)</enum><text>the amount of units of the digital commodity, or rights thereto, owned and controlled by such issuer and any use, sale, trading, or other disposition thereof; and</text></clause> <clause id="HB0126730B7A2477297017F916CD57106"><enum>(v)</enum><text>any affiliations of such issuer material to the efforts of such issuer.</text></clause></subparagraph> <subparagraph id="H9C7389E90455484981A5A9290CFFFF8C"><enum>(D)</enum><header>Rule of construction</header><text>Nothing in subparagraph (C) may be construed to make any digital commodity described in such subparagraph a security.</text></subparagraph></paragraph></subsection> <subsection id="H7C34BC40A29543FABBB0A5AA69138E68"><enum>(c)</enum><header>Requirements for intermediaries</header><text display-inline="yes-display-inline">A person acting as an intermediary in connection with the offer or sale of an investment contract involving units of a digital commodity in reliance on section 4(a)(8) shall—</text> <paragraph id="HC3DD43AB1FDD419C800B77C7860EC652" commented="no" display-inline="no-display-inline"><enum>(1)</enum><text display-inline="yes-display-inline">register with the Commission as a broker or dealer; and</text></paragraph> <paragraph id="HE908B6598BB54574B0250533BF1459AA"><enum>(2)</enum><text display-inline="yes-display-inline">be a member of a national securities association registered under section 15A of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78o-3">15 U.S.C. 78o–3</external-xref>).</text></paragraph></subsection> <subsection id="H48CD22B88C714DB981E8D208B25A1F91"><enum>(d)</enum><header>Disqualification provisions</header><text display-inline="yes-display-inline">The Commission shall issue rules to apply the disqualification provisions under section 230.262 of title 17, Code of Federal Regulations, to the exemption provided under section 4(a)(8).</text></subsection> <subsection id="H3A902D28187842CEAADB5ACB27864326"><enum>(e)</enum><header>Failure To mature</header> <paragraph id="HEFD991DA941243B396FA0E1272D5B3E9"><enum>(1)</enum><header>In general</header><text>Not later than 270 days after the date of the enactment of this section, the Commission shall issue rules applying such additional obligations and disclosures for the digital commodity issuers, digital commodity related persons, and digital commodity affiliated persons of a blockchain system described under subsection (b)(1) that does not become a mature blockchain system within the time period described in section 4(a)(8)(A) as are necessary or appropriate in the public interest or for the protection of investors. Such obligations and disclosures shall include the following:</text> <subparagraph id="HFA264516EF3A476CB699B4ABACFB96AE"><enum>(A)</enum><header>Disclosures</header><text display-inline="yes-display-inline">Disclosures regarding the following:</text> <clause id="HDF145119C2954C89BCBF39981D1E2AC1"><enum>(i)</enum><header>Failure to mature</header><text>The material reasons that the blockchain system has not become a mature blockchain system within the time period described in section 4(a)(8)(A).</text></clause> <clause id="HAF7F32CB2C684646A14D6BAE332F794E"><enum>(ii)</enum><header>Development plans</header><text>The future plans of development of the blockchain system, including information required under subsection (b)(3).</text></clause> <clause id="H56528292BF3745558CFECEE621AE7011"><enum>(iii)</enum><header>Risk factor disclosures</header><text display-inline="yes-display-inline">The material risks surrounding ownership of a unit of a digital commodity that relates to a blockchain system described under subsection (b)(1) that has not become a mature blockchain system within the time period described in section 4(a)(8)(A).</text></clause></subparagraph> <subparagraph id="HD5AB846154624A78B2BE1BC7240935E2"><enum>(B)</enum><header>Obligations</header><text>Transaction reporting and beneficial ownership disclosure obligations applicable to digital commodity related persons and digital commodity affiliated persons of such blockchain system.</text></subparagraph></paragraph> <paragraph id="HB1BDD69CF9F144CBADD16D268A76EE68"><enum>(2)</enum><header>Qualification required</header><text display-inline="yes-display-inline">The Commission may not permit any additional raising of capital by the issuer of a digital commodity related to a blockchain system described under subsection (a)(1) that has not become a mature blockchain system within the time period described in section 4(a)(8)(A) unless the Commission has qualified any offering statement related to such additional raising of capital.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="HA3533E1EA0DA42E2A578E6BC8B32E64D"><enum>(b)</enum><header>Additional exemptions</header> <paragraph id="HF8C341821D0944B5ABE991D128676FC9"><enum>(1)</enum><header>Certain registration requirements</header><text display-inline="yes-display-inline">Section 12(g)(6) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78l">15 U.S.C. 78l(g)(6)</external-xref>) is amended by striking <quote>under section 4(6)</quote> and inserting <quote>under section 4(a)(6) or 4(a)(8)</quote>.</text></paragraph> <paragraph id="H52B7042D218D404DB3947C924C0B4BF6" commented="no"><enum>(2)</enum><header>Exemption from State regulation</header><text display-inline="yes-display-inline">Section 18(b)(4) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77r">15 U.S.C. 77r(b)(4)</external-xref>) is amended—</text> <subparagraph id="HCA64C425EC5741A5992C177AAF91651F" commented="no"><enum>(A)</enum><text>in section (B), by striking <quote>section 4(4)</quote> and inserting <quote>section 4(a)(4)</quote>;</text></subparagraph> <subparagraph id="HCEDA0BD0FFBC46B687E3A7C2E150499B" commented="no"><enum>(B)</enum><text display-inline="yes-display-inline">in section (C), by striking <quote>section 4(6)</quote> and inserting <quote>section 4(a)(6)</quote>;</text></subparagraph> <subparagraph id="HFEF2A694AE1C49F6A786F56CE4626E6C" commented="no"><enum>(C)</enum><text>in subparagraph (F)—</text> <clause id="H805D785510354AC7A714C7632D91585D" commented="no"><enum>(i)</enum><text>by striking <quote>section 4(2)</quote> each place such term appears and inserting <quote>section 4(a)(2)</quote>; and</text></clause> <clause id="HB4A67946CB604075B911E7585B5B2937" commented="no"><enum>(ii)</enum><text>by striking <quote>or</quote> at the end;</text></clause></subparagraph> <subparagraph id="HDF69E3CE60824BBFAFA1C44F8383B90A" commented="no"><enum>(D)</enum><text>in subparagraph (G), by striking the period and inserting <quote>; or</quote>; and</text></subparagraph> <subparagraph id="HFDE8F2974F7B4354ADDE5229F2B10A76" commented="no"><enum>(E)</enum><text>by adding at the end the following:</text> <quoted-block style="OLC" id="H32F9181FDD054F7DBE8DAF2F0A60D382" display-inline="no-display-inline"> <subparagraph id="H3C2F7C452BBD43689794906E1FA45F08" commented="no"><enum>(H)</enum><text display-inline="yes-display-inline">section 4(a)(8).</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph></subsection> <subsection id="HE67161698DC746F884E9EAE290FA356B"><enum>(c)</enum><header>Prior issuers</header> <paragraph id="HC56BE53429AF476FB09E1CC29E43FA7D"><enum>(1)</enum><header>Reporting exception</header><text display-inline="yes-display-inline">With respect to a digital commodity, the digital commodity issuer shall not be required to file the reports otherwise required under section 4B(b)(3) of the Securities Act of 1933 (or, with respect to a digital commodity not issued in reliance on section 4(a)(8) of the Securities Act of 1933, a comparable set of reports specified by the Securities and Exchange Commission), if the digital commodity issuer—</text> <subparagraph id="H318EFE80D3BB47DB8E7E65F256C4730C"><enum>(A)</enum><text>last offered or sold an investment contract involving a unit of the digital commodity prior to January 1, 2020; or</text></subparagraph> <subparagraph id="HE774D5B24B274EC68C6221D2501539F2"><enum>(B)</enum><text>both—</text> <clause id="H0CF4E0B761D5456DBF005D7DB6904CFE"><enum>(i)</enum><text>last offered or sold an investment contract involving a unit of the digital commodity between January 1, 2020, and June 1, 2025; and</text></clause> <clause id="H5FF6CA1EF4E6422CB8DD31B3564BEEC8"><enum>(ii)</enum><text>is no longer engaged in material ongoing efforts related to the blockchain system to which the digital commodity relates.</text></clause></subparagraph></paragraph> <paragraph id="H8882EEA11E3046A7ADF6A761F46A86F5"><enum>(2)</enum><header>Reporting application date for certain prior issuers</header><text display-inline="yes-display-inline">With respect to a digital commodity, if the digital commodity issuer is engaged in material ongoing efforts related to the blockchain system to which the digital commodity relates and last offered and sold an investment contract involving a unit of the digital commodity between January 1, 2020, and June 1, 2025, the digital commodity issuer shall file with the Commission a comparable set of reports to the reports described under, as applicable, section 4B(b)(3) or 4B(b)(5)(C) of the Securities Act of 1933, where required by the Commission, not later than one year after the effective date of this section.</text></paragraph></subsection> <subsection id="HF6C098D4C16644EAB1D6EE526CCD8A31"><enum>(d)</enum><header>Use of other exemptions</header> <paragraph id="HBB5246F2423447C2A1992C9B7D516A19"><enum>(1)</enum><header>Rule of construction</header><text display-inline="yes-display-inline">Nothing in this section or the amendments made by this section may be construed as prohibiting the offer or sale of an investment contract involving units of a digital commodity in reliance on an exemption provided under section 3, 4(a), or 19 of the Securities Act of 1933 other than that provided under section 4(a)(8) of the Securities Act of 1933.</text></paragraph> <paragraph id="H11EB5C4433844BD7B5AC6792FE7E65C6"><enum>(2)</enum><header>Rulemaking</header><text display-inline="yes-display-inline">The Securities and Exchange Commission may issue rules—</text> <subparagraph id="HC907B6AEBC614BC897D648E3D29CE125"><enum>(A)</enum><text display-inline="yes-display-inline">to permit the issuer of a digital commodity related to a blockchain system described under section 4B(b)(1) of the Securities Act of 1933 that has not become a mature blockchain system within the time period described in section 4(a)(8)(A) of such Act to raise capital pursuant to an exempt offering, if the Commission qualifies any offering statement related to such raising of capital; and</text></subparagraph> <subparagraph id="H7ED2F87236794C61B08CF6FB68816E4F"><enum>(B)</enum><text>for the offer and sale of investment contracts involving units of a digital commodity by issuers that are not organized under the laws of a State, a territory of the United States, or the District of Columbia.</text></subparagraph></paragraph></subsection></section> <section id="H8B82E219A11745D082C565A8300CFC99"><enum>203.</enum><header>Treatment of secondary transactions in digital commodities that originally involved investment contracts</header> <subsection id="H31854EF1E91C49A0AD28502BFFDEBA87"><enum>(a)</enum><header>Secondary market treatment</header><text display-inline="yes-display-inline">Notwithstanding any other provision of law, the offer or sale of a digital commodity that originally involved an investment contract by a person other than the issuer of such digital commodity, or an agent or underwriter thereof, shall be deemed not to be an offer or sale of the investment contract originally involving the digital commodity between the issuer of the investment contract involving the digital commodity, or an agent or underwriter thereof, and the purchaser of such digital commodity under—</text> <paragraph id="H6F1A11C1759D4C0FBB4595DA679CD7D3"><enum>(1)</enum><text>the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77a">15 U.S.C. 77a et seq.</external-xref>);</text></paragraph> <paragraph id="H98F426EDB5CB44AAA90B78AD944AB866"><enum>(2)</enum><text>the Investment Advisers Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80b-1">15 U.S.C. 80b–1 et seq.</external-xref>);</text></paragraph> <paragraph id="H9A73DBBB77494BF1866191CA16739DED"><enum>(3)</enum><text>the Investment Company Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80a-1">15 U.S.C. 80a–1 et seq.</external-xref>);</text></paragraph> <paragraph id="H1BCBF8D0D8874A21BC63FDF13BCD2C3E"><enum>(4)</enum><text>the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78a">15 U.S.C. 78a et seq.</external-xref>);</text></paragraph> <paragraph id="H194260D4491F4639949B3E105354EB93"><enum>(5)</enum><text>the Securities Investor Protection Act of 1970 (<external-xref legal-doc="usc" parsable-cite="usc/15/78aaa">15 U.S.C. 78aaa et seq.</external-xref>); and</text></paragraph> <paragraph id="H6445C5584D8E4A6395DF0B5FBA6D0B5C"><enum>(6)</enum><text>any applicable provisions of State law.</text></paragraph></subsection> <subsection id="HAA2AF9FEEBD94C819F89DF421CF62FDC"><enum>(b)</enum><header>End user distributions not an offer or sale of a security</header><text display-inline="yes-display-inline">An end user distribution does not involve the offer or sale of a security.</text></subsection> <subsection id="H171FF2D5C5DB40A28E784C0AF8EDE838"><enum>(c)</enum><header>Agent defined</header><text>In this section and with respect to a digital commodity issuer, the term <term>agent</term> means any person directly or indirectly controlled by the issuer or under direct or indirect common control with the issuer.</text></subsection></section> <section id="H6DF10162D26E47BFB9ECDB2C4CD622E7"><enum>204.</enum><header>Requirements for offers and sales of digital commodities by digital commodity related persons and digital commodity affiliated persons</header><text display-inline="no-display-inline">The Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77a">15 U.S.C. 77a et seq.</external-xref>), as amended by section 202, is further amended by inserting after section 4B the following:</text> <quoted-block style="OLC" id="H15D69F0E55D74B999ADF83AABA9A4925" display-inline="no-display-inline"> <section id="HA60CC23AAD1A41D98DD4725B417A6A67"><enum>4C.</enum><header>Requirements for offers and sales of digital commodities by digital commodity related persons and digital commodity affiliated persons</header> <subsection id="HF6238F2458254823A12551F50EFBB75E"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">It shall be a violation of this Act for a digital commodity affiliated person or a digital commodity related person to offer or sell a digital commodity acquired directly from its issuer, or an agent or underwriter thereof, pursuant to an investment contract in reliance on section 4(a)(8) or another exemption under this Act, other than as provided in this section.</text></subsection> <subsection id="H491DDB0986EB4F2F92325D55EBE5551B"><enum>(b)</enum><header>Commission jurisdiction</header> <paragraph id="HC58A0E09CBFC4DB3A3B004C782582913"><enum>(1)</enum><text display-inline="yes-display-inline">Where a digital commodity affiliated person or a digital commodity related person offers or sells a digital commodity acquired directly from its issuer, or an agent or underwriter thereof, pursuant to an investment contract in reliance on section 4(a)(8), or another exemption under this Act, other than as provided in this section, such digital commodity affiliated person or digital commodity related person shall be considered an issuer of such investment contract.</text></paragraph> <paragraph id="H5DCED5DF450D4628878D22DCB8CDD58C"><enum>(2)</enum><text display-inline="yes-display-inline">For the purposes of this section, the Commission shall have jurisdiction and enforcement authority with respect to an offer or sale of a digital commodity described in subsection (a).</text></paragraph></subsection> <subsection id="H273F423E46C64FF68DE79EB163BC7F7A"><enum>(c)</enum><header>Restrictions on digital commodity related persons and digital commodity affiliated persons</header> <paragraph id="H5DB26C5CF5EC4E968555861ED63900F6"><enum>(1)</enum><header>Prior to being a mature blockchain system</header><text display-inline="yes-display-inline">Prior to the blockchain system to which a digital commodity relates being certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934, units of the digital commodity acquired by a digital commodity related person or digital commodity affiliated person directly from its issuer, or an agent or underwriter thereof, pursuant to an investment contract in reliance on section 4(a)(8), or another exemption under this Act, may be offered or sold by such digital commodity related person or digital commodity affiliated person if—</text> <subparagraph id="H85FF3BAC22B041B2AF2D6E9CCD23A275"><enum>(A)</enum><text display-inline="yes-display-inline">reports with respect to such digital commodity, where required under section 4B(b)(3) (or, with respect to a digital commodity not issued in reliance on section 4(a)(8), a comparable set of reports where required by the Commission) have been filed with the Commission;</text></subparagraph> <subparagraph id="H1E1F6715F9AC4020A142C67CF0B1D1DF"><enum>(B)</enum><text>the digital commodity related person or digital commodity affiliated person has held the units for not less than 12 months from the date the units were delivered; and</text></subparagraph> <subparagraph id="H5950B7D1DC7D4F2C967CBF427625841D" commented="no"><enum>(C)</enum><text display-inline="yes-display-inline">the aggregate amount of the units of the digital commodity offered or sold by the digital commodity related person or digital commodity affiliated person is—</text> <clause id="H91840846CD1A491DABFA8BF3C13231C3"><enum>(i)</enum><text display-inline="yes-display-inline">in any 12-month period, not greater than 15 percent of the total units of the digital commodity acquired directly from its issuer by the digital commodity related person or digital commodity affiliated person; and</text></clause> <clause id="H54CAC7E685A44F3CABCC5CC9C07895E7"><enum>(ii)</enum><text display-inline="yes-display-inline">not greater than 50 percent of the total units of the digital commodity acquired directly from its issuer by the digital commodity related person or digital commodity affiliated person.</text></clause></subparagraph></paragraph> <paragraph id="HE2A3A334E06D407490108D0586299012"><enum>(2)</enum><header>After becoming a mature blockchain system</header><text display-inline="yes-display-inline">After the blockchain system to which a digital commodity relates is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934, units of the digital commodity acquired by a digital commodity related person or digital commodity affiliated person directly from its issuer, or the issuer’s agent or underwriter, pursuant to an investment contract in reliance on section 4(a)(8) or another exemption under this Act, may be—</text> <subparagraph id="HC471BCD15E1141F2A8560E48B4DBC05B"><enum>(A)</enum><text display-inline="yes-display-inline">offered or sold by a digital commodity related person; or</text></subparagraph> <subparagraph id="H17FFF5B8DAE54E5FBB4AD43B256B2697"><enum>(B)</enum><text>offered or sold by a digital commodity affiliated person if—</text> <clause id="H0559CBB48E6A471B969F11297E63F3D5"><enum>(i)</enum><text display-inline="yes-display-inline">information described in section 4B(b)(5)(C), where required (or, with respect to a digital commodity not issued in reliance on section 4(a)(8), a comparable set of information, where required) is publicly available;</text></clause> <clause id="H5ADBCA69907D48778CDBF6B4C3FE0EC8"><enum>(ii)</enum><text display-inline="yes-display-inline">the digital commodity affiliated person has held the units for not less than the earlier of—</text> <subclause id="HB8196BE7B8064C72920FBCBFAF814B66"><enum>(I)</enum><text display-inline="yes-display-inline">12 months from the date the units were delivered; or</text></subclause> <subclause id="H5065E06827534A06A62FD70644F832C1"><enum>(II)</enum><text display-inline="yes-display-inline">3 months following the date on which the blockchain system is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934; and</text></subclause></clause> <clause id="H442309E678964CABB563E1B686A762D3"><enum>(iii)</enum><text display-inline="yes-display-inline">the aggregate amount of the units of the digital commodity offered or sold by the digital commodity affiliated person in any 12-month period does not exceed the greater of—</text> <subclause id="H4B6141681C5D440094CC3EB98B24DAB1"><enum>(I)</enum><text display-inline="yes-display-inline">8 percent of the total outstanding amount of the digital commodity; or</text></subclause> <subclause id="H77C153ABD1BB4AB99ECAFD758536A97D"><enum>(II)</enum><text display-inline="yes-display-inline">25 percent of the total units of the digital commodity acquired directly from its issuer by the digital commodity affiliated person.</text></subclause></clause></subparagraph></paragraph></subsection> <subsection id="H958CD4D2848043338160CEC3AE7196D8"><enum>(d)</enum><header>Use of a digital commodity in the programmatic functioning of the blockchain system</header><text display-inline="yes-display-inline">For purposes of this section, the use of a digital commodity in the programmatic functioning of the blockchain system to which it relates is not an offer or sale of a digital commodity.</text></subsection> <subsection id="H5434508C74D9407D83226494B4C76BA5"><enum>(e)</enum><header>Manipulative and deceptive devices; reporting</header> <paragraph id="H33417B83AF21402085037156BBDAE734"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">It shall be unlawful for any digital commodity issuer, digital commodity related person, or digital commodity affiliated person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, to use or employ, in connection with the purchase or sale of any digital commodity, any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.</text></paragraph> <paragraph id="HA2CB3C7E994B4A71889451CF8EA8CB3C"><enum>(2)</enum><header>Affirmative defense</header><text>Not later than 270 days after the date of the enactment of this section, the Commission shall issue rules to implement paragraph (1), including by providing any affirmative defenses to an enforcement action thereunder as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.</text></paragraph> <paragraph id="HBB237BCA62914536B9442BCE7701FF33" display-inline="no-display-inline"><enum>(3)</enum><header>Reporting</header><text display-inline="yes-display-inline">Not later than 270 days after the date of the enactment of this section, the Commission shall issue rules to prescribe such transaction reporting and beneficial ownership disclosure obligations applicable to digital commodity related persons and digital commodity affiliated persons, as necessary or appropriate in the public interest or for the protection of investors.</text></paragraph> <paragraph id="HE3FDCE109BEB4439B8F14E5EEBCAAA65"><enum>(4)</enum><header>Differentiation between persons</header><text>In issuing rules required under paragraphs (2) and (3), the Commission shall differentiate between digital commodity related persons and digital commodity affiliated persons as necessary or appropriate in the public interest or for the protection of investors.</text></paragraph></subsection> <subsection id="HFA6256F386634EF4A42D7444A494079F"><enum>(f)</enum><header>Rules for previously-Issued digital commodities</header> <paragraph id="HCBEF09624F2F46AA956BEA8239817992"><enum>(1)</enum><header>Units received prior to January 1, 2020</header><text display-inline="yes-display-inline">If a unit of a digital commodity was received by a digital commodity related person or digital commodity affiliated person prior to January 1, 2020, the unit of the digital commodity may be offered or sold by the digital commodity related person or digital commodity affiliated person without condition.</text></paragraph> <paragraph id="H950BEB6F1E5C4A0EB3ABEEEF4D1D92B8"><enum>(2)</enum><header>Certain units related to a non-mature blockchain system</header><text display-inline="yes-display-inline">If a unit of a digital commodity was received by a digital commodity related person or digital commodity affiliated person between January 1, 2020, and June 1, 2025, and the blockchain system to which the digital commodity relates is not certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934, the unit of the digital asset may be offered or sold by a digital commodity related person or digital commodity affiliated person if—</text> <subparagraph id="HE446BD95744F4EC0821FA0A2F1DAF10E"><enum>(A)</enum><text>reports with respect to such digital commodity comparable to the reports described under section 4B(b)(3), where required by the Commission, have been filed with the Commission;</text></subparagraph> <subparagraph id="HC4BFAC7842DC41C19C66F42DA65F8718"><enum>(B)</enum><text>the digital commodity related person or digital commodity affiliated person meets any requirements pursuant to subsection (e)(3); and</text></subparagraph> <subparagraph id="H272D7579A22F404D9EF482FC858438DE"><enum>(C)</enum><text>the digital commodity related person or digital commodity affiliated person has held the units for not less than 12 months from the date the units were delivered.</text></subparagraph></paragraph> <paragraph id="H7C0DAE6BD8B64D4B86A79611F68824F7"><enum>(3)</enum><header>Certain units related to a mature blockchain system</header><text display-inline="yes-display-inline">If a unit of a digital commodity was received by a digital commodity related person or digital commodity affiliated person between January 1, 2020, and June 1, 2025, and the blockchain system to which the digital commodity relates is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934, it may be offered or sold by a digital commodity related person or digital commodity affiliated person if—</text> <subparagraph id="H299373254600436CBE31BE774A5CDE4A"><enum>(A)</enum><text display-inline="yes-display-inline">information described in section 4B(b)(5)(C) or comparable thereto, where required by the Commission, is publicly available; and</text></subparagraph> <subparagraph id="H39EC0524F9734317BE2BD72FD5E9E56F"><enum>(B)</enum><text>the digital commodity related person or digital commodity affiliated person has held the units for not less than 12 months from the date the units were delivered.</text></subparagraph></paragraph></subsection> <subsection id="H25BCE3673B4F4A84834D376ECFF93287"><enum>(g)</enum><header>Rulemaking on further usage of digital commodities</header><text display-inline="yes-display-inline">Not later than 270 days after the date of enactment of this section, the Commission may issue rules to exempt, unconditionally or on stated terms or conditions, a digital commodity related person or a digital commodity affiliated person from the requirements of this section for the offer or sale of a digital commodity in order to foster the development of mature blockchain systems and fair and orderly markets.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="HAD12A0CA7D5E42EFADFD5DC3CB84CC85"><enum>205.</enum><header>Mature blockchain system requirements</header><text display-inline="no-display-inline">Title I of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78a">15 U.S.C. 78a et seq.</external-xref>) is amended by adding at the end the following:</text> <quoted-block style="OLC" id="H4BF2FB6FDB744BA5A027431A46B065D5" display-inline="no-display-inline"> <section id="HE1F4180983714B20B75AA3BB0C56791E"><enum>42.</enum><header>Mature blockchain systems</header> <subsection id="H820E18B146154AD4B71ADA72DDBA794B"><enum>(a)</enum><header>Certification of blockchain systems</header> <paragraph id="H8370439131B54CFA9E9F6EEBB8FD9DFA"><enum>(1)</enum><header>Certification</header><text display-inline="yes-display-inline">For purposes of sections 4(a)(8), 4B, and 4C of the Securities Act of 1933 any digital commodity issuer, digital commodity related person, digital commodity affiliated person, or decentralized governance system of the blockchain system may certify to the Securities and Exchange Commission that the blockchain system to which a digital commodity relates is a mature blockchain system.</text></paragraph> <paragraph id="HCB2E2F5C4EC045F2A1DF57B0A2A9638F"><enum>(2)</enum><header>Filing requirements</header><text>A certification described under paragraph (1) shall be filed with the Commission, and include such information that is reasonably necessary to establish that the blockchain system is not controlled by any person or group of persons under common control, which may include information regarding—</text> <subparagraph id="HA376E6EDAC794298A04D70D16432F6B0"><enum>(A)</enum><text>the operation of the blockchain system;</text></subparagraph> <subparagraph id="H122C79E5B9614F19A4B796FFF4A7796C"><enum>(B)</enum><text display-inline="yes-display-inline">the functionality of the related digital commodity;</text></subparagraph> <subparagraph id="HB96EBE7AB06D49BD89A26258983D7C59"><enum>(C)</enum><text display-inline="yes-display-inline">how the market value of the digital commodity is substantially derived from the programmatic functioning of such blockchain system;</text></subparagraph> <subparagraph id="H64D5E510FC4B41F3B774C29079D5E015"><enum>(D)</enum><text>any decentralized governance system which relates to the blockchain system; and</text></subparagraph> <subparagraph id="H01EFF158A8E14F07A68489CAD4D1F9A2"><enum>(E)</enum><text display-inline="yes-display-inline">the current roles, if any, of the digital commodity issuer, digital commodity affiliated persons, and digital commodity related persons where such roles are material to the development or operation of such blockchain system or the decentralized governance system of such blockchain system.</text></subparagraph></paragraph> <paragraph id="H7688F9F1034A4C0780EF7DE6FFCD1D1B"><enum>(3)</enum><header>Rebuttable presumption</header><text display-inline="yes-display-inline">The Commission may rebut a certification described under paragraph (1) with respect to a blockchain system if the Commission, within 60 days of receiving such certification, determines that the blockchain system is not a mature blockchain system.</text></paragraph> <paragraph id="HB7FC0386A17A4D8893595952FE97BF20"><enum>(4)</enum><header>Certification review</header> <subparagraph id="H0B1102E03ED24C279499FB7C124F552A"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">Any blockchain system that relates to a digital commodity for which a certification has been made under paragraph (1) shall be considered a mature blockchain system 60 days after the date on which the Commission receives a certification under paragraph (1), unless the Commission notifies the person who made the certification within such time that the Commission is staying the certification due to—</text> <clause id="H1206B20426044B7B932846FD67524587"><enum>(i)</enum><text>an inadequate explanation by the person making the certification; or</text></clause> <clause id="HA373C838E4C34A83B1AAC9CE32BF239B"><enum>(ii)</enum><text>any novel or complex issues which require additional time to consider.</text></clause></subparagraph> <subparagraph id="H2F6482C358314A4882DDFE4E8761D39E"><enum>(B)</enum><header>Public notice</header><text>The Commission shall make the following available to the public and provide a copy to the Commodity Futures Trading Commission:</text> <clause id="H178DB23A83B543F697D109A4DD91C58F"><enum>(i)</enum><text display-inline="yes-display-inline">Each certification received under paragraph (1).</text></clause> <clause id="H0F55DAA80D184D20890D1F11B2A4163C"><enum>(ii)</enum><text>Each stay of the Commission under this subsection, and the reasons therefor.</text></clause> <clause id="H35D0581856814B2F9BAC094A98366864"><enum>(iii)</enum><text display-inline="yes-display-inline">Any response from a person making a certification under paragraph (1) to a stay of the certification by the Commission.</text></clause></subparagraph> <subparagraph id="H5FEE66C55CBD423EAE31CD7689A4F2D8"><enum>(C)</enum><header>Consolidation</header><text display-inline="yes-display-inline">The Commission may consolidate and treat as one submission multiple certifications made under paragraph (1) for the same blockchain system which relates to a digital commodity which are received during the review period provided under this paragraph.</text></subparagraph></paragraph> <paragraph id="HE45AFB2533694A268939BDF070ECE9A8"><enum>(5)</enum><header>Stay of certification</header> <subparagraph id="HDC07F391CC9E445BA28A0006BEEE283B"><enum>(A)</enum><header>In general</header><text>A notification by the Commission pursuant to paragraph (4)(A) shall stay the certification once for up to an additional 120 days from the date of the notification.</text></subparagraph> <subparagraph id="HC2872998457E4A7493DD72B7245C4C7C"><enum>(B)</enum><header>Public comment period</header><text display-inline="yes-display-inline">Before the end of the 60-day period described under paragraph (4)(A), the Commission may begin a public comment period of at least 30 days in conjunction with a stay under this subsection.</text></subparagraph></paragraph> <paragraph id="H165D769A8B2B4F7C8A827A74A48CC8B4"><enum>(6)</enum><header>Disposition of certification</header><text display-inline="yes-display-inline">A certification made under paragraph (1) shall—</text> <subparagraph id="H7F174953704948E89F0D6DAA09929830"><enum>(A)</enum><text>become effective—</text> <clause id="HDFB9BAC3DF69456098F733175562E4E5"><enum>(i)</enum><text>upon the publication of a notification from the Commission to the person who made the certification that the Commission does not object to the certification; or</text></clause> <clause id="HA0748F1A437C4AC4BB2E29AECBE542EE"><enum>(ii)</enum><text>at the expiration of the certification review period; and</text></clause></subparagraph> <subparagraph id="H8603180875814E0EB7A8F19C179FB20A"><enum>(B)</enum><text>not become effective upon the publication of a notification from the Commission to the person who made the certification that the Commission has rebutted the certification.</text></subparagraph></paragraph> <paragraph id="HD71D37D2F63C440F8B2A9CAD11B0FECB"><enum>(7)</enum><header>Recertification</header><text display-inline="yes-display-inline">With respect to a blockchain system for which a certification has been rebutted under this subsection, no person may make a certification under paragraph (1) with respect to such blockchain system during the 90-day period beginning on the date of such rebuttal.</text></paragraph> <paragraph id="H260ABFD73381497796DEDFC1DDF1F9F8"><enum>(8)</enum><header>Appeal of rebuttal</header> <subparagraph id="HF37D9367427A40BF9E1CE02DA0E18B26"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">If a certification is rebutted under this section, the person making such certification may appeal the decision to the United States Court of Appeals for the District of Columbia, not later than 60 days after the notice of rebuttal is made.</text></subparagraph> <subparagraph id="H67D713E7DCBA4C6883C931DFB0720172"><enum>(B)</enum><header>Review</header><text display-inline="yes-display-inline">In an appeal under subparagraph (A), the court shall have de novo review of the determination to rebut the certification.</text></subparagraph></paragraph></subsection> <subsection id="HDA4439F462364A3092FB621C2474DF3F"><enum>(b)</enum><header>Maturity criteria</header> <paragraph id="HEE3AD88D8CED4D4EBE2A2AC0CE5D6DF7"><enum>(1)</enum><header>Sense of Congress</header><text display-inline="yes-display-inline">It is the sense of the Congress that protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation necessitates establishing clear criteria for blockchain systems to be deemed mature, as well as enabling the Commission to develop, without prejudice to any such criteria codified in statute, alternative criteria by which blockchain systems may be considered not to be controlled by any person or group of persons under common control in order to accommodate changes in markets and technology.</text></paragraph> <paragraph id="H9E4A8812FB1642EEBE5713D00D636812"><enum>(2)</enum><header>In general</header><text display-inline="yes-display-inline">The Commission may issue rules identifying conditions by which a blockchain system, together with its related digital commodity, shall be considered a mature blockchain system, consistent with the protection of investors, maintenance of fair, orderly, and efficient markets, and the facilitation of capital formation.</text></paragraph> <paragraph id="H18255B30A42A4E21B20C5BD3F27D2BE9"><enum>(3)</enum><header>Rules of construction</header> <subparagraph id="H90B9FAD2425B4F9582FB86E03E6E38BD"><enum>(A)</enum><text>Nothing in this subsection may be construed to permit the Commission to impose additional criteria to the criteria in subsection (c) for certifying that a blockchain system is a mature blockchain system pursuant to subsection (c).</text></subparagraph> <subparagraph id="H7DC5ADE639E44B34B3F9FAB219ACA283"><enum>(B)</enum><text display-inline="yes-display-inline">Nothing in this subsection or subsection (c) may be construed to limit the Commission’s ability to identify alternative conditions and criteria by which a blockchain system may be considered a mature blockchain system.</text></subparagraph></paragraph></subsection> <subsection id="HF348A17AB15345CEB41DC048C34A8B54"><enum>(c)</enum><header>Deemed mature</header> <paragraph id="H978617FB1A3B4DFDA1A9B1BEE8838B63"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Notwithstanding subsection (b), for the purposes of subsection (a), a digital commodity issuer, digital commodity related person, digital commodity affiliated person, or decentralized governance system of the blockchain system may establish that a blockchain system, together with its related digital commodity, is not controlled by any person or group of persons under common control, if the blockchain system, together with its related digital asset, meets the requirements described in paragraph (2) or (3).</text></paragraph> <paragraph id="HEA39A9D70816411FB4EEEED959575F2A"><enum>(2)</enum><header>Criteria for any blockchain system</header><text>The requirements described in this paragraph are the following:</text> <subparagraph id="H09334F5F08634F5182546707974FE360"><enum>(A)</enum><header>System value</header> <clause id="H2708EE7587DC4C618D0B584EFC94B35F"><enum>(i)</enum><header>Market value</header><text>The digital commodity has a value that is substantially derived from the adoption, use, and functioning of the blockchain system.</text></clause> <clause id="H217938CDAA264C9D801DD66AF6E419CA"><enum>(ii)</enum><header>Development of value mechanism substantially completed</header><text>Where the digital commodity issuer has made public a development plan describing how the digital commodity’s value is reasonably expected to be derived from the programmatic functioning of the blockchain system, the development of such mechanisms has been substantially completed.</text></clause></subparagraph> <subparagraph id="HEE0ABC70EE22466DA222EED3D2230A50"><enum>(B)</enum><header>Functional system</header><text>The blockchain system allows network participants to engage in the activities the blockchain system is intended to provide, including—</text> <clause id="HB120B57C49D5468FA3CC1B266FFBA562"><enum>(i)</enum><text>using, transmitting, or storing value, or otherwise executing transactions, on the blockchain system;</text></clause> <clause id="H86111D9E4D624BDCBD78A0750E227A50"><enum>(ii)</enum><text>deploying, executing, or accessing software or services, or otherwise offering or participating in services, deployed on or integrated with the blockchain system;</text></clause> <clause id="H3F2C035A90DA473A95E5800DDEC7DB63"><enum>(iii)</enum><text>participating in the consensus mechanism, transaction validation process, or decentralized governance system of the blockchain system; or</text></clause> <clause id="HE6512F4DF9924ABEA729136BD9E0AE75"><enum>(iv)</enum><text>operating any client, node, validator, sequencer, or other form of computational infrastructure with respect to the blockchain system.</text></clause></subparagraph> <subparagraph id="H0F7D6D1DD576451B91FFF9E96F6ECDAB"><enum>(C)</enum><header>Open and interoperable system</header><text>The blockchain system—</text> <clause id="H5983875EEDC545B280638D76F999C93F"><enum>(i)</enum><text>is composed of source code that is open source; and</text></clause> <clause id="HF7107E933C994E1CBE919607B7F8AD77"><enum>(ii)</enum><text>does not restrict or prohibit based on the exercise of unilateral authority any person, other than a digital commodity issuer, digital commodity related person, or a digital commodity affiliated person from engaging in the activities the blockchain system is intended to provide, including the activities described in subparagraph (B).</text></clause></subparagraph> <subparagraph id="H7B0DB0F8CC954CA7B300C887375074D4"><enum>(D)</enum><header>Programmatic system</header><text display-inline="yes-display-inline">The blockchain system operates, executes, and enforces its operations and transactions based solely on pre-established, transparent rules encoded directly within the source code of the blockchain system.</text></subparagraph> <subparagraph id="HC4BF20E64A0F4C1395A203D2D07041C3"><enum>(E)</enum><header>System governance</header><text>No person or group of persons under common control—</text> <clause id="HD441F0F60DBF43D3A7987B6DC07C8881"><enum>(i)</enum><text display-inline="yes-display-inline">has the unilateral authority, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, to control or materially alter the functionality, operation, or rules of consensus or agreement of the blockchain system or its related digital commodity; or</text></clause> <clause id="H14C8FA4DEAA04246A2395DB45B77073A"><enum>(ii)</enum><text display-inline="yes-display-inline">has the unilateral authority to direct the voting, in the aggregate, of 20 percent or more of the outstanding voting power of such blockchain system by means of a related digital commodity, nodes or validators, a decentralized governance system, or otherwise, in a blockchain system which can be altered by a voting system.</text></clause></subparagraph> <subparagraph id="H06C712E023E240AA8F1215F18C7DD2AE"><enum>(F)</enum><header>Impartial system</header><text display-inline="yes-display-inline">No person or group of persons under common control possesses a unique permission or privilege to alter the functionality, operation, or rules of consensus or agreement of the blockchain system or its related digital commodity, unless such alteration—</text> <clause id="H8364C5FDEC404DD5B99025B84A28B913"><enum>(i)</enum><text>addresses errors, regular maintenance, or cybersecurity risks of the blockchain system that affect the programmatic functioning of the blockchain system; and</text></clause> <clause id="HF9634A48A03549838DD592B2B1A6B1BB"><enum>(ii)</enum><text>is adopted through the consensus or agreement of a decentralized governance system.</text></clause></subparagraph> <subparagraph id="H2C771C0EA44F401188EBF4F4BF0E9DC6"><enum>(G)</enum><header>Distributed ownership</header><text display-inline="yes-display-inline">No digital commodity issuer, digital commodity related person, or digital commodity affiliated person beneficially owns, in the aggregate, 20 percent or more of the total amount of units of the digital commodity.</text></subparagraph></paragraph> <paragraph id="H3F994C686E5A45DEA747904B9289CB97"><enum>(3)</enum><header>Optional criteria for preexisting blockchain systems</header><text display-inline="yes-display-inline">The requirements described in this paragraph are that the blockchain system—</text> <subparagraph id="HA0473FE3F30647BC9361EAC2E9762B3C"><enum>(A)</enum><text display-inline="yes-display-inline">was created prior to the date of enactment of this section;</text></subparagraph> <subparagraph id="H5550CFD32F4842EAB6195BDF0648666E"><enum>(B)</enum><text>met the requirements of subparagraphs (A) through (F) of paragraph (2) prior to January 1, 2020; and</text></subparagraph> <subparagraph id="HF3AC8B70E15C4DABBDD451FC1889AD10"><enum>(C)</enum><text>at least 50 percent of the units of the digital commodity related to the blockchain system are held by persons other than the digital commodity issuer, a digital commodity related person, or a digital commodity affiliated person.</text></subparagraph></paragraph></subsection> <subsection id="H09D6B29BAD084B618FDD4B14CC207211"><enum>(d)</enum><header>Decentralized governance system</header> <paragraph id="HA20C8E298E974FCC83526279E4F8E6F9" display-inline="no-display-inline"><enum>(1)</enum><text display-inline="yes-display-inline">For the purposes of this section, a decentralized governance system is not a <quote>person</quote> or a <quote>group of persons under common control</quote>.</text></paragraph> <paragraph id="HBC45846DE49E46289BA176F790EC7FD7"><enum>(2)</enum><text>A blockchain system, together with its digital commodity, shall not be precluded from being considered a mature blockchain system solely based on a functional, administrative, clerical, or ministerial action of a decentralized governance system, including any such action taken by a person acting on behalf of and at the direction of the decentralized governance system, as determined by the Commission and consistent with the protection of investors, maintenance of fair, orderly, and efficient markets, and the facilitation of capital formation.</text></paragraph></subsection> <subsection id="HE680551D53814D4A9EA3D193DB284CA9"><enum>(e)</enum><header>Rulemaking</header><text>Not more than 270 days after the date of enactment of this section, the Commission shall issue rules to carry out this section.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="HE59EF5B327EE42F4A6C0A14B622CDFB2"><enum>206.</enum><header>Effective date</header><text display-inline="no-display-inline">Unless otherwise provided in this title, this title and the amendments made by this title shall take effect 360 days after the date of enactment of this Act, except that, to the extent a provision of this title requires a rulemaking, the provision shall take effect on the later of—</text> <paragraph id="HA45B32B5AFE644EDAFD5DBC995CF9109"><enum>(1)</enum><text>360 days after the date of enactment of this Act; or</text></paragraph> <paragraph id="HDDAFB3B7F50F4642BB4F295EADA455D5"><enum>(2)</enum><text>60 days after the publication in the Federal Register of the final rule implementing the provision.</text></paragraph></section> <enum>III</enum><header>Registration for Intermediaries at the Securities and Exchange Commission</header> <section id="HE4169F8824204FDB9E2B8988971F1DFC"><enum>301.</enum><header>Treatment of digital commodities and permitted payment stablecoins</header> <subsection id="H43498CCFC18E43B981BC646CA3D92512"><enum>(a)</enum><header>Securities Act of 1933</header><text display-inline="yes-display-inline">Section 2(a)(1) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77b">15 U.S.C. 77b(a)(1)</external-xref>) is amended by adding at the end the following: <quote>The term does not include a digital commodity or permitted payment stablecoin.</quote>.</text></subsection> <subsection id="H56607E08D1EC4514A0E8CA6D10748BA4"><enum>(b)</enum><header>Securities Exchange Act of 1934</header><text display-inline="yes-display-inline">Section 3(a)(10) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78c">15 U.S.C. 78c(a)</external-xref>) is amended by adding at the end the following: <quote>The term does not include a digital commodity or permitted payment stablecoin.</quote></text></subsection> <subsection id="HA5052C68CA0743389A089E5D5F389B14"><enum>(c)</enum><header>Investment Advisers Act of 1940</header><text>Section 202(a) of the Investment Advisers Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80b-2">15 U.S.C. 80b–2(a)</external-xref>) is amended—</text> <paragraph id="H374C59A894F44DBBB4AE5E6A89FF0272"><enum>(1)</enum><text>in paragraph (18), by adding at the end the following: <quote>The term does not include a digital commodity or permitted payment stablecoin.</quote>;</text></paragraph> <paragraph id="H119FF5C15C134FF9A42894F971614649" commented="no"><enum>(2)</enum><text>by redesignating the second paragraph (29) (relating to commodity pools) as paragraph (31); and</text></paragraph> <paragraph id="HD4FEF0142AD3447F828BDA164EE4FC69"><enum>(3)</enum><text>by adding at the end, the following:</text> <quoted-block id="H3480B5954D9F49529021D9956952F57E" style="OLC"> <paragraph id="HF0262832A2B749C98E9AC29FCB18977C"><enum>(32)</enum><header>Digital commodity-related terms</header><text display-inline="yes-display-inline">The terms <term>digital commodity</term> and <term>permitted payment stablecoin</term> have the meaning given those terms, respectively, under section 2(a) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77b">15 U.S.C. 77b(a)</external-xref>).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H2E21E776A2ED4D81821C1DBC794D63BC"><enum>(d)</enum><header>Investment Company Act of 1940</header><text>Section 2(a) of the Investment Company Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80a-2">15 U.S.C. 80a–2</external-xref>) is amended—</text> <paragraph id="HCC1474F656E041F98B8F56BDE1381AF7"><enum>(1)</enum><text>in paragraph (36), by adding at the end the following: <quote>The term does not include a digital commodity or permitted payment stablecoin.</quote>; and</text></paragraph> <paragraph id="H861E1B8571FB49EE829B63EE2CF66D3D"><enum>(2)</enum><text>by adding at the end, the following:</text> <quoted-block id="H226B1AFB68F64CA2A349B489E4E31CDD" style="OLC"> <paragraph id="H5DF5BAA481C24356938E03F1EB06D02D"><enum>(55)</enum><header>Digital commodity-related terms</header><text display-inline="yes-display-inline">The terms <term>digital commodity</term> and <term>permitted payment stablecoin</term> have the meaning given those terms, respectively, under section 2(a) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77b">15 U.S.C. 77b(a)</external-xref>).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="HD3E9A86EE54E4F8685E2A1B646D09D88"><enum>(e)</enum><header>Securities Investor Protection Act of 1970</header><text display-inline="yes-display-inline">Section 16(14) of the Securities Investor Protection Act of 1970 (<external-xref legal-doc="usc" parsable-cite="usc/15/78lll">15 U.S.C. 78lll(14)</external-xref>) is amended by adding at the end the following: <quote>The term does not include a digital commodity or permitted payment stablecoin, as such terms are defined, respectively, under section 2(a) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77b">15 U.S.C. 77b(a)</external-xref>)</quote>.</text></subsection></section> <section id="H01657CABE2CC424A92D27B0120878B7D" commented="no"><enum>302.</enum><header>Anti-fraud authority over permitted payment stablecoins and certain digital commodity transactions</header> <subsection id="HE475880E76944D738E3E1DC58C877254"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 10 of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78j">15 U.S.C. 78j</external-xref>) is amended—</text> <paragraph id="H3250E1C3F9DF4CFE987E773B50B08F62"><enum>(1)</enum><text>by moving subsection (c) so as to appear after subsection (b);</text></paragraph> <paragraph id="H52C53B975AC54C22AB97FB46CF3C452A"><enum>(2)</enum><text>by designating the undesignated matter at the end of that section as subsection (d); and</text></paragraph> <paragraph id="H2AD44766C6FC471EBEDFB07BAB5DDB29"><enum>(3)</enum><text>by adding at the end the following:</text> <quoted-block style="OLC" id="H8E9E2EE03D7F4CF087AF91AF3BCADA3E" display-inline="no-display-inline"> <subsection id="H02ED274334B84019907F13C9D6D7947E"><enum>(e)</enum> <paragraph commented="no" display-inline="yes-display-inline" id="H10A8D7A4F3BB479A9D1034BEC7FC01CB"><enum>(1)</enum><text display-inline="yes-display-inline">Rules promulgated under subsection (b) that prohibit fraud, manipulation, or insider trading (but not rules imposing or specifying reporting or recordkeeping requirements, procedures, or standards as prophylactic measures against fraud, manipulation, or insider trading), and judicial precedents decided under subsection (b) and rules promulgated thereunder that prohibit fraud, manipulation, or insider trading, shall apply with respect to permitted payment stablecoin and digital commodity transactions engaged in by a broker or dealer or through an alternative trading system or, as applicable, a national securities exchange to the same extent as they apply to securities transactions.</text></paragraph> <paragraph id="H8CEC72B2F49544489FCB5F5E22F6D7BA" indent="up1"><enum>(2)</enum><text display-inline="yes-display-inline">Judicial precedents decided under section 17(a) of the Securities Act of 1933 and sections 9, 15, 16, 20, and 21A of this title, and judicial precedents decided under applicable rules promulgated under such sections, shall apply to permitted payment stablecoins and digital commodities with respect to those circumstances in which the permitted payment stablecoins and digital commodities are brokered, traded, or custodied by a broker or dealer or through an alternative trading system or, as applicable, a national securities exchange to the same extent as they apply to securities.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H237E6FADC1BA45EF8CCC51B534B283B8"><enum>(b)</enum><header>Treatment of permitted payment stablecoins</header><text display-inline="yes-display-inline">Title I of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78a">15 U.S.C. 78a et seq.</external-xref>) is amended by inserting after section 6 the following:</text> <quoted-block style="OLC" id="HA80C81527CD546AEA63A6B9086FAF873" display-inline="no-display-inline"> <section id="HCD890B751B5C42F89D86C89561CB5079"><enum>6A.</enum><header>Treatment of transactions in permitted payment stablecoins</header> <subsection id="HB13FECB0602341129D136FAB33DF71CC"><enum>(a)</enum><header>Authority To broker, trade, and custody permitted payment stablecoins</header><text display-inline="yes-display-inline">Permitted payment stablecoins may be brokered, traded, or custodied by a broker, dealer or through an alternative trading system or national securities exchange.</text></subsection> <subsection id="HF5AC5FD48F2E464D8B6944ED4A73555A"><enum>(b)</enum><header>Commission jurisdiction</header><text display-inline="yes-display-inline">The Commission shall only have jurisdiction over a transaction in a permitted payment stablecoin with respect to those circumstances in which a permitted payment stablecoin is brokered, traded, or custodied—</text> <paragraph id="H6DF3165961484911BDBA3D983822E5DC"><enum>(1)</enum><text>by a broker or dealer;</text></paragraph> <paragraph id="H08BDC76DA68D42F2B0DFA4704E845DC5"><enum>(2)</enum><text display-inline="yes-display-inline">through a national securities exchange; or</text></paragraph> <paragraph id="HDE8D6489491E47EB8B555F0DFF210539"><enum>(3)</enum><text>through an alternative trading system.</text></paragraph></subsection> <subsection id="H2B3CECFC9B99427F9BCD5A584489D57C"><enum>(c)</enum><header>Limitation</header><text display-inline="yes-display-inline">Subsection (b) shall only apply to a transaction described in subsection (b) for the purposes of regulating the offer, execution, solicitation, or acceptance of a permitted payment stablecoin in those circumstances in which the permitted payment stablecoin is brokered, traded, or custodied—</text> <paragraph id="H73CB892CDDDE49799A75C51540B9A74C"><enum>(1)</enum><text>by a broker or dealer;</text></paragraph> <paragraph id="HA93C863CD1274E54923392CFA9BABBBE"><enum>(2)</enum><text display-inline="yes-display-inline">through a national securities exchange; or</text></paragraph> <paragraph id="H4046DB1865DB497399D4E946A0ECFB9D"><enum>(3)</enum><text>through an alternative trading system.</text></paragraph></subsection> <subsection id="H0622E487B7A54EFE83D2AC23111CBA5C"><enum>(d)</enum><header>Rule of construction</header><text display-inline="yes-display-inline">Nothing in this section may be construed to prohibit permitted payment stablecoins from being custodied by any person or entity that is not a broker, dealer, alternative trading system, or national securities exchange.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> <section id="H5C9359741F9B46F08B487BC2C9CBE32E"><enum>303.</enum><header>Eligibility of alternative trading systems</header> <subsection id="H3724379283A44A74AE69561F48F376E5"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 5 of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78e">15 U.S.C. 78e</external-xref>) is amended—</text> <paragraph id="H19A5D9E8DCF04F75A1129991A41CD094"><enum>(1)</enum><text>by striking <quote>It</quote> and inserting the following:</text> <quoted-block style="OLC" id="H237640DECCD641C3B7B92CFF9C4EACB7" display-inline="no-display-inline"> <subsection id="H6B8EDCA9B6F04BE7BE84B1F200FA8DD3"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">It</text></subsection><after-quoted-block>;</after-quoted-block></quoted-block></paragraph> <paragraph id="HD7257E825BFC4E9C97466F07B0C21FA3"><enum>(2)</enum><text>by adding at the end the following:</text> <quoted-block style="OLC" id="HE4269367E5894642BE0ED8E435FCD728" display-inline="no-display-inline"> <subsection id="HEF5FDAB9627740DFAC61CFBF280000D6"><enum>(b)</enum><header>Digital commodity protections</header> <paragraph id="H91A1FF5741974320857A1492319AF6D5"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The Commission may not preclude a trading platform from operating pursuant to a covered exemption on the basis that the assets traded or to be traded on such platform include—</text> <subparagraph id="HABA5B69D073F40798509C6E4E97EEFF9"><enum>(A)</enum><text>digital commodities or permitted payment stablecoins; and</text></subparagraph> <subparagraph id="HDBB7E7AA528248FA91C5E7C97D82C507"><enum>(B)</enum><text>securities.</text></subparagraph></paragraph> <paragraph id="HE7D946834A0248D4AF1C01E00CE9D261"><enum>(2)</enum><header>Covered exemption</header><text display-inline="yes-display-inline">In this subsection, the term <term>covered exemption</term> means an exemption—</text> <subparagraph id="H40D287300CB6485599E6ACED2C48344F"><enum>(A)</enum><text>described in subsection (a)(2); or</text></subparagraph> <subparagraph id="H2AEB69A8B9754D7889596EDD46C98517"><enum>(B)</enum><text>with respect to any other rule of the Commission relating to the definition of <quote>exchange</quote>.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H0896B1E8C9EA4777A103453DAD336AA4"><enum>(b)</enum><header>Securities Exchange Act of 1934</header><text display-inline="yes-display-inline">Section 3(a)(2) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78c">15 U.S.C. 78c(a)(2)</external-xref>) is amended by adding at the end the following: <quote>An alternative trading system primarily facilitating the trading of digital commodities, permitted payment stablecoins, or both, is not a <quote>facility</quote> of an exchange.</quote>.</text></subsection> <subsection id="HF080B0AD4DE1438FAF3F86125A982B8C"><enum>(c)</enum><header>Rule of construction</header><text display-inline="yes-display-inline">Nothing in this section, the amendments made by this section, or section 304 may be construed to—</text> <paragraph id="H9D0AF9686AD54828810452A15000D6AC"><enum>(1)</enum><text>prohibit a national securities exchange from owning or operating any other type of alternative trading system; or</text></paragraph> <paragraph id="H317B8425D0CF4A8299049A11B5382663"><enum>(2)</enum><text display-inline="yes-display-inline">create a presumption that any other type of alternative trading system owned or operated by a national securities exchange is a facility of that exchange.</text></paragraph></subsection></section> <section id="HFF9E551C8AC94451803E500F8231BD30"><enum>304.</enum><header>Operation of alternative trading systems</header> <subsection id="H69F38A8EF537420BBA29F9AE83B144CC"><enum>(a)</enum><header>Commission authority</header><text display-inline="yes-display-inline">The Securities and Exchange Commission shall have jurisdiction over digital commodity activities and transactions engaged in by—</text> <paragraph id="H69C14955557F4BE3A54484C2E1DB1A28"><enum>(1)</enum><text display-inline="yes-display-inline">a registered broker or registered dealer exempt from registration with the Commodity Futures Trading Commission pursuant to section 5k of the Commodity Exchange Act; and</text></paragraph> <paragraph id="HD2AD266A3A02470580E20327AF51248C"><enum>(2)</enum><text>a national securities exchange.</text></paragraph></subsection> <subsection id="HDAF3FC2DCC7046309C73C1606B3BD85E"><enum>(b)</enum><header>Rulemaking authority</header><text display-inline="yes-display-inline">The Securities and Exchange Commission shall have authority to issue rules governing any digital commodity activities and transactions engaged in by a broker, dealer, or national securities exchange registered with the Securities and Exchange Commission and exempt from registration with the Commodity Futures Trading Commission pursuant to section 5k of the Commodity Exchange Act, consistent with this section and what is necessary or appropriate in the public interest or for the protection of investors.</text></subsection> <subsection id="H7BFE52CFCA7B4489A84DF531EEC2A1B7"><enum>(c)</enum><header>National securities exchanges</header><text display-inline="yes-display-inline">Not later than 270 days after the date of the enactment of this Act, the Securities and Exchange Commission shall revise the covered regulations to permit a national securities exchange or affiliate thereof to operate an alternative trading system that permits the trading of digital commodities, permitted payment stablecoins, or both by registered brokers or registered dealers that are exempt from registration with the Commodity Futures Trading Commission pursuant section 5k of the Commodity Exchange Act, consistent with this section and what is necessary or appropriate in the public interest or for the protection of investors.</text></subsection> <subsection id="HD252FBD2CFB143019CC4DC27F245CE56"><enum>(d)</enum><header>Registered brokers and registered dealers</header><text display-inline="yes-display-inline">Not later than 270 days after the date of the enactment of this Act, the Securities and Exchange Commission shall revise the covered regulations to permit a registered broker or registered dealer that is exempt from registration with the Commodity Futures Trading Commission pursuant to section 5k of the Commodity Exchange Act to operate an alternative trading system that permits the trading of digital commodities, permitted payment stablecoins, or both, consistent with this section and what is necessary or appropriate in the public interest or for the protection of investors.</text></subsection> <subsection id="H93364E5A080340FD844E938044FAE6A4"><enum>(e)</enum><header>Permitted trading</header> <paragraph id="H7B4458DC41E344B6BB7095E597650C46"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">An alternative trading system operated pursuant to this section and the regulations promulgated hereunder shall be permitted to trade upon notice to the Securities and Exchange Commission in a manner prescribed by the Securities and Exchange Commission any digital commodity that has been listed by a digital commodity exchange in compliance with section 5i(c)(3) of the Commodity Exchange Act.</text></paragraph> <paragraph id="H2302679A1D814E93917D613A5126A8F6"><enum>(2)</enum><header>Commission authority</header><text display-inline="yes-display-inline">Digital commodity transactions offered on an alternative trading system operating pursuant to this section shall be subject to the jurisdiction of the Securities and Exchange Commission. The Securities and Exchange Commission shall have authority to promulgate rules governing such digital commodity transactions of alternative trading systems, consistent with this section and what is necessary or appropriate in the public interest or for the protection of investors.</text></paragraph> <paragraph id="H3D00942D2C0845508AE7FBB5A96E3B09"><enum>(3)</enum><header>Suspension of trading</header><text display-inline="yes-display-inline">The Securities and Exchange Commission may suspend the trading of a digital commodity by an alternative trading system operating pursuant to this section as is necessary or appropriate in the public interest and is consistent with the protection of investors.</text></paragraph></subsection> <subsection id="HF50F7E8D23F84B0F97A445A89D9A5E45"><enum>(f)</enum><header>Order display and execution reporting</header><text display-inline="yes-display-inline">Not later than 270 days after the date of the enactment of this Act, the Securities and Exchange Commission shall issue and revise rules, as necessary or appropriate in the public interest or for the protection of investors, regarding whether alternative trading systems operating pursuant to subsections (c) and (d) have an obligation to provide the prices and sizes of orders displayed to more than one person in such alternative trading system of digital commodities to self-regulatory organizations with members who trade in digital commodities or permitted payment stablecoins.</text></subsection> <subsection id="H0218944CC63940FFA8066F0A9792C067"><enum>(g)</enum><header>Principles of trade</header><text>Not later than 270 days after the date of the enactment of this Act, the Securities and Exchange Commission shall issue and revise rules, as necessary or appropriate in the public interest or for the protection of investors, to—</text> <paragraph id="H3E7130EE19CE4887B73D2A6FBBC0CA77"><enum>(1)</enum><text>apply the rules and standards promulgated pursuant to paragraph (2) to the appropriate market participants, including—</text> <subparagraph id="H7AB2B0C5FFA84815BCB485C0D49D0077"><enum>(A)</enum><text>national securities exchanges operating an alternative trading system described in subsection (c); and</text></subparagraph> <subparagraph id="H02C387B58319469D9F41BA0F479F7713"><enum>(B)</enum><text>registered brokers and registered dealers operating or subscribing to an alternative trading system described in subsection (d); and</text></subparagraph></paragraph> <paragraph id="H4A65636A86F14864BF4B50C36012C877"><enum>(2)</enum><text display-inline="yes-display-inline">apply, as appropriate to the market participants described in subparagraph (1) and customers thereof rules and standards to—</text> <subparagraph id="H2368A059634E4EA9990C3D890A7630C3"><enum>(A)</enum><text>prevent fraudulent and manipulative acts and practices;</text></subparagraph> <subparagraph id="H68661756866642DB8F49C40E5AF58409"><enum>(B)</enum><text>foster cooperation and coordination with persons engaged in regulating, settling, processing information with respect to, and facilitating transactions in digital commodities or permitted payment stablecoins traded, as applicable, on or by any alternative trading system operating pursuant to subsection (c) or (d), or any registered broker or registered dealer;</text></subparagraph> <subparagraph id="H9CD4732808AE4AD4A98E97AA4F5CF502"><enum>(C)</enum><text>remove impediments to and perfect the mechanism of a free and open market in digital commodities or permitted payment stablecoins traded, as applicable, on or by any alternative trading system operating pursuant to subsection (c) or (d), or any registered broker or registered dealer;</text></subparagraph> <subparagraph id="H35566E20D18444B0B58205B51E2A0FE1"><enum>(D)</enum><text>in general, protect investors and the public interest; and</text></subparagraph> <subparagraph id="HC9E55729F5784E89B5CEBCE34E43A79B"><enum>(E)</enum><text>prohibit any unfair discrimination between—</text> <clause id="H0FCE8BF86271433982EA2D91CC3CF27F"><enum>(i)</enum><text>customers;</text></clause> <clause id="H419CAFE1B57A4FD4B8A0698FC43D28E8"><enum>(ii)</enum><text>any market participants described in subparagraphs (A) and (B) of paragraph (1); or</text></clause> <clause id="HBB3FB9B350AE4BC888C55CA9F97A11D1"><enum>(iii)</enum><text>issuers of digital commodities.</text></clause></subparagraph></paragraph></subsection> <subsection id="H356DF0A353504AF39795267814313649"><enum>(h)</enum><header>Implementing organizations</header><text display-inline="yes-display-inline">The Securities and Exchange Commission shall require any registered national securities association that has as a member a registered broker or registered dealer that operates an alternative trading system pursuant to subsection (d) or otherwise transacts in digital commodities or permitted payment stablecoins to adopt such rules as may be necessary to further compliance with this section, including subsection (g)(2), protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.</text></subsection> <subsection id="HAE0A01CF4A214776AFECC569DCFABE85"><enum>(i)</enum><header>Rule of construction</header><text>The enumeration of any category of rules or regulations in this section shall not be construed to limit the authority of the Securities and Exchange Commission to promulgate such rules as may be necessary or appropriate to implement this section and the purposes of this Act, including over—</text> <paragraph id="HAC7D8CCDFBE247148E8826FAA57E6772"><enum>(1)</enum><text>system capacity, integrity, and security;</text></paragraph> <paragraph id="HE23EBA6BBD9E4205BCA96C0EE6725107"><enum>(2)</enum><text>examinations, inspections, and investigations;</text></paragraph> <paragraph id="HD7EDC733E2FD4612B1BAEEB5B043C873"><enum>(3)</enum><text>trade reporting; or</text></paragraph> <paragraph id="H00220949E2AE4B7B87C748E9DBAD4A7B"><enum>(4)</enum><text>written procedures for the confidential treatment of trading information.</text></paragraph></subsection> <subsection id="H7D2B8D96DF314FFEB08665CA09D42EAC"><enum>(j)</enum><header>Memorandum of understanding</header><text display-inline="yes-display-inline">Consistent with section 5k of the Commodity Exchange Act and to carry out this Act, the Securities and Exchange Commission shall enter into a memorandum of understanding with the Commodity Futures Trading Commission to ensure—</text> <paragraph id="H8105DA7913F445A6A0D6AD0F1973E685"><enum>(1)</enum><text display-inline="yes-display-inline">requirements imposed on registered brokers or registered dealers operating an alternative trading system pursuant to subsection (c) or otherwise transacting in digital commodities or permitted payment stablecoins are consistent with the substantive requirements under section 4u of the Commodity Exchange Act;</text></paragraph> <paragraph id="H39A1CB287EF8495AA64FCEC9D06F80BF"><enum>(2)</enum><text display-inline="yes-display-inline">requirements imposed on alternative trading systems operating pursuant to subsection (c) or (d) are not inconsistent with core principles of and are consistent with the other substantive requirements under section 5i of the Commodity Exchange Act; and</text></paragraph> <paragraph id="H8605592B378F47DBA8F324CF533CC2E5" commented="no"><enum>(3)</enum><text>non-duplicative supervision and enforcement with respect to registrants of the Securities and Exchange Commission notice registered with the Commodity Futures Trading Commission.</text></paragraph></subsection> <subsection id="H038E2D3A358141449B14D77B7F2ABE6B"><enum>(k)</enum><header>Covered regulations defined</header><text>In this section, the term <term>covered regulations</term> means sections 242.300, 242.301, 242.302, 242.303, 242.304, and 242.1000 through 242.1007 of title 17, Code of Federal Regulations.</text></subsection> <subsection id="H51797F3A4976449F8D364F54ECCD3927"><enum>(l)</enum><header>Rule of construction</header><text display-inline="yes-display-inline">Nothing in this section shall be construed to limit the anti-fraud, anti-manipulation, or false reporting enforcement authorities of the Commodity Futures Trading Commission with respect to a contract of sale of a commodity and persons effecting such contracts.</text></subsection></section> <section id="H9A71D90F237343EB889B2DDC53BB9676"><enum>305.</enum><header>Modernization of recordkeeping requirements</header> <subsection id="HE6711B6262134924A833625DB340B2BC"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">For purposes of books and records requirements for brokers, dealers, and exchanges under the Securities and Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78a">15 U.S.C. 78a et seq.</external-xref>), a person may consider records from a blockchain system.</text></subsection> <subsection id="H15752C18239245B6A424926C3CA3BB9E"><enum>(b)</enum><header>Revision of rules</header><text>Not later than 180 days after the date of enactment of this Act, the Securities and Exchange Commission shall issue and revise such rules as may be necessary to implement this section.</text></subsection></section> <section id="H6A29812CEC3E406FBC9C41F677A532EC"><enum>306.</enum><header>Exemptive authority</header><text display-inline="no-display-inline">Section 28 of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77z-3">15 U.S.C. 77z–3</external-xref>) is amended by striking <quote>by rule or regulation</quote> and inserting <quote>by rule, regulation, or order</quote>.</text></section> <section id="H284971701566403BA35E07A9E739A735"><enum>307.</enum><header>Additional registrations with the Commodity Futures Trading Commission</header><text display-inline="no-display-inline">Section 15 of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78o">15 U.S.C. 78o</external-xref>) is amended by adding at the end the following:</text> <quoted-block style="OLC" id="HE1C6C55953B349F8A328BADD58BC263C" display-inline="no-display-inline"> <subsection id="H1E6CF628199F4AE6B82846F0A4C11883"><enum>(p)</enum><header>Additional registrations with the Commodity Futures Trading Commission</header><text>A registered broker or registered dealer shall be permitted to maintain a registration with the Commodity Futures Trading Commission as a digital commodity broker or digital commodity dealer, to list or trade contracts of sale for digital commodities.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H609C69913ED644A4A0F4F5EFD0701442"><enum>308.</enum><header>Exempting digital commodities from State securities laws</header><text display-inline="no-display-inline">Section 18(b) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77r">15 U.S.C. 77r(b)</external-xref>) is amended by adding at the end the following:</text> <quoted-block id="H94CF9DE80AA246B8B8276F09CA4BFD4F" style="OLC"> <paragraph id="H7AB1FEF386604890A45D698786F5E36B"><enum>(5)</enum><header>Exemption in connection with digital commodities</header><text display-inline="yes-display-inline">A digital commodity shall be treated as a covered security.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="HD784A48CA2DE4B5087CEC46AF2FE65A8"><enum>309.</enum><header>Exclusion for decentralized finance activities</header><text display-inline="no-display-inline">The Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78a">15 U.S.C. 78a et seq.</external-xref>) is amended by inserting after section 15G the following:</text> <quoted-block style="OLC" id="H0CBF4211F7B44F639264C9EBA007058B" display-inline="no-display-inline"> <section id="H500F123953C54BE095C99117A0CE0B6F"><enum>15H.</enum><header>Decentralized finance activities not subject to this Act</header> <subsection id="H2108308825344262BF816597CD3B0260"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Notwithstanding any other provision of this Act, a person shall not be subject to this Act and the regulations promulgated under this Act based on the person directly or indirectly engaging in any of the following activities, whether singly or in combination, in relation to the operation of a blockchain system or in relation to a decentralized finance trading protocol:</text> <paragraph id="H28146BE317A24A309C5741D5EB9FC905"><enum>(1)</enum><text>Compiling network transactions or relaying, searching, sequencing, validating, or acting in a similar capacity.</text></paragraph> <paragraph id="H6D5C5CC04C8E4EFF874D25C1C36B5389"><enum>(2)</enum><text>Providing computational work, operating a node or oracle service, or procuring, offering, or utilizing network bandwidth, or providing other similar incidental services.</text></paragraph> <paragraph id="HD273EE82D6724DB2B5EC6DF42C7AA206"><enum>(3)</enum><text>Providing a user-interface that enables a user to read and access data about a blockchain system.</text></paragraph> <paragraph id="HD278FE5C251A4524AAE5B6F4DCAC47B9"><enum>(4)</enum><text>Developing, publishing, constituting, administering, maintaining, or otherwise distributing a blockchain system or a decentralized finance trading protocol.</text></paragraph> <paragraph id="H2D67B6042BAB49A6B700EC008D488628"><enum>(5)</enum><text display-inline="yes-display-inline">Developing, publishing, constituting, administering, maintaining, or otherwise distributing a decentralized finance messaging system, or operating or participating in a liquidity pool, for the purpose of executing a contract of sale of a digital commodity.</text></paragraph> <paragraph id="H96DADEECA66B4FCAB1B7E961A4CD2D27"><enum>(6)</enum><text>Developing, publishing, constituting, administering, maintaining, or otherwise distributing software or systems that create or deploy hardware or software, including wallets or other systems, facilitating an individual user’s own personal ability to keep, safeguard, or custody the user’s digital assets or related private keys.</text></paragraph></subsection> <subsection id="H0BB59A6E61494D89B4455D83C11AB13E"><enum>(b)</enum><header>Exceptions</header><text display-inline="yes-display-inline">Subsection (a) shall not apply to the anti-fraud and anti-manipulation authorities of the Commission.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H93B6FB098ACD4BC1AC74DA810855E370"><enum>310.</enum><header>Treatment of custody activities by banking institutions</header> <subsection id="H51215E6809B849138149C6892755B2E9" display-inline="no-display-inline"><enum>(a)</enum><header>Treatment of custody activities</header><text display-inline="yes-display-inline">The appropriate Federal banking agency, the National Credit Union Administration (in the case of a credit union), and the Securities and Exchange Commission may not require a depository institution, national bank, Federal credit union, State credit union, trust company, broker, or dealer, or any affiliate thereof (the <quote>entity</quote>)—</text> <paragraph id="H56FC4F6E4FA6489390490D10C9C4D13C"><enum>(1)</enum><text display-inline="yes-display-inline">to include assets held in custody that are not owned by the entity as a liability on the financial statement or balance sheet of the entity, including digital commodity or permitted payment stablecoin custody or safekeeping services;</text></paragraph> <paragraph id="HB76F87EC53F841E89412F759E1541057"><enum>(2)</enum><text display-inline="yes-display-inline">to hold regulatory capital against assets, including reserves backing such assets, in custody or safekeeping, except as necessary to mitigate against operational risks inherent with the custody or safekeeping services, as determined by—</text> <subparagraph id="H8A66C4100F144DD599D21732CC74F2D0"><enum>(A)</enum><text>the appropriate Federal banking agency;</text></subparagraph> <subparagraph id="H6125674BBB364A219CCE02761B28A6D1" commented="no"><enum>(B)</enum><text>the National Credit Union Administration (in the case of a credit union);</text></subparagraph> <subparagraph id="H9BB5CA957A06403D972307ECA5EE1678" commented="no"><enum>(C)</enum><text display-inline="yes-display-inline">a State bank supervisor;</text></subparagraph> <subparagraph id="H265A7A35ECC64D29B1B09330A5AEF661" commented="no"><enum>(D)</enum><text display-inline="yes-display-inline">a State credit union supervisor (as defined in section 6003 of the Anti-Money Laundering Act of 2020 (<external-xref legal-doc="usc" parsable-cite="usc/31/5311">31 U.S.C. 5311</external-xref> note)); or</text></subparagraph> <subparagraph id="H267D06478DE44D3AA906B4E6C29D3847"><enum>(E)</enum><text>the Securities and Exchange Commission (in the case of a broker or dealer); and</text></subparagraph></paragraph> <paragraph id="H68E5E0C332B74464BE785027C85F68D1"><enum>(3)</enum><text>to recognize a liability for any obligations related to activities or services performed with respect to digital commodities that the entity does not own if that liability would exceed the expense recognized in the income statement as a result of the corresponding obligation.</text></paragraph></subsection> <subsection id="H4D9B4CA1CD1F417DA21EC603BF2DB4D0"><enum>(b)</enum><header>Definitions</header><text>In this section:</text> <paragraph id="HCC898399546E4C39BC62C69EA291525E"><enum>(1)</enum><header>Banking terms</header><text display-inline="yes-display-inline">The terms <term>appropriate Federal banking agency</term>, <term>depository institution</term>, <term>national bank</term>, and <term>State bank supervisor</term> have the meaning given those terms, respectively, under section 3 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813</external-xref>).</text></paragraph> <paragraph id="H58157B128DC94CD1A654FAB130679941"><enum>(2)</enum><header>Credit union terms</header><text display-inline="yes-display-inline">The terms <term>Federal credit union</term> and <term>State credit union</term> have the meaning given those terms, respectively, under section 101 of the Federal Credit Union Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1752">12 U.S.C. 1752</external-xref>).</text></paragraph></subsection></section> <section id="H8C338CCEA959412EBA4863C9A0DCE96F"><enum>311.</enum><header>Digital commodity activities that are financial in nature</header><text display-inline="no-display-inline">Section 4(k)(4) of the Bank Holding Company Act of 1956 (<external-xref legal-doc="usc" parsable-cite="usc/12/1843">12 U.S.C. 1843(k)(4)</external-xref>) is amended—</text> <paragraph id="H16DE92822DC2483A8EBC5A7156838DF3"><enum>(1)</enum><text>in subparagraph (A), by striking <quote>or securities</quote> and inserting <quote>, securities, or digital commodities</quote>; and</text></paragraph> <paragraph id="HB693C3378CED4DF8BCE4511B54ECB13A"><enum>(2)</enum><text>in subparagraph (E), by inserting <quote>or digital commodities</quote> before the period at the end.</text></paragraph></section> <section id="H59FE0C152C4D4C63B086EF51C7B496FA"><enum>312.</enum><header>Effective date; administration</header><text display-inline="no-display-inline">Except as otherwise provided under this title, this title and the amendments made by this title shall take effect 360 days after the date of enactment of this Act, except that, to the extent a provision of this title requires a rulemaking, the provision shall take effect on the later of—</text> <paragraph id="H9236A6F3FE504106817684B9DB1BED1C"><enum>(1)</enum><text>360 days after the date of enactment of this Act; or</text></paragraph> <paragraph id="H3A3B17E953AE443A95AB939B2E2D82EE"><enum>(2)</enum><text>60 days after the publication in the Federal Register of the final rule implementing the provision.</text></paragraph></section> <section id="HF6E976DF33014576A4398B61B2509CD0" display-inline="no-display-inline" section-type="subsequent-section" commented="no"><enum>313.</enum><header>Studies on foreign adversary participation</header> <subsection id="H97257D79A499412D88CD240DC00041E3" commented="no"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The Secretary of the Treasury, in consultation with the Commodity Futures Trading Commission and the Securities and Exchange Commission, shall, not later than 1 year after date of the enactment of this section, conduct a study and submit a report to the relevant congressional committees that—</text> <paragraph id="HFD58E52D81E44EEAAE1287B9BC14F2D1" commented="no"><enum>(1)</enum><text>identifies any digital commodity registrants which are owned by governments of foreign adversaries;</text></paragraph> <paragraph id="H2C28BF83B59B46F4863E327CAFEB2E36" commented="no"><enum>(2)</enum><text display-inline="yes-display-inline">determines whether any governments of foreign adversaries are collecting personal data or trading data about United States persons in the digital commodity markets; and</text></paragraph> <paragraph id="H6C83A76852F14550B3BD5819CF531D0B" commented="no"><enum>(3)</enum><text display-inline="yes-display-inline">evaluates whether any proprietary intellectual property of digital commodity registrants is being misused or stolen by any governments of foreign adversaries.</text></paragraph></subsection> <subsection id="H599B9E1043644CD5B38A9989B2BC8BE8" commented="no"><enum>(b)</enum><header>GAO study and report</header> <paragraph id="H9FEB2058BD1742CA8538A25DB08B241B" commented="no"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The Comptroller General shall, not later than 1 year after date of the enactment of this section, conduct a study and submit a report to the relevant congressional committees that—</text> <subparagraph id="H588D230BFCF64FC9AC30913336A716B2" display-inline="no-display-inline" commented="no"><enum>(A)</enum><text display-inline="yes-display-inline">identifies any digital commodity registrants which are owned by governments of foreign adversaries;</text></subparagraph> <subparagraph id="H95AB1AC0C55647C18EFE87B3B761E64E" commented="no"><enum>(B)</enum><text display-inline="yes-display-inline">determines whether any governments of foreign adversaries are collecting personal data or trading data about United States persons in the digital commodity markets; and</text></subparagraph> <subparagraph id="HA094F606D653412ABD355B0B63BA15C0" commented="no"><enum>(C)</enum><text display-inline="yes-display-inline">evaluates whether any proprietary intellectual property of digital commodity registrants is being misused or stolen by any governments of foreign adversaries.</text></subparagraph></paragraph></subsection> <subsection id="H68C7364782EA43A6B547D55028F9F16A" commented="no"><enum>(c)</enum><header>Definitions</header><text display-inline="yes-display-inline">In this section:</text> <paragraph id="HD935B4991C894657BB4E9DB8E369CA6B" commented="no"><enum>(1)</enum><header>Digital commodity registrant</header><text display-inline="yes-display-inline">The term <term>digital commodity registrant</term> means any person required to register as a digital commodity exchange, digital commodity broker, or digital commodity dealer under the Commodity Exchange Act.</text></paragraph> <paragraph id="H6A58252116064EF39E51C2FD7B16D54C" commented="no"><enum>(2)</enum><header>Foreign adversaries</header><text display-inline="yes-display-inline">The term <term>foreign adversaries</term> means the foreign governments and foreign non-government persons determined by the Secretary of Commerce to be foreign adversaries under section 7.4(a) of title 15, Code of Federal Regulations.</text></paragraph> <paragraph id="H7378C33F8FD449818F441D8747F58D22" commented="no"><enum>(3)</enum><header>Relevant congressional committees</header><text>The term <term>relevant congressional committees</term> means—</text> <subparagraph id="HCE9E3810B3E94DB2A829E8A82603C4A1" commented="no"><enum>(A)</enum><text>the Committees on Financial Services and Agriculture of the House of Representatives; and</text></subparagraph> <subparagraph id="H66E8E50157984F52A1C86EA980AAB7FB" commented="no"><enum>(B)</enum><text>the Committees on Banking, Housing, and Urban Affairs and Agriculture, Nutrition, and Forestry of the Senate.</text></subparagraph></paragraph></subsection></section> <enum>IV</enum><header>Registration for Digital Commodity Intermediaries at the Commodity Futures Trading Commission</header> <section id="HA72C348F3DC947B5A24D39E349CD688E"><enum>401.</enum><header>Commission jurisdiction over digital commodity transactions</header> <subsection id="HDB4C5B103CC84B768A0C3B30C215FD23"><enum>(a)</enum><header>Savings clause</header><text>Section 2(a)(1) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/2">7 U.S.C. 2(a)(1)</external-xref>) is amended by adding at the end the following:</text> <quoted-block style="OLC" id="HB0FAD81AE4424FC4904F0ACECCEAC74F" display-inline="no-display-inline"> <subparagraph id="HA09603B13A55406F8904C68F8DFCABED"><enum>(J)</enum><text display-inline="yes-display-inline">Except as expressly provided in this Act, nothing in the CLARITY Act of 2025 shall affect or apply to, or be interpreted to affect or apply to—</text> <clause id="H119EFD1CAFE14F798BC9564520B0E232"><enum>(i)</enum><text>any agreement, contract, or transaction that is subject to this Act as—</text> <subclause id="H9DD09267E32D4A20AE75885CE3458F09"><enum>(I)</enum><text>a contract of sale of a commodity for future delivery or an option on such a contract;</text></subclause> <subclause id="HEF75602C8B134CD1889D6B9DEB41EC7F"><enum>(II)</enum><text>a swap;</text></subclause> <subclause id="H588E884617E14B5AB12ECB29DBF19934"><enum>(III)</enum><text>a security futures product;</text></subclause> <subclause id="HDF004D03A0EA490181B2202DDDABA517"><enum>(IV)</enum><text>an option authorized under section 4c of this Act;</text></subclause> <subclause id="HC600699945D349C187D879762DC7FDB5"><enum>(V)</enum><text>an agreement, contract, or transaction described in subparagraph (C)(i) or (D)(i) of subsection (c)(2) of this section; or</text></subclause> <subclause id="H2B4E5E2F28294D7987178DF12C29EE1D"><enum>(VI)</enum><text>a leverage transaction authorized under section 19; or</text></subclause></clause> <clause id="HF9911E2232C4406CB8DB74666FBD3D9D"><enum>(ii)</enum><text>the activities of any person with respect to any such an agreement, contract, or transaction.</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="HA07D67DC322E4F39B75C13EAEB6FC69F"><enum>(b)</enum><header>Limitation on authority over permitted payment stablecoins</header><text>Section 2(c)(1) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/2">7 U.S.C. 2(c)(1)</external-xref>) is amended—</text> <paragraph id="H1FC48BAE9A434535806017CA78BC3EFE"><enum>(1)</enum><text>in subparagraph (F), by striking <quote>or</quote> at the end;</text></paragraph> <paragraph id="H940DE2507DF9425780C5A635E196669D"><enum>(2)</enum><text>in subparagraph (G), by striking the period and inserting <quote>; or</quote>; and</text></paragraph> <paragraph id="H1886CD6DC4C24DD099139BC7074509CA"><enum>(3)</enum><text>by adding at the end the following:</text> <quoted-block style="OLC" id="HF86F47AEC1D344EDA1620DD21B66B370" display-inline="no-display-inline"> <subparagraph id="H6B2CC41886CE472E803CE35CB5B439EC"><enum>(H)</enum><text display-inline="yes-display-inline">permitted payment stablecoins.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H7C7FD5EB1A2B48118A500C131A7BA5D2"><enum>(c)</enum><header>Commission jurisdiction over financing agreements</header><text>Section 2(c)(2) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/2">7 U.S.C. 2(c)(2)</external-xref>) is amended—</text> <paragraph id="H352F029E7B8740999D911CA40B70E4FB"><enum>(1)</enum><text>in subparagraph (D)—</text> <subparagraph id="H68E65C9FB63946AFB6154664BEBF8129" commented="no"><enum>(A)</enum><text>in clause (ii)(I), by inserting after <quote>paragraph (1)</quote> the following: <quote>(other than an agreement, contract, or transaction in a permitted payment stablecoin)</quote>; and</text></subparagraph> <subparagraph id="H5B6BC48A8C494C7786DDA6989345891C"><enum>(B)</enum><text>by redesignating clause (iv) as clause (v) and inserting after clause (iii) the following:</text> <quoted-block style="OLC" id="H236A90F667554870B933EB3D467C1C39" display-inline="no-display-inline"> <clause id="H70B860D00ECE4E69BB512DDB18876F80"><enum>(iv)</enum><header>Agreements for margin financing</header><text display-inline="yes-display-inline">Notwithstanding clause (iii), a digital commodity broker may, subject to the requirements of section 4u(c)(2), offer to or enter into an agreement for margin financing with a customer for the purchase or sale of a digital commodity, provided any purchase or sale made pursuant to the agreement shall result in the delivery of the digital commodity into or from an account carried for the customer, as determined by the Commission by rule or regulation, based on commercial spot market practices.</text></clause><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph></paragraph> <paragraph id="H32A08D4ECC8E426498CDB153E57BA1FC"><enum>(2)</enum><text>by adding at the end the following:</text> <quoted-block style="OLC" id="H6080512D24FD441CB71C77E96B50137B" display-inline="no-display-inline"> <subparagraph id="H7B82C8FF65DD492B9D97819A69888EAD" commented="no"><enum>(F)</enum><header>Commission jurisdiction with respect to digital commodity transactions</header> <clause id="HD58CBDBC23C64C7BA23042431D8C6ECB" commented="no"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">Subject to sections 6d and 12(e), the Commission shall have exclusive jurisdiction with respect to any account, agreement, contract, or transaction involving a contract of sale of a digital commodity in interstate commerce, including in a digital commodity cash or spot market, that is offered, solicited, traded, facilitated, executed, cleared, reported, or otherwise dealt in—</text> <subclause id="HFA3CEC9F22F64DB7897F5020E44D0B24" commented="no"><enum>(I)</enum><text display-inline="yes-display-inline">on or subject to the rules of a registered entity or an entity that is required to be registered as a registered entity; or</text></subclause> <subclause id="HCA9F8B52B7B842DEB16310A62B993999" commented="no"><enum>(II)</enum><text>by any other entity registered, or required to be registered, with the Commission.</text></subclause></clause> <clause id="H8F9B78DFA8DD468295ACEE29D89B2A93" commented="no"><enum>(ii)</enum><header>Limitations</header><text>Clause (i) shall not apply with respect to—</text> <subclause id="H3F00C85B65494E6AB6CE0AAE8EF54367"><enum>(I)</enum><text>custodial or depository activities for a digital commodity of an entity regulated by an appropriate Federal banking agency or a State bank supervisor (within the meaning of section 3 of the Federal Deposit Insurance Act); or</text></subclause> <subclause id="H6C5A0FBFBAF0437C9744F02851148537"><enum>(II)</enum><text display-inline="yes-display-inline">an offer or sale of an investment contract involving a digital commodity or of a securities offer or sale involving a digital commodity.</text></subclause></clause> <clause id="H6E129324485F42D79381A5254AAFE87C"><enum>(iii)</enum><header>Mixed digital asset transactions</header> <subclause id="HBC3603FC926644ABA7BD0D3AD6C5E5AB"><enum>(I)</enum><header>In general</header><text display-inline="yes-display-inline">Clause (i) shall not apply to a mixed digital asset transaction.</text></subclause> <subclause id="HB413282E399C423DBD3818223CD355E9"><enum>(II)</enum><header>Reports on mixed digital asset transactions</header><text>A digital commodity issuer, digital commodity related person, digital commodity affiliated person, or other person registered with the Securities and Exchange Commission that engages in a mixed digital asset transaction, shall, on request of the Commission, open to inspection and examination by the Commission all books and records relating to the mixed digital asset transaction, subject to the confidentiality and disclosure requirements of section 8.</text></subclause></clause></subparagraph> <subparagraph id="H68E9410F12F846C384FFB132BB9F0004"><enum>(G)</enum><header>Agreements, contracts, and transactions in stablecoins</header> <clause id="H51902271FC0741709163C10ED38FAA73"><enum>(i)</enum><header>Treatment of permitted payment stablecoins on commission-registered entities</header><text display-inline="yes-display-inline">Subject to clauses (ii) and (iii), the Commission shall have jurisdiction over a cash or spot agreement, contract, or transaction in a permitted payment stablecoin that is offered, offered to enter into, entered into, executed, confirmed the execution of, solicited, or accepted—</text> <subclause id="HCE94A72A4ECA416980E38CC650CF6FDD"><enum>(I)</enum><text>on or subject to the rules of a registered entity; or</text></subclause> <subclause id="H6F35EDF5D63F4483B1D20559B539978A"><enum>(II)</enum><text>by any other entity registered with the Commission.</text></subclause></clause> <clause id="H7A06200648944A1BBC248F46F9AD6727"><enum>(ii)</enum><header>Permitted payment stablecoin transaction rules</header><text>This Act shall apply to a transaction described in clause (i) only for the purpose of regulating the offer, execution, solicitation, or acceptance of a cash or spot permitted payment stablecoin transaction on a registered entity or by any other entity registered with the Commission, as if the permitted payment stablecoin were a digital commodity.</text></clause> <clause id="HF451B99978614F2496CF9ADB6E196D0B"><enum>(iii)</enum><header>No authority over permitted payment stablecoins</header><text>Notwithstanding clauses (i) and (ii), the Commission shall not make a rule or regulation, impose a requirement or obligation on a registered entity or other entity registered with the Commission, or impose a requirement or obligation on a permitted payment stablecoin issuer, regarding the operation of a permitted payment stablecoin issuer or a permitted payment stablecoin.</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="HEE73154F7E9C46CAB2D17E1631E9E119"><enum>(d)</enum><header>Conforming amendment</header><text>Section 2(a)(1)(A) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/7/2">7 U.S.C. 2(a)(1)(A)</external-xref>) is amended in the 1st sentence by inserting <quote>subparagraphs (F) and (G) of subsection (c)(2) of this section or</quote> before <quote>section 19</quote>.</text></subsection></section> <section id="HF80F87FDE6F74D9C8A747F575EFB81D0"><enum>402.</enum><header>Requiring futures commission merchants to use qualified digital asset custodians</header><text display-inline="no-display-inline">Section 4d of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/6d">7 U.S.C. 6d</external-xref>) is amended—</text> <paragraph id="H771424A97F8B45E585077EFAAD9CB87F"><enum>(1)</enum><text display-inline="yes-display-inline">in subsection (a)(2)—</text> <subparagraph id="H884BF30F0A0640A7A9E06830FA9A5120"><enum>(A)</enum><text>in the 1st proviso, by striking <quote>any bank or trust company</quote> and inserting <quote>any bank, trust company, or qualified digital asset custodian, as applicable,</quote>; and</text></subparagraph> <subparagraph id="H38DF9D2BFF724F788A8E6ABD88B65D33"><enum>(B)</enum><text>by inserting <quote><italic>: Provided further,</italic> That any such property that is a digital asset shall be held in a qualified digital asset custodian</quote> before the period at the end; and</text></subparagraph></paragraph> <paragraph id="HFCCF595202D647A4A1D226981E469DF4"><enum>(2)</enum><text display-inline="yes-display-inline">in subsection (f)(3)(A)(i), by striking <quote>any bank or trust company</quote> and inserting <quote>any bank, trust company, or qualified digital asset custodian</quote>.</text></paragraph></section> <section id="H0EFAB61CDDBA47129B2E346A7269402D"><enum>403.</enum><header>Trading certification and approval for digital commodities</header><text display-inline="no-display-inline">Section 5c of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/7a-2">7 U.S.C. 7a–2</external-xref>) is amended—</text> <paragraph id="H300C0560FE8745D0B0F0AD6BF388C496"><enum>(1)</enum><text>in subsection (a), by striking <quote>5(d) and 5b(c)(2)</quote> and inserting <quote>5(d), 5b(c)(2), and 5i(c)</quote>;</text></paragraph> <paragraph id="H015C906227CE44B89E0C19BAF4026DE2"><enum>(2)</enum><text>in subsection (b)—</text> <subparagraph id="HEE75F98B1A094EF8BC9634945136C2C5"><enum>(A)</enum><text>in each of paragraphs (1) and (2), by inserting <quote>digital commodity exchange,</quote> before <quote>derivatives</quote>; and</text></subparagraph> <subparagraph id="H0A92852A57A547B0865EEBB05C0B489E"><enum>(B)</enum><text>in paragraph (3), by inserting <quote>digital commodity exchange,</quote> before <quote>derivatives</quote> each place it appears;</text></subparagraph></paragraph> <paragraph id="H22DD5BBEFE4A429781E0A9F5883A3EB7"><enum>(3)</enum><text>in subsection (c)—</text> <subparagraph id="HCD3609494328453B8DEB68A0327066C4"><enum>(A)</enum><text>in paragraph (2), by inserting <quote>or participants</quote> before <quote>(in a</quote>;</text></subparagraph> <subparagraph id="H647B37F579984B71B73743A741BB72EB"><enum>(B)</enum><text>in paragraph (4)(B), by striking <quote>1a(10)</quote> and inserting <quote>1a(9)</quote>; and</text></subparagraph> <subparagraph id="H892F8C9A0A724454B7C42030871078F0"><enum>(C)</enum><text>in paragraph (5), by adding at the end the following:</text> <quoted-block style="OLC" id="H720B2E35B8E648F7B1B671FE8B9821DE" display-inline="no-display-inline"> <subparagraph id="HC04AA4D70F8B44019B9B773588DCEBD4" commented="no"><enum>(D)</enum><header>Special rules for digital commodity contracts</header><text display-inline="yes-display-inline">In certifying any new rule or rule amendment, or listing any new contract or instrument, in connection with a contract of sale of a commodity for future delivery, option, swap, or other agreement, contract, or transaction, that is based on or references a digital commodity, a registered entity shall make or rely on a certification under subsection (d) for the digital commodity.</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph></paragraph> <paragraph id="H2F143EAC839D41D3876DD860806E96A3"><enum>(4)</enum><text>by inserting after subsection (c) the following:</text> <quoted-block style="OLC" id="H2F8EB3456CE646E0A021622383690811" display-inline="no-display-inline"> <subsection id="HD957FC9BD7E24D6B93F74337330B3E73"><enum>(d)</enum><header>Certifications for digital commodity trading</header> <paragraph id="H69C8575F8952473088F1D7F0918BA065"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Notwithstanding subsection (c), for the purposes of listing or offering a digital commodity for trading in a digital commodity cash or spot market, an eligible entity shall submit a written certification to the Commission that the digital commodity meets the requirements of this Act (including the regulations prescribed under this Act).</text></paragraph> <paragraph id="HB2B567CF88F84ED19261D4DFC53890D1"><enum>(2)</enum><header>Contents of the certification</header> <subparagraph id="H53EA65E75E024E4F8488B6C15052E0EC"><enum>(A)</enum><header>In general</header><text>In making a written certification under this paragraph, the eligible entity shall furnish to the Commission an analysis of how the digital commodity meets the requirements of section 5i(c)(3).</text></subparagraph> <subparagraph id="H0FEA4E85E6034066966CED346D9AA62D"><enum>(B)</enum><header>Reliance on prior disclosures</header><text>In making a certification under this subsection, an eligible entity may rely on the records and disclosures of any relevant person registered with the Securities and Exchange Commission or other State or Federal agency.</text></subparagraph></paragraph> <paragraph id="HAB5106FD139C4775B8958DE5E65EAC0E"><enum>(3)</enum><header>Modifications</header> <subparagraph id="H6AB349CB34DF448E8CC45EE1AD4016E9"><enum>(A)</enum><header>In general</header><text>An eligible entity shall modify a certification made under paragraph (1) to—</text> <clause id="H53CBF4DE5DAB47DC8A71D6A2E2C2BFD9"><enum>(i)</enum><text display-inline="yes-display-inline">account for significant changes in any information provided to the Commission under paragraph (2)(A)(ii); or</text></clause> <clause id="H0A987729C8824A6E970435F1C8ADFB8B"><enum>(ii)</enum><text>permit or restrict trading in units of a digital commodity held by a digital commodity related person or a digital commodity affiliated person.</text></clause></subparagraph> <subparagraph id="H500E977312FE4AEAA1C0B4F66C0FA7DA"><enum>(B)</enum><header>Recertification</header><text display-inline="yes-display-inline">Modifications required by this subsection shall be subject to the same disapproval and review process as a new certification under paragraphs (4) and (5).</text></subparagraph></paragraph> <paragraph id="H1C65BE83F76D428391B0AE7A01EDEAB2"><enum>(4)</enum><header>Disapproval</header> <subparagraph id="H303D5A462816414485182B333624D1DD"><enum>(A)</enum><header>In general</header><text>The written certification described in paragraph (1) shall become effective unless the Commission finds that the listing of the digital commodity is inconsistent with the requirements of this Act or the rules and regulations prescribed under this Act.</text></subparagraph> <subparagraph id="H70D3E47562434348ABE0F44EB3037833"><enum>(B)</enum><header>Analysis required</header><text display-inline="yes-display-inline">The Commission shall include, with any findings referred to in subparagraph (A), a detailed analysis of the factors on which the decision was based.</text></subparagraph> <subparagraph id="HF4DD65FE9F5243A5BC5BB9A6875BE9DE"><enum>(C)</enum><header>Public findings</header><text display-inline="yes-display-inline">The Commission shall make public any disapproval decision, and any related findings and analysis, made under this paragraph.</text></subparagraph></paragraph> <paragraph id="HCE95FE581C5F43448D739EC3D1BBB375"><enum>(5)</enum><header>Review</header> <subparagraph id="HB9935DE1C97D41CDA324C5E16E6304C5"><enum>(A)</enum><header>In general</header><text>Unless the Commission makes a disapproval decision under paragraph (4), the written certification described in paragraph (1) shall become effective, pursuant to the certification by the eligible entity and notice of the certification to the public (in a manner determined by the Commission) on the date that is—</text> <clause id="H3F0E82F3DD344776B4D5CCD444962CF7"><enum>(i)</enum><text display-inline="yes-display-inline">20 business days after the date the Commission receives the certification (or such shorter period as determined by the Commission by rule or regulation), in the case of a digital commodity that has not been certified under this section or for which a certification is being modified under paragraph (3); or</text></clause> <clause id="H6D231BDA785243929FA552AB57D32558"><enum>(ii)</enum><text display-inline="yes-display-inline">1 business day after the date the Commission receives the certification (or such shorter period as determined by the Commission by rule or regulation) for any digital commodity that has been certified under this section.</text></clause></subparagraph> <subparagraph id="H5633F8C7FFAB4BD3AEA1C21CFED5256A" commented="no"><enum>(B)</enum><header>Extensions</header><text display-inline="yes-display-inline">The time for consideration under subparagraph (A) may be extended through notice to the eligible entity that there are novel or complex issues that require additional time to analyze, that the explanation by the submitting eligible entity is inadequate, or of a potential inconsistency with this Act—</text> <clause id="HAD95B35FF9FA4C37A5634DDE1582134B" commented="no"><enum>(i)</enum><text>once, for 30 business days, through written notice to the eligible entity by the Commission; and</text></clause> <clause id="H401EA674CDDC42DF99A563D5EB8CA827" commented="no"><enum>(ii)</enum><text>once, for an additional 30 business days, through written notice to the eligible entity from the Commission that includes a description of any deficiencies with the certification, including any—</text> <subclause id="HF3BA3D5F39C2400BB3BEE73749DE01B0" commented="no"><enum>(I)</enum><text>novel or complex issues which require additional time to analyze;</text></subclause> <subclause id="HAEC84F9C31CD49AEBA51252D7805FE4B" commented="no"><enum>(II)</enum><text>missing information or inadequate explanations; or</text></subclause> <subclause id="H1AE96345C795476C8DA735776F22FE47" commented="no"><enum>(III)</enum><text>potential inconsistencies with this Act.</text></subclause></clause></subparagraph></paragraph> <paragraph id="H61A3E653661641BA86622B994F40A975" display-inline="no-display-inline"><enum>(6)</enum><header>Prior approval before registration</header> <subparagraph id="HBF1CE2BC062546EFB8BF6CA6B7CC56A2"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">A person applying for registration with the Commission for the purposes of listing or offering a digital commodity for trading in a digital commodity cash or spot market may request that the Commission grant prior approval for the person to list or offer the digital commodity on being registered with the Commission.</text></subparagraph> <subparagraph id="H03FDED1F48F24AF2B7BABEA258CDFD2F"><enum>(B)</enum><header>Request for prior approval</header><text display-inline="yes-display-inline">A person seeking prior approval under subparagraph (A) shall furnish the Commission with a written certification that the digital commodity meets the requirements of this Act (including the regulations prescribed under this Act) and the information described in paragraph (2).</text></subparagraph> <subparagraph id="H13781E8DB7D44D6BB8D79630A4CF33A2"><enum>(C)</enum><header>Deadline</header><text>The Commission shall take final action on a request for prior approval not later than 90 business days after submission of the request, unless the person submitting the request agrees to an extension of the time limitation established under this subparagraph.</text></subparagraph> <subparagraph id="H7D11BA500A404C97948930B8008C0ED7"><enum>(D)</enum><header>Disapproval</header> <clause id="H57F5AB2E35DD496F8AFC8CA2D8AA366D"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">The Commission shall approve the listing of the digital commodity unless the Commission finds that the listing is inconsistent with this Act (including any regulation prescribed under this Act).</text></clause> <clause id="H28198E1F433F4676BF9CBB6779817AE3"><enum>(ii)</enum><header>Analysis required</header><text display-inline="yes-display-inline">The Commission shall include, with any findings made under clause (i), a detailed analysis of the factors on which the decision is based.</text></clause> <clause id="HB8D96D1BD1D24043B7910D4D9A8DD03A"><enum>(iii)</enum><header>Public findings</header><text display-inline="yes-display-inline">The Commission shall make public any disapproval decision, and any related findings and analysis, made under this paragraph.</text></clause></subparagraph></paragraph> <paragraph id="H183953A5793D468A99E2E181EABB01AB"><enum>(7)</enum><header>Eligible entity defined</header><text>In this subsection, the term <term>eligible entity</term> means a registered entity or group of registered entities acting jointly.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section> <section id="H757CA029564046AFB6156A053026ABAC"><enum>404.</enum><header>Registration of digital commodity exchanges</header><text display-inline="no-display-inline">The Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1">7 U.S.C. 1 et seq.</external-xref>) is amended by inserting after section 5h the following:</text> <quoted-block style="OLC" id="H1841CF60F6C34EE18B61AB0D2E228188" display-inline="no-display-inline"> <section id="H8D27DC40A32A43A7A3BA8175694D9386"><enum>5i.</enum><header>Registration of digital commodity exchanges</header> <subsection id="H3B231B895DEE405CA84F0B6E1ECAA01B"><enum>(a)</enum><header>In general</header> <paragraph id="HCDC89FF2B7314789A9009204C4DC71D0"><enum>(1)</enum><header>Registration</header> <subparagraph id="H7BBDE390772A4A3D9A230F511EB50C91"><enum>(A)</enum><header>In general</header><text>A trading facility that offers or seeks to offer a cash or spot market in at least 1 digital commodity shall register with the Commission as a digital commodity exchange.</text></subparagraph> <subparagraph id="HD009A6BDBDD844158412B403284A37A4"><enum>(B)</enum><header>Application</header><text display-inline="yes-display-inline">A person desiring to register as a digital commodity exchange shall submit to the Commission an application in such form and containing such information as the Commission may require for the purpose of making the determinations required for approval.</text></subparagraph> <subparagraph id="H14D98BE6384D4FBD9ED4581D521A6D96"><enum>(C)</enum><header>Exemptions</header><text display-inline="yes-display-inline">A trading facility that offers or seeks to offer a cash or spot market in at least 1 digital commodity shall not be required to register under this section if the trading facility—</text> <clause id="H15AAFAE942074DF2B9FDC1EB472CBB7E"><enum>(i)</enum><text>permits no more than a de minimis amount of trading activity, as the Commission may determine by rule or regulation, in a digital commodity; or</text></clause> <clause id="H894E6CF7129448F7A6F18208A77437EA"><enum>(ii)</enum><text>serves only customers in a single State, territory, or possession of the United States.</text></clause></subparagraph></paragraph> <paragraph id="H638AB7A56A5B42FEA7F7FA9DFA80A8B8"><enum>(2)</enum><header>Additional registrations</header> <subparagraph id="H35A7A6575A8644CDA8472E7948E541A7"><enum>(A)</enum><header>With the Commission</header><text display-inline="yes-display-inline">In order to foster the development of fair and orderly markets, protect customers, and promote responsible innovation, the Commission—</text> <clause id="HAD75CF114A074EF7867F6917C57CD42B"><enum>(i)</enum><text>shall prescribe rules to exempt an entity registered with the Commission under more than 1 section of this Act from duplicative, conflicting, or unduly burdensome provisions of this Act and the rules under this Act;</text></clause> <clause id="H7514BEBC57324F60A2B76607065E7671"><enum>(ii)</enum><text>shall prescribe rules to address conflicts of interests and activities of the entity; and</text></clause> <clause id="H4BC87C4BC28B42958EB89771748CE067"><enum>(iii)</enum><text>may, after an analysis of the risks and benefits, prescribe rules to provide for portfolio margining.</text></clause></subparagraph> <subparagraph id="H3FA03F2CC26D4DA9B71ADD435FBF8270" commented="no"><enum>(B)</enum><header>With a registered futures association</header> <clause id="H3A105AA412FA49F3B2A378483A96B4A7" commented="no"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">A registered digital commodity exchange shall become and remain a member of a registered futures association and comply with rules related to such activity, if the registered digital commodity exchange accepts customer funds required to be segregated under subsection (d).</text></clause> <clause id="H870BDC154B0B44F09FCB97164A4E3E58" commented="no"><enum>(ii)</enum><header>Rulemaking required</header><text>The Commission shall require any registered futures association with a digital commodity exchange as a member to provide such rules as may be necessary to further compliance with subsection (d), protect customers, and promote the public interest.</text></clause></subparagraph> <subparagraph id="HB035612956584B4DA7012686923ABC4D"><enum>(C)</enum><header>Registration required</header><text display-inline="yes-display-inline">A person required to be registered as a digital commodity exchange under this section shall register with the Commission as such regardless of whether the person is registered with another State or Federal regulator.</text></subparagraph></paragraph></subsection> <subsection id="H9D034329A6544FF6972A5FCFE1ECB8B2"><enum>(b)</enum><header>Trading</header> <paragraph id="HAEC3E41DC77B45318DC67A8A3603F83D"><enum>(1)</enum><header>Prohibition on certain trading practices</header> <subparagraph id="H6FADD8325CDC4A338097AA8004BCC809"><enum>(A)</enum><text display-inline="yes-display-inline">Section 4b shall apply to any agreement, contract, or transaction in a digital commodity as if the agreement, contract, or transaction were a contract of sale of a commodity for future delivery.</text></subparagraph> <subparagraph id="H99FA170548EE43C0A4D8A1E3C07C6A03"><enum>(B)</enum><text>Section 4c shall apply to any agreement, contract, or transaction in a digital commodity as if the agreement, contract, or transaction were a transaction involving the purchase or sale of a commodity for future delivery.</text></subparagraph> <subparagraph id="H47B15E602A754070A8646075935B11AF"><enum>(C)</enum><text display-inline="yes-display-inline">Section 4b–1 shall apply to any agreement, contract, or transaction in a digital commodity as if the agreement, contract, or transaction were a contract of sale of a commodity for future delivery.</text></subparagraph></paragraph> <paragraph id="H02A7CD49E69A4DC1B3E9565D2F8FEFE0"><enum>(2)</enum><header>Prohibition on acting as a counterparty</header> <subparagraph id="HE39BB5325CA74A89B3B965DE1FD433C4"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">A digital commodity exchange or any affiliate of such an exchange shall not trade on or subject to the rules of the digital commodity exchange for its own account.</text></subparagraph> <subparagraph id="HE22D69C3504341AA80687431DD5291B9"><enum>(B)</enum><header>Exceptions</header><text display-inline="yes-display-inline">Subject to any conditions, requirements, or limitations imposed by the Commission pursuant to subparagraph (C), a digital commodity exchange may engage in trading on the exchange so long as the trading is not solely for the purpose of the profit of the exchange, including the following:</text> <clause id="H6435AF73C543439ABFFFFCA060C32834"><enum>(i)</enum><header>Customer direction</header><text>A transaction for, or entered into at the direction of, or for the benefit of, an unaffiliated customer.</text></clause> <clause id="H406087EE66DA4FE6A05FF31A6D4B5B04"><enum>(ii)</enum><header>Risk management</header><text>A transaction to manage the credit, market, and liquidity risks associated with the digital commodity business of the exchange.</text></clause> <clause id="HAD5AB383C29E414289E7498CE0EE30EF"><enum>(iii)</enum><header>Operational needs</header><text display-inline="yes-display-inline">A transaction related to the operational needs of the business of the digital commodity exchange or its affiliate.</text></clause> <clause id="HA0DF5EC03978475485DC0008D255F052"><enum>(iv)</enum><header>Functional use</header><text>A transaction related to the functional operation of a blockchain system.</text></clause></subparagraph> <subparagraph id="H4A478D1A4EA3497CB60492AB4A542C72"><enum>(C)</enum><header>Rulemaking</header><text display-inline="yes-display-inline">The Commission may, by rule, establish conditions, requirements, or other limitations on the activities of a digital commodity exchange and its affiliate permitted pursuant to subparagraph (B) that are necessary for the protection of customers, the promotion of innovation, or the maintenance of fair, orderly, and efficient markets.</text></subparagraph> <subparagraph id="H04EDDD122FCB4028BD95AA7C18134DE7"><enum>(D)</enum><header>Notice requirement</header><text>In order for a digital commodity exchange or any affiliate of a digital commodity exchange to engage in trading on the affiliated exchange pursuant to subsection (B), notice must be given to the Commission that shall enumerate how any proposed activity is consistent with the exceptions in subsection (B) and the purposes of this Act.</text></subparagraph></paragraph></subsection> <subsection id="HE19001981D804B1384C6F1F70CB27F90"><enum>(c)</enum><header>Core principles for digital commodity exchanges</header> <paragraph id="HAC5C5E318DB448F5B590AFDD0AAEF056"><enum>(1)</enum><header>Compliance with core principles</header> <subparagraph id="H22E4DA0D213A4AD4A005C7418000E63D"><enum>(A)</enum><header>In general</header><text>To be registered, and maintain registration, as a digital commodity exchange, a digital commodity exchange shall comply with—</text> <clause id="HD3C8DCB07CE94CAD99C84781CC3BD15D"><enum>(i)</enum><text>the core principles described in this subsection; and</text></clause> <clause id="HBFE66133CC9942F1BBBC2EE6218849D9"><enum>(ii)</enum><text>any requirement that the Commission may impose by rule or regulation pursuant to section 8a(5).</text></clause></subparagraph> <subparagraph id="H9171B1A0218E4132BB62731E63D3B89A"><enum>(B)</enum><header>Reasonable discretion of a digital commodity exchange</header><text>Unless otherwise determined by the Commission by rule or regulation, a digital commodity exchange described in subparagraph (A) shall have reasonable discretion in establishing the manner in which the digital commodity exchange complies with the core principles described in this subsection.</text></subparagraph></paragraph> <paragraph id="H9A1ED8BB0E054B00AFA82C5AFD80019F"><enum>(2)</enum><header>Compliance with rules</header><text>A digital commodity exchange shall—</text> <subparagraph id="HFF8B6CEC479D4B13AB69E91103E8F3F3"><enum>(A)</enum><text>establish and enforce compliance with any rule of the digital commodity exchange, including—</text> <clause id="HF71B707828274196964E882977B1D4AD"><enum>(i)</enum><text>the terms and conditions of the trades traded or processed on or through the digital commodity exchange; and</text></clause> <clause id="HC2FA260DA3F245D3AF9FD48895EDB985"><enum>(ii)</enum><text>any limitation on access to the digital commodity exchange;</text></clause></subparagraph> <subparagraph id="H8CB14ECCA5AB4A2BBF5DED6A269BFE51"><enum>(B)</enum><text>establish and enforce trading, trade processing, and participation rules that will deter abuses and have the capacity to detect, investigate, and enforce those rules, including means—</text> <clause id="HED0CF4EB668C4B0FB8D6F3DC31FD39FC"><enum>(i)</enum><text>to provide market participants with impartial access to the market; and</text></clause> <clause id="H124D05FEA59040E5810507EAC2A2E82B"><enum>(ii)</enum><text>to capture information that may be used in establishing whether rule violations have occurred; and</text></clause></subparagraph> <subparagraph id="HC49C43D62C45487A8032A6976ACE3A8D"><enum>(C)</enum><text>establish rules governing the operation of the exchange, including rules specifying trading procedures to be used in entering and executing orders traded or posted on the facility.</text></subparagraph></paragraph> <paragraph id="H3CADF1FDE78D4AE499235EEEBCA1B881"><enum>(3)</enum><header>Listing standards for digital commodities</header> <subparagraph id="H2B1B1C2B50B44D3CB8187D60C3D649C7"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">A digital commodity exchange shall establish policies and procedures to permit trading in a digital commodity only if—</text> <clause id="HC2B9908EF2DB411AB88BE2606387EEDA"><enum>(i)</enum><text display-inline="yes-display-inline">reports with respect to the digital commodity required under, as applicable, section 4B(b)(3) or 4B(b)(5)(C) of the Securities Act of 1933 (or, with respect to a digital commodity not issued in reliance on section 4(a)(8) of the Securities Act of 1933, a comparable set of reports, where required by the Securities and Exchange Commission) have been filed with the Securities and Exchange Commission;</text></clause> <clause id="H4FD0A4FE409D416AA4047341BC2AC0BF"><enum>(ii)</enum><text display-inline="yes-display-inline">such other similar information as the Commission may, by rule or regulation require, that is related to the ongoing development plan of the blockchain system and is able to be publicly ascertained, has been provided to the public; or</text></clause> <clause id="H8049BA92BBE44175BCD9F0B3F7D68BDD"><enum>(iii)</enum><text>the blockchain system to which the digital commodity relates, together with the digital commodity, is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934.</text></clause></subparagraph> <subparagraph id="H5594AA0BAF714F5AA9EB4EF79BC5195F"><enum>(B)</enum><header>Public information requirements</header> <clause id="H0196F28410EB4FAABE67DB911943C2C1"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">A digital commodity exchange shall—</text> <subclause id="HDE0005EC9C6E4D20A6F8C7F3F858EDCE"><enum>(I)</enum><text>permit trading in a digital commodity only if the digital commodity exchange reasonably determines that the information required by clause (ii) is correct, current, and available to the public; and</text></subclause> <subclause id="HA6BA4CCF03DB42119B3635C0150A39FF"><enum>(II)</enum><text display-inline="yes-display-inline">establish policies and procedures to determine that the information provided pursuant to clause (ii) is correct, current, and available to the public.</text></subclause></clause> <clause id="HBE79855FDFED4E4ABB5870CA53117E66"><enum>(ii)</enum><header>Required information</header><text>With respect to a digital commodity and each blockchain system to which the digital commodity relates for which the digital commodity exchange will make the digital commodity available to the customers of the digital commodity exchange, the following information:</text> <subclause id="HD7293E9600924E379DEE6AFA691A0171"><enum>(I)</enum><header>Source code</header><text>The source code for any blockchain system to which the digital commodity relates.</text></subclause> <subclause id="H2C2CB032B54045D39A779921A96B391B"><enum>(II)</enum><header>Transaction history</header><text display-inline="yes-display-inline">A description of the steps necessary to independently access, search, and verify the transaction history of any blockchain system to which the digital commodity relates, to the extent any such independent access, search, and verification activities are technically feasible with respect to the blockchain system.</text></subclause> <subclause id="H6F9162B490EC41A6AC3FF6C33264586D"><enum>(III)</enum><header>Digital commodity economics</header><text>A narrative description of the purpose of any blockchain system to which the digital commodity relates and the operation of any such blockchain system, including—</text> <item id="HEF17E676D41E44E5A0B352B701484732"><enum>(aa)</enum><text>information explaining the launch and supply process, including the number of digital assets to be issued in an initial allocation, the total number of digital commodities to be created, the release schedule for the digital commodities, and the total number of digital commodities then outstanding;</text></item> <item id="HBA2E84292FF74360B633E199B8151CE8"><enum>(bb)</enum><text>information detailing any applicable consensus mechanism or process for validating transactions, method of generating or mining digital commodities, and any process for burning or destroying digital commodities on the blockchain system;</text></item> <item id="HAA2FFADC5C834199A520B7DFD678C821"><enum>(cc)</enum><text>an explanation of governance mechanisms for implementing changes to the blockchain system or forming consensus among holders of the digital commodities; and</text></item> <item id="HBE33D24F8FF34C929D3A8E4D99C83594"><enum>(dd)</enum><text>sufficient information for a third party to create a tool for verifying the transaction history of the digital asset.</text></item></subclause> <subclause id="H6CEE81C272ED41DE87655D450E3B85D5" display-inline="no-display-inline"><enum>(IV)</enum><header>Trading volume and volatility</header><text display-inline="yes-display-inline">The trading volume and volatility of the digital commodity on the exchange.</text></subclause> <subclause id="HA845AF52B8EB45828150BCCC2F05DF3C"><enum>(V)</enum><header>Additional information</header><text display-inline="yes-display-inline">Such additional information as the Commission may determine by rule to be necessary for a customer to understand the financial and operational risks of a digital commodity, and to be practically feasible to provide.</text></subclause></clause> <clause id="HD661174D59DD47038070117DCF53C1B2" display-inline="no-display-inline"><enum>(iii)</enum><header>Format</header><text display-inline="yes-display-inline">The Commission shall prescribe rules and regulations for the standardization and simplification of disclosures under clause (ii), including requiring that disclosures—</text> <subclause id="H32597843B0784E0C9B66BBAA38D31171"><enum>(I)</enum><text>be conspicuous;</text></subclause> <subclause id="H2C80E59C89CE4F4AAE7878630F347276"><enum>(II)</enum><text>use plain language comprehensible to customers;</text></subclause> <subclause id="H4176D3318C9C47299DDC6044F4AF641F" display-inline="no-display-inline"><enum>(III)</enum><text display-inline="yes-display-inline">are not drafted in a way that presumes the customer already has a base knowledge, familiarity, or understanding of the basic terminology, operation, and function of blockchain systems; and</text></subclause> <subclause id="H896010C026B4400B89E07EACB41E92DF"><enum>(IV)</enum><text>succinctly explain the information that is required to be communicated to the customer.</text></subclause></clause> <clause id="H48C224D248864CD7A0AA80D9C5699A15"><enum>(iv)</enum><header>Reliance on previous disclosures</header><text display-inline="yes-display-inline">In complying with this subparagraph, a digital commodity exchange may rely on and make available to the public relevant information publicly disclosed to the Commission, the Securities and Exchange Commission, or an appropriate Federal banking agency.</text></clause></subparagraph> <subparagraph id="H4C72C3D5BDFD4007B6168C37AF621FEE"><enum>(C)</enum><header>Digital commodities held by related and digital commodity affiliated persons</header><text display-inline="yes-display-inline">A digital commodity exchange shall establish policies and procedures designed to permit the trading of a unit of a digital commodity acquired from the issuer and held by a digital commodity affiliated person or a digital commodity related person, only in accordance with the requirements of section 4C of the Securities Act of 1933.</text></subparagraph></paragraph> <paragraph id="HAC437E82A79440B1B1DCF153A0B6D2F6"><enum>(4)</enum><header>Treatment of customer assets</header><text>A digital commodity exchange shall establish policies and procedures that are designed to protect and ensure the safety of customer money, assets, and property.</text></paragraph> <paragraph id="HCA902AA5A65E4789A6771FDECAD71D5C"><enum>(5)</enum><header>Monitoring of trading and trade processing</header> <subparagraph id="HEA4214D78EE941A78270DEE49F41AD47"><enum>(A)</enum><header>In general</header><text>A digital commodity exchange shall provide a competitive, open, and efficient market and mechanism for executing transactions that protects the price discovery process of trading on the exchange.</text></subparagraph> <subparagraph id="H15951C12F3C64449AF825B2785EE68F9"><enum>(B)</enum><header>Protection of markets and market participants</header><text>A digital commodity exchange shall establish and enforce rules—</text> <clause id="H2B2748C942B943349C8116503532238C"><enum>(i)</enum><text>to protect markets and market participants from abusive practices committed by any party, including abusive practices committed by a party acting as an agent for a participant; and</text></clause> <clause id="H84349B2E6C4A4D4A802D95E6BBEE0E7A"><enum>(ii)</enum><text>to promote fair and equitable trading on the exchange.</text></clause></subparagraph> <subparagraph id="H4BCEB75A922445E4A8900DCFEA5071BD"><enum>(C)</enum><header>Trading procedures</header><text>A digital commodity exchange shall—</text> <clause id="HD07AE35072C24FAE821274F7E00F5D36"><enum>(i)</enum><text>establish and enforce rules or terms and conditions defining, or specifications detailing—</text> <subclause id="H7FB7946CEF0F43D8A7D87701548881C8"><enum>(I)</enum><text>trading procedures to be used in entering and executing orders traded on or through the facilities of the digital commodity exchange; and</text></subclause> <subclause id="H7F7FFC0BEB064018AC61BFF92320574B"><enum>(II)</enum><text>procedures for trade processing of digital commodities on or through the facilities of the digital commodity exchange; and</text></subclause></clause> <clause id="HBE0C068B1FB4468EA9FB4AAE264AFF10"><enum>(ii)</enum><text>monitor trading in digital commodities to prevent manipulation, price distortion, and disruptions, through surveillance, compliance, and disciplinary practices and procedures, including methods for conducting real-time monitoring of trading and comprehensive and accurate trade reconstructions.</text></clause></subparagraph></paragraph> <paragraph id="H3ED6C2398EA34CC98BD5C0AC91B262B9"><enum>(6)</enum><header>Ability to obtain information</header><text>A digital commodity exchange shall—</text> <subparagraph id="HADBAE00585A54225A13E20E8C473A847"><enum>(A)</enum><text>establish and enforce rules that will allow the facility to obtain any necessary information to perform any of the functions described in this section;</text></subparagraph> <subparagraph id="H8D016CB304FC45BAAFF9526C534B0164"><enum>(B)</enum><text>provide the information to the Commission on request; and</text></subparagraph> <subparagraph id="H8BAB3FD75682436885FA1E02B15562AA"><enum>(C)</enum><text>have the capacity to carry out such international information-sharing agreements as the Commission may require.</text></subparagraph></paragraph> <paragraph id="HC699F10CF1DC43DDA75985477E1E26ED"><enum>(7)</enum><header>Emergency authority</header><text>A digital commodity exchange shall adopt rules to provide for the exercise of emergency authority, in consultation or cooperation with the Commission or a registered entity, as is necessary and appropriate, including the authority to facilitate the liquidation or transfer of open positions in any digital commodity or to suspend or curtail trading in a digital commodity.</text></paragraph> <paragraph id="H8E292E1CF564429DBAA9EAD611BDECE0"><enum>(8)</enum><header>Timely publication of trading information</header> <subparagraph id="HCD6C6E8087F14E66865D3C72C2650BBF"><enum>(A)</enum><header>In general</header><text>A digital commodity exchange shall make public timely information on price, trading volume, and other trading data on digital commodities to the extent prescribed by the Commission.</text></subparagraph> <subparagraph id="H5D4D695D6DDE467B8F0F70A584D71333"><enum>(B)</enum><header>Capacity of digital commodity exchange</header><text>A digital commodity exchange shall have the capacity to electronically capture and transmit trade information with respect to transactions executed on the exchange.</text></subparagraph></paragraph> <paragraph id="H1B31B67D563D4007AAB9A4ADE606B948"><enum>(9)</enum><header>Recordkeeping and reporting</header> <subparagraph id="HD7F3CE929A274D8EABE486DF7035F4A9"><enum>(A)</enum><header>In general</header><text>A digital commodity exchange shall—</text> <clause id="H13467131D252454B96616EE5142DBAAC"><enum>(i)</enum><text>maintain records relating to the business of the exchange, including a complete audit trail, in a form and manner acceptable to the Commission for a period of 5 years;</text></clause> <clause id="H4E763006DA0A4340A61FA97BE6576304"><enum>(ii)</enum><text display-inline="yes-display-inline">report to the Commission, in a form and manner acceptable to the Commission, such information as the Commission determines to be necessary or appropriate for the Commission to perform the duties of the Commission under this Act; and</text></clause> <clause id="H4F72A451965B47E4B3A3D2AFE495EAEA"><enum>(iii)</enum><text display-inline="yes-display-inline">keep any such records of digital commodities which relate to a security open to inspection and examination by the Securities and Exchange Commission.</text></clause></subparagraph> <subparagraph id="H0ACE48167AB249AC860E0D768E98DF1D"><enum>(B)</enum><header>Information-sharing</header><text>Subject to section 8, and on request, the Commission shall share information collected under subparagraph (A) with—</text> <clause id="HF2444859719B4576A814E1E7519376E9"><enum>(i)</enum><text>the Board;</text></clause> <clause id="H1051D9D98D5841A0BF343D85DE914666"><enum>(ii)</enum><text>the Securities and Exchange Commission;</text></clause> <clause id="HE07CA1BD5EC7477E9BAF01382C4E4275"><enum>(iii)</enum><text>each appropriate Federal banking agency;</text></clause> <clause id="H29037BCA3E2F42A59B38DEF5D82932B4"><enum>(iv)</enum><text display-inline="yes-display-inline">each appropriate State bank supervisor (within the meaning of section 3 of the Federal Deposit Insurance Act);</text></clause> <clause id="HCFA6C971C9D048C483E7109D1525D61C"><enum>(v)</enum><text>the Financial Stability Oversight Council;</text></clause> <clause id="H21BF0A8667C74D72AE5982BB75C3353F"><enum>(vi)</enum><text>the Department of Justice; and</text></clause> <clause id="HEA97263095D1413B8070FB47D34B0E78"><enum>(vii)</enum><text>any other person that the Commission determines to be appropriate, including—</text> <subclause id="HDC155A265160435090B1A370E570660C"><enum>(I)</enum><text>foreign financial supervisors (including foreign futures authorities);</text></subclause> <subclause id="H1A833080508F4501A2D856CD23EBBA27"><enum>(II)</enum><text>foreign central banks; and</text></subclause> <subclause id="H6EA752467F8A4B6BB8D864A368AF2469"><enum>(III)</enum><text>foreign ministries.</text></subclause></clause></subparagraph> <subparagraph id="H4783F8170DD04DD199A1C45FBB6C08C5"><enum>(C)</enum><header>Confidentiality agreement</header><text>Before the Commission may share information with any entity described in subparagraph (B), the Commission shall receive a written agreement from the entity stating that the entity shall abide by the confidentiality requirements described in section 8 relating to the information on digital commodities that is provided.</text></subparagraph> <subparagraph id="H186C67963F6A470C837C1FFF169938F6"><enum>(D)</enum><header>Providing information</header><text>A digital commodity exchange shall provide to the Commission (including any designee of the Commission) information under subparagraph (A) in such form and at such frequency as is required by the Commission.</text></subparagraph></paragraph> <paragraph id="H4441ADDEBC7246A292F302371179BE2C"><enum>(10)</enum><header>Antitrust considerations</header><text display-inline="yes-display-inline">Unless necessary or appropriate to achieve the purposes of this Act, a digital commodity exchange shall not—</text> <subparagraph id="HD489AE4AD63E44AB8293F1C7379498F4"><enum>(A)</enum><text>adopt any rules or take any actions that result in any unreasonable restraint of trade; or</text></subparagraph> <subparagraph id="H70087E935B8D4A959317850AD2A3C665"><enum>(B)</enum><text>impose any material anticompetitive burden on trading.</text></subparagraph></paragraph> <paragraph id="H0380E941244C47EDBB7D75847B655116"><enum>(11)</enum><header>Conflicts of interest</header><text display-inline="yes-display-inline">The digital commodity exchange shall establish and enforce rules—</text> <subparagraph id="H76609E1894D44A9F9F582CFC1C95E57D"><enum>(A)</enum><text display-inline="yes-display-inline">to minimize conflicts of interest in the decision making processes of the contract market; and</text></subparagraph> <subparagraph id="HC123BE816F1B4AFEBEBEF3955A9ABC7B"><enum>(B)</enum><text>to establish a process for resolving conflicts of interest referred to in subparagraph (A).</text></subparagraph></paragraph> <paragraph id="HE6491D1557634FB6A5406AB671E0B8C8"><enum>(12)</enum><header>Financial resources</header> <subparagraph id="HA95D70B2937C4D1EA41CFE5D6935E248"><enum>(A)</enum><header>In general</header><text>A digital commodity exchange shall have adequate financial, operational, and managerial resources, as determined by the Commission, to discharge each responsibility of the digital commodity exchange.</text></subparagraph> <subparagraph id="H5C42B506A1654F5DA0CF1EA5684525AD"><enum>(B)</enum><header>Minimum amount of financial resources</header><text>A digital commodity exchange shall possess financial resources that, at a minimum, exceed the sum of—</text> <clause id="H750BD356D0024DDFB68211134366B269"><enum>(i)</enum><text display-inline="yes-display-inline">the total amount that would enable the digital commodity exchange to cover the operating costs of the digital commodity exchange for a 1-year period, as calculated on a rolling basis; and</text></clause> <clause id="H1F1D6C1DB4B64B93A2F07A47F96D2046"><enum>(ii)</enum><text display-inline="yes-display-inline">the total amount necessary to meet the financial obligations of the digital commodity exchange to all customers of the digital commodity exchange.</text></clause></subparagraph></paragraph> <paragraph id="HF600EA64C02C4E7091F8790A86E2300F"><enum>(13)</enum><header>Disciplinary procedures</header><text display-inline="yes-display-inline">A digital commodity exchange shall establish and enforce disciplinary procedures that authorize the digital commodity exchange to discipline, suspend, or expel members or market participants that violate the rules of the digital commodity exchange, or similar methods for performing the same functions, including delegation of the functions to third parties.</text></paragraph> <paragraph id="H30232D73D63D4708B80A01B9B21FF170"><enum>(14)</enum><header>Governance fitness standards</header> <subparagraph id="H597B0BC26D2D439A8C0D6063A15B277C"><enum>(A)</enum><header>Governance arrangements</header><text display-inline="yes-display-inline">A digital commodity exchange shall establish governance arrangements that are transparent and designed to permit consideration of the views of market participants.</text></subparagraph> <subparagraph id="HF072FF65E9F7455D8249D33DB9B9447B"><enum>(B)</enum><header>Fitness standards</header><text>A digital commodity exchange shall establish and enforce appropriate fitness standards for—</text> <clause id="H6468259128AC4D108B4FAAEEFA4D937B"><enum>(i)</enum><text>officers and directors; and</text></clause> <clause id="H26838AFD36A542F8B3D0A643D75BE749"><enum>(ii)</enum><text>any individual or entity with direct access to, or control of, customer assets.</text></clause></subparagraph></paragraph> <paragraph id="HB1C9745D67F54034B687109A18C98F9C"><enum>(15)</enum><header>System safeguards</header><text>A digital commodity exchange shall—</text> <subparagraph id="H6197CBE812C04BE980C2FB928CC4BE79"><enum>(A)</enum><text>establish and maintain a program of risk analysis and oversight to identify and minimize sources of operational and security risks, through the development of appropriate controls and procedures, and automated systems in accordance with industry standards, that—</text> <clause id="H1B0ABC2F28DF4B03A5FAED2C7AFEF1E5"><enum>(i)</enum><text>are reliable and secure; and</text></clause> <clause id="H7B143783C5954535A61B482BD382E22B"><enum>(ii)</enum><text>have adequate scalable capacity;</text></clause></subparagraph> <subparagraph id="H4B92B68A75574C228044301031945AAF"><enum>(B)</enum><text>establish and maintain emergency procedures, backup resources, and a plan for disaster recovery that allow for—</text> <clause id="H5D0CEA238B5143D498487DA3ED87695D"><enum>(i)</enum><text>the timely recovery and resumption of operations; and</text></clause> <clause id="HDF07E9EE50954CE89ABC9D43E30C6C06"><enum>(ii)</enum><text>the fulfillment of the responsibilities and obligations of the digital commodity exchange; and</text></clause></subparagraph> <subparagraph id="H77CF8A106E8A4970964212ACA3FDA0CD"><enum>(C)</enum><text>periodically conduct tests to verify that the backup resources of the digital commodity exchange are sufficient to ensure continued—</text> <clause id="H2101B8CACD0644FA939BB9907C27F191"><enum>(i)</enum><text>order processing and trade matching;</text></clause> <clause id="HD3372B647B894370B46A76C8CA4524A7"><enum>(ii)</enum><text>price reporting;</text></clause> <clause id="H2E08695A54D248A6A687C40546C9A286"><enum>(iii)</enum><text>market surveillance; and</text></clause> <clause id="H713A3C5FFDED410E9D3AE04CFDE4D82F"><enum>(iv)</enum><text>maintenance of a comprehensive and accurate audit trail.</text></clause></subparagraph></paragraph></subsection> <subsection id="H2A37B5B019DD4265B98D82DFB5B6508D"><enum>(d)</enum><header>Holding of customer assets</header> <paragraph id="HDB9C619754E749C0AC7F1F72F3973AC6"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">A digital commodity exchange shall hold customer money, assets, and property in a manner to minimize the risk of loss to the customer or unreasonable delay in customer access to the money, assets, and property of the customer.</text></paragraph> <paragraph id="H9CE2816B843E4C068592393C0EF1783E"><enum>(2)</enum><header>Segregation of funds</header> <subparagraph id="H3827C113DA4747A2AC14A35D6FC9E2AE"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">A digital commodity exchange shall treat and deal with all money, assets, and property that is received by the digital commodity exchange, or accrues to a customer as the result of trading in digital commodities, as belonging to the customer.</text></subparagraph> <subparagraph id="HEA574DB6E47F434488EECE9058C5F040"><enum>(B)</enum><header>Commingling prohibited</header><text>Money, assets, and property described in subparagraph (A) shall be separately accounted for and shall not be commingled with the funds of the digital commodity exchange or be used to margin, secure, or guarantee any trades or accounts of any customer or person other than the person for whom the same are held.</text></subparagraph> <subparagraph id="HCC0C3946F8484E1B914B265522000EFB"><enum>(C)</enum><header>Exceptions</header> <clause id="H1C0107B1597A43EEA57A2EF0961AE4AF"><enum>(i)</enum><header>Use of funds</header> <subclause id="H35C5F602C8FA4AAA8766DA922559781D"><enum>(I)</enum><header>In general</header><text display-inline="yes-display-inline">Notwithstanding subparagraph (A), money, assets, and property described in subparagraph (A) may, for convenience, be commingled and deposited in the same account or accounts with any bank, trust company, derivatives clearing organization, or qualified digital asset custodian.</text></subclause> <subclause id="HF0EB28C13167410595FBB915DFF77C07"><enum>(II)</enum><header>Withdrawal</header><text>Notwithstanding subparagraph (A), such share of the money, assets, and property described in subparagraph (A) as in the normal course of business shall be necessary to margin, guarantee, secure, transfer, adjust, or settle a contract of sale of a digital commodity with a registered entity may be withdrawn and applied to such purposes, including the payment of commissions, brokerage, interest, taxes, storage, and other charges, lawfully accruing in connection with the contract.</text></subclause></clause> <clause id="HE0DC0950EEDA48FBB336B34051AF6D92"><enum>(ii)</enum><header>Commission action</header><text display-inline="yes-display-inline">Notwithstanding subparagraph (A), in accordance with such terms and conditions as the Commission may prescribe by rule, regulation, or order, any money, assets, or property of the customers of a digital commodity exchange may be commingled and deposited in customer accounts with any other money, assets, or property received by the digital commodity exchange and required by the Commission to be separately accounted for and treated and dealt with as belonging to the customer of the digital commodity exchange.</text></clause></subparagraph></paragraph> <paragraph id="H04F0E6C8F8C244DEA5EBE93E5229AA47"><enum>(3)</enum><header>Permitted investments</header><text>Money described in paragraph (2) may be invested in obligations of the United States, in general obligations of any State or of any political subdivision of a State, and in obligations fully guaranteed as to principal and interest by the United States, or in any other investment that the Commission may by rule or regulation prescribe, and such investments shall be made in accordance with such rules and regulations and subject to such conditions as the Commission may prescribe.</text></paragraph> <paragraph id="H36C05823C2CC44FF9C76850C34F9F4FE"><enum>(4)</enum><header>Customer protection during bankruptcy</header> <subparagraph id="H67AD60D3D2AA458ABF32713EFAA16322"><enum>(A)</enum><header>Customer property</header><text>All assets held on behalf of a customer by a digital commodity exchange, and all money, assets, and property of any customer received by a digital commodity exchange for trading or custody, or to facilitate, margin, guarantee, or secure contracts of sale of a digital commodity (including money, assets, or property accruing to the customer as the result of the transactions), shall be considered customer property for purposes of section 761 of title 11, United States Code.</text></subparagraph> <subparagraph id="HA93E6726B614442A9C1B426FB8F97D05"><enum>(B)</enum><header>Transactions</header><text display-inline="yes-display-inline">A transaction involving the sale of a unit of a digital commodity occurring on or subject to the rules of a digital commodity exchange shall be considered a contract for the purchase or sale of a commodity for future delivery, on or subject to the rules of, a contract market or board of trade for purposes of the definition of <quote>commodity contract</quote> in section 761 of title 11, United States Code.</text></subparagraph> <subparagraph id="HCEC199190C774E6FA695047BC2ED1619"><enum>(C)</enum><header>Exchanges</header><text>A digital commodity exchange shall be considered a futures commission merchant for purposes of section 761 of title 11, United States Code.</text></subparagraph> <subparagraph id="H68F006C308F8468B9E87D07895364581"><enum>(D)</enum><header>Assets removed from segregation</header><text display-inline="yes-display-inline">Assets removed from segregation due to a customer election under paragraph (6) shall not be considered customer property for purposes of section 761 of title 11, United States Code.</text></subparagraph></paragraph> <paragraph id="H2B76B1AE56BB46D9917CF1D717D9C65C"><enum>(5)</enum><header>Misuse of customer property</header> <subparagraph id="H688A2BCC80C5434FBA3C7CF20BC8CAA4"><enum>(A)</enum><header>In general</header><text>It shall be unlawful—</text> <clause id="HEBB852DFCBC441BB99E29DDCDA3DABCE"><enum>(i)</enum><text display-inline="yes-display-inline">for any digital commodity exchange that has received any customer money, assets, or property for custody to dispose of, or use any such money, assets, or property as belonging to the digital commodity exchange or any person other than a customer of the digital commodity exchange; or</text></clause> <clause id="H6A53F35C1C334DF4835A6D2B1B1D82C1"><enum>(ii)</enum><text display-inline="yes-display-inline">for any other person, including any depository, other digital commodity exchange, or digital asset custodian that has received any customer money, assets, or property for deposit, to hold, dispose of, or use any such money, assets, or property, or property, as belonging to the depositing digital commodity exchange or any person other than the customers of the digital commodity exchange.</text></clause></subparagraph> <subparagraph id="HD314FAB7F43340CAA80D17E70CF95296"><enum>(B)</enum><header>Use further defined</header><text display-inline="yes-display-inline">For purposes of this section, <quote>use</quote> of a digital commodity includes utilizing any unit of a digital asset to participate in a blockchain service defined in paragraph (6) or a decentralized governance system associated with the digital commodity or the blockchain system to which the digital commodity relates in any manner other than that expressly directed by the customer from whom the unit of a digital commodity was received.</text></subparagraph></paragraph> <paragraph id="HFAEBDA02A3694F479BA8807732B96E45"><enum>(6)</enum><header>Participation in blockchain services</header> <subparagraph id="HCFE6CE15DCD44FDCB02529466FB4E8B9"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">A customer shall have the right to waive the restrictions in paragraph (2) for any unit of a digital commodity to be used under subparagraph (B) of this paragraph, by affirmatively electing, in writing to the digital commodity exchange, to waive the restrictions.</text></subparagraph> <subparagraph id="H957F637827324E9E88CC57D13F40C854"><enum>(B)</enum><header>Use of funds</header><text>Customer digital commodities removed from segregation under subparagraph (A) may be pooled and used by the digital commodity exchange or its designee to provide a blockchain service for a blockchain system to which the unit of the digital asset removed from segregation in subparagraph (A) relates.</text></subparagraph> <subparagraph id="HB48EC65B3F5A489BA66E24013E6A223C"><enum>(C)</enum><header>Limitations</header> <clause id="H857436A9627F406A91FD2A32BFDDD308"><enum>(i)</enum><header>In general</header><text>The Commission shall, by rule, establish notice and disclosure requirements, and may, by rule, establish any other limitations and rules related to the waiving of any restrictions under this paragraph that are reasonably necessary to protect customers, including eligible contract participants, non-eligible contract participants, or any other class of customers.</text></clause> <clause id="H2A96839EB73945B98C0AB3FCAA7CE858"><enum>(ii)</enum><header>Customer choice</header><text display-inline="yes-display-inline">A digital commodity exchange may not require a waiver from a customer described in subparagraph (A) as a condition of doing business on the exchange.</text></clause></subparagraph> <subparagraph id="H38ABB2F6F0394C96A82C89FA93DAE94B"><enum>(D)</enum><header>Blockchain service defined</header><text>In this paragraph, the term <term>blockchain service</term> means any activity relating to validating transactions on a blockchain system, providing security for a blockchain system, or other similar activity required for the ongoing operation of a blockchain system.</text></subparagraph></paragraph></subsection> <subsection id="H3CC2F39170F24669A63307F0312C94D0"><enum>(e)</enum><header>Market access requirements</header><text>The Commission may, by rule, impose any additional requirements related to the operations and activities of the digital commodity exchange and an affiliated digital commodity broker necessary to protect market participants, promote fair and equitable trading on the digital commodity exchange, and promote responsible innovation.</text></subsection> <subsection id="H842956C445774BB0AD1AD80D7017A0F0"><enum>(f)</enum><header>Designation of chief compliance officer</header> <paragraph id="HFA35D33A1B9D4176A1C42ED442CB72FD"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">A digital commodity exchange shall designate an individual to serve as a chief compliance officer.</text></paragraph> <paragraph id="H5A895FCCBE5C48669F087155E9BC11C2"><enum>(2)</enum><header>Duties</header><text>The chief compliance officer shall—</text> <subparagraph id="HB9DDD53149004937A51ECA65E80731CC"><enum>(A)</enum><text>report directly to the board or to the senior officer of the exchange;</text></subparagraph> <subparagraph id="H03EA48BDA7784B8DB5B6D7C7BEE75C3B"><enum>(B)</enum><text>review compliance with the core principles in this subsection;</text></subparagraph> <subparagraph id="H09195328D57348E2AF1F955E116B8B26"><enum>(C)</enum><text>in consultation with the board of the exchange, a body performing a function similar to that of a board, or the senior officer of the exchange, resolve any conflicts of interest that may arise;</text></subparagraph> <subparagraph id="H2E6A488E3D86441DBA131B36059B9223"><enum>(D)</enum><text>establish and administer the policies and procedures required to be established pursuant to this section;</text></subparagraph> <subparagraph id="H958D54BAF9D64EBE827CFCBB1876CEEE"><enum>(E)</enum><text>ensure compliance with this Act and the rules and regulations issued under this Act, including rules prescribed by the Commission pursuant to this section; and</text></subparagraph> <subparagraph id="HDAFB37B9553A407A88F47B989C670887"><enum>(F)</enum><text>establish procedures for the remediation of noncompliance issues found during compliance office reviews, look backs, internal or external audit findings, self-reported errors, or through validated complaints.</text></subparagraph></paragraph> <paragraph id="H3E5FF5EEA635402584BACAD512992E59"><enum>(3)</enum><header>Requirements for procedures</header><text>In establishing procedures under paragraph (2)(F), the chief compliance officer shall design the procedures to establish the handling, management response, remediation, retesting, and closing of noncompliance issues.</text></paragraph> <paragraph id="H10050E9F750F4680B46B7E3C17EB73BF"><enum>(4)</enum><header>Annual reports</header> <subparagraph id="HA9ACE1D4C7614ED3AEC281E65618386E"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">In accordance with rules prescribed by the Commission, the chief compliance officer shall annually prepare and sign a report that contains a description of—</text> <clause id="HC99C580768B640B3968D3690BC9C9594"><enum>(i)</enum><text>the compliance of the digital commodity exchange with this Act; and</text></clause> <clause id="H70EAE205E60F4B3CB80AE9EEBF347A18"><enum>(ii)</enum><text>the policies and procedures, including the code of ethics and conflicts of interest policies, of the digital commodity exchange.</text></clause></subparagraph> <subparagraph id="H327E88506FA147C4AF81E5004758F7AF"><enum>(B)</enum><header>Requirements</header><text>The chief compliance officer shall—</text> <clause id="HC1D17988348B4A268E100402C4660C4A"><enum>(i)</enum><text>submit each report described in subparagraph (A) with the appropriate financial report of the digital commodity exchange that is required to be submitted to the Commission pursuant to this section; and</text></clause> <clause id="HACCDEEB7D0874BF28B393158D5603CE5"><enum>(ii)</enum><text>include in the report a certification that, under penalty of law, the report is accurate and complete.</text></clause></subparagraph></paragraph></subsection> <subsection id="H67D87B69C6224F8CA27AD1C545503BE5"><enum>(g)</enum><header>Appointment of trustee</header> <paragraph id="H79CB8601A68348C0BC34A3F13F6793D5"><enum>(1)</enum><header>In general</header><text>If a proceeding under section 5e results in the suspension or revocation of the registration of a digital commodity exchange, or if a digital commodity exchange withdraws from registration, the Commission, on notice to the digital commodity exchange, may apply to the appropriate United States district court where the digital commodity exchange is located for the appointment of a trustee.</text></paragraph> <paragraph id="HABF5DB2ED3EF440586765F2661578F2B"><enum>(2)</enum><header>Assumption of jurisdiction</header><text>If the Commission applies for appointment of a trustee under paragraph (1)—</text> <subparagraph id="H1695EE9F7DE345D088B4EF87C4E89A00"><enum>(A)</enum><text>the court may take exclusive jurisdiction over the digital commodity exchange and the records and assets of the digital commodity exchange, wherever located; and</text></subparagraph> <subparagraph id="H4757B7CD52B1405C83A4810B6BAE5529"><enum>(B)</enum><text>if the court takes jurisdiction under subparagraph (A), the court shall appoint the Commission, or a person designated by the Commission, as trustee with power to take possession and continue to operate or terminate the operations of the digital commodity exchange in an orderly manner for the protection of customers subject to such terms and conditions as the court may prescribe.</text></subparagraph></paragraph></subsection> <subsection id="H286E006B2ADC44068A3FE964C5DDE3A1"><enum>(h)</enum><header>Qualified digital asset custodian</header><text>A digital commodity exchange shall hold in a qualified digital asset custodian each unit of a digital asset that is—</text> <paragraph id="H422FA81072CE4465A4DDCA79F54E3710"><enum>(1)</enum><text>the property of a customer of the digital commodity exchange;</text></paragraph> <paragraph id="HF9B96CBD98904A02B1E0F24B2EA602DD"><enum>(2)</enum><text>required to be held by the digital commodity exchange under subsection (c)(12) of this section; or</text></paragraph> <paragraph id="HF56044237DA44D1E831047C9D09BA4A7"><enum>(3)</enum><text>otherwise so required by the Commission to reasonably protect customers.</text></paragraph></subsection> <subsection id="H26ADC5EC5093478AB2C3EC0477FCC0A0"><enum>(i)</enum><header>Exemptions</header> <paragraph id="H370297E61BE041D487031B29AB6D5074"><enum>(1)</enum><header>In general</header><text>In order to promote responsible innovation and fair competition, or protect customers, the Commission may (on its own initiative or on application of the registered digital commodity exchange) exempt, either unconditionally or on stated terms or conditions or for stated periods and either retroactively or prospectively, or both, a registered digital commodity exchange from the requirements of this section, if the Commission determines that—</text> <subparagraph id="H7C53B1FB367E4611B2A2A1DE709BECAA"><enum>(A)</enum><text>the exemption would be consistent with the public interest and the purposes of this Act; and</text></subparagraph> <subparagraph id="H4903076A2B7B4FB1A24485EB693151B7"><enum>(B)</enum><text>the exemption will not have a material adverse effect on the ability of the Commission or the digital commodity exchange to discharge regulatory or self-regulatory duties under this Act.</text></subparagraph></paragraph> <paragraph id="H44E8788E83D04AD88752842CF342C567"><enum>(2)</enum><header>Foreign exchanges</header><text display-inline="yes-display-inline">The Commission may exempt, conditionally or unconditionally, a digital commodity exchange from registration under this section if the Commission finds that the digital commodity exchange is subject to comparable, comprehensive supervision and regulation on a consolidated basis by the appropriate governmental authorities in the home country of the facility.</text></paragraph></subsection> <subsection id="H1AC634A5172C4152B496EE0E863C4DED"><enum>(j)</enum><header>Customer defined</header><text display-inline="yes-display-inline">In this section, the term <term>customer</term> means any person that maintains an account for the trading of digital commodities directly with a digital commodity exchange (other than a person that is owned or controlled, directly or indirectly, by the digital commodity exchange) for its own behalf or on behalf of any other person.</text></subsection> <subsection id="HABF8E0FB5E754B12908ED37DA8A45A1D"><enum>(k)</enum><header>Federal preemption</header><text display-inline="yes-display-inline">Notwithstanding any other provision of law, the Commission shall have exclusive jurisdiction over any digital commodity exchange registered under this section with respect to activities and transactions subject to this Act.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H521E55C6ED834C34ADFA323867DC54C5"><enum>405.</enum><header>Qualified digital asset custodians</header><text display-inline="no-display-inline">The Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1">7 U.S.C. 1 et seq.</external-xref>), as amended by the preceding provisions of this Act, is amended by inserting after section 5i the following:</text> <quoted-block style="OLC" id="HA60671D1A5C249AA9B301F0A0676EAA1" display-inline="no-display-inline"> <section id="HB7AE5B0CE975466B93E626060804B30A"><enum>5j.</enum><header>Qualified digital asset custodians</header> <subsection id="H9E29C6F2479E438AB87B05FF490C6B1F"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">A person is a qualified digital asset custodian for purposes of this Act if the person—</text> <paragraph id="HF1315C4456B7478CB03CB1B906E2A6ED"><enum>(1)</enum><text display-inline="yes-display-inline">holds digital assets on behalf of a person registered under this Act or a customer of a person registered under this Act; and</text></paragraph> <paragraph id="HF819A64BC27F4CE1BAC676145737DB16"><enum>(2)</enum><text>is in compliance with subsections (b) and (c).</text></paragraph></subsection> <subsection id="H03AE634AD0154E148CFCAB19E894E65C" display-inline="no-display-inline"><enum>(b)</enum><header>Supervision requirement</header><text display-inline="yes-display-inline">A person is in compliance with this subsection if the person is subject to—</text> <paragraph id="H75D5A6A86E32433DA1D41D0B7186F71C"><enum>(1)</enum><text>supervision and examination for custody and safekeeping of digital assets by an appropriate Federal banking agency, the National Credit Union Administration, the Commission, or the Securities and Exchange Commission; or</text></paragraph> <paragraph id="H0D9B1E67829B46E2B81578A18BBDF0B7"><enum>(2)</enum><text display-inline="yes-display-inline">adequate supervision and appropriate regulation for custody and safekeeping of digital assets by—</text> <subparagraph id="H80296F120B6F414BAEDE7A83C938EB86"><enum>(A)</enum><text>a State bank supervisor (within the meaning of section 3 of the Federal Deposit Insurance Act);</text></subparagraph> <subparagraph id="H282E35AC0C7143669275CEB02D49F18F"><enum>(B)</enum><text display-inline="yes-display-inline">a State credit union supervisor, as defined under section 6003 of the Anti-Money Laundering Act of 2020; or</text></subparagraph> <subparagraph id="HEFAD7FCDF571485980ED63489AC688E9"><enum>(C)</enum><text>an appropriate foreign governmental authority in the home country of the digital commodity custodian.</text></subparagraph></paragraph></subsection> <subsection id="H39BE28FD27B44229A6C81353958F5B25"><enum>(c)</enum><header>Other requirements</header><text display-inline="yes-display-inline">A person shall be in compliance with this subsection if:</text> <paragraph id="H7419C4751A734071981FCA953C8BFA33"><enum>(1)</enum><header>Not otherwise prohibited</header><text display-inline="yes-display-inline">The person has not been prohibited by its supervisor from engaging in an activity with respect to the custody and safekeeping of digital assets.</text></paragraph> <paragraph id="HEFC63EEC68DB4EC68811D9C240427AAE"><enum>(2)</enum><header>Information sharing</header> <subparagraph id="H145C02E5A22444BA86E3442A90BAFA06"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The person shares information with the Commission on request and complies with such requirements for periodic sharing of information regarding customer accounts that the person holds on behalf of an entity registered with the Commission as the Commission determines by rule are reasonably necessary to effectuate any of the provisions, or to accomplish any of the purposes, of this Act.</text></subparagraph> <subparagraph id="H125A7B37B50C4DB4B98E3FA8DD75BE47"><enum>(B)</enum><header>Provision of information</header><text>If the person is subject to regulation and examination by an appropriate Federal banking agency, the person may satisfy any information request described in subparagraph (A) by providing the Commission with a detailed listing, in writing, of the digital assets of a customer in the custody of, or use by, the person.</text></subparagraph> <subparagraph id="HB4AE61B11E264735BC55270E0465467E"><enum>(C)</enum><header>Rulemaking for CFTC entities</header> <clause id="H5E39F02C93034237AD115C4DCD2E74CF"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">The Commission shall prescribe rules to permit a person registered with the Commission to be a qualified digital asset custodian in compliance with this section.</text></clause> <clause id="HCFF0A9CC6BFE4A3393A5A28E5AE2821C"><enum>(ii)</enum><header>Content</header><text>In prescribing the rules under subparagraph (A), the Commission shall require a person registered with the Commission to—</text> <subclause id="H8CED5B0DA7464B21809725D4415F4DF6"><enum>(I)</enum><text>implement requirement consistent with the requirements in subsection (d)(1);</text></subclause> <subclause id="H1BD551BAD6E14F24B75C03A1481C0F03"><enum>(II)</enum><text>establish sufficient system safeguards;</text></subclause> <subclause id="H8BD4C761ED624252B80ED7281EA21E46"><enum>(III)</enum><text>prevent or mitigate conflicts of interest, as appropriate; and</text></subclause> <subclause id="H90124B75AD8640749A6F784C61977E78"><enum>(IV)</enum><text>establish separate governance arrangements for the custodial function of the entity.</text></subclause></clause></subparagraph></paragraph></subsection> <subsection id="HE09E88BCAEC24171923238593375D832"><enum>(d)</enum><header>Adequate supervision and appropriate regulation</header> <paragraph id="H7C8F9C957A6B40C185A82AFDCD63589D"><enum>(1)</enum><header>In general</header><text>For purposes of subsection (b), the terms <term>adequate supervision</term> and <term>appropriate regulation</term> mean such minimum standards for supervision and regulation as are reasonably necessary to protect the digital assets held by a person registered under this Act, including standards relating to the licensing, examination, and supervisory processes that require the person to, at a minimum—</text> <subparagraph id="H1176DBD4EE0D4621A974B1ECE4514303"><enum>(A)</enum><text display-inline="yes-display-inline">receive a review and evaluation of ownership, character and fitness, conflicts of interest, business model, financial statements, funding resources, and policies and procedures of the person;</text></subparagraph> <subparagraph id="HDEE6391DD1CB40A3BFCC7D449FCF5654"><enum>(B)</enum><text>hold capital sufficient for the financial integrity of the person;</text></subparagraph> <subparagraph id="H4E4321B743EC42EA8FC42F287BF30E72"><enum>(C)</enum><text>protect customer assets;</text></subparagraph> <subparagraph id="H2AF26584B3404C83B85F8AC296EF5F1D"><enum>(D)</enum><text>establish and maintain books and records regarding the business of the person;</text></subparagraph> <subparagraph id="H2DF666AB5CDE4F57A0736664042700CB"><enum>(E)</enum><text>submit financial statements and audited financial statements to the applicable supervisor described in subsection (b);</text></subparagraph> <subparagraph id="H47A9281E5DD4447089AAB2B7B09A6C00"><enum>(F)</enum><text display-inline="yes-display-inline">provide disclosures to the applicable supervisor described in subsection (b) regarding actions, proceedings, and other items as determined by the supervisor;</text></subparagraph> <subparagraph id="H471A8B4D0A164FF8BACB55F764076AAA"><enum>(G)</enum><text>maintain and enforce policies and procedures for compliance with applicable State and Federal laws, including those related to anti-money laundering and cybersecurity;</text></subparagraph> <subparagraph id="HC59B136D06014A4598278DDBF5D519E1"><enum>(H)</enum><text>establish a business continuity plan to ensure functionality in cases of disruption; and</text></subparagraph> <subparagraph id="HE64F7A6A5786428C9F7C07C62FF8FE4E"><enum>(I)</enum><text>establish policies and procedures to resolve complaints.</text></subparagraph></paragraph> <paragraph id="HB2F0A46AF8E34A4689F8329152373FF9"><enum>(2)</enum><header>Rulemaking with respect to definitions</header> <subparagraph id="H37B4257A6B7C46E89A2216ECB5B5C899"><enum>(A)</enum><header>In general</header><text>For purposes of this section, the Commission may, by rule, further define the terms <term>adequate supervision</term> and <term>appropriate regulation</term> as necessary and appropriate for the protection of customers, and consistent with the purposes of this Act.</text></subparagraph> <subparagraph id="HCC25AF7777D84667879D786210263114"><enum>(B)</enum><header>Conditional treatment of certain custodians before rulemaking</header><text display-inline="yes-display-inline">Before the effective date of a rulemaking under subparagraph (A), a trust company is deemed subject to adequate supervision and appropriate regulation if—</text> <clause id="H0BB3386188C9467CA9356EEF81310FAE"><enum>(i)</enum><text>the trust company is expressly permitted by a State bank supervisor to engage in the custody and safekeeping of digital assets;</text></clause> <clause id="H5651DD9E6CA74BF6B4628966F15FDF63"><enum>(ii)</enum><text display-inline="yes-display-inline">the State bank supervisor has established licensing, examination, and supervisory processes that require the trust company to, at a minimum, meet the conditions described in subparagraphs (A) through (I) of paragraph (1); and</text></clause> <clause id="H1E82B834406A45BEB40D2FE135D74DFC"><enum>(iii)</enum><text display-inline="yes-display-inline">the trust company is in good standing with its State bank supervisor.</text></clause></subparagraph> <subparagraph id="H0AE4796ACEDB4654BA951FFAF02E7DE3"><enum>(C)</enum><header>Transition period for certain custodians</header><text display-inline="yes-display-inline">In implementing the rulemaking under subparagraph (A), the Commission shall provide a transition period of not less than 2 years for any trust company that is deemed subject to adequate supervision and appropriate regulation under subparagraph (B) on the effective date of the rulemaking.</text></subparagraph></paragraph></subsection> <subsection id="H976CE9EED64443F398079F9B68439CEF"><enum>(e)</enum><header>Authority To temporarily suspend standards</header><text display-inline="yes-display-inline">The Commission may, by rule or order, temporarily suspend, in whole or in part, any requirement imposed under, or any standard referred to in, this section, or any requirement to utilize a qualified digital asset custodian, if the Commission determines that the suspension would be consistent with the public interest and the purposes of this Act.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="HE37E977788314F378920991C0F5D3798"><enum>406.</enum><header>Registration and regulation of digital commodity brokers and dealers</header><text display-inline="no-display-inline">The Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1">7 U.S.C. 1 et seq.</external-xref>) is amended by inserting after section 4t the following:</text> <quoted-block style="OLC" id="H418A416EE916413F958960F6054E424F" display-inline="no-display-inline"> <section id="HA6004EF94C6D493FB3049A912CEBE2EE"><enum>4u.</enum><header>Registration and regulation of digital commodity brokers and dealers</header> <subsection id="H079522B1C12744AF9BE86CE4FFA01787"><enum>(a)</enum><header>Registration</header> <paragraph id="H62AB603B26EB4C60A4B93EDCF7FBC12D"><enum>(1)</enum><header>Requirement</header><text>It shall be unlawful for any person to act as a digital commodity broker or digital commodity dealer unless the person is registered as such with the Commission.</text></paragraph> <paragraph id="H4F0A6228161B43809F91B886962A8584"><enum>(2)</enum><header>Additional registration</header> <subparagraph id="H4142B709FF0B40F0B97AE2CBB7A17145"><enum>(A)</enum><header>Rules</header><text>In order to foster the development of fair and orderly markets, protect customers, and promote responsible innovation, the Commission—</text> <clause id="HEED478CF14164F6A8F9AD02A9440098F"><enum>(i)</enum><text>shall prescribe rules to exempt an entity registered with the Commission under more than 1 section of this Act from duplicative, conflicting, or unduly burdensome provisions of this Act and the rules under this Act;</text></clause> <clause id="H22A4EFB4D22A4114BE5E3347B33D617E"><enum>(ii)</enum><text>shall prescribe rules to address conflicts of interests and the activities of the entity; and</text></clause> <clause id="H31EDC09AE7804240855352AB35C20297"><enum>(iii)</enum><text>may after an analysis of the risks and benefits, prescribe rules to provide for portfolio margining.</text></clause></subparagraph> <subparagraph id="HE3A26FB6CD3149B19D20B505FDA39433"><enum>(B)</enum><header>With membership in a registered futures association</header><text>Any person required to be registered as a digital commodity broker or digital commodity dealer under this section shall become and remain a member of a registered futures association.</text></subparagraph></paragraph></subsection> <subsection id="H8EC9EEF643214A9585D677DA259698DB"><enum>(b)</enum><header>Requirements</header> <paragraph id="HCE9899CBCE3C4078A2210B47D37921F6"><enum>(1)</enum><header>In general</header><text>A person shall register as a digital commodity broker or digital commodity dealer by filing a registration application with the Commission.</text></paragraph> <paragraph id="HD3634C9CB1C840169F805F4F7580F56A"><enum>(2)</enum><header>Contents</header> <subparagraph id="HB996E7C4F4D740CC9B297B1D9C146744"><enum>(A)</enum><header>In general</header><text>The application shall be made in such form and manner as is prescribed by the Commission, and shall contain such information as the Commission considers necessary concerning the business in which the applicant is or will be engaged.</text></subparagraph> <subparagraph id="H2F70442A645C4F87ABAABC92A115A099"><enum>(B)</enum><header>Continual reporting</header><text>A person that is registered as a digital commodity broker or digital commodity dealer shall continue to submit to the Commission reports that contain such information pertaining to the business of the person as the Commission may require.</text></subparagraph></paragraph> <paragraph id="H957F90B5F1034315965DF59FAE96606B"><enum>(3)</enum><header>Statutory disqualification</header><text>Except to the extent otherwise specifically provided by rule, regulation, or order, it shall be unlawful for a digital commodity broker or digital commodity dealer to permit any person who is associated with a digital commodity broker or a digital commodity dealer and who is subject to a statutory disqualification to effect or be involved in effecting a contract of sale of a digital commodity on behalf of the digital commodity broker or the digital commodity dealer, respectively, if the digital commodity broker or digital commodity dealer, respectively, knew, or in the exercise of reasonable care should have known, of the statutory disqualification.</text></paragraph></subsection> <subsection id="HABD29BE6A7304B80A85C5FFACF556287"><enum>(c)</enum><header>Rulemaking</header> <paragraph id="H41849957C8904BBE82F8BE8EFA634154"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The Commission shall prescribe such rules applicable to registered digital commodity brokers and registered digital commodity dealers as are appropriate to carry out this section, including rules in the public interest that limit the activities of digital commodity brokers and digital commodity dealers.</text></paragraph> <paragraph id="HFE06B9313CC348D68AB2E2D8E696C9DB"><enum>(2)</enum><header>Financing agreements</header> <subparagraph id="H76729FA97A4249B3965E419C38432936"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The Commission shall prescribe rules and regulations applicable to digital commodity brokers or digital commodity dealers which shall set forth minimum requirements related to disclosure, recordkeeping, margin financing arrangements, rehypothecation, capital, reporting, business conduct, documentation, and supervision of employees and agents, in connection with—</text> <clause id="HEF3C953B22D644558CB87F8AA53A29CB"><enum>(i)</enum><text>an agreement described in section 2(c)(2)(D)(iv); or</text></clause> <clause id="HF69E8F20060344DB9EE4A4F5D5809599"><enum>(ii)</enum><text>any other margined, leveraged, or financing arrangement for the purchase or sale of a digital commodity with an eligible contract participant.</text></clause></subparagraph> <subparagraph id="H76AEFD7F4266437DB3C5D8A3D90E7CD5"><enum>(B)</enum><header>Specific authority</header><text>Except as prohibited in section 2(c)(2)(G)(iii), the Commission may also make, promulgate, and enforce such rules and regulations as, in the judgment of the Commission, are reasonably necessary to effectuate any of the provisions of, or to accomplish any of the purposes of, this Act in connection with an agreement referred to in subparagraph (A) of this paragraph.</text></subparagraph></paragraph></subsection> <subsection id="H1FE5C3D4C3EA40DF93979D5AD1329F8B"><enum>(d)</enum><header>Capital requirements</header> <paragraph id="HC9ECE2EC7F23437EA949FD5C08160787"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Each digital commodity broker and digital commodity dealer shall meet such minimum capital requirements as the Commission may prescribe to address the risks associated with digital commodity trading and to ensure that the digital commodity broker or digital commodity dealer, respectively, is able, at all times, to—</text> <subparagraph id="HAE146CD018E74145AFEEEB7CFCF52A93"><enum>(A)</enum><text display-inline="yes-display-inline">meet, and continue to meet the obligations of such a registrant; and</text></subparagraph> <subparagraph id="HBEF1A2A8A8A14DE78E77D1406FF8106B"><enum>(B)</enum><text>fulfill obligations to customers or counterparties for any margined, leveraged, or financed transactions.</text></subparagraph></paragraph> <paragraph id="H4B2A78E769A44CA98C2FA9A19AE4CF35" commented="no"><enum>(2)</enum><header>Futures commission merchants and other dealers</header><text>Each futures commission merchant, introducing broker, digital commodity broker, digital commodity dealer, broker, and dealer shall maintain sufficient capital to comply with the stricter of any applicable capital requirements to which the futures commission merchant, introducing broker, digital commodity broker, digital commodity dealer, broker, or dealer, respectively, is subject under this Act or the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78a">15 U.S.C. 78a et seq.</external-xref>).</text></paragraph></subsection> <subsection id="H16D71BADC3124761BF403AD1E98131A4"><enum>(e)</enum><header>Reporting and recordkeeping</header><text>Each digital commodity broker and digital commodity dealer—</text> <paragraph id="H5698DB4D221F482483CAABF1DE0F1610"><enum>(1)</enum><text>shall make such reports as are required by the Commission by rule or regulation regarding the transactions, positions, and financial condition of the digital commodity broker or digital commodity dealer, respectively;</text></paragraph> <paragraph id="H5286E8780CB84001A294F701B599B591"><enum>(2)</enum><text>shall keep books and records in such form and manner and for such period as may be prescribed by the Commission by rule or regulation; and</text></paragraph> <paragraph id="HBD44A321DEE843E2B81E264D218D7648"><enum>(3)</enum><text>shall keep the books and records open to inspection and examination by any representative of the Commission.</text></paragraph></subsection> <subsection id="HE8FA9B246E024CBABBEA2DC14D372497"><enum>(f)</enum><header>Daily trading records</header> <paragraph id="HE08784088A9440E095BC482EE59229CD"><enum>(1)</enum><header>In general</header><text>Each digital commodity broker and digital commodity dealer shall maintain daily trading records of the transactions of the digital commodity broker or digital commodity dealer, respectively, and all related records (including related forward or derivatives transactions) and recorded communications, including electronic mail, instant messages, and recordings of telephone calls, for such period as the Commission may require by rule or regulation.</text></paragraph> <paragraph id="HE2A1D42BA98946F1BB6DD244AC4818D2"><enum>(2)</enum><header>Information requirements</header><text>The daily trading records shall include such information as the Commission shall require by rule or regulation.</text></paragraph> <paragraph id="H81506431E3044CE1A884F31CB376B0BC"><enum>(3)</enum><header>Counterparty records</header><text>Each digital commodity broker and digital commodity dealer shall maintain daily trading records for each customer or counterparty in a manner and form that is identifiable with each digital commodity transaction.</text></paragraph> <paragraph id="HBF56E293E08A4E3DA0D85B36AE01F4DB"><enum>(4)</enum><header>Audit trail</header><text>Each digital commodity broker and digital commodity dealer shall maintain a complete audit trail for conducting comprehensive and accurate trade reconstructions.</text></paragraph></subsection> <subsection id="H1BC1ACF4F030470B8EC124BF078C6512"><enum>(g)</enum><header>Business conduct standards</header> <paragraph id="H980E4F2C1CA944ECBCDF7CC5BAA8B3DC"><enum>(1)</enum><header>In general</header><text>Each digital commodity broker and digital commodity dealer shall conform with such business conduct standards as the Commission, by rule or regulation, prescribes related to—</text> <subparagraph id="H097D8ADF1ADB4993AA8E76CF178FF59C"><enum>(A)</enum><text>fraud, manipulation, and other abusive practices involving spot or margined, leveraged, or financed digital commodity transactions (including transactions that are offered but not entered into);</text></subparagraph> <subparagraph id="H6694D13B346244EB9D28DD5C30869582"><enum>(B)</enum><text>diligent supervision of the business of the registered digital commodity broker or digital commodity dealer, respectively; and</text></subparagraph> <subparagraph id="HD0B985BD74144E8AA69AF111656C412B"><enum>(C)</enum><text>such other matters as the Commission deems appropriate.</text></subparagraph></paragraph> <paragraph id="HA983826A410E44F59FDF5C033B2EC8C2"><enum>(2)</enum><header>Business conduct requirements</header><text>The Commission shall, by rule, prescribe business conduct requirements which—</text> <subparagraph id="H61623A16C86046B18E54C0B924249846"><enum>(A)</enum><text>require disclosure by a registered digital commodity broker and registered digital commodity dealer to any counterparty to the transaction (other than an eligible contract participant) of—</text> <clause id="HFE4301EDAC24430A8B49E64FB6967D49"><enum>(i)</enum><text>information about the material risks and characteristics of the digital commodity; and</text></clause> <clause id="H3DB55AEA3E834E5BAF912AC23E9FB6E5"><enum>(ii)</enum><text>information about the material risks and characteristics of the transaction;</text></clause></subparagraph> <subparagraph id="HCE367769069B443ABE9A48B338EE670F"><enum>(B)</enum><text>establish a duty for such a digital commodity broker and such a digital commodity dealer to communicate in a fair and balanced manner based on principles of fair dealing and good faith;</text></subparagraph> <subparagraph id="H63C7F513B1234518B9914F74C3D049D1"><enum>(C)</enum><text display-inline="yes-display-inline">establish standards governing digital commodity broker and digital commodity dealer marketing and advertising, including testimonials and endorsements; and</text></subparagraph> <subparagraph id="H488764BD1F124B06AC6854AEBF59B7D1"><enum>(D)</enum><text display-inline="yes-display-inline">establish such other standards and requirements as the Commission may determine are appropriate for the protection of customers.</text></subparagraph></paragraph> <paragraph id="H713BB47693294424A15C71E7F9BB5933"><enum>(3)</enum><header>Prohibition on fraudulent practices</header><text>It shall be unlawful for a digital commodity broker or digital commodity dealer to—</text> <subparagraph id="H307A4F59F0CF4DBDAB94602AF549A09A"><enum>(A)</enum><text>employ any device, scheme, or artifice to defraud any customer or counterparty;</text></subparagraph> <subparagraph id="H15442DB368C3414BA7350A98718FC456"><enum>(B)</enum><text>engage in any transaction, practice, or course of business that operates as a fraud or deceit on any customer or counterparty; or</text></subparagraph> <subparagraph id="HCF7357ADA7554F35B621B05A99B76768"><enum>(C)</enum><text>engage in any act, practice, or course of business that is fraudulent, deceptive, or manipulative.</text></subparagraph></paragraph></subsection> <subsection id="H64C52AB878F6416DBAB3A82EA85A71DA"><enum>(h)</enum><header>Duties</header> <paragraph id="H254553C58BE9407AABCF4C7405A0F66F"><enum>(1)</enum><header>Risk management procedures</header><text>Each digital commodity broker and digital commodity dealer shall establish robust and professional risk management systems adequate for managing the day-to-day business of the digital commodity broker or digital commodity dealer, respectively.</text></paragraph> <paragraph id="HFC30E13C85CE4F648BBD0839E4107E89"><enum>(2)</enum><header>Disclosure of general information</header><text>Each digital commodity broker and digital commodity dealer shall disclose to the Commission information concerning—</text> <subparagraph id="HB8FFAF9090A142E1ACC075AE24107083"><enum>(A)</enum><text display-inline="yes-display-inline">the terms and conditions of the transactions of the digital commodity broker or digital commodity dealer, respectively;</text></subparagraph> <subparagraph id="H93A50BC5D8D84F67B8AEAB70ADD2BAD0"><enum>(B)</enum><text display-inline="yes-display-inline">the trading operations, mechanisms, and practices of the digital commodity broker or digital commodity dealer, respectively;</text></subparagraph> <subparagraph id="H71E23F165133462BB6B438E2A09A8E14"><enum>(C)</enum><text display-inline="yes-display-inline">financial integrity protections relating to the activities of the digital commodity broker or digital commodity dealer, respectively; and</text></subparagraph> <subparagraph id="HDD905CD9643D4D0E8D1CB2A9451E74D5"><enum>(D)</enum><text display-inline="yes-display-inline">other information relevant to trading in digital commodities by the digital commodity broker or digital commodity dealer, respectively.</text></subparagraph></paragraph> <paragraph id="HF95D6EA2BEA24D6888FDCBF3E824AD1C"><enum>(3)</enum><header>Ability to obtain information</header><text>Each digital commodity broker and digital commodity dealer shall—</text> <subparagraph id="H4A567C1FE0F145DBB1BF0EE3B52CF0DE"><enum>(A)</enum><text>establish and enforce internal systems and procedures to obtain any necessary information to perform any of the functions described in this section; and</text></subparagraph> <subparagraph id="HB5D0A42F258B4B13AD5554A3D9FE09A6"><enum>(B)</enum><text>provide the information to the Commission, on request.</text></subparagraph></paragraph> <paragraph id="H8CE01DE40AA64CFDB6CF96C722E1A776"><enum>(4)</enum><header>Conflicts of interest</header><text display-inline="yes-display-inline">Each digital commodity broker and digital commodity dealer shall establish, maintain, and enforce written policies and procedures reasonably designed, taking into consideration the nature of the business of the person, to mitigate any conflicts of interest in transactions or arrangements with affiliates.</text></paragraph> <paragraph id="HB3BB7BEFF5D649B2A9BD158FA846D435"><enum>(5)</enum><header>Antitrust considerations</header><text>Unless necessary or appropriate to achieve the purposes of this Act, a digital commodity broker or digital commodity dealer shall not—</text> <subparagraph id="HF857A886D3B741A1AE97A90B722E6EB6"><enum>(A)</enum><text>adopt any process or take any action that results in any unreasonable restraint of trade; or</text></subparagraph> <subparagraph id="H0B08FCEAA23F4D4BB2BAE3284AC8C8D4"><enum>(B)</enum><text>impose any material anticompetitive burden on trading or clearing.</text></subparagraph></paragraph></subsection> <subsection id="H34F71D46682041BA8D616722822DE876"><enum>(i)</enum><header>Designation of chief compliance officer</header> <paragraph id="H216E5B7FA48E4A13BA9C47638812F1D3"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Each digital commodity broker and digital commodity dealer shall designate an individual to serve as a chief compliance officer.</text></paragraph> <paragraph id="H3A45F3A834614C89AF30DF79D4C5486A"><enum>(2)</enum><header>Duties</header><text>The chief compliance officer shall—</text> <subparagraph id="HFF9C8146A033463F97FC76D90876BC55"><enum>(A)</enum><text>report directly to the board or to the senior officer of the registered digital commodity broker or registered digital commodity dealer;</text></subparagraph> <subparagraph id="H4BCEA2C7EC064543B908F6E6D9EA9838"><enum>(B)</enum><text>review the compliance of the registered digital commodity broker or registered digital commodity dealer with respect to the registered digital commodity broker and registered digital commodity dealer requirements described in this section;</text></subparagraph> <subparagraph id="H007A7CDAA71645D78C2E1D023889C109"><enum>(C)</enum><text>in consultation with the board of directors, a body performing a function similar to the board, or the senior officer of the organization, resolve any conflicts of interest that may arise;</text></subparagraph> <subparagraph id="HFA3E270408CC4C368B09497C85AA8017"><enum>(D)</enum><text>be responsible for administering each policy and procedure that is required to be established pursuant to this section;</text></subparagraph> <subparagraph id="H037F7D85D0AF433E94EA51CC0B1BF4C6"><enum>(E)</enum><text>ensure compliance with this Act (including regulations), including each rule prescribed by the Commission under this section;</text></subparagraph> <subparagraph id="HDF56DAC4DE474C3E9DBB135E73409ADB"><enum>(F)</enum><text>establish procedures for the remediation of noncompliance issues identified by the chief compliance officer through any—</text> <clause id="HDE0CF45E3B294C30ADB53E088F89FE41"><enum>(i)</enum><text>compliance office review;</text></clause> <clause id="HA648F441E4554DDAA24F91D45C290659"><enum>(ii)</enum><text>look-back;</text></clause> <clause id="H450323304F2543D39BFD81BFEDC10913"><enum>(iii)</enum><text>internal or external audit finding;</text></clause> <clause id="H805AE7F930FE45DF983FE07BD182F83E"><enum>(iv)</enum><text>self-reported error; or</text></clause> <clause id="H316C74CB178C48388A9EDA866ECB07D9"><enum>(v)</enum><text>validated complaint; and</text></clause></subparagraph> <subparagraph id="H8EAA178E36AB4FBCA9FA580AFE13BDC2"><enum>(G)</enum><text>establish and follow appropriate procedures for the handling, management response, remediation, retesting, and closing of noncompliance issues.</text></subparagraph></paragraph> <paragraph id="HE196D9E512194482A682D30F05842EDE"><enum>(3)</enum><header>Annual reports</header> <subparagraph id="HCFC2DEF5CBDD46D89C3A7D9E19F67AF3"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">In accordance with rules prescribed by the Commission, the chief compliance officer shall annually prepare and sign a report that contains a description of—</text> <clause id="H7BFD220AD8344EA3B8DD1EC646A3737C"><enum>(i)</enum><text>the compliance of the registered digital commodity broker or registered digital commodity dealer with this Act (including regulations); and</text></clause> <clause id="H4C70B3C7AFE1427588DCF65729741661"><enum>(ii)</enum><text>each policy and procedure of the registered digital commodity broker or registered digital commodity dealer followed by the chief compliance officer (including the code of ethics and conflict of interest policies).</text></clause></subparagraph> <subparagraph id="H4BDE0EE1F975403B8831F535C2A98CF3"><enum>(B)</enum><header>Requirements</header><text>The chief compliance officer shall ensure that a compliance report under subparagraph (A)—</text> <clause id="H6ED81C64A4924619869B0667F3555D26"><enum>(i)</enum><text>accompanies each appropriate financial report of the registered digital commodity broker or registered digital commodity dealer that is required to be furnished to the Commission pursuant to this section; and</text></clause> <clause id="H83263A8B4BE14277A7089739D97D307D"><enum>(ii)</enum><text>includes a certification that, under penalty of law, the compliance report is accurate and complete.</text></clause></subparagraph></paragraph></subsection> <subsection id="HE3578192DE694A37A0165B5963EC355F"><enum>(j)</enum><header>Segregation of digital commodities</header> <paragraph id="HBA228C88584A446B9CF24B72FCCB1AC8"><enum>(1)</enum><header>Holding of customer assets</header> <subparagraph id="H9D4B8A306CD441C2B945D24BAE912DC6"><enum>(A)</enum><header>In general</header><text>Each digital commodity broker and digital commodity dealer shall hold customer money, assets, and property in a manner to minimize the risk of loss to the customer or unreasonable delay in customer access to the money, assets, and property of the customer.</text></subparagraph> <subparagraph id="HB7F530CC3668457EB5A80480C521BBA7"><enum>(B)</enum><header>Qualified digital asset custodian</header><text>Each digital commodity broker and digital commodity dealer shall hold in a qualified digital asset custodian each unit of a digital asset that is—</text> <clause id="HFDB4A4D115B044B0AFAAF8B0EC93926C"><enum>(i)</enum><text>the property of a customer or counterparty of the digital commodity broker or digital commodity dealer, respectively;</text></clause> <clause id="HDF6E9AA9410442F3B8222AA201A6DFAC"><enum>(ii)</enum><text display-inline="yes-display-inline">required to be held by the digital commodity broker or digital commodity dealer under subsection (e); or</text></clause> <clause id="H689852B53E2646B5A97AD3DA895C4BF0"><enum>(iii)</enum><text>otherwise so required by the Commission to reasonably protect customers or promote the public interest.</text></clause></subparagraph></paragraph> <paragraph id="H326A22D5FFF846FAA08D603C4C89A648"><enum>(2)</enum><header>Segregation of funds</header> <subparagraph id="HA46F205142654859BA7A7FE2526C3644"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">Each digital commodity broker and digital commodity dealer shall treat and deal with all money, assets, and property that is received by the digital commodity broker or digital commodity dealer, or accrues to a customer as the result of trading in digital commodities, as belonging to the customer.</text></subparagraph> <subparagraph id="H465C0CCDA1154B6EA82B74094ED54CEC"><enum>(B)</enum><header>Commingling prohibited</header> <clause id="H2339D190818C4CC8AF1C401BFEE422A1"><enum>(i)</enum><header>In general</header><text>Except as provided in clause (ii), each digital commodity broker and digital commodity dealer shall separately account for money, assets, and property of a digital commodity customer, and shall not commingle any such money, assets, or property with the funds of the digital commodity broker or digital commodity dealer, respectively, or use any such money, assets, or property to margin, secure, or guarantee any trades or accounts of any customer or person other than the person for whom the money, assets, or property are held.</text></clause> <clause id="HE80B8CA019D448E4AA39F0E8BD7A2417"><enum>(ii)</enum><header>Exceptions</header> <subclause id="HC5709606CCA94372840EADA5FA487FB7"><enum>(I)</enum><header>Use of funds</header> <item id="H947CC2BBEADF4CFD958A0DEE966D00EE"><enum>(aa)</enum><header>In general</header><text display-inline="yes-display-inline">A digital commodity broker or digital commodity dealer may, for convenience, commingle and deposit in the same account or accounts with any bank, trust company, derivatives clearing organization, or qualified digital asset custodian money, assets, and property of customers.</text></item> <item id="HD01BC1F7616B4AA29BC7E7C42AAB2608"><enum>(bb)</enum><header>Withdrawal</header><text>The share of the money, assets, and property described in item (aa) as in the normal course of business shall be necessary to margin, guarantee, secure, transfer, adjust, or settle a contract of sale of a digital commodity with a registered entity may be withdrawn and applied to such purposes, including the payment of commissions, brokerage, interest, taxes, storage, and other charges, lawfully accruing in connection with the contract.</text></item></subclause> <subclause id="H4A882F3875AD40659C4B2209E5C2C06E"><enum>(II)</enum><header>Commission action</header><text>In accordance with such terms and conditions as the Commission may prescribe by rule, regulation, or order, any money, assets, or property of the customers of a digital commodity broker or digital commodity dealer may be commingled and deposited in customer accounts with any other money, assets, or property received by the digital commodity broker or digital commodity dealer, respectively, and required by the Commission to be separately accounted for and treated and dealt with as belonging to the customer of the digital commodity broker or digital commodity dealer, respectively.</text></subclause></clause></subparagraph></paragraph> <paragraph id="H59445FAE89D0458581419EB5FEA610D5"><enum>(3)</enum><header>Permitted investments</header><text>Money described in paragraph (2) may be invested in obligations of the United States, in general obligations of any State or of any political subdivision of a State, in obligations fully guaranteed as to principal and interest by the United States, or in any other investment that the Commission may by rule or regulation allow.</text></paragraph> <paragraph id="H5C3B7978E3AA494BB8C3D5B6315820F1" commented="no"><enum>(4)</enum><header>Customer protection during bankruptcy</header> <subparagraph id="H38929B6889FE4A2D8C1FBE13249058C9" commented="no"><enum>(A)</enum><header>Customer property</header><text>All money, assets, or property described in paragraph (2) shall be considered customer property for purposes of section 761 of title 11, United States Code.</text></subparagraph> <subparagraph id="HF906A2DCC853499692C26B6050352646" commented="no"><enum>(B)</enum><header>Transactions</header><text display-inline="yes-display-inline">A transaction involving a unit of a digital commodity occurring with a digital commodity broker or digital commodity dealer shall be considered a contract for the purchase or sale of a commodity for future delivery, on or subject to the rules of, a contract market or board of trade for purposes of the definition of a <quote>commodity contract</quote> in section 761 of title 11, United States Code.</text></subparagraph> <subparagraph id="HD6ECFC5CCC274A438D6E2FB883237C90" commented="no"><enum>(C)</enum><header>Brokers and dealers</header><text>A digital commodity broker and a digital commodity dealer shall be considered a futures commission merchant for purposes of section 761 of title 11, United States Code.</text></subparagraph> <subparagraph id="H2F0621A17DA947E58336E6BE50CA6BCE" commented="no"><enum>(D)</enum><header>Assets removed from segregation</header><text>Assets removed from segregation due to a customer election under paragraph (6) shall not be considered customer property for purposes of section 761 of title 11, United States Code.</text></subparagraph></paragraph> <paragraph id="H9E3173923F994F2C8047DF4E797976DD"><enum>(5)</enum><header>Misuse of customer property</header> <subparagraph id="H42C60869A2F94D0DB8C87D6FB790321A"><enum>(A)</enum><header>In general</header><text>It shall be unlawful—</text> <clause id="H7DBBD672B0AA43E1B4FC15FB8BEB041C"><enum>(i)</enum><text display-inline="yes-display-inline">for any digital commodity broker or digital commodity dealer that has received any customer money, assets, or property for custody to dispose of, or use any such money, assets, or property as belonging to the digital commodity broker or digital commodity dealer, respectively, or any person other than a customer of the digital commodity broker or digital commodity dealer, respectively; or</text></clause> <clause id="HC4637FA62C4B4682855FB9CFD71538C3"><enum>(ii)</enum><text>for any other person, including any depository, digital commodity exchange, other digital commodity broker, other digital commodity dealer, or digital commodity custodian that has received any customer money, assets, or property for deposit, to hold, dispose of, or use any such money, assets, or property, as belonging to the depositing digital commodity broker or digital commodity dealer or any person other than the customers of the digital commodity broker or digital commodity dealer, respectively.</text></clause></subparagraph> <subparagraph id="HC03CE518A23943E09C8F694F5636FC25"><enum>(B)</enum><header>Use further defined</header><text>For purposes of this section, <quote>use</quote> of a digital commodity includes utilizing any unit of a digital asset to participate in a blockchain service defined in paragraph (6) or a decentralized governance system associated with the digital commodity or the blockchain system to which the digital commodity relates in any manner other than that expressly directed by the customer from whom the unit of a digital commodity was received.</text></subparagraph></paragraph> <paragraph id="H03566B2C94CD45FCA3CEC1D8E91F881A"><enum>(6)</enum><header>Participation in blockchain services</header> <subparagraph id="H3A1914ACF06B4C07A275CAD439AA7376"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">A customer shall have the right to waive the restrictions in paragraph (2) for any unit of a digital commodity to be used under subparagraph (B) of this paragraph, by affirmatively electing, in writing to the digital commodity broker or digital commodity dealer, to waive the restrictions.</text></subparagraph> <subparagraph id="HAC457DE6CDA245AC9562EE6316581120"><enum>(B)</enum><header>Use of funds</header><text>Customer digital commodities removed from segregation under subparagraph (A) may be pooled and used by the digital commodity broker or digital commodity dealer, or one of their designees, to provide a blockchain service for a blockchain system to which the unit of the digital asset removed from segregation in subparagraph (A) relates.</text></subparagraph> <subparagraph id="H719A6FF1645446D2AD04381DBF5BA188"><enum>(C)</enum><header>Limitations</header> <clause id="H22171C532DF849FE88588280884C94CB"><enum>(i)</enum><header>In general</header><text>The Commission shall, by rule, establish notice and disclosure requirements, and may, by rule, establish any other limitations and rules related to the waiving of any restrictions under this paragraph that are reasonably necessary to protect customers, including eligible contract participants, non-eligible contract participants, or any other class of customers.</text></clause> <clause id="H8D914E0B08234FEABFEA21A6B98A3445"><enum>(ii)</enum><header>Customer choice</header><text display-inline="yes-display-inline">A digital commodity broker or digital commodity dealer may not require a waiver from a customer described in subparagraph (A) as a condition of doing business with the broker or dealer.</text></clause></subparagraph> <subparagraph id="HE89F57308FD1498ABEA4931D972DA417"><enum>(D)</enum><header>Blockchain service defined</header><text>In this paragraph, the term <term>blockchain service</term> means any activity relating to validating transactions on a blockchain system, providing security for a blockchain system, or other similar activity required for the ongoing operation of a blockchain system.</text></subparagraph></paragraph></subsection> <subsection id="H3E3658E15A8C4B1D8025CA9A2A3C02D9"><enum>(k)</enum><header>Federal preemption</header><text display-inline="yes-display-inline">Notwithstanding any other provision of law, the Commission shall have exclusive jurisdiction over any digital commodity broker or digital commodity dealer registered under this section with respect to activities subject to this Act.</text></subsection> <subsection id="H1315E23218A2402EBD4E98DB2C6F53DE"><enum>(l)</enum><header>Exemptions</header><text display-inline="yes-display-inline">In order to promote responsible innovation and fair competition, or protect customers, the Commission may (on its own initiative or on application of the registered digital commodity broker or registered digital commodity dealer) exempt, unconditionally or on stated terms or conditions, or for stated periods, and retroactively or prospectively, or both, a registered digital commodity broker or registered digital commodity dealer from the requirements of this section, if the Commission determines that—</text> <paragraph id="H7F6402C253584E99B25EACCDEEC879CC"><enum>(1)</enum> <subparagraph commented="no" display-inline="yes-display-inline" id="H389063E97F0D41F79CF4AB7410763815"><enum>(A)</enum><text>the exemption would be consistent with the public interest and the purposes of this Act; and</text></subparagraph> <subparagraph id="HF17BF4ABE8DB4AE0A5620F2810EEB57B" indent="up1"><enum>(B)</enum><text>the exemption will not have a material adverse effect on the ability of the Commission to discharge regulatory duties under this Act; or</text></subparagraph></paragraph> <paragraph id="H1BBBF627DD704FFC99BB145C9B6258AF"><enum>(2)</enum><text display-inline="yes-display-inline">the registered digital commodity broker or registered digital commodity dealer is subject to comparable, comprehensive supervision and regulation by the appropriate government authorities in the home country of the registered digital commodity broker or registered digital commodity dealer, respectively.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H123E7C85BCFB43068A2BD9837BF74BB0"><enum>407.</enum><header>Registration of associated persons</header> <subsection id="H59ADC603B88541C2BF8F829F12E00BFA"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 4k of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/6k">7 U.S.C. 6k</external-xref>) is amended—</text> <paragraph id="H1FF1B7B362E04A6998151A2366D96943"><enum>(1)</enum><text>by redesignating subsections (4) through (6) as subsections (5) through (7), respectively;</text></paragraph> <paragraph id="H4FF7FE2DF0DF445F95A03DBA17C35482"><enum>(2)</enum><text>by inserting after subsection (3) the following:</text> <quoted-block style="OLC" id="H8910B77120B640C6913840F2E659C754" display-inline="no-display-inline"> <subsection id="H53408415CCCD43EFB4171576978BC7D5"><enum>(4)</enum><text display-inline="yes-display-inline">It shall be unlawful for any person to act as an associated person of a digital commodity broker or an associated person of a digital commodity dealer unless the person is registered with the Commission under this Act and such registration shall not have expired, been suspended (and the period of suspension has not expired), or been revoked. It shall be unlawful for a digital commodity broker or a digital commodity dealer to permit such a person to become or remain associated with the digital commodity broker or digital commodity dealer if the digital commodity broker or digital commodity dealer knew or should have known that the person was not so registered or that the registration had expired, been suspended (and the period of suspension has not expired), or been revoked.</text></subsection><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph> <paragraph id="HE4A035C0473A4753952165C72F352A7A"><enum>(3)</enum><text>in subsection (5) (as so redesignated), by striking <quote>or of a commodity trading advisor</quote> and inserting <quote>of a commodity trading advisor, of a digital commodity broker, or of a digital commodity dealer</quote>.</text></paragraph></subsection> <subsection id="HF188952284C64836B02F98AB7E00A9EB"><enum>(b)</enum><header>Conforming amendments</header><text display-inline="yes-display-inline">The Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1a">7 U.S.C. 1a et seq.</external-xref>) is amended by striking <quote>section 4k(6)</quote> each place it appears and inserting <quote>section 4k(7)</quote>.</text></subsection></section> <section id="H9906FBD84A8641F19C9439E7696232E0"><enum>408.</enum><header>Registration of commodity pool operators and commodity trading advisors</header> <subsection id="HEB159805D5B744C2B5F9C96FFBCDA019"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 4m(3) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/6m">7 U.S.C. 6m(3)</external-xref>) is amended—</text> <paragraph id="H729408007BE849028B932912156E8FF1"><enum>(1)</enum><text display-inline="yes-display-inline">in subparagraph (A)—</text> <subparagraph id="HFAFDEE220F0941A5BA470F2951203321"><enum>(A)</enum><text>by striking <quote>any commodity trading advisor</quote> and inserting <quote>a commodity pool operator or commodity trading advisor</quote>; and</text></subparagraph> <subparagraph id="HDA2EEDC4FB5E45C9BDD188C8328406B6"><enum>(B)</enum><text>by striking <quote>acting as a commodity trading advisor</quote> and inserting <quote>acting as a commodity pool operator or commodity trading advisor</quote>; and</text></subparagraph></paragraph> <paragraph id="H3748C8384D014BE6BBA41FF8D2A4A263"><enum>(2)</enum><text>in subparagraph (C), by inserting <quote>digital commodities,</quote> after <quote>physical commodities,</quote>.</text></paragraph></subsection> <subsection id="HF0B9548AF8F54451B12FB2A1E5D2C4FC"><enum>(b)</enum><header>Exemptive authority</header><text display-inline="yes-display-inline">Section 4m of such Act (<external-xref legal-doc="usc" parsable-cite="usc/7/6m">7 U.S.C. 6m</external-xref>) is amended by adding at the end the following:</text> <quoted-block style="OLC" id="H0911476264854D12BAAB738FC00AB317" display-inline="no-display-inline"> <subsection id="H2E426B232DF44F89B76043D88AAD8220"><enum>(4)</enum><header>Exemptive authority</header><text display-inline="yes-display-inline">The Commission shall promulgate rules to provide appropriate exemptions for commodity pool operators and commodity trading advisors, to provide relief from duplicative, conflicting, or unduly burdensome requirements or to promote responsible innovation, to the extent the exemptions foster the development of fair and orderly cash or spot digital commodity markets, are necessary or appropriate in the public interest, and are consistent with the protection of customers.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> <section id="H6774F708ADC84FEC8E0303B60846ECBE"><enum>409.</enum><header>Exclusion for decentralized finance activities</header><text display-inline="no-display-inline">The Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1">7 U.S.C. 1 et seq.</external-xref>), as amended by the preceding provisions of this Act, is amended by inserting after section 4u the following:</text> <quoted-block style="OLC" id="HB0EC862B213E40CCBE9BCEAF88B1D48C" display-inline="no-display-inline"> <section id="HFCFCE632D1C54A4C957A0021B4E8F17F"><enum>4v.</enum><header>Decentralized finance activities not subject to this Act</header> <subsection id="HC593465001D441A3A0FFE32E97E72CEC"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Notwithstanding any other provision of this Act, a person shall not be subject to this Act and the regulations promulgated under this Act based on the person directly or indirectly engaging in any of the following activities, whether singly or in combination, in relation to the operation of a blockchain system or in relation to decentralized finance trading protocol:</text> <paragraph id="H2FCBADD43B934692930E6826A931C3FD"><enum>(1)</enum><text>Compiling network transactions or relaying, searching, sequencing, validating, or acting in a similar capacity.</text></paragraph> <paragraph id="H98E004FA339B4DC7AE6C6F87BCE6FDFB"><enum>(2)</enum><text>Providing computational work, operating a node or oracle service, or procuring, offering, or utilizing network bandwidth, or other similar incidental services.</text></paragraph> <paragraph id="HC5E8BDD7E4D8413296508AD008341C1A"><enum>(3)</enum><text>Providing a user-interface that enables a user to read, and access data about a blockchain system.</text></paragraph> <paragraph id="H3544003D597444109BFBC0EFC0F8487F"><enum>(4)</enum><text display-inline="yes-display-inline">Developing, publishing, constituting, administering, maintaining, or otherwise distributing a blockchain system other than a decentralized finance trading protocol.</text></paragraph> <paragraph id="H68573DB1090043F2AF39FBF729484D73"><enum>(5)</enum><text display-inline="yes-display-inline">Developing, publishing, constituting, administering, maintaining, or otherwise distributing a decentralized finance messaging system or decentralized finance trading protocol, or operating or participating in a liquidity pool with respect thereto, for the purpose of executing a spot contract for the purchase or sale of a digital commodity.</text></paragraph> <paragraph id="H7D14CF3FC0324C3BAEC53D4589BFBF58"><enum>(6)</enum><text>Developing, publishing, constituting, administering, maintaining, or otherwise distributing software or systems that create or deploy hardware or software, including wallets or other systems, facilitating an individual user’s own personal ability to keep, safeguard, or custody the user’s digital assets or related private keys.</text></paragraph></subsection> <subsection id="HF211320BB9774046B9FCE30625371CA0"><enum>(b)</enum><header>Exceptions</header><text display-inline="yes-display-inline">Subsection (a) shall not be interpreted to apply to the anti-fraud, anti-manipulation, or false reporting enforcement authorities of the Commission.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H7D65F9998B4442E79B009496828B6224"><enum>410.</enum><header>Resources for implementation and enforcement</header> <subsection id="H1678BB3BAC914697952F069E06398878"><enum>(a)</enum><header>Collection of fees</header> <paragraph id="HA7C0A68F86544B2398B32B16AEDCCC29"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The Commodity Futures Trading Commission (in this section referred to as the <quote>Commission</quote>) shall charge and collect a fee from each person in provisional status registered with the Commission pursuant to section 106, on—</text> <subparagraph id="H63945E02840F461DB9CC4EA0838BAD8D"><enum>(A)</enum><text display-inline="yes-display-inline">the filing of the initial application for registration; and</text></subparagraph> <subparagraph id="HB9F56B5222294633A56E5F6705BF1846"><enum>(B)</enum><text>an annual basis thereafter for maintaining provisional status.</text></subparagraph></paragraph> <paragraph id="H89BBEEBC5E2345F98E17F118C0D5EF8C"><enum>(2)</enum><header>Amount</header><text>The fees authorized under paragraph (1) may be collected and available for obligation only in the amounts provided in advance in an appropriation Act.</text></paragraph> <paragraph id="HF0EC966C59D64310A8A46962FFC23515"><enum>(3)</enum><header>Authority to adjust fees</header><text>Notwithstanding the preceding provisions of this subsection, to promote fair competition or innovation, the Commission, in its sole discretion, may reduce or eliminate any fee otherwise required to be paid by a small or medium filer under this subsection.</text></paragraph></subsection> <subsection id="HFC7F2BB32F91448DBA205F93A2DA0847"><enum>(b)</enum><header>Fee schedule</header> <paragraph id="H17545F5565354474BD1514F12487D373"><enum>(1)</enum><header>In general</header><text>The Commission shall publish in the Federal Register a schedule of the fees to be charged and collected under this section.</text></paragraph> <paragraph id="H7A2F01FCD6DD41DA9336BBC824E67449"><enum>(2)</enum><header>Content</header><text>The fee schedule for a fiscal year shall include a written analysis of the estimate of the Commission of the total costs of carrying out the functions of the Commission under this Act during the fiscal year.</text></paragraph> <paragraph id="H41496E1BA63C41D6B1F680AFC663D011"><enum>(3)</enum><header>Submission to congress</header><text>Before publishing the fee schedule for a fiscal year, the Commission shall submit a copy of the fee schedule to the Committees on Agriculture and on Appropriations of the House of Representatives and the Committees on Agriculture, Nutrition, and Forestry and on Appropriations of the Senate.</text></paragraph> <paragraph id="H2770A9470EC24CFC9B41476C124CE60B"><enum>(4)</enum><header>Timing</header> <subparagraph id="H40A790391AE246B49A8C67AC8DAF1015"><enum>(A)</enum><header>1st fiscal year</header><text>The Commission shall publish the fee schedule for the fiscal year in which this Act is enacted, within 30 days after the date of the enactment of this Act.</text></subparagraph> <subparagraph id="HD131BD7CDCF344699777E8DA7BB489EA"><enum>(B)</enum><header>Subsequent fiscal years</header><text>The Commission shall publish the fee schedule for each subsequent fiscal year, not less than 90 days before the due date prescribed by the Commission for payment of the annual fee for the fiscal year.</text></subparagraph></paragraph></subsection> <subsection id="HA8A5ACFF940144F7AA1EF5AD9484B278"><enum>(c)</enum><header>Late payment penalty</header> <paragraph id="H6FBC1A741A974AB19168927FC7C19E9C"><enum>(1)</enum><header>In general</header><text>The Commission may impose a penalty against a person that fails to pay an annual fee charged under this section, within 30 days after the due date prescribed by the Commission for payment of the fee.</text></paragraph> <paragraph id="H4FBA45B76ABA4859BAC3FD76501957F7"><enum>(2)</enum><header>Amount</header><text>The amount of the penalty shall be—</text> <subparagraph id="H1ED2E0FC08A84AE489AEFD671EA6C4D5"><enum>(A)</enum><text>5 percent of the amount of the fee due, multiplied by</text></subparagraph> <subparagraph id="HBB3AC70C716C467EB03A98B2F2A0744B"><enum>(B)</enum><text>the whole number of consecutive 30-day periods that have elapsed since the due date.</text></subparagraph></paragraph></subsection> <subsection id="H7C95D596651D4050B0E89F02FC4F98CB"><enum>(d)</enum><header>Reimbursement of excess fees</header><text>To the extent that the total amount of fees collected under this section during a fiscal year that begins after the date of the enactment of this Act exceeds the amount provided under subsection (a)(2) with respect to the fiscal year, the Commission shall reimburse the excess amount to the persons who have timely paid their annual fees, on a pro-rata basis that excludes penalties, and shall do so within 60 days after the end of the fiscal year.</text></subsection> <subsection id="H4A5F13FCD8F54BAAB6F476BAC658BD58"><enum>(e)</enum><header>Deposit of fees into the Treasury</header><text>All amounts collected under this section shall be credited to the currently applicable appropriation, account, or fund of the Commission as discretionary offsetting collections, and shall be available for the purposes authorized in subsection (f) only to the extent and in the amounts provided in advance in appropriations Acts.</text></subsection> <subsection id="H7CE090B91BFD428F97604C03C19D39FC"><enum>(f)</enum><header>Authorization of appropriations</header><text>In addition to amounts otherwise authorized to be appropriated to the Commission, there is authorized to be appropriated to the Commission amounts collected under this section to cover the costs of carrying out the functions of the Commission under this Act.</text></subsection> <subsection id="H18D6260F9BE7439E8DD172369F55E4C9"><enum>(g)</enum><header>Expedited hiring authority</header> <paragraph id="H9C3F87A01991441F85157BC5B080035D"><enum>(1)</enum><header>Appointment authority</header><text>The Chairman, pursuant to section 6(a), may appoint individuals to a position described in paragraph (2) of this subsection—</text> <subparagraph id="H8B49643DC1394DFDB0A7FC5FF5EEAF29"><enum>(A)</enum><text>in accordance with the statutes, rules, and regulations governing appointments to positions in the excepted service (as defined in section 2103 of title 5, United States Code); and</text></subparagraph> <subparagraph id="H39136440C78B42BEA94786EA1E269928"><enum>(B)</enum><text>without regard to any statute, rule, or regulation governing appointments to positions in the competitive service (as defined in section 2102 of such title).</text></subparagraph></paragraph> <paragraph id="H2A5810DDD536479F924DCA7E962EA050"><enum>(2)</enum><header>Position described</header><text>A position referred to in subparagraph (1) is a position at the Commission that—</text> <subparagraph id="HE41FDE25D8274DC595D6F64E93631D88"><enum>(A)</enum><text>is in the competitive service (as defined in section 2102 of such title); and</text></subparagraph> <subparagraph id="H3C50DB3D8D4040168508E8085B64950F"><enum>(B)</enum><text>requires specialized knowledge of digital commodities markets, financial and capital market formation or regulation, financial market structures or surveillance, data collection or analysis, or information technology, cybersecurity, or system safeguards.</text></subparagraph></paragraph> <paragraph id="HD973B9FC857A4446B93ED14E4284808E"><enum>(3)</enum><header>Rule of construction</header><text>The appointment of a candidate to a position under this subsection shall not be considered to cause the position to be converted from the competitive service to the excepted service.</text></paragraph></subsection> <subsection id="H17E5BECED0474B16B1173E45388E5892"><enum>(h)</enum><header>Sunset</header><text>The authorities provided by this section shall expire at the end of the 4th fiscal year that begins after the date of the enactment of this Act.</text></subsection></section> <section id="HB882F3D3CAC74EE88D2E1E378DD529FF"><enum>411.</enum><header>Digital commodity activities by SEC-registered entities</header><text display-inline="no-display-inline">The Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1">7 U.S.C. 1 et seq.</external-xref>), as amended by the preceding provisions of this Act, is amended by inserting after section 5j the following:</text> <quoted-block style="OLC" id="HB69BF4B97B274F18AD71492F601AD7E3" display-inline="no-display-inline"> <section id="H44CAA0D18D9B4AC38B2742D0ACC3052B" commented="no"><enum>5k.</enum><header>Exemption for certain registered entities engaged in digital commodity activities</header> <subsection id="H983D8472457949AD9FD45CEC8818ED97" commented="no"><enum>(a)</enum><header>By alternative trading systems</header> <paragraph id="HA1D4D9F3ACF14A3FB95D88651B875459" commented="no"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">On receipt by the Commission from an alternative trading system of a written or electronic notice that contains such information as the Commission, by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors, the alternative trading system shall be exempt from registration as a digital commodity exchange pursuant to section 5i if—</text> <subparagraph id="H61176924B0214DB1B5BA440C06220EE1" commented="no"><enum>(A)</enum><text display-inline="yes-display-inline">the alternative trading system does not list any retail commodity transactions pursuant to section 2(c)(2)(D);</text></subparagraph> <subparagraph id="H130C0CCCA51B4E94A1BF47C8C087F720" commented="no"><enum>(B)</enum><text display-inline="yes-display-inline">the provider, or an affiliated person of the provider, of the alternative trading system is not otherwise registered under this Act;</text></subparagraph> <subparagraph id="HD15F0E6332904832BA82A835EF164BB6"><enum>(C)</enum><text display-inline="yes-display-inline">the alternative trading system lists or trades no other contracts of sale of commodities, except for digital commodities, currencies, and securities; and</text></subparagraph> <subparagraph id="HB5F1561462F34D0A81FF41F706B3DB14" commented="no"><enum>(D)</enum><text display-inline="yes-display-inline">the registration of the alternative trading system is not suspended pursuant to an order by the Securities and Exchange Commission.</text></subparagraph></paragraph> <paragraph id="H8C93FA31AC8043A2B0211DA0572751E6" commented="no"><enum>(2)</enum><header>Further requirements</header><text>An alternative trading system that provides notice to the Commission pursuant to paragraph (1) of this subsection shall be exempt from the requirements of section 5i to the extent that the alternative trading system—</text> <subparagraph id="H9BC9A12171B24698BB43D7B2D5B17D19"><enum>(A)</enum><text>is in compliance with requirements consistent with the requirements of section 5i and imposed on the alternative trading system by the Securities and Exchange Commission;</text></subparagraph> <subparagraph id="HF4E942BFD270455DBE0062AB476C1593"><enum>(B)</enum><text display-inline="yes-display-inline">annually files with the Commission, in a form and manner acceptable to the Commission, a notice that demonstrates compliance with this paragraph and contains any other information the Commission determines to be necessary or appropriate to perform the duties of the Commission under this Act; and</text></subparagraph> <subparagraph id="H569005C54212497595ADBB7E2A365856"><enum>(C)</enum><text display-inline="yes-display-inline">has total trading volume in digital commodities during any calendar quarter in either of its 2 most recently completed fiscal years that does not exceed the lesser of—</text> <clause id="H504DE4C80F5A49ADB28C26CB154C9CD3"><enum>(i)</enum><text>25 percent of the total trading volume for all transactions over the same period; or</text></clause> <clause id="H813D46868EE94E6EA97FA8CA19E37CC9"><enum>(ii)</enum><text>$50,000,000,000.</text></clause></subparagraph></paragraph> <paragraph id="HBE8E73430FF94D46997505061C03753C"><enum>(3)</enum><header>Enforcement</header><text display-inline="yes-display-inline">This subsection shall not be construed to limit any jurisdiction that the Commission may otherwise have under any other provision of this Act with respect to a contract of sale of a digital commodity or persons effecting contracts of sale of digital commodities.</text></paragraph></subsection> <subsection id="H73B930D6949F4FCF91DF85E68AA874ED" commented="no"><enum>(b)</enum><header>By registered intermediaries</header> <paragraph id="HDC189287E126487A809EFDB7CEEDDC36" commented="no"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">On receipt by the Commission, from a broker or dealer that is registered with the Securities and Exchange Commission, of a written or electronic notice that contains such information as the Commission, by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors, the broker or dealer shall be exempt from registration as a digital commodity broker or digital commodity dealer pursuant to section 4u of this Act if—</text> <subparagraph id="H320910B6F7B44122AD99661D809DB5FE" commented="no"><enum>(A)</enum><text display-inline="yes-display-inline">the broker or dealer does not offer or engage in any retail commodity transactions pursuant to section 2(c)(2)(D) of this Act;</text></subparagraph> <subparagraph id="HA3A1363BB5174A61A80BCC648D76EDAC"><enum>(B)</enum><text display-inline="yes-display-inline">the broker or dealer, or an affiliated person of the broker or dealer, is not otherwise registered under this Act;</text></subparagraph> <subparagraph id="H855EDE392EF84B55A8ABE678E8E725E8"><enum>(C)</enum><text display-inline="yes-display-inline">the broker or dealer does not offer or engage in any other contracts of sale of commodities, except for digital commodities, currencies, and securities;</text></subparagraph> <subparagraph id="H167F7F90358A4EC58884DB07674F451B" commented="no"><enum>(D)</enum><text display-inline="yes-display-inline">the broker or dealer is not subject to a statutory disqualification, as defined under section 3(a) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78c">15 U.S.C. 78c(a)</external-xref>); and</text></subparagraph> <subparagraph id="HE495CBB4652647EEB17DF0897F300AE2" commented="no"><enum>(E)</enum><text>the broker or dealer is a member of a national securities association registered pursuant to section 15A of the Securities Exchange Act of 1934.</text></subparagraph></paragraph> <paragraph id="H0FCF6CC8557B464A83ABD92330779153" commented="no"><enum>(2)</enum><header>Further requirements</header><text>A broker or dealer that provides notice to the Commission pursuant to paragraph (1) shall be exempt from the requirements of section 4u to the extent that the broker or dealer—</text> <subparagraph id="H9B021088D2E04A468614049F5CC0BF20"><enum>(A)</enum><text>is in compliance with requirements consistent with the requirements of section 4u and imposed on the broker or dealer by the Securities and Exchange Commission;</text></subparagraph> <subparagraph id="H68C982AA035F4603A8450A9088153D3E"><enum>(B)</enum><text display-inline="yes-display-inline">annually files with the Commission, in a form and manner acceptable to the Commission, a notice that demonstrates compliance with this subsection and contains any other information the Commission determines to be necessary or appropriate to perform the duties of the Commission under this Act; and</text></subparagraph> <subparagraph id="H403879F55DAC4090BD23E06E16B19068"><enum>(C)</enum><text display-inline="yes-display-inline">has consolidated annual gross financial revenues in either of its 2 most recently completed fiscal years from sales, commissions or other activities in digital commodities that do not exceed the lesser of—</text> <clause id="H7983A0353DC745C1934597A3648A9833"><enum>(i)</enum><text>10 percent of the total annual gross revenues during the same period; or</text></clause> <clause id="H5E0117B2E7BB40269C4E1579D9A03A31"><enum>(ii)</enum><text>$100,000,000.</text></clause></subparagraph></paragraph> <paragraph id="H59BB7D01283C41B68412D173D3F7A42E"><enum>(3)</enum><header>Enforcement</header><text display-inline="yes-display-inline">This subsection shall not be construed to limit any jurisdiction that the Commission may otherwise have under any other provision of this Act with respect to a contract of sale of a digital commodity and persons effecting contracts of sale of digital commodities.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="HEA40026DE65B4AF2A8CB6B78F4AF73A7"><enum>412.</enum><header>Requirements related to control persons</header><text display-inline="no-display-inline">The Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1">7 U.S.C. 1 et seq.</external-xref>), as amended the preceding provisions of this Act, is amended by inserting after section 4v the following:</text> <quoted-block style="OLC" id="H1B2086E9BBA84EDC9BB510D49C3FA429" display-inline="no-display-inline"> <section id="H4DF8E648573E46F083136DFE0123FD49"><enum>4w.</enum><header>Limitation on transactions by blockchain control persons</header> <subsection id="H9D3F8434C6364EA78EDE9F6B9198B8AA"><enum>(a)</enum><header>Limitation</header><text display-inline="yes-display-inline">It shall be unlawful for a blockchain control person with respect to a blockchain system certified as a mature blockchain system in accordance with section 42 of the Securities Exchange Act of 1934 to sell a unit of a digital commodity related to the blockchain system unless the person files notice with the Commission, in a form and manner determined by the Commission, that the person has or intends to obtain an authority described in subsection (b)(1) with respect to the blockchain system, and complies with rules adopted by the Commission that require—</text> <paragraph id="H1D909CD324E843AC83E762422D9C8374"><enum>(1)</enum><text>disclosure of information to the Commission and the public about the material activities, as determined by the Commission, of the blockchain control person; and</text></paragraph> <paragraph id="HA6EDF67026E3411986A4C18D585767D3"><enum>(2)</enum> <subparagraph commented="no" display-inline="yes-display-inline" id="HF86029237EE64BCA83C8B54F72BA3030"><enum>(A)</enum><text>the use of a digital commodity broker to effect the sale; or</text></subparagraph> <subparagraph id="HCBE56870140D4AEE9B2EFC0BA2083F3E" indent="up1"><enum>(B)</enum><text>such other sales restrictions applicable to the blockchain control person, or any affiliated blockchain control person, to prevent manipulation and distortion of the value of the digital commodity and promote further maturity of the blockchain system to which the digital commodity relates.</text></subparagraph></paragraph></subsection> <subsection id="HC07F9F52494C4406A882009D2E0E050C"><enum>(b)</enum><header>Definitions</header><text>In this section:</text> <paragraph id="H3DD66E981A764615B01F03FC1CA6408E"><enum>(1)</enum><header>Blockchain control person</header><text>The term <term>blockchain control person</term> means, with respect to a blockchain system, any person or group of persons under common control, other than a decentralized governance system, who—</text> <subparagraph id="H9E301AE447724330BB5BDB80A266C6A5"><enum>(A)</enum><text>has the unilateral authority, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, to control or materially alter the functionality, operation, or rules of consensus or agreement of the blockchain system or its related digital commodity; or</text></subparagraph> <subparagraph id="H5B07A2CF4B4543AF9532DA033C53AB19"><enum>(B)</enum><text>has the unilateral authority to direct the voting, in the aggregate, of 20 percent or more of the outstanding voting power of the blockchain system by means of a related digital commodity, nodes or validators, a decentralized governance system, or otherwise, in a blockchain system which can be altered by a voting system.</text></subparagraph></paragraph> <paragraph id="H9E0F997FAF6E464ABB1BE262D05BC66D"><enum>(2)</enum><header>Affiliated blockchain control person</header><text>The term <term>affiliated blockchain control person</term> means any person directly or indirectly controlling, controlled by, or under common control with a blockchain control person, as the Commission by rule or regulation, may determine will effectuate the purposes of this section.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="HE578705922B34403896322FA95A68F51" commented="no"><enum>413.</enum><header>Other tradable assets</header><text display-inline="no-display-inline">The Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1">7 U.S.C. 1 et seq.</external-xref>), as amended by the preceding provisions of this Act, is amended by inserting after section 4w the following:</text> <quoted-block style="OLC" id="H0BD84758246645358165CF86760EDD1A" display-inline="no-display-inline"> <section id="H8CD4B427AB8149BA87A1957DC8BC8BF0" commented="no"><enum>4x.</enum><header>Trading requirements for other tradable assets</header> <subsection id="H9AC883D3BC774A98974D0B4B1AF2ECBA" commented="no"><enum>(a)</enum><header>Limitation</header><text display-inline="yes-display-inline">A tradable asset shall not be offered, solicited, traded, facilitated, executed, cleared, reported, or otherwise dealt in, on or subject to the rules of a registered entity, or by any other entity registered with the Commission, except in accordance with subsection (b).</text></subsection> <subsection id="HF7D329F78CB4467FBD084B901C76D947" commented="no"><enum>(b)</enum><header>Requirements</header> <paragraph id="H10551E646B71433CBF744A6275FD4FF3" commented="no"><enum>(1)</enum><header>Treatment of tradable assets</header><text>A tradable asset that is offered, solicited, traded, facilitated, executed, cleared, reported, or otherwise dealt in on or subject to the rules of a registered entity, or by any other entity registered with the Commission, shall be treated as a digital commodity for purposes of this Act.</text></paragraph> <paragraph id="H55DDF63B996241AA8D8234116FC8E833" commented="no"><enum>(2)</enum><header>Additional rulemaking authority</header><text>In addition to the other requirements of this Act, the Commission may, by rule or regulation, impose additional obligations on any person registered under this Act offering, soliciting, trading, facilitating, executing, clearing, reporting, or otherwise dealing in a tradable asset, or class thereof, pursuant to paragraph (1) as are necessary for the protection of customers, the promotion of innovation, and the maintenance of fair, orderly, and efficient markets, including additional obligations related to—</text> <subparagraph id="H8744EA0BA465435CBC762E25219E3A7D" commented="no"><enum>(A)</enum><text>disclosure;</text></subparagraph> <subparagraph id="H3AC7EE4ADB7F40D093D64618D2FA008F" commented="no"><enum>(B)</enum><text>recordkeeping;</text></subparagraph> <subparagraph id="HB1C47FFC96C34628BE41B1D1074F4D73" commented="no"><enum>(C)</enum><text>capital;</text></subparagraph> <subparagraph id="H6230223C183643D1B0E1A93F38637FBD" commented="no"><enum>(D)</enum><text>reporting;</text></subparagraph> <subparagraph id="H51C6090F24034007B43F8246603D3B05" commented="no"><enum>(E)</enum><text>business conduct;</text></subparagraph> <subparagraph id="H527F1C611E414794B820576E4DDB0E80" commented="no"><enum>(F)</enum><text>documentation;</text></subparagraph> <subparagraph id="H19F084552EBD4393B5A629A2B4F74446" commented="no"><enum>(G)</enum><text>supervision of employees; and</text></subparagraph> <subparagraph id="HC667B7773A454B53A73DE8305C7ED3E1" commented="no"><enum>(H)</enum><text>segregation.</text></subparagraph></paragraph> <paragraph id="H1019A8787CD243F28318304564F78579" commented="no"><enum>(3)</enum><header>Prohibition on trading</header><text>A tradable asset, the primary purpose of which is to be used to commit fraud or market manipulation, or engage in any other conduct that would result in abusive practices or be disruptive to market integrity, shall not be offered, solicited, traded, facilitated, executed, cleared, reported, or otherwise dealt in on or subject to the rules of a registered entity, or by any other entity registered with the Commission.</text></paragraph></subsection> <subsection id="H11A74FB9D8524D2DAD44C9E20D984A51" commented="no"><enum>(c)</enum><header>Tradable asset defined</header><text>In this section, the term <quote>tradable asset</quote> means a digital asset other than—</text> <paragraph id="HCB0EDA2330E54457B446DE0D6A089E5B" commented="no"><enum>(1)</enum><text>a digital commodity that is treated as such other than by reason of subsection (b)(1) of this section; or</text></paragraph> <paragraph id="H56D212664B7D42D3A168A00CBB7DFAFA" commented="no"><enum>(2)</enum><text>a digital asset excluded from the definition of digital commodity pursuant to subclause (I) through (VII) of section 1a(16)(F)(iii).</text></paragraph></subsection> <subsection id="H346B8354129D485AA786D2824D95BC76" commented="no"><enum>(d)</enum><header>Guidance on fraudulent, manipulative, or disruptive tradable assets</header><text>The Commission may, after public notice and comment, issue guidance establishing criteria for determining if the primary purpose of a tradable asset is to be used to commit fraud or market manipulation, or engage in any other conduct that would result in abusive practices or be disruptive to market integrity.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H3A3A60B026344DDE97EA733183B65C3A"><enum>414.</enum><header>Effective date</header><text display-inline="no-display-inline">Unless otherwise provided in this title, this title and the amendments made by this title shall take effect 270 days after the date of the enactment of this Act.</text></section> <section id="HC49ED86212DC4CC2B4D54551006ED425" display-inline="no-display-inline" section-type="subsequent-section"><enum>415.</enum><header>Sense of Congress</header><text display-inline="no-display-inline">It is the sense of Congress that nothing in this Act or any amendment made by this Act should be interpreted to authorize any entity to regulate any commodity, other than a digital commodity, on any spot market.</text></section> <enum>V</enum><header>Innovation and Technology Improvements</header> <section id="H734AFF8B5A5E4DD5876784A76821DF57"><enum>501.</enum><header>Findings; sense of Congress</header> <subsection id="H6172D6C22E12441CA5225A6F7DF03A81"><enum>(a)</enum><header>Findings</header><text display-inline="yes-display-inline">Congress finds the following:</text> <paragraph id="H5821A1F3191D44EAADDF7FA8026311F3"><enum>(1)</enum><text display-inline="yes-display-inline">Entrepreneurs and innovators are building and deploying this next generation of the internet.</text></paragraph> <paragraph id="H133EB0CBD40F41A0BA125CA4A8B7FB6C"><enum>(2)</enum><text>Digital commodity networks represent a new way for people to join together and cooperate with one another to undertake certain activities.</text></paragraph> <paragraph id="H03E85064B7E64460864FA0BF6501EF52"><enum>(3)</enum><text>Digital commodities have the potential to be the foundational building blocks of these systems, aligning the economic incentive for individuals to cooperate with one another to achieve a common purpose.</text></paragraph> <paragraph id="HA6C4CCC5702D49A3B42C245DCB18BDCC"><enum>(4)</enum><text>The digital commodity ecosystem has the potential to grow our economy and improve everyday lives of Americans by facilitating collaboration through the use of technology to manage activities, allocate resources, and facilitate decision making.</text></paragraph> <paragraph id="H5A3095EA1BC14203A902D9711D992B8B"><enum>(5)</enum><text display-inline="yes-display-inline">Blockchain systems and the digital commodities they empower provide control, enhance transparency, reduce transaction costs, and increase efficiency if proper protections are put in place for investors, consumers, our financial system, and our national security.</text></paragraph> <paragraph id="H636D5B124C2842239AFED4AF39E82FAD"><enum>(6)</enum><text>Blockchain technology facilitates new types of network participation which businesses in the United States may utilize in innovative ways.</text></paragraph> <paragraph id="HAA3CC834EDA547B5A7FF74AB85D4F6B2"><enum>(7)</enum><text>Other digital commodity companies are setting up their operations outside of the United States, where countries are establishing frameworks to embrace the potential of blockchain technology and digital commodities and provide safeguards for consumers.</text></paragraph> <paragraph id="H11F23157B6D64CAA9D79449ED780858A"><enum>(8)</enum><text>Digital commodities, despite the purported anonymity, provide law enforcement with an exceptional tracing tool to identify illicit activity and bring criminals to justice.</text></paragraph> <paragraph id="HB5C8F75E234149179CD48F5D946F3C62"><enum>(9)</enum><text display-inline="yes-display-inline">The Financial Services Committee of the House of Representatives has held multiple hearings highlighting various risks that digital commodities can pose to the financial markets, consumers, and investors that must be addressed as we seek to harness the benefits of these innovations.</text></paragraph></subsection> <subsection id="HC2A8B428921C40E2AED5057A1649DEBF"><enum>(b)</enum><header>Sense of Congress</header><text>It is the sense of Congress that—</text> <paragraph id="H3AC7E38ED6E44F7E9E7E4ADB3D8C0C2F"><enum>(1)</enum><text display-inline="yes-display-inline">the United States should seek to prioritize understanding the potential opportunities of the next generation of the internet;</text></paragraph> <paragraph id="H6DC44494E81F498BB9328C7DF0D35411"><enum>(2)</enum><text display-inline="yes-display-inline">the United States should seek to foster advances in technology that have robust evidence indicating they can improve our financial system and create more fair and equitable access to financial services for everyday Americans while protecting our financial system, investors, and consumers;</text></paragraph> <paragraph id="H6B81BA13D846409AA16EF0628C9660B5"><enum>(3)</enum><text>the United States must support the responsible development of digital commodities and the underlying technology in the United States or risk the shifting of the development of such assets and technology outside of the United States, to less regulated countries;</text></paragraph> <paragraph id="HE27B84F35D584BCCA06762C37306EB68"><enum>(4)</enum><text display-inline="yes-display-inline">Congress should consult with public and private sector stakeholders to understand how to enact a functional framework tailored to the specific risks and unique benefits of different digital commodity-related activities, distributed ledger technology, distributed networks, and mature blockchain systems;</text></paragraph> <paragraph id="HD23A2F8F78F34ED8A71F78CDAAED7569"><enum>(5)</enum><text display-inline="yes-display-inline">Congress should enact a functional framework tailored to the specific risks of different digital commodity-related activities and unique benefits of distributed ledger technology, distributed networks, and mature blockchain systems; and</text></paragraph> <paragraph id="H5DB20EC73C624072B1CD6C6C76C4A801"><enum>(6)</enum><text>consumers and market participants will benefit from a framework for digital commodities consistent with longstanding investor protections in securities and commodities markets, yet tailored to the unique benefits and risks of the digital commodity ecosystem.</text></paragraph></subsection></section> <section id="HB1E637AF96824587910E6D4588620980" display-inline="no-display-inline" section-type="subsequent-section"><enum>502.</enum><header>Modernization of the Securities and Exchange Commission mission</header> <subsection id="HDAF13272DCA34D6AAFA3EDD890A3ECA9"><enum>(a)</enum><header>Securities Act of 1933</header><text>Section 2(b) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77">15 U.S.C. 77(b)</external-xref>) is amended—</text> <paragraph id="HF19B520C9ED64E6B8DB1A70F5FD47268"><enum>(1)</enum><text>in the heading, by inserting <quote><header-in-text level="subsection" style="OLC">Innovation,</header-in-text></quote> after <quote><header-in-text level="subsection" style="OLC">Efficiency,</header-in-text></quote>; and</text></paragraph> <paragraph id="H0EB9B8A882834421A963964C442D6095"><enum>(2)</enum><text>by inserting <quote>innovation,</quote> after <quote>efficiency,</quote>.</text></paragraph></subsection> <subsection id="H29966A6D27EA441584C6225CD432969C"><enum>(b)</enum><header>Securities Exchange act of 1934</header><text>Section 3(f) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78">15 U.S.C. 78(c)</external-xref>) is amended—</text> <paragraph id="H800BC5E8FC6B4D2EA560F7D4C4AD2974"><enum>(1)</enum><text display-inline="yes-display-inline">in the heading, by inserting <quote><header-in-text level="subsection" style="OLC">Innovation,</header-in-text></quote> after <quote><header-in-text level="subsection" style="OLC">Efficiency,</header-in-text></quote>; and</text></paragraph> <paragraph id="H85F16532202447CFBED9B7D38CCE2178"><enum>(2)</enum><text>by inserting <quote>innovation,</quote> after <quote>efficiency,</quote>.</text></paragraph></subsection> <subsection id="HA913682A0E6745E5B3E19D2B88EEBD7D"><enum>(c)</enum><header>Investment Advisers Act of 1940</header><text>Section 202(c) of the Investment Advisers Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80b-2">15 U.S.C. 80b–2</external-xref>) is amended—</text> <paragraph id="HB22109F4C50F4789BEFE4DEAEDCDC914"><enum>(1)</enum><text display-inline="yes-display-inline">in the heading, by inserting <quote><header-in-text level="subsection" style="OLC">Innovation,</header-in-text></quote> after <quote><header-in-text level="subsection" style="OLC">Efficiency,</header-in-text></quote>; and</text></paragraph> <paragraph id="HB6FA9C297A004E85864F34BA8580CA12"><enum>(2)</enum><text>by inserting <quote>innovation,</quote> after <quote>efficiency,</quote>.</text></paragraph></subsection> <subsection id="H1362CD6430D24A01A4C563F2B4371829" display-inline="no-display-inline"><enum>(d)</enum><header>Investment Company Act of 1940</header><text>Section 2(c) of the Investment Company Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80a-2">15 U.S.C. 80a–2</external-xref>) is amended—</text> <paragraph id="H3C188DC1CECD42A1AAE16E758B4C9B78"><enum>(1)</enum><text display-inline="yes-display-inline">in the heading, by inserting <quote><header-in-text level="subsection" style="OLC">Innovation,</header-in-text></quote> after <quote><header-in-text level="subsection" style="OLC">Efficiency,</header-in-text></quote>; and</text></paragraph> <paragraph id="H06A50C8C14A44B4C94BFC12D6CC3E2DC"><enum>(2)</enum><text>by inserting <quote>innovation,</quote> after <quote>efficiency,</quote>.</text></paragraph></subsection></section> <section id="HDE83667521AF4A5DAEFD9084D64C9C69"><enum>503.</enum><header>Strategic Hub for Innovation and Financial Technology</header><text display-inline="no-display-inline">Section 4 of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78d">15 U.S.C. 78d</external-xref>) is amended by adding at the end the following:</text> <quoted-block style="OLC" id="H718EFAABBE9643599002A3D50CD40071" display-inline="no-display-inline"> <subsection id="H4F4F626585A5470B824F7C70103F8B40"><enum>(k)</enum><header>Strategic Hub for Innovation and Financial Technology</header> <paragraph id="H9081CB25DB03482B91BA01ECFD736AF4"><enum>(1)</enum><header>Establishment</header><text display-inline="yes-display-inline">Not later than 180 days after the date of the enactment of this subsection, the Securities and Exchange Commission shall establish a committee to be known as the Strategic Hub for Innovation and Financial Technology (referred to in this subsection as the <quote>FinHub</quote>) to support engagement on emerging technologies in the financial sector.</text></paragraph> <paragraph id="H8D94D0A16AF24706B32EE1841FE35213"><enum>(2)</enum><header>Members</header><text>The composition of FinHub shall be determined by the Commission, drawing from relevant divisions as appropriate, including the Division of Trading and Markets, Division of Corporate Finance, and Division of Investment Management.</text></paragraph> <paragraph id="H93675F14556E49C8BE8F0485D7235875"><enum>(3)</enum><header>Responsibilities</header><text>FinHub shall—</text> <subparagraph id="HFDBA350CC11847BC95255455EDAC0CDC"><enum>(A)</enum><text>serve as a resource for the Commission on emerging financial technology advancements;</text></subparagraph> <subparagraph id="H0B686130F509434C9CA6B63924F3D687"><enum>(B)</enum><text>engage with market participants working on emerging financial technologies; and</text></subparagraph> <subparagraph id="HA3E2EBC4DDEB4C6587F9778399FD756A"><enum>(C)</enum><text>facilitate communication between the Commission and businesses working in emerging financial technology fields with information on the Commission, its rules, and regulations.</text></subparagraph></paragraph> <paragraph id="H330B6B2B6B204C29947DC5FCA97E7209"><enum>(4)</enum><header>Report to the Commission</header> <subparagraph id="HFD4B4436C0064DF8A43C81922D50C030"><enum>(A)</enum><header>In general</header><text>Not later than October 31 of each year after 2025, FinHub shall provide an annual summary of its engagement activities to the Commission, which shall be included in the Commission’s annual report to Congress.</text></subparagraph> <subparagraph id="H2C3DDA0FC03248FD9B662CDAA77B4DBA"><enum>(B)</enum><header>Confidentiality</header><text>Each report submitted under this paragraph shall not contain confidential information.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="HECC3401820C94581B292EC38A77629B5" display-inline="no-display-inline"><enum>504.</enum><header>Codification of LabCFTC</header> <subsection id="HBC1718FA732D4ECAA972F4811816C10B"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 18 of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/22">7 U.S.C. 22</external-xref>) is amended by adding at the end the following:</text> <quoted-block style="OLC" id="HB49D03B697F24286B9DAC09BCB6B25EA" display-inline="no-display-inline"> <subsection id="H1104DFF0FCAA4CE887FB3508FFE4C8C9"><enum>(c)</enum><header>LabCFTC</header> <paragraph id="H5778B5B4D35D418B9E9148FEE7DF6780"><enum>(1)</enum><header>Establishment</header><text display-inline="yes-display-inline">There is established in the Commission LabCFTC.</text></paragraph> <paragraph id="H9758612D63534AF0AA1A642F0F240584"><enum>(2)</enum><header>Purpose</header><text display-inline="yes-display-inline">The purposes of LabCFTC are to—</text> <subparagraph id="H34F2AAAACD8540A3B5FDDEC68ACDAE8F"><enum>(A)</enum><text display-inline="yes-display-inline">promote responsible financial technology innovation and fair competition for the benefit of the American public;</text></subparagraph> <subparagraph id="HF67E235CE3554D7C933B2DD07CA2CDA8"><enum>(B)</enum><text>serve as an information platform to inform the Commission about new financial technology innovation; and</text></subparagraph> <subparagraph id="HF4E8BF6708DD4D4AAE52E7769F702D0A"><enum>(C)</enum><text>provide outreach to financial technology innovators to discuss their innovations and the regulatory framework established by this Act and the regulations promulgated thereunder.</text></subparagraph></paragraph> <paragraph id="HF31E2BD49B1A4FAC8CDFA40363A2261E"><enum>(3)</enum><header>Director</header><text display-inline="yes-display-inline">LabCFTC shall have a Director, who shall be appointed by the Commission and serve at the pleasure of the Commission. Notwithstanding section 2(a)(6)(A), the Director shall report directly to the Commission and perform such functions and duties as the Commission may prescribe.</text></paragraph> <paragraph id="HF6C11FE28E4741919E928E7D68DE1AA2"><enum>(4)</enum><header>Duties</header><text>LabCFTC shall—</text> <subparagraph id="HF4E137045E1641B6B2282C2BD0982B3E"><enum>(A)</enum><text>advise the Commission with respect to rulemakings or other agency or staff action regarding financial technology;</text></subparagraph> <subparagraph id="H224F11398E7D4E61A535D5FC95128CE3"><enum>(B)</enum><text>provide internal education and training to the Commission regarding financial technology;</text></subparagraph> <subparagraph id="H95A783DFC0734B08825286ABF9C2500D"><enum>(C)</enum><text>advise the Commission regarding financial technology that would bolster the Commission’s oversight functions;</text></subparagraph> <subparagraph id="H78F58965137E4B45871BFDA7C105F2F6"><enum>(D)</enum><text>engage with academia, students, and professionals on financial technology issues, ideas, and technology relevant to activities under this Act;</text></subparagraph> <subparagraph id="H813114C038CD490E8DA3B1ABC3258C35"><enum>(E)</enum><text>provide persons working in emerging technology fields with information on the Commission, its rules and regulations, and the role of a registered futures association; and</text></subparagraph> <subparagraph id="H618E95DFBE0B4DFE9A84C8C8832B4552"><enum>(F)</enum><text>encourage persons working in emerging technology fields to engage with the Commission and obtain feedback from the Commission on potential regulatory issues.</text></subparagraph></paragraph> <paragraph id="H38FB064807114F9084C5845DE4C8C1F9"><enum>(5)</enum><header>Report to Congress</header> <subparagraph id="HBF48351604A746B2BA37D0AE2E1EF76B"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">Not later than October 31 of each year after 2025, LabCFTC shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report on its activities.</text></subparagraph> <subparagraph id="H0BC9DF00787944F1A8B276C268BA3B4D"><enum>(B)</enum><header>Contents</header><text>Each report required under paragraph (1) shall include—</text> <clause id="H997A494FBA3340B49BC7DFC1053FCFF5"><enum>(i)</enum><text display-inline="yes-display-inline">the total number of persons that met with LabCFTC;</text></clause> <clause id="H00892C88FEF146ACA86621DBCFEFD34D"><enum>(ii)</enum><text>a summary of general issues discussed during meetings with the person;</text></clause> <clause id="H040E3EF5831F40129E3DD10DD11C44C6"><enum>(iii)</enum><text>information on steps LabCFTC has taken to improve Commission services, including responsiveness to the concerns of persons;</text></clause> <clause id="HAE54078209094907B8AF8B0843CB135C"><enum>(iv)</enum><text>recommendations made to the Commission with respect to the regulations, guidance, and orders of the Commission and such legislative actions as may be appropriate; and</text></clause> <clause id="HC9DEEA948EA645358FD8FC6046F0CD4E"><enum>(v)</enum><text>any other information determined appropriate by the Director of LabCFTC.</text></clause></subparagraph> <subparagraph id="H95B6759DB6A345F2BCF405896BC02F55"><enum>(C)</enum><header>Confidentiality</header><text>A report under paragraph (A) shall abide by the confidentiality requirements in section 8.</text></subparagraph></paragraph> <paragraph id="H792AD9AA113941909048C8E8908C9171"><enum>(6)</enum><header>Records and engagement</header><text display-inline="yes-display-inline">The Commission shall—</text> <subparagraph id="H5AED37CA21F246BBA59797D015536E77"><enum>(A)</enum><text>maintain systems of records to track engagements with the public through LabCFTC;</text></subparagraph> <subparagraph id="H529D50640DF44CB990B70D9972233749"><enum>(B)</enum><text>store communications and materials received in connection with any such engagement in accordance with Commission policies and procedures on data retention and confidentiality; and</text></subparagraph> <subparagraph id="H650BBC54D9E2480ABAF0C0C00DE5C491"><enum>(C)</enum><text>take reasonable steps to protect any confidential or proprietary information received through LabCFTC engagement.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="H3654054D71D646F6BB6F90FE91715CBC"><enum>(b)</enum><header>Conforming amendments</header><text>Section 2(a)(6)(A) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/7/2">7 U.S.C. 2(a)(6)(A)</external-xref>) is amended—</text> <paragraph id="H810DF142B4AB45D39CA604688A6FFDC6"><enum>(1)</enum><text>by striking <quote>paragraph and in</quote> and inserting <quote>paragraph,</quote>; and</text></paragraph> <paragraph id="HCFF60E44BE5542D89F7A1841F8AF6AAF"><enum>(2)</enum><text>by inserting <quote>and section 18(c)(3),</quote> before <quote>the executive</quote>.</text></paragraph></subsection> <subsection id="H896AB4808A434881A092BC641EE30667"><enum>(c)</enum><header>Effective date</header><text>The Commodity Futures Trading Commission shall implement the amendments made by this section (including complying with section 18(c)(7) of the Commodity Exchange Act) within 180 days after the date of the enactment of this Act.</text></subsection></section> <section id="H601A0990792045FDAB9A435700A7C92B"><enum>505.</enum><header>Study on decentralized finance</header> <subsection id="H79516C9915C3492BA1E620C36E7737F2"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The Commodity Futures Trading Commission, the Securities and Exchange Commission, and the Secretary of the Treasury shall jointly carry out a study on decentralized finance that analyzes—</text> <paragraph id="H4E9ED67DFFBA429D83CE045FD611F3FB"><enum>(1)</enum><text>the nature, size, role, and use of decentralized finance blockchain applications;</text></paragraph> <paragraph id="H05FFFBC99AFF4377B169D356EB37F795"><enum>(2)</enum><text>the operation of blockchain applications that comprise decentralized finance;</text></paragraph> <paragraph id="H8C053B2FB16D47C5A08963868E2F626A"><enum>(3)</enum><text>the interoperability of blockchain applications and other blockchain systems;</text></paragraph> <paragraph id="H141CFAAA67D7466DA2F8FF0F19F43A90"><enum>(4)</enum><text>the interoperability of blockchain applications and software-based systems, including websites and wallets;</text></paragraph> <paragraph id="HD52A53E42DCC4B7EA885C2A19518FC8F"><enum>(5)</enum><text>the decentralized governance systems through which blockchain applications may be developed, published, constituted, administered, maintained, or otherwise distributed, including—</text> <subparagraph id="HE490BD1AC9D14C53932F45C13ED27CDE"><enum>(A)</enum><text>whether the systems enhance or detract from—</text> <clause id="H79629CA7E7924228B7045191B8F75577"><enum>(i)</enum><text>the decentralization of the decentralized finance; and</text></clause> <clause id="H43393DCD65F54DE4A2A59ADFC74D9941"><enum>(ii)</enum><text>the inherent benefits and risks of the decentralized governance system; and</text></clause></subparagraph> <subparagraph id="H5349BC566A0A4D64B4CE082E5F192462"><enum>(B)</enum><text>any procedures, requirements, or best practices that would mitigate the risks identified in subparagraph (A)(ii);</text></subparagraph></paragraph> <paragraph id="H8ADB757112624C2AB22E6DB3C2732981"><enum>(6)</enum><text>the benefits of decentralized finance, including—</text> <subparagraph id="HD57D0D6D48EC40C08EBEFFCDA9C6E75E"><enum>(A)</enum><text>operational resilience and availability of blockchain systems;</text></subparagraph> <subparagraph id="H139F83C56E384121B84B99CF614482A3"><enum>(B)</enum><text>interoperability of blockchain systems;</text></subparagraph> <subparagraph id="H5AF2E6363829443D8CAF7AC95297DF10"><enum>(C)</enum><text>market competition and innovation;</text></subparagraph> <subparagraph id="H3A5CF49EFBDE4518A72327680E6CFB9E"><enum>(D)</enum><text>transaction efficiency;</text></subparagraph> <subparagraph id="HD914D644D14D414BAA6C98E16814765D"><enum>(E)</enum><text>transparency and traceability of transactions; and</text></subparagraph> <subparagraph id="H58BAE447A37F4944AE7C490295620618"><enum>(F)</enum><text>disintermediation;</text></subparagraph></paragraph> <paragraph id="HC95411FE2F0842C9805512CA97228325"><enum>(7)</enum><text>the risks of decentralized finance, including—</text> <subparagraph id="HD6FF763AF26644ACB1370EAA0507109D"><enum>(A)</enum><text>pseudonymity of users and transactions;</text></subparagraph> <subparagraph id="H5663C02B36EE4BE491D9695A43EC05D7"><enum>(B)</enum><text>disintermediation; and</text></subparagraph> <subparagraph id="H8160D4DADBE647EAB51B5A60ABBAA7B4"><enum>(C)</enum><text>cybersecurity vulnerabilities;</text></subparagraph></paragraph> <paragraph id="HD875BD5386C84BC9B453ACAE33DF3EB0"><enum>(8)</enum><text>the extent to which decentralized finance has integrated with the traditional financial markets and any potential risks or improvements to the stability of the markets;</text></paragraph> <paragraph id="H3503898D664B4D2B838BE2E948AC93FF"><enum>(9)</enum><text>how the levels of illicit activity in decentralized finance compare with the levels of illicit activity in traditional financial markets;</text></paragraph> <paragraph id="H6838462769EF4F6FBD8E618D43CABD83"><enum>(10)</enum><text display-inline="yes-display-inline">methods for addressing illicit activity in decentralized finance and traditional markets that are tailored to the unique attributes of each;</text></paragraph> <paragraph id="HB7A07271A94C4B0E878ACEE90AF62551"><enum>(11)</enum><text>how decentralized finance may increase the accessibility of cross-border transactions; and</text></paragraph> <paragraph id="HB20E59D74FE848F896ECE4774BF5DD00"><enum>(12)</enum><text display-inline="yes-display-inline">the feasibility of embedding self-executing compliance and risk controls into decentralized finance.</text></paragraph></subsection> <subsection id="HC0D0E7AA5FD84C8A91CA9BED0FFEDDEE"><enum>(b)</enum><header>Consultation</header><text display-inline="yes-display-inline">In carrying out the study required under subsection (a), the Commodity Futures Trading Commission and the Securities and Exchange Commission shall consult with the Secretary of the Treasury on the factors described under paragraphs (7) through (10) of subsection (a).</text></subsection> <subsection id="H41173B1E94BA4623BBDA7CAD29CEEC9D"><enum>(c)</enum><header>Report</header><text display-inline="yes-display-inline">Not later than 1 year after the date of enactment of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly submit to the relevant congressional committees a report that includes the results of the study required by subsection (a).</text></subsection> <subsection id="HC63E32F2421F4455956E1B0FA19BEEA8"><enum>(d)</enum><header>GAO Study</header><text>The Comptroller General of the United States shall—</text> <paragraph id="H07170F501BDD4CCF9353DD95CB0A2913"><enum>(1)</enum><text display-inline="yes-display-inline">carry out a study on decentralized finance that analyzes the information described under paragraphs (1) through (12) of subsection (a); and</text></paragraph> <paragraph id="H073F0641ED38489D8473F7E2DB5C5DDB"><enum>(2)</enum><text display-inline="yes-display-inline">not later than 1 year after the date of enactment of this Act, submit to the relevant congressional committees a report that includes the results of the study required by paragraph (1).</text></paragraph></subsection> <subsection id="H502B800C1B8645FC8AA577FB61BF9F16"><enum>(e)</enum><header>Definitions</header><text>In this section:</text> <paragraph id="H45AD06DD87A84913B5F008534959B13D"><enum>(1)</enum><header>Decentralized finance</header> <subparagraph id="H2EC0A80963054F91BEDE74C386075F0E"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The term <term>decentralized finance</term> means blockchain applications (including decentralized finance trading protocols and related decentralized finance messaging systems) that allow users to engage in financial transactions in a self-directed manner so that a third-party intermediary does not effectuate the transactions or take custody of digital commodities of a user during any part of the transactions.</text></subparagraph> <subparagraph id="H54D94A8DAC6645B894515F7BEAFDE783"><enum>(B)</enum><header>Relationship to excluded activities</header><text display-inline="yes-display-inline">The term <term>decentralized finance</term> shall not be interpreted to limit or exclude any activity from the activities described in section 15I(a) of the Securities Exchange Act of 1934 or section 4v(a) of the Commodity Exchange Act.</text></subparagraph></paragraph> <paragraph id="HD4292768B2B54EA399AAABD8ED58436F"><enum>(2)</enum><header>Relevant congressional committees</header><text>The term <term>relevant congressional committees</term> means—</text> <subparagraph id="H97527F95BC9042AEAB21CE2DE7FAB2C7"><enum>(A)</enum><text>the Committees on Financial Services and Agriculture of the House of Representatives; and</text></subparagraph> <subparagraph id="H1796968BA3F844A2826B847AA8724980"><enum>(B)</enum><text>the Committees on Banking, Housing, and Urban Affairs and Agriculture, Nutrition, and Forestry of the Senate.</text></subparagraph></paragraph></subsection></section> <section id="H2BC26DDBC6C242AAB6455BE661D4B1A8"><enum>506.</enum><header>Study on non-fungible tokens</header> <subsection id="H92899D6ECC444B3AA5A1B8FCB07DA8E0"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The Comptroller General of the United States shall carry out a study of non-fungible tokens that analyzes—</text> <paragraph id="H1DBD4AFC447142F0AC66492FC96436E0"><enum>(1)</enum><text display-inline="yes-display-inline">the nature, size, role, purpose, and use of non-fungible tokens;</text></paragraph> <paragraph id="H6596A7CEA6E148D8B2A4FE23B5404867"><enum>(2)</enum><text display-inline="yes-display-inline">the similarities and differences between non-fungible tokens and other digital commodities, including digital commodities and permitted payment stablecoins, and how the markets for those digital commodities intersect with each other;</text></paragraph> <paragraph id="HD83C8A43C43D45B7B5AE7E1094A0446B"><enum>(3)</enum><text display-inline="yes-display-inline">how non-fungible tokens are minted by issuers and subsequently administered to purchasers;</text></paragraph> <paragraph id="HE1B925643C3D4C838537928FD9D512DB"><enum>(4)</enum><text display-inline="yes-display-inline">how non-fungible tokens are stored after being purchased by a consumer;</text></paragraph> <paragraph id="HBBD92C6636624900A1B24B14317C15BC"><enum>(5)</enum><text display-inline="yes-display-inline">the interoperability of non-fungible tokens between different blockchain systems;</text></paragraph> <paragraph id="HE7C66410A80D44789528B5FA6373E8C9"><enum>(6)</enum><text>the scalability of different non-fungible tokens marketplaces;</text></paragraph> <paragraph id="HFD15FF984AD8459FA898A2B8212FAF3C"><enum>(7)</enum><text display-inline="yes-display-inline">the benefits of non-fungible tokens, including verifiable digital ownership;</text></paragraph> <paragraph id="H4207A88D652C4532948340172EABEC03"><enum>(8)</enum><text>the risks of non-fungible tokens, including—</text> <subparagraph id="HD3DC1C2E8E0B4758A9AD9DB13DE8F643"><enum>(A)</enum><text>intellectual property rights;</text></subparagraph> <subparagraph id="HC94116D544A84B4AAEF3F45CF999DF5D"><enum>(B)</enum><text>cybersecurity risks; and</text></subparagraph> <subparagraph id="H53764F4B559B48B0822CA905239E10CC"><enum>(C)</enum><text>market risks;</text></subparagraph></paragraph> <paragraph id="H19061F2E531044A0B4F002556D1FB846"><enum>(9)</enum><text display-inline="yes-display-inline">whether and how non-fungible tokens have integrated with traditional marketplaces, including those for music, real estate, gaming, events, and travel;</text></paragraph> <paragraph id="HB4B0466290E44D029399FCD80FBA9ABD"><enum>(10)</enum><text display-inline="yes-display-inline">whether and how non-fungible tokens can be used to facilitate commerce or other activities through the representation of documents, identification, contracts, licenses, and other commercial, government, or personal records;</text></paragraph> <paragraph id="H6E8A60FE8529402AAE1D8424FAAC4530"><enum>(11)</enum><text>any potential risks to traditional markets from such integration; and</text></paragraph> <paragraph id="HFC98D265AD664792844C1D0ACB9C579E"><enum>(12)</enum><text>the levels and types of illicit activity in non-fungible tokens markets.</text></paragraph></subsection> <subsection id="HBCE3965B7C8D4D4B950D246F8C0F6B1B"><enum>(b)</enum><header>Report</header><text display-inline="yes-display-inline">Not later than 1 year after the date of the enactment of this Act, the Comptroller General, shall make publicly available a report that includes the results of the study required by subsection (a).</text></subsection></section> <section id="HDA8A2066FDAF41EA8948A4B97463B6DC" display-inline="no-display-inline" section-type="subsequent-section"><enum>507.</enum><header>Study on expanding financial literacy amongst digital commodity holders</header> <subsection id="H340BCCE79AFB4399BA37ED87B59F89CE"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The Commodity Futures Trading Commission with the Securities and Exchange Commission shall jointly conduct a study to identify—</text> <paragraph id="HCA369E1B9DB44E4AACACBBE86DDF9A97"><enum>(1)</enum><text display-inline="yes-display-inline">the existing level of financial literacy among retail digital commodity holders, including subgroups of investors identified by the Commodity Futures Trading Commission with the Securities and Exchange Commission;</text></paragraph> <paragraph id="H1A230117B1DD4D29999BD272F7BC6B59"><enum>(2)</enum><text display-inline="yes-display-inline">methods to improve the timing, content, and format of financial literacy materials regarding digital commodities provided by the Commodity Futures Trading Commission and the Securities and Exchange Commission;</text></paragraph> <paragraph id="HA610AA5CC56949289CAB17CF828FBA83"><enum>(3)</enum><text display-inline="yes-display-inline">methods to improve coordination between the Securities and Exchange Commission and the Commodity Futures Trading Commission with other agencies, including the Financial Literacy and Education Commission as well as nonprofit organizations and State and local jurisdictions, to better disseminate financial literacy materials;</text></paragraph> <paragraph id="HA26CA56775104CDCA89172BE66891454"><enum>(4)</enum><text>the efficacy of current financial literacy efforts with a focus on rural communities and communities with majority minority populations;</text></paragraph> <paragraph id="H4557047706E846FEBFBB764278461639"><enum>(5)</enum><text display-inline="yes-display-inline">the most useful and understandable relevant information, including clear disclosures, that retail digital commodity holders need to make informed financial decisions before engaging with or purchasing a digital commodity or service that is typically sold to retail investors of digital commodities;</text></paragraph> <paragraph id="HE5B1C3494A3141C3B5B038A4D08BEC17"><enum>(6)</enum><text display-inline="yes-display-inline">the most effective public-private partnerships in providing financial literacy regarding digital commodities to consumers;</text></paragraph> <paragraph id="H52EA4DA02111439AB731C667556863C6"><enum>(7)</enum><text>the most relevant metrics to measure successful improvement of the financial literacy of an individual after engaging with financial literacy efforts; and</text></paragraph> <paragraph id="H307D7BE4FE354BB084A50BF3CC2B4D49"><enum>(8)</enum><text display-inline="yes-display-inline">in consultation with the Financial Literacy and Education Commission, a strategy (including to the extent practicable, measurable goals and objectives) to increase financial literacy of investors regarding digital commodities.</text></paragraph></subsection> <subsection id="H5DAD6D57B6934FE698FDDEB0307A7AA6"><enum>(b)</enum><header>Report</header><text>Not later than 1 year after the date of the enactment of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly submit a written report on the study required by subsection (a) to the Committees on Financial Services and on Agriculture of the House of Representatives and the Committees on Banking, Housing, and Urban Affairs and on Agriculture, Nutrition, and Forestry of the Senate.</text></subsection></section> <section id="H35AB1C94ADFE4621B8E929415CC4500D"><enum>508.</enum><header>Study on financial market infrastructure improvements</header> <subsection id="HF441293516614602B33B2AB11B717F36"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly conduct a study to assess whether additional guidance or rules are necessary to facilitate the development of tokenized securities and derivatives products, and to the extent such guidance or rules would foster the development of fair and orderly financial markets, be necessary or appropriate in the public interest, and be consistent with the protection of investors and customers.</text></subsection> <subsection id="HEAEE82DE56FC4304BFD5F8FDDAC34966"><enum>(b)</enum><header>Report</header> <paragraph id="HC1EAC5B8EA4644EB838DBB67936F3843"><enum>(1)</enum><header>Time limit</header><text display-inline="yes-display-inline">Not later than 1 year after the date of enactment of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly submit to the relevant congressional committees a report that includes the results of the study required by subsection (a).</text></paragraph> <paragraph id="H0CEB670173614EB7953845B2EE4E896E"><enum>(2)</enum><header>Relevant congressional committees defined</header><text>In this section, the term <term>relevant congressional committees</term> means—</text> <subparagraph id="H8DF7F2EDAF2B4ABF9CFE9B0571FA9C2F"><enum>(A)</enum><text>the Committees on Financial Services and on Agriculture of the House of Representatives; and</text></subparagraph> <subparagraph id="H11F6CB9E018F488FA554F6728E2981C6"><enum>(B)</enum><text>the Committees on Banking, Housing, and Urban Affairs and on Agriculture, Nutrition, and Forestry of the Senate.</text></subparagraph></paragraph></subsection></section> <section id="H5F2988514826454292AA0F29E5B6A330"><enum>509.</enum><header>Study on illicit use of digital assets</header> <subsection id="H521150A21C1D4111887C9AD81EC1E927"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">One year after the date of the enactment of this Act, the Securities and Exchange Commission and the Commodity Futures Trading Commission, in conjunction with the Secretary of the Treasury, shall conduct a comprehensive review of how Foreign Terrorist Organizations and Transnational Criminal Syndicates utilize digital assets in connection with illicit activities.</text></subsection> <subsection id="HB6D9D3688AAC4AF0A81CBFF01A1BE42A"><enum>(b)</enum><header>Scope</header><text display-inline="yes-display-inline">This review shall include an analysis of whether the Securities and Exchange Commission and the Commodity Futures Trading Commission have the necessary tools and resources to effectively detect, disrupt, and deter illicit financial activity.</text></subsection> <subsection id="H429625FC55E845BBA470F27EA8B06019"><enum>(c)</enum><header>Report</header><text>The two Commissions shall jointly issue a report to the Committees on Agriculture and on Financial Services of the House of Representatives and the Committees on Agriculture, Nutrition, and Forestry and on Banking, Housing, and Urban Affairs of the Senate on the findings of the Commissions.</text></subsection></section> <section id="H9EA310E0704141E6963E2C910B5C2BD1"><enum>510.</enum><header>Conflict of interest rulemaking</header><text display-inline="no-display-inline">No later than 360 days after the date of the enactment of this Act, the Commodity Futures Trading Commission shall issue rules establishing requirements for the identification, mitigation, and resolution of conflicts of interest among and across registered entities (within the meaning of the Commodity Exchange Act) and persons required to be registered with the Commission, including conflicts of interest related to vertically integrated market structures and their varying responsibilities.</text></section>
1.
Short title; table of contents
(a)
Short title
This Act may be cited as the Digital Asset Market Clarity Act of 2025 or the CLARITY Act of 2025. (b)
Table of contents
The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. Title I—Definitions; Rulemaking; Provisional registration Sec. 101. Definitions under the Securities Act of 1933. Sec. 102. Definitions under the Securities Exchange Act of 1934. Sec. 103. Definitions under the Commodity Exchange Act. Sec. 104. Definitions under this Act. Sec. 105. Rulemakings. Sec. 106. Provisional registration for digital commodity exchanges, brokers, and dealers. Sec. 107. Commodity Exchange Act and securities laws savings provisions. Sec. 108. Administrative requirements. Sec. 109. International cooperation. Sec. 110. Treatment of certain non-controlling blockchain developers. Sec. 111. Application of the Bank Secrecy Act. Sec. 112. Implementation. Title II—Offers and Sales of Digital Commodities Sec. 201. Treatment of investment contract assets. Sec. 202. Exempted primary transactions in digital commodities. Sec. 203. Treatment of secondary transactions in digital commodities that originally involved investment contracts. Sec. 204. Requirements for offers and sales of digital commodities by digital commodity related persons and digital commodity affiliated persons. Sec. 205. Mature blockchain system requirements. Sec. 206. Effective date. Title III—Registration for Intermediaries at the Securities and Exchange Commission Sec. 301. Treatment of digital commodities and permitted payment stablecoins. Sec. 302. Anti-fraud authority over permitted payment stablecoins and certain digital commodity transactions. Sec. 303. Eligibility of alternative trading systems. Sec. 304. Operation of alternative trading systems. Sec. 305. Modernization of recordkeeping requirements. Sec. 306. Exemptive authority. Sec. 307. Additional registrations with the Commodity Futures Trading Commission. Sec. 308. Exempting digital commodities from State securities laws. Sec. 309. Exclusion for decentralized finance activities. Sec. 310. Treatment of custody activities by banking institutions. Sec. 311. Broker and dealer disclosures regarding the treatment of assets. Sec. 312. Digital commodity activities that are financial in nature. Sec. 313. Effective date; administration. Sec. 314. Studies on foreign adversary participation. Title IV—Registration for Digital Commodity Intermediaries at the Commodity Futures Trading Commission Sec. 401. Commission jurisdiction over digital commodity transactions. Sec. 402. Requiring futures commission merchants to use qualified digital asset custodians. Sec. 403. Trading certification and approval for digital commodities. Sec. 404. Registration of digital commodity exchanges. Sec. 405. Qualified digital asset custodians. Sec. 406. Registration and regulation of digital commodity brokers and dealers. Sec. 407. Registration of associated persons. Sec. 408. Registration of commodity pool operators and commodity trading advisors. Sec. 409. Exclusion for decentralized finance activities. Sec. 410. Resources for implementation and enforcement. Sec. 411. Digital commodity activities by SEC-registered entities. Sec. 412. Requirements related to control persons. Sec. 413. Effective date. Sec. 414. Sense of Congress. Title V—Innovation and Technology Improvements Sec. 501. Findings; sense of Congress. Sec. 502. Modernization of the Securities and Exchange Commission mission. Sec. 503. Strategic Hub for Innovation and Financial Technology. Sec. 504. Codification of LabCFTC. Sec. 505. Study on decentralized finance. Sec. 506. Study on non-fungible tokens. Sec. 507. Study on expanding financial literacy amongst digital commodity holders. Sec. 508. Study on financial market infrastructure improvements. Sec. 509. Study on blockchain in payments.
<enum>I</enum><header>Definitions; Rulemaking; Provisional registration</header> <section id="H286FA08C92984471BC6AA210F0D3046A"><enum>101.</enum><header>Definitions under the Securities Act of 1933</header><text display-inline="no-display-inline">Section 2(a) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77b">15 U.S.C. 77b(a)</external-xref>) is amended by adding at the end the following:</text> <quoted-block style="OLC" id="H367B93CB20A24CADBC65D97A81E9D172" display-inline="no-display-inline"> <paragraph id="HFDABC6735C504F18ACBED233A762EA0E"><enum>(20)</enum><header>Blockchain</header><text display-inline="yes-display-inline">The term <term>blockchain</term> means—</text> <subparagraph id="H5361F420702341CB961920F55EB45D5B"><enum>(A)</enum><text>any technology—</text> <clause id="H4409429D6BA942F39D85E75EC4DCFC9A"><enum>(i)</enum><text>where data is—</text> <subclause id="HEA97387480A24EECB30FC268154DB709"><enum>(I)</enum><text display-inline="yes-display-inline">shared across a network to create a distributed ledger of independently verifiable transactions or information among network participants;</text></subclause> <subclause id="H62EFE14AF5B547E196D8B00531F6F488"><enum>(II)</enum><text>linked using cryptography to maintain the integrity of the distributed ledger and to execute other functions; and</text></subclause> <subclause id="H088385AD0BFB470FA1824096C8709617" display-inline="no-display-inline"><enum>(III)</enum><text display-inline="yes-display-inline">propagated among network participants to reach consensus on the state of the distributed ledger and any other functions; and</text></subclause></clause> <clause id="H7FD8BCCF54EE408BBC62BE0E76DA8063"><enum>(ii)</enum><text>composed of source code that is publicly available; and</text></clause></subparagraph> <subparagraph id="HE16065F739E64378A93A08CD7A701120"><enum>(B)</enum><text>any similar technology to the technology described in subparagraph (A).</text></subparagraph></paragraph> <paragraph id="H288F58119C2B43C49BADE8016753ADF7"><enum>(21)</enum><header>Blockchain application</header><text display-inline="yes-display-inline">The term <term>blockchain application</term> means any executable software that is deployed to a blockchain and composed of source code that is publicly available, including a smart contract or any network of smart contracts, or other similar technology.</text></paragraph> <paragraph id="HCC05AB8B34AB40A0942B592A889D6784"><enum>(22)</enum><header>Blockchain protocol</header><text display-inline="yes-display-inline">The term <quote>blockchain protocol</quote> means publicly available source code of a blockchain that is executed by the network participants of a blockchain to facilitate its functioning, or other similar technology.</text></paragraph> <paragraph id="H454ED217CD4741F5B0AB25A9AB0322FF"><enum>(23)</enum><header>Blockchain system</header><text display-inline="yes-display-inline">The term <term>blockchain system</term> means any blockchain, together with its blockchain protocol or any blockchain application or network of blockchain applications.</text></paragraph> <paragraph id="H1E5A652764154790AFC4608F3FA60254" commented="no"><enum>(24)</enum><header>Decentralized governance system</header> <subparagraph id="HE7560771F1844FC08AA949A7AB19C33C"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The term <term>decentralized governance system</term> means, with respect to a blockchain system, any transparent, rules-based system permitting persons to form consensus or reach agreement in the development, provision, publication, maintenance, or administration of such blockchain system, where participation is not limited to, or under the effective control of, any person or group of persons under common control.</text></subparagraph> <subparagraph id="H12E52F77C6AC46AEA46A5E4FA2BB6E20"><enum>(B)</enum><header>Relationship of persons to decentralized governance systems</header><text display-inline="yes-display-inline">With respect to a decentralized governance system, the decentralized governance system and any persons participating in the decentralized governance system shall be treated as separate persons unless such persons are under common control or acting pursuant to an agreement to act in concert.</text></subparagraph> <subparagraph id="H6EBDB3623A61402C8485F4C14EA2650B"><enum>(C)</enum><header>Legal entities for decentralized governance systems</header><text display-inline="yes-display-inline">The term <term>decentralized governance system</term> shall include a legal entity used to implement the rules-based system described in subparagraph (A), provided that the legal entity does not operate pursuant to centralized management. For the purposes of this subparagraph, the delegation of ministerial or administrative authority at the direction of the participants in a decentralized governance system shall not be construed to be centralized management.</text></subparagraph></paragraph> <paragraph id="H3502825E9B5F4ACBB28900A1C66CA9ED"><enum>(25)</enum><header>Digital asset</header><text display-inline="yes-display-inline">The term <term>digital asset</term> means any digital representation of value which is recorded on a cryptographically-secured distributed ledger or other similar technology.</text></paragraph> <paragraph id="H85170BE0DA6F45919D16FC7AE7282C9A"><enum>(26)</enum><header>Digital commodity</header><text display-inline="yes-display-inline">The term <term>digital commodity</term> has the meaning given that term under section 1a of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1a">7 U.S.C. 1a</external-xref>).</text></paragraph> <paragraph id="H18E5245746D14C908464D6EF7286837F"><enum>(27)</enum><header>Digital commodity affiliated person</header><text display-inline="yes-display-inline">The term <term>digital commodity affiliated person</term> means a person (including a digital commodity related person) that, with respect to any digital commodity—</text> <subparagraph id="H44F73F4DC7C345FFB717AD443AC932F8"><enum>(A)</enum><text display-inline="yes-display-inline">acquires or has any right to acquire 5 percent or more of the total outstanding units of such digital commodity from a digital commodity issuer or an agent or underwriter thereof (other than a decentralized governance system);</text></subparagraph> <subparagraph id="HEDC78B03AADB4B389A666B9FA8662469"><enum>(B)</enum><text display-inline="yes-display-inline">is a founder of the digital commodity issuer; or</text></subparagraph> <subparagraph id="H8722A5091D244AFCAA5E71EDD995642D"><enum>(C)</enum><text display-inline="yes-display-inline">is an executive officer, director, trustee, general partner, or person serving in a similar capacity of the digital commodity issuer or held such role at any point in the previous 12-month period.</text></subparagraph></paragraph> <paragraph id="HEE8CAC1510824DB39E40182EDE7BC180"><enum>(28)</enum><header>Digital commodity issuer</header> <subparagraph id="H9F7F1D5E2C4D439BABDE6F957D411FD7"><enum>(A)</enum><header>In general</header><text>With respect to a digital commodity, the term <term>digital commodity issuer</term> means any person that—</text> <clause id="H8CFFA12E146D477EB74AC4847F551ED5"><enum>(i)</enum><text display-inline="yes-display-inline">issues or causes to be issued, or proposes to issue or cause to be issued, a unit of such digital commodity to a person; or</text></clause> <clause id="H5AD85D1B11B24F9E8D48D69E17157B07"><enum>(ii)</enum><text>offers or sells a right to a future issuance of a unit of such digital commodity to a person.</text></clause></subparagraph> <subparagraph id="H4C01580BF5684BC88AD19223999BC3B5" commented="no"><enum>(B)</enum><header>Prohibition on evasion</header><text display-inline="yes-display-inline">It shall be unlawful for any person to knowingly evade classification as a <quote>digital commodity issuer</quote> and facilitate an arrangement for the primary purpose of effecting an offer, sale, distribution, or other issuance of a digital commodity, including via any arrangement involving the transfer of intellectual property associated with the blockchain system to which the digital commodity relates.</text></subparagraph></paragraph> <paragraph id="H46D394B3ABCD495EBBCC893D15A30987"><enum>(29)</enum><header>Digital commodity related person</header> <subparagraph id="HE4C868A6E4824FD79434D06B78594D4A"><enum>(A)</enum><header>In general</header><text>With respect to a digital commodity issuer, the term <term>digital commodity related person</term> means a person—</text> <clause id="H61706F070FA541B5B50A526BB49D8DE0"><enum>(i)</enum><text display-inline="yes-display-inline">that is or was in the previous 6-month period a promoter, senior employee, advisory board member, consultant, advisor, or person serving in a similar capacity; or</text></clause> <clause id="H5CADEF13432140ECB006DA0350ADDD8C"><enum>(ii)</enum><text display-inline="yes-display-inline">that acquires or has any right to acquire 1 percent or more of the total outstanding units of such digital commodity from a digital commodity issuer or an agent or underwriter thereof (other than a decentralized governance system).</text></clause></subparagraph> <subparagraph id="HE5DEBF6B15BC4AE5BDA33F2ECBBDD6BE"><enum>(B)</enum><header>Senior employee defined</header><text display-inline="yes-display-inline">In this paragraph and with respect to a digital commodity issuer, the term <term>senior employee</term> means any employee materially involved in the management of the digital commodity issuer, including management of the development of the blockchain system to which the digital commodity relates.</text></subparagraph></paragraph> <paragraph id="H83A2813F41AC4711B484D9CE812EA7EB"><enum>(30)</enum><header>End user distribution</header><text>The term <term>end user distribution</term> means a distribution of a unit of a digital commodity that—</text> <subparagraph id="HA5AFAC7AE4924C728F3D18CB8BD79B03"><enum>(A)</enum><text display-inline="yes-display-inline">does not involve an exchange of more than a nominal value of cash, property, or other assets; and</text></subparagraph> <subparagraph id="H13399BD10333419896D7A8ED36491149"><enum>(B)</enum><text display-inline="yes-display-inline">is distributed in a broad and equitable manner based on conditions capable of being satisfied by any participant in the blockchain system, including, as incentive-based rewards—</text> <clause id="HEE330CE393804564B736C2EBF2638B86"><enum>(i)</enum><text display-inline="yes-display-inline">to users of the digital commodity or any blockchain system to which the digital commodity relates;</text></clause> <clause id="H937B4798E1EE42419BA052C9A29DA514"><enum>(ii)</enum><text>for activities directly related to the operation of the blockchain system, such as mining, validating, staking, or other activity directly tied to the operation of the blockchain system; or</text></clause> <clause id="HA02FAB2F831A4D6891FA054EF95637FA"><enum>(iii)</enum><text display-inline="yes-display-inline">to the existing holders of another digital commodity, in proportion to the total units of such other digital commodity as are held by each person.</text></clause></subparagraph></paragraph> <paragraph id="H0F42E4324B4A45F4B27F09DF652A857C"><enum>(31)</enum><header>Mature blockchain system</header><text display-inline="yes-display-inline">The term ‘mature blockchain system’ means a blockchain system, together with its related digital commodity, that is not controlled by any person or group of persons under common control.</text></paragraph> <paragraph id="H2B9EF51534DC4694A16AD74D3B48C836" commented="no"><enum>(32)</enum><header>Permitted payment stablecoin</header> <subparagraph id="H63F94C19BA314D23815F03635AD0E997"><enum>(A)</enum><header>In general</header><text>The term <term>permitted payment stablecoin</term> means a digital asset—</text> <clause id="H434DD67FBEA94F4FAB10EDA37CD19BE3" commented="no"><enum>(i)</enum><text>that is or is designed to be used as a means of payment or settlement;</text></clause> <clause id="HD5C02665E6CD4B288E6799345021BD58"><enum>(ii)</enum><text>that is denominated in a national currency;</text></clause> <clause id="HAA58A9344DC54CD0B4C0BC5546C47981"><enum>(iii)</enum><text display-inline="yes-display-inline">the issuer of which is subject to the regulatory and supervisory authority of a State or Federal agency;</text></clause> <clause id="H9FD205964B7B46FBB69EBA9A220C7130" commented="no"><enum>(iv)</enum><text>the issuer of which—</text> <subclause id="HE8BD1EA1EB7D42D2BC44AEF4018590D9" commented="no"><enum>(I)</enum><text>is obligated to convert, redeem, or repurchase for a fixed amount of monetary value; or</text></subclause> <subclause id="H992133D9511A485F91A13FFAA3EE3724" commented="no"><enum>(II)</enum><text display-inline="yes-display-inline">represents that the digital asset will maintain or creates the reasonable expectation that the digital asset will maintain a stable value relative to the value of a fixed amount of monetary value; and</text></subclause></clause> <clause id="HC5E413BB57304688BFE2748BBA3ECD4C" commented="no"><enum>(v)</enum><text>that is not—</text> <subclause id="H4FDAD102EACD4491A099DB84B89741B5" commented="no"><enum>(I)</enum><text>a national currency;</text></subclause> <subclause id="HBCD5CBA6E36C466DBE1CEF4F5FE946AE" commented="no"><enum>(II)</enum><text>a security issued by—</text> <item id="H2154E9D286094399B8F4037D6E449005"><enum>(aa)</enum><text>an investment company registered under section 8(a) of the Investment Company Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80a-8">15 U.S.C. 80a–8(a)</external-xref>); or</text></item> <item id="H1254105F9DE64914BF31536D5B659D4D"><enum>(bb)</enum><text display-inline="yes-display-inline">a person that would be an investment company under the Investment Company Act of 1940 but for paragraphs (1) and (7) of section 3(c) of that Act (<external-xref legal-doc="usc" parsable-cite="usc/15/80a-3">15 U.S.C. 80a–3(c)</external-xref>);</text></item></subclause> <subclause id="HC58CC8B86373470CB40E35A156174700"><enum>(III)</enum><text display-inline="yes-display-inline">a deposit (as defined under section 3 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813</external-xref>)), regardless of the technology used to record such deposit; or</text></subclause> <subclause id="H695DB437BD634E89B140AA439BC64448"><enum>(IV)</enum><text display-inline="yes-display-inline">an account (as defined in section 101 of the Federal Credit Union Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1752">12 U.S.C. 1752</external-xref>)), regardless of the technology used to record such account.</text></subclause></clause></subparagraph> <subparagraph id="H792409460CA644F69FCCA25C0F7B75AB" display-inline="no-display-inline"><enum>(B)</enum><header>Monetary value defined</header><text>The term <term>monetary value</term>—</text> <clause id="H11CD1A4EF11645D6BFC9D6C1D703AEBA"><enum>(i)</enum><text display-inline="yes-display-inline">means—</text> <subclause id="H630C8CA496C54C4BA0012D2A1776808F"><enum>(I)</enum><text>a national currency;</text></subclause> <subclause id="H085474C04376429787E4AABAA401FC55"><enum>(II)</enum><text>a deposit (as defined in section 3 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813</external-xref>)) that is denominated in a national currency; or</text></subclause> <subclause id="HEB2B6C1568AD44D2B8014B48443182B8"><enum>(III)</enum><text display-inline="yes-display-inline">an account (as defined in section 101 of the Federal Credit Union Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1752">12 U.S.C. 1752</external-xref>)); and</text></subclause></clause> <clause id="H500B27221C56491BBCD349414DAD5E87"><enum>(ii)</enum><text display-inline="yes-display-inline">does not include any agricultural or other physical commodity (as defined in section 1a of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1a">7 U.S.C. 1a</external-xref>)).</text></clause></subparagraph></paragraph> <paragraph id="H72B8F46C966B4DB797A00DEB5FF7BD92"><enum>(33)</enum><header>Securities laws</header><text display-inline="yes-display-inline">The term <term>securities laws</term> has the meaning given that term under section 3(a) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78c">15 U.S.C. 78c(a)</external-xref>).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="HCABE8594EC5649A4BD7EA2052E0C8B35"><enum>102.</enum><header>Definitions under the Securities Exchange Act of 1934</header><text display-inline="no-display-inline">Section 3(a) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78c">15 U.S.C. 78c(a)</external-xref>) is amended—</text> <paragraph id="H534506E2EFAF48DE9CBAD9D72182B851"><enum>(1)</enum><text>by redesignating the second paragraph (80) (relating to funding portals) as paragraph (81); and</text></paragraph> <paragraph id="H33F08CA629244CF9B8E985729CDD97C7"><enum>(2)</enum><text>by adding at the end the following:</text> <quoted-block id="H5C2DD95097BD472EBD749FCCBF5DFACF" style="OLC"> <paragraph id="H53EC6F0EB6554AD5AAE42B1FBB0A9C6C" display-inline="no-display-inline"><enum>(82)</enum><header>Bank Secrecy Act</header><text>The term <term>Bank Secrecy Act</term> means—</text> <subparagraph id="HCBA5F21801EA49E7A6493901D155C40A"><enum>(A)</enum><text>section 21 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1829b">12 U.S.C. 1829b</external-xref>);</text></subparagraph> <subparagraph id="HDCCDB026F1E44953BCF6015F3D078685"><enum>(B)</enum><text>chapter 2 of title I of <external-xref legal-doc="public-law" parsable-cite="pl/91/508">Public Law 91–508</external-xref> (<external-xref legal-doc="usc" parsable-cite="usc/12/1951">12 U.S.C. 1951 et seq.</external-xref>); and</text></subparagraph> <subparagraph id="H3691FB0091DD405FBA86834E8C8F060B"><enum>(C)</enum><text>subchapter II of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/31/53">chapter 53</external-xref> of title 31, United States Code.</text></subparagraph></paragraph> <paragraph id="H0ACCD0C97EF7483A9B8763DE3A43254C"><enum>(83)</enum><header>Additional digital commodity-related terms</header> <subparagraph id="H5116712F48ED497FB371D0446C9ED2CA"><enum>(A)</enum><header>Securities Act of 1933</header><text display-inline="yes-display-inline">The terms <term>blockchain system</term>, <term>decentralized governance system</term>, <term>digital asset</term>, <term>digital commodity affiliated person</term>, <term>digital commodity issuer</term>, <term>digital commodity related person</term>, <term>end user distribution</term>, <term>mature blockchain system</term>, and <term>permitted payment stablecoin</term> have the meaning given those terms, respectively, under section 2(a) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77b">15 U.S.C. 77b(a)</external-xref>).</text></subparagraph> <subparagraph id="HB3EB0D6C35224AD9B87208541052DB31"><enum>(B)</enum><header>Commodity Exchange Act</header><text display-inline="yes-display-inline">The terms <term>digital commodity</term>, <term>digital commodity broker</term>, <term>digital commodity dealer</term>, <term>digital commodity exchange</term>, <term>decentralized finance messaging system</term>, and <term>decentralized finance trading protocol</term> have the meaning given those terms, respectively, under section 1a of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1a">7 U.S.C. 1a</external-xref>).</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section> <section id="H8494F2E2318C4614A8618B3493ABC2DF" display-inline="no-display-inline" section-type="subsequent-section"><enum>103.</enum><header>Definitions under the Commodity Exchange Act</header> <subsection id="HF83AA75447344969979346782EAA0B62"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 1a of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1a">7 U.S.C. 1a</external-xref>) is amended—</text> <paragraph id="H6666995D7E4D4198AD02E8CA9792A239"><enum>(1)</enum><text>in paragraph (10)—</text> <subparagraph id="HCCC473D5A5354C5E9071CCAF1B089775"><enum>(A)</enum><text>in subparagraph (A)—</text> <clause id="H7B1C78A03E79483E99349777EBE5EFCA"><enum>(i)</enum><text display-inline="yes-display-inline">by redesignating clauses (iii) and (iv) as clauses (iv) and (v), respectively; and</text></clause> <clause id="H890422D4D2CC4AABA151BD77E2EEB966"><enum>(ii)</enum><text>by inserting after clause (ii) the following:</text> <quoted-block style="OLC" id="HB335D47E7806446FA67F47AA64396203" display-inline="no-display-inline"> <clause id="H1E51550E84B1472DB42C17C7A9A7E7C9"><enum>(iii)</enum><text display-inline="yes-display-inline">digital commodity;</text></clause><after-quoted-block>; and</after-quoted-block></quoted-block></clause></subparagraph> <subparagraph id="H1C78C83CB1C04718B7868BC7EB0521FE"><enum>(B)</enum><text>by redesignating subparagraph (B) as subparagraph (C) and inserting after subparagraph (A) the following:</text> <quoted-block style="OLC" id="H152D4941F3664A2A9CE62680480DDCAD" display-inline="no-display-inline"> <subparagraph id="HD2AB7306547448B4B69210575A739291"><enum>(B)</enum><header>Exclusion</header><text display-inline="yes-display-inline">For purposes of this paragraph, the term <term>trading in commodity interests</term> shall not include transacting in digital commodities for the purpose of—</text> <clause id="H0798D922DB314C6BA2550DB52E60DA05"><enum>(i)</enum><text>acting as a digital commodity custodian;</text></clause> <clause id="HD0C32B6EACFD4A0E959ACDB5A7EB4410"><enum>(ii)</enum><text>establishing, maintaining, or managing inventory or payment instruments for commercial purposes; or</text></clause> <clause id="HA03DC571BC0D43AB8484A4E2689E2B23"><enum>(iii)</enum><text>maintaining or supporting the operation of, or validating transactions on, a blockchain system.</text></clause></subparagraph><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph></paragraph> <paragraph id="H9A528486C8014F3DAACAFFA9975D0078"><enum>(2)</enum><text>in paragraph (11)—</text> <subparagraph id="H64F280E1433545A6957A783E22C59989"><enum>(A)</enum><text>in subparagraph (A)(i)—</text> <clause id="HDF7D77A00D39409097631D9CA30DD7AC"><enum>(i)</enum><text display-inline="yes-display-inline">by redesignating subclauses (III) and (IV) as subclauses (IV) and (V), respectively; and</text></clause> <clause id="HF6440ECA2EDF425786ECF2282426A884"><enum>(ii)</enum><text>by inserting after subclause (II) the following:</text> <quoted-block style="OLC" id="H57D9DB68DDE64AA7ACEBFEAD91F95D69" display-inline="no-display-inline"> <subclause id="HFB187EC65D58407E89E6B9B58D6CF50B"><enum>(III)</enum><text display-inline="yes-display-inline">digital commodity;</text></subclause><after-quoted-block>; and</after-quoted-block></quoted-block></clause></subparagraph> <subparagraph id="HFDF3F1AE564F45B4BC62D1A9E88276B2"><enum>(B)</enum><text>by redesignating subparagraph (B) as subparagraph (C) and inserting after subparagraph (A) the following:</text> <quoted-block style="OLC" id="HFCBFF1D768AC4C21951777831E3E6DF2" display-inline="no-display-inline"> <subparagraph id="H60205DE886B54456836152CB5BC5C4D2"><enum>(B)</enum><header>Exclusion</header><text display-inline="yes-display-inline">For purposes of this paragraph, the term <term>trading in commodity interests</term> shall not include transacting in digital commodities for the purpose of—</text> <clause id="H3F40B4D4B6F74120A3B27F1AB9315ABB"><enum>(i)</enum><text>acting as a digital commodity custodian;</text></clause> <clause id="HD960E6FEC2B04DC2864892C795CEBA93"><enum>(ii)</enum><text>establishing, maintaining, or managing inventory or payment instruments for commercial purposes; or</text></clause> <clause id="H0CF55D2E92F74D598DBD9890D183BE84"><enum>(iii)</enum><text>maintaining or supporting the operation of, or validating transactions on, a blockchain system.</text></clause></subparagraph><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph></paragraph> <paragraph id="HC723ACB074C646BB950D1B5C94C11E81"><enum>(3)</enum><text>in paragraph (12)(A)(i)—</text> <subparagraph id="H12CBADA56E5A461F89BF3CCBEA931DF5"><enum>(A)</enum><text>in subclause (II), by adding at the end a semicolon;</text></subparagraph> <subparagraph id="HE5A511D0030D4EE5B4DC583BE491BDEB"><enum>(B)</enum><text display-inline="yes-display-inline">by redesignating subclauses (III) and (IV) as subclauses (IV) and (V), respectively; and</text></subparagraph> <subparagraph id="HE238CA733F464A24AA5311903C10DD36"><enum>(C)</enum><text>by inserting after subclause (II) the following:</text> <quoted-block style="OLC" id="H823F7E9422F542BAA01540CAF55EE791" display-inline="no-display-inline"> <subclause id="H9ED508C30F504685B3F6DA287C5773FB"><enum>(III)</enum><text display-inline="yes-display-inline">a digital commodity;</text></subclause><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph></paragraph> <paragraph id="H75265422FB024B90A34A95C4A52DC8DC"><enum>(4)</enum><text display-inline="yes-display-inline">by redesignating paragraphs (16) through (51) as paragraphs (17) through (52), respectively, and inserting after paragraph (15) the following:</text> <quoted-block style="OLC" id="HDEFB647179DE40E2886EF37AEA7D85F0" display-inline="no-display-inline"> <paragraph id="H2E589342DE1F4414AAE079BFAA39FF1E"><enum>(16)</enum><header>Terms related to digital commodities</header> <subparagraph id="H50962BEBB43948EF956C6E2E3A992DFB" commented="no"><enum>(A)</enum><header>Associated person of a digital commodity broker</header> <clause id="H791EC07CAED8462D8146FD54C6A76CD7" commented="no"><enum>(i)</enum><header>In general</header><text>Except as provided in clause (ii), the term <term>associated person of a digital commodity broker</term> means a person who is associated with a digital commodity broker as a partner, officer, employee, or agent (or any person occupying a similar status or performing similar functions) in any capacity that involves—</text> <subclause id="H830AF0250E764112A4C77E3C45F28E79" commented="no"><enum>(I)</enum><text>the solicitation or acceptance of an order for the purchase or sale of a digital commodity; or</text></subclause> <subclause id="HB04AA8C8A3B94DB9AD6334B4FFD6F978" commented="no"><enum>(II)</enum><text>the supervision of any person engaged in the solicitation or acceptance of an order for the purchase or sale of a digital commodity.</text></subclause></clause> <clause id="H2083115B5B784F05ADA7BF0512300799" commented="no"><enum>(ii)</enum><header>Exclusion</header><text>The term <term>associated person of a digital commodity broker</term> does not include any person associated with a digital commodity broker the functions of which are solely clerical or ministerial.</text></clause></subparagraph> <subparagraph id="HC3EDFDA3EDD8410AB133DE958B33A22F" commented="no"><enum>(B)</enum><header>Associated person of a digital commodity dealer</header> <clause id="HFC03D7DD0EC049879ED4EEB324073508" commented="no"><enum>(i)</enum><header>In general</header><text>Except as provided in clause (ii), the term <term>associated person of a digital commodity dealer</term> means a person who is associated with a digital commodity dealer as a partner, officer, employee, or agent (or any person occupying a similar status or performing similar functions) in any capacity that involves—</text> <subclause id="H362E63A4088F479892723BA24C769FC5" commented="no"><enum>(I)</enum><text>the solicitation or acceptance of a contract for the purchase or sale of a digital commodity; or</text></subclause> <subclause id="H3298CDE1E95243DBB034643C64879C98" commented="no"><enum>(II)</enum><text>the supervision of any person engaged in the solicitation or acceptance of a contract for the purchase or sale of a digital commodity.</text></subclause></clause> <clause id="H16120508863241968D72E13950C4E353" commented="no"><enum>(ii)</enum><header>Exclusion</header><text>The term <term>associated person of a digital commodity dealer</term> does not include any person associated with a digital commodity dealer the functions of which are solely clerical or ministerial.</text></clause></subparagraph> <subparagraph id="H7B91E49FC6BC4A358DF18AFCF8749139" display-inline="no-display-inline"><enum>(C)</enum><header>Bank Secrecy Act</header><text>The term <term>Bank Secrecy Act</term> means—</text> <clause id="HA48F5849BE4A4C698E9B358800FD70C1"><enum>(i)</enum><text>section 21 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1829b">12 U.S.C. 1829b</external-xref>);</text></clause> <clause id="H5D05E7C79DF947F580845F8B3C0DFBEA"><enum>(ii)</enum><text>chapter 2 of title I of <external-xref legal-doc="public-law" parsable-cite="pl/91/508">Public Law 91–508</external-xref> (<external-xref legal-doc="usc" parsable-cite="usc/12/1951">12 U.S.C. 1951 et seq.</external-xref>); and</text></clause> <clause id="H1DCBE98E6D13402F8E66E313B32E9FD2"><enum>(iii)</enum><text>subchapter II of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/31/53">chapter 53</external-xref> of title 31, United States Code.</text></clause></subparagraph> <subparagraph id="H94AF55F30B0B4F099EAD435FA30F92D1"><enum>(D)</enum><header>Decentralized finance messaging system</header> <clause id="H9CAB3122DB5D404FB753E4A03BB02571"><enum>(i)</enum><header>In general</header><text>The term <term>decentralized finance messaging system</term> means a software application that provides a user with the ability to create or submit an instruction, communication, or message to a decentralized finance trading protocol for the purpose of executing a transaction by the user.</text></clause> <clause id="H022216D7DF2B4138B9D07E826D34CA7A"><enum>(ii)</enum><header>Additional requirements</header><text>The term <term>decentralized finance messaging system</term> does not include any system that provides any person other than the user with control over—</text> <subclause id="HADF2AF652DF348B5A42825385654CA09"><enum>(I)</enum><text>the funds of the user; or</text></subclause> <subclause id="H5763A077CEBC4721AD30DA7FE0E2D896"><enum>(II)</enum><text>the execution of the transaction of the user.</text></subclause></clause></subparagraph> <subparagraph id="H86DA5FFE002C4F8BA6080F1358BADDC4"><enum>(E)</enum><header>Decentralized finance trading protocol</header> <clause id="H83B21B7C0CFF4A5B9FCB625C3D889B8A"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">The term <term>decentralized finance trading protocol</term> means a blockchain system through which multiple participants can execute a financial transaction—</text> <subclause id="HEE92834A8EE74ECAA97DE10F349DE32E"><enum>(I)</enum><text>in accordance with an automated rule or algorithm that is predetermined and non-discretionary; and</text></subclause> <subclause id="HA4829745467E4A87B633E0C2F94063F1"><enum>(II)</enum><text>without reliance on any other person to maintain control of the digital assets of the user during any part of the financial transaction.</text></subclause></clause> <clause id="H729D0AC199264B5CB6B796B2187AEB21"><enum>(ii)</enum><header>Exclusions</header> <subclause id="HB3F232C0E8914CF2BAA158357E3DD81F"><enum>(I)</enum><header>In general</header><text>The term <term>decentralized finance trading protocol</term> does not include a blockchain system if—</text> <item id="H8B0FF9B0FBC04185930672221564C28A"><enum>(aa)</enum><text display-inline="yes-display-inline">a person or group of persons under common control has the unilateral authority, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, to control or materially alter the functionality, operation, or rules of consensus or agreement of the blockchain system; or</text></item> <item id="H35AC3F6988294A3DA228FEE6DA26BA0A"><enum>(bb)</enum><text>the blockchain system does not operate, execute and enforce its operations and transactions based solely on pre-established, transparent rules encoded directly within the source code of the blockchain system.</text></item></subclause> <subclause id="HA1F3072A2D1B483E865E05097E626D65"><enum>(II)</enum><header>Special rule</header><text>For purposes of subclause (I), a decentralized governance system shall not be considered to be a person or a group of persons under common control.</text></subclause></clause></subparagraph> <subparagraph id="HFFFB920D7A19404483BE1265FD150286" commented="no"><enum>(F)</enum><header>Digital commodity</header> <clause id="HAAFC9DD7106641ADA9E893A65B799740"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">The term <term>digital commodity</term> means a digital asset that is intrinsically linked to a blockchain system, and the value of which is derived from or is reasonably expected to be derived from the use of the blockchain system.</text></clause> <clause id="H10024498C0E1466B961EDE3491E6A182"><enum>(ii)</enum><header>Relationship to a blockchain system</header><text>For purposes of this subparagraph, a digital asset is intrinsically linked to a blockchain system if the digital asset is directly related to the functionality or operation of the blockchain system or to the activities or services for which the blockchain system is created or utilized, including where the digital asset is—</text> <subclause id="HABBA047409694C45BAFB2435201D9663"><enum>(I)</enum><text>issued or generated by the programmatic functioning of the blockchain system;</text></subclause> <subclause id="H22BBFD313D864C3E885A7E9AD45A323B"><enum>(II)</enum><text>used to transfer value between participants in the blockchain system;</text></subclause> <subclause id="H44B8216689BA415F9C7D26BA755CAA08"><enum>(III)</enum><text>used to access the activities or services of the blockchain system;</text></subclause> <subclause id="HF43D686ACE8E45719CCD6E7540D9E2B3"><enum>(IV)</enum><text>used to participate in the decentralized governance system of the blockchain system;</text></subclause> <subclause id="HC120E7FBBE6C443598DC9099E99EBFEE"><enum>(V)</enum><text>used or removed from circulation in whole or in part to pay fees or otherwise verify or validate transactions on the blockchain system;</text></subclause> <subclause id="H1E85C47D81574FC1ACB020779580C5AB"><enum>(VI)</enum><text>used as payment or incentive to participants in the blockchain system to engage in the activities of the blockchain system, provide services to other participants in the blockchain system, or otherwise participate in the functionality of the blockchain system; or</text></subclause> <subclause id="H58A1B9DA1E604EB097954E936D9629C1"><enum>(VII)</enum><text>used as payment or incentive to participants in the blockchain system to validate transactions, secure the blockchain system, provide computational services, maintain or distribute information, or otherwise participate in the operations of the blockchain system.</text></subclause></clause> <clause id="H8728CB6CBFC2444DA6B2A5789BEF058D"><enum>(iii)</enum><header>Exclusion</header><text>The term <term>digital commodity</term> does not include any of the following:</text> <subclause id="H11DE94AED9F147B2B8DCE70AC7B74DAB" commented="no"><enum>(I)</enum><header>Security</header> <item id="H4D3F7504C46D4AFDB7824E07F6CD734C" commented="no"><enum>(aa)</enum><text display-inline="yes-display-inline">Any security, other than a note, an investment contract, or a certificate of interest or participation in any profit-sharing agreement.</text></item> <item id="HEF0728BC85794179837D751D328947BE" commented="no"><enum>(bb)</enum><text>A note, an investment contract, or a certificate of interest or participation in any profit-sharing agreement that represents or gives the holder an ownership interest or other interest in the revenues, profits, obligations, debts, assets, or assets or debts to be acquired of the issuer of the digital asset or another person (other than a decentralized governance system). </text></item></subclause> <subclause id="H104FD260CD88424EBF0D16B46FB93345"><enum>(II)</enum><header>Security derivative</header><text>A digital asset that, based on its terms and other characteristics, is, represents, or is functionally equivalent to an agreement, contract, or transaction that is—</text> <item id="H51CDD01AFF204F7BAAC9B758E25FC1C2"><enum>(aa)</enum><text>a security future, as defined in section 2a of the Securities Act of 1933;</text></item> <item id="H39FFFBA86FE548A4843E2CA6ECFE5179"><enum>(bb)</enum><text>a security-based swap, as defined in section 2a of the Securities Act of 1933;</text></item> <item id="H26AD456444B24989A5EB04CE5063DD46"><enum>(cc)</enum><text>a put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), as defined in section 2a of the Securities Act of 1933; or</text></item> <item id="H1EC62B78091446018CA973CF4CDB33AA"><enum>(dd)</enum><text>a put, call, straddle, option, or privilege on any security, as defined in section 2a of the Securities Act of 1933.</text></item></subclause> <subclause id="HE905D4FCCE9D422E83FF3D8A8EF3512C"><enum>(III)</enum><header>Permitted payment stablecoin</header><text>A digital asset that is a permitted payment stablecoin.</text></subclause> <subclause id="HDBD64B9B647743D892279DD17B52DED4"><enum>(IV)</enum><header>Banking deposit</header> <item id="HE5C574CE32AA4B77A35F375256641EE6"><enum>(aa)</enum><text>A deposit (as defined under section 3 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813</external-xref>)), regardless of the technology used to record the deposit.</text></item> <item id="HB03D83BF422144D5A9175A80F4D1849B"><enum>(bb)</enum><text display-inline="yes-display-inline">An account (as defined in section 101 of the Federal Credit Union Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1752">12 U.S.C. 1752</external-xref>)), regardless of the technology used to record the account.</text></item></subclause> <subclause id="HD4376F0937474DC9884DEA40E699C100"><enum>(V)</enum><header>Commodity</header><text>A digital asset that references, represents an interest in, or is functionally equivalent to—</text> <item id="HE74877B06E0249FBBB951C2AE586C0DB"><enum>(aa)</enum><text>an agricultural commodity;</text></item> <item id="HF5E8D9B6C2B147A68C39C718FD3D0D90"><enum>(bb)</enum><text>an excluded commodity, other than a security; or</text></item> <item id="H7F896E0CF13945D0A5DE678FBAC80704"><enum>(cc)</enum><text>an exempt commodity, other than the digital commodity itself, as shall be further defined by the Commission.</text></item></subclause> <subclause id="HF754BDEA18C64204A5B910885236B2CD"><enum>(VI)</enum><header>Commodity derivative</header><text>A digital asset that, based on its terms and other characteristics, is, represents, or is functionally equivalent to an agreement, contract, or transaction that is—</text> <item id="H2DFFC1DB1DC446EFAFAE1EDCCFFED886"><enum>(aa)</enum><text>a contract of sale of a commodity for future delivery or an option thereon;</text></item> <item id="H1B06622A58404CD9B285E287401F209F"><enum>(bb)</enum><text>a security futures product;</text></item> <item id="H8EAF785B089746B4A30FCE61CF1D15FB"><enum>(cc)</enum><text>a swap;</text></item> <item id="H989FF497B4AE4C03A71706E3BFADED36"><enum>(dd)</enum><text>an agreement, contract, or transaction described in section 2(c)(2)(C)(i) or 2(c)(2)(D)(i);</text></item> <item id="HCDD6F5B9EDAD48F0AE5F6069F7261978"><enum>(ee)</enum><text>a commodity option authorized under section 4c; or</text></item> <item id="H69A69FA18B2141C98F00027D0C32DADE"><enum>(ff)</enum><text>a leverage transaction authorized under section 19.</text></item></subclause> <subclause id="HB23A4402984D42D88506E07AE0517225"><enum>(VII)</enum><header>Pooled investment vehicle</header> <item id="H73D3DDD24BF440DF8555CB64FAF2B3C3"><enum>(aa)</enum><header>In general</header><text>A digital asset that, based on its terms and other characteristics, is, represents, or is functionally equivalent to—</text> <subitem id="H3C37F15767F14CC1AA1A1D1911FF74BA"><enum>(AA)</enum><text>a commodity pool, as defined in this Act; or</text></subitem> <subitem id="H2A92CD4283914C99A2B1D1942B39CD48"><enum>(BB)</enum><text>a pooled investment vehicle.</text></subitem></item> <item id="H8DC8036D84DF435D855E388B9ED4366C"><enum>(bb)</enum><header>Pooled investment vehicle defined</header><text display-inline="yes-display-inline">In this subclause, the term <term>pooled investment vehicle</term> means any investment company as defined in section 3(a) of the Investment Company Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80a-3">15 U.S.C. 80a–3(a)</external-xref>) or any company that would be an investment company under section 3(a) of such Act but for the exclusion provided from that definition by paragraph (1), (7), or (9) of section 3(c) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/15/80a-3">15 U.S.C. 80a–3(c)(1)</external-xref>, (7), or (9)).</text></item></subclause> <subclause id="HC482409DBA284638B84E2EE3AEB5C8E7"><enum>(VIII)</enum><header>Good, collectible, and other non-commodity asset</header><text display-inline="yes-display-inline">A digital asset that has inherent value, utility, or significance beyond its mere existence as a digital asset, including the digital equivalent of a tangible or intangible good, such as—</text> <item id="H4290B9861311490CBF0DA2C72F1A0FD0"><enum>(aa)</enum><text>a work of art, a musical composition, a literary work, or other intellectual property;</text></item> <item id="H1BECD6429F3B41F9855EAB3A2532669A"><enum>(bb)</enum><text>collectibles, merchandise, virtual land, and video game assets;</text></item> <item id="HF6A7DF0A63EF47A998D90AE6C7D3E48D"><enum>(cc)</enum><text>affinity, rewards, or loyalty points, including airline miles or credit card points, that are not primarily speculative in nature; or</text></item> <item id="HF061735F1278459EB333BD9004F8F77F"><enum>(dd)</enum><text>rights, licenses, and tickets.</text></item></subclause></clause> <clause id="H09754C32AB2149AB9B9F063D8A2A7841"><enum>(iv)</enum><header>Rule of construction</header><text display-inline="yes-display-inline">No presumption shall exist that a digital asset is a security, nor shall a digital asset be excluded from being a digital commodity pursuant to clause (iii)(I), solely due to—</text> <subclause id="H774CF76451D74D47816A0868923E2FBF"><enum>(I)</enum><text>the digital asset providing voting or economic rights with respect to the blockchain system to which the digital asset relates or the decentralized governance system of the blockchain system;</text></subclause> <subclause id="H641B4EAF3A404D2A8434F49BB19E758A"><enum>(II)</enum><text display-inline="yes-display-inline">the value of the digital asset having the potential to appreciate or depreciate in response to the efforts, operations, or financial performance of the decentralized governance system of the blockchain system to which the digital asset relates; or</text></subclause> <subclause id="H4368FD9AC0CB426D9512BECFF3C0655A"><enum>(III)</enum><text display-inline="yes-display-inline">the value of the digital asset appreciating or depreciating due to the adoption and use of the blockchain system to which the digital asset relates or the decentralized governance system of the blockchain system.</text></subclause></clause></subparagraph> <subparagraph id="H4166C697C03D44AFB56521D3B4C6113E" commented="no"><enum>(G)</enum><header>Digital commodity broker</header> <clause id="H9A3BF90F60ED4204B76C5E7564BD8B48" commented="no"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">The term <term>digital commodity broker</term> means any person who, as a regular business—</text> <subclause id="H595E6BCB074247E58059B2148E44EC7B" commented="no"><enum>(I)</enum><text>is engaged in—</text> <item id="H61F2F7EB219A4EE0A35FB9E9A05A2C1D" commented="no"><enum>(aa)</enum><text>soliciting or accepting an order from a customer for—</text> <subitem id="HD5407C7327A245D78ECD22B1203A3192" commented="no"><enum>(AA)</enum><text>the purchase or sale of a digital commodity; or</text></subitem> <subitem id="H1B8E84527CFF46F29BA8CEAC5BF7682A" commented="no"><enum>(BB)</enum><text>an agreement, contract, or transaction described in section 2(c)(2)(D)(iv); and</text></subitem></item> <item id="H9681082FE435498AAD6468FD6B87644D" commented="no"><enum>(bb)</enum><text>in conjunction with the activities in item (aa), accepts or maintains control over—</text> <subitem id="HFD829638620D434295C09355EEC49CCD" commented="no"><enum>(AA)</enum><text>the funds of any customer; or</text></subitem> <subitem id="H289C769BCC314408A481B1C3A9ACB917" commented="no"><enum>(BB)</enum><text>the execution of any transaction of a customer;</text></subitem></item></subclause> <subclause id="H54F1DB4B55F14838AD51B130D63FE898" commented="no"><enum>(II)</enum><text>is engaged in soliciting or accepting orders from a customer for the purchase or sale of a unit of a digital commodity on or subject to the rules of a registered entity; or</text></subclause> <subclause id="HB0A711E4C7574214B139F8470D1F7F1D" commented="no"><enum>(III)</enum><text>is registered with the Commission as a digital commodity broker.</text></subclause></clause> <clause id="H2033E1691B604AA68E7B4B12E7E64255" commented="no"><enum>(ii)</enum><header>Exceptions</header><text>The term ‘digital commodity broker’ does not include a person solely because the person—</text> <subclause id="H8B04DCBBC7FE43B686E6FD979395F323"><enum>(I)</enum><text display-inline="yes-display-inline">solicits or accepts an order described in clause (i)(I)(aa)(AA) from a customer who is an eligible contract participant;</text></subclause> <subclause id="H216988E54AE74E49A3400B474C30D3B7" commented="no"><enum>(II)</enum><text>enters into a digital commodity transaction the primary purpose of which is to make, send, receive, or facilitate payments, whether involving a payment service provider or on a peer-to-peer basis; or</text></subclause> <subclause id="H53E8672E821840D0B17AC6AA4C2BAF77" commented="no"><enum>(III)</enum><text>is a bank (as defined under section 3(a) of the Securities Exchange Act of 1934) engaging in certain banking activities with respect to a digital commodity in the same or a similar manner as a bank is excluded from the definition of a broker under such section, as determined by the Commission.</text></subclause></clause> <clause id="H974166A3D2474EF4928E3C3D1A47C203" commented="no"><enum>(iii)</enum><header>Further definition</header><text>The Commission, by rule or regulation, may exclude from the term <term>digital commodity broker</term> any person or class of persons if the Commission determines that the rule or regulation will effectuate the purposes of this Act.</text></clause></subparagraph> <subparagraph id="H331BBC6B11544895B58CE68B65714A45" commented="no"><enum>(H)</enum><header>Digital commodity dealer</header> <clause id="H5F9DDE0310BD4F26A605AABC8C4D4193" commented="no"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">The term <term>digital commodity dealer</term> means any person who, as a regular business—</text> <subclause id="H78557DC2169B45EDB6F97C884B1B3316" commented="no"><enum>(I)</enum><text>is, or offers to be a counterparty to a person for the purchase or sale of a digital commodity as a regular business, and in conjunction with the activities, accepts or maintains control over the funds of any counterparty; or</text></subclause> <subclause id="H7F6A8139314044DBA3A5D643E7361C4A" commented="no"><enum>(II)</enum><text>is registered with the Commission as a digital commodity dealer.</text></subclause></clause> <clause id="H6C041ADFD7654983938C34E7EFF3F8DE" commented="no"><enum>(ii)</enum><header>Exception</header><text>The term <term>digital commodity dealer</term> does not include a person solely because the person—</text> <subclause id="HC16294F1BBE848A6921C036281A3E8C0"><enum>(I)</enum><text display-inline="yes-display-inline">is or offers to be a counterparty to a person who is an eligible contract participant;</text></subclause> <subclause id="H4E78E0436512499494D6C11EE06C9CB8" commented="no"><enum>(II)</enum><text>enters into a digital commodity transaction with an eligible contract participant;</text></subclause> <subclause id="H1ACF38141C004105AF386E387F942835" commented="no"><enum>(III)</enum><text display-inline="yes-display-inline">enters into a digital commodity transaction on or through a registered digital commodity exchange, with a registered digital commodity broker, or through a decentralized finance trading protocol;</text></subclause> <subclause id="H3197E6E189A74321A82157F314D3BC89" commented="no"><enum>(IV)</enum><text>enters into a digital commodity transaction for the person’s own account, either individually or in a fiduciary capacity, but not as a part of a regular business;</text></subclause> <subclause id="H5F71AF8F1B4446E2B3408C3623100DB5" commented="no"><enum>(V)</enum><text>enters into a digital commodity transaction the primary purpose of which is to make, send, receive, or facilitate payments, whether involving a payment service provider or on a peer-to-peer basis; or</text></subclause> <subclause id="H157F6909EB4444FE84119F2B73266006" commented="no"><enum>(VI)</enum><text>is a bank (as defined under section 3(a) of the Securities Exchange Act of 1934) engaging in certain banking activities with respect to a digital commodity in the same or a similar manner as a bank is excluded from the definition of a dealer under section 3(a)(5) of such Act, as determined by the Commission.</text></subclause></clause> <clause id="H0197FE212C494D21AE4A12315AD2DC92" commented="no"><enum>(iii)</enum><header>Further definition</header><text>The Commission, by rule or regulation, may exclude from the term <term>digital commodity dealer</term> any person or class of persons if the Commission determines that the rule or regulation will effectuate the purposes of this Act.</text></clause></subparagraph> <subparagraph id="H1A502529B68E4E5C99D856482DA17EB3"><enum>(I)</enum><header>Digital commodity exchange</header><text display-inline="yes-display-inline">The term <term>digital commodity exchange</term> means a trading facility that offers or seeks to offer a cash or spot market in at least 1 digital commodity.</text></subparagraph> <subparagraph id="H41C42D674E88453EAA4256F6C648C1DE"><enum>(J)</enum><header>Mixed digital asset transaction</header><text display-inline="yes-display-inline">The term <term>mixed digital asset transaction</term> means a transaction in which a digital commodity is traded for a security.</text></subparagraph> <subparagraph id="H922957FECE574A2E9FE4DDF6C01DEB2E"><enum>(K)</enum><header>Terms defined under the Securities Act of <enum-in-header>1933</enum-in-header></header><text display-inline="yes-display-inline">The terms <term>blockchain system</term>, <term>decentralized governance system</term>, <term>digital asset</term>, <term>digital commodity issuer</term>, <term>digital commodity affiliated person</term>, <term>digital commodity related person</term>, <term>end user distribution</term>, <term>mature blockchain system</term>, and <term>permitted payment stablecoin</term> have the meaning given those terms, respectively, under section 2(a) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77b">15 U.S.C. 77b(a)</external-xref>).</text></subparagraph></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph> <paragraph id="HB1B4B666A22A4B549CC4E8AB467851CF"><enum>(5)</enum><text>in paragraph (41) (as so redesignated by paragraph (4) of this subsection)—</text> <subparagraph id="H13C80114E2F04FA7B1E4A1C609DFA22B"><enum>(A)</enum><text>by striking <quote>and</quote> at the end of subparagraph (E);</text></subparagraph> <subparagraph id="H1A497A5EE62E4D70A64E7A3336257ED7"><enum>(B)</enum><text>by striking the period at the end of subparagraph (F) and inserting <quote>; and</quote>; and</text></subparagraph> <subparagraph id="H392CB81183574B77991FD923A45B9B30"><enum>(C)</enum><text>by adding at the end the following:</text> <quoted-block style="OLC" id="HC3F2DA7ECED84B55A72A6C1A9ABFCDFE" display-inline="no-display-inline"> <subparagraph id="HDDEB70787DB34C83BDBEBD29E994C045"><enum>(G)</enum><text display-inline="yes-display-inline">a digital commodity exchange registered under section 5i.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph></subsection> <subsection id="HA33F62B14DEC4A65AE4B0F5D5A4C6280"><enum>(b)</enum><header>Conforming amendments</header> <paragraph id="HB154367D6CAA42E88BA563A9A024B99D"><enum>(1)</enum><text>Each of the following provisions of law is amended by striking <quote>1a(18)</quote> and inserting <quote>1a(19)</quote>:</text> <subparagraph id="H2AC4964448334B49ABC00FC95F3C8596"><enum>(A)</enum><text>Section 4s(h)(5)(A)(i) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/6s">7 U.S.C. 6s(h)(5)(A)(i)</external-xref>).</text></subparagraph> <subparagraph id="HE4187313B69E43A78CA92957C52DAFB8"><enum>(B)</enum><text>Section 5(e) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77e">15 U.S.C. 77e(e)</external-xref>).</text></subparagraph> <subparagraph id="HC6283AA5B1DA4081B22E7CEE236EA82D"><enum>(C)</enum><text>Section 6(g)(5)(B) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78f">15 U.S.C. 78f(g)(5)(B)</external-xref>).</text></subparagraph> <subparagraph id="H02C5CCFEA5C2444E98FF69540372D577"><enum>(D)</enum><text display-inline="yes-display-inline">Section 15F(h)(5)(A)(i) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78o-10">15 U.S.C. 78o–10(h)(5)(A)(i)</external-xref>).</text></subparagraph></paragraph> <paragraph id="H87F38B20A3A740EDBC440B7B0E7002E5"><enum>(2)</enum><text>Section 752 of the Wall Street Transparency and Accountability Act of 2010 (<external-xref legal-doc="usc" parsable-cite="usc/15/8325">15 U.S.C. 8325</external-xref>) is amended by striking <quote>1a(39)</quote> and inserting <quote>1a(40)</quote>.</text></paragraph> <paragraph id="H52D8831F87BE47C0B6C0B479F9583FB0"><enum>(3)</enum><text display-inline="yes-display-inline">Section 4s(f)(1)(D) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/6s">7 U.S.C. 6s(f)(1)(D)</external-xref>) is amended by striking <quote>1a(47)(A)</quote> and inserting <quote>1a(48)(A)</quote>.</text></paragraph> <paragraph id="H25571F9F25B44F1291B6886D6DF70D01"><enum>(4)</enum><text>Each of the following provisions of the Commodity Exchange Act is amended by striking <quote>1a(47)(A)(v)</quote> and inserting <quote>1a(48)(A)(v)</quote>:</text> <subparagraph id="H1CE3685B38124417802261587DDA72E3"><enum>(A)</enum><text>Section 4t(b)(1)(C) (<external-xref legal-doc="usc" parsable-cite="usc/7/6t">7 U.S.C. 6t(b)(1)(C)</external-xref>).</text></subparagraph> <subparagraph id="H86D31C2B981F49288196BCA04C28E571"><enum>(B)</enum><text>Section 5(d)(23) (<external-xref legal-doc="usc" parsable-cite="usc/7/7">7 U.S.C. 7(d)(23)</external-xref>).</text></subparagraph> <subparagraph id="H66DCCDD40DA14E2E967FE400AE57A537"><enum>(C)</enum><text display-inline="yes-display-inline">Section 5b(k)(3) (<external-xref legal-doc="usc" parsable-cite="usc/7/7a-1">7 U.S.C. 7a–1(k)(3)</external-xref>).</text></subparagraph> <subparagraph id="HE7A90324303440B298189A0AC752B51E"><enum>(D)</enum><text display-inline="yes-display-inline">Section 5h(f)(10)(A)(iii) (<external-xref legal-doc="usc" parsable-cite="usc/7/7b-3">7 U.S.C. 7b–3(f)(10)(A)(iii)</external-xref>).</text></subparagraph></paragraph> <paragraph id="H5B65D67CF8CC4C9FA2717287FDB1F92F"><enum>(5)</enum><text>Section 21(f)(4)(C) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/24a">7 U.S.C. 24a(f)(4)(C)</external-xref>) is amended by striking <quote>1a(48)</quote> and inserting <quote>1a(49)</quote>.</text></paragraph> <paragraph id="H700D63E4A5EB4AD7B314A8CA9BAC6B57"><enum>(6)</enum><text>Section 403 of the Legal Certainty for Bank Products Act of 2000 (<external-xref legal-doc="usc" parsable-cite="usc/7/27a">7 U.S.C. 27a</external-xref>) is amended—</text> <subparagraph id="HAFCC9803241345BD8B8DC33105A67F24"><enum>(A)</enum><text>in subsection (a)(2), by striking <quote>1a(47)(A)(v)</quote> and inserting <quote>1a(48)(A)(v)</quote>; and</text></subparagraph> <subparagraph id="H7D83313D49824C4D86DFE04CFEAA6334"><enum>(B)</enum><text>in each of subsections (b)(1) and (c)(2), by striking <quote>1a(47)</quote> and inserting <quote>1a(48)</quote>.</text></subparagraph></paragraph> <paragraph id="HE2AD60CAFCA44225B9EADFDC70F7C4E9"><enum>(7)</enum><text>Section 712 of the Wall Street Transparency and Accountability Act of 2010 (<external-xref legal-doc="usc" parsable-cite="usc/15/8302">15 U.S.C. 8302</external-xref>) is amended—</text> <subparagraph id="HB519E3B82CFA40A29D8B460888909D74"><enum>(A)</enum><text>in subsection (a)(8), by striking <quote>1a(47)(D)</quote> each place it appears and inserting <quote>1a(48)(D)</quote>; and</text></subparagraph> <subparagraph id="HB71388CCE73048F782B1116AD5995029"><enum>(B)</enum><text>in subsection (d)(1), by striking <quote>1a(47)(A)(v)</quote> each place it appears and inserting <quote>1a(48)(A)(v)</quote>.</text></subparagraph></paragraph></subsection></section> <section id="H2DFDC518DB094367BF73A7407C5D0E28" commented="no" display-inline="no-display-inline" section-type="subsequent-section"><enum>104.</enum><header>Definitions under this Act</header><text display-inline="no-display-inline">In this Act:</text> <paragraph id="H3F8118753F39499A8A5A88D3FCC6F6F3" commented="no"><enum>(1)</enum><header>Definitions under the Commodity Exchange Act</header><text display-inline="yes-display-inline">The terms <term>decentralized finance messaging system</term>, <term>decentralized finance trading protocol</term>, <term>digital commodity</term>, <term>digital commodity broker</term>, <term>digital commodity dealer</term>, <term>digital commodity exchange</term>, and <term>mixed digital asset transaction</term> have the meaning given those terms, respectively, under section 1a of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1a">7 U.S.C. 1a</external-xref>).</text></paragraph> <paragraph id="HBC513F479875429D8EA896EF94CCEF40" commented="no"><enum>(2)</enum><header>Definitions under the Securities Act of 1933</header><text display-inline="yes-display-inline">The terms <term>blockchain</term>, <term>blockchain system</term>, <term>blockchain protocol</term>, <term>decentralized governance system</term>, <term>digital asset</term>, <term>digital commodity issuer</term>, <term>end user distribution</term>, <term>mature blockchain system</term>, <term>permitted payment stablecoin</term>, and <term>securities laws</term> have the meaning given those terms, respectively, under section 2(a) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77b">15 U.S.C. 77b(a)</external-xref>).</text></paragraph> <paragraph id="HC02B15B209DE4222A1D279CFAE04DC10"><enum>(3)</enum><header>Definitions under the Securities Exchange Act of 1934</header><text display-inline="yes-display-inline">The terms <term>Bank Secrecy Act</term>, <term>securities laws</term>, and <term>self-regulatory organization</term> have the meaning given those terms, respectively, under section 3(a) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78c">15 U.S.C. 78c(a)</external-xref>).</text></paragraph></section> <section id="H5A0A4116D07D44F9918120F02BA417B8"><enum>105.</enum><header>Rulemakings</header> <subsection id="HF83C0148FD934EAABE15D2EF33CA6CF3"><enum>(a)</enum><header>Definitions</header><text display-inline="yes-display-inline">The Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly issue rules to further define the following terms:</text> <paragraph id="H69F2EADB6782474ABF7EE3D63D3AEAAB"><enum>(1)</enum><text display-inline="yes-display-inline">The terms—</text> <subparagraph id="H18983F9426134C2B8D114BEC30404F48"><enum>(A)</enum><text><quote>blockchain</quote>, <quote>blockchain application</quote>, <quote>blockchain system</quote>, <quote>blockchain protocol</quote>, <quote>decentralized governance system</quote>, <quote>digital commodity affiliated person</quote>, <quote>digital commodity issuer</quote>, <quote>digital commodity related person</quote>, <quote>end user distribution</quote>, and <quote>mature blockchain system</quote>, as defined under section 2(a) of the Securities Act of 1933;</text></subparagraph> <subparagraph id="HF06018B7765748A9A0E4015C954F2F25"><enum>(B)</enum><text display-inline="yes-display-inline"><quote>unilateral authority</quote>, as such term is used in section 42 of the Securities Exchange Act of 1934 and section 1a of the Commodity Exchange Act; and</text></subparagraph> <subparagraph id="H3B9A5E54162B475BA6554D0D87E668E1"><enum>(C)</enum><text display-inline="yes-display-inline"><quote>programmatic functioning</quote>, as such term is used in sections 4C of the Securities Act of 1933, section 42 of the Securities Exchange Act of 1934, and section 1a of the Commodity Exchange Act.</text></subparagraph></paragraph> <paragraph id="H4A056BE97BE3483C8BC436550AE5A656"><enum>(2)</enum><text display-inline="yes-display-inline">The terms <term>digital commodity</term>, <term>decentralized finance messaging system</term>, and <term>decentralized finance trading protocol</term>, as defined under section 1a of the Commodity Exchange Act.</text></paragraph></subsection> <subsection id="H3C5713AB7F444F089D11AD3665F6908D"><enum>(b)</enum><header>Joint rulemaking for mixed digital asset transactions</header><text display-inline="yes-display-inline">The Securities and Exchange Commission and the Commodity Futures Trading Commission shall jointly issue rules applicable to mixed digital asset transactions under this Act and the amendments made by this Act, including by further defining such term.</text></subsection> <subsection id="HCD8576E75C8241CF859DAA05E5E8975C"><enum>(c)</enum><header>Protection of self-Custody</header> <paragraph id="H067E4FC3AE0A4A6CA49B0D89D4647F76"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">A United States individual shall retain the right to—</text> <subparagraph id="HE3E0CB12D9B143848CA711E6D6DD8DD7"><enum>(A)</enum><text>maintain a hardware wallet or software wallet for the purpose of facilitating the individual’s own lawful custody of digital assets; and</text></subparagraph> <subparagraph id="HE5616F26AB9B44D9A6049A6AD7FDA072"><enum>(B)</enum><text>engage in direct, peer-to-peer transactions in digital assets with another individual or entity for the individual’s own lawful purposes using a hardware wallet or software wallet, if—</text> <clause id="H7B50F618E2764D8BBF41D8C4A2A22234"><enum>(i)</enum><text display-inline="yes-display-inline">such other individual or entity is not a financial institution (as defined in section 5312 of title 31, United States Code); and</text></clause> <clause id="H6D656043F5D7476C8BF4994FF2E36964"><enum>(ii)</enum><text>the transactions do not involve any property or interests in property that are blocked pursuant to, or are otherwise prohibited by, United States sanctions.</text></clause></subparagraph></paragraph> <paragraph id="H7DC384636E794C5CBFD9011D4B5E8617"><enum>(2)</enum><header>Application</header><text>This subsection—</text> <subparagraph id="H9A03B1A76B3F44E690146B2957927642"><enum>(A)</enum><text>applies solely to personal use by individuals; and</text></subparagraph> <subparagraph id="H58BDAAA95FD84A6FB3974361C126D85C"><enum>(B)</enum><text>does not apply to individuals acting in a custodial or fiduciary capacity for others.</text></subparagraph></paragraph> <paragraph id="HFF99A0EEDD3D4B46A9D90E59B16105FF"><enum>(3)</enum><header>Rule of construction</header><text>Nothing in this subsection shall be construed to limit the authority of the Secretary of the Treasury, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, or the National Credit Union Administration to carry out any enforcement action or special measure authorized under applicable law, including—</text> <subparagraph id="H5788ED54D54B420B86914CBC8B7388F3"><enum>(A)</enum><text display-inline="yes-display-inline">the Bank Secrecy Act, section 9714 of the Combating Russian Money Laundering Act (<external-xref legal-doc="usc" parsable-cite="usc/31/5318A">31 U.S.C. 5318A</external-xref> note), and section 7213A of the Fentanyl Sanctions Act (<external-xref legal-doc="usc" parsable-cite="usc/21/2313a">21 U.S.C. 2313a</external-xref>); or</text></subparagraph> <subparagraph id="HB8832F93926246B88780C7B234133F9D"><enum>(B)</enum><text>any other law relating to illicit finance, money laundering, terrorism financing, or United States sanctions.</text></subparagraph></paragraph></subsection> <subsection id="H832C63AA2DA44540AE017459A72044D9" display-inline="no-display-inline"><enum>(d)</enum><header>Joint rulemaking, procedures, or guidance for delisting</header><text display-inline="yes-display-inline">Not later than 180 days after the date of the enactment of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly issue rules, procedures, or guidance (as determined appropriate by the Commissions) regarding the process to delist an asset for trading under section 106 of this Act if the Commissions determine that the listing is inconsistent with the Commodity Exchange Act, the securities laws (including regulations under those laws), or this Act.</text></subsection> <subsection id="HBF4AB24603444B9BA74F21E5F9E07B46" commented="no"><enum>(e)</enum><header>Joint rules for portfolio margining determinations</header> <paragraph id="H530CA3EF7D2C4F18A0B3BAB437E15159" commented="no"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Not later than 360 days after the date of the enactment of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly issue rules describing the process for persons registered with either such Commission to seek a joint order or determination with respect to margin, customer protection, segregation, or other requirements as necessary to facilitate portfolio margining of securities (including related extensions of credit), security-based swaps, contracts for future delivery, options on a contract for future delivery, swaps, and digital commodities, or any subset thereof, in—</text> <subparagraph id="H2AE455076E7F40BDBFC574E8615CDA7D" commented="no"><enum>(A)</enum><text>a securities account carried by a registered broker or dealer or a security-based swap account carried by a registered security-based swap dealer;</text></subparagraph> <subparagraph id="H7806850A2A6F4B41AAE4A10AC0AB58E9" commented="no"><enum>(B)</enum><text>a futures or cleared swap account carried by a registered futures commission merchant;</text></subparagraph> <subparagraph id="H457E5EAB2B8048FA842F02D378F5D3AE" commented="no"><enum>(C)</enum><text>a swap account carried by a swap dealer; or</text></subparagraph> <subparagraph id="HC741A8766126426084574DD44498D832" commented="no"><enum>(D)</enum><text>a digital commodity account carried by a registered digital commodity broker or digital commodity dealer that is also registered in such other capacity as is necessary to also carry the other customer or counterparty positions being held in the account.</text></subparagraph></paragraph> <paragraph id="H80EB5AA3EB114925BECD8C69E5A30550" commented="no"><enum>(2)</enum><header>Process</header><text display-inline="yes-display-inline">With respect to a joint order or determination described in paragraph (1), the rules required to be issued pursuant to paragraph (1) shall require—</text> <subparagraph id="HA70C3F3419F846309EB85312ACF64CB0" commented="no"><enum>(A)</enum><text display-inline="yes-display-inline">the joint order or determination to be issued only if the order or determination is in the public interest and provides for the appropriate protection of customers;</text></subparagraph> <subparagraph id="H883CE8B1512E4114BEE3E54F0328BA25" commented="no"><enum>(B)</enum><text display-inline="yes-display-inline">applicants to file a standard application, in a form and manner determined by the Securities and Exchange Commission and the Commodity Futures Trading Commission, which shall include the information necessary to make the joint order or determination;</text></subparagraph> <subparagraph id="H7ADDBF84407A4BD6BB5B71D68E4D86E6" commented="no"><enum>(C)</enum><text display-inline="yes-display-inline">the Securities and Exchange Commission and the Commodity Futures Trading Commission to make a final determination not later than 270 days after the filing of a completed application;</text></subparagraph> <subparagraph id="HAF81DCEE21054DB79FB71F3047B29CA0" commented="no"><enum>(D)</enum><text display-inline="yes-display-inline">the Securities and Exchange Commission and the Commodity Futures Trading Commission to consider the public interest of the joint order or determination through the solicitation of public comments; and</text></subparagraph> <subparagraph id="H594D2EB27D864BD486639FCA2ED278AE" commented="no"><enum>(E)</enum><text display-inline="yes-display-inline">the Securities and Exchange Commission and the Commodity Futures Trading Commission to consult with other relevant foreign or domestic regulators, including the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, as appropriate.</text></subparagraph></paragraph></subsection> <subsection id="H83991500E3434F8CA95EE66DAAD82306" commented="no"><enum>(f)</enum><header>Capital requirements to address netting agreements</header><text display-inline="yes-display-inline">No later than 360 days following the date of enactment of this Act, the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, and the Federal Deposit Insurance Corporation shall develop risk-based and leverage capital requirements for insured depository institutions, depository institution holding companies, and nonbank financial companies supervised by the Board of Governors that address netting agreements that provide for termination and close-out netting across multiple types of financial transactions, consistent with subsection (e), in the event of a counterparty’s default. </text></subsection></section> <section id="H41E1A50D7E8A4E288F7E3480D4083286" display-inline="no-display-inline" section-type="subsequent-section"><enum>106.</enum><header>Provisional registration for digital commodity exchanges, brokers, and dealers</header> <subsection id="HB894890860F84C4BB2CFAB86447C8F98"><enum>(a)</enum><header>In general</header> <paragraph id="H39F6469600074CB282F3DFFE8A511AC6"><enum>(1)</enum><header>Provisional registration</header><text display-inline="yes-display-inline">Within 180 days after the date of the enactment of this Act, a person acting as a digital commodity exchange, digital commodity broker, or digital commodity dealer shall file a statement of provisional registration with the Commodity Futures Trading Commission (in this subsection referred to as the <quote>Commission</quote>), unless exempted from registration under section 5k of the Commodity Exchange Act, as a—</text> <subparagraph id="H3D8D4FA55BFD4D1082F098D2E33AF967"><enum>(A)</enum><text>digital commodity exchange, for a person acting as a digital commodity exchange;</text></subparagraph> <subparagraph id="HAB679DE55AC64E55877F0388E991A575"><enum>(B)</enum><text>digital commodity broker, for a person acting as a digital commodity broker; or</text></subparagraph> <subparagraph id="H30E4A441B2FB454D8A1E4442F11848C7"><enum>(C)</enum><text>digital commodity dealer, for a person acting as a digital commodity dealer.</text></subparagraph></paragraph> <paragraph id="HC301B94E855242FCBAB96709CB6BC9E9"><enum>(2)</enum><header>Conditions</header> <subparagraph id="H930357F10A544A6FBED6025850386935"><enum>(A)</enum><header>Non-registered entities</header><text display-inline="yes-display-inline">A person, other than a registered entity, who files a statement of provisional registration under paragraph (1) shall be considered to be in compliance with this section if the person—</text> <clause id="H40730641554B4C9ABC74BBCE612CB752"><enum>(i)</enum><text>is a member of a futures association registered under section 17 of the Commodity Exchange Act, and complies with the rules of the association, including the rules of the association pertaining to customer disclosures and protection of customer assets;</text></clause> <clause id="HBD41C10F8EAC4A3AAD34076E5E9C9BB7"><enum>(ii)</enum><text>submits to the Commission, in the form and manner determined by the Commission, and continues to materially update, as necessary or required by the Commission, a statement of the nature of the digital commodity-related activities the person is pursuing or intends to pursue;</text></clause> <clause id="H59F71270947D416581256CBA85E5BB7D"><enum>(iii)</enum><text>submits to the Commission and continues to materially update the information required by this subsection;</text></clause> <clause id="H762BC7F21F9E45BCAB462645E9B1CE58"><enum>(iv)</enum><text>complies with subsection (c) of this section; and</text></clause> <clause id="H51A0DD8A008F4BE98D023D7B2CBD9743" commented="no"><enum>(v)</enum><text>pays all fees and penalties imposed on the person under section 410 of this Act.</text></clause></subparagraph> <subparagraph id="H49F9DE608E6D4867806D7527E755CF4B"><enum>(B)</enum><header>Registered entity</header> <clause id="H5C5AB3E893B24095A074C1757EFDDE82"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">A registered entity who files a statement of provisional registration under paragraph (1) shall be considered to be in compliance with this section if the person—</text> <subclause id="H14137826BD6747E48A17E04712160594"><enum>(I)</enum><text>submits to the Commission and continues to materially update, a statement of the nature of the digital commodity-related activities the person is pursuing or intends to pursue;</text></subclause> <subclause id="HD875E538C4124851961BE6BA25F2AF0A"><enum>(II)</enum><text>submits, and continues to materially update, the information required by this subsection and subsection (b);</text></subclause> <subclause id="HEF5AB7CFCE7A499081D5D3BC0037CE68"><enum>(III)</enum><text>complies with subsection (c); and</text></subclause> <subclause id="H5B4A4421C2F84079B0C263294C70BE2E" commented="no"><enum>(IV)</enum><text>pays all fees and penalties imposed on the person under section 410.</text></subclause></clause> <clause id="H5C9FE70731CE4763967ACBFBD16B0F9F"><enum>(ii)</enum><header>Definition</header><text>In this paragraph, the term <term>registered entity</term> means a person who is designated by the Commodity Futures Trading Commission as a contract market or registered with the Commodity Futures Trading Commission as a swap execution facility.</text></clause></subparagraph></paragraph></subsection> <subsection id="H7C1A51C3D95748D3B74C49D3C228CF2F"><enum>(b)</enum><header>Disclosure of general information</header><text display-inline="yes-display-inline">A person who files a statement of provisional registration under subsection (a) shall disclose to the Commission, unless already known to the Commission, the following:</text> <paragraph id="HCE80AB53F0574A34A9B982EE845DD2F2"><enum>(1)</enum><header>Management</header><text>Information concerning the management of the person, including information describing—</text> <subparagraph id="H991C3BB11E42433FA9C0E3693D91B137"><enum>(A)</enum><text>the ownership and management of the person;</text></subparagraph> <subparagraph id="H48E35A4B94AE458BB21DE2F25E79F237"><enum>(B)</enum><text>the financial condition of the person;</text></subparagraph> <subparagraph id="H8EFC54F02DBC442F932248B988CAEFEF"><enum>(C)</enum><text>affiliated entities;</text></subparagraph> <subparagraph id="HB96D49A7E6A24704AACF6335F950A1A0"><enum>(D)</enum><text>potential conflicts of interest;</text></subparagraph> <subparagraph id="H3479076C64B3423786ABA4DB8103D5A8"><enum>(E)</enum><text display-inline="yes-display-inline">the address of the person, including—</text> <clause id="HC14BE6B1E856449FA47AA11BF8E8F5EA"><enum>(i)</enum><text>the place of incorporation;</text></clause> <clause id="H15CFFD94072F417A9F305E27A2259903"><enum>(ii)</enum><text>principal place of business; and</text></clause> <clause id="H0CE7F0697E4E45BA8DB129A246989946"><enum>(iii)</enum><text>an address for service of process; and</text></clause></subparagraph> <subparagraph id="H9B5435ED08CA46FAA1148616B3C69D93"><enum>(F)</enum><text>a list of the States in which the person has operations.</text></subparagraph></paragraph> <paragraph id="H92DAD3A4F9DD40BA96EF6B72F560EACB"><enum>(2)</enum><header>Digital commodity operations</header><text>Information concerning the digital commodity operations of the person, including—</text> <subparagraph id="H05BA7498C5814BFD93CA27DD04BFED7C"><enum>(A)</enum><text display-inline="yes-display-inline">a general description of the person’s business and the terms of service for United States customers;</text></subparagraph> <subparagraph id="H097280FE17384CBA9FE6EC3989E095A4"><enum>(B)</enum><text>a description of the person’s account approval process;</text></subparagraph> <subparagraph id="H168F7ABEAE8C46FD8FB84E8F253D19FC"><enum>(C)</enum><text>any rulebook or other customer order fulfillment rules or procedures;</text></subparagraph> <subparagraph id="HAC0B6765E3CA468490B81DBF4C363B65"><enum>(D)</enum><text>risk management procedures;</text></subparagraph> <subparagraph id="H631D0F3AC6364D4BBD635A957F6A64F1"><enum>(E)</enum><text>a description of the product listing process; and</text></subparagraph> <subparagraph id="HD4EB5143081D444A853FF768C6FBE0E7"><enum>(F)</enum><text>policies and procedures for compliance with the Bank Secrecy Act.</text></subparagraph></paragraph></subsection> <subsection id="H0D855B977CDA476DBD68D88C41F19D27"><enum>(c)</enum><header>Requirements</header><text>A person who files a statement of provisional registration under subsection (a) shall comply with the following requirements:</text> <paragraph id="HCF5C001AA88F49B3A94317C604B17B7E"><enum>(1)</enum><header>Statutory disqualifications</header><text display-inline="yes-display-inline">Except to the extent otherwise specifically provided by the Commission or any registered futures association rule, regulation, or order, the person shall not permit an individual who is subject to a statutory disqualification under paragraph (2) or (3) of section 8a of the Commodity Exchange Act or subject to a statutory disqualification as defined in section 3(a) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78c">15 U.S.C. 78c(a)</external-xref>) to effect or be involved in effecting transactions on behalf of the person, if the person knew, or in the exercise of reasonable care should have known, of the statutory disqualification.</text></paragraph> <paragraph id="HC1968E6202894275B2B851F6F0D36BD7"><enum>(2)</enum><header>Books and records</header><text display-inline="yes-display-inline">The person shall keep their books and records open to inspection and examination by the Commission and by any registered futures association or national securities association of which the person is a member.</text></paragraph> <paragraph id="H4392E78C6C63456DAC257308834EAC6E"><enum>(3)</enum><header>Customer disclosures</header><text display-inline="yes-display-inline">The person shall disclose to customers—</text> <subparagraph id="H1CCEE0EAEC40481D961622F990A223E4"><enum>(A)</enum><text>information about the material risks and characteristics of the assets listed for trading on the person;</text></subparagraph> <subparagraph id="HE511D347234443DCBDF7F9AA9E258357"><enum>(B)</enum><text display-inline="yes-display-inline">information about the legal entity that custodies customer assets and the general manner in which the digital assets of the customer will be and are custodied;</text></subparagraph> <subparagraph id="H798DE2F63DD1458FB20D3E1185F20CF4"><enum>(C)</enum><text display-inline="yes-display-inline">information concerning the policies and procedures of the person that are related to the protection of customers of the person, including information regarding any conflicts of interest or material affiliates; and</text></subparagraph> <subparagraph id="HD9B0BF8FBA0E4EC19430DA711FDA4569"><enum>(D)</enum><text display-inline="yes-display-inline">in their disclosure documents, offering documents, and promotional material—</text> <clause id="H06989E283DBD4162B13F67778D092AC5"><enum>(i)</enum><text>in a prominent manner, that they are not registered with or regulated by the Commission; and</text></clause> <clause id="H8681FCD77085454D97455127A902E214"><enum>(ii)</enum><text display-inline="yes-display-inline">the contact information for the whistleblower, complaint, and reparation programs of the Commission.</text></clause></subparagraph></paragraph></subsection> <subsection id="H52FAD0B709464A2AB9EB9428AB202798"><enum>(d)</enum><header>Authority</header> <paragraph id="H2FF534F104E844F38094E80A2DF753D2"><enum>(1)</enum><header>In general</header> <subparagraph id="HE2FEA8C54A1142D4A43A1F7F7C2AB87B"><enum>(A)</enum><header>Deemed registration</header><text display-inline="yes-display-inline">A person who remains in compliance with the requirements of this section is deemed to be—</text> <clause id="HB5AD3A1099A44551A49B6C0CB9A76B92"><enum>(i)</enum><text>a registered digital commodity exchange, pursuant to section 5i, if the person filed a statement of provisional registration as a digital commodity exchange; or</text></clause> <clause id="H6714370AA1CD4AE490D8AF3296B3CB46"><enum>(ii)</enum><text>a registered digital commodity broker or dealer, pursuant to section 4u, if the person filed a statement of provisional registration as a digital commodity broker or dealer, as the case may be.</text></clause></subparagraph> <subparagraph id="H2C3E0C309D3645A5A409C5973DA554F0"><enum>(B)</enum><header>Sunset</header><text>The applicability of subparagraph (A) shall expire—</text> <clause id="HBF05C28D115C460F81ADC5A6A7FDFDB0"><enum>(i)</enum><text>in the case of a digital commodity exchange deemed registered pursuant to subparagraph (A)(i), 180 days after the final effective date of the rulemakings required under 5i; or</text></clause> <clause id="H65E84B55B0A44EF7A1B4BAE044CFB774"><enum>(ii)</enum><text>in the case of a digital commodity broker or dealer deemed registered pursuant to subparagraph (A)(ii), 180 days after the final effective date of the rulemakings required under 4u.</text></clause></subparagraph></paragraph> <paragraph id="HF6F6BEDEB54B44CAA16B299A78945C8B"><enum>(2)</enum><header>Superiority of Commission-adopted requirements</header><text>The requirements of the preceding provisions of this section shall not supersede any requirements applicable to registered persons adopted by the Commission under the Commodity Exchange Act.</text></paragraph></subsection> <subsection id="H10114F87C1E24D8487C6648FF9AFEA39"><enum>(e)</enum><header>Delisting</header><text display-inline="yes-display-inline">This section shall not be construed to limit the authority of the Commission and the Securities and Exchange Commission to jointly require a person to delist an asset for trading if the Commission and the Securities and Exchange Commission determine, in accordance with rules, procedures or guidance jointly issued by the Commission and the Securities and Exchange Commission to delist an asset for trading, that the listing is inconsistent with the Commodity Exchange Act, the securities laws (including regulations under those laws), or this Act.</text></subsection> <subsection id="HE753A7A68BD44060A98269B10F24EB40"><enum>(f)</enum><header>Registration</header><text display-inline="yes-display-inline">A person may not file a statement of provisional registration with the Commission after the Commission has finalized its rules for the registration of digital commodity exchanges, digital commodity brokers, or digital commodity dealers, as appropriate.</text></subsection> <subsection id="H61D5B3E0E6194ED49AC23A5741E782D2"><enum>(g)</enum><header>Rulemaking</header> <paragraph id="H8940A919C31E449295620DF061CA273D"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Within 180 days after the date of the enactment of this Act, a registered futures association shall adopt and enforce rules applicable to persons required by subsection (a)(2) to be members of the association.</text></paragraph> <paragraph id="H67B242F0EA474B91A975AC5470E2E181"><enum>(2)</enum><header>Fees</header><text>The rules adopted under subparagraph (A) of this paragraph may provide for dues in accordance with section 17(b)(6) of the Commodity Exchange Act.</text></paragraph> <paragraph id="HEA8A0AD95AB7417CAEE32FE84ECE164E"><enum>(3)</enum><header>Effect</header><text>A registered futures association shall submit to the Commission any rule adopted under subparagraph (A) of this paragraph, which shall take effect pursuant to the requirements of section 17(j) of the Commodity Exchange Act.</text></paragraph></subsection> <subsection id="H311C1CAAAC0642919379508FF7FD19A9"><enum>(h)</enum><header>Liability of the filer</header><text display-inline="yes-display-inline">It shall be unlawful for any person to provide false information in support of a filing under this section if the person knew or reasonably should have known that the information was false.</text></subsection> <subsection id="H87D40CAD343645A49F852C857FAD970D"><enum>(i)</enum><header>Whistleblower enforcement</header><text display-inline="yes-display-inline">For purposes of section 23 of the Commodity Exchange Act, the term <term>this Act</term> includes this section.</text></subsection> <subsection id="H3AE9BAF4951A49CB9F93D1A6001EF432"><enum>(j)</enum><header>Federal preemption</header> <paragraph id="H5B8726AE507348218AE3F982CE28A875"><enum>(1)</enum><text>This section shall supersede any State or local law (other than antifraud provisions of general applicability) that regulates the offer or sale of digital assets in the case of a transaction conducted in compliance with this section and conducted on or through a person who files a statement of provisional registration under subsection (a) and complies with the requirements of this section.</text></paragraph> <paragraph id="H6112439BBD2947468742FECAFA69801E"><enum>(2)</enum><text>Notwithstanding any other provision of law, the Commission shall have exclusive jurisdiction over the digital asset activities of a person who—</text> <subparagraph id="H66036619BBCE40069E74ECB25C0BA0EE"><enum>(A)</enum><text>files a statement of provisional registration under subsection (a); and</text></subparagraph> <subparagraph id="HF6E0F017852347059978238634C6B1A7"><enum>(B)</enum><text>complies with the requirements of this section.</text></subparagraph></paragraph></subsection></section> <section id="H07B040B1D1184139A9A5925053A46414" display-inline="no-display-inline" section-type="subsequent-section"><enum>107.</enum><header>Commodity Exchange Act and securities laws savings provisions</header> <subsection id="HCF161D1CE29A4E8799D6E364261D80D2"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Nothing in this Act shall affect or apply to, or be interpreted to affect or apply to—</text> <paragraph id="HCF719F2177E442E3B1558EA20098282E"><enum>(1)</enum><text>any agreement, contract, or transaction that is subject to the Commodity Exchange Act as—</text> <subparagraph id="HD46138271EC34C53A615103757B9B3CB"><enum>(A)</enum><text>a contract of sale of a commodity for future delivery or an option on such a contract;</text></subparagraph> <subparagraph id="H5426400023F44B02B5A19EF937247A26"><enum>(B)</enum><text>a swap;</text></subparagraph> <subparagraph id="H7DFD55EFDC684730B6B6D4064EFC5701"><enum>(C)</enum><text>a security futures product;</text></subparagraph> <subparagraph id="HB5085CD43C734608A7E374B8B9438E4E"><enum>(D)</enum><text>an option authorized under section 4c of such Act;</text></subparagraph> <subparagraph id="H15F5D7C40BF24550B62971349BD4F6E2"><enum>(E)</enum><text>an agreement, contract, or transaction described in section 2(c)(2)(C)(i) of such Act; or</text></subparagraph> <subparagraph id="HB0B711774234425087328625A4B90CD0"><enum>(F)</enum><text>a leverage transaction authorized under section 19 of such Act;</text></subparagraph></paragraph> <paragraph id="HD4A4CDB1EDB24CC7A63A3645F2A23E80"><enum>(2)</enum><text display-inline="yes-display-inline">any agreement, contract, or transaction that is subject to the securities laws as—</text> <subparagraph id="HC1BC7EFCA5AE4E75A6FA6BE747B61389"><enum>(A)</enum><text>a security-based swap;</text></subparagraph> <subparagraph id="H834BBE1A63CF4F29AD9F20EEF21A7031"><enum>(B)</enum><text>a security futures product; or</text></subparagraph> <subparagraph id="HE130E3AA6B2B46069F4071919E60682E"><enum>(C)</enum><text>an option on or based on the value of a security; or</text></subparagraph></paragraph> <paragraph id="H9751E784E2EE459F8C22995AF724FD18"><enum>(3)</enum><text>the activities of any person with respect to any such agreement, contract, or transaction.</text></paragraph></subsection> <subsection id="HC18F71381ABC43B892768020AB89C1AF"><enum>(b)</enum><header>Prohibitions on spot digital commodity entities</header><text>Nothing in this Act authorizes, or shall be interpreted to authorize, a digital commodity exchange, digital commodity broker, or digital commodity dealer to engage in any activities involving any transaction, contract, or agreement described in subsection (a)(1), solely by virtue of being registered or filing a statement of provisional registration as a digital commodity exchange, digital commodity broker, or digital commodity dealer.</text></subsection> <subsection id="H251C6B2EEE6245478BE89DC289B2617E"><enum>(c)</enum><header>Definitions</header><text>In this section, each term shall have the meaning provided in the Commodity Exchange Act or the regulations prescribed under such Act.</text></subsection></section> <section id="H59FB381747404941BDC9422D4B2FDF55"><enum>108.</enum><header>Administrative requirements</header><text display-inline="no-display-inline">Section 4c(a) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/6c">7 U.S.C. 6c(a)</external-xref>) is amended—</text> <paragraph id="HF03BB5703D9E4ECC8C583450A21FC70F"><enum>(1)</enum><text>in paragraph (3)—</text> <subparagraph id="H61CEB8BA4D014E80BE1E47EE84F3EC3A"><enum>(A)</enum><text>in subparagraph (B), by striking <quote>or</quote> at the end;</text></subparagraph> <subparagraph id="H8ED172E35AB44E688080FBA329762A84"><enum>(B)</enum><text>in subparagraph (C), by striking the period and inserting <quote>; or</quote>; and</text></subparagraph> <subparagraph id="HD1952F1555BE48E9B12EBC3698F3A764"><enum>(C)</enum><text>by adding at the end the following:</text> <quoted-block style="OLC" id="H127E212090FF4405AE1CE548CFB82CC2" display-inline="no-display-inline"> <subparagraph id="HD0DE7FC753ED421EBAC3D6D493968E4A"><enum>(D)</enum><text display-inline="yes-display-inline">a contract of sale of a digital commodity.</text></subparagraph><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph></paragraph> <paragraph id="HEC624A6C6B5349379C245D326B81F0A4" display-inline="no-display-inline"><enum>(2)</enum><text>in paragraph (4)—</text> <subparagraph id="HB9F420AC851D4E739125F034F75DF892"><enum>(A)</enum><text>in subparagraph (A)—</text> <clause id="HFB7A0CB470714D4DBDA5EA3D17A9F477"><enum>(i)</enum><text>in clause (ii), by striking <quote>or</quote> at the end;</text></clause> <clause id="H03FEEF31E0FC4A42A259D7F6EA5D92CE"><enum>(ii)</enum><text>in clause (iii), by striking the period and inserting <quote>; or</quote>; and</text></clause> <clause id="H49630C3504434B819915BD45D757F1F0"><enum>(iii)</enum><text>by adding at the end the following:</text> <quoted-block style="OLC" display-inline="no-display-inline" id="HC09D0AB7E2C947D589474BA091982613"> <clause id="H5B69A8A5918644FAB65B495B84D84ACF"><enum>(iv)</enum><text display-inline="yes-display-inline">a contract of sale of a digital commodity.</text></clause><after-quoted-block>;</after-quoted-block></quoted-block></clause></subparagraph> <subparagraph id="H32A7B78C9B604D6FAC6E8342A184E742" display-inline="no-display-inline"><enum>(B)</enum><text>in subparagraph (B)—</text> <clause id="H69845C87FD504F7A81E9EA3B0290BF68"><enum>(i)</enum><text>in clause (ii), by striking <quote>or</quote> at the end;</text></clause> <clause id="HE82942C21A83402CBB123407DBD1B219"><enum>(ii)</enum><text>in clause (iii), by striking the period and inserting <quote>; or</quote>; and</text></clause> <clause id="H8CBDA082F2D5478E9888BE9D3371871D"><enum>(iii)</enum><text>by adding at the end the following:</text> <quoted-block style="OLC" display-inline="no-display-inline" id="H44D8FF53C707477CA1835FE3CC6DC03E"> <clause id="H69E1F69306994FD19C348ED4A5A40E74"><enum>(iv)</enum><text display-inline="yes-display-inline">a contract of sale of a digital commodity.</text></clause><after-quoted-block>; and</after-quoted-block></quoted-block></clause></subparagraph> <subparagraph id="H2004CFF8EEA746C783E4BE0A9973EEF9" display-inline="no-display-inline"><enum>(C)</enum><text>in subparagraph (C)—</text> <clause id="H9CA7AC6E103B49C6B171C53C0C84F17B"><enum>(i)</enum><text>in clause (ii), by striking <quote>or</quote> at the end;</text></clause> <clause id="HDE940353D0AA47E7B31678D69104D74A"><enum>(ii)</enum><text>by striking <quote>(iii) a swap, provided however,</quote> and inserting the following:</text> <quoted-block style="OLC" display-inline="no-display-inline" id="HC5405C1BF19249F09B24E76F9769199B"> <clause id="H2B09B4C9FF7340EBB40106B9F8615404"><enum>(iii)</enum><text>a swap; or</text></clause> <clause id="HC02DA7AC5571476BABB647837A805640"><enum>(iv)</enum><text display-inline="yes-display-inline">a contract of sale of a digital commodity,</text></clause> <quoted-block-continuation-text quoted-block-continuation-text-level="subparagraph">provided, however,</quoted-block-continuation-text><after-quoted-block>; and</after-quoted-block></quoted-block></clause> <clause id="HCE533D24EB6A4405B83AEA902B7DB3E7"><enum>(iii)</enum><text>by striking <quote>clauses (i), (ii), or (iii)</quote> and insert <quote>any of clauses (i) through (iv)</quote>.</text></clause></subparagraph></paragraph></section> <section id="H8155F7C8748A46E9AA7BF1FD6E618C02" display-inline="no-display-inline" section-type="subsequent-section"><enum>109.</enum><header>International cooperation</header><text display-inline="no-display-inline">In order to promote greater consistency in effective and consistent global regulation of digital assets, the Commodity Futures Trading Commission and the Securities and Exchange Commission, as appropriate—</text> <paragraph id="H1D2D684E2380464B8C53567A33E30FE5"><enum>(1)</enum><text>shall consult and coordinate with foreign regulatory authorities on the application of consistent international standards with respect to the regulation of digital assets; and</text></paragraph> <paragraph id="H025A9B7D79A04B6F9FDE7BDF665529F3"><enum>(2)</enum><text display-inline="yes-display-inline">may enter into such information-sharing arrangements as may be deemed to be necessary or appropriate in the public interest or for the protection of investors, customers, and users of digital assets.</text></paragraph></section> <section id="H7ECE92D84BE746E1ADD96574CD9EAB78"><enum>110.</enum><header>Treatment of certain non-controlling blockchain developers</header> <subsection id="HCAD909DCB32C4EFFB7461AE631391BDD"><enum>(a)</enum><header>In general</header><text>Notwithstanding applicable law, a non-controlling blockchain developer or provider of a blockchain service shall not be treated as a money transmitter or as engaged in <quote>money transmitting</quote> or, following the date of enactment of this Act, be otherwise subject to any new registration requirement that is substantially similar to the requirement that currently applies to money transmitters, solely on the basis of—</text> <paragraph id="HAA3B6E8EE5504CE59E87356A0195734B"><enum>(1)</enum><text>creating or publishing software to facilitate the creation of, or provision of maintenance services to, a blockchain or blockchain service;</text></paragraph> <paragraph id="H3025F469E48D4037AD9035759ED706C4"><enum>(2)</enum><text>providing hardware or software to facilitate a customer’s own custody or safekeeping of the customer’s digital assets; or</text></paragraph> <paragraph id="H159B1230A9594ADA929B25983EC83852"><enum>(3)</enum><text>providing infrastructure support to maintain a blockchain service.</text></paragraph></subsection> <subsection id="HB8A9B8D05E14464295C0431BA9C7BD54"><enum>(b)</enum><header>Rule of Construction</header><text>Nothing in this section shall be construed to affect whether a blockchain developer or provider of a blockchain service is otherwise subject to classification or treatment as a money transmitter, or as engaged in <quote>money transmitting</quote>, under applicable State or Federal law, including laws relating to anti-money laundering or countering the financing of terrorism, based on conduct outside the scope of subsection (a). Nothing in this section shall be construed to affect whether a blockchain developer or provider of a blockchain service is otherwise subject to classification or treatment as a financial institution under the Bank Secrecy Act, this Act, or any Act enacted after the date of enactment of this Act.</text></subsection> <subsection id="HCD112F8CC21C4A4FB1BE3C20D08C6CE0"><enum>(c)</enum><header>Effect on other laws</header> <paragraph id="HE7FAFBC10BA34400B43E0D73463F7B71"><enum>(1)</enum><header>Intellectual property law</header><text>Nothing in this section shall be construed to limit or expand any law pertaining to intellectual property.</text></paragraph> <paragraph id="H6AD7383C67574C358903DAD07FD2E412"><enum>(2)</enum><header>State law</header><text>Nothing in this section shall be construed to prevent any State from enforcing any State law that is consistent with this section. No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section.</text></paragraph></subsection> <subsection id="H5A67AFAAA2A84507AA76546B7D43B9C3"><enum>(d)</enum><header>Definitions</header><text>In this section:</text> <paragraph id="H0EB452F7C0F4408AB361971C15243E9D"><enum>(1)</enum><header>Blockchain developer</header><text>The term <quote>blockchain developer</quote> means any person or business that creates or publishes software to facilitate the creation of, or provide maintenance to, a blockchain or a blockchain service.</text></paragraph> <paragraph id="H62BF87990A874FF38BFB71EE95721BB9"><enum>(2)</enum><header>Blockchain service</header><text>The term <quote>blockchain service</quote> means any information, transaction, or computing service or system that provides or enables access to a blockchain network by multiple users, including specifically a service or system that enables users to send, receive, exchange, or store digital assets described by blockchain networks.</text></paragraph> <paragraph id="HD839CCDC5DBF47A3BED8FC2DBA90AF75"><enum>(3)</enum><header>Non-controlling blockchain developer or provider of a blockchain service</header><text>The term <quote>non-controlling blockchain developer or provider of a blockchain service</quote> means a blockchain developer or provider of a blockchain service that in the regular course of operations, does not have the legal right or the unilateral and independent ability to control, initiate upon demand, or effectuate transactions involving digital assets that users are entitled to, without the approval, consent, or direction of any other third party.</text></paragraph></subsection></section> <section id="H7D64F4FC5B454EC68E34F9004AE539AE" section-type="subsequent-section" display-inline="no-display-inline"><enum>111.</enum><header>Application of the Bank Secrecy Act</header> <subsection id="HE5A625A13E1A490687E2A5CD0B9D30CD"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 5312(c)(1)(A) of title 31, United States Code, is amended—</text> <paragraph id="H17B6B0AE3F0E42899147AC914C32B95D"><enum>(1)</enum><text>by inserting <quote>digital commodity broker, digital commodity dealer,</quote> after <quote>futures commission merchant,</quote>; and</text></paragraph> <paragraph id="HD785AB5C127B42CD81BFB66893009BDC"><enum>(2)</enum><text>by inserting before the period the following: <quote>and any digital commodity exchange registered, or required to register, under the Commodity Exchange Act which permits direct customer access</quote>.</text></paragraph></subsection> <subsection id="H05F6910B244F4E109F200ABD62081CCE"><enum>(b)</enum><header>GAO study</header> <paragraph id="H1CEB5F38C8AB465C9C2D1E51A1E66354"><enum>(1)</enum><header>In general</header><text>The Comptroller General of the United States, in consultation with the Secretary of the Treasury, shall conduct a study to—</text> <subparagraph id="HFB83F56C2E934D658EDCB24A48F107A8"><enum>(A)</enum><text display-inline="yes-display-inline">assess the risks posed by centralized intermediaries that are primarily located in foreign jurisdictions that provide services to U.S. persons without regulatory requirements that are substantially similar to the requirements of the Bank Secrecy Act; and</text></subparagraph> <subparagraph id="HC841A6CA201E451A90115A46850E6377"><enum>(B)</enum><text>provide any regulatory or legislative recommendations to address these risks under subparagraph (A).</text></subparagraph></paragraph> <paragraph id="H5E364637EFF841E3AD297CFF7A901C3C"><enum>(2)</enum><header>Report</header><text display-inline="yes-display-inline">Not later than 1 year after the date of enactment of this Act, the Comptroller General shall issue a report to Congress containing all findings and determinations made in carrying out the study required under paragraph (1).</text></paragraph></subsection></section> <section id="H26EC36DB54DC4A90AB2511E89953EF0D"><enum>112.</enum><header>Implementation</header> <subsection id="HFF2E3ACEA48E4EF5A9000C16A2C7BA6B"><enum>(a)</enum><header>Global rulemaking timeframe</header><text display-inline="yes-display-inline">Unless otherwise provided in this Act or an amendment made by this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission, or both, shall individually, and jointly where required, promulgate rules and regulations required of each Commission under this Act or an amendment made by this Act not later than 360 days after the date of enactment of this Act.</text></subsection> <subsection id="H9A1366F2E47F4130834E5428397BF701"><enum>(b)</enum><header>Rules and registration before final effective dates</header> <paragraph id="H36D3471BDF5B492888F8BAAC4FDBB298"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">In order to prepare for the implementation of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission may, before any effective date provided in this Act—</text> <subparagraph id="H5D38630F4FCA4C27B21E5DA7AF286266"><enum>(A)</enum><text>promulgate rules, regulations, or orders permitted or required by this Act;</text></subparagraph> <subparagraph id="H8264F73F1D2249DA8DC457C45A4AC028"><enum>(B)</enum><text>conduct studies and prepare reports and recommendations required by this Act;</text></subparagraph> <subparagraph id="HC26FADFFF49F486E8B8A023A66236201"><enum>(C)</enum><text>register persons under this Act; and</text></subparagraph> <subparagraph id="H3EEE8568F6F9422C9B758E6B77CD5286"><enum>(D)</enum><text>exempt persons, agreements, contracts, or transactions from provisions of this Act, under the terms contained in this Act.</text></subparagraph></paragraph> <paragraph id="HB2E8176A9F3544F0B43951F8C8C3A0ED"><enum>(2)</enum><header>Limitation on effectiveness</header><text>An action by the Commodity Futures Trading Commission or the Securities and Exchange Commission under paragraph (1) shall not become effective before the effective date otherwise applicable to the action under this Act.</text></paragraph></subsection></section> <enum>II</enum><header>Offers and Sales of Digital Commodities</header> <section id="H6C9EC7EB8AFC4B9FB49BC1F52DC219D6" commented="no" display-inline="no-display-inline" section-type="subsequent-section"><enum>201.</enum><header>Treatment of investment contract assets</header> <subsection id="H10E91788F0304031B9B411FBAE71FCF6" commented="no"><enum>(a)</enum><header>Securities Act of 1933</header><text display-inline="yes-display-inline">Section 2(a) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77b">15 U.S.C. 77b(a)</external-xref>), as amended by section 101, is further amended—</text> <paragraph id="H0F16C601FF3C44F490754507CE71F712" commented="no"><enum>(1)</enum><text>in paragraph (1), by adding at the end the following: <quote>The term <term>investment contract</term> does not include an investment contract asset.</quote>; and</text></paragraph> <paragraph id="HE578AD533DD945D6886310B000095767" commented="no"><enum>(2)</enum><text>by adding at the end the following:</text> <quoted-block style="OLC" display-inline="no-display-inline" id="HAF97AB5357364E76A1A7C5315166AC30"> <paragraph id="HBB57D9919AFC4435912030C224D2C21C" commented="no"><enum>(34)</enum><text display-inline="yes-display-inline">The term <term>investment contract asset</term> means a digital commodity—</text> <subparagraph id="HD3BD51DFCD2C4B35B7A536C31FDA0EB0" commented="no"><enum>(A)</enum><text display-inline="yes-display-inline">that can be exclusively possessed and transferred, person to person, without necessary reliance on an intermediary, and is recorded on a blockchain; and</text></subparagraph> <subparagraph id="H6C1869FB3E944D468EA1C706BEE87599" commented="no"><enum>(B)</enum><text display-inline="yes-display-inline">sold or otherwise transferred, or intended to be sold or otherwise transferred, pursuant to an investment contract.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H77567934023B455385C5ABC416DE664B" commented="no"><enum>(b)</enum><header>Investment Advisers Act of 1940</header><text display-inline="yes-display-inline">Section 202(a)(18) of the Investment Advisers Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80b-2">15 U.S.C. 80b–2(a)(18)</external-xref>) is amended by adding at the end the following: <quote>The term <term>investment contract</term> does not include an investment contract asset (as such term is defined under section 2(a) of the Securities Act of 1933).</quote>.</text></subsection> <subsection id="HCB9D5AF48AA04E6EAEB4215571E438F3" commented="no"><enum>(c)</enum><header>Investment Company Act of 1940</header><text display-inline="yes-display-inline">Section 2(a)(36) of the Investment Company Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80a-2">15 U.S.C. 80a–2(a)(36)</external-xref>) is amended by adding at the end the following: <quote>The term <term>investment contract</term> does not include an investment contract asset (as such term is defined under section 2(a) of the Securities Act of 1933).</quote>.</text></subsection> <subsection id="H02D8B68A208C43E09185A0D158E72852" commented="no"><enum>(d)</enum><header>Securities Exchange Act of 1934</header><text display-inline="yes-display-inline">Section 3(a)(10) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78c">15 U.S.C. 78c(a)(10)</external-xref>) is amended by adding at the end the following: <quote>The term <term>investment contract</term> does not include an investment contract asset (as such term is defined under section 2(a) of the Securities Act of 1933).</quote>.</text></subsection> <subsection id="H53A569E5FBB146A38AF7210EC952C8EF" commented="no"><enum>(e)</enum><header>Securities Investor Protection Act of 1970</header><text display-inline="yes-display-inline">Section 16(14) of the Securities Investor Protection Act of 1970 (<external-xref legal-doc="usc" parsable-cite="usc/15/78lll">15 U.S.C. 78lll(14)</external-xref>) is amended by adding at the end the following: <quote>The term <term>investment contract</term> does not include an investment contract asset (as such term is defined under section 2(a) of the Securities Act of 1933).</quote>.</text></subsection></section> <section id="H86D42EEB76B44A17BA0BAB48F535E301"><enum>202.</enum><header>Exempted primary transactions in digital commodities</header> <subsection id="H12978DF8953742F28FBD8AADE89848AB"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77a">15 U.S.C. 77a et seq.</external-xref>) is amended—</text> <paragraph id="H3DE82465055541C1830B09FD5D162B59"><enum>(1)</enum><text>in section 4(a), by adding at the end the following:</text> <quoted-block style="OLC" id="H64350A1E24004205A157C4B8F65167A1" display-inline="no-display-inline"> <paragraph id="HD3512FE08AE14D4EA5EB69AC39005450"><enum>(8)</enum><text display-inline="yes-display-inline">the offer or sale of an investment contract involving units of a digital commodity by its digital commodity issuer (including all entities controlled by or under common control with the issuer), if—</text> <subparagraph id="H6910DD4845C744EDB8C271634CBA3A8C"><enum>(A)</enum><text display-inline="yes-display-inline">the blockchain system to which the digital commodity relates, together with the digital commodity, is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934 or the issuer intends for the blockchain system to which the digital commodity relates to be a mature blockchain system by the later of—</text> <clause id="H74DAFE747D124A6A8ADEE3F82E6EFFF5"><enum>(i)</enum><text display-inline="yes-display-inline">the date that is four years after the first sale of the investment contract involving a unit of such digital commodity in reliance on the exemption provided under this paragraph, subject to any extensions as may be granted by the Commission; or</text></clause> <clause id="H00671D8355704A0ABED1D0A905263C21"><enum>(ii)</enum><text>the date that is four years after the effective date of this paragraph;</text></clause></subparagraph> <subparagraph id="HD18B8BDB80B64E5B80B031B7968FD87B"><enum>(B)</enum><text display-inline="yes-display-inline">the sum of all cash and other consideration to be received by the digital commodity issuer in reliance on the exemption provided under this paragraph, during the 12-month period preceding the date of such offering, including the amount received in such offering, is not more than $75,000,000 (as such amount is annually adjusted by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor);</text></subparagraph> <subparagraph id="HFEF3EF88DA5E47F890D6B1782BD8510D"><enum>(C)</enum><text display-inline="yes-display-inline">after the completion of the transaction, a purchaser does not own more than 10 percent of the total amount of the outstanding units of the digital commodity;</text></subparagraph> <subparagraph id="HE3971B77D5494741ADC5EC61F8A9874C"><enum>(D)</enum><text display-inline="yes-display-inline">the transaction does not involve the offer or sale of an investment contract involving units of a digital commodity by its digital commodity issuer that—</text> <clause id="HFF3160125DA642F7A4C640E3AAD4522B"><enum>(i)</enum><text display-inline="yes-display-inline">is not organized under the laws of a State, a territory of the United States, or the District of Columbia;</text></clause> <clause id="H88D15790EE7E4787A7F02E7DBB10D332"><enum>(ii)</enum><text>is a development stage company that either—</text> <subclause id="H89C7C0044EFD470483FCDB319181FE2C"><enum>(I)</enum><text>has no specific business plan or purpose; or</text></subclause> <subclause id="HC4F25DFEB9BE44168B7F1E84AA055D37"><enum>(II)</enum><text>has indicated that the business plan of the company is to merge with or acquire an unidentified company;</text></subclause></clause> <clause id="H2D55996A6BB94DAC8CF11846FFFE3F7B"><enum>(iii)</enum><text>is an investment company, as defined in section 3 of the Investment Company Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80a-3">15 U.S.C. 80a–3</external-xref>), or is excluded from the definition of investment company by section 3(b) or section 3(c) of that Act (<external-xref legal-doc="usc" parsable-cite="usc/15/80a-3">15 U.S.C. 80a–3(b)</external-xref> or 80a–3(c));</text></clause> <clause id="HF2032197A679499F8DCE8B3F25DB3032"><enum>(iv)</enum><text>is issuing fractional undivided interests in oil or gas rights, or a similar interest in other mineral rights;</text></clause> <clause id="HF013FB6C068C4D06A1818C87B3320730"><enum>(v)</enum><text>is, or has been, subject to any order of the Commission entered pursuant to section 12(j) of the Securities Exchange Act of 1934 during the 5-year period before the filing of the offering statement; or</text></clause> <clause id="HAC169A4E17A042FD86BC1980622CBB1F"><enum>(vi)</enum><text>is disqualified pursuant to section 230.262 of title 17, Code of Federal Regulations; and</text></clause></subparagraph> <subparagraph id="H3D624C7C5B594C63B035031ED854152C"><enum>(E)</enum><text>the issuer meets the requirements of section 4B(b).</text></subparagraph></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph> <paragraph id="HE732B673214A4BB2AD216331CA2C0823"><enum>(2)</enum><text>by inserting after section 4A the following:</text> <quoted-block style="OLC" id="H7F364410767A41D392A5489011B1B28F" display-inline="no-display-inline"> <section id="HC4035F3594D94C3BAA14C3131DED13EA"><enum>4B.</enum><header>Requirements with respect to certain digital commodity transactions</header> <subsection id="H8D39B5461F6C4B898718FF0B4755763B"><enum>(a)</enum><header>Commission jurisdiction</header><text display-inline="yes-display-inline">For the purposes of this section:</text> <paragraph id="H932B680C1BAE418F99D5E308E6AF4AD7"><enum>(1)</enum><text>The Commission shall have jurisdiction and enforcement authority with respect to disclosures described in this section.</text></paragraph> <paragraph id="H6251146490A34AA6822D2984FEAFBB51"><enum>(2)</enum><text display-inline="yes-display-inline">Section 17 shall apply to a statement made in an offering statement, disclosure, or report filed under this section to the same extent as such section 17 applies to a statement made in any other offering statement, disclosure, or report filed under this Act. </text></paragraph></subsection> <subsection id="H8B7881D216E5476BAD6F3EF8C3D6FCC1"><enum>(b)</enum><header>Requirements for digital commodity issuers</header> <paragraph id="HB05C199368F94815AF90628FE23CD2D6"><enum>(1)</enum><header>Terms and conditions</header><text display-inline="yes-display-inline">A digital commodity issuer offering or selling an investment contract involving units of a digital commodity in reliance on section 4(a)(8) shall file with the Commission an offering statement and any related documents, in such form and with such content as prescribed by the Commission, including financial information, a description of the issuer and the operations of the issuer, the financial condition of the issuer, a description of the plan of distribution of any unit of a digital commodity that is to be offered as well as the intended use of the offering proceeds, and a description of the development plan for the blockchain system, and the related digital commodity, to become a mature blockchain system, if such blockchain system is not already certified as a mature blockchain system pursuant to section 42 of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78a">15 U.S.C. 78a et seq.</external-xref>).</text></paragraph> <paragraph id="HD1857644106A4D1580C2FD931CAC37FD"><enum>(2)</enum><header>Information required for purchasers</header><text display-inline="yes-display-inline">A digital commodity issuer that has filed a statement under paragraph (1) to offer and sell an investment contract involving a unit of a digital commodity in reliance on section 4(a)(8) shall include in such statement the following information:</text> <subparagraph id="H4AE7F599478D403B9D4BDD33E63DDFDF"><enum>(A)</enum><header>Maturity status</header><text display-inline="yes-display-inline">Whether the blockchain system to which the digital commodity relates has been certified as a mature blockchain system pursuant to section 42 of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78a">15 U.S.C. 78a et seq.</external-xref>) and, where such blockchain system is not so certified, a statement of the digital commodity issuer’s intent for the blockchain system to which the digital commodity relates to be a mature blockchain system within the time period described in section 4(a)(8)(A).</text></subparagraph> <subparagraph id="HD342236C72FF49E1A65FE33E0DDCE2A7"><enum>(B)</enum><header>Source code</header><text display-inline="yes-display-inline">The source code, or a publicly accessible webpage displaying such source code, for any blockchain system to which the digital commodity relates, and whether the source code was sourced from an external third party, whether there are any existing external dependencies, and whether the code underwent a third-party security audit, along with material results of any such audit.</text></subparagraph> <subparagraph id="H3D8A96192B1E48F7AAB092F42B869DAA"><enum>(C)</enum><header>Transaction history</header><text display-inline="yes-display-inline">A description of the steps necessary to independently access, search, and verify the transaction history of any blockchain system to which the digital commodity relates, to the extent any such independent access, search, and verification activities are technically feasible with respect to such blockchain system.</text></subparagraph> <subparagraph id="H1212261CB2674541A721957B0F0488FD"><enum>(D)</enum><header>Digital commodity economics</header><text>A description of the purpose of any blockchain system to which the digital commodity relates and the operation of any such blockchain system, including—</text> <clause id="H4919BC70420F4ED79A0AB55EF9640133"><enum>(i)</enum><text>information explaining the launch and supply process, including the number of units of the digital commodity to be issued in an initial allocation, the total number of units of the digital commodity to be created, the release schedule for the units of the digital commodity, and the total number of units of the digital commodity outstanding;</text></clause> <clause id="H55A291EA7FF24C9E8F51497B6686C5A0"><enum>(ii)</enum><text>information explaining the technical requirements for holding, accessing, and transferring the digital commodity;</text></clause> <clause id="H7D71E2E43F1A48AD9702826D71D5DBBB"><enum>(iii)</enum><text>information on any applicable consensus mechanism or process for validating transactions, method of generating or mining digital commodities, and any process for burning or destroying units of the digital commodity on the blockchain system;</text></clause> <clause id="HBA4E7FD5306848D5B0E9F82A31FD5071"><enum>(iv)</enum><text display-inline="yes-display-inline">an explanation of any mechanism for driving value to the digital commodity of such blockchain system; and</text></clause> <clause id="H71D26174570247A8AF9A990CBE5D2D04"><enum>(v)</enum><text>an explanation of governance mechanisms for implementing changes to the blockchain system or forming consensus among holders of units of such digital commodity.</text></clause></subparagraph> <subparagraph id="HB691BBD55F7C48C6A0716F99AC03224B"><enum>(E)</enum><header>Plan of development</header><text display-inline="yes-display-inline">The current state and timeline for the development of any blockchain system to which the digital commodity relates, detailing how and when the blockchain system is intended to be a mature blockchain system, if the blockchain system is not yet certified as a mature blockchain system, and the various roles that exist or are intended to exist in connection with the blockchain system, such as users, service providers, developers, transaction validators, and governance participants, including a discussion of any mechanisms by which control or authority are exerted with respect to the blockchain system or its related digital commodity, and any critical operational dependencies of the blockchain system or its related digital commodity.</text></subparagraph> <subparagraph id="HAB7098C93F1C49E6AA613F7D5583009F" display-inline="no-display-inline"><enum>(F)</enum><header>Ownership disclosures</header> <clause id="H6F8FC5A9337749F593931D43A1CBE397"><enum>(i)</enum><header>In general</header><text>A list of all persons who are digital commodity related persons or digital commodity affiliated persons who have been issued a unit of the digital commodity by the digital commodity issuer or have a right to a unit of the digital commodity from the digital commodity issuer.</text></clause> <clause id="H14108F901341469F97C07C8B19FD2790"><enum>(ii)</enum><header>Confidentiality</header><text display-inline="yes-display-inline">The Commission shall keep each list described under clause (i) confidential, consistent with what is necessary or appropriate in the public interest or for the protection of investors.</text></clause></subparagraph> <subparagraph id="HF60A77F6D4F34197A99A1E9D2FE80ECA"><enum>(G)</enum><header>Risk factor disclosures</header><text>A description of the material risks surrounding ownership of a unit of a digital commodity.</text></subparagraph></paragraph> <paragraph id="HA0AC9DA493144899AE2AA4D8BC8A0AE6"><enum>(3)</enum><header>Ongoing disclosure requirements for maturing blockchain systems</header><text display-inline="yes-display-inline">Subject to paragraph (5), the issuer of a digital commodity related to a blockchain system that is not yet certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934 that has filed a statement under paragraph (1) to offer and sell an investment contract involving a unit of a digital commodity in reliance on section 4(a)(8) shall file the following with the Commission:</text> <subparagraph id="HCEFC820A83844BF48B86BFA3B5CD071F"><enum>(A)</enum><header>Semiannual reports</header><text display-inline="yes-display-inline">Every 6 months, a report containing—</text> <clause id="H4AFFC4F2AF18488F848DE800DD121D0A"><enum>(i)</enum><text display-inline="yes-display-inline">an updated description of the current state and timeline for the development of the blockchain system to which the digital commodity relates, showing how and when the blockchain is intended to be a mature blockchain system;</text></clause> <clause id="HA97BA6E0925A441594500DEAED99D48E"><enum>(ii)</enum><text display-inline="yes-display-inline">a description of the efforts of the issuer and digital commodity related persons in developing the blockchain system to which the digital commodity relates;</text></clause> <clause id="H773EE93005CC4DF7BD672E97A5E2F94D"><enum>(iii)</enum><text display-inline="yes-display-inline">the amount of money raised by the digital commodity issuer in reliance on section 4(a)(8), how much of that money has been spent, and the general categories of activities for which that money has been spent and amounts spent per category; and</text></clause> <clause id="H0936FB04202D4961BF3C9E968E63601E" commented="no"><enum>(iv)</enum><text display-inline="yes-display-inline">financial statements, where applicable.</text></clause></subparagraph> <subparagraph id="H44B77C9BEDF2417CA7D0DC3AC6D4346E" commented="no"><enum>(B)</enum><header>Current reports</header><text display-inline="yes-display-inline">A current report reflecting any material changes relevant to the information previously reported to the Commission by the digital commodity issuer, which shall be filed as soon as practicable after the material change occurred, in accordance with such rules as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.</text></subparagraph></paragraph> <paragraph id="H9C5BCF32F9734D66B8907A5CA77063F5" commented="no"><enum>(4)</enum><header>Rulemaking</header><text display-inline="yes-display-inline">Not later than 360 days after the date of the enactment of this section, the Commission shall prescribe rules on requirements applicable to issuers of digital commodities in reliance on section 4(a)(8).</text></paragraph> <paragraph id="HF7F1AC31CBE64360B8E44029160EBFB0" display-inline="no-display-inline"><enum>(5)</enum><header>Termination of certain reporting requirements; post-maturity reporting requirements</header> <subparagraph id="HD1CFBADA9B214BBEB39A68138C54A2DF"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The ongoing reporting requirements under paragraph (3) shall not apply to a digital commodity issuer 180 days after the end of the covered fiscal year, if the information with respect to the digital commodity and the blockchain system to which it relates described in subparagraphs (A) through (C) of paragraph (2) is made publicly available and the disclosure requirements under subparagraph (C) of this paragraph are satisfied.</text></subparagraph> <subparagraph id="H567C3659B5F44EA5AF6795D698DF045C"><enum>(B)</enum><header>Covered fiscal year defined</header><text>In this paragraph, the term <quote>covered fiscal year</quote> means, with respect to a digital commodity, the first fiscal year of a digital commodity issuer in which the blockchain system to which such digital commodity relates is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934. </text></subparagraph> <subparagraph id="HB739AF22C43E4BF1A49697923E828E8B"><enum>(C)</enum><header>Post-maturity reporting requirements</header><text display-inline="yes-display-inline">After the blockchain system to which a digital commodity relates is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934, any digital commodity issuer that has filed a statement under paragraph (1) to offer and sell an investment contract involving a unit of a digital commodity in reliance on section 4(a)(8) and is engaged in material ongoing efforts related to the mature blockchain system shall disclose, in a manner reasonably calculated to inform the public, and at such frequency as the Commission may prescribe, by rule, a description of such efforts, including—</text> <clause id="HE849D5AF6C0C466EA79B0ADBC23DA3F7"><enum>(i)</enum><text>any participation in a decentralized governance system of such blockchain system;</text></clause> <clause id="H9124E8AFB19547228E31CFF62A90469B"><enum>(ii)</enum><text>any participation in alterations or proposed alterations to the functionality or operation of such blockchain system;</text></clause> <clause id="HDFBBA87FB69945F8BB09BD3949E17928"><enum>(iii)</enum><text display-inline="yes-display-inline">the use or planned use of any funds raised in reliance on section 4(a)(8) or any rulemaking pursuant to section 202(c) of the CLARITY Act of 2025 in such efforts;</text></clause> <clause id="H9606F9A7F8FD43B793795D502EAC5CED"><enum>(iv)</enum><text>the amount of units of the digital commodity, or rights thereto, owned and controlled by such issuer and any use, sale, trading, or other disposition thereof; and</text></clause> <clause id="HD7302A774B7E43858A83A5317235596D"><enum>(v)</enum><text>any affiliations of such issuer material to the efforts of such issuer.</text></clause></subparagraph> <subparagraph id="H8B9937F78EEC43A0B481043751244A20"><enum>(D)</enum><header>Termination of and exemption from post-maturity reporting requirements</header><text display-inline="yes-display-inline">Not later than 270 days after the date of the enactment of this section, the Commission shall issue rules—</text> <clause id="HC3F71476D3034501AF75BFD697483FA8"><enum>(i)</enum><text>for terminating the disclosure requirements described in subparagraph (C) during the first fiscal year in which the digital commodity issuer does not engage in material ongoing efforts related to the mature blockchain system; and</text></clause> <clause id="H10FE966BA1304289874403DBE75AE24D"><enum>(ii)</enum><text>to, as is necessary or appropriate in the public interest or for the protection of investors, exempt a digital commodity issuer from the requirements described in subparagraph (C) where only a de minimis amount of market activity involving the digital commodity of such digital commodity issuer is taking place.</text></clause></subparagraph> <subparagraph id="H9AE5FABB02E24301B7C39340AD6B3994"><enum>(E)</enum><header>Rule of construction</header><text>Nothing in subparagraph (C) may be construed to make any digital commodity described in such subparagraph a security.</text></subparagraph></paragraph></subsection> <subsection id="HEF0688BEEB79410B8E0C784FB7E6AA29"><enum>(c)</enum><header>Requirements for intermediaries</header><text display-inline="yes-display-inline">A person acting as an intermediary in connection with the offer or sale of an investment contract involving units of a digital commodity in reliance on section 4(a)(8) shall—</text> <paragraph id="H116650BB38734BACAB2C491F03AFF66D" commented="no" display-inline="no-display-inline"><enum>(1)</enum><text display-inline="yes-display-inline">register with the Commission as a broker or dealer; and</text></paragraph> <paragraph id="H8FE8B112CD4A4A3EA1531E4A24668D73"><enum>(2)</enum><text display-inline="yes-display-inline">be a member of a national securities association registered under section 15A of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78o-3">15 U.S.C. 78o–3</external-xref>).</text></paragraph></subsection> <subsection id="H82260AF51A434648A070205856ED9156"><enum>(d)</enum><header>Disqualification provisions</header><text display-inline="yes-display-inline">The Commission shall issue rules to apply the disqualification provisions under section 230.262 of title 17, Code of Federal Regulations, to the exemption provided under section 4(a)(8).</text></subsection> <subsection id="HB3AF69EC929549429B293D6CB009CF31"><enum>(e)</enum><header>Failure To mature</header> <paragraph id="H0AB45FC427B64B9CB4A00D602A399D52"><enum>(1)</enum><header>In general</header><text>Not later than 270 days after the date of the enactment of this section, the Commission shall issue rules applying such additional obligations and disclosures for the digital commodity issuers, digital commodity related persons, and digital commodity affiliated persons of a blockchain system described under subsection (b)(1) that does not become a mature blockchain system within the time period described in section 4(a)(8)(A) as are necessary or appropriate in the public interest or for the protection of investors. Such obligations and disclosures shall include the following:</text> <subparagraph id="HA83F6312D2EA4B18B3811622C59D8470"><enum>(A)</enum><header>Disclosures</header><text display-inline="yes-display-inline">Disclosures regarding the following:</text> <clause id="HA7C37E35819B41D4AE747CBBB40DB98B"><enum>(i)</enum><header>Failure to mature</header><text>A detailed explanation of the reason that the blockchain system has not become a mature blockchain system within the time period described in section 4(a)(8)(A).</text></clause> <clause id="HC0F478AF038C416B93E48519136DC5C8"><enum>(ii)</enum><header>Development plans</header><text>The future plans of development of the blockchain system, including information required under subsection (b)(3).</text></clause> <clause id="H5175764E63474738BBF4BBBFF4965A60"><enum>(iii)</enum><header>Risk factor disclosures</header><text display-inline="yes-display-inline">The material risks surrounding ownership of a unit of a digital commodity that relates to a blockchain system described under subsection (b)(1) that has not become a mature blockchain system within the time period described in section 4(a)(8)(A).</text></clause></subparagraph> <subparagraph id="HC9F27BFC397941DEA22CAD8D48460BB1"><enum>(B)</enum><header>Obligations</header><text>Transaction reporting and beneficial ownership disclosure obligations applicable to digital commodity related persons and digital commodity affiliated persons of such blockchain system.</text></subparagraph></paragraph> <paragraph id="H70D03B8C21514DC58EF480AC281748F0"><enum>(2)</enum><header>Qualification required</header><text display-inline="yes-display-inline">The Commission may not permit any additional reliance on an exempt offering for the offer or sale of an investment contract involving a unit of a digital commodity by the issuer of the digital commodity related to a blockchain system described under subsection (a)(1) that has not become a mature blockchain system within the time period described in section 4(a)(8)(A) unless the Commission has qualified any offering statement related to such exempt offering.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="HD39C62F70C9A4453A8089B6C80EF05B5"><enum>(b)</enum><header>Additional exemptions</header> <paragraph id="H1C82D62278B44479A47CD02E0B1B3BE2"><enum>(1)</enum><header>Certain registration requirements</header><text display-inline="yes-display-inline">Section 12(g)(6) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78l">15 U.S.C. 78l(g)(6)</external-xref>) is amended by striking <quote>under section 4(6)</quote> and inserting <quote>under section 4(a)(6) or 4(a)(8)</quote>.</text></paragraph> <paragraph id="HBD7DF14C0A0E470085301BC738C7FA2F" commented="no"><enum>(2)</enum><header>Exemption from State regulation</header><text display-inline="yes-display-inline">Section 18(b)(4) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77r">15 U.S.C. 77r(b)(4)</external-xref>) is amended—</text> <subparagraph id="HF2FBCEF3791B434494925A1ECB89B6E9" commented="no"><enum>(A)</enum><text>in subparagraph (B), by striking <quote>section 4(4)</quote> and inserting <quote>section 4(a)(4)</quote>;</text></subparagraph> <subparagraph id="HED6A4BC11A8E4273AECDC563B01E33BA" commented="no"><enum>(B)</enum><text display-inline="yes-display-inline">in subparagraph (C), by striking <quote>section 4(6)</quote> and inserting <quote>section 4(a)(6)</quote>;</text></subparagraph> <subparagraph id="H24F9BE4A68DB40A295893EF5CD47476C" commented="no"><enum>(C)</enum><text>in subparagraph (F)—</text> <clause id="HF8914978BA414F8B9A179DE9F90BCE09" commented="no"><enum>(i)</enum><text>by striking <quote>section 4(2)</quote> each place such term appears and inserting <quote>section 4(a)(2)</quote>; and</text></clause> <clause id="HEFA06F4A6445495B899F502A84B9895C" commented="no"><enum>(ii)</enum><text>by striking <quote>or</quote> at the end;</text></clause></subparagraph> <subparagraph id="HAEF67FD71C324807AC260D7B3CD366F5" commented="no"><enum>(D)</enum><text>in subparagraph (G), by striking the period and inserting <quote>; or</quote>; and</text></subparagraph> <subparagraph id="HF17686C7DFD642929BEF87196681947D" commented="no"><enum>(E)</enum><text>by adding at the end the following:</text> <quoted-block style="OLC" id="HFC0464A5E47D403C97DB7E142A504CEE" display-inline="no-display-inline"> <subparagraph id="H633480E60EBA4E88BB0A9BDDD1E21E5D" commented="no"><enum>(H)</enum><text display-inline="yes-display-inline">section 4(a)(8).</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph></subsection> <subsection id="H88607A62DC6942E298DD7F6769E187FA"><enum>(c)</enum><header>Use of other exemptions</header> <paragraph id="HDDBB73A199E942EE94E98FB4C39D6FD0"><enum>(1)</enum><header>Rule of construction</header><text display-inline="yes-display-inline">Except as provided in this subsection, nothing in this section or the amendments made by this section may be construed as prohibiting the offer or sale of an investment contract involving units of a digital commodity in reliance on an exemption provided under section 3, 4(a), or 19 of the Securities Act of 1933 other than that provided under section 4(a)(8) of the Securities Act of 1933.</text></paragraph> <paragraph id="HEB7636F9042A4ED1949375C7DA9B8C9B"><enum>(2)</enum><header>Rulemakings</header> <subparagraph id="HC560E72E6CC14440AE16C854A0A7F83B"><enum>(A)</enum><text>The Securities and Exchange Commission may issue rules—</text> <clause id="H628060915335459E81670E7D0B3D3D12"><enum>(i)</enum><text display-inline="yes-display-inline">to permit the issuer of a digital commodity related to a blockchain system described under section 4B(b)(1) of the Securities Act of 1933 that has not become a mature blockchain system within the time period described in section 4(a)(8)(A) of such Act, or the issuer of a digital commodity described in subparagraph (B)(iii), to utilize an exempt offering to offer or sell an investment contract involving the digital commodity, if the Commission qualifies any offering statement related to such exempt offering; and</text></clause> <clause id="HA36BEB67F91546D0B6127B79703231F7"><enum>(ii)</enum><text>for the offer and sale of investment contracts involving units of a digital commodity by issuers that are not organized under the laws of a State, a territory of the United States, or the District of Columbia.</text></clause></subparagraph> <subparagraph id="H4B96E434D7114772B9B00F3CDAFCD332" commented="no"><enum>(B)</enum><text display-inline="yes-display-inline">Not later than 270 days after the date of the enactment of this section, the Securities and Exchange Commission shall issue the following rules:</text> <clause id="H8D34AB4D2EA0409488EA4B3D06C31A80" commented="no"><enum>(i)</enum><text display-inline="yes-display-inline">A rule requiring a digital commodity issuer that last offered or sold an investment contract involving units of a digital commodity in reliance on an exemption provided under section 3, 4(a), or 19 of the Securities Act of 1933 prior to the date of enactment of this Act, to file a comparable set of disclosures to those described under section 4B of the Securities Act of 1933 as the Commission determines appropriate based on the exemption, the maturity of the blockchain system to which such digital commodity relates, and any material ongoing efforts of such digital commodity issuer (provided that for blockchains certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934, such disclosures shall be comparable to those under section 4B(b)(5)(C)), not later than the later of—</text> <subclause id="HA7271EFE151642F88F2C22D21A0EAFF5" commented="no"><enum>(I)</enum><text display-inline="yes-display-inline">one year after the effective date of this section; or</text></subclause> <subclause id="HAA68AEB963364D818E781588AD60EA3E" commented="no"><enum>(II)</enum><text>the date of any secondary market sale of such digital commodity made in reliance on section 203.</text></subclause></clause> <clause id="H2E4884DB76FD47618C08A094C7B032FC" commented="no"><enum>(ii)</enum><text display-inline="yes-display-inline">A rule requiring a digital commodity issuer that offers or sells an investment contract involving units of a digital commodity in reliance on an exemption provided under section 3, 4(a), or 19 of the Securities Act of 1933, other than that provided under section 4(a)(8) of the Securities Act of 1933, on or after the date of enactment of this Act, to file a comparable set of disclosures to those described under section 4B of the Securities Act of 1933 as the Commission determines appropriate based on the exemption, the maturity of the blockchain system to which such digital commodity relates, and any material ongoing efforts of such digital commodity issuer, prior to the date of any secondary market sale of such digital commodity made in reliance on section 203.</text></clause> <clause id="HB6E36CAD90224E97B242ADF45D193A1C" commented="no"><enum>(iii)</enum><text display-inline="yes-display-inline">With respect to a digital commodity where the digital commodity issuer is required to file disclosures under clause (i) or (ii) and where the blockchain system to which the digital commodity relates is not certified as a mature blockchain system pursuant to section 42 of the Securities Exchange Act of 1934 after the 4-year period beginning on the date that the first such disclosure is filed—</text> <subclause id="H6F6B3F8606944A3E9E74DFF73D2D57BB" commented="no"><enum>(I)</enum><text>a rule prohibiting the offer or sale of an investment contract involving units of the digital commodity unless the Commission has qualified any offering statement related to such offer or sale, where such offer or sale is permitted pursuant to subparagraph (A)(i); and</text></subclause> <subclause id="H30DAE00B4A9049E5BE51352B7CB5E87F" commented="no"><enum>(II)</enum><text display-inline="yes-display-inline">a rule requiring the digital commodity issuer to make disclosures comparable to those described in 4B(e)(1)(A) of the Securities Act of 1933. </text></subclause></clause></subparagraph></paragraph></subsection></section> <section id="H608F3AA33E8E4882BBCCDEB5351865F4"><enum>203.</enum><header>Treatment of secondary transactions in digital commodities that originally involved investment contracts</header> <subsection id="H4E844D22DCF1419C8D0B506DC97B219C"><enum>(a)</enum><header>Secondary market treatment</header><text display-inline="yes-display-inline">Notwithstanding any other provision of law, the offer or sale of a digital commodity that originally involved an investment contract by a person other than the issuer of such digital commodity, or an agent or underwriter thereof, shall be deemed not to be an offer or sale of such investment contract between the issuer of the investment contract involving the digital commodity, or an agent or underwriter thereof, and the purchaser of such digital commodity under—</text> <paragraph id="H7C29FF4979BE4B5A8A8A7D16C450C7F5"><enum>(1)</enum><text>the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77a">15 U.S.C. 77a et seq.</external-xref>);</text></paragraph> <paragraph id="H092A805149C54958873130712B3EFB1F"><enum>(2)</enum><text>the Investment Advisers Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80b-1">15 U.S.C. 80b–1 et seq.</external-xref>);</text></paragraph> <paragraph id="H7C1896E6939B4B848FB533BBED627524"><enum>(3)</enum><text>the Investment Company Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80a-1">15 U.S.C. 80a–1 et seq.</external-xref>);</text></paragraph> <paragraph id="HC01DE05CF0E7492D8C149FF94A981DC4"><enum>(4)</enum><text>the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78a">15 U.S.C. 78a et seq.</external-xref>);</text></paragraph> <paragraph id="HEA50F81633D8439C9931086E1E522D2A"><enum>(5)</enum><text>the Securities Investor Protection Act of 1970 (<external-xref legal-doc="usc" parsable-cite="usc/15/78aaa">15 U.S.C. 78aaa et seq.</external-xref>); and</text></paragraph> <paragraph id="H1B538309A4E24546BB4855672165EAF5"><enum>(6)</enum><text>any applicable provisions of State law.</text></paragraph></subsection> <subsection id="H521C95C0CF164D6B9FEAECEF449EBA0D"><enum>(b)</enum><header>End user distributions not an offer or sale of a security</header><text display-inline="yes-display-inline">An end user distribution does not involve the offer or sale of a security.</text></subsection> <subsection id="H93CD4D84068D4795BEB68CF897907C29"><enum>(c)</enum><header>Agent defined</header><text>In this section and with respect to a digital commodity issuer, the term <term>agent</term> means any person directly or indirectly controlled by the issuer or under direct or indirect common control with the issuer.</text></subsection></section> <section id="H50066B84599C4537988D92A394B9C4C0"><enum>204.</enum><header>Requirements for offers and sales of digital commodities by digital commodity related persons and digital commodity affiliated persons</header><text display-inline="no-display-inline">The Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77a">15 U.S.C. 77a et seq.</external-xref>), as amended by section 202, is further amended by inserting after section 4B the following:</text> <quoted-block style="OLC" id="H84344B8261584DDEA42C4E59BF7CC96C" display-inline="no-display-inline"> <section id="HFA64BFD02E024B3EA399FDE43A7070A5"><enum>4C.</enum><header>Requirements for offers and sales of digital commodities by digital commodity related persons and digital commodity affiliated persons</header> <subsection id="H29EF5932834D48F1A7511CC844B5E1D8"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">It shall be a violation of this Act for a digital commodity affiliated person or a digital commodity related person to offer or sell a digital commodity acquired directly from its issuer, or an agent or underwriter thereof, pursuant to an investment contract in reliance on section 4(a)(8) or another exemption under this Act, other than as provided in this section.</text></subsection> <subsection id="HE2C624180A99421E9D3024AC019CA105"><enum>(b)</enum><header>Commission jurisdiction</header> <paragraph id="HC8A0B4CAB3C4488DB498D08BBDECB7B1"><enum>(1)</enum><text display-inline="yes-display-inline">Where a digital commodity affiliated person or a digital commodity related person offers or sells a digital commodity acquired directly from its issuer, or an agent or underwriter thereof, pursuant to an investment contract in reliance on section 4(a)(8), or another exemption under this Act, other than as provided in this section, such digital commodity affiliated person or digital commodity related person shall be considered an issuer of such investment contract.</text></paragraph> <paragraph id="H69ACA0D7E53740DBA0EE403AA1E606CC"><enum>(2)</enum><text display-inline="yes-display-inline">For the purposes of this section, the Commission shall have jurisdiction and enforcement authority with respect to an offer or sale of a digital commodity described in subsection (a).</text></paragraph></subsection> <subsection id="HBB6B8C128F32499D8FECD38C19D185EA"><enum>(c)</enum><header>Restrictions on digital commodity related persons and digital commodity affiliated persons</header> <paragraph id="H99A7A32F51DF4923BB4A283E56F0AD73"><enum>(1)</enum><header>Prior to being a mature blockchain system</header><text display-inline="yes-display-inline">Prior to the blockchain system to which a digital commodity relates being certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934, units of the digital commodity acquired by a digital commodity related person or digital commodity affiliated person directly from its issuer (or an agent or underwriter thereof) pursuant to an investment contract in reliance on section 4(a)(8), or another exemption under this Act, may be offered or sold by such digital commodity related person or digital commodity affiliated person if—</text> <subparagraph id="H5A62AB5735BD4D8AADC2AD31E5BC3C50"><enum>(A)</enum><text display-inline="yes-display-inline">reports with respect to such digital commodity, where required under section 4B(b)(3) (or, with respect to a digital commodity not issued in reliance on section 4(a)(8), a comparable set of reports where required by the Commission) have been filed with the Commission;</text></subparagraph> <subparagraph id="H9316BB57D6C5447BB79F9D27F21A9D95"><enum>(B)</enum><text>the digital commodity related person or digital commodity affiliated person has held the units for not less than 12 months; and</text></subparagraph> <subparagraph id="HF2C9B386FAA24B85B30433DEDA0B3D33" commented="no"><enum>(C)</enum><text display-inline="yes-display-inline">the aggregate amount of the units of the digital commodity offered or sold by the digital commodity related person or digital commodity affiliated person is—</text> <clause id="HFA1754973B0241FD940AE8ABC52126F5"><enum>(i)</enum><text display-inline="yes-display-inline">in any 12-month period, or shorter period as the Commission may prescribe, not less than 5 percent or greater than 20 percent of the total units of the digital commodity acquired directly from its issuer (or an agent or underwriter thereof) by the digital commodity related person or digital commodity affiliated person, as determined by the Commission pursuant to paragraph (3); and</text></clause> <clause id="H84AC244B0B8F4E1283EF96B91726DF15"><enum>(ii)</enum><text display-inline="yes-display-inline">an amount, as determined by the Commission pursuant to paragraph (3), not less than 30 percent or greater than 50 percent of the total units of the digital commodity acquired directly from its issuer (or an agent or underwriter thereof) by the digital commodity related person or digital commodity affiliated person.</text></clause></subparagraph></paragraph> <paragraph id="HC441AD9C5A3A4C7587EE0303012A7396"><enum>(2)</enum><header>After becoming a mature blockchain system</header><text display-inline="yes-display-inline">After the blockchain system to which a digital commodity relates is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934, units of the digital commodity acquired by a digital commodity related person or digital commodity affiliated person directly from its issuer (or an agent or underwriter thereof) pursuant to an investment contract in reliance on section 4(a)(8) or another exemption under this Act, may be—</text> <subparagraph id="H0AD15505D3274391896D96004ADD563F"><enum>(A)</enum><text display-inline="yes-display-inline">offered or sold by a digital commodity related person; or</text></subparagraph> <subparagraph id="HD0B512ADB87F494C92F445289B5EBE69"><enum>(B)</enum><text>offered or sold by a digital commodity affiliated person if—</text> <clause id="H866BEEB92FE847DB9765D0C81FCED558"><enum>(i)</enum><text display-inline="yes-display-inline">information described in section 4B(b)(5)(C), where required (or, with respect to a digital commodity not issued in reliance on section 4(a)(8), a comparable set of information, where required) is publicly available;</text></clause> <clause id="H5151D72E29EF4AA692CF72D0962B5C5D"><enum>(ii)</enum><text display-inline="yes-display-inline">the digital commodity affiliated person has held the units for not less than the earlier of—</text> <subclause id="H251B709EDA4843EF8EDE520689D80CD6"><enum>(I)</enum><text display-inline="yes-display-inline">12 months; or</text></subclause> <subclause id="H98F030470E744F73B6D01843A218FEAA"><enum>(II)</enum><text display-inline="yes-display-inline">3 months following the date on which the blockchain system is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934; and</text></subclause></clause> <clause id="H63806E20A8D24B66AC880E07B068C471"><enum>(iii)</enum><text display-inline="yes-display-inline">the aggregate amount of the units of the digital commodity offered or sold by the digital commodity affiliated person in any 12-month period is an amount, as determined by the Commission pursuant to paragraph (3), not less than 5 percent or greater than 10 percent of the total outstanding amount of the digital commodity.</text></clause></subparagraph></paragraph> <paragraph id="HFE12C2ABC08A4F4CBAF5C88D28A771A0"><enum>(3)</enum><header>Rulemakings required</header><text display-inline="yes-display-inline">Not later than 270 days after the date of the enactment of this section, consistent with protecting investors, fostering the development of mature blockchain systems, facilitating capital formation, and maintaining fair and orderly markets the Commission, by rule, after notice and comment—</text> <subparagraph id="H97BB960553274643A741603EA1B264F9"><enum>(A)</enum><text>shall set the percentage amounts described in paragraphs (1)(C)(i), (1)(C)(ii), and (2)(B)(iii); and</text></subparagraph> <subparagraph id="HADA2C7AC9A714ECFA9C032EB5CFEB5CB"><enum>(B)</enum><text>may provide an exemption from the limitation described in paragraph (1)(C)(ii), if the Commission requires any offer or sale pursuant to such exemption of a digital commodity related to a blockchain system that has failed to become a mature blockchain system under this Act or any rule promulgated hereunder to be accompanied by the disclosures required under, as applicable, section 4B(e)(1)(A) or section 202(c)(2)(B)(iii)(II) of the CLARITY Act of 2025.</text></subparagraph></paragraph></subsection> <subsection id="HB1D1BA6FE4B64B34AFA57BFD73900E97"><enum>(d)</enum><header>Use of a digital commodity in the programmatic functioning of the blockchain system</header><text display-inline="yes-display-inline">For purposes of this section, the use of a digital commodity in the programmatic functioning of the blockchain system to which it relates is not an offer or sale of a digital commodity.</text></subsection> <subsection id="HA5071463997B43C898BC5661FF25D510"><enum>(e)</enum><header>Manipulative and deceptive devices; reporting</header> <paragraph id="HE71B49624E0C49F8ADAD5293ECEF27E2"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">It shall be unlawful for any digital commodity issuer, digital commodity related person, or digital commodity affiliated person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, to use or employ, in connection with the purchase or sale of any digital commodity, any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.</text></paragraph> <paragraph id="H0BDF1CFD0A2943D5B9A7175D8EA0DA5B"><enum>(2)</enum><header>Affirmative defense</header><text>Not later than 270 days after the date of the enactment of this section, the Commission shall issue rules to implement paragraph (1), including by providing any affirmative defenses to an enforcement action thereunder as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.</text></paragraph> <paragraph id="HB2719F4D42AA48F1802BCF9C50E20663" display-inline="no-display-inline"><enum>(3)</enum><header>Reporting</header><text display-inline="yes-display-inline">Not later than 270 days after the date of the enactment of this section, the Commission shall issue rules to prescribe such transaction reporting and beneficial ownership disclosure obligations applicable to digital commodity related persons and digital commodity affiliated persons, as necessary or appropriate in the public interest or for the protection of investors.</text></paragraph> <paragraph id="H1622F7EB4AF3423E9034B99CE103EB40"><enum>(4)</enum><header>Differentiation between persons</header><text>In issuing rules required under paragraphs (2) and (3), the Commission shall differentiate between digital commodity related persons and digital commodity affiliated persons, as necessary or appropriate in the public interest or for the protection of investors.</text></paragraph></subsection> <subsection id="H59AE978492EE42F0AC5695C5D499C3A3" commented="no"><enum>(f)</enum><header>Certain units received prior to enactment</header><text display-inline="yes-display-inline">A unit of a digital commodity received from the digital commodity issuer prior to the date of the enactment of this section through an offer or sale of an investment contract involving units of a digital commodity in reliance on an exemption provided under section 3, 4(a), or 19, may be offered or sold by a digital commodity related person or digital commodity affiliated person, if—</text> <paragraph id="HE4A7ECC3B0044A22B5017946B656515F" commented="no"><enum>(1)</enum><text display-inline="yes-display-inline">the digital commodity issuer is no longer engaged in material ongoing efforts related to the blockchain system to which the digital commodity relates and the blockchain system to which the digital commodity relates is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934;</text></paragraph> <paragraph id="H02F4B3CCAC9E4E498FDA2985DBA428B9" commented="no"><enum>(2)</enum><text display-inline="yes-display-inline">the digital commodity issuer is engaged in material ongoing efforts related to the blockchain system to which the digital commodity relates and the blockchain system to which the digital commodity relates is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934, and the appropriate disclosures required under section 202(c)(2)(B) of the CLARITY Act of 2025 have been made with the Commission; or</text></paragraph> <paragraph id="H57A8C50C7DED4C8D8CE2BE91BFF3DE6A" commented="no"><enum>(3)</enum><text display-inline="yes-display-inline">the digital commodity issuer is engaged in material ongoing efforts related to the blockchain system to which the digital commodity relates and the blockchain system to which the digital commodity relates is not certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934, and the appropriate disclosures required under section 202(c)(2)(B) of the CLARITY Act of 2025 have been made with the Commission.</text></paragraph></subsection> <subsection id="HF17EF36D1C5F4346B9992B5098F08044"><enum>(g)</enum><header>Rulemaking on further usage of digital commodities</header><text display-inline="yes-display-inline">The Commission, consistent with protecting investors, fostering the development of mature blockchain systems, facilitating capital formation, and maintaining fair and orderly markets, may, by rule, exempt unconditionally or on stated terms or conditions, a digital commodity related person or a digital commodity affiliated person, or any class thereof, from the requirements of this section for the offer or sale of a digital commodity.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H12EC5F5E9A7D4267AEB142D0C5EBB4E0"><enum>205.</enum><header>Mature blockchain system requirements</header><text display-inline="no-display-inline">Title I of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78a">15 U.S.C. 78a et seq.</external-xref>) is amended by adding at the end the following:</text> <quoted-block style="OLC" id="H008376FE39AB4E699D31D008372BB864" display-inline="no-display-inline"> <section id="H323D1FC8F91F42C08F70041057B18259"><enum>42.</enum><header>Mature blockchain systems</header> <subsection id="H3A6F8706026A44828D6B083E9919EDF3"><enum>(a)</enum><header>Certification of blockchain systems</header> <paragraph id="HA4D0CD0898674B60BBAF499D7306A3D3"><enum>(1)</enum><header>Certification</header><text display-inline="yes-display-inline">For purposes of sections 4(a)(8), 4B, and 4C of the Securities Act of 1933, any digital commodity issuer, digital commodity related person, digital commodity affiliated person, or decentralized governance system of the blockchain system may certify to the Securities and Exchange Commission that the blockchain system to which a digital commodity relates is a mature blockchain system.</text></paragraph> <paragraph id="H1B69CA0E1E274FA495EA2F24222B2F48"><enum>(2)</enum><header>Filing requirements</header><text>A certification described under paragraph (1) shall be filed with the Commission, and include such information that is reasonably necessary to establish that the blockchain system is not controlled by any person or group of persons under common control, which may include information regarding—</text> <subparagraph id="H470AE932EC834DA291FD9172DE6C0A42"><enum>(A)</enum><text>the operation of the blockchain system;</text></subparagraph> <subparagraph id="HB4DE120332FC477681A074AE054FD161"><enum>(B)</enum><text display-inline="yes-display-inline">the functionality of the related digital commodity;</text></subparagraph> <subparagraph id="H4EF839D2164F4A4985AB4D227F739258"><enum>(C)</enum><text display-inline="yes-display-inline">how the market value of the digital commodity is substantially derived from the programmatic functioning of such blockchain system;</text></subparagraph> <subparagraph id="H72C85A43CDB4403894F53B8274FCDEC1"><enum>(D)</enum><text>any decentralized governance system which relates to the blockchain system; and</text></subparagraph> <subparagraph id="HC31E68A2714545BCBA0973A5546075E1"><enum>(E)</enum><text display-inline="yes-display-inline">the current roles, if any, of the digital commodity issuer, digital commodity affiliated persons, and digital commodity related persons where such roles are material to the development or operation of such blockchain system or the decentralized governance system of such blockchain system.</text></subparagraph></paragraph> <paragraph id="H06B7948E1CF84BBFB63F97F65CA125EE"><enum>(3)</enum><header>Rebuttable presumption</header><text display-inline="yes-display-inline">The Commission may rebut a certification described under paragraph (1) with respect to a blockchain system if the Commission, within 60 days of receiving such certification, determines that the blockchain system is not a mature blockchain system.</text></paragraph> <paragraph id="HA42113F6045443EEB65BAFF8FBAD8FE8"><enum>(4)</enum><header>Certification review</header> <subparagraph id="HE853A5B7958746F4B509DDA11B713C52"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">Any blockchain system that relates to a digital commodity for which a certification has been made under paragraph (1) shall be considered a mature blockchain system 60 days after the date on which the Commission receives a certification under paragraph (1), unless the Commission notifies the person who made the certification within such time that the Commission is staying the certification due to—</text> <clause id="HBF0F78919A3644798F20B65DCC8A5E11"><enum>(i)</enum><text>an inadequate explanation by the person making the certification; or</text></clause> <clause id="H849EE87A14D74D58B78A8467190CAF63"><enum>(ii)</enum><text>any novel or complex issues which require additional time to consider.</text></clause></subparagraph> <subparagraph id="HF8F9AEE8562E494A9F4A4765BAE756D5"><enum>(B)</enum><header>Public notice</header><text>The Commission shall make the following available to the public and provide a copy to the Commodity Futures Trading Commission:</text> <clause id="H688F2CBE864C416581E14CB0193D8F9E"><enum>(i)</enum><text display-inline="yes-display-inline">Each certification received under paragraph (1).</text></clause> <clause id="HEB6CE77B37F945659DF14C4D139727A2"><enum>(ii)</enum><text>Each stay of the Commission under this subsection, and the reasons therefor.</text></clause> <clause id="HE5972841678B45CB9789EDC22F96ADAA"><enum>(iii)</enum><text display-inline="yes-display-inline">Any response from a person making a certification under paragraph (1) to a stay of the certification by the Commission.</text></clause></subparagraph> <subparagraph id="H810B0C5A062B4E98AD83139F0B8F013F"><enum>(C)</enum><header>Consolidation</header><text display-inline="yes-display-inline">The Commission may consolidate and treat as one submission multiple certifications made under paragraph (1) for the same blockchain system which relates to a digital commodity which are received during the review period provided under this paragraph.</text></subparagraph></paragraph> <paragraph id="H8758629DDB64433BA23D49FD6202C75E"><enum>(5)</enum><header>Stay of certification</header> <subparagraph id="H37B9855915064AD5A08C31CF0A680BDC"><enum>(A)</enum><header>In general</header><text>A notification by the Commission pursuant to paragraph (4)(A) shall stay the certification once for up to an additional 120 days from the date of the notification.</text></subparagraph> <subparagraph id="H32484C09FE044353AED774465390F729"><enum>(B)</enum><header>Public comment period</header><text display-inline="yes-display-inline">Before the end of the 60-day period described under paragraph (4)(A), the Commission may begin a public comment period of at least 30 days in conjunction with a stay under this subsection.</text></subparagraph></paragraph> <paragraph id="HD9EDA8D38458441FA6E0F9A03EEA1242"><enum>(6)</enum><header>Disposition of certification</header><text display-inline="yes-display-inline">A certification made under paragraph (1) shall—</text> <subparagraph id="H8367B0721A854696AB46A28DE91E5860"><enum>(A)</enum><text>become effective—</text> <clause id="H77899F03AFDC4EFC8E686073DABCEB50"><enum>(i)</enum><text>upon the publication of a notification from the Commission to the person who made the certification that the Commission does not object to the certification; or</text></clause> <clause id="H0497B1496EAE4E15BDC8BCBC2E8FBBDC"><enum>(ii)</enum><text>at the expiration of the certification review period; and</text></clause></subparagraph> <subparagraph id="H9347929D63E44F4281373A75BF895C7D"><enum>(B)</enum><text>not become effective upon the publication of a notification from the Commission to the person who made the certification that the Commission has rebutted the certification.</text></subparagraph></paragraph> <paragraph id="HAD407ED343D0485CBA8889AEAEF22AA1"><enum>(7)</enum><header>Recertification</header><text display-inline="yes-display-inline">With respect to a blockchain system for which a certification has been rebutted under this subsection, no person may make a certification under paragraph (1) with respect to such blockchain system during the 90-day period beginning on the date of such rebuttal.</text></paragraph> <paragraph id="HD7E00FC6B940452799C97F60639D49FC"><enum>(8)</enum><header>Appeal of rebuttal</header> <subparagraph id="HFED3676C2BF84990B305E9243B5E757F"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">If a certification is rebutted under this section, the person making such certification may appeal the decision to the United States Court of Appeals for the District of Columbia, not later than 60 days after the notice of rebuttal is made.</text></subparagraph> <subparagraph id="HBE22B86F7045417AB6EAB91365AC3636"><enum>(B)</enum><header>Review</header><text display-inline="yes-display-inline">In an appeal under subparagraph (A), the court shall have de novo review of the determination to rebut the certification.</text></subparagraph></paragraph></subsection> <subsection id="H523CB682B84F4FD5BCEFA31E9D980D70"><enum>(b)</enum><header>Maturity criteria</header> <paragraph id="HC49435D123634AC7AE6B77552AF3F480"><enum>(1)</enum><header>Sense of Congress</header><text display-inline="yes-display-inline">It is the sense of the Congress that protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation necessitates establishing clear criteria for blockchain systems to be deemed mature, as well as enabling the Commission to develop, without prejudice to any such criteria codified in statute, alternative criteria by which blockchain systems may be considered not to be controlled by any person or group of persons under common control in order to accommodate changes in markets and technology.</text></paragraph> <paragraph id="H630DAD03E5CA441DA42DF668BEC41153"><enum>(2)</enum><header>In general</header><text display-inline="yes-display-inline">The Commission may issue rules identifying conditions by which a blockchain system, together with its related digital commodity, shall be considered a mature blockchain system, consistent with the protection of investors, maintenance of fair, orderly, and efficient markets, and the facilitation of capital formation.</text></paragraph> <paragraph id="H5A2B9887042F46B8878043CDA972233E"><enum>(3)</enum><header>Rules of construction</header> <subparagraph id="HF1EC37D3043E4603BFDE89190FD1671F"><enum>(A)</enum><text>Nothing in this subsection may be construed to permit the Commission to impose additional criteria to the criteria in subsection (c) for certifying that a blockchain system is a mature blockchain system pursuant to subsection (c).</text></subparagraph> <subparagraph id="H375F990BAE9842BF992CD386B73322D5"><enum>(B)</enum><text display-inline="yes-display-inline">Nothing in this subsection or subsection (c) may be construed to limit the Commission’s ability to identify alternative conditions and criteria by which a blockchain system may be considered a mature blockchain system.</text></subparagraph></paragraph></subsection> <subsection id="H6EC6EF6E657B48C0B9CC653A8C97893B"><enum>(c)</enum><header>Deemed mature</header> <paragraph id="HFDF92A91B4F74B08AB5938D8F0D735E3"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Notwithstanding subsection (b), for the purposes of subsection (a), a digital commodity issuer, digital commodity related person, digital commodity affiliated person, or decentralized governance system of the blockchain system may establish that a blockchain system, together with its related digital commodity, is not controlled by any person or group of persons under common control, if the blockchain system, together with its related digital asset, meets the requirements described in paragraph (2) or (3).</text></paragraph> <paragraph id="HA1DC918F5B75486897C4F0BA38456D79"><enum>(2)</enum><header>Criteria for any blockchain system</header><text>The requirements described in this paragraph are the following:</text> <subparagraph id="H0FB0A3587E784E10BA4566F4CE48D91A"><enum>(A)</enum><header>System value</header> <clause id="H5ADE213CD3204DCE8D0D76F3F88CB7AA"><enum>(i)</enum><header>Market value</header><text>The digital commodity has a value that is substantially derived from the use and functioning of the blockchain system.</text></clause> <clause id="HDD5AC8A9417A45C6A52CD7323ED3D648"><enum>(ii)</enum><header>Development of value mechanism substantially completed</header><text>Where the digital commodity issuer has made public a development plan describing how the digital commodity’s value is reasonably expected to be derived from the programmatic functioning of the blockchain system, the development of such mechanisms has been substantially completed.</text></clause></subparagraph> <subparagraph id="HB0AA76D7F5744AF6AA773BF16F257DB0"><enum>(B)</enum><header>Functional system</header><text>The blockchain system allows network participants to engage in the activities the blockchain system is intended to provide, including—</text> <clause id="H8F2062668EBC4532AF055A8E0D4DC18C"><enum>(i)</enum><text>using, transmitting, or storing value, or otherwise executing transactions, on the blockchain system;</text></clause> <clause id="H57F9D5AA6E11417E8098328F31B49C7E"><enum>(ii)</enum><text>deploying, executing, or accessing software or services, or otherwise offering or participating in services, deployed on or integrated with the blockchain system;</text></clause> <clause id="HE535D4A88B824B459F80845695591033"><enum>(iii)</enum><text>participating in the consensus mechanism, transaction validation process, or decentralized governance system of the blockchain system; or</text></clause> <clause id="H2715706A29A94B439A638917A1289B12"><enum>(iv)</enum><text>operating any client, node, validator, or other form of computational infrastructure with respect to the blockchain system.</text></clause></subparagraph> <subparagraph id="H177AF8EF85D146CBA61D92A2EB81B705"><enum>(C)</enum><header>Open and interoperable system</header><text>The blockchain system—</text> <clause id="HC314DBB109CF416B93682543D9C08417"><enum>(i)</enum><text>is composed of source code that is open source; and</text></clause> <clause id="H617C342968CE4269BA22FC2533BF5856"><enum>(ii)</enum><text>does not restrict or prohibit based on the exercise of unilateral authority any person, other than a digital commodity issuer, digital commodity related person, or digital commodity affiliated person from engaging in the activities the blockchain system is intended to provide, including the activities described in subparagraph (B).</text></clause></subparagraph> <subparagraph id="HA2C48E780B3D4460B9C7AB926A3183D0"><enum>(D)</enum><header>Programmatic system</header><text display-inline="yes-display-inline">The blockchain system operates, executes, and enforces its operations and transactions based solely on pre-established, transparent rules encoded directly within the source code of the blockchain system.</text></subparagraph> <subparagraph id="HF6DB96259DBA4190A610B999873617CD"><enum>(E)</enum><header>System governance</header><text>No person or group of persons under common control—</text> <clause id="H6535E7957BE14A8694517CBF3BC6A651"><enum>(i)</enum><text display-inline="yes-display-inline">has the unilateral authority, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, to control or materially alter the functionality, operation, or rules of consensus or agreement of the blockchain system or its related digital commodity; or</text></clause> <clause id="H76FB170CC74F4750BDBBD29C37E213D3"><enum>(ii)</enum><text display-inline="yes-display-inline">has the unilateral authority to direct the voting, in the aggregate, of 20 percent or more of the outstanding voting power of such blockchain system by means of a related digital commodity, nodes or validators, a decentralized governance system, or otherwise, in a blockchain system which can be altered by a voting system.</text></clause></subparagraph> <subparagraph id="H0D93BA04E752447AA3682721086B2CF3"><enum>(F)</enum><header>Impartial system</header><text display-inline="yes-display-inline">No person or group of persons under common control possesses a unique permission or privilege to alter the functionality, operation, or rules of consensus or agreement of the blockchain system or its related digital commodity, unless such alteration—</text> <clause id="HF2F49184B46F46689DFEF9A48010482F"><enum>(i)</enum><text>addresses errors, regular maintenance, or cybersecurity risks of the blockchain system that affect the programmatic functioning of the blockchain system; and</text></clause> <clause id="HF627FFFE917C4A2FB794B7FCF764E7E6"><enum>(ii)</enum><text>is adopted through the consensus or agreement of a decentralized governance system.</text></clause></subparagraph> <subparagraph id="H0B56695887A247ECAE51931FFB8BDC67"><enum>(G)</enum><header>Distributed ownership</header><text display-inline="yes-display-inline">No digital commodity issuer, digital commodity related person, or digital commodity affiliated person beneficially owns, in the aggregate, 20 percent or more of the total amount of units of the digital commodity.</text></subparagraph></paragraph> <paragraph id="H1840A96B374C4A31B1FB2606E1BDFEB1"><enum>(3)</enum><header>Optional criteria for preexisting blockchain systems</header><text display-inline="yes-display-inline">The requirements described in this paragraph are that the blockchain system—</text> <subparagraph id="H10A5956B83054FDF91DFE12BF835C274"><enum>(A)</enum><text display-inline="yes-display-inline">was created prior to the date of enactment of this section;</text></subparagraph> <subparagraph id="HEE79C8A6C80A4083B8272A090B86AE31"><enum>(B)</enum><text>met the requirements of subparagraphs (A) through (F) of paragraph (2) prior to January 1, 2020; and</text></subparagraph> <subparagraph id="HBA6BE3A6E5A9415FA5B429D144678B55"><enum>(C)</enum><text>at least 50 percent of the units of the digital commodity related to the blockchain system are held by persons other than the digital commodity issuer, a digital commodity related person, or a digital commodity affiliated person.</text></subparagraph></paragraph></subsection> <subsection id="HF707F3818893441BB9566BCECC259F62"><enum>(d)</enum><header>Decentralized governance system</header> <paragraph id="H14B59FB652FB49C385A2B3F969327245" display-inline="no-display-inline"><enum>(1)</enum><text display-inline="yes-display-inline">For the purposes of this section, a decentralized governance system is not a <quote>person</quote> or a <quote>group of persons under common control</quote>.</text></paragraph> <paragraph id="HA419E2C773574F3E8D0B7DC0B9FEC661"><enum>(2)</enum><text>A blockchain system, together with its digital commodity, shall not be precluded from being considered a mature blockchain system solely based on a functional, administrative, clerical, or ministerial action of a decentralized governance system, including any such action taken by a person acting on behalf of and at the direction of the decentralized governance system, as determined by the Commission and consistent with the protection of investors, maintenance of fair, orderly, and efficient markets, and the facilitation of capital formation.</text></paragraph></subsection> <subsection id="H8739075019DD45B1884FABBD722650B2"><enum>(e)</enum><header>Rulemaking</header><text>Not more than 270 days after the date of enactment of this section, the Commission shall issue rules to carry out this section.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H0628715F3FB844FA836F050B8F0DA19C"><enum>206.</enum><header>Effective date</header><text display-inline="no-display-inline">Unless otherwise provided in this title, this title and the amendments made by this title shall take effect 360 days after the date of enactment of this Act, except that, to the extent a provision of this title requires a rulemaking, the provision shall take effect on the later of—</text> <paragraph id="HC3609D283DBC49989768627B52125778"><enum>(1)</enum><text>360 days after the date of enactment of this Act; or</text></paragraph> <paragraph id="HE7C90A43EB8F489EBF1D98030F8A8744"><enum>(2)</enum><text>60 days after the publication in the Federal Register of the final rule implementing the provision.</text></paragraph></section> <enum>III</enum><header>Registration for Intermediaries at the Securities and Exchange Commission</header> <section id="HCFEF956A6C2E483497F62B3BC8438AD3"><enum>301.</enum><header>Treatment of digital commodities and permitted payment stablecoins</header> <subsection id="H1BFC8D6B1C3C4FBA819DF7E70A74B2A8"><enum>(a)</enum><header>Securities Act of 1933</header><text display-inline="yes-display-inline">Section 2(a)(1) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77b">15 U.S.C. 77b(a)(1)</external-xref>), as amended by section 201(a)(1), is further amended by adding at the end the following: <quote>The term does not include a digital commodity or permitted payment stablecoin.</quote>.</text></subsection> <subsection id="HF05C18F993BF45149BEF9102B878096B"><enum>(b)</enum><header>Securities Exchange Act of 1934</header><text display-inline="yes-display-inline">Section 3(a)(10) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78c">15 U.S.C. 78c(a)</external-xref>), as amended by section 201(d) is further is amended by adding at the end the following: <quote>The term does not include a digital commodity or permitted payment stablecoin.</quote>.</text></subsection> <subsection id="H50C612003D25453CB901F2BAE3E84A1F"><enum>(c)</enum><header>Investment Advisers Act of 1940</header><text>Section 202(a) of the Investment Advisers Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80b-2">15 U.S.C. 80b–2(a)</external-xref>) is amended—</text> <paragraph id="H2BFD0FB3CDC646828D1DC25372E141E4"><enum>(1)</enum><text display-inline="yes-display-inline">in paragraph (18)), as amended by section 201(b), by adding at the end the following: <quote>The term does not include a digital commodity or permitted payment stablecoin.</quote>;</text></paragraph> <paragraph id="H654A984E4B484C5CBEE31C81FEC8FC48" commented="no"><enum>(2)</enum><text>by redesignating the second paragraph (29) (relating to commodity pools) as paragraph (31); and</text></paragraph> <paragraph id="H7D8B23447A6C43FC94D83935F121EFB9"><enum>(3)</enum><text>by adding at the end, the following:</text> <quoted-block id="H0B746D31D06C48E3BA64B24AB28A63B7" style="OLC"> <paragraph id="HBC96CB4CDD984077BEADCED8882E660B"><enum>(32)</enum><header>Digital commodity-related terms</header><text display-inline="yes-display-inline">The terms <term>digital commodity</term> and <term>permitted payment stablecoin</term> have the meaning given those terms, respectively, under section 2(a) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77b">15 U.S.C. 77b(a)</external-xref>).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H4BD8925B99E248C8B775B420C4C6D6C9"><enum>(d)</enum><header>Investment Company Act of 1940</header><text>Section 2(a) of the Investment Company Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80a-2">15 U.S.C. 80a–2</external-xref>) is amended—</text> <paragraph id="H908FFD989521485CBBB5D212E49C8517"><enum>(1)</enum><text display-inline="yes-display-inline">in paragraph (36), as amended by section 201(c), by adding at the end the following: <quote>The term does not include a digital commodity or permitted payment stablecoin.</quote>; and</text></paragraph> <paragraph id="H2D7E92F816EB4346BBB255E79DC65004"><enum>(2)</enum><text>by adding at the end, the following:</text> <quoted-block id="HEDE2888943224A81B58B8B580BA71C78" style="OLC"> <paragraph id="H02E4CF511DFA43898BAD9F02AF9AECDE"><enum>(55)</enum><header>Digital commodity-related terms</header><text display-inline="yes-display-inline">The terms <term>digital commodity</term> and <term>permitted payment stablecoin</term> have the meaning given those terms, respectively, under section 2(a) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77b">15 U.S.C. 77b(a)</external-xref>).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H6D6558CD103B435CA406BF3DD8569DC3"><enum>(e)</enum><header>Securities Investor Protection Act of 1970</header><text display-inline="yes-display-inline">Section 16 of the Securities Investor Protection Act of 1970 (<external-xref legal-doc="usc" parsable-cite="usc/15/78lll">15 U.S.C. 78lll</external-xref>) is amended—</text> <paragraph id="H41D57EB4E6A5437AB69013BA390D1431"><enum>(1)</enum><text display-inline="yes-display-inline">in paragraph (14), as amended by section 201(e), by adding at the end the following: <quote>The term does not include a digital commodity or permitted payment stablecoin, as such terms are defined, respectively, under section 2(a) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77b">15 U.S.C. 77b(a)</external-xref>)</quote>; and</text></paragraph> <paragraph id="H5AD40917324443F2A44ED11C509C2F66"><enum>(2)</enum><text>by adding at the end the following:</text> <quoted-block style="OLC" id="H3E0123D88E9E4A8986F300305DBC6EF8" display-inline="no-display-inline"> <paragraph id="HA92AC8499D484AAC94996B762A32EF5C"><enum>(15)</enum><header>Treatment of permitted payment stablecoins</header><text display-inline="yes-display-inline">A permitted payment stablecoin, as defined in section 2(a) of the Securities Act of 1933, shall not qualify as <quote>cash</quote> and a claim for a permitted payment stablecoin shall not qualify as a <quote>claim for cash</quote>.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section> <section id="H0AF802B4AED64E50B300801150444486" commented="no"><enum>302.</enum><header>Anti-fraud authority over permitted payment stablecoins and certain digital commodity transactions</header> <subsection id="HE1528395B79A44028B0AEF864B4F89A3"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 10 of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78j">15 U.S.C. 78j</external-xref>) is amended—</text> <paragraph id="HC2CCC6D9009E49E4A779CDC533FEB274"><enum>(1)</enum><text>by moving subsection (c) so as to appear after subsection (b);</text></paragraph> <paragraph id="H481016DE0D6B4EB7B885CAA5000FBAC4"><enum>(2)</enum><text>by inserting after subsection (c) the following:</text> <quoted-block style="OLC" id="H2815454AF47F400A9B9C7E04A66670FC" display-inline="no-display-inline"> <subsection id="H2E0338F1C60F42F499D00D084795B22F" indent="down1"><enum>(d)</enum><text display-inline="yes-display-inline">To use or employ, in connection with the purchase or sale of any permitted payment stablecoin or digital commodity, including, as applicable, by or through a broker or dealer or an alternative trading system, any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.</text></subsection><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph> <paragraph id="HB816F83D743E4ED28F2B67DD8224A811"><enum>(3)</enum><text>by adding at the end the following: <quote>Rules promulgated under subsection (b) that prohibit fraud, manipulation, or insider trading (but not rules imposing or specifying reporting or recordkeeping requirements, procedures, or standards as prophylactic measures against fraud, manipulation, or insider trading), and judicial precedents decided under subsection (b) and rules promulgated thereunder that prohibit fraud, manipulation, or insider trading, shall apply with respect to permitted payment stablecoin and digital commodity transactions engaged in by a broker or dealer or through an alternative trading system or, as applicable, a national securities exchange to the same extent as they apply to securities transactions. Judicial precedents decided under section 17(a) of the Securities Act of 1933 and sections 9, 15, 16, 20, and 21A of this title, and judicial precedents decided under applicable rules promulgated under such sections, shall apply to permitted payment stablecoins and digital commodities with respect to those circumstances in which the permitted payment stablecoins and digital commodities are brokered, traded, or custodied by a broker or dealer or through an alternative trading system or, as applicable, a national securities exchange to the same extent as they apply to securities.</quote>. </text> <quoted-block style="OLC" id="HD57C9B2BCED24DA2B6B28F5F6F826527" display-inline="no-display-inline"><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="HEA806CC065E548379B1405BE44391942"><enum>(b)</enum><header>Treatment of permitted payment stablecoins</header><text display-inline="yes-display-inline">Title I of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78a">15 U.S.C. 78a et seq.</external-xref>) is amended by inserting after section 6 the following:</text> <quoted-block style="OLC" id="H2931EE061F92408D9782088C799206C4" display-inline="no-display-inline"> <section id="H3480EFAE4B88462FBB75DAA23D585FBA"><enum>6A.</enum><header>Treatment of transactions in permitted payment stablecoins</header> <subsection id="HB8663D2B89184C55A008A19125953414"><enum>(a)</enum><header>Authority To broker, trade, and custody permitted payment stablecoins</header><text display-inline="yes-display-inline">Permitted payment stablecoins may be brokered, traded, or custodied by a broker or dealer or through an alternative trading system or national securities exchange.</text></subsection> <subsection id="H0FFC3D7109BC490CAD20399E56930594"><enum>(b)</enum><header>Commission jurisdiction</header><text display-inline="yes-display-inline">The Commission shall only have jurisdiction over a transaction in a permitted payment stablecoin with respect to those circumstances in which a permitted payment stablecoin is brokered, traded, or custodied—</text> <paragraph id="H91AA545A4DB14A169815D72D8CD1D2B8"><enum>(1)</enum><text>by a broker or dealer;</text></paragraph> <paragraph id="HB6E1C3131DBC41D9BACA697C93BCF4CF"><enum>(2)</enum><text display-inline="yes-display-inline">through a national securities exchange; or</text></paragraph> <paragraph id="H91E86E1402904AE0B517BF7A81F2A56F"><enum>(3)</enum><text>through an alternative trading system.</text></paragraph></subsection> <subsection id="H546A1A7E426944D99EA16C41E15EFAD9"><enum>(c)</enum><header>Limitation</header><text display-inline="yes-display-inline">Subsection (b) shall only apply to a transaction described in subsection (b) for the purposes of regulating the offer, execution, solicitation, or acceptance of a permitted payment stablecoin in those circumstances in which the permitted payment stablecoin is brokered, traded, or custodied—</text> <paragraph id="HD00BEEB41C264119B5FCC27981ED045A"><enum>(1)</enum><text>by a broker or dealer;</text></paragraph> <paragraph id="H00A4CAFBF5DA40199590650561CB205C"><enum>(2)</enum><text display-inline="yes-display-inline">through a national securities exchange; or</text></paragraph> <paragraph id="HBD8261DFFF99475E8F62B7EF24BC0B16"><enum>(3)</enum><text>through an alternative trading system.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> <section id="HF7EBE033D8264F90A42ADCB66040A99C"><enum>303.</enum><header>Eligibility of alternative trading systems</header> <subsection id="H7CE39B60398E470AB599CE574F75D4E1"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 5 of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78e">15 U.S.C. 78e</external-xref>) is amended—</text> <paragraph id="H35A0AED753AE472D94203C7F648AC3F0"><enum>(1)</enum><text>by striking <quote>It</quote> and inserting the following:</text> <quoted-block style="OLC" id="HD4586ABA81714F6B941B5215657E9C3C" display-inline="no-display-inline"> <subsection id="H39332A87DAAA4FCBB2936B001522F73B"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">It</text></subsection><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph> <paragraph id="HFEA50E03D0914BB1AA3FE5F84F3242A6"><enum>(2)</enum><text>by adding at the end the following:</text> <quoted-block style="OLC" id="HDA32E580C30F4C51BA0E73EF5AAC1194" display-inline="no-display-inline"> <subsection id="H08FB6BF65A6A45CE98724BC60AE7A208"><enum>(b)</enum><header>Digital commodity protections</header> <paragraph id="HB9BBF56B4CE3474DA12B0C66A55CAA5B"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The Commission may not preclude a trading platform from operating pursuant to a covered exemption on the basis that the assets traded or to be traded on such platform include—</text> <subparagraph id="H403B62E111EC44BA9A74BF3BC2FA2B1F"><enum>(A)</enum><text>digital commodities or permitted payment stablecoins; and</text></subparagraph> <subparagraph id="HA78EAD3E70B743A0A70EA9DF394F6832"><enum>(B)</enum><text>securities.</text></subparagraph></paragraph> <paragraph id="HDA8CCED351BD4D9B84FBEC579E124E10"><enum>(2)</enum><header>Covered exemption</header><text display-inline="yes-display-inline">In this subsection, the term <term>covered exemption</term> means an exemption—</text> <subparagraph id="H20304531202249B588CAC328BA98318F"><enum>(A)</enum><text>described in subsection (a)(2); or</text></subparagraph> <subparagraph id="H014E493C5C1744C5826476BE972D59C9"><enum>(B)</enum><text>with respect to any other rule of the Commission relating to the definition of <quote>exchange</quote>.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H60710540F5E64496B1EC03B688052BAD"><enum>(b)</enum><header>Securities Exchange Act of 1934</header><text display-inline="yes-display-inline">Section 3(a)(2) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78c">15 U.S.C. 78c(a)(2)</external-xref>) is amended by adding at the end the following: <quote>An alternative trading system primarily facilitating the trading of digital commodities, permitted payment stablecoins, or both, is not a <quote>facility</quote> of an exchange.</quote>.</text></subsection> <subsection id="HEDAE4DABA1E34BBAB4410855D8B03269"><enum>(c)</enum><header>Rule of construction</header><text display-inline="yes-display-inline">Nothing in this section, the amendments made by this section, or section 304 may be construed to—</text> <paragraph id="H1C12019ED4414089A06D9A446C9C2E16"><enum>(1)</enum><text>prohibit a national securities exchange from owning or operating any other type of alternative trading system; or</text></paragraph> <paragraph id="HC00C9F7D99EE4745ABA915A60F2A45BA"><enum>(2)</enum><text display-inline="yes-display-inline">create a presumption that any other type of alternative trading system owned or operated by a national securities exchange is a facility of that exchange.</text></paragraph></subsection></section> <section id="HEC78C3634D7B43C1B512B72040F1664C"><enum>304.</enum><header>Operation of alternative trading systems</header> <subsection id="H64384124FF5D499FA7879FA1EEB27CE9"><enum>(a)</enum><header>Commission authority</header><text display-inline="yes-display-inline">The Securities and Exchange Commission shall have jurisdiction over digital commodity activities and transactions engaged in by—</text> <paragraph id="HCCBD6DD577C8440C9B24605E25EF7288"><enum>(1)</enum><text display-inline="yes-display-inline">a registered broker or registered dealer exempt from registration with the Commodity Futures Trading Commission pursuant to section 5k of the Commodity Exchange Act; and</text></paragraph> <paragraph id="H6D6598C103D043B1BCAB86B4D2BAFDB7" commented="no"><enum>(2)</enum><text display-inline="yes-display-inline">an alternative trading system exempt from registration with the Commodity Futures Trading Commission pursuant to section 5k of the Commodity Exchange Act, including where such alternative trading system is operated by a national securities exchange or affiliate thereof.</text></paragraph></subsection> <subsection id="H14DB88F4D2BF41B48F0B80AE892F905D"><enum>(b)</enum><header>Rulemaking authority</header><text display-inline="yes-display-inline">The Securities and Exchange Commission shall have authority to issue rules governing any digital commodity activities and transactions engaged in by a registered broker or registered dealer, or an alternative trading system, including where such alternative trading system is operated by a national securities exchange or affiliate thereof, that is exempt from registration with the Commodity Futures Trading Commission pursuant to section 5k of the Commodity Exchange Act, consistent with this section and what is necessary or appropriate in the public interest or for the protection of investors.</text></subsection> <subsection id="HE6279A65F20C46D09068C037329937BC"><enum>(c)</enum><header>National securities exchanges</header><text display-inline="yes-display-inline">Not later than 270 days after the date of the enactment of this Act, the Securities and Exchange Commission shall revise the covered regulations to permit a national securities exchange or affiliate thereof to operate an alternative trading system that permits the trading of digital commodities, permitted payment stablecoins, or both by registered brokers or registered dealers that are exempt from registration with the Commodity Futures Trading Commission pursuant section 5k of the Commodity Exchange Act, consistent with this section and what is necessary or appropriate in the public interest or for the protection of investors.</text></subsection> <subsection id="H0CEA8B2C9BFA4DDA91D184AC671B1AA3"><enum>(d)</enum><header>Registered brokers and registered dealers</header><text display-inline="yes-display-inline">Not later than 270 days after the date of the enactment of this Act, the Securities and Exchange Commission shall revise the covered regulations to permit a registered broker or registered dealer that is exempt from registration with the Commodity Futures Trading Commission pursuant to section 5k of the Commodity Exchange Act to operate an alternative trading system that permits the trading of digital commodities, permitted payment stablecoins, or both, consistent with this section and what is necessary or appropriate in the public interest or for the protection of investors.</text></subsection> <subsection id="H36BDC66F34194538A918D6EE02BBE34F"><enum>(e)</enum><header>Permitted trading</header> <paragraph id="HC53651DE4E5B4090B4F2ECF2E5292F9B"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">An alternative trading system operated pursuant to this section and the regulations promulgated hereunder shall be permitted to trade upon notice to the Securities and Exchange Commission in a manner prescribed by the Securities and Exchange Commission any digital commodity that has been listed by a digital commodity exchange in compliance with section 5i(c)(3) of the Commodity Exchange Act.</text></paragraph> <paragraph id="HF9D1B0912A5C4BFFACF9EC86E10A8749"><enum>(2)</enum><header>Commission authority</header><text display-inline="yes-display-inline">Digital commodity transactions offered on an alternative trading system operating pursuant to this section shall be subject to the jurisdiction of the Securities and Exchange Commission. The Securities and Exchange Commission shall have authority to promulgate rules governing such digital commodity transactions of alternative trading systems, consistent with this section and what is necessary or appropriate in the public interest or for the protection of investors.</text></paragraph> <paragraph id="H22DD237B862B484697770321BC3F1C2E"><enum>(3)</enum><header>Suspension of trading</header><text display-inline="yes-display-inline">The Securities and Exchange Commission may suspend the trading of a digital commodity by an alternative trading system operating pursuant to this section as is necessary or appropriate in the public interest and is consistent with the protection of investors.</text></paragraph></subsection> <subsection id="H113D8D8CDF714C0098C3623432215519"><enum>(f)</enum><header>Order display and execution</header><text display-inline="yes-display-inline">Not later than 270 days after the date of the enactment of this Act, the Securities and Exchange Commission shall issue and revise rules, as necessary or appropriate in the public interest or for the protection of investors, regarding whether alternative trading systems operating pursuant to subsections (c) and (d) have an obligation to provide the prices and sizes of orders displayed to more than one person in such alternative trading system of digital commodities to self-regulatory organizations with members who trade in digital commodities or permitted payment stablecoins.</text></subsection> <subsection id="H1204CB4D58C744429361F0633B0B1529"><enum>(g)</enum><header>Principles of trade</header><text>Not later than 270 days after the date of the enactment of this Act, the Securities and Exchange Commission shall issue and revise rules, as necessary or appropriate in the public interest or for the protection of investors, to—</text> <paragraph id="HD8CCCC6DD4CF403681EB6D2D54BC824B"><enum>(1)</enum><text>apply the rules and standards promulgated pursuant to paragraph (2) to the appropriate market participants, including—</text> <subparagraph id="H644A57A4B6464573AC96FE55C10D687A"><enum>(A)</enum><text>national securities exchanges operating an alternative trading system described in subsection (c); and</text></subparagraph> <subparagraph id="H5CB910F793B846B6B580735A753A72E8"><enum>(B)</enum><text>registered brokers and registered dealers operating or subscribing to an alternative trading system described in subsection (d); and</text></subparagraph></paragraph> <paragraph id="HF2AAD1D98C6D435999F091C19C1AFCC8"><enum>(2)</enum><text display-inline="yes-display-inline">apply, as appropriate to the market participants described in paragraph (1) and customers thereof, rules and standards to—</text> <subparagraph id="H7F19F1BFB1704551B06F2ED7E44078BC"><enum>(A)</enum><text>prevent fraudulent and manipulative acts and practices;</text></subparagraph> <subparagraph id="HE060340959784E17B151A5F90B1FDF1D"><enum>(B)</enum><text>foster cooperation and coordination with persons engaged in regulating, settling, processing information with respect to, and facilitating transactions in digital commodities or permitted payment stablecoins traded, as applicable, on or by any alternative trading system operating pursuant to subsection (c) or (d), or any registered broker or registered dealer;</text></subparagraph> <subparagraph id="H1C0D528BC5F74DEBB91D4C9707681482"><enum>(C)</enum><text>remove impediments to and perfect the mechanism of a free and open market in digital commodities or permitted payment stablecoins traded, as applicable, on or by any alternative trading system operating pursuant to subsection (c) or (d), or any registered broker or registered dealer;</text></subparagraph> <subparagraph id="HA75963E96DA14E65826D4DA9CF218C90"><enum>(D)</enum><text>in general, protect investors and the public interest; and</text></subparagraph> <subparagraph id="H2BC424DBD98C429E8DD69C7654E9F615"><enum>(E)</enum><text>prohibit any unfair discrimination between—</text> <clause id="H07E93A1A8DDB48ABB07C0960B25C32D7"><enum>(i)</enum><text>customers;</text></clause> <clause id="H3CF1A142420F4186813A7E5407A847C8"><enum>(ii)</enum><text>any market participants described in subparagraphs (A) and (B) of paragraph (1); or</text></clause> <clause id="HB49BF468D72E4FE9A45CB2768D770354"><enum>(iii)</enum><text>issuers of digital commodities.</text></clause></subparagraph></paragraph></subsection> <subsection id="H28BA2EA20CEB4FA18402DFD252FBD7E6"><enum>(h)</enum><header>Implementing organizations</header><text display-inline="yes-display-inline">The Securities and Exchange Commission shall require any registered national securities association that has as a member a registered broker or registered dealer that operates an alternative trading system pursuant to subsection (d) or otherwise transacts in digital commodities or permitted payment stablecoins to adopt such rules as may be necessary to further compliance with this section, including subsection (g)(2), protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.</text></subsection> <subsection id="HF52AE94785774C419DFF70DEF35AE40D"><enum>(i)</enum><header>Rule of construction</header><text>The enumeration of any category of rules or regulations in this section shall not be construed to limit the authority of the Securities and Exchange Commission to promulgate such rules as may be necessary or appropriate to implement this section and the purposes of this Act, including over—</text> <paragraph id="H08F198069EFF43F8B2FB489CEFD8437C"><enum>(1)</enum><text>system capacity, integrity, and security;</text></paragraph> <paragraph id="H4ACDBB33B0974702A0A6614CE986CE6F"><enum>(2)</enum><text>examinations, inspections, and investigations;</text></paragraph> <paragraph id="H6CFCD236C86C4DFF80BA2DF986F41F64"><enum>(3)</enum><text>trade reporting; or</text></paragraph> <paragraph id="H5B965097C8734F5B8B34903680015B4C"><enum>(4)</enum><text>written procedures for the confidential treatment of trading information.</text></paragraph></subsection> <subsection id="H1B6064D23D83486B8853AEE35A66ADA9"><enum>(j)</enum><header>Memorandum of understanding</header><text display-inline="yes-display-inline">Consistent with section 5k of the Commodity Exchange Act and to carry out this Act, the Securities and Exchange Commission shall enter into a memorandum of understanding with the Commodity Futures Trading Commission to ensure—</text> <paragraph id="H00A39A7DFB374DBB977A9E72061432EA"><enum>(1)</enum><text display-inline="yes-display-inline">requirements imposed on registered brokers or registered dealers operating an alternative trading system pursuant to subsection (c) or otherwise transacting in digital commodities or permitted payment stablecoins are consistent with the substantive requirements under section 4u of the Commodity Exchange Act;</text></paragraph> <paragraph id="H866630B7B94B463985054916211FD65D"><enum>(2)</enum><text display-inline="yes-display-inline">requirements imposed on alternative trading systems operating pursuant to subsection (c) or (d) are not inconsistent with core principles of and are consistent with the other substantive requirements under section 5i of the Commodity Exchange Act; and</text></paragraph> <paragraph id="H7DE1F0239C2E4137A2E66B326CE72A02" commented="no"><enum>(3)</enum><text>non-duplicative supervision and enforcement with respect to registrants of the Securities and Exchange Commission notice registered with the Commodity Futures Trading Commission.</text></paragraph></subsection> <subsection id="HC2246D21E1AB4FB0A118C421D1AE897F"><enum>(k)</enum><header>Covered regulations defined</header><text>In this section, the term <term>covered regulations</term> means sections 242.300, 242.301, 242.302, 242.303, 242.304, and 242.1000 through 242.1007 of title 17, Code of Federal Regulations.</text></subsection> <subsection id="HA635726D237E42E8A4F11C0370B37E9B"><enum>(l)</enum><header>Rule of construction</header><text display-inline="yes-display-inline">Nothing in this section shall be construed to limit the anti-fraud, anti-manipulation, or false reporting enforcement authorities of the Commodity Futures Trading Commission with respect to a contract of sale of a commodity and persons effecting such contracts.</text></subsection></section> <section id="H88A803C81B4149ABBAA9E243B8312858"><enum>305.</enum><header>Modernization of recordkeeping requirements</header> <subsection id="H6741B83EAAFF4334B800574C2F247A3B"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">For purposes of books and records requirements for brokers, dealers, transfer agents, national securities exchanges under the Securities and Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78a">15 U.S.C. 78a et seq.</external-xref>), investment advisers under the Investment Advisers Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80b-1">15 U.S.C. 80b–1 et seq.</external-xref>), and investment companies under the Investment Company Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80a-1">15 U.S.C. 80a–1 et seq.</external-xref>), a person may consider records from a blockchain system.</text></subsection> <subsection id="H44AD2D7B27A1463289D70B0F45D0453A"><enum>(b)</enum><header>Revision of rules</header><text>Not later than 180 days after the date of enactment of this Act, the Securities and Exchange Commission shall issue and revise such rules as may be necessary to implement this section.</text></subsection></section> <section id="HA5BDA399750942439DD722E43AE9D96A"><enum>306.</enum><header>Exemptive authority</header><text display-inline="no-display-inline">Section 28 of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77z-3">15 U.S.C. 77z–3</external-xref>) is amended by striking <quote>by rule or regulation</quote> and inserting <quote>by rule, regulation, or order</quote>.</text></section> <section id="H28A886900EAD4A8C86F9319E5DC5AE45"><enum>307.</enum><header>Additional registrations with the Commodity Futures Trading Commission</header><text display-inline="no-display-inline">Section 15 of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78o">15 U.S.C. 78o</external-xref>) is amended by adding at the end the following:</text> <quoted-block style="OLC" id="H5B941473CC0E48338FC459B8E5EBD76E" display-inline="no-display-inline"> <subsection id="H9B4AB4CCF1DC48FA8137C4024C2C622A"><enum>(p)</enum><header>Additional registrations with the Commodity Futures Trading Commission</header><text>A registered broker or registered dealer shall be permitted to maintain a registration with the Commodity Futures Trading Commission as a digital commodity broker or digital commodity dealer, to list or trade contracts of sale for digital commodities.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="HEE91EDD69BDE4F6A91D769965ED5081B"><enum>308.</enum><header>Exempting digital commodities from State securities laws</header><text display-inline="no-display-inline">Section 18(b) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77r">15 U.S.C. 77r(b)</external-xref>) is amended by adding at the end the following:</text> <quoted-block id="HEBC2B96163AD4575B854ACCF4F3C2126" style="OLC"> <paragraph id="H64A07F4BB4574A2AA461E6C4288203D0"><enum>(5)</enum><header>Exemption in connection with digital commodities</header><text display-inline="yes-display-inline">A digital commodity shall be treated as a covered security.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H02AFA6423D194F5599FE2C9499532C85"><enum>309.</enum><header>Exclusion for decentralized finance activities</header><text display-inline="no-display-inline">The Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78a">15 U.S.C. 78a et seq.</external-xref>) is amended by inserting after section 15G the following:</text> <quoted-block style="OLC" id="H8D1C3E4F3F484CECBEAAEDD27449A392" display-inline="no-display-inline"> <section id="HF997D819ABD9487D8164DAD9056DC354"><enum>15H.</enum><header>Decentralized finance activities not subject to this Act</header> <subsection id="HA0A820F790264AF4B3915C5C04FB6AEF"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Notwithstanding any other provision of this Act, a person shall not be subject to this Act and the regulations promulgated under this Act based on the person directly or indirectly engaging in any of the following activities, whether singly or in combination, in relation to the operation of a blockchain system or in relation to a decentralized finance trading protocol:</text> <paragraph id="H4E6CDCFA55F949298D4930DF42183475"><enum>(1)</enum><text>Compiling network transactions or relaying, searching, sequencing, validating, or acting in a similar capacity.</text></paragraph> <paragraph id="HADE86C2D8FAD4FA8971ECAE0AF821F02"><enum>(2)</enum><text>Providing computational work, operating a node or oracle service, or procuring, offering, or utilizing network bandwidth, or providing other similar incidental services.</text></paragraph> <paragraph id="H9B495714A4F64BE982DD1E21C686BFF3"><enum>(3)</enum><text>Providing a user-interface that enables a user to read and access data about a blockchain system.</text></paragraph> <paragraph id="HA2EE5D616F59400FAC2220B28607F41F"><enum>(4)</enum><text>Developing, publishing, constituting, administering, maintaining, or otherwise distributing a blockchain system or a decentralized finance trading protocol.</text></paragraph> <paragraph id="H16515A68D0CD46F4A9872240AD46BC7B"><enum>(5)</enum><text display-inline="yes-display-inline">Developing, publishing, constituting, administering, maintaining, or otherwise distributing a decentralized finance messaging system, or operating or participating in a liquidity pool, for the purpose of executing a spot contract for the purchase or sale of a digital commodity in relation to a decentralized finance trading protocol.</text></paragraph> <paragraph id="HB81BE6A7D8024D5E969B4DB1DB3A5E88"><enum>(6)</enum><text>Developing, publishing, constituting, administering, maintaining, or otherwise distributing software or systems that create or deploy hardware or software, including wallets or other systems, facilitating an individual user’s own personal ability to keep, safeguard, or custody the user’s digital assets or related private keys.</text></paragraph></subsection> <subsection id="H27337D41F07F4ABEB37E93820A67B580"><enum>(b)</enum><header>Exceptions</header><text display-inline="yes-display-inline">Subsection (a) shall not apply to the anti-fraud and anti-manipulation authorities of the Commission.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H5000197023964FEB8C12EAB319701097"><enum>310.</enum><header>Treatment of custody activities by banking institutions</header> <subsection id="H1463CBB0EEAE4629A7497780DF326794" display-inline="no-display-inline"><enum>(a)</enum><header>Treatment of custody activities</header><text display-inline="yes-display-inline">The appropriate Federal banking agency, the National Credit Union Administration (in the case of a credit union), and the Securities and Exchange Commission may not require a depository institution, national bank, Federal credit union, State credit union, trust company, broker, or dealer, or any affiliate thereof (the <quote>entity</quote>)—</text> <paragraph id="H84CDB781030245CD8EC12F784F3BE5C7"><enum>(1)</enum><text display-inline="yes-display-inline">to include assets held in custody that are not owned by the entity as a liability on the financial statement or balance sheet of the entity, including digital commodity or permitted payment stablecoin custody or safekeeping services;</text></paragraph> <paragraph id="HF0CBAA3EB4F849AA99A9307A3FDC8B3B"><enum>(2)</enum><text display-inline="yes-display-inline">to hold regulatory capital against assets, including reserves backing such assets, in custody or safekeeping, except as necessary to mitigate against operational risks inherent with the custody or safekeeping services, as determined by—</text> <subparagraph id="HD011F41705764336B7CDDA67E994B4A0"><enum>(A)</enum><text>the appropriate Federal banking agency;</text></subparagraph> <subparagraph id="H7B94515C88044DB3A222C007AC54D9A4" commented="no"><enum>(B)</enum><text>the National Credit Union Administration (in the case of a credit union);</text></subparagraph> <subparagraph id="H8931A834164D43269585B7CF07132DFE" commented="no"><enum>(C)</enum><text display-inline="yes-display-inline">a State bank supervisor;</text></subparagraph> <subparagraph id="H90F3A812595B45EB97DA72EE64E5FF70" commented="no"><enum>(D)</enum><text display-inline="yes-display-inline">a State credit union supervisor (as defined in section 6003 of the Anti-Money Laundering Act of 2020 (<external-xref legal-doc="usc" parsable-cite="usc/31/5311">31 U.S.C. 5311</external-xref> note)); or</text></subparagraph> <subparagraph id="H7C9B69C0357F4FE2ABE63A55DAE75D79"><enum>(E)</enum><text>the Securities and Exchange Commission (in the case of a broker or dealer); and</text></subparagraph></paragraph> <paragraph id="HCC836B1CCC1E4638965724201778C3CD"><enum>(3)</enum><text>to recognize a liability for any obligations related to activities or services performed with respect to digital commodities that the entity does not own if that liability would exceed the expense recognized in the income statement as a result of the corresponding obligation.</text></paragraph></subsection> <subsection id="HCE8111C452F5458E8C723D585CC715B1"><enum>(b)</enum><header>Definitions</header><text>In this section:</text> <paragraph id="HF7C5F085977B4BE0B05A1E011FFB3411"><enum>(1)</enum><header>Banking terms</header><text display-inline="yes-display-inline">The terms <term>appropriate Federal banking agency</term>, <term>depository institution</term>, <term>national bank</term>, and <term>State bank supervisor</term> have the meaning given those terms, respectively, under section 3 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813</external-xref>).</text></paragraph> <paragraph id="HABC787C81CF84293A2C766B72FF51213"><enum>(2)</enum><header>Credit union terms</header><text display-inline="yes-display-inline">The terms <term>Federal credit union</term> and <term>State credit union</term> have the meaning given those terms, respectively, under section 101 of the Federal Credit Union Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1752">12 U.S.C. 1752</external-xref>).</text></paragraph></subsection></section> <section id="HA48DE67DAABB4C759470547F18979177" commented="no"><enum>311.</enum><header>Broker and dealer disclosures regarding the treatment of assets</header> <subsection id="H890C9D3814024BCBB264A2EB888E8AA4" commented="no"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Not later than 270 days after the date of the enactment of this Act, the Securities and Exchange Commission shall issue rules requiring written disclosures regarding the treatment of customer assets in the event of an insolvency, resolution, or liquidation proceeding to be provided by a registered broker or dealer to an investor before a digital commodity, a permitted payment stablecoin, or an investment contract involving a unit of a digital commodity is received, acquired, or held by the broker or dealer for the account of the investor, which shall include, as necessary or appropriate for the protection of investors—</text> <paragraph id="HF97EBFD5C24A4062A5935F6AC7CC8573" commented="no"><enum>(1)</enum><text>a description of the manner in which any digital commodity, permitted payment stablecoin, or investment contact involving a unit of a digital commodity received, acquired, or held by the broker or dealer for the account of such investor would be treated in an insolvency, resolution, or liquidation proceeding with respect to the broker or dealer under—</text> <subparagraph id="H5C7EEDC137364DA19F2DB11BAD310CCD" commented="no"><enum>(A)</enum><text>title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (<external-xref legal-doc="usc" parsable-cite="usc/12/5381">12 U.S.C. 5381 et seq.</external-xref>);</text></subparagraph> <subparagraph id="HD71D5618D5AE4E2A80D43799752897AF" commented="no"><enum>(B)</enum><text>the Securities Investor Protection Act of 1970 (<external-xref legal-doc="usc" parsable-cite="usc/15/78aaa">15 U.S.C. 78aaa et seq.</external-xref>); or</text></subparagraph> <subparagraph id="H26F767C79E854274AE7EBF90E6C3A8E8" commented="no"><enum>(C)</enum><text>as applicable, chapter 7 or <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/11/11">chapter 11</external-xref> of title 11, United States Code; and</text></subparagraph></paragraph> <paragraph id="H661AF3E589BB4A17B45BE2D9AA44D1AF" commented="no"><enum>(2)</enum><text>how the treatment described in paragraph (1) differs from the treatment of securities and cash received, acquired, or held by the broker or dealer for the account of such investor in the event of an insolvency, resolution, or liquidation proceeding with respect to the broker or dealer under each law described under subparagraph (A) through (C) of paragraph (1).</text></paragraph></subsection></section> <section id="H7DD3B6DDD1D848098851BD7B1350EB5E"><enum>312.</enum><header>Digital commodity activities that are financial in nature</header> <subsection id="HA95DF23102AA4DD8BC8C8473ABD3C681"><enum>(a)</enum><header>Digital commodity activities that are financial in nature</header><text display-inline="yes-display-inline">Section 4(k)(4) of the Bank Holding Company Act of 1956 (<external-xref legal-doc="usc" parsable-cite="usc/12/1843">12 U.S.C. 1843(k)(4)</external-xref>) is amended—</text> <paragraph id="HC3ACA21CBF8846CE99D9803152C9B512"><enum>(1)</enum><text>in subparagraph (A), by striking <quote>or securities</quote> and inserting <quote>, securities, or digital commodities</quote>; and</text></paragraph> <paragraph id="HCCB344B56F5A4EC89C77548FA2F71E06"><enum>(2)</enum><text>in subparagraph (E), by inserting <quote>or digital commodities</quote> before the period at the end.</text></paragraph></subsection> <subsection id="H7F34B77B2AF546E7B8FC9BF8E24B2626" commented="no"><enum>(b)</enum><header>National bank activity</header> <paragraph id="H7695F4A48F4A471E933B3CEF7B8DB97D" commented="no"><enum>(1)</enum><header>In general</header><text>A national bank may use a digital asset or blockchain system to perform, provide, or deliver any activity, function, product, or service that the national bank is otherwise authorized by law to perform, provide, or deliver.</text></paragraph> <paragraph id="H615FB4A746D4466AA6AA4F9B7F4972AA" commented="no"><enum>(2)</enum><header>Rule of construction</header><text>Nothing in this subsection may be construed to exempt a national bank’s performance, provision, or delivery of an activity, function, product, or service from a requirement that would apply if the activity were not performed, provided, or delivered using a digital asset or blockchain system.</text></paragraph></subsection> <subsection id="H9F4F11A51CEA4B9C928FECAFC60F40B4" commented="no"><enum>(c)</enum><header>Insured State banks and subsidiaries of insured State banks</header><text>For purposes of sections 24(a) and 24(d) of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1831a">12 U.S.C. 1831a(a)</external-xref> and (d)), all of the activities authorized for a national bank under subsection (b) that are principal activities shall be permissible for an insured State bank and subsidiary of an insured State bank.</text></subsection></section> <section id="H4D20438425D646EFA94411C9C34000EA"><enum>313.</enum><header>Effective date; administration</header><text display-inline="no-display-inline">Except as otherwise provided under this title, this title and the amendments made by this title shall take effect 360 days after the date of enactment of this Act, except that, to the extent a provision of this title requires a rulemaking, the provision shall take effect on the later of—</text> <paragraph id="HBBD3140391A844959704B0925B5B82DE"><enum>(1)</enum><text>360 days after the date of enactment of this Act; or</text></paragraph> <paragraph id="H12A07AFFF38544EE8AB209EEE3416187"><enum>(2)</enum><text>60 days after the publication in the Federal Register of the final rule implementing the provision.</text></paragraph></section> <section id="H52611F1D8EEB4ECD83BAA3A72716043B" display-inline="no-display-inline" section-type="subsequent-section" commented="no"><enum>314.</enum><header>Studies on foreign adversary participation</header> <subsection id="H77FBD11F2E1F41618F4042A97C912B01" commented="no"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The Secretary of the Treasury, in consultation with the Commodity Futures Trading Commission and the Securities and Exchange Commission, shall, not later than 1 year after date of the enactment of this section, conduct a study and submit a report to the relevant congressional committees that—</text> <paragraph id="H41B01CCDCF994AFF9BFEAC564D2C1972" commented="no"><enum>(1)</enum><text>identifies any digital commodity registrants which are owned by governments of foreign adversaries;</text></paragraph> <paragraph id="HC57722DD37664D95B2BE93E1DC44BCB7" commented="no"><enum>(2)</enum><text display-inline="yes-display-inline">determines whether any governments of foreign adversaries are collecting personal data or trading data about United States persons in the digital commodity markets; and</text></paragraph> <paragraph id="H03E4D23503004520AC9377FBC306EF83" commented="no"><enum>(3)</enum><text display-inline="yes-display-inline">evaluates whether any proprietary intellectual property of digital commodity registrants is being misused or stolen by any governments of foreign adversaries.</text></paragraph></subsection> <subsection id="HB12601FD3ECD4713BECC7ABA772C44D7" commented="no"><enum>(b)</enum><header>GAO study and report</header> <paragraph id="H3E280CA7C8D54A80ABB707A46B6D336F" commented="no"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The Comptroller General shall, not later than 1 year after date of the enactment of this section, conduct a study and submit a report to the relevant congressional committees that—</text> <subparagraph id="HF5D94EEA62DC4D70AD694BC85A366463" display-inline="no-display-inline" commented="no"><enum>(A)</enum><text display-inline="yes-display-inline">identifies any digital commodity registrants which are owned by governments of foreign adversaries;</text></subparagraph> <subparagraph id="H9FFF4B08934B4F74B24740AB75C7D40D" commented="no"><enum>(B)</enum><text display-inline="yes-display-inline">determines whether any governments of foreign adversaries are collecting personal data or trading data about United States persons in the digital commodity markets; and</text></subparagraph> <subparagraph id="H51DBDFD9B3D84F45AA7F775E5219697D" commented="no"><enum>(C)</enum><text display-inline="yes-display-inline">evaluates whether any proprietary intellectual property of digital commodity registrants is being misused or stolen by any governments of foreign adversaries.</text></subparagraph></paragraph></subsection> <subsection id="HE6DF67C058984AE5931C1D63855B9730" commented="no"><enum>(c)</enum><header>Definitions</header><text display-inline="yes-display-inline">In this section:</text> <paragraph id="HCFF6AA691CB7425389D657CF3F7A3078" commented="no"><enum>(1)</enum><header>Digital commodity registrant</header><text display-inline="yes-display-inline">The term <term>digital commodity registrant</term> means any person required to register as a digital commodity exchange, digital commodity broker, or digital commodity dealer under the Commodity Exchange Act.</text></paragraph> <paragraph id="H5765923D89764369ACDDE7F0B2EAA63D" commented="no"><enum>(2)</enum><header>Foreign adversaries</header><text display-inline="yes-display-inline">The term <term>foreign adversaries</term> means the foreign governments and foreign non-government persons determined by the Secretary of Commerce to be foreign adversaries under section 7.4(a) of title 15, Code of Federal Regulations.</text></paragraph> <paragraph id="HA9F074A1247645F0A645C8A015F3D58B" commented="no"><enum>(3)</enum><header>Relevant congressional committees</header><text>The term <term>relevant congressional committees</term> means—</text> <subparagraph id="H919A6BA2CB864E399F41BDF8D520CEA9" commented="no"><enum>(A)</enum><text>the Committees on Financial Services and Agriculture of the House of Representatives; and</text></subparagraph> <subparagraph id="H8E453A2B815F45D895998AB07CCB128E" commented="no"><enum>(B)</enum><text>the Committees on Banking, Housing, and Urban Affairs and Agriculture, Nutrition, and Forestry of the Senate.</text></subparagraph></paragraph></subsection></section> <enum>IV</enum><header>Registration for Digital Commodity Intermediaries at the Commodity Futures Trading Commission</header> <section id="HC72AA02735A84A39A75E4D302AA2FC39"><enum>401.</enum><header>Commission jurisdiction over digital commodity transactions</header> <subsection id="H6FE12D4E172D479A8B195354D5082B83"><enum>(a)</enum><header>Savings clause</header><text>Section 2(a)(1) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/2">7 U.S.C. 2(a)(1)</external-xref>) is amended by adding at the end the following:</text> <quoted-block style="OLC" id="H908175A85792412994D3C8FA47D5F4D5" display-inline="no-display-inline"> <subparagraph id="H846F9F36D0F742ED85CE3DE0D08E54DE"><enum>(J)</enum><text display-inline="yes-display-inline">Except as expressly provided in this Act, nothing in the CLARITY Act of 2025 shall affect or apply to, or be interpreted to affect or apply to—</text> <clause id="HE762FC85DE9E480BAEB9CDE5185C1886"><enum>(i)</enum><text>any agreement, contract, or transaction that is subject to this Act as—</text> <subclause id="H1499BBBFAE0F4FBE820FCBD565AB7745"><enum>(I)</enum><text>a contract of sale of a commodity for future delivery or an option on such a contract;</text></subclause> <subclause id="HE6D447D4C28C4AB988329790D6F3EC8E"><enum>(II)</enum><text>a swap;</text></subclause> <subclause id="HCA50245EB03345E496A673C3E75B3DE5"><enum>(III)</enum><text>a security futures product;</text></subclause> <subclause id="H1E71A450505E422C8219D39C66EEE6C9"><enum>(IV)</enum><text>an option authorized under section 4c of this Act;</text></subclause> <subclause id="H0C94FA8598194307BE21D809546DF7E9"><enum>(V)</enum><text>an agreement, contract, or transaction described in subparagraph (C)(i) or (D)(i) of subsection (c)(2) of this section; or</text></subclause> <subclause id="H72005EFE2DC348B98BE1C440DF17B155"><enum>(VI)</enum><text>a leverage transaction authorized under section 19; or</text></subclause></clause> <clause id="H09C1B91D3F9742D190B6C6DBBC4E135A"><enum>(ii)</enum><text>the activities of any person with respect to any such an agreement, contract, or transaction.</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="HB5CCCD6AAFA94AA587691C5546644513"><enum>(b)</enum><header>Limitation on authority over permitted payment stablecoins</header><text>Section 2(c)(1) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/2">7 U.S.C. 2(c)(1)</external-xref>) is amended—</text> <paragraph id="HA19D1752FA1D4AB9AF160E0C82F56087"><enum>(1)</enum><text>in subparagraph (F), by striking <quote>or</quote> at the end;</text></paragraph> <paragraph id="HF8E1FEADCA844FF1BE08FEF284AC2C24"><enum>(2)</enum><text>in subparagraph (G), by striking the period and inserting <quote>; or</quote>; and</text></paragraph> <paragraph id="H889E1A9C807A4099886300B132D7420E"><enum>(3)</enum><text>by adding at the end the following:</text> <quoted-block style="OLC" id="H38DF47FDCF644BD48ACAEA66469C50EB" display-inline="no-display-inline"> <subparagraph id="H76831B6339484F409E92EF24B42AB1FA"><enum>(H)</enum><text display-inline="yes-display-inline">permitted payment stablecoins.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H3B33F6ABB54F4F8B8931CF681EAC89CC"><enum>(c)</enum><header>Commission jurisdiction over financing agreements</header><text>Section 2(c)(2) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/2">7 U.S.C. 2(c)(2)</external-xref>) is amended—</text> <paragraph id="HF45071F8EDDB45FBAA52358F8F4B5192"><enum>(1)</enum><text>in subparagraph (D), by redesignating clause (iv) as clause (v) and inserting after clause (iii) the following:</text> <quoted-block style="OLC" id="H1359FA61E76440B6938904A9755F137D" display-inline="no-display-inline"> <clause id="H944D4BCC8CF14513806876963A534E3E"><enum>(iv)</enum><text display-inline="yes-display-inline">Notwithstanding clause (iii), a digital commodity broker may, subject to the requirements of section 4u(c)(3), offer to or enter into an agreement for margin financing with a customer for the purchase or sale of a digital commodity.</text></clause><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph> <paragraph id="HAF4A1513F90F4540B0DAA2099A2AD7C2"><enum>(2)</enum><text>by adding at the end the following:</text> <quoted-block style="OLC" id="HEE0119C7BDAD4F70A384C59414B58ECE" display-inline="no-display-inline"> <subparagraph id="H6116FE1AC57F4E3CBCC2290A05467C02" indent="up2" commented="no"><enum>(F)</enum><header>Commission jurisdiction with respect to digital commodity transactions</header> <clause id="H33AB3D6706D5404F89CAA6F32023FC29" commented="no"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">Subject to sections 6d and 12(e), the Commission shall have exclusive jurisdiction with respect to any account, agreement, contract, or transaction involving a contract of sale of a digital commodity in interstate commerce, including in a digital commodity cash or spot market, that is offered, solicited, traded, facilitated, executed, cleared, reported, or otherwise dealt in—</text> <subclause id="HC48A6F61CBE04E83BC42EB4A4ABCE52E" commented="no"><enum>(I)</enum><text display-inline="yes-display-inline">on or subject to the rules of a registered entity or an entity that is required to be registered as a registered entity; or</text></subclause> <subclause id="HD2B8066E6ED34AEB89EC5AE10B99107B" commented="no"><enum>(II)</enum><text>by any other entity registered, or required to be registered, with the Commission.</text></subclause></clause> <clause id="HF9DAA7A764084EAA9E8ACDBDF4EC0D2C" commented="no"><enum>(ii)</enum><header>Limitations</header><text>Clause (i) shall not apply with respect to—</text> <subclause id="H67354264F50C4E7C825A318A6962EF3F"><enum>(I)</enum><text>custodial or depository activities for a digital commodity of an entity regulated by an appropriate Federal banking agency or a State bank supervisor (within the meaning of section 3 of the Federal Deposit Insurance Act); or</text></subclause> <subclause id="H13BA48BD82D94DA28AA79E6B5651FC60"><enum>(II)</enum><text display-inline="yes-display-inline">an offer or sale of an investment contract involving a digital commodity or of a securities offer or sale involving a digital commodity.</text></subclause></clause> <clause id="H7238835F264449A88F0E2DB285E037E1"><enum>(iii)</enum><header>Mixed digital asset transactions</header> <subclause id="H8E52AC7196B64196B5C9D33A180A6115"><enum>(I)</enum><header>In general</header><text display-inline="yes-display-inline">Clause (i) shall not apply to a mixed digital asset transaction.</text></subclause> <subclause id="HCD09BFA4FCEA450FBA3BFEC6984FDE41"><enum>(II)</enum><header>Reports on mixed digital asset transactions</header><text>A digital commodity issuer, digital commodity related person, digital commodity affiliated person, or other person registered with the Securities and Exchange Commission that engages in a mixed digital asset transaction, shall, on request of the Commission, open to inspection and examination by the Commission all books and records relating to the mixed digital asset transaction, subject to the confidentiality and disclosure requirements of section 8.</text></subclause></clause></subparagraph> <subparagraph id="H92E53C96BDAC4F6FA10F1C05BDA277F0" indent="up2"><enum>(G)</enum><header>Agreements, contracts, and transactions in stablecoins</header> <clause id="H64A11389836649DEBB04CA170EC93143"><enum>(i)</enum><header>Treatment of permitted payment stablecoins on commission-registered entities</header><text display-inline="yes-display-inline">Subject to clauses (ii) and (iii), the Commission shall have jurisdiction over a cash or spot agreement, contract, or transaction in a permitted payment stablecoin that is offered, offered to enter into, entered into, executed, confirmed the execution of, solicited, or accepted—</text> <subclause id="H36C988963CBB4F3A965534FFB7036BD5"><enum>(I)</enum><text>on or subject to the rules of a registered entity; or</text></subclause> <subclause id="H9FBADD270B0C42748A1494F0F41926ED"><enum>(II)</enum><text>by any other entity registered with the Commission.</text></subclause></clause> <clause id="H959DB7EF2029489D84EC605AF5DC8885"><enum>(ii)</enum><header>Permitted payment stablecoin transaction rules</header><text>This Act shall apply to a transaction described in clause (i) only for the purpose of regulating the offer, execution, solicitation, or acceptance of a cash or spot permitted payment stablecoin transaction on a registered entity or by any other entity registered with the Commission, as if the permitted payment stablecoin were a digital commodity.</text></clause> <clause id="HC713BBA7618742BEB4239BB181D62FEC"><enum>(iii)</enum><header>No authority over permitted payment stablecoins</header><text>Notwithstanding clauses (i) and (ii), the Commission shall not make a rule or regulation, impose a requirement or obligation on a registered entity or other entity registered with the Commission, or impose a requirement or obligation on a permitted payment stablecoin issuer, regarding the operation of a permitted payment stablecoin issuer or a permitted payment stablecoin.</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H3A2808CD19294D5180D40349E88FDAAF"><enum>(d)</enum><header>Conforming amendment</header><text>Section 2(a)(1)(A) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/7/2">7 U.S.C. 2(a)(1)(A)</external-xref>) is amended in the 1st sentence by inserting <quote>subparagraphs (F) and (G) of subsection (c)(2) of this section or</quote> before <quote>section 19</quote>.</text></subsection></section> <section id="H07828B5CF1FD4A628BAEB6F602083A94"><enum>402.</enum><header>Requiring futures commission merchants to use qualified digital asset custodians</header><text display-inline="no-display-inline">Section 4d of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/6d">7 U.S.C. 6d</external-xref>) is amended—</text> <paragraph id="HB194D0F219554147890A809E921A2523"><enum>(1)</enum><text display-inline="yes-display-inline">in subsection (a)(2)—</text> <subparagraph id="H9E6967DE10394A35B690A9C3BBB67209"><enum>(A)</enum><text>in the 1st proviso, by striking <quote>any bank or trust company</quote> and inserting <quote>any bank, trust company, or qualified digital asset custodian, as applicable,</quote>; and</text></subparagraph> <subparagraph id="H8A9BF3E07FBA4827B0B45F27A07B0D46"><enum>(B)</enum><text>by inserting <quote><italic>: Provided further,</italic> That any such property that is a digital asset shall be held in a qualified digital asset custodian</quote> before the period at the end; and</text></subparagraph></paragraph> <paragraph id="H507732F8EA6149DBA2E7293D1144F843"><enum>(2)</enum><text display-inline="yes-display-inline">in subsection (f)(3)(A)(i), by striking <quote>any bank or trust company</quote> and inserting <quote>any bank, trust company, or qualified digital asset custodian</quote>.</text></paragraph></section> <section id="H1A03776E30ED4AEB9526CEB750E98BAD"><enum>403.</enum><header>Trading certification and approval for digital commodities</header><text display-inline="no-display-inline">Section 5c of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/7a-2">7 U.S.C. 7a–2</external-xref>) is amended—</text> <paragraph id="H7066CB5D25C74B12AAA09B38B5F17AEE"><enum>(1)</enum><text>in subsection (a), by striking <quote>5(d) and 5b(c)(2)</quote> and inserting <quote>5(d), 5b(c)(2), and 5i(c)</quote>;</text></paragraph> <paragraph id="H2DF87E1EAA244635A817AEDE55795233"><enum>(2)</enum><text>in subsection (b)—</text> <subparagraph id="H40ABFAD9BA984075900C185CE92D7A78"><enum>(A)</enum><text>in each of paragraphs (1) and (2), by inserting <quote>digital commodity exchange,</quote> before <quote>derivatives</quote>; and</text></subparagraph> <subparagraph id="H8B985BC6092C4C4BAA3668AAEEDDF9C7"><enum>(B)</enum><text>in paragraph (3), by inserting <quote>digital commodity exchange,</quote> before <quote>derivatives</quote> each place it appears;</text></subparagraph></paragraph> <paragraph id="H161C595F3A684A74AA4187BC92D72C88"><enum>(3)</enum><text>in subsection (c)—</text> <subparagraph id="H56914200E0AA4AFD9164FEED20960816"><enum>(A)</enum><text>in paragraph (2), by inserting <quote>or participants</quote> before <quote>(in</quote>;</text></subparagraph> <subparagraph id="HA50A977B1B524A2EB1488BC21C21BA91"><enum>(B)</enum><text>in paragraph (4)(B), by striking <quote>1a(10)</quote> and inserting <quote>1a(9)</quote>; and</text></subparagraph> <subparagraph id="H6A30093D366C4B14A896BC781719D2C9"><enum>(C)</enum><text>in paragraph (5), by adding at the end the following:</text> <quoted-block style="OLC" id="H2F88EC6270724314AB70FD64024A8DDA" display-inline="no-display-inline"> <subparagraph id="H1298E877A0F94EBC973476C5C498B7AE" commented="no"><enum>(D)</enum><header>Special rules for digital commodity contracts</header><text display-inline="yes-display-inline">In certifying any new rule or rule amendment, or listing any new contract or instrument, in connection with a contract of sale of a commodity for future delivery, option, swap, or other agreement, contract, or transaction, that is based on or references a digital commodity, a registered entity shall make or rely on a certification under subsection (d) for the digital commodity.</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph></paragraph> <paragraph id="HA007EE15D5DB49A693360F11AA37A8EA"><enum>(4)</enum><text>by inserting after subsection (c) the following:</text> <quoted-block style="OLC" id="H876645049A114694AC2F6761A7450F4A" display-inline="no-display-inline"> <subsection id="HA0C2B69FA41B44128CA3AA99852CA98B"><enum>(d)</enum><header>Certifications for digital commodity trading</header> <paragraph id="HEFDE9BB486A94B5E90C372343A071505"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Notwithstanding subsection (c), for the purposes of listing or offering a digital commodity for trading in a digital commodity cash or spot market, an eligible entity shall submit a written certification to the Commission that the digital commodity meets the requirements of this Act (including the regulations prescribed under this Act).</text></paragraph> <paragraph id="H000A3F23A9F24A2E907A126B1E258ADC"><enum>(2)</enum><header>Contents of the certification</header> <subparagraph id="HA2604617A9184552B74081248A63B423"><enum>(A)</enum><header>In general</header><text>In making a written certification under this paragraph, the eligible entity shall furnish to the Commission an analysis of how the digital commodity meets the requirements of section 5i(c)(3).</text></subparagraph> <subparagraph id="H68BAB117D03C48CB8B0F75BC9197CC49"><enum>(B)</enum><header>Reliance on prior disclosures</header><text>In making a certification under this subsection, an eligible entity may rely on the records and disclosures of any relevant person registered with the Securities and Exchange Commission or other State or Federal agency.</text></subparagraph></paragraph> <paragraph id="H050CE7E31D2E4A708833D874629E90EE"><enum>(3)</enum><header>Modifications</header> <subparagraph id="HEE298416FE11401DB0FBD05C05F807D3"><enum>(A)</enum><header>In general</header><text>An eligible entity shall modify a certification made under paragraph (1) to—</text> <clause id="H10534B2AB62D4C10B2F1C5CF45DE3599"><enum>(i)</enum><text display-inline="yes-display-inline">account for significant changes in any information provided to the Commission under paragraph (2)(A)(ii); or</text></clause> <clause id="H9F2F499F07674584AD61E75BE8BFBA0F"><enum>(ii)</enum><text>permit or restrict trading in units of a digital commodity held by a digital commodity related person or a digital commodity affiliated person.</text></clause></subparagraph> <subparagraph id="HBE6A8123301B4905AA13239109CC8317"><enum>(B)</enum><header>Recertification</header><text display-inline="yes-display-inline">Modifications required by this subsection shall be subject to the same disapproval and review process as a new certification under paragraphs (4) and (5).</text></subparagraph></paragraph> <paragraph id="HAEE6EDB88204477F97ADBCF3D4B53198"><enum>(4)</enum><header>Disapproval</header> <subparagraph id="HBF83379C849A483097A9798AAE359E79"><enum>(A)</enum><header>In general</header><text>The written certification described in paragraph (1) shall become effective unless the Commission finds that the listing of the digital commodity is inconsistent with the requirements of this Act or the rules and regulations prescribed under this Act.</text></subparagraph> <subparagraph id="H461F9E31137E414D8A47A72592C1FC1E"><enum>(B)</enum><header>Analysis required</header><text display-inline="yes-display-inline">The Commission shall include, with any findings referred to in subparagraph (A), a detailed analysis of the factors on which the decision was based.</text></subparagraph> <subparagraph id="H5D059D21709C4E7E901ABF24B2EC88E6"><enum>(C)</enum><header>Public findings</header><text display-inline="yes-display-inline">The Commission shall make public any disapproval decision, and any related findings and analysis, made under this paragraph.</text></subparagraph></paragraph> <paragraph id="HA69097E82C8A4EA3BE95BFB07ADFDB16"><enum>(5)</enum><header>Review</header> <subparagraph id="H8D2CE20D669E45CC9B12ADC849C6BC6A"><enum>(A)</enum><header>In general</header><text>Unless the Commission makes a disapproval decision under paragraph (4), the written certification described in paragraph (1) shall become effective, pursuant to the certification by the eligible entity and notice of the certification to the public (in a manner determined by the Commission) on the date that is—</text> <clause id="H7D1CB98B12FD4258BE18DCE216EE7BBF"><enum>(i)</enum><text display-inline="yes-display-inline">20 business days after the date the Commission receives the certification (or such shorter period as determined by the Commission by rule or regulation), in the case of a digital commodity that has not been certified under this section or for which a certification is being modified under paragraph (3); or</text></clause> <clause id="H642DC24D82434E73AF4FDDA920C8B1BD"><enum>(ii)</enum><text display-inline="yes-display-inline">1 business day after the date the Commission receives the certification (or such shorter period as determined by the Commission by rule or regulation) for any digital commodity that has been certified under this section.</text></clause></subparagraph> <subparagraph id="H50D3186E48C94E658B2A3AE60C88149C" commented="no"><enum>(B)</enum><header>Extensions</header><text display-inline="yes-display-inline">The time for consideration under subparagraph (A) may be extended through notice to the eligible entity that there are novel or complex issues that require additional time to analyze, that the explanation by the submitting eligible entity is inadequate, or of a potential inconsistency with this Act—</text> <clause id="HFB98164AE71A4C8091322AE12959175F" commented="no"><enum>(i)</enum><text>once, for 30 business days, through written notice to the eligible entity by the Commission; and</text></clause> <clause id="HD8B541251F004F4E9A158185526F5D59" commented="no"><enum>(ii)</enum><text>once, for an additional 30 business days, through written notice to the eligible entity from the Commission that includes a description of any deficiencies with the certification, including any—</text> <subclause id="HF57A78B1433E4D5E97AB3A1E83442C6E" commented="no"><enum>(I)</enum><text>novel or complex issues which require additional time to analyze;</text></subclause> <subclause id="HE5B710A0B050482C8308394913D0A4F5" commented="no"><enum>(II)</enum><text>missing information or inadequate explanations; or</text></subclause> <subclause id="HE28F5AD4C94141C5B5456709EBDDCF8F" commented="no"><enum>(III)</enum><text>potential inconsistencies with this Act.</text></subclause></clause></subparagraph></paragraph> <paragraph id="HD3F08C2BE94E4822BBDD667043E8BD46" display-inline="no-display-inline"><enum>(6)</enum><header>Prior approval before registration</header> <subparagraph id="H475FE296778E4DD0931512BE3175FED4"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">A person applying for registration with the Commission for the purposes of listing or offering a digital commodity for trading in a digital commodity cash or spot market may request that the Commission grant prior approval for the person to list or offer the digital commodity on being registered with the Commission.</text></subparagraph> <subparagraph id="HFAC897FB0AFB43F28AD904C9677F1708"><enum>(B)</enum><header>Request for prior approval</header><text display-inline="yes-display-inline">A person seeking prior approval under subparagraph (A) shall furnish the Commission with a written certification that the digital commodity meets the requirements of this Act (including the regulations prescribed under this Act) and the information described in paragraph (2).</text></subparagraph> <subparagraph id="H41E69999424D430DA7DA061728469C81"><enum>(C)</enum><header>Deadline</header><text>The Commission shall take final action on a request for prior approval not later than 90 business days after submission of the request, unless the person submitting the request agrees to an extension of the time limitation established under this subparagraph.</text></subparagraph> <subparagraph id="H1E29BD7B14674C49B8A66887A5C765BB"><enum>(D)</enum><header>Disapproval</header> <clause id="H77357E0155EA48BEB40582AE5D94CE5F"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">The Commission shall approve the listing of the digital commodity unless the Commission finds that the listing is inconsistent with this Act (including any regulation prescribed under this Act).</text></clause> <clause id="HA97D61D7F6E741E3B9460703A69CF101"><enum>(ii)</enum><header>Analysis required</header><text display-inline="yes-display-inline">The Commission shall include, with any findings made under clause (i), a detailed analysis of the factors on which the decision is based.</text></clause> <clause id="H3AE79B248EF24B59893026CDCA6C492C"><enum>(iii)</enum><header>Public findings</header><text display-inline="yes-display-inline">The Commission shall make public any disapproval decision, and any related findings and analysis, made under this paragraph.</text></clause></subparagraph></paragraph> <paragraph id="HB0B4A219662E4957AF5A9AA1CBC45BEC"><enum>(7)</enum><header>Eligible entity defined</header><text>In this subsection, the term <term>eligible entity</term> means a registered entity or group of registered entities acting jointly.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section> <section id="HDA654DA86F754652BE295745C0FD5FF4"><enum>404.</enum><header>Registration of digital commodity exchanges</header><text display-inline="no-display-inline">The Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1">7 U.S.C. 1 et seq.</external-xref>) is amended by inserting after section 5h the following:</text> <quoted-block style="OLC" id="H268EAA61C3954EF5858C8479B0751BEC" display-inline="no-display-inline"> <section id="HA54FC58821994CE2BCAFD42F6ABC9639"><enum>5i.</enum><header>Registration of digital commodity exchanges</header> <subsection id="H34C499C443E948C78DD071663C0FA6AD"><enum>(a)</enum><header>In general</header> <paragraph id="HCE9B238C4F6341FDA3C2FE15A98612AC"><enum>(1)</enum><header>Registration</header> <subparagraph id="H15FB47F001914EE0B4EEDE1634F87729"><enum>(A)</enum><header>In general</header><text>A trading facility that offers or seeks to offer a cash or spot market in at least 1 digital commodity shall register with the Commission as a digital commodity exchange.</text></subparagraph> <subparagraph id="H8BADFB35A07243A1B4092109C5160C77"><enum>(B)</enum><header>Application</header><text display-inline="yes-display-inline">A person desiring to register as a digital commodity exchange shall submit to the Commission an application in such form and containing such information as the Commission may require for the purpose of making the determinations required for approval.</text></subparagraph> <subparagraph id="H61573D5A5F51424F8B972002382DF54F"><enum>(C)</enum><header>Exemptions</header><text display-inline="yes-display-inline">A trading facility that offers or seeks to offer a cash or spot market in at least 1 digital commodity shall not be required to register under this section if the trading facility—</text> <clause id="H065D6AC1B8B3413D87AA56F907B62F28"><enum>(i)</enum><text>permits no more than a de minimis amount of trading activity, as the Commission may determine by rule or regulation, in a digital commodity; or</text></clause> <clause id="H4BDE25C900A2466EBB0FFA252B250CC5"><enum>(ii)</enum><text>serves only customers in a single State, territory, or possession of the United States.</text></clause></subparagraph></paragraph> <paragraph id="HCA53349EF7394CA78AEBE4D3B5E79B46"><enum>(2)</enum><header>Additional registrations</header> <subparagraph id="HDE1DDBB97523484081BB818D76DD7522"><enum>(A)</enum><header>With the Commission</header><text display-inline="yes-display-inline">In order to foster the development of fair and orderly markets, protect customers, and promote responsible innovation, the Commission—</text> <clause id="H018A6247DF5A453C849C1494FB26C424"><enum>(i)</enum><text>shall prescribe rules to exempt an entity registered with the Commission under more than 1 section of this Act from duplicative, conflicting, or unduly burdensome provisions of this Act and the rules under this Act;</text></clause> <clause id="H42DA63A6C6EF464F9B62037F052A1CA5"><enum>(ii)</enum><text>shall prescribe rules to address conflicts of interests and activities of the entity; and</text></clause> <clause id="HAB08E9AABAA64EBA9555571CBA3AFD04"><enum>(iii)</enum><text>may, after an analysis of the risks and benefits, prescribe rules to provide for portfolio margining.</text></clause></subparagraph> <subparagraph id="H85E1C51A326944E5A22CC8EC3A2EDF5F" commented="no"><enum>(B)</enum><header>With a registered futures association</header> <clause id="H3019AC4682AC41B2A7040826894423FB" commented="no"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">A registered digital commodity exchange shall also be a member of a registered futures association and comply with rules related to such activity, if the registered digital commodity exchange accepts customer funds required to be segregated under subsection (d).</text></clause> <clause id="H98A92BA075DF4B379D65037240939CE7" commented="no"><enum>(ii)</enum><header>Rulemaking required</header><text>The Commission shall require any registered futures association with a digital commodity exchange as a member to provide such rules as may be necessary to further compliance with subsection (d), protect customers, and promote the public interest.</text></clause></subparagraph> <subparagraph id="H858BBE762BEF4649BEDAD528B5651F76"><enum>(C)</enum><header>Registration required</header><text display-inline="yes-display-inline">A person required to be registered as a digital commodity exchange under this section shall register with the Commission as such regardless of whether the person is registered with another State or Federal regulator.</text></subparagraph></paragraph></subsection> <subsection id="H5656F0EA96D8456791C4C8405C471B5B"><enum>(b)</enum><header>Trading</header> <paragraph id="HC20740CF3D984CCD95E52FCD7A505D6A"><enum>(1)</enum><header>Prohibition on certain trading practices</header> <subparagraph id="H0CCE38F494684170820B8C5567E6293A"><enum>(A)</enum><text display-inline="yes-display-inline">Section 4b shall apply to any agreement, contract, or transaction in a digital commodity as if the agreement, contract, or transaction were a contract of sale of a commodity for future delivery.</text></subparagraph> <subparagraph id="H4C7563648D234237BA170E539DBEB798"><enum>(B)</enum><text>Section 4c shall apply to any agreement, contract, or transaction in a digital commodity as if the agreement, contract, or transaction were a transaction involving the purchase or sale of a commodity for future delivery.</text></subparagraph> <subparagraph id="HBB431D0D09134B8FA50E16B0FF1C0F0D"><enum>(C)</enum><text display-inline="yes-display-inline">Section 4b–1 shall apply to any agreement, contract, or transaction in a digital commodity as if the agreement, contract, or transaction were a contract of sale of a commodity for future delivery.</text></subparagraph></paragraph> <paragraph id="H86A390EDAD7841309FA35547F50FCBEA"><enum>(2)</enum><header>Prohibition on acting as a counterparty</header> <subparagraph id="HA08F65CF3A0B48E98A3D55A32593FA32"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">A digital commodity exchange or any affiliate of such an exchange shall not trade on or subject to the rules of the digital commodity exchange for its own account.</text></subparagraph> <subparagraph id="H1981B4AE367B4FDFB70355381682E8A8"><enum>(B)</enum><header>Exceptions</header><text>The Commission shall, by rule, permit a digital commodity exchange or any affiliate of a digital commodity exchange to engage in trading on the exchange so long as the trading is not solely for the purpose of the profit of the exchange, including the following:</text> <clause id="HCD399189DB8A48618F9EEA2A81D89A88"><enum>(i)</enum><header>Customer direction</header><text>A transaction for, or entered into at the direction of, or for the benefit of, an unaffiliated customer.</text></clause> <clause id="HC7A76FF539EC4081837108B0B234BE60"><enum>(ii)</enum><header>Risk management</header><text>A transaction to manage the credit, market, and liquidity risks associated with the digital commodity business of the exchange.</text></clause> <clause id="H19FBAA5DFFD146A6A99C18B14E05F376"><enum>(iii)</enum><header>Operational needs</header><text display-inline="yes-display-inline">A transaction related to the operational needs of the business of the digital commodity exchange or its affiliate.</text></clause> <clause id="H7BD1CB9D70F34C1BA5E8984784734558"><enum>(iv)</enum><header>Functional use</header><text>A transaction related to the functional operation of a blockchain system.</text></clause></subparagraph> <subparagraph id="H9FC433B2495149A18F1EC9472107017B"><enum>(C)</enum><header>Notice requirement</header><text>In order for a digital commodity exchange or any affiliate of a digital commodity exchange to engage in trading on the affiliated exchange pursuant to subsection (B), notice must be given to the Commission that shall enumerate how any proposed activity is consistent with the exceptions in subsection (B) and the purposes of this Act.</text></subparagraph></paragraph></subsection> <subsection id="HCE12739F7680457C8A17954ED5ECC2DE"><enum>(c)</enum><header>Core principles for digital commodity exchanges</header> <paragraph id="H56D1D16BE181425F90BA2BDA363F2F75"><enum>(1)</enum><header>Compliance with core principles</header> <subparagraph id="HBB5BCAD73B0544A9990FB23604F95C3C"><enum>(A)</enum><header>In general</header><text>To be registered, and maintain registration, as a digital commodity exchange, a digital commodity exchange shall comply with—</text> <clause id="HB38E5C17C50D403C90F12B775B115DE3"><enum>(i)</enum><text>the core principles described in this subsection; and</text></clause> <clause id="HB57860E48E1341EBA8937FE98809B444"><enum>(ii)</enum><text>any requirement that the Commission may impose by rule or regulation pursuant to section 8a(5).</text></clause></subparagraph> <subparagraph id="H682FF430AC8E45E49D0DEDE44A5E2300"><enum>(B)</enum><header>Reasonable discretion of a digital commodity exchange</header><text>Unless otherwise determined by the Commission by rule or regulation, a digital commodity exchange described in subparagraph (A) shall have reasonable discretion in establishing the manner in which the digital commodity exchange complies with the core principles described in this subsection.</text></subparagraph></paragraph> <paragraph id="H6FF9EC02BEA44F248C433CA0A7227EE1"><enum>(2)</enum><header>Compliance with rules</header><text>A digital commodity exchange shall—</text> <subparagraph id="H133B030CF50D41718CEE32B2BF6A35E0"><enum>(A)</enum><text>establish and enforce compliance with any rule of the digital commodity exchange, including—</text> <clause id="H05993EB5CA2C4CDD8BFE6301EAB1569C"><enum>(i)</enum><text>the terms and conditions of the trades traded or processed on or through the digital commodity exchange; and</text></clause> <clause id="H002CAF25C6EC4D96BA93116D42D2D341"><enum>(ii)</enum><text>any limitation on access to the digital commodity exchange;</text></clause></subparagraph> <subparagraph id="H6F617724E4AC40A9B407A361E1626CDC"><enum>(B)</enum><text>establish and enforce trading, trade processing, and participation rules that will deter abuses and have the capacity to detect, investigate, and enforce those rules, including means—</text> <clause id="H661ECB5B21C346BC82B3734F7F9C5A8A"><enum>(i)</enum><text>to provide market participants with impartial access to the market; and</text></clause> <clause id="H4B2A9E0625404DF3AB505FDC98A2B11A"><enum>(ii)</enum><text>to capture information that may be used in establishing whether rule violations have occurred; and</text></clause></subparagraph> <subparagraph id="H73FB44B1C4414D7F88ECA7FA04665539"><enum>(C)</enum><text>establish rules governing the operation of the exchange, including rules specifying trading procedures to be used in entering and executing orders traded or posted on the facility.</text></subparagraph></paragraph> <paragraph id="H688AF599346E410D9B82730FB94801AD"><enum>(3)</enum><header>Listing standards for digital commodities</header> <subparagraph id="HC6A8DE8660EB49FE851B83BCC65F0D8E"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">A digital commodity exchange shall not permit trading in a digital commodity unless—</text> <clause id="H9C789F9AC2C34E94AEA9BD9683830C9C"><enum>(i)</enum><text display-inline="yes-display-inline">reports with respect to the digital commodity required under section 4B(b)(3) of the Securities Act of 1933 (or, with respect to a digital commodity not issued in reliance on section 4(a)(8) of the Securities Act of 1933, a comparable set of reports, where required by the Securities and Exchange Commission) have been filed with the Securities and Exchange Commission; or</text></clause> <clause id="HD84DDCA2B9D54A64B5D44CE8D97773BE"><enum>(ii)</enum><text>the blockchain system to which the digital commodity relates, together with the digital commodity, is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934.</text></clause></subparagraph> <subparagraph id="H48DE642AA10B412782A1ED2D65A4A6C8"><enum>(B)</enum><header>Public information requirements</header> <clause id="H7418DB63255C458CAD592C68F3ACF366"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">A digital commodity exchange shall permit trading only in a digital commodity if the information required in clause (ii) is correct, current, and available to the public.</text></clause> <clause id="HDB7B955FD5BE428B961535630A1FEBDA"><enum>(ii)</enum><header>Required information</header><text>With respect to a digital commodity and each blockchain system to which the digital commodity relates for which the digital commodity exchange will make the digital commodity available to the customers of the digital commodity exchange, the information required in this clause is as follows:</text> <subclause id="H63C70EB2676A49F3B0BEB6CB9E3E8C7B"><enum>(I)</enum><header>Source code</header><text>The source code for any blockchain system to which the digital commodity relates.</text></subclause> <subclause id="H49CD4A3D761A41E78D3256DF2608E522"><enum>(II)</enum><header>Transaction history</header><text display-inline="yes-display-inline">A description of the steps necessary to independently access, search, and verify the transaction history of any blockchain system to which the digital commodity relates, to the extent any such independent access, search, and verification activities are technically feasible with respect to the blockchain system.</text></subclause> <subclause id="H98307277024B488C9F5B41984A9F3664"><enum>(III)</enum><header>Digital commodity economics</header><text>A narrative description of the purpose of any blockchain system to which the digital commodity relates and the operation of any such blockchain system, including—</text> <item id="H806D56F9638D41539EEEF3BFB2B58B87"><enum>(aa)</enum><text>information explaining the launch and supply process, including the number of digital assets to be issued in an initial allocation, the total number of digital commodities to be created, the release schedule for the digital commodities, and the total number of digital commodities then outstanding;</text></item> <item id="H2ADC549031024492B11F0385A5E992A8"><enum>(bb)</enum><text>information detailing any applicable consensus mechanism or process for validating transactions, method of generating or mining digital commodities, and any process for burning or destroying digital commodities on the blockchain system;</text></item> <item id="H80689288C0F742B19631B2CF64310D2F"><enum>(cc)</enum><text>an explanation of governance mechanisms for implementing changes to the blockchain system or forming consensus among holders of the digital commodities; and</text></item> <item id="HA0816259003E4644993515DCB443DF1E"><enum>(dd)</enum><text>sufficient information for a third party to create a tool for verifying the transaction history of the digital asset.</text></item></subclause> <subclause id="HC5E2F2C06662470193E12D171604FBD3" display-inline="no-display-inline"><enum>(IV)</enum><header>Trading volume and volatility</header><text display-inline="yes-display-inline">The trading volume and volatility of the digital commodity on the exchange.</text></subclause> <subclause id="H74B53016DAB84C928F6472F2F11D2CC9"><enum>(V)</enum><header>Additional information</header><text display-inline="yes-display-inline">Such additional information as the Commission may determine by rule to be necessary for a customer to understand the financial and operational risks of a digital commodity, and to be practically feasible to provide.</text></subclause></clause> <clause id="H3EC098C5BFD14C48A4B53E04B3F3F1D8" display-inline="no-display-inline"><enum>(iii)</enum><header>Format</header><text display-inline="yes-display-inline">The Commission shall prescribe rules and regulations for the standardization and simplification of disclosures under clause (ii), including requiring that disclosures—</text> <subclause id="H9DE1B0C039F5446AB53D23EAE47C7D62"><enum>(I)</enum><text>be conspicuous;</text></subclause> <subclause id="H005C01B575D4402BA6EA582406658261"><enum>(II)</enum><text>use plain language comprehensible to customers; and</text></subclause> <subclause id="HBF99CE819B1140A0A0397741A73817D7"><enum>(III)</enum><text>succinctly explain the information that is required to be communicated to the customer.</text></subclause></clause> <clause id="H5A93FB2852644D989185B5C4C797E6F6"><enum>(iv)</enum><header>Reliance on previous disclosures</header><text display-inline="yes-display-inline">In complying with this subparagraph, a digital commodity exchange may rely on and make available to the public relevant information publicly disclosed to the Commission, the Securities and Exchange Commission, or an appropriate Federal banking agency.</text></clause></subparagraph> <subparagraph id="H03C71237D4164D3B8EF2CD123437CD8D"><enum>(C)</enum><header>Digital commodities held by related and digital commodity affiliated persons</header><text display-inline="yes-display-inline">A digital commodity exchange shall permit the trading of a unit of a digital commodity held by a digital commodity affiliated person or a digital commodity related person, only pursuant to section 4C of the Securities Act of 1933.</text></subparagraph></paragraph> <paragraph id="HBFB64593C99344DC918F505BA4EB69C5"><enum>(4)</enum><header>Treatment of customer assets</header><text>A digital commodity exchange shall establish policies and procedures that are designed to protect and ensure the safety of customer money, assets, and property.</text></paragraph> <paragraph id="HFFBDFB44C5124F50A9B1AC7F8E801001"><enum>(5)</enum><header>Monitoring of trading and trade processing</header> <subparagraph id="HEA0E4AB389A14C1E8BE2A4CF67132B95"><enum>(A)</enum><header>In general</header><text>A digital commodity exchange shall provide a competitive, open, and efficient market and mechanism for executing transactions that protects the price discovery process of trading on the exchange.</text></subparagraph> <subparagraph id="HE8A7C001A58240F0ADAF308118521D75"><enum>(B)</enum><header>Protection of markets and market participants</header><text>A digital commodity exchange shall establish and enforce rules—</text> <clause id="H2428A563FE6B4554A5895CBDBD028E53"><enum>(i)</enum><text>to protect markets and market participants from abusive practices committed by any party, including abusive practices committed by a party acting as an agent for a participant; and</text></clause> <clause id="H7BB44567E5A041C097E711282161F395"><enum>(ii)</enum><text>to promote fair and equitable trading on the exchange.</text></clause></subparagraph> <subparagraph id="H76EB779E248D407A82F18D6DA3C555E2"><enum>(C)</enum><header>Trading procedures</header><text>A digital commodity exchange shall—</text> <clause id="HB8EB3D9BE5514EC6AE0422F48F2BC50A"><enum>(i)</enum><text>establish and enforce rules or terms and conditions defining, or specifications detailing—</text> <subclause id="H97DDE22198654BC59BC2BCBF4BDEABDF"><enum>(I)</enum><text>trading procedures to be used in entering and executing orders traded on or through the facilities of the digital commodity exchange; and</text></subclause> <subclause id="H394161FAEB894DFB9A2C6FD20D8DD9EA"><enum>(II)</enum><text>procedures for trade processing of digital commodities on or through the facilities of the digital commodity exchange; and</text></subclause></clause> <clause id="H293513E3D59047B9B1CC7AB6DCD1456D"><enum>(ii)</enum><text>monitor trading in digital commodities to prevent manipulation, price distortion, and disruptions, through surveillance, compliance, and disciplinary practices and procedures, including methods for conducting real-time monitoring of trading and comprehensive and accurate trade reconstructions.</text></clause></subparagraph></paragraph> <paragraph id="HFF27F90E3EFC45A0A0AD67C2AFB87E01"><enum>(6)</enum><header>Ability to obtain information</header><text>A digital commodity exchange shall—</text> <subparagraph id="H25C8546A4DC64CC286605D9644D97AE2"><enum>(A)</enum><text>establish and enforce rules that will allow the facility to obtain any necessary information to perform any of the functions described in this section;</text></subparagraph> <subparagraph id="HFF2B8DEDC4254FEA96AB20EDE8C405DD"><enum>(B)</enum><text>provide the information to the Commission on request; and</text></subparagraph> <subparagraph id="H7B02D0C64BBE4782B43C6DAB2C607B08"><enum>(C)</enum><text>have the capacity to carry out such international information-sharing agreements as the Commission may require.</text></subparagraph></paragraph> <paragraph id="H1CC896CC9BEF4570B6ED8D1D2AF15AE5"><enum>(7)</enum><header>Emergency authority</header><text>A digital commodity exchange shall adopt rules to provide for the exercise of emergency authority, in consultation or cooperation with the Commission or a registered entity, as is necessary and appropriate, including the authority to facilitate the liquidation or transfer of open positions in any digital commodity or to suspend or curtail trading in a digital commodity.</text></paragraph> <paragraph id="HB4DA6779B3B34F919C0F28853E60C095"><enum>(8)</enum><header>Timely publication of trading information</header> <subparagraph id="H44D30BA777F04629B5711B78A47DDD06"><enum>(A)</enum><header>In general</header><text>A digital commodity exchange shall make public timely information on price, trading volume, and other trading data on digital commodities to the extent prescribed by the Commission.</text></subparagraph> <subparagraph id="HDD24B3F0F5704DE4AF4AF1B1C97B7903"><enum>(B)</enum><header>Capacity of digital commodity exchange</header><text>A digital commodity exchange shall have the capacity to electronically capture and transmit trade information with respect to transactions executed on the exchange.</text></subparagraph></paragraph> <paragraph id="HA150405D55B84A7AA3E41EFBA9582933"><enum>(9)</enum><header>Recordkeeping and reporting</header> <subparagraph id="HFF3247A1F28249E0831EA03111125038"><enum>(A)</enum><header>In general</header><text>A digital commodity exchange shall—</text> <clause id="H7D5A0DC7F9834B24B73254438FF2BA42"><enum>(i)</enum><text>maintain records relating to the operation of the exchange, including a complete audit trail, in a form and manner acceptable to the Commission for a period of 5 years;</text></clause> <clause id="HF695FEFDAE3647F99311648E8588C708"><enum>(ii)</enum><text display-inline="yes-display-inline">report to the Commission, in a form and manner acceptable to the Commission, such information as the Commission determines to be necessary or appropriate for the Commission to perform the duties of the Commission under this Act; and</text></clause> <clause id="H0002AD2785024D769D5CE72A544048BB"><enum>(iii)</enum><text display-inline="yes-display-inline">keep any such records of digital commodities which relate to a security open to inspection and examination by the Securities and Exchange Commission.</text></clause></subparagraph> <subparagraph id="H08F418EFE9DD4CF58EA567079E2D5BA9"><enum>(B)</enum><header>Information-sharing</header><text>Subject to section 8, and on request, the Commission shall share information collected under subparagraph (A) with—</text> <clause id="H239899095F35466EA3E044B801AA485F"><enum>(i)</enum><text>the Board;</text></clause> <clause id="H6A16CFC0F20E454787C956F800F70933"><enum>(ii)</enum><text>the Securities and Exchange Commission;</text></clause> <clause id="HF325C2085F134265A6B3266B56C0428A"><enum>(iii)</enum><text>each appropriate Federal banking agency;</text></clause> <clause id="HF5AA1448BE86440896F0022CB5F64E08"><enum>(iv)</enum><text display-inline="yes-display-inline">each appropriate State bank supervisor (within the meaning of section 3 of the Federal Deposit Insurance Act);</text></clause> <clause id="HC154514B2ACD443FA58D7EA8E0989897"><enum>(v)</enum><text>the Financial Stability Oversight Council;</text></clause> <clause id="H5BD93DF2BF4442AE847AF94CECB79F3E"><enum>(vi)</enum><text>the Department of Justice; and</text></clause> <clause id="H1AB0604B129D4B0E8EE9FFBCFEFEEA77"><enum>(vii)</enum><text>any other person that the Commission determines to be appropriate, including—</text> <subclause id="H643902A284164F11B5E588C01CD7813E"><enum>(I)</enum><text>foreign financial supervisors (including foreign futures authorities);</text></subclause> <subclause id="H5C253F9AA10C442091F517061EFA820F"><enum>(II)</enum><text>foreign central banks; and</text></subclause> <subclause id="H236AA5F2596C475C9FCE4CFC48154D8F"><enum>(III)</enum><text>foreign ministries.</text></subclause></clause></subparagraph> <subparagraph id="H9BB3F79252D8403585FC314DF1939931"><enum>(C)</enum><header>Confidentiality agreement</header><text>Before the Commission may share information with any entity described in subparagraph (B), the Commission shall receive a written agreement from the entity stating that the entity shall abide by the confidentiality requirements described in section 8 relating to the information on digital commodities that is provided.</text></subparagraph> <subparagraph id="HDD9FE11402314F9E976010D433530A5A"><enum>(D)</enum><header>Providing information</header><text>A digital commodity exchange shall provide to the Commission (including any designee of the Commission) information under subparagraph (A) in such form and at such frequency as is required by the Commission.</text></subparagraph></paragraph> <paragraph id="H17E355E517C047CAA4847692A60BFD97"><enum>(10)</enum><header>Antitrust considerations</header><text display-inline="yes-display-inline">Unless necessary or appropriate to achieve the purposes of this Act, a digital commodity exchange shall not—</text> <subparagraph id="H10FDE11ABB93494885A437E95F9B75F3"><enum>(A)</enum><text>adopt any rules or take any actions that result in any unreasonable restraint of trade; or</text></subparagraph> <subparagraph id="H097B04CB70C04873BAE0DF9FB8C5F8E3"><enum>(B)</enum><text>impose any material anticompetitive burden on trading.</text></subparagraph></paragraph> <paragraph id="H7693180B8C5848349620D3BE7CDFAE6D"><enum>(11)</enum><header>Conflicts of interest</header><text display-inline="yes-display-inline">The digital commodity exchange shall establish and enforce rules—</text> <subparagraph id="H9970CA7C20194953BB2C4DB07479B805"><enum>(A)</enum><text display-inline="yes-display-inline">to minimize conflicts of interest in the decision making processes of the contract market; and</text></subparagraph> <subparagraph id="HBF2F247C78EE43B1A262733A5BFDDBB9"><enum>(B)</enum><text>to establish a process for resolving conflicts of interest referred to in subparagraph (A).</text></subparagraph></paragraph> <paragraph id="H73CD2C242EFB4124834A17046F050C55"><enum>(12)</enum><header>Financial resources</header> <subparagraph id="HA191D0BD1E1D45A29B52F25374341933"><enum>(A)</enum><header>In general</header><text>A digital commodity exchange shall have adequate financial, operational, and managerial resources, as determined by the Commission, to discharge each responsibility of the digital commodity exchange.</text></subparagraph> <subparagraph id="HFC00D19F98F7420B86C5766485A11AC7"><enum>(B)</enum><header>Minimum amount of financial resources</header><text>A digital commodity exchange shall possess financial resources that, at a minimum, exceed—</text> <clause id="H12C3152F7CBA48188CD812127CA019A0"><enum>(i)</enum><text display-inline="yes-display-inline">the total amount that would enable the digital commodity exchange to cover the operating costs of the digital commodity exchange for a 1-year period, as calculated on a rolling basis; and</text></clause> <clause id="HE62947F43D184D2E96ADAF0A0A294790"><enum>(ii)</enum><text display-inline="yes-display-inline">the total amount necessary to meet the financial obligations of the digital commodity exchange to all customers of the digital commodity exchange.</text></clause></subparagraph></paragraph> <paragraph id="H1646968E69CA40938F63146F1C808A81"><enum>(13)</enum><header>Disciplinary procedures</header><text display-inline="yes-display-inline">A digital commodity exchange shall establish and enforce disciplinary procedures that authorize the digital commodity exchange to discipline, suspend, or expel members or market participants that violate the rules of the digital commodity exchange, or similar methods for performing the same functions, including delegation of the functions to third parties.</text></paragraph> <paragraph id="HA7D74BC231E84F16B3B4E30333BE76B5"><enum>(14)</enum><header>Governance fitness standards</header> <subparagraph id="H8FE845244080405E95FFE7B9E834382E"><enum>(A)</enum><header>Governance arrangements</header><text display-inline="yes-display-inline">A digital commodity exchange shall establish governance arrangements that are transparent and designed to permit consideration of the views of market participants.</text></subparagraph> <subparagraph id="HE96D9960E1D74A61931F2FE1AA35D593"><enum>(B)</enum><header>Fitness standards</header><text>A digital commodity exchange shall establish and enforce appropriate fitness standards for—</text> <clause id="HDB1126D023B7404EBB14F6CC198A67AA"><enum>(i)</enum><text>officers and directors; and</text></clause> <clause id="HBC9B5EAF07BF41D2BD4E7C9EE08835D2"><enum>(ii)</enum><text>any individual or entity with direct access to, or control of, customer assets.</text></clause></subparagraph></paragraph> <paragraph id="H65700AEFD2AC4D9892C95CC2D5012BCE"><enum>(15)</enum><header>System safeguards</header><text>A digital commodity exchange shall—</text> <subparagraph id="HEFE25CDC7B8B4F3F85D34025CC3697FC"><enum>(A)</enum><text>establish and maintain a program of risk analysis and oversight to identify and minimize sources of operational and security risks, through the development of appropriate controls and procedures, and automated systems in accordance with industry standards, that—</text> <clause id="HC820CC7986D54E1F9573D32B64AFDBF4"><enum>(i)</enum><text>are reliable and secure; and</text></clause> <clause id="H19DAA11E67B54067BA6A9ACCE80AAC40"><enum>(ii)</enum><text>have adequate scalable capacity;</text></clause></subparagraph> <subparagraph id="HF74E028322D84663A8EB22ABAEE0D69D"><enum>(B)</enum><text>establish and maintain emergency procedures, backup resources, and a plan for disaster recovery that allow for—</text> <clause id="HC713D3CF07C2476B80D33E28C62F5D68"><enum>(i)</enum><text>the timely recovery and resumption of operations; and</text></clause> <clause id="H5238AB9E606D49D6A1D2A382E871E4E9"><enum>(ii)</enum><text>the fulfillment of the responsibilities and obligations of the digital commodity exchange; and</text></clause></subparagraph> <subparagraph id="H8819E4600F2D4129B7114E792B50037C"><enum>(C)</enum><text>periodically conduct tests to verify that the backup resources of the digital commodity exchange are sufficient to ensure continued—</text> <clause id="H1B0C54E09DCF44788A3F83DAD9E80E8D"><enum>(i)</enum><text>order processing and trade matching;</text></clause> <clause id="H551269B9CB6B48F6A413F04D7F142641"><enum>(ii)</enum><text>price reporting;</text></clause> <clause id="HE00511A89B0C4CF48CAF200F4491F5D0"><enum>(iii)</enum><text>market surveillance; and</text></clause> <clause id="H8F5E89F629664725B79FC8911B0575B4"><enum>(iv)</enum><text>maintenance of a comprehensive and accurate audit trail.</text></clause></subparagraph></paragraph></subsection> <subsection id="HFED3DB51A5DA41ABB3C55B35D4FFCDE2"><enum>(d)</enum><header>Holding of customer assets</header> <paragraph id="HB64F027C7238437490A910597C4AEA43"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">A digital commodity exchange shall hold customer money, assets, and property in a manner to minimize the risk of loss to the customer or unreasonable delay in customer access to the money, assets, and property of the customer.</text> <subparagraph id="HAD27D04F709645D2AE2FD09B8F735DB9"><enum>(A)</enum><header>Segregation of funds</header> <clause id="HAAFAE14330BA4970B14F3EA99E85870D"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">A digital commodity exchange shall treat and deal with all money, assets, and property that is received by the digital commodity exchange, or accrues to a customer as the result of trading in digital commodities, as belonging to the customer.</text></clause> <clause id="H8DDE787A8029484DB3E03D9CF06F25F4"><enum>(ii)</enum><header>Commingling prohibited</header><text>Money, assets, and property of a customer described in clause (i) shall be separately accounted for and shall not be commingled with the funds of the digital commodity exchange or be used to margin, secure, or guarantee any trades or accounts of any customer or person other than the person for whom the same are held.</text></clause></subparagraph> <subparagraph id="HBA5B7357AA3346C5B6F075440AB2341A"><enum>(B)</enum><header>Exceptions</header> <clause id="H564DFD6D972E4A99B1E04DB89E9B4B9D"><enum>(i)</enum><header>Use of funds</header> <subclause id="HABDA09CD7EF1484D8849012E9834F52B"><enum>(I)</enum><header>In general</header><text display-inline="yes-display-inline">Notwithstanding subparagraph (A), money, assets, and property of customers of a digital commodity exchange described in subparagraph (A) may, for convenience, be commingled and deposited in the same account or accounts with any bank, trust company, derivatives clearing organization, or qualified digital asset custodian.</text></subclause> <subclause id="H17C8B9AF7A894DD082C0ABAA13E15965"><enum>(II)</enum><header>Withdrawal</header><text>Notwithstanding subparagraph (A), such share of the money, assets, and property described in subclause (I) of this clause as in the normal course of business shall be necessary to margin, guarantee, secure, transfer, adjust, or settle a contract of sale of a digital commodity with a registered entity may be withdrawn and applied to such purposes, including the payment of commissions, brokerage, interest, taxes, storage, and other charges, lawfully accruing in connection with the contract of sale of a digital commodity.</text></subclause></clause> <clause id="H17A2B82753654A64839CA44C20C0D8B9"><enum>(ii)</enum><header>Commission action</header><text>Notwithstanding subparagraph (A), in accordance with such terms and conditions as the Commission may prescribe by rule, regulation, or order, any money, assets, or property of the customers of a digital commodity exchange described in subparagraph (A) may be commingled and deposited in customer accounts with any other money, assets, or property received by the digital commodity exchange and required by the Commission to be separately accounted for and treated and dealt with as belonging to the customer of the digital commodity exchange.</text></clause></subparagraph></paragraph> <paragraph id="H8F0EE9AD6BC14574A1F66B900430078B"><enum>(2)</enum><header>Permitted investments</header><text>Money described in subparagraph (A) may be invested in obligations of the United States, in general obligations of any State or of any political subdivision of a State, and in obligations fully guaranteed as to principal and interest by the United States, or in any other investment that the Commission may by rule or regulation prescribe, and such investments shall be made in accordance with such rules and regulations and subject to such conditions as the Commission may prescribe.</text></paragraph> <paragraph id="H4893838641D44918A1F6F1D497192B25"><enum>(3)</enum><header>Customer protection during bankruptcy</header> <subparagraph id="H626B27455C6542A787D40D3AE6D00BA6"><enum>(A)</enum><header>Customer property</header><text>All assets held on behalf of a customer by a digital commodity exchange, and all money, assets, and property of any customer received by a digital commodity exchange for trading or custody, or to facilitate, margin, guarantee, or secure contracts of sale of a digital commodity (including money, assets, or property accruing to the customer as the result of the transactions), shall be considered customer property for purposes of section 761 of title 11, United States Code.</text></subparagraph> <subparagraph id="HEB733E66630946469E530AE4BDEDE42E"><enum>(B)</enum><header>Transactions</header><text display-inline="yes-display-inline">A transaction involving the sale of a unit of a digital commodity occurring on or subject to the rules of a digital commodity exchange shall be considered a contract for the purchase or sale of a commodity for future delivery, on or subject to the rules of, a contract market or board of trade for purposes of the definition of <quote>commodity contract</quote> in section 761 of title 11, United States Code.</text></subparagraph> <subparagraph id="HE1026538CAFF49AB8324EED0966DF2D6"><enum>(C)</enum><header>Exchanges</header><text>A digital commodity exchange shall be considered a futures commission merchant for purposes of section 761 of title 11, United States Code.</text></subparagraph> <subparagraph id="H4EBAAEB9C2F246ACA71DF77F010EDE9B"><enum>(D)</enum><header>Assets removed from segregation</header><text display-inline="yes-display-inline">Assets removed from segregation due to a customer election under paragraph (5) shall not be considered customer property for purposes of section 761 of title 11, United States Code.</text></subparagraph></paragraph> <paragraph id="H8E6CCE0F6B884A73B9A514A7B8F5A512"><enum>(4)</enum><header>Misuse of customer property</header> <subparagraph id="H1B5D88C5F58A421C8945C89890CD091A"><enum>(A)</enum><header>In general</header><text>It shall be unlawful—</text> <clause id="HAF9D54D86E0E4844B070683E422DDE88"><enum>(i)</enum><text display-inline="yes-display-inline">for any digital commodity exchange that has received any customer money, assets, or property for custody to dispose of, or use any such money, assets, or property as belonging to the digital commodity exchange or any person other than a customer of the digital commodity exchange; or</text></clause> <clause id="HF3E1DB263573467F985864910346BD63"><enum>(ii)</enum><text display-inline="yes-display-inline">for any other person, including any depository, other digital commodity exchange, or digital asset custodian that has received any customer money, assets, or property for deposit, to hold, dispose of, or use any such money, assets, or property, or property, as belonging to the depositing digital commodity exchange or any person other than the customers of the digital commodity exchange.</text></clause></subparagraph> <subparagraph id="H1A1B118F2E94403F99A63470631348F4"><enum>(B)</enum><header>Use further defined</header><text display-inline="yes-display-inline">For purposes of this section, <quote>use</quote> of a digital commodity includes utilizing any unit of a digital asset to participate in a blockchain service defined in paragraph (5) or a decentralized governance system associated with the digital commodity or the blockchain system to which the digital commodity relates in any manner other than that expressly directed by the customer from whom the unit of a digital commodity was received.</text></subparagraph></paragraph> <paragraph id="H3A7BD777663442CE95822B0EB79F863C"><enum>(5)</enum><header>Participation in blockchain services</header> <subparagraph id="H1D4A6B2AE7F645689FE6A45DDA227B5D"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">A customer shall have the right to waive the restrictions in paragraph (1) for any unit of a digital commodity to be used under subparagraph (B), by affirmatively electing, in writing to the digital commodity exchange, to waive the restrictions.</text></subparagraph> <subparagraph id="HCCE6B6D1CC77496F997BDA93266DD680"><enum>(B)</enum><header>Use of funds</header><text>Customer digital commodities removed from segregation under subparagraph (A) may be pooled and used by the digital commodity exchange or its designee to provide a blockchain service for a blockchain system to which the unit of the digital asset removed from segregation in subparagraph (A) relates.</text></subparagraph> <subparagraph id="H8216E8226B7444BF8B15A45B43C04E51"><enum>(C)</enum><header>Limitations</header> <clause id="H683C4FD9A88348DD89AAFF4D3B1EA787"><enum>(i)</enum><header>In general</header><text>The Commission shall, by rule, establish notice and disclosure requirements, and may, by rule, establish any other limitations and rules related to the waiving of any restrictions under this paragraph that are reasonably necessary to protect customers, including eligible contract participants, non-eligible contract participants, or any other class of customers.</text></clause> <clause id="HA4C583C8E2894291A324A6391504DDB2"><enum>(ii)</enum><header>Customer choice</header><text display-inline="yes-display-inline">A digital commodity exchange may not require a waiver from a customer described in subparagraph (A) as a condition of doing business on the exchange.</text></clause></subparagraph> <subparagraph id="H76D727F0B04840008679A34B145E5508"><enum>(D)</enum><header>Blockchain service defined</header><text>In this subparagraph, the term <term>blockchain service</term> means any activity relating to validating transactions on a blockchain system, providing security for a blockchain system, or other similar activity required for the ongoing operation of a blockchain system.</text></subparagraph></paragraph></subsection> <subsection id="H4383CC4F02DE41C5ADABA655BF6A9396"><enum>(e)</enum><header>Market access requirements</header><text>The Commission may, by rule, impose any additional requirements related to the operations and activities of the digital commodity exchange and an affiliated digital commodity broker necessary to protect market participants, promote fair and equitable trading on the digital commodity exchange, and promote responsible innovation.</text></subsection> <subsection id="H6F6D9B75D2A3429C8A4379837F60C4E4"><enum>(f)</enum><header>Designation of chief compliance officer</header> <paragraph id="H0DA661C4C47845E68C84FD7FA4485C11"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">A digital commodity exchange shall designate an individual to serve as a chief compliance officer.</text></paragraph> <paragraph id="H872BC2CE4942416088E0342E04D7C91D"><enum>(2)</enum><header>Duties</header><text>The chief compliance officer shall—</text> <subparagraph id="HED759B93C30C480FB9B7410104CBA82A"><enum>(A)</enum><text>report directly to the board or to the senior officer of the exchange;</text></subparagraph> <subparagraph id="HFE2F05A1992D4FCAB113D93969271BA3"><enum>(B)</enum><text>review compliance with the core principles in this subsection;</text></subparagraph> <subparagraph id="H291860ADAA094F469C081E56FE95ECD1"><enum>(C)</enum><text>in consultation with the board of the exchange, a body performing a function similar to that of a board, or the senior officer of the exchange, resolve any conflicts of interest that may arise;</text></subparagraph> <subparagraph id="H7E1279EA6FA5465C91396C04FBD35080"><enum>(D)</enum><text>establish and administer the policies and procedures required to be established pursuant to this section;</text></subparagraph> <subparagraph id="HC012846AE8E945C8AF52AA9AE35394E5"><enum>(E)</enum><text>ensure compliance with this Act and the rules and regulations issued under this Act, including rules prescribed by the Commission pursuant to this section; and</text></subparagraph> <subparagraph id="H62BAB0A0684A413EBD2586BEE88ADD3F"><enum>(F)</enum><text>establish procedures for the remediation of noncompliance issues found during compliance office reviews, look backs, internal or external audit findings, self-reported errors, or through validated complaints.</text></subparagraph></paragraph> <paragraph id="H7D75E73A180F48F4B01F8E22920D1D93"><enum>(3)</enum><header>Requirements for procedures</header><text>In establishing procedures under paragraph (2)(F), the chief compliance officer shall design the procedures to establish the handling, management response, remediation, retesting, and closing of noncompliance issues.</text></paragraph> <paragraph id="H0C6A7A6533F846CDB9E536E148BFD121"><enum>(4)</enum><header>Annual reports</header> <subparagraph id="HA0FB712F45914F3F88AC88977CB66BCD"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">In accordance with rules prescribed by the Commission, the chief compliance officer shall annually prepare and sign a report that contains a description of—</text> <clause id="H3EDDC675B7D24F59AE8851BBA63D6933"><enum>(i)</enum><text>the compliance of the digital commodity exchange with this Act; and</text></clause> <clause id="HA20619A4444F4576AB20AD5D1F9A40B0"><enum>(ii)</enum><text>the policies and procedures, including the code of ethics and conflicts of interest policies, of the digital commodity exchange.</text></clause></subparagraph> <subparagraph id="H9482A8B970DF4CF7A357940FA33B9B9C"><enum>(B)</enum><header>Requirements</header><text>The chief compliance officer shall—</text> <clause id="H70DE5E6EAD664548A681BA3E8ADC5D2C"><enum>(i)</enum><text>submit each report described in subparagraph (A) with the appropriate financial report of the digital commodity exchange that is required to be submitted to the Commission pursuant to this section; and</text></clause> <clause id="H0E667CEC003B4D959616EBE7C52468AE"><enum>(ii)</enum><text>include in the report a certification that, under penalty of law, the report is accurate and complete.</text></clause></subparagraph></paragraph></subsection> <subsection id="H2C4A58D8CB974732A005D55F3AA3158C"><enum>(g)</enum><header>Appointment of trustee</header> <paragraph id="H99DF7AEDEF4B41508F4F974AD2C9CAA9"><enum>(1)</enum><header>In general</header><text>If a proceeding under section 5e results in the suspension or revocation of the registration of a digital commodity exchange, or if a digital commodity exchange withdraws from registration, the Commission, on notice to the digital commodity exchange, may apply to the appropriate United States district court where the digital commodity exchange is located for the appointment of a trustee.</text></paragraph> <paragraph id="HBA3A8BE4A1654D0A99D6C98A27420ED0"><enum>(2)</enum><header>Assumption of jurisdiction</header><text>If the Commission applies for appointment of a trustee under paragraph (1)—</text> <subparagraph id="H6F3EEC42F9FD4B81A83BB9A2263EDDFB"><enum>(A)</enum><text>the court may take exclusive jurisdiction over the digital commodity exchange and the records and assets of the digital commodity exchange, wherever located; and</text></subparagraph> <subparagraph id="H6BA960B4164649B5B5F7A018149A54FD"><enum>(B)</enum><text>if the court takes jurisdiction under subparagraph (A), the court shall appoint the Commission, or a person designated by the Commission, as trustee with power to take possession and continue to operate or terminate the operations of the digital commodity exchange in an orderly manner for the protection of customers subject to such terms and conditions as the court may prescribe.</text></subparagraph></paragraph></subsection> <subsection id="H62B34ADEF51B4D86B9A71BBEE6E77F69"><enum>(h)</enum><header>Qualified digital asset custodian</header><text>A digital commodity exchange shall hold in a qualified digital asset custodian each unit of a digital asset that is—</text> <paragraph id="H1DB6DB0BA3EA4B2B85EC5DB1DD52EEB1"><enum>(1)</enum><text>the property of a customer of the digital commodity exchange;</text></paragraph> <paragraph id="HEDE05EB3C68A4C689C077458B8206CD0"><enum>(2)</enum><text>required to be held by the digital commodity exchange under subsection (c)(12) of this section; or</text></paragraph> <paragraph id="H7A3F23FDE33740F2B51B51F4BE2FB0F0"><enum>(3)</enum><text>otherwise so required by the Commission to reasonably protect customers.</text></paragraph></subsection> <subsection id="H3CCA658055E748C98D1DEAE0E5EA9777"><enum>(i)</enum><header>Exemptions</header> <paragraph id="H9C7D73065746498CADD9DE961D9FA064"><enum>(1)</enum><text>In order to promote responsible innovation and fair competition, or protect customers, the Commission may (on its own initiative or on application of the registered digital commodity exchange) exempt, either unconditionally or on stated terms or conditions or for stated periods and either retroactively or prospectively, or both, a registered digital commodity exchange from the requirements of this section, if the Commission determines that—</text> <subparagraph id="H3C4D5DB47E6B48569B8EE40BAB6D9721"><enum>(A)</enum><text>the exemption would be consistent with the public interest and the purposes of this Act; and</text></subparagraph> <subparagraph id="H5B6FE93A4577491FA733149F292933D2"><enum>(B)</enum><text>the exemption will not have a material adverse effect on the ability of the Commission or the digital commodity exchange to discharge regulatory or self-regulatory duties under this Act.</text></subparagraph></paragraph> <paragraph id="H64D7AFC4BF91429A8A4CA48BACA4352A"><enum>(2)</enum><text display-inline="yes-display-inline">The Commission may exempt, conditionally or unconditionally, a digital commodity exchange from registration under this section if the Commission finds that the digital commodity exchange is subject to comparable, comprehensive supervision and regulation on a consolidated basis by the appropriate governmental authorities in the home country of the facility.</text></paragraph></subsection> <subsection id="H88743DF8C3684660A73A3A5647EA2C33"><enum>(j)</enum><header>Customer defined</header><text display-inline="yes-display-inline">In this section, the term <term>customer</term> means any person that maintains an account for the trading of digital commodities directly with a digital commodity exchange (other than a person that is owned or controlled, directly or indirectly, by the digital commodity exchange) for its own behalf or on behalf of any other person.</text></subsection> <subsection id="HB69FA877BF1E4F0B9179AC559FE89B06"><enum>(k)</enum><header>Federal preemption</header><text display-inline="yes-display-inline">Notwithstanding any other provision of law, the Commission shall have exclusive jurisdiction over any digital commodity exchange registered under this section with respect to activities and transactions subject to this Act.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="HAD69798EBDDF423E98D6D4990028E4CC"><enum>405.</enum><header>Qualified digital asset custodians</header><text display-inline="no-display-inline">The Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1">7 U.S.C. 1 et seq.</external-xref>), as amended by the preceding provisions of this Act, is amended by inserting after section 5i the following:</text> <quoted-block style="OLC" id="HA1DCFD5C66B044CA87708DB1D4B05594" display-inline="no-display-inline"> <section id="H673A27C634B147F78EC9A42AD3B326BC"><enum>5j.</enum><header>Qualified digital asset custodians</header> <subsection id="H7337C7B6072943739516FA848346FDE0"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">A person is a qualified digital asset custodian for purposes of this Act if the person—</text> <paragraph id="HA87BDFF9AAD04F4995983BB27E12D410"><enum>(1)</enum><text display-inline="yes-display-inline">holds digital assets on behalf of a person registered under this Act or a customer of a person registered under this Act; and</text></paragraph> <paragraph id="HCC9C52CAEF1F45A19E821CFA121ADF3C"><enum>(2)</enum><text>is in compliance with subsections (b) and (c).</text></paragraph></subsection> <subsection id="HE683F3C22AFF496F80BE482F030ADC17" display-inline="no-display-inline"><enum>(b)</enum><header>Supervision requirement</header><text display-inline="yes-display-inline">A person is in compliance with this subsection if the person is subject to—</text> <paragraph id="H02D82111F3A54AC19F795898FCEBCA84"><enum>(1)</enum><text>supervision and examination for custody and safekeeping of digital assets by an appropriate Federal banking agency, the National Credit Union Administration, the Commission, or the Securities and Exchange Commission; or</text></paragraph> <paragraph id="H1654FFD02E7E4405BB215F27338D09E6"><enum>(2)</enum><text display-inline="yes-display-inline">adequate supervision and appropriate regulation for custody and safekeeping of digital assets by—</text> <subparagraph id="HF719A3B1E84F4A8D8550139295591AF8"><enum>(A)</enum><text>a State bank supervisor (within the meaning of section 3 of the Federal Deposit Insurance Act);</text></subparagraph> <subparagraph id="H4FD296D8A459412C91F7BB40EEFE8BEC"><enum>(B)</enum><text display-inline="yes-display-inline">a State credit union supervisor, as defined under section 6003 of the Anti-Money Laundering Act of 2020; or</text></subparagraph> <subparagraph id="H43AB91E4593A4E7487CC9463F18781A1"><enum>(C)</enum><text>an appropriate foreign governmental authority in the home country of the digital commodity custodian.</text></subparagraph></paragraph></subsection> <subsection id="H115CEB96432D49F4B27327747F9188DA"><enum>(c)</enum><header>Other requirements</header><text display-inline="yes-display-inline">A person shall be in compliance with this subsection if:</text> <paragraph id="HBA4051B825A24973A7C2B0E055484DB9"><enum>(1)</enum><header>Not otherwise prohibited</header><text display-inline="yes-display-inline">The person has not been prohibited by its supervisor from engaging in an activity with respect to the custody and safekeeping of digital assets.</text></paragraph> <paragraph id="HD42910F99B444B78A90A87D305E2C9AE"><enum>(2)</enum><header>Information sharing</header> <subparagraph id="H8D0373DAECFC4266BE0CF589CE42B5C8"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The person shares information with the Commission on request and complies with such requirements for periodic sharing of information regarding customer accounts that the person holds on behalf of an entity registered with the Commission as the Commission determines by rule are reasonably necessary to effectuate any of the provisions, or to accomplish any of the purposes, of this Act.</text></subparagraph> <subparagraph id="HE4921A88D5BC4E9D96A1E9F78B73ACCD"><enum>(B)</enum><header>Provision of information</header><text>If the person is subject to regulation and examination by an appropriate Federal banking agency, the person may satisfy any information request described in subparagraph (A) by providing the Commission with a detailed listing, in writing, of the digital assets of a customer in the custody of, or use by, the person.</text></subparagraph> <subparagraph id="H4834FF173E614409A909D017C2A5CA06"><enum>(C)</enum><header>Rulemaking for CFTC entities</header> <clause id="HF1871DB23E3B4015858F4273A15D8D8E"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">The Commission shall prescribe rules to permit a person registered with the Commission to be a qualified digital asset custodian in compliance with this section.</text></clause> <clause id="HFC7375E374CA4C49870CD9E184FC6207"><enum>(ii)</enum><header>Content</header><text>In prescribing the rules under subparagraph (A), the Commission shall require a person registered with the Commission to—</text> <subclause id="HBF0AA1BDD1CA4A2A9BEA43982B355B05"><enum>(I)</enum><text>implement requirement consistent with the requirements in subsection (d)(1);</text></subclause> <subclause id="HD6A8114506FB485FB967AB6C7DB11FAF"><enum>(II)</enum><text>establish sufficient system safeguards;</text></subclause> <subclause id="HCB26A4E180FF43E38CEFFDAD8E1D1CB5"><enum>(III)</enum><text>prevent or mitigate conflicts of interest, as appropriate; and</text></subclause> <subclause id="HEDF0577FBD7E445780FEFD44CAADD659"><enum>(IV)</enum><text>establish separate governance arrangements for the custodial function of the entity.</text></subclause></clause></subparagraph></paragraph></subsection> <subsection id="HFC71137B6D22491C894C9F4D18DB5FE5"><enum>(d)</enum><header>Adequate supervision and appropriate regulation</header> <paragraph id="H847F35884AFF4337885C6CCCCD5F6AA9"><enum>(1)</enum><header>In general</header><text>For purposes of subsection (b), the terms <term>adequate supervision</term> and <term>appropriate regulation</term> mean such minimum standards for supervision and regulation as are reasonably necessary to protect the digital assets held by a person registered under this Act, including standards relating to the licensing, examination, and supervisory processes that require the person to, at a minimum—</text> <subparagraph id="H7C4EE6A89372426FAB73E894ECED516C"><enum>(A)</enum><text display-inline="yes-display-inline">receive a review and evaluation of ownership, character and fitness, conflicts of interest, business model, financial statements, funding resources, and policies and procedures of the person;</text></subparagraph> <subparagraph id="H3619C03AA26543B19D6CCFD71CFF30CE"><enum>(B)</enum><text>hold capital sufficient for the financial integrity of the person;</text></subparagraph> <subparagraph id="HCFE1906050E0403DAA3135F1E3C023E0"><enum>(C)</enum><text>protect customer assets;</text></subparagraph> <subparagraph id="HCA01AB811A5F48BE89E8C4075FDB8FC8"><enum>(D)</enum><text>establish and maintain books and records regarding the business of the person;</text></subparagraph> <subparagraph id="HB46B310004874273AC026AB46C2C8AD1"><enum>(E)</enum><text>submit financial statements and audited financial statements to the applicable supervisor described in subsection (b);</text></subparagraph> <subparagraph id="HA94D6F15B970401CBCAD0A90E13BDEC1"><enum>(F)</enum><text display-inline="yes-display-inline">provide disclosures to the applicable supervisor described in subsection (b) regarding actions, proceedings, and other items as determined by the supervisor;</text></subparagraph> <subparagraph id="HC8036B9FDE70484AB46352C18CA977DA"><enum>(G)</enum><text>maintain and enforce policies and procedures for compliance with applicable State and Federal laws, including those related to anti-money laundering and cybersecurity;</text></subparagraph> <subparagraph id="H1F9DD1B8012A46F89DC0386BDB07CB8E"><enum>(H)</enum><text>establish a business continuity plan to ensure functionality in cases of disruption; and</text></subparagraph> <subparagraph id="HDCE5DB6D416245CFBB0A7A3FC229E1A6"><enum>(I)</enum><text>establish policies and procedures to resolve complaints.</text></subparagraph></paragraph> <paragraph id="HE907D1708F0B43E0ABB537E073B11557"><enum>(2)</enum><header>Rulemaking with respect to definitions</header> <subparagraph id="HEEABEBCDD9354A269EF9CF401F3EB559"><enum>(A)</enum><header>In general</header><text>For purposes of this section, the Commission may, by rule, further define the terms <term>adequate supervision</term> and <term>appropriate regulation</term> as necessary and appropriate for the protection of customers, and consistent with the purposes of this Act.</text></subparagraph> <subparagraph id="H0A0C1E7C72334CF582CA629CF6099485"><enum>(B)</enum><header>Conditional treatment of certain custodians before rulemaking</header><text display-inline="yes-display-inline">Before the effective date of a rulemaking under subparagraph (A), a trust company is deemed subject to adequate supervision and appropriate regulation if—</text> <clause id="HC6A7FE0D775446938DF7342A461F2D7D"><enum>(i)</enum><text>the trust company is expressly permitted by a State bank supervisor to engage in the custody and safekeeping of digital assets;</text></clause> <clause id="H0F5326DBDC4F4D7A8C533D84FC52B2F1"><enum>(ii)</enum><text display-inline="yes-display-inline">the State bank supervisor has established licensing, examination, and supervisory processes that require the trust company to, at a minimum, meet the conditions described in subparagraphs (A) through (I) of paragraph (1); and</text></clause> <clause id="H7C40CA4762AF402CB98E9C505214146E"><enum>(iii)</enum><text display-inline="yes-display-inline">the trust company is in good standing with its State bank supervisor.</text></clause></subparagraph> <subparagraph id="H465081726E994422A532D03DD47EB24D"><enum>(C)</enum><header>Transition period for certain custodians</header><text display-inline="yes-display-inline">In implementing the rulemaking under subparagraph (A), the Commission shall provide a transition period of not less than 2 years for any trust company that is deemed subject to adequate supervision and appropriate regulation under subparagraph (B) on the effective date of the rulemaking.</text></subparagraph></paragraph></subsection> <subsection id="H32E16D46E50349E3A7D66C16EFFF194C"><enum>(e)</enum><header>Authority To temporarily suspend standards</header><text display-inline="yes-display-inline">The Commission may, by rule or order, temporarily suspend, in whole or in part, any requirement imposed under, or any standard referred to in, this section if the Commission determines that the suspension would be consistent with the public interest and the purposes of this Act.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H0C0E6210EEAE4BCBB4F066E405F95175"><enum>406.</enum><header>Registration and regulation of digital commodity brokers and dealers</header><text display-inline="no-display-inline">The Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1">7 U.S.C. 1 et seq.</external-xref>) is amended by inserting after section 4t the following:</text> <quoted-block style="OLC" id="HE440BD6CC6774040A1B3FAE57BD9A780" display-inline="no-display-inline"> <section id="H3F0BB54936F54FF7BEDC608D18808DDA"><enum>4u.</enum><header>Registration and regulation of digital commodity brokers and dealers</header> <subsection id="H130BFA4731FE400D92D1E33C9F95B49C"><enum>(a)</enum><header>Registration</header> <paragraph id="H27D40E98A33E423C99840A3DB0F23CBC"><enum>(1)</enum><header>Requirement</header><text>It shall be unlawful for any person to act as a digital commodity broker or digital commodity dealer unless the person is registered as such with the Commission.</text></paragraph> <paragraph id="HB1DED4A1BBE0477BA42D54C2945E6046"><enum>(2)</enum><header>Additional registration</header> <subparagraph id="H82E4A404168F4299A248D7953BB41C2B"><enum>(A)</enum><header>Rules</header><text>In order to foster the development of fair and orderly markets, protect customers, and promote responsible innovation, the Commission—</text> <clause id="HD4EFE9BCC9A54669A75F96143F2C7674"><enum>(i)</enum><text>shall prescribe rules to exempt an entity registered with the Commission under more than 1 section of this Act from duplicative, conflicting, or unduly burdensome provisions of this Act and the rules under this Act;</text></clause> <clause id="H67200E6591D3471C89CB737B1C3F0BA5"><enum>(ii)</enum><text>shall prescribe rules to address conflicts of interests and the activities of the entity; and</text></clause> <clause id="HAB58D8F6C3504061B264C6EA0C0C0B26"><enum>(iii)</enum><text>may after an analysis of the risks and benefits, prescribe rules to provide for portfolio margining.</text></clause></subparagraph> <subparagraph id="H5E35FF4DF70B4DD495DEB89BA57B3180"><enum>(B)</enum><header>With membership in a registered futures association</header><text>Any person required to be registered as a digital commodity broker or digital commodity dealer under this section shall be a member of a registered futures association.</text></subparagraph></paragraph></subsection> <subsection id="H73EFAD21056544E8B3FB0D0BF347750E"><enum>(b)</enum><header>Requirements</header> <paragraph id="HE65107C0934F49398834FE50B79E35C4"><enum>(1)</enum><header>In general</header><text>A person shall register as a digital commodity broker or digital commodity dealer by filing a registration application with the Commission.</text></paragraph> <paragraph id="HC73ADDA33EAA4E69B548C22C49B7FE89"><enum>(2)</enum><header>Contents</header> <subparagraph id="HC9A0A76A6B2D4BE4BD942BEA102F6A01"><enum>(A)</enum><header>In general</header><text>The application shall be made in such form and manner as is prescribed by the Commission, and shall contain such information as the Commission considers necessary concerning the business in which the applicant is or will be engaged.</text></subparagraph> <subparagraph id="HFD26E7ED3C54440ABAD920B78E2876D0"><enum>(B)</enum><header>Continual reporting</header><text>A person that is registered as a digital commodity broker or digital commodity dealer shall continue to submit to the Commission reports that contain such information pertaining to the business of the person as the Commission may require.</text></subparagraph></paragraph> <paragraph id="H344F75C45E8F4F8EB6E0A11C28C034A8"><enum>(3)</enum><header>Statutory disqualification</header><text>Except to the extent otherwise specifically provided by rule, regulation, or order, it shall be unlawful for a digital commodity broker or digital commodity dealer to permit any person who is associated with a digital commodity broker or a digital commodity dealer and who is subject to a statutory disqualification to effect or be involved in effecting a contract of sale of a digital commodity on behalf of the digital commodity broker or the digital commodity dealer, respectively, if the digital commodity broker or digital commodity dealer, respectively, knew, or in the exercise of reasonable care should have known, of the statutory disqualification.</text></paragraph></subsection> <subsection id="HEA3D383995854830BA0A4B65011C18C7"><enum>(c)</enum><header>Rulemaking</header> <paragraph id="H20A40EEDFB0A4327AB793F5EA4601318"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The Commission shall prescribe such rules applicable to registered digital commodity brokers and registered digital commodity dealers as are appropriate to carry out this section, including rules in the public interest that limit the activities of digital commodity brokers and digital commodity dealers.</text></paragraph> <paragraph id="H73092344B9594F0FB3ED2A9B789BECC7"><enum>(2)</enum><header>Financing agreements</header> <subparagraph id="HA643D6AF30344FA9ABF80626AF59C3FC"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The Commission shall prescribe rules and regulations applicable to digital commodity brokers or digital commodity dealers which shall set forth minimum requirements related to disclosure, recordkeeping, margin and financing arrangements, rehypothecation, capital, reporting, business conduct, documentation, and supervision of employees and agents, in connection with—</text> <clause id="H37202E970B8D49208C63FFD716B80F1B"><enum>(i)</enum><text>an agreement described in section 2(c)(2)(D)(iv); or</text></clause> <clause id="H9DD43A3E9EE94AE5BD480DDC2357C148"><enum>(ii)</enum><text>any other margined, leveraged, or financing arrangement for the purchase or sale of a digital commodity with an eligible contract participant.</text></clause></subparagraph> <subparagraph id="HCA7B55147E7F4038B26581F8E7313E4F"><enum>(B)</enum><header>Specific authority</header><text>Except as prohibited in section 2(c)(2)(G)(iii), the Commission may also make, promulgate, and enforce such rules and regulations as, in the judgment of the Commission, are reasonably necessary to effectuate any of the provisions of, or to accomplish any of the purposes of, this Act in connection with an agreement referred to in subparagraph (A) of this paragraph, which may include, without limitation, requirements regarding registration with the Commission and membership in a registered futures association.</text></subparagraph></paragraph></subsection> <subsection id="HED654661C419431E9E48BE50947E5CAE"><enum>(d)</enum><header>Capital requirements</header> <paragraph id="HD97EF470EC934DE69DBD4D21B3F19DFA"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Each digital commodity broker and digital commodity dealer shall meet such minimum capital requirements as the Commission may prescribe to address the risks associated with digital commodity trading and to ensure that the digital commodity broker or digital commodity dealer, respectively, is able, at all times, to—</text> <subparagraph id="H05E8F35E063247AB8453F6C30DDB3874"><enum>(A)</enum><text display-inline="yes-display-inline">meet, and continue to meet the obligations of such a registrant; and</text></subparagraph> <subparagraph id="HD0F9A881FD07491482595670ACCD5EAE"><enum>(B)</enum><text>fulfill obligations to customers or counterparties for any margined, leveraged, or financed transactions.</text></subparagraph></paragraph> <paragraph id="HA2BBCE220F0E4D81861867200766BB85" commented="no"><enum>(2)</enum><header>Futures commission merchants and other dealers</header><text>Each futures commission merchant, introducing broker, digital commodity broker, digital commodity dealer, broker, and dealer shall maintain sufficient capital to comply with the stricter of any applicable capital requirements to which the futures commission merchant, introducing broker, digital commodity broker, digital commodity dealer, broker, or dealer, respectively, is subject under this Act or the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78a">15 U.S.C. 78a et seq.</external-xref>).</text></paragraph></subsection> <subsection id="H85BF525DEC1743BAB8363C6270E5891F"><enum>(e)</enum><header>Reporting and recordkeeping</header><text>Each digital commodity broker and digital commodity dealer—</text> <paragraph id="H7A3A1CC283894605A287611FF49B8B49"><enum>(1)</enum><text>shall make such reports as are required by the Commission by rule or regulation regarding the transactions, positions, and financial condition of the digital commodity broker or digital commodity dealer, respectively;</text></paragraph> <paragraph id="HD6467D58701C414EA8D8BDAAB9F0841D"><enum>(2)</enum><text>shall keep books and records in such form and manner and for such period as may be prescribed by the Commission by rule or regulation; and</text></paragraph> <paragraph id="H8823341471AB45DDA5513E00A8FC0006"><enum>(3)</enum><text>shall keep the books and records open to inspection and examination by any representative of the Commission.</text></paragraph></subsection> <subsection id="H11677593C69848578E30ABDCEF41F579"><enum>(f)</enum><header>Daily trading records</header> <paragraph id="HD9051D0722944329BD45D4749F853740"><enum>(1)</enum><header>In general</header><text>Each digital commodity broker and digital commodity dealer shall maintain daily trading records of the transactions of the digital commodity broker or digital commodity dealer, respectively, and all related records (including related forward or derivatives transactions) and recorded communications, including electronic mail, instant messages, and recordings of telephone calls, for such period as the Commission may require by rule or regulation.</text></paragraph> <paragraph id="H5D7F61EC6B2E4822BA38DF92793F68A6"><enum>(2)</enum><header>Information requirements</header><text>The daily trading records shall include such information as the Commission shall require by rule or regulation.</text></paragraph> <paragraph id="H0CBACFD844AD423AA84CD30413627603"><enum>(3)</enum><header>Counterparty records</header><text>Each digital commodity broker and digital commodity dealer shall maintain daily trading records for each customer or counterparty in a manner and form that is identifiable with each digital commodity transaction.</text></paragraph> <paragraph id="H807A6D8D38184740A8ABFB92270AC737"><enum>(4)</enum><header>Audit trail</header><text>Each digital commodity broker and digital commodity dealer shall maintain a complete audit trail for conducting comprehensive and accurate trade reconstructions.</text></paragraph></subsection> <subsection id="H230B805A40F24530B02578DC9454803B"><enum>(g)</enum><header>Business conduct standards</header> <paragraph id="H9BB4CD935AAA46EFAC5B84DE63ED56B5"><enum>(1)</enum><header>In general</header><text>Each digital commodity broker and digital commodity dealer shall conform with such business conduct standards as the Commission, by rule or regulation, prescribes related to—</text> <subparagraph id="HDBAEC2ADB98440C7AAD7E01E9B073302"><enum>(A)</enum><text>fraud, manipulation, and other abusive practices involving spot or margined, leveraged, or financed digital commodity transactions (including transactions that are offered but not entered into);</text></subparagraph> <subparagraph id="H1439EA94DC044794825D87F53638C20A"><enum>(B)</enum><text>diligent supervision of the business of the registered digital commodity broker or digital commodity dealer, respectively; and</text></subparagraph> <subparagraph id="HB663C8DA6CCF4AD28BC5389CF2307D77"><enum>(C)</enum><text>such other matters as the Commission deems appropriate.</text></subparagraph></paragraph> <paragraph id="HA2B8AECD35B343EFAF0EF6DA503D0075"><enum>(2)</enum><header>Business conduct requirements</header><text>The Commission shall, by rule, prescribe business conduct requirements which—</text> <subparagraph id="H51257067CBB94004953F6A1EA7E1554F"><enum>(A)</enum><text>require disclosure by a registered digital commodity broker and registered digital commodity dealer to any counterparty to the transaction (other than an eligible contract participant) of—</text> <clause id="H413BE691DC6D4264B8C4CB2BEFBACB72"><enum>(i)</enum><text>information about the material risks and characteristics of the digital commodity;</text></clause> <clause id="H1797BFCF4647406CBA0349EDFA0DF0E5"><enum>(ii)</enum><text>information about the material risks and characteristics of the transaction;</text></clause></subparagraph> <subparagraph id="H5AAB8D429E484570B7E42CD2AA03C54D"><enum>(B)</enum><text>establish a duty for such a digital commodity broker and such a digital commodity dealer to communicate in a fair and balanced manner based on principles of fair dealing and good faith;</text></subparagraph> <subparagraph id="HD1A7A5691FE640B5B032F18E385E54BA"><enum>(C)</enum><text display-inline="yes-display-inline">establish standards governing digital commodity broker and digital commodity dealer marketing and advertising, including testimonials and endorsements; and</text></subparagraph> <subparagraph id="H1B70605D3D1B4E5183640F1034CB8F55"><enum>(D)</enum><text display-inline="yes-display-inline">establish such other standards and requirements as the Commission may determine are appropriate for the protection of customers.</text></subparagraph></paragraph> <paragraph id="H3F60BC91F14745799D5F4C5D1D62D61F"><enum>(3)</enum><header>Prohibition on fraudulent practices</header><text>It shall be unlawful for a digital commodity broker or digital commodity dealer to—</text> <subparagraph id="H0066F52CC849441BB7B8A7A7F68FD7C5"><enum>(A)</enum><text>employ any device, scheme, or artifice to defraud any customer or counterparty;</text></subparagraph> <subparagraph id="H39E0D1A6C89E4FCB8D1026C58E6B93CF"><enum>(B)</enum><text>engage in any transaction, practice, or course of business that operates as a fraud or deceit on any customer or counterparty; or</text></subparagraph> <subparagraph id="H4B9E0CD77B224670B63698304DC578E1"><enum>(C)</enum><text>engage in any act, practice, or course of business that is fraudulent, deceptive, or manipulative.</text></subparagraph></paragraph></subsection> <subsection id="H1E977C5FBEC3426C8C4CC48FE94CF639"><enum>(h)</enum><header>Duties</header> <paragraph id="HFB8C0A2921624AF4B19850F48134B8BA"><enum>(1)</enum><header>Risk management procedures</header><text>Each digital commodity broker and digital commodity dealer shall establish robust and professional risk management systems adequate for managing the day-to-day business of the digital commodity broker or digital commodity dealer, respectively.</text></paragraph> <paragraph id="HD4FC52D6895F407298466F981BA4FCB7"><enum>(2)</enum><header>Disclosure of general information</header><text>Each digital commodity broker and digital commodity dealer shall disclose to the Commission information concerning—</text> <subparagraph id="H6EA4BC4B6AFC4987BDCE095EFAD027C7"><enum>(A)</enum><text display-inline="yes-display-inline">the terms and conditions of the transactions of the digital commodity broker or digital commodity dealer, respectively;</text></subparagraph> <subparagraph id="HF11F43EE3B644D0AA5A449259A288CBC"><enum>(B)</enum><text display-inline="yes-display-inline">the trading operations, mechanisms, and practices of the digital commodity broker or digital commodity dealer, respectively;</text></subparagraph> <subparagraph id="H7399FF714B994BFC97938EB978CBCF20"><enum>(C)</enum><text display-inline="yes-display-inline">financial integrity protections relating to the activities of the digital commodity broker or digital commodity dealer, respectively; and</text></subparagraph> <subparagraph id="HC13EE7B9C31F4906A0B296A313DDC9C2"><enum>(D)</enum><text display-inline="yes-display-inline">other information relevant to trading in digital commodities by the digital commodity broker or digital commodity dealer, respectively.</text></subparagraph></paragraph> <paragraph id="HA3D109AD5CC44F048E9AEE82CFAF69C5"><enum>(3)</enum><header>Ability to obtain information</header><text>Each digital commodity broker and digital commodity dealer shall—</text> <subparagraph id="HA0C4E33197FB43C9B37BB4B1898F06E5"><enum>(A)</enum><text>establish and enforce internal systems and procedures to obtain any necessary information to perform any of the functions described in this section; and</text></subparagraph> <subparagraph id="H937DC23DDFE34FE684C8CE5C5CCA8135"><enum>(B)</enum><text>provide the information to the Commission, on request.</text></subparagraph></paragraph> <paragraph id="HAF77E0C0F3A44332B7244CB0E8C099B5"><enum>(4)</enum><header>Conflicts of interest</header><text display-inline="yes-display-inline">Each digital commodity broker and digital commodity dealer shall establish, maintain, and enforce written policies and procedures reasonably designed, taking into consideration the nature of the business of the person, to mitigate any conflicts of interest in transactions or arrangements with affiliates.</text></paragraph> <paragraph id="HB0DB71AB7C1E48639E9737E3CC407D22"><enum>(5)</enum><header>Antitrust considerations</header><text>Unless necessary or appropriate to achieve the purposes of this Act, a digital commodity broker or digital commodity dealer shall not—</text> <subparagraph id="H819D5CB9E29D4A74901325BBEB642C35"><enum>(A)</enum><text>adopt any process or take any action that results in any unreasonable restraint of trade; or</text></subparagraph> <subparagraph id="HCC93528D50C9467790BA24AEFCC77364"><enum>(B)</enum><text>impose any material anticompetitive burden on trading or clearing.</text></subparagraph></paragraph></subsection> <subsection id="H5891BA713B6A4247A4AD7452BC9D9214"><enum>(i)</enum><header>Designation of chief compliance officer</header> <paragraph id="HBF002DF1E2CC4A22913DC6E6032C0393"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Each digital commodity broker and digital commodity dealer shall designate an individual to serve as a chief compliance officer.</text></paragraph> <paragraph id="H1FCC8614050E43358997AC1F83420E90"><enum>(2)</enum><header>Duties</header><text>The chief compliance officer shall—</text> <subparagraph id="HB02F94E72CDF429BADD322EC47857EE1"><enum>(A)</enum><text>report directly to the board or to the senior officer of the registered digital commodity broker or registered digital commodity dealer;</text></subparagraph> <subparagraph id="H916334DFB2464DFA8768D8EDD5E11AFF"><enum>(B)</enum><text>review the compliance of the registered digital commodity broker or registered digital commodity dealer with respect to the registered digital commodity broker and registered digital commodity dealer requirements described in this section;</text></subparagraph> <subparagraph id="HDE071B859DAD41E39B9662B05BE3DC36"><enum>(C)</enum><text>in consultation with the board of directors, a body performing a function similar to the board, or the senior officer of the organization, resolve any conflicts of interest that may arise;</text></subparagraph> <subparagraph id="HB9517F053C34458095D054F72D7D38FF"><enum>(D)</enum><text>be responsible for administering each policy and procedure that is required to be established pursuant to this section;</text></subparagraph> <subparagraph id="H3B2467BAC40C441F9158C81E9419EBCF"><enum>(E)</enum><text>ensure compliance with this Act (including regulations), including each rule prescribed by the Commission under this section;</text></subparagraph> <subparagraph id="H724E356FA4824D2BA68DE67233047195"><enum>(F)</enum><text>establish procedures for the remediation of noncompliance issues identified by the chief compliance officer through any—</text> <clause id="H2AC540535AC44AEA893798C58AB55718"><enum>(i)</enum><text>compliance office review;</text></clause> <clause id="H3C1603F6301E4CE3B14E59A7CD299A65"><enum>(ii)</enum><text>look-back;</text></clause> <clause id="HA44E89344C3B4E6C9C245D4F409FC500"><enum>(iii)</enum><text>internal or external audit finding;</text></clause> <clause id="H4D32C279C0F244B5BC3114001B9AE058"><enum>(iv)</enum><text>self-reported error; or</text></clause> <clause id="H13233279496F4669A8F6F482C9C50B88"><enum>(v)</enum><text>validated complaint; and</text></clause></subparagraph> <subparagraph id="H21AD981C0C0D4DB28033DF8F2187E54F"><enum>(G)</enum><text>establish and follow appropriate procedures for the handling, management response, remediation, retesting, and closing of noncompliance issues.</text></subparagraph></paragraph> <paragraph id="H00269FC010504108B6F1400ECAA036F5"><enum>(3)</enum><header>Annual reports</header> <subparagraph id="H8A38AC91BA3A45BFA5B62DCA9F544A64"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">In accordance with rules prescribed by the Commission, the chief compliance officer shall annually prepare and sign a report that contains a description of—</text> <clause id="H435F00FA86564C30B0BC836E8B3473B9"><enum>(i)</enum><text>the compliance of the registered digital commodity broker or registered digital commodity dealer with this Act (including regulations); and</text></clause> <clause id="H982BF3016D46484AA2A4A08FD5561463"><enum>(ii)</enum><text>each policy and procedure of the registered digital commodity broker or registered digital commodity dealer followed by the chief compliance officer (including the code of ethics and conflict of interest policies).</text></clause></subparagraph> <subparagraph id="H974394DB409F44A2AB088C75F84568EE"><enum>(B)</enum><header>Requirements</header><text>The chief compliance officer shall ensure that a compliance report under subparagraph (A)—</text> <clause id="H9D7846B9FE624997AEA93AA835AD46C3"><enum>(i)</enum><text>accompanies each appropriate financial report of the registered digital commodity broker or registered digital commodity dealer that is required to be furnished to the Commission pursuant to this section; and</text></clause> <clause id="HA6904058640548488FF93FABBBCAC9D3"><enum>(ii)</enum><text>includes a certification that, under penalty of law, the compliance report is accurate and complete.</text></clause></subparagraph></paragraph></subsection> <subsection id="H58FB1B951DBF4B5D82E5550C4FF5EE30"><enum>(j)</enum><header>Segregation of digital commodities</header> <paragraph id="H73A02602057B4B04A419A55D0D496BF9"><enum>(1)</enum><header>Holding of customer assets</header> <subparagraph id="H1C02FE7F9C124BE2983DD43F58DB19A0"><enum>(A)</enum><header>In general</header><text>Each digital commodity broker and digital commodity dealer shall hold customer money, assets, and property in a manner to minimize the risk of loss to the customer or unreasonable delay in customer access to the money, assets, and property of the customer.</text></subparagraph> <subparagraph id="HBCFDA3C7E01C424AA084504F2BF2F5A3"><enum>(B)</enum><header>Qualified digital asset custodian</header><text>Each digital commodity broker and digital commodity dealer shall hold in a qualified digital asset custodian each unit of a digital asset that is—</text> <clause id="H4EEC98F385CA47638F6B85270B429F34"><enum>(i)</enum><text>the property of a customer or counterparty of the digital commodity broker or digital commodity dealer, respectively;</text></clause> <clause id="H5B870C3BCC6442FBA798CC7E41B0D275"><enum>(ii)</enum><text display-inline="yes-display-inline">required to be held by the digital commodity broker or digital commodity dealer under subsection (e); or</text></clause> <clause id="HED3105B9B79240F19E07FACA0B235A2F"><enum>(iii)</enum><text>otherwise so required by the Commission to reasonably protect customers or promote the public interest.</text></clause></subparagraph></paragraph> <paragraph id="H4F7C73E30A214822A1CD356AD22E16CB"><enum>(2)</enum><header>Segregation of funds</header> <subparagraph id="H82B69B6C6E024ACBB5C40405270101DA"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">Each digital commodity broker and digital commodity dealer shall treat and deal with all money, assets, and property that is received by the digital commodity broker or digital commodity dealer, or accrues to a customer as the result of trading in digital commodities, as belonging to the customer.</text></subparagraph> <subparagraph id="H123251AA22A2479288B5D2D6AFBC4D79"><enum>(B)</enum><header>Commingling prohibited</header> <clause id="HCD39E9EAF8C54598BE959A981A88FE55"><enum>(i)</enum><header>In general</header><text>Except as provided in clause (ii), each digital commodity broker and digital commodity dealer shall separately account for money, assets, and property of a digital commodity customer, and shall not commingle any such money, assets, or property with the funds of the digital commodity broker or digital commodity dealer, respectively, or use any such money, assets, or property to margin, secure, or guarantee any trades or accounts of any customer or person other than the person for whom the money, assets, or property are held.</text></clause> <clause id="H75002D37564347358479BAA7702F89BB"><enum>(ii)</enum><header>Exceptions</header> <subclause id="HF6509C482E30464AACEFB6C37EFAA722"><enum>(I)</enum><header>Use of funds</header> <item id="H1EEFC46063A143EBB9DFCD639AF8050C"><enum>(aa)</enum><header>In general</header><text display-inline="yes-display-inline">A digital commodity broker or digital commodity dealer may, for convenience, commingle and deposit in the same account or accounts with any bank, trust company, derivatives clearing organization, or qualified digital asset custodian money, assets, and property of customers.</text></item> <item id="H07AFA63B454C46B19FC286D14FA2CA28"><enum>(bb)</enum><header>Withdrawal</header><text>The share of the money, assets, and property described in item (aa) as in the normal course of business shall be necessary to margin, guarantee, secure, transfer, adjust, or settle a contract of sale of a digital commodity with a registered entity may be withdrawn and applied to such purposes, including the payment of commissions, brokerage, interest, taxes, storage, and other charges, lawfully accruing in connection with the contract.</text></item></subclause> <subclause id="H4A62CBBDFA174A6D9358FB6849BE89AE"><enum>(II)</enum><header>Commission action</header><text>In accordance with such terms and conditions as the Commission may prescribe by rule, regulation, or order, any money, assets, or property of the customers of a digital commodity broker or digital commodity dealer may be commingled and deposited in customer accounts with any other money, assets, or property received by the digital commodity broker or digital commodity dealer, respectively, and required by the Commission to be separately accounted for and treated and dealt with as belonging to the customer of the digital commodity broker or digital commodity dealer, respectively.</text></subclause></clause></subparagraph></paragraph> <paragraph id="HB60E217D8E884DF1B05B83EC7B3C42F2"><enum>(3)</enum><header>Permitted investments</header><text>Money described in paragraph (2) may be invested in obligations of the United States, in general obligations of any State or of any political subdivision of a State, in obligations fully guaranteed as to principal and interest by the United States, or in any other investment that the Commission may by rule or regulation allow.</text></paragraph> <paragraph id="H4D009AB8ECBC4CFD9BF8644B2B365BC5" commented="no"><enum>(4)</enum><header>Customer protection during bankruptcy</header> <subparagraph id="H8E8726F6916F46048C467D9AF126D29B" commented="no"><enum>(A)</enum><header>Customer property</header><text>All money, assets, or property described in paragraph (2) shall be considered customer property for purposes of section 761 of title 11, United States Code.</text></subparagraph> <subparagraph id="H7F565E351CDF46249968574A1AE1F53E" commented="no"><enum>(B)</enum><header>Transactions</header><text>A transaction involving a unit of a digital commodity occurring with a digital commodity broker or digital commodity dealer shall be considered a <quote>contract for the purchase or sale of a commodity for future delivery, on or subject to the rules of, a contract market or board of trade</quote> for purposes of the definition of a <quote>commodity contract</quote> in section 761 of title 11, United States Code.</text></subparagraph> <subparagraph id="H4EF56DA629224195AB6B2775234C71F1" commented="no"><enum>(C)</enum><header>Brokers and dealers</header><text>A digital commodity broker and a digital commodity dealer shall be considered a futures commission merchant for purposes of section 761 of title 11, United States Code.</text></subparagraph> <subparagraph id="H164C035A92CB4516A119C494E55ED3C0" commented="no"><enum>(D)</enum><header>Assets removed from segregation</header><text>Assets removed from segregation due to a customer election under paragraph (6) shall not be considered customer property for purposes of section 761 of title 11, United States Code.</text></subparagraph></paragraph> <paragraph id="H8616A13E21F34C68A2667EA3F7BF4EB2"><enum>(5)</enum><header>Misuse of customer property</header> <subparagraph id="H0A77DD672C0C492DB7AC8712E4125F51"><enum>(A)</enum><header>In general</header><text>It shall be unlawful—</text> <clause id="H5F23EAD2DC2741B38173271BF302092C"><enum>(i)</enum><text display-inline="yes-display-inline">for any digital commodity broker or digital commodity dealer that has received any customer money, assets, or property for custody to dispose of, or use any such money, assets, or property as belonging to the digital commodity broker or digital commodity dealer, respectively, or any person other than a customer of the digital commodity broker or digital commodity dealer, respectively; or</text></clause> <clause id="HC0B9BD65DA0D46B7BE9EA7CF819535C5"><enum>(ii)</enum><text>for any other person, including any depository, digital commodity exchange, other digital commodity broker, other digital commodity dealer, or digital commodity custodian that has received any customer money, assets, or property for deposit, to hold, dispose of, or use any such money, assets, or property, as belonging to the depositing digital commodity broker or digital commodity dealer or any person other than the customers of the digital commodity broker or digital commodity dealer, respectively.</text></clause></subparagraph> <subparagraph id="H7D5987C7380745348581F54984AEBA6F"><enum>(B)</enum><header>Use further defined</header><text>For purposes of this section, <quote>use</quote> of a digital commodity includes utilizing any unit of a digital asset to participate in a blockchain service defined in paragraph (6) or a decentralized governance system associated with the digital commodity or the blockchain system to which the digital commodity relates in any manner other than that expressly directed by the customer from whom the unit of a digital commodity was received.</text></subparagraph></paragraph> <paragraph id="HEED0F0C5600743A882E9B503C11C6C8E"><enum>(6)</enum><header>Participation in blockchain services</header> <subparagraph id="H420B15F32DAF4532857320F1AD88A508"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">A customer shall have the right to waive the restrictions in paragraph (2) for any unit of a digital commodity to be used under subparagraph (B) of this paragraph, by affirmatively electing, in writing to the digital commodity broker or digital commodity dealer, to waive the restrictions.</text></subparagraph> <subparagraph id="H2ECEEDC318BE4526B40AB2E8A389BBCD"><enum>(B)</enum><header>Use of funds</header><text>Customer digital commodities removed from segregation under subparagraph (A) may be pooled and used by the digital commodity broker or digital commodity dealer, or one of their designees, to provide a blockchain service for a blockchain system to which the unit of the digital asset removed from segregation in subparagraph (A) relates.</text></subparagraph> <subparagraph id="HB55C12AC71DB4D90920388BBE7FF2DE7"><enum>(C)</enum><header>Limitations</header> <clause id="H854BCAFCCD184A55BB4ABC1E45E31238"><enum>(i)</enum><header>In general</header><text>The Commission shall, by rule, establish notice and disclosure requirements, and may, by rule, establish any other limitations and rules related to the waiving of any restrictions under this paragraph that are reasonably necessary to protect customers, including eligible contract participants, non-eligible contract participants, or any other class of customers.</text></clause> <clause id="HFA23D717EE80461A8FDED073991AE7FC"><enum>(ii)</enum><header>Customer choice</header><text display-inline="yes-display-inline">A digital commodity broker or digital commodity dealer may not require a waiver from a customer described in subparagraph (A) as a condition of doing business with the broker or dealer.</text></clause></subparagraph> <subparagraph id="HD5E2B60A2E18443597F187E6451C3493"><enum>(D)</enum><header>Blockchain service defined</header><text>In this subparagraph, the term <term>blockchain service</term> means any activity relating to validating transactions on a blockchain system, providing security for a blockchain system, or other similar activity required for the ongoing operation of a blockchain system.</text></subparagraph></paragraph></subsection> <subsection id="HBDDCB7BBD3CD4C4D85155385AB13BD5B"><enum>(k)</enum><header>Federal preemption</header><text display-inline="yes-display-inline">Notwithstanding any other provision of law, the Commission shall have exclusive jurisdiction over any digital commodity broker or digital commodity dealer registered under this section with respect to activities subject to this Act, except as provided in section 5k.</text></subsection> <subsection id="HD9C69532FD1E40E1BCDB67EE7DB23BD4"><enum>(l)</enum><header>Exemptions</header><text display-inline="yes-display-inline">In order to promote responsible innovation and fair competition, or protect customers, the Commission may (on its own initiative or on application of the registered digital commodity broker or registered digital commodity dealer) exempt, unconditionally or on stated terms or conditions, or for stated periods, and retroactively or prospectively, or both, a registered digital commodity broker or registered digital commodity dealer from the requirements of this section, if the Commission determines that—</text> <paragraph id="H801395E9F7BA40EA9C558E968186FCA3"><enum>(1)</enum> <subparagraph commented="no" display-inline="yes-display-inline" id="H95855CE083D2471ABFAB909A51A5C356"><enum>(A)</enum><text>the exemption would be consistent with the public interest and the purposes of this Act; and</text></subparagraph> <subparagraph id="H2F8F1CFB7402444E8BE08E4243099CFC" indent="up1"><enum>(B)</enum><text>the exemption will not have a material adverse effect on the ability of the Commission to discharge regulatory duties under this Act; or</text></subparagraph></paragraph> <paragraph id="H1E525A69862B46E680206D149B1BB573"><enum>(2)</enum><text display-inline="yes-display-inline">the registered digital commodity broker or registered digital commodity dealer is subject to comparable, comprehensive supervision and regulation by the appropriate government authorities in the home country of the registered digital commodity broker or registered digital commodity dealer, respectively.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="HDB5DAB90C89846E6A4DEEE0EBBE169A3"><enum>407.</enum><header>Registration of associated persons</header> <subsection id="H4C54C00A0ADC4AB69239AF4EDF31AA16"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 4k of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/6k">7 U.S.C. 6k</external-xref>) is amended—</text> <paragraph id="H5D729A0AD5DC42CAA42CD359593E6807"><enum>(1)</enum><text>by redesignating subsections (4) through (6) as subsections (5) through (7), respectively;</text></paragraph> <paragraph id="H88E872C553364114A101DF81BC342C6B"><enum>(2)</enum><text>by inserting after subsection (3) the following:</text> <quoted-block style="OLC" id="H5645E77CEF774DEAA0F6DBED8B69B1FD" display-inline="no-display-inline"> <subsection id="HD79C7A67CF054ACABD03181A6155CBB8"><enum>(4)</enum><text display-inline="yes-display-inline">It shall be unlawful for any person to act as an associated person of a digital commodity broker or an associated person of a digital commodity dealer unless the person is registered with the Commission under this Act and such registration shall not have expired, been suspended (and the period of suspension has not expired), or been revoked. It shall be unlawful for a digital commodity broker or a digital commodity dealer to permit such a person to become or remain associated with the digital commodity broker or digital commodity dealer if the digital commodity broker or digital commodity dealer knew or should have known that the person was not so registered or that the registration had expired, been suspended (and the period of suspension has not expired), or been revoked.</text></subsection><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph> <paragraph id="HE6AD1D620F3C41998463848C0B2B3EF4"><enum>(3)</enum><text>in subsection (5) (as so redesignated), by striking <quote>or of a commodity trading advisor</quote> and inserting <quote>of a commodity trading advisor, of a digital commodity broker, or of a digital commodity dealer</quote>.</text></paragraph></subsection> <subsection id="HCCF2A01911F94356A97DEC5FF01D79BA"><enum>(b)</enum><header>Conforming amendments</header><text display-inline="yes-display-inline">The Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1a">7 U.S.C. 1a et seq.</external-xref>) is amended by striking <quote>section 4k(6)</quote> each place it appears and inserting <quote>section 4k(7)</quote>.</text></subsection></section> <section id="H2E70BE8BEA7A4B75AF58C118D0233E37"><enum>408.</enum><header>Registration of commodity pool operators and commodity trading advisors</header> <subsection id="HE37C5A27333042D88A6FCD9D4D1BCFB8"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 4m(3) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/6m">7 U.S.C. 6m(3)</external-xref>) is amended—</text> <paragraph id="HFE42A41F72F84EDFB250CF1458900DC2"><enum>(1)</enum><text display-inline="yes-display-inline">in subparagraph (A)—</text> <subparagraph id="H921DBA0244374DCB8A6BA10CAD966EEB"><enum>(A)</enum><text>by striking <quote>any commodity trading advisor</quote> and inserting <quote>a commodity pool operator or commodity trading advisor</quote>; and</text></subparagraph> <subparagraph id="HF362F7BA1EDB482E98F442F94128A828"><enum>(B)</enum><text>by striking <quote>acting as a commodity trading advisor</quote> and inserting <quote>acting as a commodity pool operator or commodity trading advisor</quote>; and</text></subparagraph></paragraph> <paragraph id="HAF07424515F1434DA665A42E61B28F0C"><enum>(2)</enum><text>in subparagraph (C), by inserting <quote>digital commodities,</quote> after <quote>physical commodities,</quote>.</text></paragraph></subsection> <subsection id="H8A7F2C584ED1416B8F457E4D2861C219"><enum>(b)</enum><header>Exemptive authority</header><text display-inline="yes-display-inline">Section 4m of such Act (<external-xref legal-doc="usc" parsable-cite="usc/7/6m">7 U.S.C. 6m</external-xref>) is amended by adding at the end the following:</text> <quoted-block style="OLC" id="H0307F614723F4F928E3A938807A1CBFA" display-inline="no-display-inline"> <subsection id="H3A58CFAFE1574801A3FED783A82BE97B"><enum>(4)</enum><header>Exemptive authority</header><text display-inline="yes-display-inline">The Commission shall promulgate rules to provide appropriate exemptions for commodity pool operators and commodity trading advisors, to provide relief from duplicative, conflicting, or unduly burdensome requirements or to promote responsible innovation, to the extent the exemptions foster the development of fair and orderly cash or spot digital commodity markets, are necessary or appropriate in the public interest, and are consistent with the protection of customers.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> <section id="HAB86FAEA434246708A7B0884B0EA69AA"><enum>409.</enum><header>Exclusion for decentralized finance activities</header><text display-inline="no-display-inline">The Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1">7 U.S.C. 1 et seq.</external-xref>), as amended by the preceding provisions of this Act, is amended by inserting after section 4u the following:</text> <quoted-block style="OLC" id="HBD309365D93D489AA2DCAD01159696FE" display-inline="no-display-inline"> <section id="H2FDF419B153F40EB904BDCFAB897B656"><enum>4v.</enum><header>Decentralized finance activities not subject to this Act</header> <subsection id="H5725E8FFAC934F06AC9CB4997B485234"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Notwithstanding any other provision of this Act, a person shall not be subject to this Act and the regulations promulgated under this Act based on the person directly or indirectly engaging in any of the following activities, whether singly or in combination, in relation to the operation of a blockchain system or in relation to decentralized finance trading protocol:</text> <paragraph id="HD8285E0988C141DAA76F9B569C3C6635"><enum>(1)</enum><text>Compiling network transactions or relaying, searching, sequencing, validating, or acting in a similar capacity.</text></paragraph> <paragraph id="H86C4F06D2B69450F886A8B56760FA855"><enum>(2)</enum><text>Providing computational work, operating a node or oracle service, or procuring, offering, or utilizing network bandwidth, or other similar incidental services.</text></paragraph> <paragraph id="HB2AFD1EE96BD4001B1D8CFF0367ECB23"><enum>(3)</enum><text>Providing a user-interface that enables a user to read, and access data about a blockchain system.</text></paragraph> <paragraph id="HC827375845AD498A8EEDB3524F6951BA"><enum>(4)</enum><text display-inline="yes-display-inline">Developing, publishing, constituting, administering, maintaining, or otherwise distributing a blockchain system or a decentralized finance trading protocol.</text></paragraph> <paragraph id="HF49D7A0B3D8B4EE39F8B35A650580AD7"><enum>(5)</enum><text display-inline="yes-display-inline">Developing, publishing, constituting, administering, maintaining, or otherwise distributing a decentralized finance messaging system or operating or participating in a liquidity pool for the purpose of executing a contract of sale of a digital commodity.</text></paragraph> <paragraph id="H231B1AD3BB644E4589F7384554509052"><enum>(6)</enum><text>Developing, publishing, constituting, administering, maintaining, or otherwise distributing software or systems that create or deploy hardware or software, including wallets or other systems, facilitating an individual user’s own personal ability to keep, safeguard, or custody the user’s digital assets or related private keys.</text></paragraph></subsection> <subsection id="H63E00A7A965B41FE9D03B7BF4B9AC026"><enum>(b)</enum><header>Exceptions</header><text display-inline="yes-display-inline">Subsection (a) shall not be interpreted to apply to the anti-fraud, anti-manipulation, or false reporting enforcement authorities of the Commission.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H1E90349F7BA84EDD82D70170FA8F2C4A"><enum>410.</enum><header>Resources for implementation and enforcement</header> <subsection id="H2A74639B954D47A6976B9CBEE87A4515"><enum>(a)</enum><header>Collection of fees</header> <paragraph id="HD609B30D81314EF9810DDC32DD6ADEC1"><enum>(1)</enum><header>In general</header><text>The Commodity Futures Trading Commission (in this section referred to as the <quote>Commission</quote>) shall charge and collect a filing fee from each person who files with the Commission a statement of provisional registration as a digital commodity exchange, digital commodity broker, or digital commodity dealer pursuant to section 106.</text></paragraph> <paragraph id="HD63436536C164FA8B3CB2C2146043A0F"><enum>(2)</enum><header>Amount</header><text>The fees authorized under paragraph (1) may be collected and available for obligation only in the amounts provided in advance in an appropriation Act.</text></paragraph> <paragraph id="H8E76240498F045CE93B6820308920B02"><enum>(3)</enum><header>Authority to adjust fees</header><text>Notwithstanding the preceding provisions of this subsection, to promote fair competition or innovation, the Commission, in its sole discretion, may reduce or eliminate any fee otherwise required to be paid by a small or medium filer under this subsection.</text></paragraph></subsection> <subsection id="HC423149FCE5A4735BA2320A9B98724F2"><enum>(b)</enum><header>Fee schedule</header> <paragraph id="HA622AE3B61BE451DB6727E025E133D9C"><enum>(1)</enum><header>In general</header><text>The Commission shall publish in the Federal Register a schedule of the fees to be charged and collected under this section.</text></paragraph> <paragraph id="H460683C8756B4A7BB9349EC45AF48FA9"><enum>(2)</enum><header>Content</header><text>The fee schedule for a fiscal year shall include a written analysis of the estimate of the Commission of the total costs of carrying out the functions of the Commission under this Act during the fiscal year.</text></paragraph> <paragraph id="HE508691DCE4149CFA9CCD10DD64C7CCB"><enum>(3)</enum><header>Submission to congress</header><text>Before publishing the fee schedule for a fiscal year, the Commission shall submit a copy of the fee schedule to the Committees on Agriculture and on Appropriations of the House of Representatives and the Committees on Agriculture, Nutrition, and Forestry and on Appropriations of the Senate.</text></paragraph> <paragraph id="HFCAAE73E98344A04A61A121497121EF7"><enum>(4)</enum><header>Timing</header> <subparagraph id="H0260B174B50846E09D3FB711F48FD636"><enum>(A)</enum><header>1st fiscal year</header><text>The Commission shall publish the fee schedule for the fiscal year in which this Act is enacted, within 30 days after the date of the enactment of this Act.</text></subparagraph> <subparagraph id="HA7DD9463DF9A44B2B9434000F89EDD80"><enum>(B)</enum><header>Subsequent fiscal years</header><text>The Commission shall publish the fee schedule for each subsequent fiscal year, not less than 90 days before the due date prescribed by the Commission for payment of the annual fee for the fiscal year.</text></subparagraph></paragraph></subsection> <subsection id="H2E33B61585E8401F9B0403292700B89B"><enum>(c)</enum><header>Late payment penalty</header> <paragraph id="HA3B6F7BFD5F341458144F0FF84084B17"><enum>(1)</enum><header>In general</header><text>The Commission may impose a penalty against a person that fails to pay an annual fee charged under this section, within 30 days after the due date prescribed by the Commission for payment of the fee.</text></paragraph> <paragraph id="H7934CE70B2F043B688223FD38AE5B782"><enum>(2)</enum><header>Amount</header><text>The amount of the penalty shall be—</text> <subparagraph id="HEC6E6E0DA95849A1ABCA619DB9CDC87E"><enum>(A)</enum><text>5 percent of the amount of the fee due, multiplied by</text></subparagraph> <subparagraph id="H8A7B73B2E36F4121BD5A29B7BCE8CF36"><enum>(B)</enum><text>the whole number of consecutive 30-day periods that have elapsed since the due date.</text></subparagraph></paragraph></subsection> <subsection id="HEFCD06064A4343489022BC37FEE13AA5"><enum>(d)</enum><header>Reimbursement of excess fees</header><text>To the extent that the total amount of fees collected under this section during a fiscal year that begins after the date of the enactment of this Act exceeds the amount provided under subsection (a)(2) with respect to the fiscal year, the Commission shall reimburse the excess amount to the persons who have timely paid their annual fees, on a pro-rata basis that excludes penalties, and shall do so within 60 days after the end of the fiscal year.</text></subsection> <subsection id="H4934B920E167469AB4B94BF3D4A7274E"><enum>(e)</enum><header>Deposit of fees into the Treasury</header><text>All amounts collected under this section shall be credited to the currently applicable appropriation, account, or fund of the Commission as discretionary offsetting collections, and shall be available for the purposes authorized in subsection (f) only to the extent and in the amounts provided in advance in appropriations Acts.</text></subsection> <subsection id="HBA648727FAD44C37B02DA01C5D5C5D42"><enum>(f)</enum><header>Authorization of appropriations</header><text>In addition to amounts otherwise authorized to be appropriated to the Commission, there is authorized to be appropriated to the Commission amounts collected under this section to cover the costs the costs of carrying out the functions of the Commission under this Act.</text></subsection> <subsection id="H0EE51094B82E44CEA8CED59175827C89"><enum>(g)</enum><header>Expedited hiring authority</header> <paragraph id="HF237C3EFB5C341678471DBA92DD1B4C2"><enum>(1)</enum><header>Appointment authority</header><text>The Chairman, pursuant to section 6(a), may appoint individuals to a position described in paragraph (2) of this subsection—</text> <subparagraph id="HBCFDEA611C0E48689EB4BD8FD52CB243"><enum>(A)</enum><text>in accordance with the statutes, rules, and regulations governing appointments to positions in the excepted service (as defined in section 2103 of title 5, United States Code); and</text></subparagraph> <subparagraph id="HB6158DF20C1D4B68BCCACE7E58B4CDDB"><enum>(B)</enum><text>without regard to any statute, rule, or regulation governing appointments to positions in the competitive service (as defined in section 2102 of such title).</text></subparagraph></paragraph> <paragraph id="H2F60F218E6B149A7B1D7EE5280D3B0E1"><enum>(2)</enum><header>Position described</header><text>A position referred to in subparagraph (1) is a position at the Commission that—</text> <subparagraph id="H6B4882C926034B46AB346CF5306AB2ED"><enum>(A)</enum><text>is in the competitive service (as defined in section 2102 of such title); and</text></subparagraph> <subparagraph id="HA000895493114101AC99462B0CD215FA"><enum>(B)</enum><text>requires specialized knowledge of digital commodities markets, financial and capital market formation or regulation, financial market structures or surveillance, data collection or analysis, or information technology, cybersecurity, or system safeguards.</text></subparagraph></paragraph> <paragraph id="H82E86098DBAD45A4928E90164F70CE10"><enum>(3)</enum><header>Rule of construction</header><text>The appointment of a candidate to a position under this subsection shall not be considered to cause the position to be converted from the competitive service to the excepted service.</text></paragraph></subsection> <subsection id="H870CC20D39604244B28D434016901E80"><enum>(h)</enum><header>Sunset</header><text>The authorities provided by this section shall expire at the end of the 4th fiscal year that begins after the date of the enactment of this Act.</text></subsection></section> <section id="H65E007FFCB684BCFB44D097E877ED21A"><enum>411.</enum><header>Digital commodity activities by SEC-registered entities</header><text display-inline="no-display-inline">The Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1">7 U.S.C. 1 et seq.</external-xref>), as amended by the preceding provisions of this Act, is amended by inserting after section 5j the following:</text> <quoted-block style="OLC" id="H7BEB8B04516B4EA39A2AE587518FADF8" display-inline="no-display-inline"> <section id="H4CEA8FE4A9354ECDA4011D5AA79B79B8" commented="no"><enum>5k.</enum><header>Exemption for certain registered entities engaged in digital commodity activities</header> <subsection id="H183DA0FE4B634AAFBF0740B54550F942" commented="no"><enum>(a)</enum><header>By alternative trading systems</header> <paragraph id="H18691422B7AF4D3BA538F8F4875B1D5A" commented="no"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">On receipt by the Commission from an alternative trading system of a written or electronic notice that contains such information as the Commission, by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors, the alternative trading system shall be exempt from registration as a digital commodity exchange pursuant to section 5i if—</text> <subparagraph id="HE8F1820801E74A2B900EB3F3D5472AA7" commented="no"><enum>(A)</enum><text display-inline="yes-display-inline">the alternative trading system does not list any retail commodity transactions pursuant to section 2(c)(2)(D);</text></subparagraph> <subparagraph id="HABE98CF7411C4177A8A8C9753260CF92" commented="no"><enum>(B)</enum><text display-inline="yes-display-inline">the provider, or an affiliate person of the provider, of the alternative trading system is not otherwise registered under this Act;</text></subparagraph> <subparagraph id="HB89AB5BC7487479793951B6598A51340"><enum>(C)</enum><text display-inline="yes-display-inline">the alternative trading system lists or trades no other contracts of sale of commodities, except for digital commodities, currencies, and securities; and</text></subparagraph> <subparagraph id="HBA7B8CF19511411DBE4A43F6BA58AA9B" commented="no"><enum>(D)</enum><text display-inline="yes-display-inline">the registration of the alternative trading system is not suspended pursuant to an order by the Securities and Exchange Commission.</text></subparagraph></paragraph> <paragraph id="HC91C85CA89C443E799E2F98D32640741" commented="no"><enum>(2)</enum><header>Further requirements</header><text>An alternative trading system that provides notice to the Commission pursuant to paragraph (1) of this subsection shall be exempt from the requirements of section 5i to the extent that the alternative trading system—</text> <subparagraph id="H96B62A02F7BC4BB690EC2C0C0198CEB0"><enum>(A)</enum><text>is in compliance with requirements consistent with the requirements of section 5i and imposed on the alternative trading system by the Securities and Exchange Commission;</text></subparagraph> <subparagraph id="H19B0A94F240A4A5A99C98E0489416CFA"><enum>(B)</enum><text display-inline="yes-display-inline">annually files with the Commission, in a form and manner acceptable to the Commission, a notice that demonstrates compliance with this paragraph and contains any other information the Commission determines to be necessary or appropriate to perform the duties of the Commission under this Act; and</text></subparagraph> <subparagraph id="H1C7E073697C84CC28171A84D5D6D09D7"><enum>(C)</enum><text display-inline="yes-display-inline">has total trading volume in digital commodities during any calendar quarter in either of its 2 most recently completed fiscal years that does not exceed the lesser of—</text> <clause id="H5ABC92DA2119434FAA24A0A9C08E1DBE"><enum>(i)</enum><text>25 percent of the total trading volume for all transactions over the same period; or</text></clause> <clause id="H7F03BA2190614D04B2AF8FCF46D32F8B"><enum>(ii)</enum><text>$50,000,000,000.</text></clause></subparagraph></paragraph> <paragraph id="H4CE6099DE7FC4F64996306E194597B34"><enum>(3)</enum><header>Enforcement</header><text display-inline="yes-display-inline">This subsection shall not be construed to limit any jurisdiction that the Commission may otherwise have under any other provision of this Act with respect to a contract of sale of a digital commodity or persons effecting contracts of sale of digital commodities.</text></paragraph></subsection> <subsection id="H4D377752D0B14F52AB26A75FF1D9F9CF" commented="no"><enum>(b)</enum><header>By registered intermediaries</header> <paragraph id="H27EFA01E429040C2939B3ACF900225AF" commented="no"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">On receipt by the Commission, from a broker or dealer that is registered with the Securities and Exchange Commission, of a written or electronic notice that contains such information as the Commission, by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors, the broker or dealer shall be exempt from registration as a digital commodity broker or digital commodity dealer pursuant to section 4u of this Act if—</text> <subparagraph id="H41EE5C1186524686855FD4AF30498BC0" commented="no"><enum>(A)</enum><text display-inline="yes-display-inline">the broker or dealer does not offer or engage in any retail commodity transactions pursuant to section 2(c)(2)(D) of this Act or other contracts of sale of commodities, except for digital commodities, currencies, and securities;</text></subparagraph> <subparagraph id="H62035F7260334FFFA0E3F069E5EEFFDA"><enum>(B)</enum><text>the broker or dealer is not otherwise registered under this Act;</text></subparagraph> <subparagraph id="H2EE82FBC22194E27A98B56C0B900BEC4" commented="no"><enum>(C)</enum><text display-inline="yes-display-inline">the broker or dealer is not subject to a statutory disqualification, as defined under section 3(a) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78c">15 U.S.C. 78c(a)</external-xref>); and</text></subparagraph> <subparagraph id="HE1906DAE6396461E8AC9E3D70D1E59CE" commented="no"><enum>(D)</enum><text>the broker or dealer is a member of a national securities association registered pursuant to section 15A of the Securities Exchange Act of 1934.</text></subparagraph></paragraph> <paragraph id="H7BB164810274480F84B364CCBBE84B9B" commented="no"><enum>(2)</enum><header>Further requirements</header><text>A broker or dealer that provides notice to the Commission pursuant to paragraph (1) shall be exempt from the requirements of section 4u to the extent that the broker or dealer—</text> <subparagraph id="H8F2A7D017B694139B50FD24503BE3500"><enum>(A)</enum><text>is in compliance with requirements consistent with the requirements of section 4u and imposed on the broker or dealer by the Securities and Exchange Commission;</text></subparagraph> <subparagraph id="H5132F486C8784EA496325751D0AB1319"><enum>(B)</enum><text display-inline="yes-display-inline">annually files with the Commission, in a form and manner acceptable to the Commission, a notice that demonstrates compliance with this subsection and contains any other information the Commission determines to be necessary or appropriate to perform the duties of the Commission under this Act; and</text></subparagraph> <subparagraph id="H3117F5B45C8F43B799549F0DADF6DF8B"><enum>(C)</enum><text display-inline="yes-display-inline">has consolidated annual gross financial revenues in either of its 2 most recently completed fiscal years from sales, commissions or other activities in digital commodities that do not exceed the lesser of—</text> <clause id="H8AB3ED46B67647089C2943190AEB1F47"><enum>(i)</enum><text>10 percent of the total annual gross revenues during the same period; or</text></clause> <clause id="HDC5B09137D7949F6AC7B6241170F3DB4"><enum>(ii)</enum><text>$100,000,000.</text></clause></subparagraph></paragraph> <paragraph id="H3CE70BE043C242D292475423F146DB33"><enum>(3)</enum><header>Enforcement</header><text display-inline="yes-display-inline">This subsection shall not be construed to limit any jurisdiction that the Commission may otherwise have under any other provision of this Act with respect to a contract of sale of a digital commodity and persons effecting contracts of sale of digital commodities.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H4BD7A2DA12D64E2E9786137787B518C7"><enum>412.</enum><header>Requirements related to control persons</header><text display-inline="no-display-inline">The Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1">7 U.S.C. 1 et seq.</external-xref>), as amended the preceding provisions of this Act, is amended by inserting after section 4v the following:</text> <quoted-block style="OLC" id="H222C1E0FBCDD4C4B9FF82CEDED21BB2C" display-inline="no-display-inline"> <section id="H879EE17B7A034ADEB5542192F37CAB21"><enum>4w.</enum><header>Limitation on transactions by blockchain control persons</header> <subsection id="H11616EF2360B474F91791D74B0134965"><enum>(a)</enum><header>Limitation</header><text display-inline="yes-display-inline">It shall be unlawful for a blockchain control person with respect to a blockchain system certified as a mature blockchain system in accordance with section 42 of the Securities Exchange Act of 1934 to sell a unit of a digital commodity related to the blockchain system unless the person files notice with the Commission, in a form and manner determined by the Commission, that the person has or intends to obtain an authority described in subsection (b)(1) with respect to the blockchain system, and complies with rules adopted by the Commission that require—</text> <paragraph id="H1771271A64CA427E98E1C2B15440741D"><enum>(1)</enum><text>disclosure of information to the Commission and the public about the material activities, as determined by the Commission, of the blockchain control person; and</text></paragraph> <paragraph id="H844195BFAFDD40748FF3266EEE931A93"><enum>(2)</enum> <subparagraph commented="no" display-inline="yes-display-inline" id="HEB10E39FC6D649F19CD4C4285036EDAB"><enum>(A)</enum><text>the use of a digital commodity broker to effect the sale; or</text></subparagraph> <subparagraph id="H0924FB24D0BC466AA7EB62DE01CF74D6" indent="up1"><enum>(B)</enum><text>such other sales restrictions applicable to blockchain control person, or any of its digital commodity affiliated persons, to prevent manipulation and distortion of the value of the digital commodity and promote further maturity of the blockchain system to which the digital commodity relates.</text></subparagraph></paragraph></subsection> <subsection id="HC2255B30451E4EC2963E8ED5B0B5674B"><enum>(b)</enum><header>Definitions</header><text>In this section:</text> <paragraph id="HC5AB93203A0A46CC8E4DCC4049E58F97"><enum>(1)</enum><header>Blockchain control person</header><text>The term <term>blockchain control person</term> means, with respect to a blockchain system, any person or group of persons under common control who—</text> <subparagraph id="HCD3E90EE04A14F3A9292444EF6D4D116"><enum>(A)</enum><text>has the unilateral authority, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, to control or materially alter the functionality, operation, or rules of consensus or agreement of the blockchain system or its related digital commodity; or</text></subparagraph> <subparagraph id="H681E64B430EF4438985F65A9F7C3C8B4"><enum>(B)</enum><text>has the unilateral authority to direct the voting, in the aggregate, of 20 percent or more of the outstanding voting power of the blockchain system by means of a related digital commodity, nodes or validators, a decentralized governance system, or otherwise, in a blockchain system which can be altered by a voting system.</text></subparagraph></paragraph> <paragraph id="H755E22690858450A97F6DCE824638758"><enum>(2)</enum><header>Digital commodity affiliated person</header><text>The term <term>digital commodity affiliated person</term> means any person directly or indirectly controlling, controlled by, or under common control with a blockchain control person, as the Commission by rule or regulation, may determine will effectuate the purposes of this section.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H5E1D60A2881241E4ADB6FACDD60519F8"><enum>413.</enum><header>Effective date</header><text display-inline="no-display-inline">Unless otherwise provided in this title, this title and the amendments made by this title shall take effect 360 days after the date of the enactment of this Act, except that, to the extent a provision of this title requires a rulemaking, the provision shall take effect on the later of—</text> <paragraph id="HDAF0C5B3FE0343B3979C933D945D87D8"><enum>(1)</enum><text>360 days after the date of the enactment of this Act; or</text></paragraph> <paragraph id="H4725E00C09054589B9819A84F986A914"><enum>(2)</enum><text>60 days after the publication in the Federal Register of the final rule implementing the provision.</text></paragraph></section> <section id="H628B26940A5D46008F5778E5EDF98D81" display-inline="no-display-inline" section-type="subsequent-section"><enum>414.</enum><header>Sense of Congress</header><text display-inline="no-display-inline">It is the sense of Congress that nothing in this Act or any amendment made by this Act should be interpreted to authorize any entity to regulate any commodity, other than a digital commodity, on any spot market.</text></section> <enum>V</enum><header>Innovation and Technology Improvements</header> <section id="H348845AE793042C385EDF95289AC9DDA"><enum>501.</enum><header>Findings; sense of Congress</header> <subsection id="HBDFC558AAE814C699801DE478AC7E2A5"><enum>(a)</enum><header>Findings</header><text display-inline="yes-display-inline">Congress finds the following:</text> <paragraph id="H0378204BE6A4452B99433A3EA4654BB6"><enum>(1)</enum><text display-inline="yes-display-inline">Entrepreneurs and innovators are building and deploying this next generation of the internet.</text></paragraph> <paragraph id="H740058C4F6F34F2094851CD85513509B"><enum>(2)</enum><text>Digital commodity networks represent a new way for people to join together and cooperate with one another to undertake certain activities.</text></paragraph> <paragraph id="H846644E168B04929AB5A17D2566165D6"><enum>(3)</enum><text>Digital commodities have the potential to be the foundational building blocks of these systems, aligning the economic incentive for individuals to cooperate with one another to achieve a common purpose.</text></paragraph> <paragraph id="HF4792FFE35BF48A893A5F36925C3F85B"><enum>(4)</enum><text>The digital commodity ecosystem has the potential to grow our economy and improve everyday lives of Americans by facilitating collaboration through the use of technology to manage activities, allocate resources, and facilitate decision making.</text></paragraph> <paragraph id="HB84E7E0693654FA6ABD11F12DB20AB7D"><enum>(5)</enum><text display-inline="yes-display-inline">Blockchain systems and the digital commodities they empower provide control, enhance transparency, reduce transaction costs, and increase efficiency if proper protections are put in place for investors, consumers, our financial system, and our national security.</text></paragraph> <paragraph id="H3DC3B262FDD64C4B9F971282A70712B0"><enum>(6)</enum><text>Blockchain technology facilitates new types of network participation which businesses in the United States may utilize in innovative ways.</text></paragraph> <paragraph id="H2ED999AB9F7A4E5B82DB3B71EFC73D89"><enum>(7)</enum><text>Other digital commodity companies are setting up their operations outside of the United States, where countries are establishing frameworks to embrace the potential of blockchain technology and digital commodities and provide safeguards for consumers.</text></paragraph> <paragraph id="H03FE6F54A2B24BC6BAAB30F400F9AD28"><enum>(8)</enum><text>Digital commodities, despite the purported anonymity, provide law enforcement with an exceptional tracing tool to identify illicit activity and bring criminals to justice.</text></paragraph> <paragraph id="HBD14467DB2064837AD3E67476B09A006"><enum>(9)</enum><text display-inline="yes-display-inline">The Financial Services Committee of the House of Representatives has held multiple hearings highlighting various risks that digital commodities can pose to the financial markets, consumers, and investors that must be addressed as we seek to harness the benefits of these innovations.</text></paragraph></subsection> <subsection id="H9A0F906CC8744B6D9788FBAFBAABB822"><enum>(b)</enum><header>Sense of Congress</header><text>It is the sense of Congress that—</text> <paragraph id="H89B0B4DF6C3C408484532B9938C57E6D"><enum>(1)</enum><text display-inline="yes-display-inline">the United States should seek to prioritize understanding the potential opportunities of the next generation of the internet;</text></paragraph> <paragraph id="HDC7E723E67154225A2508E3767B1CB71"><enum>(2)</enum><text display-inline="yes-display-inline">the United States should seek to foster advances in technology that have robust evidence indicating they can improve our financial system and create more fair and equitable access to financial services for everyday Americans while protecting our financial system, investors, and consumers;</text></paragraph> <paragraph id="H11F718D49136431B881FCD9CCB9AFDBC"><enum>(3)</enum><text>the United States must support the responsible development of digital commodities and the underlying technology in the United States or risk the shifting of the development of such assets and technology outside of the United States, to less regulated countries;</text></paragraph> <paragraph id="HB5934D5C1CB84BF1900D7638E138F083"><enum>(4)</enum><text display-inline="yes-display-inline">Congress should consult with public and private sector stakeholders to understand how to enact a functional framework tailored to the specific risks and unique benefits of different digital commodity-related activities, distributed ledger technology, distributed networks, and mature blockchain systems;</text></paragraph> <paragraph id="H83D9A707640B45DFBDD4800143A1B897"><enum>(5)</enum><text display-inline="yes-display-inline">Congress should enact a functional framework tailored to the specific risks of different digital commodity-related activities and unique benefits of distributed ledger technology, distributed networks, and mature blockchain systems; and</text></paragraph> <paragraph id="HF75BCDA5142A4B48A7F8EB47E95EC061"><enum>(6)</enum><text>consumers and market participants will benefit from a framework for digital commodities consistent with longstanding investor protections in securities and commodities markets, yet tailored to the unique benefits and risks of the digital commodity ecosystem.</text></paragraph></subsection></section> <section id="HA4023054B2C349CE853206DB76C2644A" display-inline="no-display-inline" section-type="subsequent-section"><enum>502.</enum><header>Modernization of the Securities and Exchange Commission mission</header> <subsection id="H4C2D604FC59E412CA95C740CC6C8811C"><enum>(a)</enum><header>Securities Act of 1933</header><text>Section 2(b) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77">15 U.S.C. 77(b)</external-xref>) is amended—</text> <paragraph id="H63AC0064827E40D8B74C93F53BC5444B"><enum>(1)</enum><text>in the heading, by inserting <quote><header-in-text level="subsection" style="OLC">Innovation,</header-in-text></quote> after <quote><header-in-text level="subsection" style="OLC">Efficiency,</header-in-text></quote>; and</text></paragraph> <paragraph id="HE4578892C2B64848A4A72FE4C7EA2759"><enum>(2)</enum><text>by inserting <quote>innovation,</quote> after <quote>efficiency,</quote>.</text></paragraph></subsection> <subsection id="H5DFD20B02EAC4E1E8DE5E9DFBAF45D92"><enum>(b)</enum><header>Securities Exchange act of 1934</header><text>Section 3(f) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78">15 U.S.C. 78(c)</external-xref>) is amended—</text> <paragraph id="H82F25CD69D584F09BA743856BB149014"><enum>(1)</enum><text display-inline="yes-display-inline">in the heading, by inserting <quote><header-in-text level="subsection" style="OLC">Innovation,</header-in-text></quote> after <quote><header-in-text level="subsection" style="OLC">Efficiency,</header-in-text></quote>; and</text></paragraph> <paragraph id="H387092E1BCAE468A8A2C1311FCE86A4C"><enum>(2)</enum><text>by inserting <quote>innovation,</quote> after <quote>efficiency,</quote>.</text></paragraph></subsection> <subsection id="HE34AF2D4E68B445DBEC02BAF87C32CB7"><enum>(c)</enum><header>Investment Advisers Act of 1940</header><text>Section 202(c) of the Investment Advisers Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80b-2">15 U.S.C. 80b–2</external-xref>) is amended—</text> <paragraph id="H7B170E5E8AB8452FAD0F77A2FE8C6764"><enum>(1)</enum><text display-inline="yes-display-inline">in the heading, by inserting <quote><header-in-text level="subsection" style="OLC">Innovation,</header-in-text></quote> after <quote><header-in-text level="subsection" style="OLC">Efficiency,</header-in-text></quote>; and</text></paragraph> <paragraph id="H2BAD8429E30248BB9F77B47E2452AB29"><enum>(2)</enum><text>by inserting <quote>innovation,</quote> after <quote>efficiency,</quote>.</text></paragraph></subsection> <subsection id="H6E5EA8AC7BAC4EBC9B80967C1EBA250A" display-inline="no-display-inline"><enum>(d)</enum><header>Investment Company Act of 1940</header><text>Section 2(c) of the Investment Company Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80a-2">15 U.S.C. 80a–2</external-xref>) is amended—</text> <paragraph id="H899EE55D63D048828A56BB6B8FA6E1A4"><enum>(1)</enum><text display-inline="yes-display-inline">in the heading, by inserting <quote><header-in-text level="subsection" style="OLC">Innovation,</header-in-text></quote> after <quote><header-in-text level="subsection" style="OLC">Efficiency,</header-in-text></quote>; and</text></paragraph> <paragraph id="HA7646F3457B64DD4AA556E1A42755B0F"><enum>(2)</enum><text>by inserting <quote>innovation,</quote> after <quote>efficiency,</quote>.</text></paragraph></subsection></section> <section id="HF83CA4A77668454B9E3DD3EB9981F520"><enum>503.</enum><header>Strategic Hub for Innovation and Financial Technology</header><text display-inline="no-display-inline">Section 4 of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78d">15 U.S.C. 78d</external-xref>) is amended by adding at the end the following:</text> <quoted-block style="OLC" id="HE48CB19FE0F34272BDFE3B292FDF3852" display-inline="no-display-inline"> <subsection id="HD73F5BE7AE574DC2BCF9BA6EE64AB157"><enum>(l)</enum><header>Strategic Hub for Innovation and Financial Technology</header> <paragraph id="HC4DFC1F8FAF84FD2B9871D602AD58BA4"><enum>(1)</enum><header>Establishment</header><text display-inline="yes-display-inline">Not later than 180 days after the date of the enactment of this subsection, the Securities and Exchange Commission shall establish a committee to be known as the Strategic Hub for Innovation and Financial Technology (referred to in this subsection as the <quote>FinHub</quote>) to support engagement on emerging technologies in the financial sector.</text></paragraph> <paragraph id="HB1590730E149464B891B91AEF342BB3B"><enum>(2)</enum><header>Members</header><text>The composition of FinHub shall be determined by the Commission, drawing from relevant divisions as appropriate, including the Division of Trading and Markets, Division of Corporate Finance, and Division of Investment Management.</text></paragraph> <paragraph id="H5FDACAF185994B74AC7EB4603AC57BCF"><enum>(3)</enum><header>Responsibilities</header><text>FinHub shall—</text> <subparagraph id="HDCABCBAD26B04C608E9DD969B4021D84"><enum>(A)</enum><text>serve as a resource for the Commission on emerging financial technology advancements;</text></subparagraph> <subparagraph id="HC875F399415C414DA79A7C59DC5AE087"><enum>(B)</enum><text>engage with market participants working on emerging financial technologies; and</text></subparagraph> <subparagraph id="HFE01A0D52ED94A3CAAE25A1CD5F6746F"><enum>(C)</enum><text>facilitate communication between the Commission and businesses working in emerging financial technology fields with information on the Commission, its rules, and regulations.</text></subparagraph></paragraph> <paragraph id="H71820FDAC2ED4EC89C0909A0813BA9B3"><enum>(4)</enum><header>Report to the Commission</header> <subparagraph id="H1F1173B22B7B4EB791F0018D66EA2797"><enum>(A)</enum><header>In general</header><text>Not later than October 31 of each year after 2025, FinHub shall provide an annual summary of its engagement activities to the Commission, which shall be included in the Commission’s annual report to Congress.</text></subparagraph> <subparagraph id="H6BDEC10BEA004B9F8D19A93F191FD915"><enum>(B)</enum><header>Confidentiality</header><text>Each report submitted under this paragraph shall not contain confidential information.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H6D5A2C002FFA4F1BB4BED9BECB83EFCC" display-inline="no-display-inline"><enum>504.</enum><header>Codification of LabCFTC</header> <subsection id="HFF5054AB06004336BFE8C6975C3E54B9"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 18 of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/22">7 U.S.C. 22</external-xref>) is amended by adding at the end the following:</text> <quoted-block style="OLC" id="HE0A5965B0DDC437FA0CF074D96DFB46D" display-inline="no-display-inline"> <subsection id="HC813B9736BCA4304B5FD9E36B1242E21"><enum>(c)</enum><header>LabCFTC</header> <paragraph id="H6902D738D428465FA79E13731C986BE5"><enum>(1)</enum><header>Establishment</header><text display-inline="yes-display-inline">There is established in the Commission LabCFTC.</text></paragraph> <paragraph id="HA68F7F4B4C4549418EC80D104D65390E"><enum>(2)</enum><header>Purpose</header><text display-inline="yes-display-inline">The purposes of LabCFTC are to—</text> <subparagraph id="H32F90E9B45894DCEAF4F94D3E979AC84"><enum>(A)</enum><text display-inline="yes-display-inline">promote responsible financial technology innovation and fair competition for the benefit of the American public;</text></subparagraph> <subparagraph id="H11B989D181C346B0AFE5B0215C1E8091"><enum>(B)</enum><text>serve as an information platform to inform the Commission about new financial technology innovation; and</text></subparagraph> <subparagraph id="H7960FF2070B64E60904920069A60A771"><enum>(C)</enum><text>provide outreach to financial technology innovators to discuss their innovations and the regulatory framework established by this Act and the regulations promulgated thereunder.</text></subparagraph></paragraph> <paragraph id="H200A8122E15A44D291E8E7F54D368817"><enum>(3)</enum><header>Director</header><text display-inline="yes-display-inline">LabCFTC shall have a Director, who shall be appointed by the Commission and serve at the pleasure of the Commission. Notwithstanding section 2(a)(6)(A), the Director shall report directly to the Commission and perform such functions and duties as the Commission may prescribe.</text></paragraph> <paragraph id="HDDB82DB4BD5445B1B14ECA9497161E00"><enum>(4)</enum><header>Duties</header><text>LabCFTC shall—</text> <subparagraph id="H243B1E7BDBE3405182884FA1B506B9F9"><enum>(A)</enum><text>advise the Commission with respect to rulemakings or other agency or staff action regarding financial technology;</text></subparagraph> <subparagraph id="H28B47C9F8B014BA4AB68F430CAA9714D"><enum>(B)</enum><text>provide internal education and training to the Commission regarding financial technology;</text></subparagraph> <subparagraph id="HC23FC54153674BF1B5E6C6EEC6287FF4"><enum>(C)</enum><text>advise the Commission regarding financial technology that would bolster the Commission’s oversight functions;</text></subparagraph> <subparagraph id="HBA1D56449CE04F9CA6D92E78ED6E02E7"><enum>(D)</enum><text>engage with academia, students, and professionals on financial technology issues, ideas, and technology relevant to activities under this Act;</text></subparagraph> <subparagraph id="HB4C05B3D10614B879A041FF09AA15A72"><enum>(E)</enum><text>provide persons working in emerging technology fields with information on the Commission, its rules and regulations, and the role of a registered futures association; and</text></subparagraph> <subparagraph id="HDF147A823CC04018BFB60C7A2355AD37"><enum>(F)</enum><text>encourage persons working in emerging technology fields to engage with the Commission and obtain feedback from the Commission on potential regulatory issues.</text></subparagraph></paragraph> <paragraph id="HBFCCE2BCDC5D4887BB9DAAAF23D8FA71"><enum>(5)</enum><header>Report to Congress</header> <subparagraph id="HED01F015D7F64F48A4FD3E4093B00BB1"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">Not later than October 31 of each year after 2025, LabCFTC shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report on its activities.</text></subparagraph> <subparagraph id="H19B6D7461C2B4FA0984D0DE6D23154E9"><enum>(B)</enum><header>Contents</header><text>Each report required under paragraph (1) shall include—</text> <clause id="H61389D05FA91419388479DE2C96C6DF2"><enum>(i)</enum><text display-inline="yes-display-inline">the total number of persons that met with LabCFTC;</text></clause> <clause id="H69F06A4F903E4B7D841E68AD21B4A023"><enum>(ii)</enum><text>a summary of general issues discussed during meetings with the person;</text></clause> <clause id="HB5D4489345DF43EFB99C7D28C6E7DBC2"><enum>(iii)</enum><text>information on steps LabCFTC has taken to improve Commission services, including responsiveness to the concerns of persons;</text></clause> <clause id="H70D1E15EEFF34767930232359EEB7536"><enum>(iv)</enum><text>recommendations made to the Commission with respect to the regulations, guidance, and orders of the Commission and such legislative actions as may be appropriate; and</text></clause> <clause id="H3B1327A4B7A04E19929F3DDEF7CB7C0C"><enum>(v)</enum><text>any other information determined appropriate by the Director of LabCFTC.</text></clause></subparagraph> <subparagraph id="HA5AB3DE21B934C86B23DDDFDE4271482"><enum>(C)</enum><header>Confidentiality</header><text>A report under paragraph (A) shall abide by the confidentiality requirements in section 8.</text></subparagraph></paragraph> <paragraph id="HBD1A0820BF8848FC878FCC75653F55D7"><enum>(6)</enum><header>Records and engagement</header><text display-inline="yes-display-inline">The Commission shall—</text> <subparagraph id="H93C5675655324DBCA2295863DA06716C"><enum>(A)</enum><text>maintain systems of records to track engagements with the public through LabCFTC;</text></subparagraph> <subparagraph id="H79DCBC06B7CC44ED8725FE35A6342F4F"><enum>(B)</enum><text>store communications and materials received in connection with any such engagement in accordance with Commission policies and procedures on data retention and confidentiality; and</text></subparagraph> <subparagraph id="H123C777B79334B1BBC5A05105F73C92A"><enum>(C)</enum><text>take reasonable steps to protect any confidential or proprietary information received through LabCFTC engagement.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="HCD9724C485364F38AB4F788AE34F67B0"><enum>(b)</enum><header>Conforming amendments</header><text>Section 2(a)(6)(A) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/7/2">7 U.S.C. 2(a)(6)(A)</external-xref>) is amended—</text> <paragraph id="H4EC0C6195F0D4D8BAFCBC9AE7CC1C871"><enum>(1)</enum><text>by striking <quote>paragraph and in</quote> and inserting <quote>paragraph,</quote>; and</text></paragraph> <paragraph id="HEF7643BA3D5F437A86BD3CE9C3CC9CA6"><enum>(2)</enum><text>by inserting <quote>and section 18(c)(3),</quote> before <quote>the executive</quote>.</text></paragraph></subsection> <subsection id="H1DB1648364414519B533A18BDE41F44B"><enum>(c)</enum><header>Effective date</header><text>The Commodity Futures Trading Commission shall implement the amendments made by this section (including complying with section 18(c)(7) of the Commodity Exchange Act) within 180 days after the date of the enactment of this Act.</text></subsection></section> <section id="H85F31CAA1A5647E6AA3A7C0CF09907E0"><enum>505.</enum><header>Study on decentralized finance</header> <subsection id="H8D1F2A3DBCD640D6B9955F14C30F0020"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The Commodity Futures Trading Commission, the Securities and Exchange Commission, and the Secretary of the Treasury shall jointly carry out a study on decentralized finance that analyzes—</text> <paragraph id="H240E7345DD0C48D690C00DF1B014C638"><enum>(1)</enum><text>the nature, size, role, and use of decentralized finance blockchain applications;</text></paragraph> <paragraph id="H3009DC5E64C14020A99FF2B882AB999E"><enum>(2)</enum><text>the operation of blockchain applications that comprise decentralized finance;</text></paragraph> <paragraph id="H6E7D31F18DB148BAB3FD825FF7346E2B"><enum>(3)</enum><text>the interoperability of blockchain applications and other blockchain systems;</text></paragraph> <paragraph id="H643D16D16D9A44DB85B3A278D1E21BD6"><enum>(4)</enum><text>the interoperability of blockchain applications and software-based systems, including websites and wallets;</text></paragraph> <paragraph id="H8835807E91DE49CA8DCAF1DFBED2F7BE"><enum>(5)</enum><text>the decentralized governance systems through which blockchain applications may be developed, published, constituted, administered, maintained, or otherwise distributed, including—</text> <subparagraph id="H330A42F93A434C7FB9C382D8C2468454"><enum>(A)</enum><text>whether the systems enhance or detract from—</text> <clause id="HE526B12B105A40B88F0A3ED14C02883F"><enum>(i)</enum><text>the decentralization of the decentralized finance; and</text></clause> <clause id="H908E4974C9E6484791187ED9E639DA7C"><enum>(ii)</enum><text>the inherent benefits and risks of the decentralized governance system; and</text></clause></subparagraph> <subparagraph id="H295F73CC09CB4C918EA24DF3738CB75E"><enum>(B)</enum><text>any procedures, requirements, or best practices that would mitigate the risks identified in subparagraph (A)(ii);</text></subparagraph></paragraph> <paragraph id="H398F954A82864BBDA1CCD36401D6F33D"><enum>(6)</enum><text>the benefits of decentralized finance, including—</text> <subparagraph id="H55A45675B0854C1D8688F5A7C7D56EE8"><enum>(A)</enum><text>operational resilience and availability of blockchain systems;</text></subparagraph> <subparagraph id="H8FB8A48F89964D968DA0E516D142FB05"><enum>(B)</enum><text>interoperability of blockchain systems;</text></subparagraph> <subparagraph id="H27C6F1999FC34F95B7E0DD3889749345"><enum>(C)</enum><text>market competition and innovation;</text></subparagraph> <subparagraph id="HA9E8E00F83B6483DAF998387DBE248A8"><enum>(D)</enum><text>transaction efficiency;</text></subparagraph> <subparagraph id="H2FEC2BD0C130440199C4703C535FFC43"><enum>(E)</enum><text>transparency and traceability of transactions; and</text></subparagraph> <subparagraph id="H9B0F0AFA41AD44C7BCF655F2590B751A"><enum>(F)</enum><text>disintermediation;</text></subparagraph></paragraph> <paragraph id="H62E8E300F2474394AE9A77F2C77670CA"><enum>(7)</enum><text>the risks of decentralized finance, including—</text> <subparagraph id="HEFFE7C0BD38B4FAA9B98D669193D3EF6"><enum>(A)</enum><text>pseudonymity of users and transactions;</text></subparagraph> <subparagraph id="H0465A8D0353B49CE912CCE620F24C775"><enum>(B)</enum><text>disintermediation; and</text></subparagraph> <subparagraph id="HD0CC924582F245BCB2557B0DBBDF0B50"><enum>(C)</enum><text>cybersecurity vulnerabilities;</text></subparagraph></paragraph> <paragraph id="H0D650C443E4E4EE7847BD2CA96E1EEA8"><enum>(8)</enum><text>the extent to which decentralized finance has integrated with the traditional financial markets and any potential risks or improvements to the stability of the markets;</text></paragraph> <paragraph id="H3689C1AC7B654B6C80866729775BBAA6"><enum>(9)</enum><text>how the levels of illicit activity in decentralized finance compare with the levels of illicit activity in traditional financial markets;</text></paragraph> <paragraph id="H7908658D1D7A4F718EC1A86C2D6CB07F"><enum>(10)</enum><text display-inline="yes-display-inline">methods for addressing illicit activity in decentralized finance and traditional markets that are tailored to the unique attributes of each;</text></paragraph> <paragraph id="HA8897E192C734AB8B78CEAC88FA0BE76"><enum>(11)</enum><text>how decentralized finance may increase the accessibility of cross-border transactions; and</text></paragraph> <paragraph id="H87735BB40D2F4D2B8B5A9FEF4B214B16"><enum>(12)</enum><text display-inline="yes-display-inline">the feasibility of embedding self-executing compliance and risk controls into decentralized finance.</text></paragraph></subsection> <subsection id="HB98B10A1AC2744C480C72A1A883DA2B6"><enum>(b)</enum><header>Consultation</header><text display-inline="yes-display-inline">In carrying out the study required under subsection (a), the Commodity Futures Trading Commission and the Securities and Exchange Commission shall consult with the Secretary of the Treasury on the factors described under paragraphs (7) through (10) of subsection (a).</text></subsection> <subsection id="H53459F0EDA744C11B74475B74B5C09C6"><enum>(c)</enum><header>Report</header><text display-inline="yes-display-inline">Not later than 1 year after the date of enactment of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly submit to the relevant congressional committees a report that includes the results of the study required by subsection (a).</text></subsection> <subsection id="H72E829BE0FDD417394694C131A7288B6"><enum>(d)</enum><header>GAO Study</header><text>The Comptroller General of the United States shall—</text> <paragraph id="HB759B536737C436889A3830059A4112D"><enum>(1)</enum><text display-inline="yes-display-inline">carry out a study on decentralized finance that analyzes the information described under paragraphs (1) through (12) of subsection (a); and</text></paragraph> <paragraph id="H3802AE6912FA402C8C25E9CB6C8DB1FF"><enum>(2)</enum><text display-inline="yes-display-inline">not later than 1 year after the date of enactment of this Act, submit to the relevant congressional committees a report that includes the results of the study required by paragraph (1).</text></paragraph></subsection> <subsection id="HF58EC01EBC1D416F92BCC8A57698C10F"><enum>(e)</enum><header>Definitions</header><text>In this section:</text> <paragraph id="H221F366D3B1640DB96ADE203394A23A0"><enum>(1)</enum><header>Decentralized finance</header> <subparagraph id="H2CC9DB1954144B33AFBE0721FE9A5E4F"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The term <term>decentralized finance</term> means blockchain applications (including decentralized finance trading protocols and related decentralized finance messaging systems) that allow users to engage in financial transactions in a self-directed manner so that a third-party intermediary does not effectuate the transactions or take custody of digital commodities of a user during any part of the transactions.</text></subparagraph> <subparagraph id="H272C382FB74F442CAA4125BAC463811B"><enum>(B)</enum><header>Relationship to excluded activities</header><text display-inline="yes-display-inline">The term <term>decentralized finance</term> shall not be interpreted to limit or exclude any activity from the activities described in section 15I(a) of the Securities Exchange Act of 1934 or section 4v(a) of the Commodity Exchange Act.</text></subparagraph></paragraph> <paragraph id="HB8D80D2760004F3CB572D43AE5B230A7"><enum>(2)</enum><header>Relevant congressional committees</header><text>The term <term>relevant congressional committees</term> means—</text> <subparagraph id="HB88CDA0B6B4F40A388B707D9B779F88F"><enum>(A)</enum><text>the Committees on Financial Services and Agriculture of the House of Representatives; and</text></subparagraph> <subparagraph id="H2CFAA15E3DFB4DDA81DB1957EABE1757"><enum>(B)</enum><text>the Committees on Banking, Housing, and Urban Affairs and Agriculture, Nutrition, and Forestry of the Senate.</text></subparagraph></paragraph></subsection></section> <section id="HFBA5BE408F29428EB211C16BB69A3F15"><enum>506.</enum><header>Study on non-fungible tokens</header> <subsection id="H5478631C5197456F9AE966DB638D0B5B"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The Comptroller General of the United States shall carry out a study of non-fungible tokens that analyzes—</text> <paragraph id="H91F61A97B4274CFE84819EAFD038557B"><enum>(1)</enum><text display-inline="yes-display-inline">the nature, size, role, purpose, and use of non-fungible tokens;</text></paragraph> <paragraph id="H626D88F3C95C44BF9B4941FAE1885D2D"><enum>(2)</enum><text display-inline="yes-display-inline">the similarities and differences between non-fungible tokens and other digital commodities, including digital commodities and permitted payment stablecoins, and how the markets for those digital commodities intersect with each other;</text></paragraph> <paragraph id="HF2F8433B9A074B87B5F97E9C9034FF11"><enum>(3)</enum><text display-inline="yes-display-inline">how non-fungible tokens are minted by issuers and subsequently administered to purchasers;</text></paragraph> <paragraph id="HB3FF65AB19CB4C1299696A09A21BEA08"><enum>(4)</enum><text display-inline="yes-display-inline">how non-fungible tokens are stored after being purchased by a consumer;</text></paragraph> <paragraph id="H3D03E9483FDB4F07A834D62CD9175103"><enum>(5)</enum><text display-inline="yes-display-inline">the interoperability of non-fungible tokens between different blockchain systems;</text></paragraph> <paragraph id="H4B6A993030DC463796319C3D0D882761"><enum>(6)</enum><text>the scalability of different non-fungible tokens marketplaces;</text></paragraph> <paragraph id="HFF18008664D949FAA806A3CA1367F381"><enum>(7)</enum><text display-inline="yes-display-inline">the benefits of non-fungible tokens, including verifiable digital ownership;</text></paragraph> <paragraph id="H7EF6A840BF734A3C992948424B4B37D7"><enum>(8)</enum><text>the risks of non-fungible tokens, including—</text> <subparagraph id="HF7D8F5662AC640958C0DE2C4DD1ADF46"><enum>(A)</enum><text>intellectual property rights;</text></subparagraph> <subparagraph id="HE14D4191379544FB9F1E77D0BA2B9D81"><enum>(B)</enum><text>cybersecurity risks; and</text></subparagraph> <subparagraph id="H275FF41059044EFA928D446B6DA97939"><enum>(C)</enum><text>market risks;</text></subparagraph></paragraph> <paragraph id="H6D6FE75089164009B9CE8DFD6D3A6209"><enum>(9)</enum><text display-inline="yes-display-inline">whether and how non-fungible tokens have integrated with traditional marketplaces, including those for music, real estate, gaming, events, and travel;</text></paragraph> <paragraph id="HF6521F43E8A24B079D53150132809ABD"><enum>(10)</enum><text display-inline="yes-display-inline">whether and how non-fungible tokens can be used to facilitate commerce or other activities through the representation of documents, identification, contracts, licenses, and other commercial, government, or personal records;</text></paragraph> <paragraph id="H417BC9E7113D41ECAAE50D4D6CAC5BCC"><enum>(11)</enum><text>any potential risks to traditional markets from such integration; and</text></paragraph> <paragraph id="HAAE6302E64D24239B67BC7113E9CBE12"><enum>(12)</enum><text>the levels and types of illicit activity in non-fungible tokens markets.</text></paragraph></subsection> <subsection id="HFFCFC42F07674517B30D072B6321E304"><enum>(b)</enum><header>Report</header><text display-inline="yes-display-inline">Not later than 1 year after the date of the enactment of this Act, the Comptroller General, shall make publicly available a report that includes the results of the study required by subsection (a).</text></subsection></section> <section id="H5724F26F612D4A4E92D01B20037EE880" display-inline="no-display-inline" section-type="subsequent-section"><enum>507.</enum><header>Study on expanding financial literacy amongst digital commodity holders</header> <subsection id="H8D6ADBE1B0094F5E84320DDEFFED8C2F"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The Commodity Futures Trading Commission with the Securities and Exchange Commission shall jointly conduct a study to identify—</text> <paragraph id="H6A34E74B6C4E41AEBB2BE49FC51CD6C5"><enum>(1)</enum><text display-inline="yes-display-inline">the existing level of financial literacy among retail digital commodity holders, including subgroups of investors identified by the Commodity Futures Trading Commission with the Securities and Exchange Commission;</text></paragraph> <paragraph id="H0ED8A73F939F4D96B045B59F5DFEAB55"><enum>(2)</enum><text display-inline="yes-display-inline">methods to improve the timing, content, and format of financial literacy materials regarding digital commodities provided by the Commodity Futures Trading Commission and the Securities and Exchange Commission;</text></paragraph> <paragraph id="H8457C92C263E41D0B7B379588E46BDF7"><enum>(3)</enum><text display-inline="yes-display-inline">methods to improve coordination between the Securities and Exchange Commission and the Commodity Futures Trading Commission with other agencies, including the Financial Literacy and Education Commission as well as nonprofit organizations and State and local jurisdictions, to better disseminate financial literacy materials;</text></paragraph> <paragraph id="H2722C49F1B4D4A2AB4B8DFD939FE669D"><enum>(4)</enum><text>the efficacy of current financial literacy efforts with a focus on rural communities and communities with majority minority populations;</text></paragraph> <paragraph id="H3321706592CD481A8ADE270BB6DC6170"><enum>(5)</enum><text display-inline="yes-display-inline">the most useful and understandable relevant information, including clear disclosures, that retail digital commodity holders need to make informed financial decisions before engaging with or purchasing a digital commodity or service that is typically sold to retail investors of digital commodities;</text></paragraph> <paragraph id="HC701678C982B497DBFAA832966AE95B3"><enum>(6)</enum><text display-inline="yes-display-inline">the most effective public-private partnerships in providing financial literacy regarding digital commodities to consumers;</text></paragraph> <paragraph id="H98466278748D433F8F7AB774D5712D8C"><enum>(7)</enum><text>the most relevant metrics to measure successful improvement of the financial literacy of an individual after engaging with financial literacy efforts; and</text></paragraph> <paragraph id="HF497E1E90BE94D03904F7034918A97A9"><enum>(8)</enum><text display-inline="yes-display-inline">in consultation with the Financial Literacy and Education Commission, a strategy (including to the extent practicable, measurable goals and objectives) to increase financial literacy of investors regarding digital commodities.</text></paragraph></subsection> <subsection id="H2F5894ACEF634F118498F6B1E04A7E8F"><enum>(b)</enum><header>Report</header><text>Not later than 1 year after the date of the enactment of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly submit a written report on the study required by subsection (a) to the Committees on Financial Services and on Agriculture of the House of Representatives and the Committees on Banking, Housing, and Urban Affairs and on Agriculture, Nutrition, and Forestry of the Senate.</text></subsection></section> <section id="HCD1C815EFAAA43718B330BC263A1E56E"><enum>508.</enum><header>Study on financial market infrastructure improvements</header> <subsection id="H5E1A063611BB44A682F6E6E3CDF3C22F"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly conduct a study to assess whether additional guidance or rules are necessary to facilitate the development of tokenized securities and derivatives products, and to the extent such guidance or rules would foster the development of fair and orderly financial markets, be necessary or appropriate in the public interest, and be consistent with the protection of investors and customers.</text></subsection> <subsection id="H97726B39BEDF4CCE8C28C3BDACB57B2A"><enum>(b)</enum><header>Report</header> <paragraph id="HE2C37A80D45C4B6EB04B3D6DE1F38063"><enum>(1)</enum><header>Time limit</header><text display-inline="yes-display-inline">Not later than 1 year after the date of enactment of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly submit to the relevant congressional committees a report that includes the results of the study required by subsection (a).</text></paragraph> <paragraph id="H0E08B459B9104A68BA6C222C2D8B61EF"><enum>(2)</enum><header>Relevant congressional committees defined</header><text>In this section, the term <term>relevant congressional committees</term> means—</text> <subparagraph id="H2906824BCD664C92AF2BA7F82A083F4E"><enum>(A)</enum><text>the Committees on Financial Services and on Agriculture of the House of Representatives; and</text></subparagraph> <subparagraph id="H2586A0E29E5B4994BCB6936A7B5E1E27"><enum>(B)</enum><text>the Committees on Banking, Housing, and Urban Affairs and on Agriculture, Nutrition, and Forestry of the Senate.</text></subparagraph></paragraph></subsection></section> <section id="HFF0B44DD63D9442D9018E74FE1378EED" commented="no"><enum>509.</enum><header>Study on blockchain in payments</header> <subsection id="H244DF8697ED04C86B6E14EFB062FA92F" commented="no"><enum>(a)</enum><header>Study required</header><text display-inline="yes-display-inline">The Secretary of the Treasury shall conduct a study on the potential use of blockchain technology by the domestic private sector to address—</text> <paragraph id="H23F45DE8F0374C5AAF322E81DE6060DB" commented="no"><enum>(1)</enum><text>fraud in payments;</text></paragraph> <paragraph id="HBD5F135138D34E2FAE9E39D25198C35B" commented="no"><enum>(2)</enum><text>transaction costs and transaction times;</text></paragraph> <paragraph id="H1AD593F0286C43F6B050DBB0FDE87941" commented="no"><enum>(3)</enum><text>automated payments; and</text></paragraph> <paragraph id="HC75C5A01CA1B434BAC32E826D0541901" commented="no"><enum>(4)</enum><text>efficiency in commercial transactions.</text></paragraph></subsection> <subsection id="HDA2E0AF10983471991C212D15DFC48EF" commented="no"><enum>(b)</enum><header>Report to Congress</header><text>Not later than one year after the date of enactment of this Act, the Secretary shall submit a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate that summarizes the findings of the study required under subsection (a).</text></subsection> <subsection id="H281FD197679C471BA045C9BAFDD8AD0B" commented="no"><enum>(c)</enum><header>Rule of construction</header><text>Nothing in this section shall be construed to mandate the use of blockchain technology by any public or private entity.</text></subsection></section> June 23, 2025 Reported from the Committee on Agriculture with an amendment June 23, 2025 Reported from the Committee on Financial Services with an amendment; committed to the Committee of the Whole House on the State of the Union and ordered to be printed