[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 4760 Introduced in Senate (IS)]
<DOC>
117th CONGRESS
2d Session
S. 4760
To amend the Commodity Exchange Act to provide the Commodity Futures
Trading Commission jurisdiction to oversee the spot digital commodity
market, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
August 3, 2022
Ms. Stabenow (for herself, Mr. Boozman, Mr. Booker, and Mr. Thune)
introduced the following bill; which was read twice and referred to the
Committee on Agriculture, Nutrition, and Forestry
_______________________________________________________________________
A BILL
To amend the Commodity Exchange Act to provide the Commodity Futures
Trading Commission jurisdiction to oversee the spot digital commodity
market, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Digital Commodities Consumer
Protection Act of 2022''.
SEC. 2. DEFINITIONS.
(a) In General.--Section 1a of the Commodity Exchange Act (7 U.S.C.
1a) is amended--
(1) by redesignating paragraphs (3) through (15) and
paragraphs (16) through (51) as paragraphs (5) through (17) and
paragraphs (25) through (60), respectively;
(2) by inserting after paragraph (2) the following:
``(3) Associated person of a digital commodity broker.--
``(A) In general.--The term `associated person of a
digital commodity broker' 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--
``(i) the solicitation or acceptance of a
digital commodity trade; or
``(ii) the supervision of any person
engaged in the solicitation or acceptance of a
digital commodity trade.
``(B) Exclusion.--The term `associated person of a
digital commodity broker' does not include any person
associated with a digital commodity broker the
functions of which are solely clerical or ministerial.
``(4) Associated person of a digital commodity dealer.--
``(A) In general.--The term `associated person of a
digital commodity dealer' 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--
``(i) the solicitation or acceptance of a
digital commodity trade; or
``(ii) the supervision of any person
engaged in the solicitation or acceptance of a
digital commodity trade.
``(B) Exclusion.--The term `associated person of a
digital commodity dealer' does not include any person
associated with a digital commodity dealer the
functions of which are solely clerical or
ministerial.'';
(3) in paragraph (11) (as so redesignated), by striking
``and frozen concentrated orange juice'' and inserting ``frozen
concentrated orange juice, and digital commodities,'';
(4) in paragraph (12)(A) (as so redesignated)--
(A) by redesignating clauses (iii) and (iv) as
clauses (iv) and (v), respectively; and
(B) by inserting after clause (ii) the following:
``(iii) digital commodity;'';
(5) in paragraph (13)(A)(i) (as so redesignated)--
(A) by redesignating subclauses (III) and (IV) as
subclauses (IV) and (V), respectively; and
(B) by inserting after subclause (II) the
following:
``(III) digital commodity;'';
(6) in paragraph (14)(A)(i) (as so redesignated)--
(A) in subclause (II), by adding a semicolon at the
end;
(B) by redesignating subclauses (III) and (IV) as
subclauses (IV) and (V), respectively; and
(C) by inserting after subclause (II) the
following:
``(III) a digital commodity;'';
(7) by inserting after paragraph (17) (as so redesignated)
the following:
``(18) Digital commodity.--
``(A) In general.--The term `digital commodity'
means a fungible digital form of personal property that
can be possessed and transferred person-to-person
without necessary reliance on an intermediary.
``(B) Inclusions.--The term `digital commodity'
includes property commonly known as cryptocurrency or
virtual currency, such as Bitcoin and Ether.
``(C) Exclusions.--The term `digital commodity'
does not include--
``(i) an interest in a physical commodity;
``(ii) a security;
``(iii) a digital form of currency backed
by the full faith and credit of the United
States;
``(iv) except as provided in subparagraph
(D), an instrument regulated by the Commission
pursuant to any provision of this Act other
than section 2(c)(2)(F); or
``(v) any other instrument that the
Commission determines not to be a digital
commodity.
``(D) Exception.--The exclusion described in
subparagraph (C)(iv) shall not apply to a commodity
transaction that is subject only to Commission
antimanipulation, antifraud, or false reporting
authority.
``(19) Digital commodity broker.--
``(A) In general.--The term `digital commodity
broker' means a person that is engaged, as an
identifiable business, in--
``(i) soliciting or accepting orders on
behalf of another person for a digital
commodity trade;
``(ii) accepting digital commodities from
another person for the purpose of entering into
digital commodity trades;
``(iii) arranging digital commodity trades
on behalf of another person; or
``(iv) a similar activity, as determined by
the Commission.
``(B) Exclusion.--The term `digital commodity
broker' does not include a person solely because that
person validates digital commodity transactions.
``(20) Digital commodity custodian.--
``(A) In general.--The term `digital commodity
custodian' means a person that, as an identifiable
business, maintains possession, custody, or control
over digital commodities on behalf of another person.
``(B) Exclusions.--The term `digital commodity
custodian' does not include--
``(i) an insured depository institution (as
defined in section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813)); or
``(ii) an insured credit union (as defined
in section 101 of the Federal Credit Union Act
(12 U.S.C. 1752)).
``(21) Digital commodity dealer.--
``(A) In general.--The term `digital commodity
dealer' means a person that--
``(i) has an identifiable business of
dealing in a digital commodity as principal for
its own account;
``(ii) makes a market in a digital
commodity;
``(iii) holds itself out as a dealer in a
digital commodity;
``(iv) has as an identifiable business of
buying or selling digital commodities for
conversion into other digital commodities,
currency, or other consideration;
``(v) has as an identifiable business of
accepting digital commodities from another
person (referred to in this clause as a
`depositor') with an obligation to return the
digital commodities, consideration linked to
the digital commodities, or both to the
depositor; or
``(vi) engages in a similar activity, as
determined by the Commission.
``(B) Exclusion.--The term `digital commodity
dealer' does not include a person solely because that
person validates digital commodity transactions.
``(22) Digital commodity platform.--
``(A) In general.--The term `digital commodity
platform' means a person that is 1 or more of the
following:
``(i) A digital commodity broker.
``(ii) A digital commodity custodian.
``(iii) A digital commodity dealer.
``(iv) A digital commodity trading
facility.
``(B) Category.--The term `category', with respect
to a digital commodity platform, means 1 or more
categories described in clauses (i) through (iv) of
subparagraph (A) of that digital commodity platform.
``(23) Digital commodity trade.--
``(A) In general.--The term `digital commodity
trade' means a purchase or sale of a digital commodity
in exchange for--
``(i) another digital commodity; or
``(ii) any other consideration.
``(B) Inclusions.--The term `digital commodity
trade' includes--
``(i) an offer to enter into a purchase or
sale described in subparagraph (A); and
``(ii) a loan of a digital commodity, an
offer to enter into a loan of a digital
commodity, or a similar activity, as determined
by the Commission.
``(C) Exclusion.--Except as provided in
subparagraph (D), the term `digital commodity trade'
excludes a transaction regulated by the Commission
pursuant to any provision of this Act except section
2(c)(2)(F).
``(D) Exception.--The exclusion described in
subparagraph (C) shall not apply to a commodity
transaction that is subject only to Commission
antimanipulation, antifraud, or false reporting
authority.
``(24) Digital commodity trading facility.--
``(A) In general.--The term `digital commodity
trading facility' means a trading facility that
facilitates the execution or trading of digital
commodity trades between persons.
``(B) Exclusion.--The term `digital commodity
trading facility' does not include a person solely
because that person validates digital commodity
transactions.'';
(8) in paragraph (43) (as so redesignated)--
(A) in the paragraph heading, by striking ``;
member of a derivatives transaction execution
facility'';
(B) in the matter preceding subparagraph (A), by
striking ``entity or derivatives transaction execution
facility,'' and inserting ``entity,'';
(C) in subparagraph (A), by striking ``entity'' and
all that follows through the semicolon and inserting
``entity;''; and
(D) in subparagraph (B), by striking ``entity'' and
all that follows through the period at the end and
inserting ``entity.''; and
(9) in paragraph (49) (as so redesignated)--
(A) by redesignating subparagraphs (E) and (F) as
subparagraphs (F) and (G), respectively; and
(B) by inserting after subparagraph (D) the
following:
``(E) a digital commodity trading facility
registered under section 5i;''.
(b) Conforming Amendments.--
(1) Section 1a of the Commodity Exchange Act (7 U.S.C. 1a)
is amended--
(A) in paragraph (26)(A) (as redesignated by
subsection (a)(1)), in the matter preceding clause (i),
by striking ``(18)(A)'' and inserting ``(27)(A)''; and
(B) in paragraph (27)(A)(vii)(III)(aa) (as
redesignated by subsection (a)(1)), by striking
``(17)(A)'' and inserting ``(26)(A)''.
(2) Section 4(c)(1)(A)(i)(I) of the Commodity Exchange Act
(7 U.S.C. 6(c)(1)(A)(i)(I)) is amended by striking ``paragraphs
(2), (3), (4), (5), and (7), paragraph (18)(A)(vii)(III),
paragraphs (23), (24), (31), (32), (38), (39), (41), (42),
(46), (47), (48), and (49) of section 1a'' and inserting
``paragraphs (2), (5), (6), (7), (9), (27)(A)(vii)(III), (32),
(33), (40), (41), (47), (48), (50), (51), (55), (56), (57), and
(58) of section 1a''.
(3) Section 4q(a)(1) of the Commodity Exchange Act (7
U.S.C. 6q(a)(1)) is amended by striking ``1a(9)'' and inserting
``1a(11)''.
(4) Section 4s of the Commodity Exchange Act (7 U.S.C. 6s)
is amended--
(A) in subsection (f)(1)(D), by striking
``1a(47)(A)(v)'' and inserting ``1a(56)(A)(v)''; and
(B) in subsection (h)(5)(A)(i), in the matter
preceding subclause (I), by striking ``1a(18)'' and
inserting ``1a(27)(A)''.
(5) Section 4t(b)(1)(C) of the Commodity Exchange Act (7
U.S.C. 6t(b)(1)(C)) is amended by striking ``1a(47)(A)(v)),''
and inserting ``1a(56)(A)(v)),''.
(6) Section 5 of the Commodity Exchange Act (7 U.S.C. 7) is
amended--
(A) in subsection (d)(23), by striking
``1a(47)(A)(v)'' and inserting ``1a(56)(A)(v)''; and
(B) in subsection (e)(1), by striking ``1a(9)'' and
inserting ``1a(11)''.
(7) Section 5b(k)(3)(A) of the Commodity Exchange Act (7
U.S.C. 7a-1(k)(3)(A)) is amended by striking ``1a(47)(A)(v))''
and inserting ``1a(56)(A)(v))''.
(8) Section 5c(c)(4)(B) of the Commodity Exchange Act (7
U.S.C. 7a-2(c)(4)(B)) is amended by striking ``1a(10)'' and
inserting ``1a(11)''.
(9) Section 5h(f)(10)(A)(iii) of the Commodity Exchange Act
(7 U.S.C. 7b-3(f)(10)(A)(iii)) is amended by striking
``1a(47)(A)(v)'' and inserting ``1a(56)(A)(v)''.
(10) Section 21(f)(4)(C) of the Commodity Exchange Act (7
U.S.C. 24a(f)(4)(C)) is amended by striking ``1a(48)'' and
inserting ``1a(57)''.
(11) Section 403 of the Legal Certainty for Bank Products
Act of 2000 (7 U.S.C. 27a) is amended--
(A) in subsection (a)(2), by striking
``1a(47)(A)(v)'' and inserting ``1a(56)(A)(v)''; and
(B) in subsection (b)(1), by striking ``1a(47)''
and inserting ``1a''.
(12) Section 5(e) of the Securities Act of 1933 (15 U.S.C.
77e(e)) is amended by striking ``section 1a(18) of the
Commodity Exchange Act (7 U.S.C. 1a(18))'' and inserting
``section 1a of the Commodity Exchange Act (7 U.S.C. 1a)''.
(13) Section 3C(g)(3)(A)(v) of the Securities Exchange Act
of 1934 (15 U.S.C. 78c-3(g)(3)(A)(v)) is amended by striking
``section 1a(10) of the Commodity Exchange Act;'' and inserting
``section 1a of the Commodity Exchange Act (7 U.S.C. 1a);''.
(14) Section 6(g)(5)(B)(i) of the Securities Exchange Act
of 1934 (15 U.S.C. 78f(g)(5)(B)(i)) is amended--
(A) in subclause (I), by striking ``section
1a(18)(B)(ii) of the Commodity Exchange Act'' and
inserting ``subparagraph (B)(ii) of section 1a(27) of
the Commodity Exchange Act (7 U.S.C. 1a(27))''; and
(B) in subclause (II), by striking ``such section
1a(18))'' and inserting ``that section)''.
(15) Section 712(a)(8) of the Dodd-Frank Wall Street Reform
and Consumer Protection Act (15 U.S.C. 8302(a)(8)) is amended
by striking ``section 1a(47)(D) of the Commodity Exchange Act
(7 U.S.C. 1a(47)(D))'' and inserting ``section 1a(56)(D) of the
Commodity Exchange Act (7 U.S.C. 1a(56)(D))''.
(16) Section 752(a) of the Dodd-Frank Wall Street Reform
and Consumer Protection Act (15 U.S.C. 8325(a)) is amended by
striking ``section 1a(39) of the Commodity Exchange Act),'' and
inserting ``section 1a of the Commodity Exchange Act (7 U.S.C.
1a)),''.
SEC. 3. COMMISSION JURISDICTION OVER DIGITAL COMMODITY TRADES.
Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is amended--
(1) in subsection (a)(1)(A), in the first sentence, by
striking ``section 19 of this Act'' and inserting ``subsection
(c)(2)(F) or section 19''; and
(2) in subsection (c)(2), by adding at the end the
following:
``(F) Commission jurisdiction over digital
commodity trades.--
``(i) In general.--Except as provided in
clause (ii), this Act applies to, and the
Commission shall have exclusive jurisdiction
over, any account, agreement, contract, or
transaction involving a digital commodity
trade.
``(ii) Exception.--Nothing in this Act
applies to, and the Commission shall not have
jurisdiction over, any digital commodity
transaction by a merchant or consumer that uses
a digital commodity solely for the purchase or
sale of a good or service.
``(iii) Prohibition on certain trading
practices.--Sections 4b, 4c, and 6(c) shall
apply to any digital commodity trade as if the
digital commodity trade were a contract of sale
of a commodity for future delivery.''.
SEC. 4. DIGITAL COMMODITY PLATFORMS.
The Commodity Exchange Act is amended by inserting after section 5h
(7 U.S.C. 7b-3) the following:
``SEC. 5I. DIGITAL COMMODITY PLATFORMS.
``(a) Registration.--
``(1) Requirement.--It shall be unlawful for any person to
act as any category of digital commodity platform unless the
person is registered under this section as that category of
digital commodity platform.
``(2) Applications.--A person desiring to register as any
category of digital commodity platform shall submit to the
Commission an application in such form and containing such
information as the Commission may require for the purpose of
determining whether the applicant is in compliance with
subsection (b) and the other requirements of this Act.
``(3) Multiple registrations.--As appropriate to further
the purposes of this Act and avoid duplicative or unnecessary
requirements, and taking into consideration potential conflicts
of interest or other risks, the Commission may prescribe rules
or regulations permitting, or may otherwise authorize--
``(A) registration by a person in more than 1
category of digital commodity platform;
``(B) a registered entity, a swap dealer, or a
futures commission merchant registered under this Act
to register under this section in 1 or more categories
of digital commodity platform; and
``(C) exemptions or additional requirements
applicable to persons with multiple registrations under
this Act.
``(b) Core Principles for Digital Commodity Platforms.--
``(1) Compliance with core principles.--
``(A) In general.--To be registered, and maintain
registration, as a digital commodity platform, the
digital commodity platform shall comply with--
``(i) the core principles described in this
subsection; and
``(ii) any requirement that the Commission
may impose by rule or regulation.
``(B) Reasonable discretion of digital commodity
platform.--Unless otherwise determined by the
Commission by rule or regulation, a digital commodity
platform described in subparagraph (A) shall have
reasonable discretion in establishing the manner in
which the digital commodity platform complies with the
core principles described in this subsection.
``(2) Core principles applicable to digital commodity
trading facilities.--
``(A) Compliance with rules.--A digital commodity
trading facility shall--
``(i) establish and enforce compliance with
any rule of the digital commodity trading
facility, including--
``(I) the terms and conditions of
the transactions in digital commodities
traded or processed on or through the
digital commodity trading facility; and
``(II) any limitation on access to
the digital commodity trading facility;
``(ii) establish and enforce trading, trade
processing, and participation rules that will
deter abuses and have the capacity to detect,
investigate, and enforce those rules, including
means--
``(I) to provide market
participants with impartial access to
the market; and
``(II) to capture information that
may be used in establishing whether
rule violations have occurred; and
``(iii) establish rules governing the
operation of the digital commodity trading
facility.
``(B) Digital commodity transactions not readily
susceptible to manipulation.--A digital commodity
trading facility shall permit trading only in
transactions in digital commodities that are not
readily susceptible to manipulation.
``(C) Monitoring of trading and trade processing.--
``(i) Markets and mechanisms.--
``(I) In general.--A digital
commodity trading facility shall
provide a competitive, open, and
efficient market and mechanism for
executing transactions that protects
the price discovery process of trading
on the digital commodity trading
facility.
``(II) Centralized market.--A
digital commodity trading facility
shall provide a centralized market for
executing transactions.
``(ii) Protection of markets and market
participants.--A digital commodity trading
facility shall establish and enforce rules--
``(I) 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
``(II) to promote fair and
equitable trading on the digital
commodity trading facility.
``(iii) Procedures and monitoring.--A
digital commodity trading facility shall--
``(I) establish and enforce rules
or terms and conditions defining, or
specifications detailing--
``(aa) trading procedures
to be used in entering and
executing orders traded on or
through the facilities of the
digital commodity trading
facility; and
``(bb) procedures for trade
processing of digital
commodities on or through the
facilities of the digital
commodity trading facility; and
``(II) monitor trading in digital
commodities to prevent manipulation,
price distortion, and disruptions of
the delivery or settlement process
through surveillance, compliance, and
disciplinary practices and procedures,
including investigations, sanctions,
and methods for conducting real-time
monitoring of trading and comprehensive
and accurate trade reconstructions.
``(D) Ability to obtain information.--A digital
commodity trading facility shall--
``(i) establish and enforce rules that will
allow the digital commodity trading facility to
obtain any necessary information to perform any
of the functions described in this section;
``(ii) provide the information to the
Commission on request; and
``(iii) have the capacity to carry out such
international information-sharing agreements as
the Commission may require.
``(E) Financial integrity of transactions.--A
digital commodity trading facility shall establish and
enforce rules and procedures for ensuring the financial
integrity of digital commodity trades entered on or
through the facilities of the digital commodity trading
facility.
``(F) Emergency authority.--A digital commodity
trading facility shall adopt rules to provide for the
exercise of emergency authority, in consultation or
cooperation with the Commission, as is necessary and
appropriate, including the authority to liquidate or
transfer open positions in any digital commodity or to
suspend or curtail trading in a digital commodity.
``(G) Timely publication of trading information.--
``(i) In general.--A digital commodity
trading facility shall make public timely
information on price, trading volume, and other
trading data on digital commodities to the
extent prescribed by the Commission.
``(ii) Capacity of digital commodity
trading facility.--A digital commodity trading
facility shall be required to have the capacity
to electronically capture and transmit trade
information with respect to transactions
executed on the digital commodity trading
facility.
``(H) Availability of general information.--A
digital commodity trading facility shall make available
to market authorities, market participants, and the
public accurate information concerning--
``(i) the terms and conditions of the
contracts for transactions in digital
commodities;
``(ii) the rules and mechanisms for
executing digital commodity trades on or
through the facilities of the digital commodity
trading facility; and
``(iii) the rules and specifications
describing the operation of the electronic
matching platform or trade execution facility
of the digital commodity trading facility.
``(I) Disciplinary procedures.--A digital commodity
trading facility shall establish and enforce--
``(i) disciplinary procedures that
authorize the digital commodity trading
facility to discipline, suspend, or expel
market participants that violate the rules of
the digital commodity trading facility; or
``(ii) similar methods for performing the
functions described in clause (i), including
delegation to third parties.
``(J) Dispute resolution.--A digital commodity
trading facility shall establish and enforce rules
regarding, and provide facilities for alternative
dispute resolution, as appropriate, for, market
participants and market intermediaries.
``(3) Core principles applicable to digital commodity
dealers and digital commodity brokers.--
``(A) Execution.--A digital commodity dealer or
digital commodity broker--
``(i) shall establish prices fairly and
objectively;
``(ii) shall disclose the basis for those
prices; and
``(iii) shall not disrupt market
functioning or hinder the price discovery
process.
``(B) Daily trading records.--
``(i) In general.--A digital commodity
dealer or digital commodity broker shall keep
full, complete, and systematic records
(including all pertinent data and memoranda) of
all transactions relating to its business of
dealing or brokerage in digital commodity
transactions.
``(ii) Included communications.--A digital
commodity dealer or digital commodity broker
shall keep all oral and written communications
provided or received concerning quotes,
solicitations, bids, offers, instructions,
trading, and prices that lead to the execution
of a transaction in a digital commodity.
``(C) Business conduct standards.--A digital
commodity dealer or digital commodity broker shall
conform with such business conduct standards as may be
prescribed by the Commission by rule or regulation that
relate to--
``(i) fraud, manipulation, and other
abusive practices involving digital commodity
trades (including digital commodity trades that
are offered but not entered into);
``(ii) diligent supervision of the business
of the digital commodity dealer or digital
commodity broker; and
``(iii) such other matters as the
Commission determines to be appropriate.
``(D) Duties.--A digital commodity dealer or
digital commodity broker shall comply with the
following requirements:
``(i) Risk management procedures.--The
digital commodity dealer or digital commodity
broker shall establish robust and professional
risk management systems adequate for managing
the day-to-day business of the digital
commodity dealer or digital commodity broker.
``(ii) Disclosure of general information.--
The digital commodity dealer or digital
commodity broker shall disclose to the
Commission, as applicable, information
concerning--
``(I) terms and conditions of its
digital commodity trades;
``(II) trading operations,
mechanisms, and practices;
``(III) financial integrity
protections relating to transactions in
digital commodity trades; and
``(IV) other information relevant
to its digital commodity trades.
``(E) Ability to obtain information.--A digital
commodity dealer or digital commodity broker shall--
``(i) establish and enforce internal
systems and procedures to obtain any necessary
information to perform any of the functions
described in this section; and
``(ii) provide the information described in
clause (i) to the Commission on request.
``(4) Core principles applicable to all digital commodity
platforms.--
``(A) Recordkeeping and reporting.--A digital
commodity platform shall--
``(i)(I) maintain records of all activities
relating to the business of the digital
commodity platform, including a complete audit
trail, in a form and manner acceptable to the
Commission for a period of 5 years; and
``(II) keep the records described in
subclause (I) open to inspection by the
Commission;
``(ii) provide 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
``(iii) make such reports as are required
by the Commission relating to the transactions
and positions of the customers of the digital
commodity platform.
``(B) Antitrust considerations.--Unless necessary
or appropriate to achieve the purposes of this Act, a
digital commodity platform shall not--
``(i) adopt any rules or take any actions
that result in any unreasonable restraint of
trade; or
``(ii) impose any material anticompetitive
burden on trading or custody.
``(C) Conflicts of interest.--The Commission shall
require conflict of interest systems and procedures
that--
``(i) establish structural and
institutional safeguards--
``(I) to minimize conflicts of
interest that might potentially bias
the judgment or supervision of a
digital commodity platform and
contravene the core principles of fair
and equitable trading and the business
conduct standards described in this
Act, including conflicts arising out of
transactions or arrangements with
affiliates (including affiliates acting
as issuers, market-makers, or
custodians); and
``(II) which may include, as the
Commission determines to be
appropriate, information partitions and
the legal separation of different
categories of digital commodity
platforms;
``(ii) establish a process for resolving
conflicts of interest described in clause (i);
``(iii) require disclosure by a digital
commodity platform of any material incentives
or conflicts of interest that the digital
commodity platform is unable to resolve; and
``(iv) address such other issues as the
Commission determines to be appropriate.
``(D) Financial resources.--
``(i) In general.--A digital commodity
platform shall have adequate financial,
operational, and managerial resources to
discharge each responsibility of the digital
commodity platform.
``(ii) Financial resources for margin
trading.--The Commission shall require such
additional financial resources as are necessary
to enable a digital commodity platform to
fulfill obligations of the digital commodity
platform arising from margined, leveraged, or
financed transactions.
``(E) System safeguards.--A digital commodity
platform shall--
``(i) establish and maintain a program of
risk analysis and oversight to identify and
minimize sources of operational risk (including
cybersecurity risk), through the development of
appropriate controls and procedures, and
automated systems, that--
``(I) are reliable and secure; and
``(II) have adequate scalable
capacity;
``(ii) establish and maintain emergency
procedures, backup facilities, and a plan for
disaster recovery that allow for--
``(I) the timely recovery and
resumption of operations; and
``(II) the fulfillment of the
responsibilities and obligations of the
digital commodity platform; and
``(iii) periodically conduct tests to
verify that the backup resources of the digital
commodity platform are sufficient to ensure
continued--
``(I) order processing and trade
matching;
``(II) price reporting;
``(III) market surveillance; and
``(IV) maintenance of a
comprehensive and accurate audit trail.
``(F) Designation of chief compliance officer.--
``(i) In general.--A digital commodity
platform shall designate an individual to serve
as a chief compliance officer (referred to in
this paragraph as a `chief compliance
officer').
``(ii) Duties.--A chief compliance officer
shall--
``(I) report directly to the board
or to the senior officer of the digital
commodity platform;
``(II) review compliance with the
core principles described in this
subsection;
``(III) in consultation with the
board of the digital commodity
platform, a body performing a function
similar to that of a board, or the
senior officer of the digital commodity
platform, resolve any conflicts of
interest that may arise;
``(IV) be responsible for
establishing and administering the
policies and procedures required to be
established pursuant to this section;
``(V) 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
``(VI) 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.
``(iii) Requirements for procedures.--In
establishing procedures under clause (ii)(VI),
a chief compliance officer shall design the
procedures to establish the handling,
management response, remediation, retesting,
and closing of noncompliance issues.
``(iv) Annual reports.--
``(I) In general.--In accordance
with rules prescribed by the
Commission, a chief compliance officer
shall annually prepare and sign a
report that contains a description of--
``(aa) the compliance of
the digital commodity platform
with this Act; and
``(bb) the policies and
procedures, including the code
of ethics and conflict of
interest policies, of the
digital commodity platform.
``(II) Requirements.--A chief
compliance officer shall--
``(aa) submit each report
described in subclause (I) with
the appropriate financial
report of the digital commodity
platform that is required to be
submitted to the Commission
pursuant to this section; and
``(bb) include in the
report a certification that,
under penalty of law, the
report is accurate and
complete.
``(G) Governance; fitness standards.--
``(i) Governance arrangements.--A digital
commodity platform shall establish governance
arrangements that are transparent to fulfill
public interest requirements.
``(ii) Fitness standards.--A digital
commodity platform shall establish and enforce
appropriate fitness standards for--
``(I) directors; and
``(II) any entity offering
affiliated services for the digital
commodity platform.
``(H) Treatment of customer assets.--
``(i) In general.--A digital commodity
platform shall hold customer property
(including digital commodities) in a manner
that minimizes the risk of loss of, or
unreasonable delay in access to, the customer
property.
``(ii) Segregation of funds.--
``(I) In general.--A digital
commodity platform shall treat and deal
with all customer property that is
received by the digital commodity
platform as belonging to the customer.
``(II) Commingling prohibited.--
Customer property described in
subclause (I)--
``(aa) shall be separately
accounted for; and
``(bb) shall not be
commingled with the assets of
the digital commodity platform.
``(iii) Exceptions.--
``(I) Use of funds.--
Notwithstanding clause (ii), customer
property described in that clause may,
for convenience, be commingled in the
same account or accounts with--
``(aa) an insured
depository institution (as
defined in section 3 of the
Federal Deposit Insurance Act
(12 U.S.C. 1813));
``(bb) an insured credit
union (as defined in section
101 of the Federal Credit Union
Act (12 U.S.C. 1752)); or
``(cc) a digital commodity
platform.
``(II) Withdrawal.--Notwithstanding
clause (ii), such share of the customer
property described in that clause as,
in the normal course of business, is
necessary to margin, guarantee, secure,
transfer, adjust, or settle a digital
commodity transaction with a digital
commodity platform, or with any
customer of a digital commodity
platform, may be withdrawn and applied
to such purposes lawfully accruing in
connection with the digital commodity
transaction, including the payment of
commissions, taxes, and brokerage,
interest, storage, and other charges.
``(III) Commission action.--
Notwithstanding clause (ii)--
``(aa) the Commission may
adopt rules or regulations
permitting the lending of
digital commodities by a
digital commodity platform
holding those digital
commodities for customers,
subject to such conditions as
the Commission may prescribe to
protect customers and achieve
the purposes of this Act; and
``(bb) in accordance with
such terms and conditions as
the Commission may prescribe by
rule, regulation, or order, any
customer property described in
that clause may be commingled
and deposited in customer
accounts with any other money,
securities, or property
received by the digital
commodity platform and required
by the Commission to be
separately accounted for,
treated, and dealt with as
belonging to customers.
``(iv) Permitted investments.--
``(I) In general.--Customer
property described in clause (ii) in
the form of money may be invested in--
``(aa) obligations of the
United States;
``(bb) obligations the
principal and interest of which
are fully guaranteed by the
United States; and
``(cc) any other investment
that the Commission may by rule
or regulation prescribe.
``(II) Rules and conditions.--
Investments under subclause (I) shall
be made in accordance with such rules
and regulations, and subject to such
conditions, as the Commission may
prescribe.
``(v) Prohibition.--It shall be unlawful
for any person, including a digital commodity
platform or a depository institution, that has
received any customer property for deposit in a
separate account or accounts in accordance with
clause (ii) to hold, dispose of, or use that
customer property as belonging to the
depositing digital commodity platform or any
person other than the customers of the digital
commodity platform.
``(c) Rules Governing Margined or Leveraged Trading.--The
Commission may make, promulgate, and enforce such rules governing
margined, leveraged, or financed digital commodity trades on digital
commodity platforms as are reasonably necessary to protect the public
interest and promote the orderly settlement of transactions.
``(d) Contract Listings, Rules, and Rule Amendments for Digital
Commodity Trading Facilities.--
``(1) In general.--Subject to the requirements under this
subsection, a digital commodity trading facility may--
``(A) list for trading a contract for a digital
commodity; and
``(B) approve and implement a new rule or rule
amendment.
``(2) Certification from digital commodity trading
facility.--A digital commodity trading facility that elects to
carry out an activity described in subparagraph (A) or (B) of
paragraph (1) shall, prior to carrying out that activity,
provide to the Commission a written certification that the
contract, new rule, or rule amendment, as applicable, complies
with this Act (including regulations under this Act).
``(3) Effective date of listing, rule, and rule
amendment.--Subject to paragraph (4), a listing, rule, or rule
amendment described in paragraph (1) shall become effective on
the date that is--
``(A) in the case of a listing of a contract that
has not previously been listed on any digital commodity
trading facility, 30 business days after the date on
which the Commission receives the certification (or
such shorter period as determined by the Commission by
rule or regulation); or
``(B) in any other case, 10 business days after the
date on which the Commission receives the certification
(or such shorter period as determined by the Commission
by rule or regulation).
``(4) Stay of certification.--
``(A) In general.--The Commission may stay a
certification for a listing, rule, or rule amendment
described in paragraph (1) by notifying the digital
commodity trading facility that the Commission is
staying the certification because there exists--
``(i) a novel or complex issue that
requires additional time to analyze;
``(ii) an inadequate explanation by the
submitting digital commodity trading facility;
or
``(iii) a potential inconsistency with this
Act (including regulations under this Act).
``(B) Duration of stay.--A stay of certification by
the Commission under subparagraph (A) shall be for a
period of not more than 90 days, beginning on the date
of the notification by the Commission under that
subparagraph.
``(C) Effective date after stay.--A listing, rule,
or rule amendment subject to a stay under subparagraph
(A) shall become effective on the expiration of the
period described in subparagraph (B), unless the
Commission--
``(i) withdraws the stay prior to that
time; or
``(ii) notifies the digital commodity
trading facility during such period that the
Commission objects to the proposed
certification and disapproves a listing, rule,
or rule amendment pursuant to paragraph (5).
``(D) Public comment.--The Commission may provide a
public comment period of not less than 30 days, within
the period in which a stay is in effect under
subparagraph (B), whenever the Commission reviews a
listing, rule, or rule amendment pursuant to a
notification by the Commission under subparagraph (A).
``(5) Disapproval.--
``(A) In general.--The Commission may disapprove a
listing, rule, or rule amendment described in paragraph
(1) if the Commission determines that the listing,
rule, or rule amendment is inconsistent with this Act
(including the considerations in subparagraph (B) and
regulations under this Act).
``(B) Considerations.--In making a determination
described in subparagraph (A) with respect to a listing
for a digital commodity, the Commission may consider,
among other things--
``(i) whether the operating structure and
system of the digital commodity is secure from
cybersecurity threats, including the
possibility of material alterations by persons
acting collectively;
``(ii) whether the functionality of the
digital commodity will protect holders from
operational failures;
``(iii) with respect to a digital commodity
that purports to have a fixed value--
``(I) an identification and
description of the issuer of the
digital commodity;
``(II) the collateral or reserves
backing the digital commodity; and
``(III) the terms by which the
issuer will redeem the digital
commodity; and
``(iv) whether the digital commodity and
the market for the digital commodity are not
readily susceptible to manipulation.
``(6) Prior approval.--
``(A) In general.--A digital commodity trading
facility may request that the Commission grant prior
approval to the listing of any new contract for a
digital commodity.
``(B) Deadline.--If prior approval is requested
under subparagraph (A), the Commission shall take final
action on the request not later than 90 days after
submission of the request, unless the person submitting
the request agrees to an extension of the time
limitation established under this subparagraph.
``(C) Disapproval.--Paragraphs (4) and (5) shall
apply to Commission action on a request under this
paragraph.
``(7) Delisting; revocation.--After the listing of a
contract for a digital commodity has taken effect, the
Commission may require the delisting of the contract or
disapprove the listing in accordance with paragraph (5).
``(8) Disclosures.--
``(A) In general.--The Commission shall require a
digital commodity trading facility to disclose to the
public, on a timely basis, with respect to a listing
described in paragraph (1)(A)--
``(i) the operating structure and system of
the digital commodity; and
``(ii) the trading volume and volatility of
the digital commodity.
``(B) Format.--The Commission shall prescribe rules
and regulations for the standardization and
simplification of disclosures under subparagraph (A)
and subsection (f)(1)(A), including requiring that
disclosures--
``(i) are conspicuous;
``(ii) use plain language comprehensible to
customers; and
``(iii) succinctly explain the information
that is required to be communicated to the
customer.
``(e) Product Listing for Digital Commodity Brokers and Digital
Commodity Dealers.--
``(1) In general.--A digital commodity broker and a digital
commodity dealer may only trade, or arrange a trade, in a
contract for a digital commodity that is not readily
susceptible to manipulation.
``(2) Disclosure, listing, and certification
requirements.--A digital commodity broker and a digital
commodity dealer may only trade, or arrange for trading, in
digital commodities that have met the requirements of
subsection (d) (including the listing and disclosure
requirements).
``(f) Customer Protection.--The Commission shall adopt customer
protection requirements that--
``(1) require disclosure by a digital commodity platform to
a customer (other than another digital commodity platform
registered under this section) of--
``(A) information about the material risks and
characteristics of any applicable digital commodity
contracts; and
``(B) any material incentives or conflicts of
interest that the digital commodity platform may have
in connection with any applicable digital commodity
contracts;
``(2) establish a duty for a digital commodity platform to
communicate in a fair and balanced manner based on principles
of fair dealing and good faith;
``(3) establish standards governing digital commodity
platform marketing and advertising, including testimonials and
endorsements; and
``(4) establish such other standards and requirements as
the Commission may determine are--
``(A) in the public interest;
``(B) appropriate for the protection of customers;
or
``(C) otherwise in furtherance of the purposes of
this Act.
``(g) Examination and Publication of Energy Consumption in Digital
Commodity Markets.--
``(1) In general.--The Commission shall examine, in
collaboration with other Federal regulatory agencies as the
Commission determines appropriate, the energy consumption and
sources of energy used in connection with the creation and
transfer of the most widely traded digital commodities.
``(2) Report.--Not later than 180 days after the date of
enactment of the Digital Commodities Consumer Protection Act of
2022, the Commission shall submit to the Committee on
Agriculture, Nutrition, and Forestry of the Senate and the
Committee on Agriculture of the House of Representatives a
report describing--
``(A) an estimate of the energy consumption and
sources of energy used in connection with the creation
and transfer of the most widely traded digital
commodities; and
``(B) the methodology used by the Commission to
generate the estimate described in subparagraph (A).
``(3) Publication.--Using the methodology described in
paragraph (2)(B), the Commission shall publish on the website
of the Commission, and periodically update on a timely basis,
an estimate of the energy consumption and sources of energy
used in connection with the creation and transfer of the most
widely traded digital commodities.
``(h) Prohibition on Fraud, Deception, and Manipulation.--It shall
be unlawful for any digital commodity platform to engage in any act,
practice, or course of business in connection with its business as a
digital commodity platform that is fraudulent, deceptive, or
manipulative.
``(i) Self-Regulation.--
``(1) In general.--A digital commodity broker, digital
commodity dealer, or digital commodity custodian shall be a
member of a registered futures association, regardless of
whether such person is separately registered as a digital
commodity trading facility.
``(2) Delegation of registration functions.--The Commission
may authorize any registered futures association to perform any
portion of the registration functions with respect to digital
commodity platforms, associated persons of digital commodity
brokers, and associated persons of digital commodity dealers--
``(A) in accordance with rules, notwithstanding any
other provision of law, adopted by that registered
futures association and submitted to the Commission for
approval; and
``(B) subject to the provisions of this section
applicable to registrations granted by the Commission.
``(j) Dual Registration.--A digital commodity platform registered
under this section may also be registered with the Securities and
Exchange Commission as an exchange, broker, or dealer (as those terms
are defined in section 3 of the Securities Exchange Act of 1934 (15
U.S.C. 78c)) or another trading platform.
``(k) Fees for Registration.--
``(1) In general.--The Commission shall, in accordance with
this subsection, assess and collect fees, which shall be used
to recover the annual costs of--
``(A) registering digital commodity platforms;
``(B) conducting oversight of digital commodity
trades; and
``(C) carrying out education and outreach under
subsection (l).
``(2) Determination of fee rates.--In determining fee rates
under paragraph (1), the Commission shall consider--
``(A) the volume of business of the digital
commodity platform; and
``(B) the category of the digital commodity
platform.
``(3) Prohibitions.--
``(A) Commission.--The Commission shall not require
a digital commodity platform to collect directly from
customers a per-transaction fee for each digital
commodity trade.
``(B) Digital commodity platforms.--A digital
commodity platform shall not impose directly on
customers a per-transaction fee for each digital
commodity trade to pay the fees under paragraph (1).
``(4) Publication.--Not later than 60 days after the date
of enactment of an Act making a regular appropriation to the
Commission for a fiscal year, the Commission shall publish in
the Federal Register a notice of--
``(A) the fee rates determined pursuant to this
subsection for that fiscal year; and
``(B) any estimates or projections on which those
fee rates are based.
``(5) Records and disclosure.--In carrying out this
subsection, the Commission shall not be required to comply with
section 553 of title 5, United States Code.
``(6) No judicial review.--A fee rate prescribed under this
subsection shall not be subject to judicial review.
``(7) Deposit of fees.--Fees collected pursuant to this
subsection for any fiscal year shall be deposited and credited
as offsetting collections to the account providing
appropriations to the Commission.
``(8) Annual adjustment.--For each fiscal year, the
Commission shall, by order, determine fee rates pursuant to
this subsection that are reasonably likely to produce aggregate
fee collections that are equal to the annual appropriation to
the Commission by Congress for activities relating to the
registration of digital commodity platforms and the oversight
of digital commodity trades.
``(9) Lapse of appropriation.--If, on the first day of a
fiscal year, a regular appropriation to the Commission has not
been enacted, the Commission shall continue to collect (as
offsetting collections) fees pursuant to this subsection at
each of the rates in effect during the preceding fiscal year.
``(10) Budget requests.--The Commission shall itemize in
each budget submitted to the President or the Office of
Management and Budget the estimated annual costs of--
``(A) registering digital commodity platforms;
``(B) conducting oversight of digital commodity
trades; and
``(C) carrying out education and outreach under
subsection (l).
``(11) Limitations.--
``(A) In general.--Fees may only be assessed and
imposed pursuant to this subsection on digital
commodity platforms regulated by the Commission
pursuant to this section.
``(B) Use of fees.--Fees authorized under this
subsection are prohibited from funding any Commission
activity not directly related to the registration of
digital commodity platforms, the oversight of digital
commodity trades, and the education and outreach
carried out under subsection (l).
``(l) Customer Education and Outreach.--The Commission shall
provide education and outreach to customers participating in digital
commodity markets.
``(m) Inspection.--The Commission may inspect and monitor digital
commodity platforms, on an ongoing basis, for the purpose of ensuring
compliance with this Act.
``(n) Preemption of State Laws.--
``(1) In general.--The registration of a digital commodity
platform, an associated person of a digital commodity broker,
or an associated person of a digital commodity dealer under
this section--
``(A) shall preempt any applicable registration
requirements under State laws relating to money
transmission, virtual currency, and commodity brokers;
and
``(B) shall not affect the applicability of State
antifraud laws.
``(2) Compliance.--Beginning on the effective date of a
registration of a digital commodity platform under this
section, the digital commodity platform shall not be required
to comply with applicable State law requirements relating to
money transmission, virtual currency, and commodity brokerage.
``(o) Regulations.--The Commission shall prescribe such rules and
regulations as are appropriate for the implementation of this
section.''.
SEC. 5. ADDITIONAL AMENDMENTS.
(a) Retail Commodity Transactions.--Section 2(c)(2)(D)(ii) of the
Commodity Exchange Act (7 U.S.C. 2(c)(2)(D)(ii)) is amended--
(1) in subclause (III)(bb), by striking ``or'' at the end;
(2) by redesignating subclauses (IV) and (V) as subclauses
(V) and (VI), respectively; and
(3) by inserting after subclause (III) the following:
``(IV) a digital commodity
trade;''.
(b) Applicability.--Section 2(i) of the Commodity Exchange Act (7
U.S.C. 2(i)) is amended--
(1) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively, and indenting
appropriately;
(2) in the matter preceding subparagraph (A) (as so
redesignated), by striking ``The provisions'' and inserting the
following:
``(1) Swaps.--The provisions''; and
(3) by adding at the end the following:
``(2) Digital commodities.--The provisions of this Act
(including any rule prescribed or regulation promulgated under
this Act) relating to digital commodities shall not apply to
activities outside the United States unless those activities--
``(A) have a reasonably foreseeable significant
effect within the United States;
``(B) involve, for the purpose of soliciting or
accepting any order for, or otherwise dealing in,
digital commodities--
``(i) the offering to enter into, entering
into, execution, or confirming the execution of
digital commodities with any United States
person; or
``(ii) the conducting of any office or
business anywhere in the United States
(including any territory or possession of the
United States); or
``(C) contravene such rules or regulations as the
Commission may prescribe or promulgate as are necessary
or appropriate to prevent the evasion of any provision
of this Act.''.
(c) Registration of Associated Persons.--
(1) In general.--Section 4k of the Commodity Exchange Act
(7 U.S.C. 6k) is amended--
(A) by redesignating paragraphs (4) through (6) as
paragraphs (5) through (7);
(B) by inserting after paragraph (3) the following:
``(4) 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 such
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 such digital commodity broker or digital
commodity dealer knew or should have known that such person was
not so registered or that such registration had expired, been
suspended (and the period of suspension has not expired), or
been revoked.''; and
(C) in paragraph (5) (as so redesignated), by
striking ``or of a commodity trading advisor'' and
inserting ``of a commodity trading advisor, of a
digital commodity broker, or of a digital commodity
dealer''.
(2) Conforming amendment.--The Commodity Exchange Act (7
U.S.C. 1a et seq.) is amended by striking ``section 4k(6)''
each place it appears and inserting ``section 4k(7)''.
(d) Commodity Trading Advisers; Commodity Pool Operators.--
(1) In general.--Section 4l of the Commodity Exchange Act
(7 U.S.C. 6l) is amended--
(A) in paragraph (2), by striking ``derivatives
transaction execution facilities'' and inserting
``digital commodity trades on or subject to the rules
of digital commodity trading facilities''; and
(B) in paragraph (3), by striking ``derivatives
transaction execution facilities'' and inserting
``digital commodity trading facilities''.
(2) Use of mail or other interstate commerce.--Section
4m(3)(C) of the Commodity Exchange Act (7 U.S.C. 6m(3)(C)) is
amended by inserting ``digital commodity trades,'' before ``and
any monies''.
(3) Registration.--Section 4n(3)(B) of the Commodity
Exchange Act (7 U.S.C. 6n(3)(B)) is amended by inserting ``or
digital commodity'' after ``futures market''.
(e) Acceptable Business Practices Under Core Principles.--Section
5c(a)(1) of the Commodity Exchange Act (7 U.S.C. 7a-2(a)(1)) is amended
by striking ``and 5b(c)(2),'' and inserting ``, 5b(c)(2), and 5i(b)''.
(f) Public Disclosure.--Section 8(a)(1) of the Commodity Exchange
Act (7 U.S.C. 12(a)(1)) is amended, in the first sentence of the matter
preceding subparagraph (A), by inserting ``, digital commodity
platforms,'' after ``boards of trade''.
(g) Anti-Money Laundering.--
(1) Amendment.--Section 5312(a)(2) of title 31, United
States Code, is amended--
(A) by redesignating subparagraphs (Y) and (Z) as
subparagraphs (Z) and (AA), respectively; and
(B) by inserting after subparagraph (X) the
following:
``(Y) a digital commodity platform (as defined in
section 1a of the Commodity Exchange Act (7 U.S.C.
1a));''.
(2) Regulations.--
(A) Proposed regulations.--Not later than 180 days
after the date of enactment of this Act, the Secretary
of the Treasury, after consultation with the Commodity
Futures Trading Commission, shall publish proposed
regulations in the Federal Register requiring a digital
commodity platform (as defined in section 1a of the
Commodity Exchange Act (7 U.S.C. 1a)) registered with
the Commodity Futures Trading Commission to submit a
report of any suspicious transaction under section
5318(g) of title 31, United States Code.
(B) Final regulations.--Not later than 180 days
after the date of publication of the proposed
regulations under subparagraph (A), the Secretary of
the Treasury shall publish those regulations in final
form.
(h) Registration of Commodity Dealers and Associated Persons.--
Section 8a of the Commodity Exchange Act (7 U.S.C. 12a) is amended--
(1) in paragraph (1), by inserting ``digital commodity
brokers, associated persons of digital commodity brokers,
digital commodity dealers, associated persons of digital
commodity dealers,'' after ``to register'';
(2) in paragraph (2)--
(A) in subparagraph (C)--
(i) in clause (i), by inserting ``digital
commodity broker, digital commodity dealer,''
before ``futures commission merchant''; and
(ii) in clause (ii), by striking
``contracts of'' and inserting ``a digital
commodity trade or a contract of'';
(B) in subparagraph (D)--
(i) in clause (i), by inserting ``digital
commodity trade or'' before ``contract of
sale''; and
(ii) in clause (ii), by inserting ``digital
commodity broker, digital commodity dealer,''
before ``futures commission merchant''; and
(C) in subparagraph (E)(i), by striking
``Investors'' and inserting ``Investor'';
(3) in paragraph (3)--
(A) in subparagraph (B)(i), by striking
``Investors'' and inserting ``Investor'';
(B) in subparagraph (E)--
(i) in clause (i), by striking ``contract
of sale of a commodity for future delivery or''
and inserting ``contract of sale of a commodity
for future delivery, digital commodity trade,
or''; and
(ii) in clause (ii), by inserting ``digital
commodity broker, digital commodity dealer,''
before ``futures commission merchant''; and
(C) in subparagraph (J)--
(i) by inserting ``a digital commodity
trading facility,'' before ``a registered
entity''; and
(ii) by striking ``registered entity,
association'' and inserting ``digital commodity
trading facility, registered entity, registered
futures association'';
(4) in paragraph (4)--
(A) by striking ``futures commission merchant'' and
inserting ``digital commodity broker, digital commodity
dealer, futures commission merchant,'';
(B) by inserting ``digital commodity subject to the
rules of a digital commodity trading facility or''
before ``commodity''; and
(C) by inserting ``digital commodity trading
facility or'' before ``registered entity'' each place
it appears;
(5) in paragraph (6), by inserting ``digital commodity
trading facility, digital commodity custodian,'' before
``registered entity'' each place it appears; and
(6) in paragraph (9)--
(A) by inserting ``digital commodity trading
facility or'' before ``registered entity'' each place
it appears;
(B) by inserting ``digital commodity or'' before
``futures contract'' each place it appears; and
(C) by inserting ``digital commodity or'' before
``commodity'' each place it appears.
(i) Amendments to Title 11.--Title 11, United States Code, is
amended--
(1) in section 101(6), by inserting ``digital commodity
platform, as defined in section 1a of the Commodity Exchange
Act (7 U.S.C. 1a),'' after ``leverage transaction merchant,'';
and
(2) in section 761--
(A) in paragraph (4)(F)--
(i) in clause (i), by striking ``and'' at
the end;
(ii) in clause (ii), by inserting ``and''
after the semicolon; and
(iii) by adding at the end the following:
``(iii) with respect to a digital commodity
platform, a contract for a digital commodity trade--
``(I) held at a digital commodity platform;
or
``(II) executed by or through a digital
commodity platform;'';
(B) in paragraph (9)--
(i) in subparagraph (D), by striking ``or''
at the end;
(ii) in subparagraph (E)(ii)(II), by adding
``or'' after the semicolon at the end; and
(iii) by adding at the end the following:
``(F) with respect to a digital commodity
platform--
``(i) entity for or with whom the digital
commodity platform deals and that holds a claim
against the digital commodity platform on
account of a commodity contract made, received,
acquired, or held by or through the digital
commodity platform in the ordinary course of
the business of the digital commodity platform
as a digital commodity platform from or for a
commodity contract account of the entity; or
``(ii) entity that holds a claim against
the digital commodity platform arising out of--
``(I) the making, liquidation, or
change in the value of a commodity
contract of a kind specified in clause
(i) of this subparagraph;
``(II) a deposit or payment of
cash, a security, digital commodity, or
other property with the digital
commodity platform for the purpose of--
``(aa) making or margining
the commodity contract; or
``(bb) holding in custody,
or accepting a deposit, of
property related to the making
or margining of the commodity
contract; or
``(III) the making or taking of
delivery on the commodity contract.'';
(C) by redesignating paragraphs (11) through (17)
as paragraphs (12) through (18), respectively; and
(D) by inserting after paragraph (10) the
following:
``(11) the terms `digital commodity', `digital commodity
platform', and `digital commodity trade' have the meanings
given those terms in section 1a of the Commodity Exchange Act
(7 U.S.C. 1a);''.
SEC. 6. APPLICABILITY.
The amendments made by this Act shall not apply to any person
regulated under the Commodity Exchange Act (7 U.S.C. 1 et seq.), as
amended by this Act, until the date of effectiveness of the final rule
of the Commodity Futures Trading Commission requiring registration of
digital commodity platforms under section 5i of that Act.
SEC. 7. REPORT ON HISTORICALLY UNDERSERVED CUSTOMERS PARTICIPATING IN
DIGITAL COMMODITY MARKETS.
Not later than 180 days after the date of enactment of this Act,
the Commodity Futures Trading Commission (referred to in this section
as the ``Commission'') shall--
(1) examine the racial, ethnic, and gender demographics of
customers participating in digital commodity markets; and
(2) submit to the Committee on Agriculture, Nutrition, and
Forestry of the Senate and the Committee on Agriculture of the
House of Representatives a report--
(A) describing how those demographics will inform
the rules and regulations of the Commission relating to
customer protection;
(B) proposing ways in which the Commission can
provide outreach to historically underserved customers
participating in digital commodity markets; and
(C) containing recommendations relating to any
other activities the Commission determines to be
necessary to provide appropriate protection, outreach,
or other similar activities relating to historically
underserved customers participating in digital
commodity markets.
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