118 HR 5745 IH: Digital Asset Market Structure and Investor Protection Act
U.S. House of Representatives
2023-09-27
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.
1.This Act may be cited as the Digital Asset Market Structure and Investor Protection Act
.2.The table of contents for this Act is as follows:Sec. 1. Short title.Sec. 2. Table of contents.Title I—Digital Asset Securities under the Federal Securities LawsSubtitle A—Securities Exchange Act of 1934Sec. 101. Definition of digital asset security.Sec. 102. Delayed registration for digital asset securities.Sec. 103. Desecuritization of digital asset securities.Sec. 104. Joint SEC and CFTC rulemaking on major digital asset classification.Sec. 105. Conforming amendments.Subtitle B—Other Securities LawsSec. 111. Securities Act of 1933.Sec. 112. Investment Advisers Act of 1940.Sec. 113. Investment Company Act of 1940.Sec. 114. Securities Investor Protection Act of 1970.Title II—Treatment of Digital Assets under the Commodity Exchange ActSec. 201. Definitions.Sec. 202. Actual delivery of digital assets.Sec. 203. Optional Federal charter for digital asset trading and clearing.Sec. 204. Reporting requirements.Sec. 205. CTA and CPOs: Commodity Interests.Sec. 206. Swap data repositories and digital asset trade repositories.Title III—Digital Federal Reserve Notes, Legal Tender Status, the Regulation of Digital Asset Fiat-Based Stablecoins, and Federal Deposit and Share Insurance for Digital AssetsSubtitle A—Digital Federal Reserve NotesSec. 301. In general.Sec. 302. Digital asset legal tender status.Subtitle B—Regulation of Digital Asset Fiat-Based StablecoinsSec. 311. Department of Treasury regulation of digital asset fiat-based stablecoins.Sec. 312. Conforming amendment.Subtitle C—Federal Deposit and Share Insurance for Digital AssetsSec. 321. Digital asset not deposits for Federal deposit and share insurance.Sec. 322. Directed rulemaking FDIC and NCUA website disclosure on digital assets and insurance noncoverage.Title IV—Bank Secrecy ActSec. 401. Bank Secrecy Act.Sec. 402. Anonymizing services, money mule, and anonymity-enhanced convertible virtual currencies.Sec. 403. Digital asset transaction actual delivery reporting.Sec. 404. Virtual digital asset service providers.Title V—Various Digital Asset ReportsSec. 501. IRS report on digital asset ownership/taxes.Sec. 502. Report on ransomware and digital assets.Sec. 503. Report on decentralized finance.Sec. 504. Report on custody of digital assets and digital asset securities.Sec. 505. Report on digital asset trading platforms.Sec. 506. Report on false trade reporting, wash trading, and off-chain transaction on digital asset trading platforms.Sec. 507. Relevant committees defined.<enum>I</enum><header>Digital Asset Securities under the Federal Securities Laws</header><subtitle id="HA787E7F103104007B31D1ACE8BE4A10A"><enum>A</enum><header>Securities Exchange Act of 1934</header><section id="HE521BCDB90DF498996F44617C1325D0C"><enum>101.</enum><header>Definition of digital asset security</header><subsection id="H8E5C0CDC3EF0442A9A0B2ABD33C4E147" commented="no"><enum>(a)</enum><header>Definition of security</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—</text><paragraph id="HCFB093A8EDA74085ADFB170ED16099EC" commented="no"><enum>(1)</enum><text display-inline="yes-display-inline">by inserting <quote>digital asset security,</quote> after <term>investment contract,</term>; and</text></paragraph><paragraph id="HC2D0EB0B0B2D440BA141F81D3AA11B16" commented="no"><enum>(2)</enum><text display-inline="yes-display-inline">by striking <quote>; but shall not include currency</quote> and inserting <quote>; but shall not include any fiat currency, commodity, digital asset,</quote>.</text></paragraph></subsection><subsection id="HC2FC50E711CA408782F52D2A8C34335A"><enum>(b)</enum><header>Other definitions</header><text display-inline="yes-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="HC4631F4F0C4E4232A21C40F8412147BE"><enum>(1)</enum><text>by transferring paragraph (79) so as to appear after paragraph (78);</text></paragraph><paragraph id="H1FB0FEF6EE294714892971FC7DB1DAF2"><enum>(2)</enum><text>by redesignating the second paragraph (80) as paragraph (81); and</text></paragraph><paragraph id="HF339B225BB584D65A129CEBBDFB3BD96"><enum>(3)</enum><text>by adding at the end the following:</text><quoted-block style="OLC" id="H6EFAC35CD5594A79B0DE0382145BEF96" display-inline="no-display-inline"><paragraph id="H33093DC8DD894101AF2E517E30322492" commented="no"><enum>(82)</enum><header>Digital asset security</header><subparagraph id="H409239BE6E3F4B18A4735601D1BEFE33"><enum>(A)</enum><header>In general</header><text>The term <term>digital asset security</term> means a digital asset that:</text><clause id="H6BC2C9F79E534448A73C4084D08EB08F" commented="no"><enum>(i)</enum><text>Provides the holder of the digital asset with any of the following rights:</text><subclause id="H3D050D6D6954461B95C94BC51600E066" commented="no"><enum>(I)</enum><text>Equity or debt interest in the issuer.</text></subclause><subclause id="HCD0F818B3AC747008495C7CE7691B359" commented="no"><enum>(II)</enum><text>Right to profits, interest, or dividend payments from the issuer.</text></subclause><subclause id="H0B32AB90790644CDB54EFB422C595DAA" commented="no"><enum>(III)</enum><text>Voting rights in the major corporate actions (which shall not include new block creations, hardforks, or protocol changes related to the digital asset) of the issuer.</text></subclause><subclause id="HDB4F31B09424403C85918A92B8F4E6C3" commented="no"><enum>(IV)</enum><text>Liquidation rights in the event of the issuer’s liquidation.</text></subclause></clause><clause id="H5D8BA4A6DDCC472D8CA5709DCF96DE7B" commented="no"><enum>(ii)</enum><text display-inline="yes-display-inline">In the case of an issuer with a service, goods, or platform that is not wholly operational at the time of issuing such digital asset, with respect to any fundraising or capital formation activity (including initial coin offerings) which is accomplished through the issuance of such a digital asset, issues such digital asset to a holder in return for money (including other digital assets) to fund the development of the proposed service, goods, or platform of the issuer.</text></clause></subparagraph><subparagraph id="HDB21DB5AC78046089E430E7F324D36CE"><enum>(B)</enum><header>Rule relating to digital assets</header><text>The term <term>digital asset security</term> does not include any digital asset other than the digital assets described in subparagraph (A). Any digital asset not described in subparagraph (A) shall be considered to be, and regulated as, a commodity under the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1a">7 U.S.C. 1a et seq.</external-xref>). </text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section><section id="HB3D28A69BE0D44838D4A973AB4D147BF" commented="no"><enum>102.</enum><header>Delayed registration for digital asset securities</header><text display-inline="no-display-inline">Section 12(g)(1) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78l">15 U.S.C. 78l(g)(1)</external-xref>) is amended—</text><paragraph id="H948BFF78A87A4C458B64BA7551A1A964" commented="no"><enum>(1)</enum><text>in subparagraph (A)(ii), by striking <quote>and</quote> at the end;</text></paragraph><paragraph id="HF7D62FA10B9B4C2DB94C13153D7FF9DF"><enum>(2)</enum><text>in subparagraph (B), by inserting <quote>and</quote> after <quote>persons,</quote>; and</text></paragraph><paragraph id="H6E6C6D99C93849209D5C7A11594EFB45"><enum>(3)</enum><text>by inserting after subparagraph (B) the following:</text><quoted-block id="HC3E90F0C8CD645AC9122371EE9A83B62" style="OLC"><subparagraph id="HAECDE5808741411E8948711C4B241D9B" commented="no" indent="up1"><enum>(C)</enum><text display-inline="yes-display-inline">in the case of an issuer of a digital asset security, not later than 120 days after the last day of the third fiscal year on which the issuer first has total assets exceeding $10,000,000 and a class of equity security (other than an exempted security) held of record by 2,000 or more persons,</text></subparagraph><after-quoted-block>. </after-quoted-block></quoted-block></paragraph></section><section id="H9DDD25C200F8426D8ACA36C41B022BB9" commented="no"><enum>103.</enum><header>Desecuritization of digital asset securities</header><text display-inline="no-display-inline">Section 12(g) of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78l">15 U.S.C. 78l(g)</external-xref>) is amended by adding at the end the following:</text><quoted-block id="H5AC47665787745CFAA3434AFFF4BBC72" style="OLC"><paragraph id="HBE491399800B49A3BDA8DD8751A059AE" commented="no" indent="down1"><enum>(7)</enum><header>Desecuritization of digital asset securities</header><text display-inline="yes-display-inline">Registration of any class of digital asset security pursuant to this subsection or status as a security (or both) shall be terminated ninety days, or such shorter period as the Commission may determine, after the issuer files a desecuritization certification with the Commission. The desecuritization certification shall demonstrate that the issuer’s service, goods, or platform are fully operational and that the digital asset does not provide holders of such digital assets with any of the rights specified in subclauses (I) through (IV) of section 3(a)(82)(A). The Commission shall after notice and opportunity for hearing deny termination of registration or change in status as a security (or both) if it finds that the desecuritization certification is untrue. Termination of registration or change in status (or both) shall be deferred pending final determination on the question of denial. A digital asset security so desecuritized shall be considered to be, and regulated as, a commodity under the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1a">7 U.S.C. 1a et seq.</external-xref>). </text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section><section id="H832EAAE85AA64DEF9D8CA92F9746E38D"><enum>104.</enum><header>Joint SEC and CFTC rulemaking on major digital asset classification</header><text display-inline="no-display-inline">The Securities Exchange Act of 1934 is amended by adding at the end the following:</text><quoted-block id="HA447AD85712B473DB8E6B7F098C5CEBB"><section id="H64AEAC81F55344C39D8FFCA9D500DC43"><enum>105.</enum><header>Joint SEC and CFTC rulemaking on major digital asset classification</header><subsection id="H7E75D8CC855E4ED5B4DDA0760E3BA9C1"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Not later than 150 days after the date of the enactment of this section, the Commission and the Commodity Futures Trading Commission shall jointly publish, for purposes of a 60-day public comment period, a proposed rulemaking that classifies each of the major digital assets by (i) highest market capitalization and (ii) highest daily trading volume as either—</text><paragraph id="H47167949E3874BD68D572A3A86159D24"><enum>(1)</enum><text>a digital asset; or</text></paragraph><paragraph id="HB31F54DBDC464335A3C5ACD5F16226E9"><enum>(2)</enum><text>a digital asset security.</text></paragraph></subsection><subsection id="HBA8E0840CFE74C73B817B0B0C2B7DE0E"><enum>(b)</enum><header>Final rule</header><text display-inline="yes-display-inline">Not later than 270 days after the date of the enactment of this Act, the Commission and the Commodity Futures Trading Commission shall jointly publish a final rule that classifies each of the major digital assets by (i) highest market capitalization and (ii) highest daily average trading volume as—</text><paragraph id="H8914C199BDA64D6B81BC8E1763388C18"><enum>(1)</enum><text>a digital asset; or</text></paragraph><paragraph id="HCDE44290E8304A2F9C14B23C9307BE17"><enum>(2)</enum><text>a digital asset security.</text></paragraph></subsection><subsection id="H61F7A4B733DF42ADBF9E0F0F87F472CB" commented="no"><enum>(c)</enum><header>Major digital assets defined</header><text display-inline="yes-display-inline">In this subsection, the term <term>major digital assets</term> means the top 25 digital assets (including digital asset securities) by (i) the highest market capitalization and (ii) the highest daily trading volume as of the date of the enactment of the Digital Asset Market Structure and Investor Protection Act as reported on an appropriate publicly available website (as jointly determined by the Commission and the Commodity Futures Trading Commission) that publishes such information, such as CoinMarketCap. </text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section><section id="H71861A3A6FCC4C8FA49008DF83860CCD"><enum>105.</enum><header>Conforming amendments</header><subsection id="H44B625EEF23A4E2F83045B3DB5CB4C88"><enum>(a)</enum><header>Definition of broker</header><text display-inline="yes-display-inline">Section 3(a)(4)(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 by inserting <quote>including a digital asset security, but not digital assets,</quote> after <quote>security</quote>.</text></subsection><subsection id="HDE37C8A27FBD4CE999AB5494A5D08ED1"><enum>(b)</enum><header>Securities Exchange Act definitions</header><text>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>), as amended by section 101, is further amended by adding at the end the following:</text><quoted-block style="OLC" id="HD98678AD6A9E47F48BEF1D04684454FA" display-inline="no-display-inline"><paragraph id="HB5D18759D96E419F85E4E8AE8C0F2249" display-inline="no-display-inline"><enum>(83)</enum><header>Commodity Exchange Act terms</header><text>The terms, <quote>commodity</quote>, <term>digital asset</term>, <quote>digital asset repository of transactions</quote>, and <quote>virtual currency</quote> have the meanings given such terms, respectively, 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></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section></subtitle><subtitle id="H832AABE2E7894B3EACF69B6BAA11C806"><enum>B</enum><header>Other Securities Laws</header><section id="HDD644A8297EA47109D003B052C46817C"><enum>111.</enum><header>Securities Act of 1933</header><subsection id="HBB99ADCD3E1C49C7847407B759794C7D" commented="no"><enum>(a)</enum><header>Definition of security</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—</text><paragraph id="H83B2933D702840D88D559BF46B29D7B7" commented="no"><enum>(1)</enum><text>by inserting <quote>digital asset security,</quote> after <term>investment contract,</term>; and</text></paragraph><paragraph id="HD7BDB8CE0ECC40A5BE699E00EE9A8DC3" commented="no"><enum>(2)</enum><text display-inline="yes-display-inline">by striking the period at the end and inserting <quote>; but does not include any fiat currency, commodity, digital asset, or any note, draft, bill of exchange, or banker’s acceptance which has a maturity at the time of issuance of not exceeding nine months exclusive of days of grace or any renewal thereof the maturity of which is likewise limited.</quote>.</text></paragraph></subsection><subsection id="HF82FDC8E0A6545139498D11339122983"><enum>(b)</enum><header>Other definitions</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>) is amended by adding the following:</text><quoted-block style="OLC" id="HD68141309402406D89B5841FEB640050" display-inline="no-display-inline"><paragraph id="HDFFEF18C5BF241C7AB14ADBA1BC85DFD"><enum>(20)</enum><text display-inline="yes-display-inline">The terms <term>commodity</term>, <term>digital asset</term>, <term>digital asset repository of transactions</term>, and <term>virtual currency</term> have the meanings given such terms, respectively, 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></paragraph><paragraph id="H5EBC980A97434CDEBE6AFC7E1A9A9E5B"><enum>(21)</enum><text display-inline="yes-display-inline">The term <term>digital asset security</term> has the meaning given such term 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>).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section><section id="H86CC8586E00A4C04BDD93A7B664528C3"><enum>112.</enum><header>Investment Advisers Act of 1940</header><subsection id="H76E8C6372F464B7BBFBCD900A520EFCD" commented="no"><enum>(a)</enum><header>Definition of Security</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—</text><paragraph id="H2458E76AF2FA451DAE061221AFFC7AD3" commented="no"><enum>(1)</enum><text>by inserting <quote>digital asset security,</quote> after <quote>investment contract,</quote>; and</text></paragraph><paragraph id="H28BED5F3B43044F487BAEF34C4E7F594" commented="no"><enum>(2)</enum><text>by striking the period at the end and inserting <quote>; but does not include any fiat currency, commodity, digital asset, or any note, draft, bill of exchange, or banker’s acceptance which has a maturity at the time of issuance of not exceeding nine months exclusive of days of grace or any renewal thereof the maturity of which is likewise limited.</quote>.</text></paragraph></subsection><subsection id="H13141498CAF1496C90291232F4468046"><enum>(b)</enum><header>Definition of Digital Asset Security</header><text>Section 202(a) of the Investment Advisers Act of (<external-xref legal-doc="usc" parsable-cite="usc/15/80b-2">15 U.S.C. 80b–2(a)</external-xref>) is amended by adding at the end the following:</text><quoted-block id="HB131C92E7A1E46E7AB77ABCE8F79BBBE" style="OLC"><paragraph id="H1C52D385EF9C4AF7B34DED35DFD15105"><enum>(31)</enum><text display-inline="yes-display-inline">The term <term>digital asset security</term> has the meaning given such term 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></subsection><subsection id="HB16E55BEC94B4A6EA00037625DFD11E3" commented="no"><enum>(c)</enum><header>Other definitions</header><text display-inline="yes-display-inline">The second paragraph (29) of 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)(29)</external-xref>) is amended by inserting <quote><quote>commodity</quote>, <quote>digital asset</quote>, <quote>digital asset repository of transactions</quote>, <quote>virtual currency</quote></quote>, after <quote><quote>commodity trading advisor</quote>,</quote>.</text></subsection></section><section id="H3EE33B1C9BFE4B77966765086CED7CF6"><enum>113.</enum><header>Investment Company Act of 1940</header><subsection id="H04EE47B66B2F4354995822F9D478D42F" commented="no"><enum>(a)</enum><header>Definition of security</header><text>Section 2(a)(36) of the Investment Company Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80b-2">15 U.S.C. 80b–2(a)(36)</external-xref> is amended—</text><paragraph id="H1A8C41448B7D41C1AB4DEE1751E57A8E" commented="no"><enum>(1)</enum><text>by inserting <quote>digital asset security,</quote> after <quote>investment contract,</quote>; and</text></paragraph><paragraph id="HADA0FB76CD864EA281233E36323FF76B" commented="no"><enum>(2)</enum><text display-inline="yes-display-inline">by striking the period at the end and inserting <quote>; but does not include any fiat currency, commodity, digital asset, or any note, draft, bill of exchange, or banker’s acceptance which has a maturity at the time of issuance of not exceeding nine months exclusive of days of grace or any renewal thereof the maturity of which is likewise limited.</quote>.</text></paragraph></subsection><subsection id="H52B5DBF5B4F540D796B916689C8B584C"><enum>(b)</enum><header>Commodity Exchange Act terms</header><text>Section 2(a)(54) 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)</external-xref>) is amended by striking <quote>and <quote>swap execution facility</quote></quote> and inserting <quote><quote>swap execution facility</quote>, <quote>commodity</quote>, <quote>digital asset</quote>, <quote>digital asset repository of transactions</quote>, and <quote>virtual currency</quote></quote>. </text></subsection><subsection id="H0BDBA664EC104985B4532F4A2399DEC6"><enum>(c)</enum><header>Definition of digital asset security</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(a)</external-xref>) is amended by adding at the end the following:</text><quoted-block id="HA5B50865CA754899886C8A0838F5DB74" style="OLC"><paragraph id="HA41F6160D8D1416C855F675BB82D66C9"><enum>(55)</enum><text display-inline="yes-display-inline">The term <term>digital asset security</term> has the meaning given such term 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>).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section><section id="HD25F26BC08CC4717BB81924A7C22959E"><enum>114.</enum><header>Securities Investor Protection Act of 1970</header><subsection id="H382A82E044BB4FAB9AC92A767F57811B" commented="no"><enum>(a)</enum><header>In general</header><paragraph id="H13ABDF275B904878A2F2F3754F349678"><enum>(1)</enum><header>Definition of Security</header><text>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—</text><subparagraph id="H2C273BB1B7B84ACBB48937D498745130" commented="no"><enum>(A)</enum><text>by inserting <quote>, digital asset security,</quote> after <quote>investment contract</quote>;</text></subparagraph><subparagraph id="H145405C861994208A11ABFE29A2BB13E" commented="no"><enum>(B)</enum><text>by inserting <quote>, digital asset security,</quote> after <quote>if such investment contract</quote>; and</text></subparagraph><subparagraph id="H25FE5081F4424F12929383E3E16E2045" commented="no"><enum>(C)</enum><text display-inline="yes-display-inline">in the last sentence, by inserting <quote>digital asset,</quote> after <quote>commodity,</quote>. </text></subparagraph></paragraph><paragraph id="HA864D4FE6C0547639F84E03D1CE24930"><enum>(2)</enum><header>Other definitions</header><text>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 by adding the following:</text><quoted-block id="H700B2CCEF73F47A39709874CC1E5DE35" style="OLC"><paragraph id="H13B6DBE49F2845E281F813080E4F1205"><enum>(15)</enum><header>Commodity Exchange Act terms</header><text>The terms <term>commodity</term>, <term>digital asset</term>, <term>digital asset repository of transactions</term>, and <term>virtual currency</term> have the meanings given such terms, respectively, 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></paragraph><paragraph id="H9FCDF16F2966482B9453AB5BEA63B3E5"><enum>(16)</enum><header>Digital asset security</header><text display-inline="yes-display-inline">The term <term>digital asset security</term> has the meaning given such term 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>).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="H716940F265404D5EA2C6F8DD4CD86238"><enum>(b)</enum><header>SIPC notice</header><text>Not later than 90 days after the date of the enactment of this Act, the Securities Investor Protection Corporation shall make publicly available on the website of the Corporation a notice—</text><paragraph id="H0F95DE0D1CC346838A78A75CBFED5A94"><enum>(1)</enum><text display-inline="yes-display-inline">regarding the status of digital assets and digital asset securities and how such status impacts Securities Investor Protection Corporation insurance coverage; and</text></paragraph><paragraph id="H6EB68A78384F48DE8F9DD161099EE904"><enum>(2)</enum><text display-inline="yes-display-inline">that digital assets are not deposits and digital asset securities are in almost all cases not securities and neither would be covered by Securities Investor Protection Corporation insurance, regardless of whether—</text><subparagraph id="HB54C143DFD78499E8FA33A1E8B176AE3"><enum>(A)</enum><text>an insured bank, savings association, or credit union holds the digital assets or digital asset securities; or</text></subparagraph><subparagraph id="H6158FEC668274022BB128CAF20D075BB"><enum>(B)</enum><text display-inline="yes-display-inline">a broker or dealer (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>)) holds the digital assets or digital asset securities. </text></subparagraph></paragraph></subsection></section></subtitle><enum>II</enum><header>Treatment of Digital Assets under the Commodity Exchange Act</header><section id="H49B304846CB24ACEA495CF40FB628B98" commented="no"><enum>201.</enum><header>Definitions</header><subsection id="HA12614D05FE744ABB25BB499E7CB4763" commented="no"><enum>(a)</enum><header>Definition of commodity</header><text>Section 1a(9) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1a">7 U.S.C. 1a(9)</external-xref>) is amended by adding <quote>digital asset (including Bitcoin, Ether, and their hardforks),</quote> after <quote>livestock products,</quote>.</text></subsection><subsection id="HCADFF516C24248D1A2812A24635C7214" commented="no"><enum>(b)</enum><header>Other definitions relating to digital assets</header><text>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 by adding at the end the following:</text><quoted-block id="HD5AEA815E43146DFA89D00B9FE547DE0" style="OLC"><paragraph id="H253BC544F19D4E6D8811B569F6DE0D82"><enum>(52)</enum><header>Digital asset</header><text>The term <term>digital asset</term>—</text><subparagraph id="H75F01359F7E64FED95F0FEC46685F1A6"><enum>(A)</enum><text>means an asset—</text><clause id="H4A6EB0C1E98B4BF68AD7480C380A84EB" commented="no"><enum>(i)</enum><text>that is created electronically or digitally through software code;</text></clause><clause id="H5EFF1AC7D2344B54AC0285A892E352EF" commented="no"><enum>(ii)</enum><text>that is programmed with rules that—</text><subclause id="H50CFF2DC75EC411590B49D48A6B91B21" commented="no"><enum>(I)</enum><text>govern the creation, supply, ownership, use, and transfer of such digital asset; and</text></subclause><subclause id="H8A678131FBBA4C309F5E86A0B6251E81" commented="no"><enum>(II)</enum><text>are designed to resist modification or tampering by any single person or persons under common control; </text></subclause></clause><clause id="HD58DF3ED1D4E4AC283918FBE3F07CEB9" commented="no"><enum>(iii)</enum><text>that has a transaction history that—</text><subclause id="HC458B856A4DE4D4D9842E0EFB855EE52" commented="no"><enum>(I)</enum><text>is recorded on a—</text><item id="HDCEF71B673C64C148B7B33835F2AAD58" commented="no"><enum>(aa)</enum><text>distributed digital ledger; or</text></item><item id="HE47FCAAB73A04AF691693EA7F36B9EF0" commented="no"><enum>(bb)</enum><text>digital data structure in which consensus is achieved through a mathematically verifiable process;</text></item></subclause><subclause id="H89CABBFB28C54FDAB3935C6D3CE1E97A" commented="no"><enum>(II)</enum><text>is updated as soon as possible in accordance with the digital asset programming rules related to transactions and ownership; and</text></subclause><subclause id="H1C76867C815940B69524E22F8AD48A09" commented="no"><enum>(III)</enum><text>after consensus is reached, is designed to prevent modification or tampering with the ownership or transaction history by any single person or persons under common control; </text></subclause></clause><clause id="H006A648A74E44F1A81EDD515D24F29D0" commented="no"><enum>(iv)</enum><text>that is capable of being transferred between persons through a decentralized method without an intermediate custodian; and</text></clause></subparagraph><subparagraph id="H2FCEF75B8BB749119B73562DEFFD75FF"><enum>(B)</enum><text display-inline="yes-display-inline">is a broad term which includes several other terms used to describe digital assets by market participants and regulators such as <quote>virtual asset</quote>, <quote>virtual currency</quote>, and <quote>convertible virtual currency</quote> among others. </text></subparagraph></paragraph><paragraph id="H4CA7BD54146E440A9757B76FA44B858D" commented="no"><enum>(53)</enum><header>Digital asset security</header><text display-inline="yes-display-inline">The term <term>digital asset security</term> has the meaning given the term 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>).</text></paragraph><paragraph id="H3C712547406D45FD8A6A57342EA56A05" commented="no"><enum>(54)</enum><header>Digital asset repository of transactions</header><text display-inline="yes-display-inline">The term <term>digital asset repository of transactions</term> or <quote>DART</quote> means any person that collects and maintains information or records with respect to transactions or positions in, or the terms and conditions of, contracts of sale of digital assets in interstate commerce entered into by third parties (both on chain public distributed ledger transactions as well as off-chain transactions) for the purpose of providing a centralized recordkeeping facility for any digital asset, but does not include a private or public distributed ledger or the operator of either such ledger unless such private or public distributed ledger or operator seeks to aggregate or include <quote>off-chain</quote> transactions as well.</text></paragraph><paragraph id="HC7DC5E11005F47549EF0836830F2148F" commented="no"><enum>(55)</enum><header>Distributed ledger technology</header><text>The term <term>distributed ledger technology,</term> means a decentralized peer-to-peer network of computers that operate on open-source software which validate and irrevocably log digital asset ownership and transactions on a permanent public distributed ledger which is visible to the entire network.</text></paragraph><paragraph id="H6EC178599561495D96217EA425A4D6F0" commented="no"><enum>(56)</enum><header>Virtual currency</header><text>The term <term>virtual currency</term> means a digital asset which is a digital representation of value that does not have legal tender status and that functions as a medium of exchange, a unit of account, or a store of value. </text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="H6CBFE87733C74AD881EB8DF6B31A410C"><enum>(c)</enum><header>Definition of commodity trading advisor</header><text display-inline="yes-display-inline">Section 1(a)(12)(A)(i) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1">7 U.S.C. 1(a)(12)(A)(i)</external-xref> is amended by adding <quote>commodity interests, including any—</quote> after <quote>advisability of trading in</quote>.</text></subsection><subsection id="HF8BA7DF1668743D1BABED75E599F5464" commented="no"><enum>(d)</enum><header>Definition of futures commission merchant</header><text display-inline="yes-display-inline">Section 1a(28)(A)(i)(I)(aa) Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1a">7 U.S.C. 1a(9)</external-xref>) is amended—</text><paragraph id="HF97E2FE0D68C4F79A002DE15EB7246C5"><enum>(1)</enum><text>in subitem (EE), by striking <quote>or</quote> at the end; and</text></paragraph><paragraph id="H68E8C430F8D24792A19B70CFDBE1EA92"><enum>(2)</enum><text>by adding at the end the following:</text><quoted-block id="HE674ACA1ED394656A6D948716B76EAE2" style="OLC"><subparagraph id="HE206FBB8D2C045C9B76829D36797A702" commented="no" indent="down4"><enum>(GG)</enum><text display-inline="yes-display-inline">any contract of sale of a digital asset in interstate commerce, but not a digital asset security; or</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="HE63E3CBEA7EC40E499DA9B771A5358E1"><enum>(e)</enum><header>Definition of introducing broker</header><text display-inline="yes-display-inline">Section 1a(31)(A)(i)(I) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/1a">7 U.S.C. 1a(31)</external-xref>) is amended—</text><paragraph id="H0D2429CB6DF84E9AB781EA4B58E72E34"><enum>(1)</enum><text>in item (cc) by striking <quote>or</quote> at the end;</text></paragraph><paragraph id="HEB8ED66D8FCD4A22AA43875FA963622E"><enum>(2)</enum><text>in item (dd), by striking <quote>and</quote> at the end and inserting <quote>or</quote>; and </text></paragraph><paragraph id="HD04F6A353FB044BC89BBB78E24869B64"><enum>(3)</enum><text>by adding at the end the following: </text><quoted-block style="OLC" id="H543299D43E1F4C42A844D5E89B3B5827" display-inline="no-display-inline"><item id="HCA4DDF7145FE49949ED94AB2BBA5F086"><enum>(ee)</enum><text display-inline="yes-display-inline">any contract of sale of a digital asset in interstate commerce, but not a digital asset security; and</text></item><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section><section id="H3B88BFD0FB7544CE98B30BDEF20F01BD" commented="no"><enum>202.</enum><header>Actual delivery of digital assets</header><text display-inline="no-display-inline">Section 2(c)(2)(D)(ii)(III) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/2">7 U.S.C. 2(c)(2)(D)(ii)(III)</external-xref>) is amended—</text><paragraph id="H33D71974DD23414781A52B0A032F3FA4" commented="no"><enum>(1)</enum><text>in item (aa)—</text><subparagraph id="H3294D6889D35416DA8D0436FA361796B"><enum>(A)</enum><text>by striking <quote>other longer</quote> and inserting <quote>shorter</quote>; and</text></subparagraph><subparagraph id="H9F60F969967E45298AA19716AFCA773F"><enum>(B)</enum><text>by striking <quote>; or</quote> and inserting a semicolon; and</text></subparagraph></paragraph><paragraph id="HC6B63633F3A84C04AE7D05827CCB87A1" commented="no"><enum>(2)</enum><text>by adding at the end the following:</text><quoted-block id="H20220EE077F44B529D4DAB182D14000B" style="OLC"><item id="HD673A7FCA29047489A39DDA61DBD318C" commented="no"><enum>(cc)</enum><text>with respect to digital assets, results in actual delivery (including transfer of control over private keys) not later than 24 hours after the transaction is entered into and such delivery is accomplished by either—</text><subitem id="HF44E0475BA194031AC07233A20A16C99" commented="no"><enum>(AA)</enum><text>recording the transaction on the public distributed ledger for the digital asset; or</text></subitem><subitem id="H2C3DD6F5FA354D83860ED22358318D68" commented="no"><enum>(BB)</enum><text>with respect to digital asset transactions which are not recorded on a public distributed ledger for the digital asset, reporting the transaction to a CFTC registered digital asset repository of transactions; or</text></subitem></item><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section><section id="HD8A3253E65C548F6A24174426BD3DF8E" commented="no"><enum>203.</enum><header>Optional Federal charter for digital asset trading and clearing</header><text display-inline="no-display-inline">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 id="H66075EA2EE1C4ADA93B3C4870A77F06C" style="OLC"><subparagraph id="H4F72520CE51D43D8BC43B671925B5FEB" commented="no"><enum>(J)</enum><header>Optional Federal charter for digital asset trading and clearing</header><text display-inline="yes-display-inline">Notwithstanding any other provision of law, a registered entity may list, trade, or clear a contract of sale of a commodity in interstate commerce (including digital assets). The registered entity shall apply all the core principles and related regulations, including Bank Secrecy Act, anti-money laundering and know your customer requirements, to such contracts. The Commission shall have exclusive jurisdiction under this paragraph over any agreement, contract, or transaction involving a contract of sale of a commodity in interstate commerce (including any digital asset) which is listed, traded, or cleared on or through a registered entity and, provided further, such contracts shall be treated for regulatory and enforcement purposes as if they were contracts of sale of a commodity for future delivery. </text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></section><section id="H2DCD4C7F79B0400CBAEE23DC57FA3F52" commented="no"><enum>204.</enum><header>Reporting of digital asset transactions to DART</header><text display-inline="no-display-inline">A digital asset trading platform shall report to the digital asset repository of transactions each contract of sale of a digital asset in interstate commerce transaction executed on such digital asset trading platform, not later than 24 hours after such trade has executed.</text></section><section id="H5DBC1F1AB52A4B708A778A7F0B0D9D4F"><enum>205.</enum><header>CTA and CPOs: Commodity Interests</header><text display-inline="no-display-inline">Section 4m (3)(C) of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/6m">7 U.S.C. 6m(3)(C)</external-xref>) is amended by replacing the word <quote>paragraph</quote> with <quote>Act</quote> and striking the word <quote>physical</quote>.</text></section><section id="HCCE514F3FFD04FBFA85144DB25345B1B" commented="no"><enum>206.</enum><header>Swap data repositories and digital asset trade repositories</header><text display-inline="no-display-inline">Section 21 of the Commodity Exchange Act (<external-xref legal-doc="usc" parsable-cite="usc/7/24a">7 U.S.C. 24a</external-xref>) is amended to read as follows:</text><quoted-block id="HC59515167ED2437E9FFA18CB1B25339F" style="OLC"><section id="H6110017CF769423486E9FD95799ECCC5" commented="no"><enum>21.</enum><header>Swap data repositories and digital asset trade repositories</header><subsection id="H49FC87FD109C43E1B25A2D074E9AEAB6" commented="no"><enum>(a)</enum><header>Registration requirement</header><paragraph id="H707EB159C278491698D03954C8E3AE8F" commented="no"><enum>(1)</enum><header>Requirement; authority of derivatives clearing organization</header><subparagraph id="H8FCF58DB8C0D49F79BBAC0E9039E8FAF" commented="no"><enum>(A)</enum><header>In general</header><text>It shall be unlawful for any person, unless registered with the Commission, directly or indirectly to make use of the mails or any means or instrumentality of interstate commerce to perform the functions of a swap data repository or a digital asset repository of transactions.</text></subparagraph><subparagraph id="HAF775DACEED445F5B760207C10467F22" commented="no"><enum>(B)</enum><header>Registration of derivatives clearing organizations</header><text>A derivatives clearing organization may register as a swap data repository.</text></subparagraph></paragraph><paragraph id="H662D7F40D4A04CA0A5C690EC6725F1DF" commented="no"><enum>(2)</enum><header>Inspection and examination</header><text>Each registered swap data repository and digital asset repository of transactions shall be subject to inspection and examination by any representative of the Commission.</text></paragraph><paragraph id="HC826142E74154D47857323847CA04F05" commented="no"><enum>(3)</enum><header>Compliance with core principles</header><subparagraph id="H129DEF46430940CF94943975BE87E433" commented="no"><enum>(A)</enum><header>In general</header><text>To be registered, and maintain registration, as a swap data repository or a digital asset repository of transactions, the swap data repository or digital asset repository of transactions shall comply with—</text><clause id="HB602EC20FD3C44A8B1B0E4A26AAD29E0" commented="no"><enum>(i)</enum><text>the requirements and core principles described in this section; and</text></clause><clause id="HB5F6BB26ECA5478D8FC1351A30847F62" commented="no"><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="HF8DA92D71D1D414C8FAFCFA7DC0CE0CD" commented="no"><enum>(B)</enum><header>Reasonable discretion of repository</header><text display-inline="yes-display-inline">Unless otherwise determined by the Commission by rule or regulation, a swap data repository or a digital asset repository of transactions described in subparagraph (A) shall have reasonable discretion in establishing the manner in which the swap data repository or the digital asset repository of transactions complies with the core principles described in this section.</text></subparagraph></paragraph></subsection><subsection id="H751AFDD6B8DA4CE09E375746F68DA4F4" commented="no"><enum>(b)</enum><header>Standard setting</header><paragraph id="H4C654C7592FC4E7AACCF6BE36FF29E05" commented="no"><enum>(1)</enum><header>Data identification</header><subparagraph id="H5193EC840CC14F80B8C39416714EC9F6" commented="no"><enum>(A)</enum><header>In general</header><text>In accordance with subparagraph (B), the Commission shall prescribe standards that specify the data elements for each swap or digital asset that shall be collected and maintained by each registered swap data repository or digital asset repository of transactions, respectively.</text></subparagraph><subparagraph id="H6D9063D026F445E7891C817AE9B33015" commented="no"><enum>(B)</enum><header>Requirement</header><text display-inline="yes-display-inline">In carrying out subparagraph (A), the Commission shall prescribe consistent data element standards applicable to registered entities and reporting counterparties.</text></subparagraph></paragraph><paragraph id="H4C4EAAAB298E41CDA671E8970C7221FC" commented="no"><enum>(2)</enum><header>Data collection and maintenance</header><text display-inline="yes-display-inline">The Commission shall prescribe data collection and data maintenance standards for swap data repositories and digital asset trade repositories.</text></paragraph><paragraph id="H57C36465F47540D1B5E92DFA9E1377C7" commented="no"><enum>(3)</enum><header>Comparability</header><text display-inline="yes-display-inline">The standards prescribed by the Commission under this subsection shall be comparable to the data standards imposed by the Commission on derivatives clearing organizations in connection with the clearing of swaps or digital assets, as appropriate.</text></paragraph></subsection><subsection id="H1BDA08F9FBE646A1ACE4FCA89E9F1ABD" commented="no"><enum>(c)</enum><header>Duties</header><text display-inline="yes-display-inline">A swap data repository or a digital asset repository of transactions shall—</text><paragraph id="H8C9D3117B71E4DC58194C3461382EFC7" commented="no"><enum>(1)</enum><text>accept data prescribed by the Commission for each swap or digital asset transaction under subsection (b), respectively;</text></paragraph><paragraph id="H8162CED554F0478E8A1B2A7D99F89373" commented="no"><enum>(2)</enum><text>confirm with both counterparties to the swap or the digital asset transaction the accuracy of the data that was submitted;</text></paragraph><paragraph id="H2B5B50E5D91C46A6A72691FCEAF8CB43" commented="no"><enum>(3)</enum><text>maintain the data described in paragraph (1) in such form, in such manner, and for such period as may be required by the Commission;</text></paragraph><paragraph id="H31F075A4ABD34D1FB5B97031B3DD7C75" commented="no" display-inline="no-display-inline"><enum>(4)</enum><subparagraph commented="no" display-inline="yes-display-inline" id="H797C87F4F77B42B3988878CBE849E4F8"><enum>(A)</enum><text>provide direct electronic access to the Commission (or any designee of the Commission, including another registered entity); and</text></subparagraph><subparagraph id="H3F04607B0E2E4BC59397656365EA363F" commented="no" indent="up1"><enum>(B)</enum><text>provide the information described in paragraph (1) in such form and at such frequency as the Commission may require to comply with the public reporting requirements contained in section 2(a)(13);</text></subparagraph></paragraph><paragraph id="H5940FAB884AC42B0A482AF16C8B2E210" commented="no"><enum>(5)</enum><text>at the direction of the Commission, establish automated systems for monitoring, screening, and analyzing swap or digital asset data, including compliance and frequency of end user clearing exemption claims by individual and affiliated entities;</text></paragraph><paragraph id="HCF05765A8B1E4663BDF9BDC9EAA83707" commented="no"><enum>(6)</enum><text>maintain the privacy of any and all swap or digital asset transaction information that the swap data repository or digital asset repository of transactions, respectively, receives from a swap dealer, counterparty, or any other registered entity;</text></paragraph><paragraph id="H6F58A277CEFD47B8977FE12E583F798E" commented="no"><enum>(7)</enum><text>on a confidential basis pursuant to section 8, upon request, and after notifying the Commission of the request, make available swap or digital asset data obtained by the swap data repository or digital asset repository of transactions, respectively, including individual counterparty trade and position data, to—</text><subparagraph id="H46ECE9A96B3E47689400A2BB1BAFE938" commented="no"><enum>(A)</enum><text>each appropriate prudential regulator;</text></subparagraph><subparagraph id="HE6755A274E1B4BB293E61BB25821FAB0" commented="no"><enum>(B)</enum><text>the Financial Stability Oversight Council;</text></subparagraph><subparagraph id="HEC76FBEED02540B697AB47C1654C3DAC" commented="no"><enum>(C)</enum><text>the Securities and Exchange Commission;</text></subparagraph><subparagraph id="H2CD59461113E4F0A8B81A33E0F1F9C97" commented="no"><enum>(D)</enum><text>the Department of Justice; and</text></subparagraph><subparagraph id="H7EB1F40BEDC9419F97627D68B57C0E56" commented="no"><enum>(E)</enum><text>any other person that the Commission determines to be appropriate, including—</text><clause id="H909C3731239245DF8703F36A1BC9E1D6" commented="no"><enum>(i)</enum><text>foreign financial supervisors (including foreign futures authorities);</text></clause><clause id="H3709A5F2EF3D48339561DA1AB23A8578" commented="no"><enum>(ii)</enum><text>foreign central banks;</text></clause><clause id="H7EE38A93359D4DA9AF03C9A94F707664" commented="no"><enum>(iii)</enum><text>foreign ministries; and</text></clause><clause id="HF665173A87AF45258889605B037622F1" commented="no"><enum>(iv)</enum><text>other foreign authorities; and</text></clause></subparagraph></paragraph><paragraph id="HA8BBD19593DA4747A5559AAFA71E4193" commented="no"><enum>(8)</enum><text>establish and maintain emergency procedures, backup facilities, and a plan for disaster recovery that allows timely recovery and resumption of operations and the fulfillment of the responsibilities and obligations of the organization.</text></paragraph></subsection><subsection id="H2AF668A4796D4A30ACA51A36A657E6FB" commented="no"><enum>(d)</enum><header>Confidentiality agreement</header><text display-inline="yes-display-inline">Before the swap data repository or digital asset repository of transactions may share information with any entity described in subsection (c)(7), the swap data repository or digital asset repository of transactions shall receive a written agreement from each entity stating that the entity shall abide by the confidentiality requirements described in section 12 of this title relating to information on swap or digital asset transactions, respectively, that is provided.</text></subsection><subsection id="HFD0A768CC6994C6CB096674970210850" commented="no"><enum>(e)</enum><header>Designation of chief compliance officer</header><paragraph id="H7152A5F323574DF0BDC16295D615CDBF" commented="no"><enum>(1)</enum><header>In general</header><text>Each swap data repository or digital asset repository of transactions shall designate an individual to serve as a chief compliance officer.</text></paragraph><paragraph id="HD542C6668FEC43F2AA835CDB10404FFB" commented="no"><enum>(2)</enum><header>Duties</header><text>The chief compliance officer shall—</text><subparagraph id="H0D3761F04F4B4ECE876D6657E80B3B93" commented="no"><enum>(A)</enum><text>report directly to the board or to the senior officer of the swap data repository or digital asset repository of transactions;</text></subparagraph><subparagraph id="H893CE1992E8041939DDFB2B25A4B1726" commented="no"><enum>(B)</enum><text>review the compliance of the swap data repository or digital asset repository of transactions with respect to requirements and core principles described in this section;</text></subparagraph><subparagraph id="HB01C377B2A1D4B02A0A6CAF8BD3B6161" commented="no"><enum>(C)</enum><text>in consultation with the board of the swap data repository or digital asset repository of transactions, a body performing a function similar to the board of the swap data repository or digital asset repository of transactions, or senior officer of the swap data repository or digital asset repository of transactions resolve any conflicts of interest that may arise;</text></subparagraph><subparagraph id="H1E18C05B25C94389AE09DFD15896C2D3" commented="no"><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="HA45E240991EF4D709AAB883CB3EC999F" commented="no"><enum>(E)</enum><text>ensure compliance with this Act (including regulations) relating to agreements, contracts, or transactions, including each rule prescribed by the Commission under this section;</text></subparagraph><subparagraph id="HE2790D2470EC46729EA8125BC94AB2AD" commented="no"><enum>(F)</enum><text>establish procedures for the remediation of noncompliance issues identified by the chief compliance officer through any—</text><clause id="H81ACCE79C33F4EB1B2C4F4AAF62ECF78" commented="no"><enum>(i)</enum><text>compliance office review;</text></clause><clause id="HE2E453C324F243FA9D7CB61295001528" commented="no"><enum>(ii)</enum><text>look-back;</text></clause><clause id="H9E3F67D90C434FC4BF42E1ACECA73A05" commented="no"><enum>(iii)</enum><text>internal or external audit finding;</text></clause><clause id="H811C7D335E6142B0A3E7D4DEA231D4DC" commented="no"><enum>(iv)</enum><text>self-reported error; or</text></clause><clause id="H1402E03B64FE46519C18EFD0DD5151D2" commented="no"><enum>(v)</enum><text>validated complaint; and</text></clause></subparagraph><subparagraph id="H835CE18543084FB681B2AFE715AC24D7" commented="no"><enum>(G)</enum><text>establish and follow appropriate procedures for handling, management response, remediation, retesting, and closing of noncompliance issues.</text></subparagraph></paragraph><paragraph id="HF68307133687413696D735071CE48B36" commented="no"><enum>(3)</enum><header>Annual Reports</header><subparagraph id="HB76CB1FD11AE4ABEA0A8355B2D0A8165" commented="no"><enum>(A)</enum><header>In general</header><text>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="H491835024D8A402AA51B8EA660C4F105" commented="no"><enum>(i)</enum><text>the compliance of the swap data repository or the digital asset repository of transactions, as appropriate, of the chief compliance office with respect to this Act (including regulations); and</text></clause><clause id="H87963FF9C7D64399B2B6DBE36B026718" commented="no"><enum>(ii)</enum><text>each policy and procedure of the swap data repository or the digital asset repository of transactions, as appropriate, of the chief compliance officer (including the code of ethics and conflict of interest policies of the swap data repository or the digital asset repository of transactions, as appropriate).</text></clause></subparagraph><subparagraph id="H27AE812063794B4387FF7C1490618949" commented="no"><enum>(B)</enum><header>Requirements</header><text>A compliance report under subparagraph (A) shall—</text><clause id="H5B2BE657E65D4028A0A9287E94954F66" commented="no"><enum>(i)</enum><text>accompany each appropriate financial report of the swap data repository or digital asset repository of transactions that is required to be furnished to the Commission pursuant to this section; and</text></clause><clause id="HD092477BC2EA4EE28EE9C3C8EACF4F7D" commented="no"><enum>(ii)</enum><text>include a certification that, under penalty of law, the compliance report is accurate and complete.</text></clause></subparagraph></paragraph></subsection><subsection id="HC50310B060214D6982D6CA5859BFDA93" commented="no"><enum>(f)</enum><header>Core principles applicable to swap data repositories and digital asset trade repositories</header><paragraph id="H353F650B19CB4C8FACE7D2D88CBEFFE8" commented="no"><enum>(1)</enum><header>Antitrust considerations</header><text>Unless necessary or appropriate to achieve the purposes of this Act, a swap data repository or digital asset repository of transactions shall not—</text><subparagraph id="H674628F2FFA64257AF5448D8338F2870" commented="no"><enum>(A)</enum><text>adopt any rule or take any actions that result in any unreasonable restraint of trade; or</text></subparagraph><subparagraph id="H5D16321E3E7E45B4932D2B17FD6B02CC" commented="no"><enum>(B)</enum><text>impose any material anticompetitive burden on the trading, clearing, or reporting of transactions.</text></subparagraph></paragraph><paragraph id="H70667079B02C4645836D3DEEF2C0CDC2" commented="no"><enum>(2)</enum><header>Governance arrangements</header><text>Each swap data repository or digital asset repository of transactions shall establish governance arrangements that are transparent—</text><subparagraph id="HBCB35C7AC0FD49F6AD009ACF96BF4D50" commented="no"><enum>(A)</enum><text>to fulfill public interest requirements; and</text></subparagraph><subparagraph id="HECC49A52CB154EA5A7B71F6751CDE99D" commented="no"><enum>(B)</enum><text>to support the objectives of the Federal Government, owners, and participants.</text></subparagraph></paragraph><paragraph id="H7E794C9B2D0C44399EEE04990A957066" commented="no"><enum>(3)</enum><header>Conflicts of interest</header><text>Each swap data repository or digital asset repository of transactions shall—</text><subparagraph id="HCE72AAD057034E60A5A4F367F5C9AFC1" commented="no"><enum>(A)</enum><text>establish and enforce rules to minimize conflicts of interest in the decision making process of the swap data repository or the digital asset repository of transactions; and</text></subparagraph><subparagraph id="H87409A929C474B3487B6ACD2E6ADC513" commented="no"><enum>(B)</enum><text>establish a process for resolving conflicts of interest described in subparagraph (A).</text></subparagraph></paragraph><paragraph id="HD72C2815F7624BE495497D29C6CEF973" commented="no"><enum>(4)</enum><header>Additional duties developed by the Commission</header><subparagraph id="H71C45A70EB5749618E7FC44A88774D63" commented="no"><enum>(A)</enum><header>In general</header><text>The Commission may develop 1 or more additional duties applicable to swap data repositories or digital asset trade repositories.</text></subparagraph><subparagraph id="HB7BAA807B71D4E9880E7180699CBA437" commented="no"><enum>(B)</enum><header>Consideration of evolving standards</header><text>In developing additional duties under subparagraph (A), the Commission may take into consideration any evolving standard of the United States or the international community.</text></subparagraph><subparagraph id="H5D4C03F23911494CBFE17C1E35A3A61A" commented="no"><enum>(C)</enum><header>Additional duties for Commission designees</header><text>The Commission shall establish additional duties for any registered swap data repository or digital asset repository of transactions in order to minimize conflicts of interest, protect data, ensure compliance, and guarantee safety and security of the swap data repository or digital asset repository of transactions.</text></subparagraph></paragraph></subsection><subsection id="HB499D6C1235B414E8C498AF7A4FBC180" commented="no"><enum>(g)</enum><header>Required registration of swap data repositories and digital asset trade repositories</header><text>Any person that is required to be registered as a swap data repository or a digital asset repository of transactions under this section shall register with the Commission regardless of whether that person is also licensed as a bank, trust company, money services business, or registered with the Securities and Exchange Commission as a security-based swap data repository, broker-dealer, qualified custodian, or transfer agent.</text></subsection><subsection id="H7435BD84861448028133FEF241C3063C" commented="no"><enum>(h)</enum><header>Rules</header><text display-inline="yes-display-inline">The Commission shall adopt rules governing persons that are registered under this section.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section><enum>III</enum><header>Digital Federal Reserve Notes, Legal Tender Status, the Regulation of Digital Asset Fiat-Based Stablecoins, and Federal Deposit and Share Insurance for Digital Assets</header><subtitle id="H3B4BA421AADD404C9D425DB4B589F086"><enum>A</enum><header>Digital Federal Reserve Notes</header><section id="H7C8D843B606D49BE87D30803E2E296D5"><enum>301.</enum><header>In general</header><subsection id="H697B7369634A43F69B22DA7AA53D954B"><enum>(a)</enum><header>Supervising and regulating issue and retirement of Federal Reserve notes</header><text display-inline="yes-display-inline">Section 11(d) of the Federal Reserve Act (<external-xref legal-doc="usc" parsable-cite="usc/12/248">12 U.S.C. 248(d)</external-xref>) is amended to read as follows: </text><quoted-block style="OLC" display-inline="no-display-inline" id="H1D67359B36924F0E9C69698C9E5A0885"><subsection id="HE1050E8B47474C528097EC965CA321C0"><enum>(d)</enum><text display-inline="yes-display-inline">To supervise and regulate through the Secretary of the Treasury the issue and retirement of Federal Reserve notes (both physical and digital), except for the cancellation and destruction, and accounting with respect to such cancellation and destruction, of notes unfit for circulation, and to prescribe rules and regulations (including appropriate technology) under which such notes may be delivered by the Secretary of the Treasury to the Federal Reserve agents applying therefor.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="H891DA160995A47FEBF8DE9EEC13B5888"><enum>(b)</enum><header>Issuance to reserve banks; nature of obligation; redemption</header><text display-inline="yes-display-inline">Section 16 of the Federal Reserve Act (<external-xref legal-doc="usc" parsable-cite="usc/12/411">12 U.S.C. 411</external-xref>) is amended by striking the first two sentences and inserting: <quote>Federal reserve notes, to be issued at the discretion of the Board of Governors of the Federal Reserve System for the purpose of making advances to Federal reserve banks through the Federal reserve agents as hereinafter set forth and for no other purpose, are authorized. Notwithstanding any other provision of law, the Board of Governors of the Federal Reserve System is authorized to issue digital versions of Federal reserve notes in addition to current physical Federal reserve notes. Further, the Board of Governors of the Federal Reserve System, after consultation with the Secretary of the Treasury, is authorized to use distributed ledger technology for the creation, distribution and recordation of all transactions involving digital Federal reserve notes. The said notes shall be obligations of the United States and shall be considered legal tender and shall be receivable by all national and member banks and Federal reserve banks and for all taxes, customs, and other public dues. They shall be redeemed in lawful money on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve bank.</quote>.</text></subsection></section><section id="H41CC2D49A806481BA86B151A76F0BFDC"><enum>302.</enum><header>Digital asset legal tender status</header><text display-inline="no-display-inline">Section 5103 of title 31, United States Code, is amended to read as follows:</text><quoted-block style="USC" id="HD2E1D9078E424F9F9D99900BB03A046D" display-inline="no-display-inline"><section id="H3CA7EA62F48D49E3A3C517B33BA044AE"><enum>5103.</enum><header>Legal tender</header><text display-inline="no-display-inline">United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign fiat currencies, digital assets, digital asset securities and foreign gold and silver coins are not legal tender.</text></section><after-quoted-block>.</after-quoted-block></quoted-block></section></subtitle><subtitle id="H93AC438BD49D48A0881E69E399069956"><enum>B</enum><header>Regulation of Digital Asset Fiat-Based Stablecoins</header><section id="H55BBFBD418844108AB7E4678A34531D4"><enum>311.</enum><header>Department of Treasury regulation of digital asset fiat-based stablecoins</header><text display-inline="no-display-inline">Subchapter I of chapter 51 of subtitle IV of title 31, United States Code is amended by adding at the end the following:</text><quoted-block style="USC" id="H1D1B0D40E4BC40C4BC6F830783C66D29" display-inline="no-display-inline"><section id="H4837DA2455394F9882FEF3A918C9AEBE"><enum>5104.</enum><header>Department of Treasury regulation of digital asset fiat-based stablecoins</header><subsection id="H3A6920139F994D16B872488EE51C28AE"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Beginning on the date of the enactment of this section, no person may issue, use, or permit to be used a digital asset fiat-based stablecoin that is not approved by the Secretary of the Treasury under subsection (b). </text></subsection><subsection id="H82D7AE73499B4527828EABFF75C803F7"><enum>(b)</enum><header>Applications</header><paragraph id="HEA9F1B8C70C343BC99DFA0E8613BC505"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Not later than 90 days after the date of the enactment of this section, the Secretary of the Treasury shall establish an application process under which the Secretary may approve or disapprove a person wishing to issue a digital asset fiat-based stablecoin, under such terms and conditions as the Secretary determines necessary and appropriate. </text></paragraph><paragraph id="HBD98191AE032418896C02F5496E38215"><enum>(2)</enum><header>Consultation</header><text display-inline="yes-display-inline">In carrying out paragraph (1), the Secretary of the Treasury shall, in considering applications for digital asset fiat-based stablecoins, consult with—</text><subparagraph id="H59FC16EE093B48E0B18A11E3400B294C"><enum>(A)</enum><text>the Board of Governors of the Federal Reserve System;</text></subparagraph><subparagraph id="H4A3607F4DE2F4CCAB9E26067E7379A3E"><enum>(B)</enum><text>the Securities and Exchange Commission;</text></subparagraph><subparagraph id="H997C75378DFA4CE79D69C5F9925EEEC7"><enum>(C)</enum><text>the Commodity Futures Trading Commission; and</text></subparagraph><subparagraph id="H8D5B2B22A0AC46A88DB901416754D7E9"><enum>(D)</enum><text>such other foreign central banks or foreign treasury departments or agencies as the Secretary of the Treasury determines appropriate.</text></subparagraph></paragraph><paragraph id="H3A8B2FB8C98247F28DE55CA4AA3BE6D1"><enum>(3)</enum><header>Approval or disapproval; terms and conditions changes; termination</header><subparagraph id="H109A4AA2E66F4C008DF17185D33118D5"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">Subject to subparagraph (B), the Secretary of the Treasury may approve or disapprove an application by an issuer of a digital asset fiat-based stablecoin or may withdraw an approval or modify the terms and conditions of an approval previously issued under paragraph (1).</text></subparagraph><subparagraph id="H1017BD179BE04408B3B2F13BA8682F5A"><enum>(B)</enum><header>Timing</header><text>With respect to a withdrawal or modification of an approval under subparagraph (A), the Secretary of the Treasury shall notify the issuer at least 60 days before such approval is so withdrawn or modified.</text></subparagraph></paragraph><paragraph id="HEAC13F26997F4AD196E9DE28233CF946"><enum>(4)</enum><header>No grandfathering of existing digital asset fiat-based stablecoins</header><text display-inline="yes-display-inline">The Secretary of the Treasury shall not grandfather the use of any digital asset fiat-based stablecoin. All digital asset fiat-based stablecoins, including digital asset fiat-based stablecoins existing on the date of the enactment of this section, shall apply to the Secretary of the Treasury under this section.</text></paragraph></subsection><subsection id="H2B3FBA2CA9ED42D5A0A5E489B75F2B42"><enum>(c)</enum><header>Digital asset fiat-Based stablecoin defined</header><text display-inline="yes-display-inline">In this section, the term <term>digital asset fiat-based stablecoin</term> means a digital asset (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>)) that is, as determined by the Secretary of the Treasury, tied, pegged to, or collateralized substantially by—</text><paragraph id="H861A93723AD644E4A2E56E04ED728401"><enum>(1)</enum><text>the United States dollar or;</text></paragraph><paragraph id="HCDCF491D8DEC4B32B346DD669A2BA0E4"><enum>(2)</enum><text>one or more fiat currencies.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section><section id="H548164FE696C4E898937E522F14B73EA"><enum>312.</enum><header>Conforming amendment</header><text display-inline="no-display-inline">The table of contents for subchapter I of chapter 51 of subtitle IV of title 31, United States Code is amended by adding at the end the following:</text><quoted-block style="OLC" id="HFC6134553C2444D48586A46D9901CB3C" display-inline="no-display-inline"><toc regeneration="no-regeneration"><toc-entry level="section">5104. Department of Treasury regulation of digital asset fiat-based stablecoins.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></section></subtitle><subtitle id="H7221EFF0C4D8417ABAEDF69AD349A66C"><enum>C</enum><header>Federal Deposit and Share Insurance for Digital Assets</header><section id="HE46F45DA99054107A538A57665931B1F"><enum>321.</enum><header>Digital asset not deposits for Federal deposit and share insurance</header><subsection id="HAA5D6FD68C3F4E79B7E5580DB588FEA2" display-inline="no-display-inline"><enum>(a)</enum><header>Federal Deposit Insurance Act</header><text>Section 3(l)(5) of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813(l)(5)</external-xref>) is amended—</text><paragraph id="HD592E64BF7F341ECA189A541009A2722"><enum>(1)</enum><text>in subparagraph (B), by striking <quote>; and</quote> and inserting a semicolon;</text></paragraph><paragraph id="HE73BC21148CF4BE7A864E8304B128AC5"><enum>(2)</enum><text>in subparagraph (C), by striking the period at the end and inserting <quote>; and</quote>; and </text></paragraph><paragraph id="HFB60710A5E8B4DDC981F3227E7AA0C90"><enum>(3)</enum><text>by adding at the end the following:</text><quoted-block style="OLC" id="H3A1ECAFD2B3A4E56BB38502F2BFE5A8E" display-inline="no-display-inline"><subparagraph id="H18D8C1CC89A143EB8CDA11FCD926A8D2"><enum>(D)</enum><text display-inline="yes-display-inline">any—</text><clause id="H43808DD8000C44A18CFAAB85B157104F"><enum>(i)</enum><text>digital asset (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>)); or</text></clause><clause id="H16CAC243C4A24D91BDA3879B650A7C8A"><enum>(ii)</enum><text display-inline="yes-display-inline">digital asset security (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>).</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="HE6A4A4E579144F779E667C9AD20E5724"><enum>(b)</enum><header>Federal Credit Union Act</header><text>Section 101(5) of the Federal Credit Union Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1752">12 U.S.C. 1752(5)</external-xref>) is amended by striking <quote>State law</quote> and inserting <quote>State law: <italic>Provided further</italic>: That in no case may such terms include a digital asset (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>)) or digital asset security (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>)</quote>.</text></subsection></section><section id="H901A2BABE21E46949F5DF4ED1A846352" display-inline="no-display-inline"><enum>322.</enum><header>Directed rulemaking FDIC and NCUA website disclosure on digital assets and insurance noncoverage</header><subsection id="H02DF3E1EDEB94071A1A6EDC0DD4E49F2"><enum>(a)</enum><header>FDIC and NCUA notices</header><text display-inline="yes-display-inline">Not later than 90 days after the date of the enactment of this Act, the Federal Deposit Insurance Corporation and the National Credit Union Administration shall each make publicly available on the website of such entity a notice—</text><paragraph id="H11E03686657B49E8A24216C682B36850"><enum>(1)</enum><text>regarding the treatment of digital assets and digital asset securities;</text></paragraph><paragraph id="HF0A6BF6BD35C4583BAA05FA7915FF7D5"><enum>(2)</enum><text display-inline="yes-display-inline">that digital assets and digital asset securities are not <quote>deposits</quote> or <quote>shares</quote> and are not covered by Federal deposit insurance (FDIC or NCUA), regardless of whether an insured bank, savings association, or credit union holds the digital assets or digital assets securities; and</text></paragraph><paragraph id="H906DA250F82E4491BBBC86B3E70D1521"><enum>(3)</enum><text display-inline="yes-display-inline">such notice shall specifically address whether the FDIC Nondeposit Investment Product (NDIP) Policy Statement and related disclosure obligations or similar NCUA requirements apply to digital assets and digital asset securities.</text></paragraph></subsection><subsection id="H88930671674B4E6F9FB7A9781F11D26A" display-inline="no-display-inline"><enum>(b)</enum><header>Digital asset</header><text display-inline="yes-display-inline">In this section, the term <term>digital asset</term> has the meaning given the term 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></subsection><subsection id="HAF0E0F0533DC42AA83CEB5FF99E457CE"><enum>(c)</enum><header>Digital asset security</header><text display-inline="yes-display-inline">In this section, the term <term>digital asset security</term> has the meaning given the term in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. Sec. 78c(a)).</text></subsection></section></subtitle><enum>IV</enum><header>Bank Secrecy Act</header><section id="H0E288B443E5243D2983BEF3B82CD43CB"><enum>401.</enum><header>Bank Secrecy Act</header><subsection id="HA0EC3DFB66AF49A989081C7705BEC441" display-inline="no-display-inline"><enum>(a)</enum><header>Definition of monetary instruments</header><text display-inline="yes-display-inline">Section 5312(a)(3)(B) of title 31, United States Code, is amended—</text><paragraph id="HE2342304CB8841378E5CFA60C7ECF17E"><enum>(1)</enum><text>by inserting <quote>digital assets,</quote> after <quote>coins and currency of a foreign country,</quote>; and </text></paragraph><paragraph id="H5A762BC09100463C9048337BCAA04174"><enum>(2)</enum><text>by inserting after <quote>passed on delivery</quote>, the following: <quote>, digital asset security as such term is defined in section 3(a) of the Securities Exchange Act of 1934</quote>.</text></paragraph></subsection><subsection id="H35B778862F5648B1BC9A76191F67EE83"><enum>(b)</enum><header>Definition of digital Asset and virtual asset</header><text display-inline="yes-display-inline">Section 5312(a) of title 31, United States Code, is amended by adding after paragraph (6) the following:</text><quoted-block style="OLC" id="HA6540B82FA334699B64CD5BFFB5D8216" display-inline="no-display-inline"><paragraph id="HF32795B6D7D64A37AEA86A9BA85C664C"><enum>(7)</enum><header>Digital Asset</header><text display-inline="yes-display-inline">The term <term>digital asset</term> has the meaning given the term 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></paragraph><paragraph id="H4E15DC7B32B54D369CCD8CC4AAD52A87"><enum>(8)</enum><header>Virtual asset</header><text display-inline="yes-display-inline">The term <term>virtual asset</term> means—</text><subparagraph id="HBC16A14A1918405AB53C59FF79284D16"><enum>(A)</enum><text>a digital representation of value that can be digitally traded, or transferred, and can be used for payment or investment purposes; and</text></subparagraph><subparagraph id="HA70554321DD944CD92408E9E254B73F1"><enum>(B)</enum><text>a digital asset. </text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="HC543558BF07B49D0BACFAFC04761C3E2"><enum>(c)</enum><header>Definition of Virtual Asset Service Provider</header><text>Section 5312(a) of title 31, United States Code, is further amended by adding at the end the following:</text><quoted-block style="OLC" id="HF4C1B94668494B6FA10B00FB32026D08" display-inline="no-display-inline"><paragraph id="H65A9008F133D4182A6BA1A3B4F457E6E"><enum>(9)</enum><header>Virtual Asset Service Provider</header><text display-inline="yes-display-inline">The term <term>virtual asset service provider</term>— </text><subparagraph id="HD66FB351FBAB44C3993252E4430440F2"><enum>(A)</enum><text>means a person who—</text><clause id="HA2EDF3A6DB644D0EBE8A6D5286AADA36" commented="no"><enum>(i)</enum><text>exchanges between digital asset and fiat currencies;</text></clause><clause id="H8F310840B3A940B58F3C9FE908FB34AC" commented="no"><enum>(ii)</enum><text>exchanges between digital assets;</text></clause><clause id="HA319AF47473A4307A9EEC7CD9B178CAA" commented="no"><enum>(iii)</enum><text>transfers of digital assets;</text></clause><clause id="H35CCCB62DBAF4FB9A6988FE611E71CFE"><enum>(iv)</enum><text display-inline="yes-display-inline">is responsible for the custody, safekeeping of a digital asset or an instrument that enables control over a digital asset;</text></clause><clause id="H7FE6BDE7A62047AAA84D30200EB44C1A" commented="no"><enum>(v)</enum><text display-inline="yes-display-inline">issues or has the authority to redeem a digital asset; and</text></clause><clause id="HADFEFEE1FCD3469D8CB51A96A0111B93" commented="no"><enum>(vi)</enum><text>provides financial services related to the offer or sale of a digital asset by a person who issues such digital asset; and</text></clause></subparagraph><subparagraph id="HBE8BB43009F54241A6AE96D6B6268B30" display-inline="no-display-inline" commented="no"><enum>(B)</enum><text display-inline="yes-display-inline">does not include any person who—</text><clause id="HDFD292383FCC46EBB3E138953ECE661C" commented="no"><enum>(i)</enum><text>obtains a digital asset to purchase goods or services for themself;</text></clause><clause id="HC36CB57084114757B3F1D53B5ADD9E8E" commented="no"><enum>(ii)</enum><text>provides communication service or network access services used by a money transmitter; or</text></clause><clause id="H108D93E1887449AC967A4B24ECB75E07" commented="no"><enum>(iii)</enum><text>develops, creates, or disseminates software designed to be used to issue a digital asset or facilitate financial activities associated with a digital asset. </text></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="H1A84A8B982D244D59E74CE5E8F14FD79"><enum>(d)</enum><header>Additional definitions</header><text display-inline="yes-display-inline">Section 5312(c)(1) of title 31, United States Code, is amended—</text><paragraph id="H1B2E1E51915649F780B2925E39C59E76"><enum>(1)</enum><text>in subparagraph (A), by striking the period at the end and inserting a semicolon; and</text></paragraph><paragraph id="H8A41D93A067946CA8EA46F90BB2B2011"><enum>(2)</enum><text>by adding after subparagraph (A), the following:</text><quoted-block style="OLC" id="H8CF25ADC0B444317814E7DDCD1457E43" display-inline="no-display-inline"><subparagraph id="H3176484943CB4A2FBE61083FEEF4F996" commented="no"><enum>(B)</enum><text>any virtual asset service provider that—</text><clause id="H038AA1580C48450287D2A26273A96D73" commented="no"><enum>(i)</enum><text>exchanges between digital assets and fiat currencies; </text></clause><clause id="HFE5E8B5708434F3B8A834199583DD60B" commented="no"><enum>(ii)</enum><text>exchanges between digital assets;</text></clause><clause id="H7B25EEE2841B458EB0C1F7B46E017A69" commented="no"><enum>(iii)</enum><text>transfers digital assets; </text></clause><clause id="H9607EFB36957486F97EE002DEAB58B30" commented="no"><enum>(iv)</enum><text>is responsible for the custody, safekeeping or administration of digital assets or instruments enabling control over digital assets; or</text></clause><clause id="H38F28F6E02844398BCA14F3800CBE9E5" commented="no"><enum>(v)</enum><text>provides financial services related to the offer or sale of a digital asset by an issuer.</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section><section id="HEB4F574AECAD448386FEE255CE285E04"><enum>402.</enum><header>Anonymizing services, money mule, and anonymity-enhanced convertible virtual currencies</header><text display-inline="no-display-inline">Subchapter II of chapter 53 of subtitle IV of title 31, United States Code is amended by adding at the end the following: </text><quoted-block id="H6C581004417A4EF1AD0B5836311ACDAE"><section id="HADA88EE08CED435E95D90E6728CA3DB8"><enum>5333.</enum><header>Anonymizing services, money mule, and anonymity-enhanced convertible virtual currencies</header><subsection id="HBD8CD4DB00A14F0CAE55B45918B5A35A" display-inline="no-display-inline"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Not later than 180 days of the date of the enactment of the Digital Asset Market Structure and Investor Protection Act, the Secretary of the Treasury, acting through the Financial Crimes Enforcement Network, shall issue a rule that governs—</text><paragraph id="H3CE3CEA57C054DDC9DA93ABE09918931"><enum>(1)</enum><text>anonymizing services;</text></paragraph><paragraph id="HD4DA080CB7E54AF0B1DB86286E69AD19"><enum>(2)</enum><text>money mules; and</text></paragraph><paragraph id="H4988C8C3B73D41E79407525A76407198"><enum>(3)</enum><text display-inline="yes-display-inline">anonymity-enhanced convertible virtual currency transactions.</text></paragraph></subsection><subsection id="H5B8BB3F002B24A269BA558E2AFA22F45"><enum>(b)</enum><header>Purpose</header><text display-inline="yes-display-inline">The purpose of the rule described in subsection (a) shall be to ensure that anonymizing services, money mule, and anonymity-enhanced convertible virtual currencies are not used to prevent association of an individual customer with the movement of a digital asset, digital asset security, or virtual currency of which the customer is the direct or beneficial owner.</text></subsection><subsection id="H705654C3145A46E5B967806749AF051E" display-inline="no-display-inline"><enum>(c)</enum><header>Requirements</header><text>The rule described in subsection (a) shall—</text><paragraph id="H3287666B2820424DA500656A36D56505" commented="no" display-inline="no-display-inline"><enum>(1)</enum><text>require any financial institution to prohibit any person from engaging in any transactions that involves digital assets or digital asset securities and—</text><subparagraph id="HF7B73F06D6D944149A93AE4B1EC831C0" commented="no"><enum>(A)</enum><text>anonymizing services;</text></subparagraph><subparagraph id="H91A1343D798A4D5EBD0723A8767694F9" commented="no"><enum>(B)</enum><text>money mules; or</text></subparagraph><subparagraph id="H77BC13E0AB214C00AA0DB9F02A365BB1" commented="no"><enum>(C)</enum><text>anonymity-enhanced convertible virtual currencies;</text></subparagraph></paragraph><paragraph id="H8E5F60C00B0E4642A8D6834275DC6978" commented="no"><enum>(2)</enum><text>prohibit any financial institution from informing persons about—</text><subparagraph id="HFF845A447714407AA0EB3A76EB2EC5BA" commented="no"><enum>(A)</enum><text display-inline="yes-display-inline">the existence of anonymizing services, money mules and anonymity-enhanced convertible virtual currencies;</text></subparagraph><subparagraph id="H771BF5104C2945C9B8E77786CA83F16B" commented="no"><enum>(B)</enum><text display-inline="yes-display-inline">the availability of anonymizing services, money mules and anonymity-enhanced convertible virtual currencies; or</text></subparagraph><subparagraph id="HB09531F2B3D54F1FAC3B122D006ED0F3" commented="no"><enum>(C)</enum><text display-inline="yes-display-inline">means for identifying anonymizing services, money mules and anonymity-enhanced convertible virtual currencies; and</text></subparagraph></paragraph><paragraph id="H0A4569F4C7444BC587CA3423BBF226AE" commented="no"><enum>(3)</enum><text>require any financial institution to establish written procedures governing the documentation of the persons and amounts associated with any transaction involving—</text><subparagraph id="H7B5EABC51D6041FCB2306FBF626AF9D3" commented="no"><enum>(A)</enum><text>an anonymizing service;</text></subparagraph><subparagraph id="H5A92F4924592478E8956C918F0E7A172" commented="no"><enum>(B)</enum><text>a money mule; or</text></subparagraph><subparagraph id="H1F19A2E2B4A04FC8A87C298AB125028B" commented="no"><enum>(C)</enum><text display-inline="yes-display-inline">anonymity-enhanced convertible virtual currencies.</text></subparagraph></paragraph></subsection><subsection id="HF79F3FB98F4E43E980C27A7C111BFC53"><enum>(d)</enum><header>Definitions</header><text display-inline="yes-display-inline">In this section, the term <term>virtual currency</term>, <term>anonymizing service</term>, <term>money mule</term>, and <term>anonymity-enhanced convertible virtual currency</term> have the meanings given such terms by the Secretary of the Treasury, acting through the Financial Crimes Enforcement Network.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section><section id="HC758357218B64C7BA870AAE391F5BC08"><enum>403.</enum><header>Digital asset transaction actual delivery reporting</header><text display-inline="no-display-inline">Not later than 180 days after the date of the enactment of this Act, the Secretary of the Treasury, in consultation with the Commodity Futures Trading Commission, shall issue a rule that requires, for any transaction involving a contract of sale of a digital asset (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>)) in interstate commerce—</text><paragraph id="HC4627341FD4842AA8EEE505B8D791AF1"><enum>(1)</enum><text display-inline="yes-display-inline">the transfer of possession and control (including transfer of control over any private keys) by the seller to the purchaser not later than 24 hours after the digital asset transaction is entered into and such delivery is accomplished by either—</text><subparagraph id="H83B7B38E52DE44C5B37AF26A7FAD6B4B"><enum>(A)</enum><text display-inline="yes-display-inline">the recording of the transaction on the public distributed ledger for the digital asset; or</text></subparagraph><subparagraph id="H0010FA48257B4843A6A7B6AA505881AE"><enum>(B)</enum><text display-inline="yes-display-inline">with respect to digital asset transactions which are not recorded on the public distributed ledger for the digital asset, reporting the transaction to a CFTC registered digital asset repository of transactions. </text></subparagraph></paragraph></section><section id="HA421AC50A40D4BFC8E22C871361268D4"><enum>404.</enum><header>Virtual digital asset service providers</header><subsection id="HE6DE9A79AB1C4F7D983B6A2A7BF883B8"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The Secretary of the Treasury shall, not later than 270 days after the date of the enactment of this Act, issue a rule requiring virtual asset service providers (as defined in section 5312(a) of title 31, United States Code), which are engaged in services which are available in the United States and to United States persons, even if the provider is located outside the United States, related to digital asset securities and digital assets, that such persons shall be required to—</text><paragraph id="HC827B480EA1A464FAF8ED5E865FEACF7"><enum>(1)</enum><text>register with the Securities and Exchange Commission or with the Commodity Futures Trading Commission, as appropriate and in such capacities as are appropriate;</text></paragraph><paragraph id="H380FDA51EE8148F9B7113A7C38E2613E"><enum>(2)</enum><text display-inline="yes-display-inline">with respect to digital asset securities, meet the customer protection and account custody rules which are applicable to Securities Exchange Commission registered broker-dealers for customer funds and securities; and</text></paragraph><paragraph id="HABA6D516555744E2ADCFF7EEBBE06EA0"><enum>(3)</enum><text display-inline="yes-display-inline">with respect to digital assets, meet the customer account custody and segregated funds rules which are applicable to Commodity Futures Trading Commission registered futures commission merchants.</text></paragraph></subsection><subsection id="HBB48ABC4E97840D4922D9FEBF8D8A767"><enum>(b)</enum><header>Customer accounts</header><text display-inline="yes-display-inline">The customer accounts custody requirements referenced in subsection (a) shall include, but are not limited to, using registered and qualified custodians, proper customer account labeling and identification, minimum of quarterly account statements being issued to customers by the registered and qualified custodian, annual surprise audit requirements and annual audits by accounting firms which are registered with the Public Company Accounting Oversight Board.</text></subsection></section><enum>V</enum><header>Various Digital Asset Reports</header><section id="HAAF4DC28E028484EB85ED86CCF4C052B"><enum>501.</enum><header>IRS report on digital asset ownership/taxes</header><subsection id="H2189105500EB4C12A898B6DFAB6C595D"><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 Secretary of the Treasury, acting through the Internal Revenue Service, after consulting with other Federal and State regulators and market participants as appropriate, shall submit a report to the specified committees on the utilization of digital assets by United States citizens that—</text><paragraph id="HCDC3FA17F10B4F2E93463EE728928D33"><enum>(1)</enum><text display-inline="yes-display-inline">estimates the number and percentage of United States citizens who own digital assets as of the date of the enactment of this Act and who have paid tax on digital assets each year between 2016 and 2020;</text></paragraph><paragraph id="H99A4F23E558F4565BD429165C3852DD3"><enum>(2)</enum><text display-inline="yes-display-inline">compares the number and percentage of Americans who own stocks and bonds and who have paid taxes on such assets over the same time period referenced above;</text></paragraph><paragraph id="HAFE7149BBC4B4B3CBE416A87EDC53287"><enum>(3)</enum><text display-inline="yes-display-inline">estimates the number and percentage of Americans who fail to report digital asset holdings and income versus stock and bond holdings;</text></paragraph><paragraph id="HCB92F7163EA542E8B6F0524A4F5A36FE"><enum>(4)</enum><text>identifies the major digital asset trading platforms in the United States, the number of customer accounts with each platform, and the annual trading volume of each platform;</text></paragraph><paragraph id="HD277C756CABD403DA0F4461EDEF44E25"><enum>(5)</enum><text>estimates the number of United States citizens who use United States registered digital asset trading platforms compared to foreign digital asset trading platforms;</text></paragraph><paragraph id="HB85EF500F96C4EDBBD36F7025EF94314"><enum>(6)</enum><text display-inline="yes-display-inline">estimates the amount of tax revenue which was not received by the United States Treasury due to under reporting by United States taxpayers each year between 2016 and 2020; and</text></paragraph><paragraph id="H3480016CAA754348A0DBAADD43616CBB"><enum>(7)</enum><text>makes legislative and regulatory recommendations regarding changes which would improve reporting and collection of taxes on digital assets so it would be closer to reporting and collection of taxes on securities holdings.</text></paragraph></subsection><subsection id="HC330DC64F55E4A92A8B75545D9EC08C6"><enum>(b)</enum><header>Specified committees</header><text display-inline="yes-display-inline">In this section, the term <term>specified committees</term> means—</text><paragraph id="HD9B3BD12085F4940B237012118DF1727"><enum>(1)</enum><text>the Ways and Means Committee of the House of Representatives;</text></paragraph><paragraph id="H1C97CDC5FEDA4163BD3A16A560CDBF28"><enum>(2)</enum><text>the Finance Committee of the Senate;</text></paragraph><paragraph id="H8DF9C7C7E950412896A2A702B56BAE7B"><enum>(3)</enum><text display-inline="yes-display-inline">the Committee on Financial Services of the House of Representatives;</text></paragraph><paragraph id="HADBF01F34A1740EB9FF5D4F7E6DC30FF"><enum>(4)</enum><text>the Committee on Banking, Housing, and Urban Affairs of the Senate;</text></paragraph><paragraph id="HCE1548C0D16541E7B09B5317666C235F"><enum>(5)</enum><text>the Committee on Agriculture of the House of Representatives; and</text></paragraph><paragraph id="H244129F6BE934DE19F02373A20028A2E"><enum>(6)</enum><text>the Committee on Agriculture, Nutrition, and Forestry of the Senate.</text></paragraph></subsection></section><section id="H2D58CDDE93E5421AA2F2F04B7C1B8F1C"><enum>502.</enum><header>Report on ransomware and digital assets</header><subsection id="H45C3F5762A534E4EB8BE88A4B46681E7"><enum>(a)</enum><header>Report</header><text display-inline="yes-display-inline">Not later than 270 days after the date of enactment of this Act, the Department of Justice, Department of Homeland Security, Department of the Treasury, and Board of Governors of the Federal Reserve System shall jointly submit a report to the appropriate committees that—</text><paragraph id="HFEB04AF1CBB3428CB0025D7405F05694"><enum>(1)</enum><text>summarizes the number and size of recent ransomware attacks in the United States and the world;</text></paragraph><paragraph id="HAFA3528019C442F09ADE33F491FC07CB"><enum>(2)</enum><text>discusses the frequency of ransomware hackers requesting payment in digital assets and identifies the most common digital assets which are demanded;</text></paragraph><paragraph id="HCB1E7BBBE9F340588861665BF2886D7E"><enum>(3)</enum><text>discusses the use of mixing and tumbling services and money mules to help obscure audit trail for the digital assets involved;</text></paragraph><paragraph id="HCA4C54E4F51A4BE8B7CDF4C8AC590435"><enum>(4)</enum><text>identifies the digital asset trading platforms most frequently used for transactions involving digital asset ransoms; and</text></paragraph><paragraph id="H4D1586B192B043728DD645273E6FD064"><enum>(5)</enum><text>makes legislative and regulatory recommendations for addressing the problem of ransomware and digital assets.</text></paragraph></subsection><subsection id="H8371C9DB2ACD4398BB24F721D99F41E9"><enum>(b)</enum><header>Appropriate committees</header><text display-inline="yes-display-inline">Appropriate committees include the Committee on the Judiciary, Committee on Homeland Security, Committee on Financial Services, and the Committee on Agriculture of the House of Representatives, and the Committee on the Judiciary, Committee on Homeland Security and Governmental Affairs, Committee on Banking, Housing, and Urban Affairs, Committee on Agriculture, Nutrition, and Forestry of the Senate.</text></subsection></section><section id="HDC7D786C861449CB8546001542BF0509"><enum>503.</enum><header>Report on decentralized finance</header><text display-inline="no-display-inline">Not later than 270 days after the date of the enactment of this Act, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Secretary of the Treasury, the Securities and Exchange Commission, and the Commodity Futures Trading Commission, shall jointly submit a report to the appropriate committees that—</text><paragraph id="HE382AB79E3EE4080A20AB59F7D5E9748"><enum>(1)</enum><text>summarizes the use of decentralized finance in the United States;</text></paragraph><paragraph id="HE57855E41E534DFC904A5C01AD8B155A"><enum>(2)</enum><text display-inline="yes-display-inline">estimates the number and percentage of Americans using decentralized finance products and services versus the global usage and identifies the major decentralized finance products and services by estimated dollar volume usage;</text></paragraph><paragraph id="H51C2BF1B515B4B0D97D9172AF17B7303"><enum>(3)</enum><text>provides recommendations with respect to the definition of the term <term>decentralized finance</term> to be adopted and codified in United States law;</text></paragraph><paragraph id="H100EA727EFF74588A5E595322DAF7D40"><enum>(4)</enum><text display-inline="yes-display-inline">discusses the primary differences between digital asset fiat-based stablecoins and central bank digital currencies;</text></paragraph><paragraph id="H69D03D82113B40C6874AB15D9F0577C2"><enum>(5)</enum><text>discusses whether there are financial stability risks or concerns posed by decentralized finance;</text></paragraph><paragraph id="H979810D5329C409DA50C1B951099E999"><enum>(6)</enum><text>provides recommendations regarding appropriate regulation and investor protection for decentralized finance in United States banking, securities, and commodities, including with respect to United States jurisdiction and application of United States law; and</text></paragraph><paragraph id="HB20160E4691A4BE08A3BB9A24F1ACA3B"><enum>(7)</enum><text display-inline="yes-display-inline">discusses the legal obligations of creators, owners, or operators of decentralized finance applications, distributed ledgers, smart contracts, and other applications which are hacked or are used for fraud and manipulation. </text></paragraph></section><section id="H14790B3DE5EF4E0AB3DA714C7711FC66"><enum>504.</enum><header>Report on custody of digital assets and digital asset securities</header><text display-inline="no-display-inline">Not later than 270 days after the date of the enactment of this Act, the Securities and Exchange Commission, the Office of the Comptroller of the Currency, the Secretary of the Treasury, and the Commodity Futures Trading Commission, shall jointly submit a report to the appropriate committees that—</text><paragraph id="H430E628CD46649D4B12B93FB25B443EA"><enum>(1)</enum><text>provides recommendations on the regulation, licensing, and auditing of digital asset custodians and digital asset security custodians; and</text></paragraph><paragraph id="H0FB674A780AD4F76B444EAC82CA9D16C"><enum>(2)</enum><text>considers each of the following issues:</text><subparagraph id="H58E01801AB6E4FF9BB7D312196519AB6"><enum>(A)</enum><text>The custody of digital assets and digital asset securities.</text></subparagraph><subparagraph id="H3756603E68914041BA2E9E80238EB90E"><enum>(B)</enum><text>Estimates on digital assets and digital asset securities custody at trading platforms, licensed custodians, self custody in wallets.</text></subparagraph><subparagraph id="H8DC88AFCAF6E48CAA9F0F0A93DBAE2D8"><enum>(C)</enum><text>FINRA Guidance to Broker Dealers on Digital Asset and Digital Asset Security Custody.</text></subparagraph><subparagraph id="HFC52AF46E4EE489DAB7C69AD2620A231"><enum>(D)</enum><text>AICPA position on custody of digital assets and digital asset securities.</text></subparagraph><subparagraph id="HB40B16E23C6448D4A1EE0011A3645D1D"><enum>(E)</enum><text>Custodian markets, banks, trust companies, brokers, dealers, and futures commissions merchants.</text></subparagraph><subparagraph id="H28F4175EC2A14025A947B2C228A90D0A"><enum>(F)</enum><text display-inline="yes-display-inline">The background on major United States and foreign digital asset and digital asset security custodians by size (assets held) and licensing.</text></subparagraph></paragraph></section><section id="H1A7D2DA4ED354BF2AB7023E88B1E15AB" commented="no"><enum>505.</enum><header>Report on digital asset trading platforms</header><text display-inline="no-display-inline">Not later than 270 days after the date of the enactment of this section, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Secretary of the Treasury, and the Financial Crimes Enforcement Network, in consultation with such Federal and State regulators and market participants as the Commission determines appropriate, shall jointly submit to the relevant committees a report that—</text><paragraph id="H72B11CD4C55E498880768CCD4B313042"><enum>(1)</enum><text display-inline="yes-display-inline">identifies the 10 largest digital asset trading platforms in the United States, their registration status, the number of client accounts each platform has, and the annual trading volume on each trading platform over the last 5 years;</text></paragraph><paragraph id="H1359E913488A49C4BC8B99FCCC065BE4"><enum>(2)</enum><text>summarizes and compares—</text><subparagraph id="H66E548E3244043C7970F145FE2FEB845"><enum>(A)</enum><text>the statutory and regulatory requirements applicable to United States digital asset trading platforms (MSBs) which are currently available to United States investors; and</text></subparagraph><subparagraph id="HA6AD25E5FBFB4FFB859E9B34F59A4E52"><enum>(B)</enum><text display-inline="yes-display-inline">the statutory and regulatory requirements applicable to national securities exchanges, alternative trading systems, designated contract market, and swap execution facility;</text></subparagraph></paragraph><paragraph id="H25520B5281BC4A978D42A82E459DC158"><enum>(3)</enum><text display-inline="yes-display-inline">identifies and quantifies investor losses related to all known major foreign and domestic unauthorized electronic access or hacks of digital asset trading platforms in the 5-year period preceding the date of the enactment of this Act; and</text></paragraph><paragraph id="H5BECA2E35E414D4E87670B0CAE1F229A"><enum>(4)</enum><text display-inline="yes-display-inline">provides legislative and regulatory recommendations to promote and increase United States investor protection with respect to sale or trading of digital assets and digital asset securities. </text></paragraph><continuation-text continuation-text-level="subsection">The report shall discuss the major differences between money services businesses and securities/commodities exchanges and provide concrete legislative and regulatory recommendations which would help clarify on what entities and under what rules and requirements the trading of digital assets and digital asset securities should take place as distinguished from the entities and the rules which should apply to the transmission of monetary instruments. </continuation-text></section><section id="HCC8CED31EDDC42A0A61FCEC9DDF35F68"><enum>506.</enum><header>Report on false trade reporting, wash trading, and off-chain transaction on digital asset trading platforms</header><text display-inline="no-display-inline">Not later than 270 days after the date of the enactment of this section, the Commodity Futures Trading Commission, the Secretary of the Treasury, and the Financial Crimes Enforcement Network, in consultation with such Federal and State regulators and market participants as the Commission determines appropriate, shall jointly submit to the relevant committees a report on false trade reporting, wash trading, and off-chain transactions with respect to contracts of sale of digital assets in interstate commerce that—</text><paragraph id="HBA121853EA4B42AF8A63CDDF0D4FCB4D"><enum>(1)</enum><text>with respect to the 5-year period preceding the date of the enactment of this section, examines each public report regarding false trade reporting and wash trading of digital assets on digital asset trading platforms;</text></paragraph><paragraph id="H6831BBE27C3845858867F9D5610B4E3F"><enum>(2)</enum><text>identifies the US and foreign digital asset trading platforms which have engaged in significant false trade reporting and wash trading;</text></paragraph><paragraph id="HEDB13C98AF5145E4929EE979DF3E4937"><enum>(3)</enum><text display-inline="yes-display-inline">quantifies and estimates the amount of false trade reporting and wash trading for each year of the last five years;</text></paragraph><paragraph id="H8507FCFCF0CD45D49A0C2E31EC633126"><enum>(4)</enum><text display-inline="yes-display-inline">discusses the use of omnibus accounts by digital asset trading platforms to hold customer assets and whether internalization of digital asset transactions by digital asset trading platforms creates transparency issues related to the public distributed ledger having an up-to-date record of all transactions and current ownership of digital assets;</text></paragraph><paragraph id="H522F824824BF4DBEA64FEA5395613783"><enum>(5)</enum><text display-inline="yes-display-inline">quantifies the amount and average daily trading volume of off-chain digital asset transactions occurring on United States digital asset trading platforms which are not reported to the public distributed ledger for the digital asset for each of the last five years;</text></paragraph><paragraph id="H3CDABE78B4DC490394BEF4533A06C820"><enum>(6)</enum><text>identifies the entities which have facilitated false trade reporting; and</text></paragraph><paragraph id="HF8466C6B20FD4594999776F0F7B5C527"><enum>(7)</enum><text>provides legislative and regulatory recommendations to promote and increase United States investor protection with respect to digital assets.</text></paragraph></section><section id="H3E1C484D0C4648DE8D757A42CEB56E0C"><enum>507.</enum><header>Relevant committees defined</header><text display-inline="no-display-inline">The term <term>relevant committees</term> means—</text><paragraph id="H93267C4970F845EC997E92CCA7BDEC5D"><enum>(1)</enum><text display-inline="yes-display-inline">the Committee on Financial Services of the House of Representatives;</text></paragraph><paragraph id="HF41DBA025C0640ACB04597E6A0AF6DAF"><enum>(2)</enum><text>the Committee on Banking, Housing, and Urban Affairs of the Senate;</text></paragraph><paragraph id="H42B959B5F1014A3D83A6B083980A54EC"><enum>(3)</enum><text>the Committee on Agriculture of the House of Representatives; and</text></paragraph><paragraph id="HE9422FD121C34A199ACA035C3CDC92CA"><enum>(4)</enum><text>the Committee on Agriculture, Nutrition, and Forestry of the Senate.</text></paragraph></section>