H.R. 3633

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3633 Reported in Senate (RS)]

<DOC>

Calendar No. 423
119th CONGRESS
2d Session
H. R. 3633

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

September 18 (legislative day, September 16), 2025

Received; read twice and referred to the Committee on Banking, 
Housing, and Urban Affairs

June 1, 2026

Reported by Mr. Scott of South Carolina, with an amendment
[Strike out all after the enacting clause and insert the part printed 
in italic]

_______________________________________________________________________

AN ACT

To provide for a system of regulation of the offer and sale of digital 
commodities by the Securities and Exchange Commission and the Commodity 
Futures Trading Commission, to amend the Federal Reserve Act to 
prohibit the Federal reserve banks from offering certain products or 
services directly to an individual, to prohibit the use of central bank 
digital currency for monetary policy, and for other purposes.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

<DELETED>SECTION 1. SHORT TITLES; TABLE OF CONTENTS.</DELETED>

<DELETED> (a) Short Titles.--This Act may be cited as the ``Digital 
Asset Market Clarity Act of 2025'' or the ``CLARITY Act of 2025'' and 
the ``Anti-CBDC Surveillance State Act''.</DELETED>
<DELETED> (b) Table of Contents.--The table of contents for this Act 
is as follows:</DELETED>

<DELETED>Sec. 1. Short titles; table of contents.
<DELETED>TITLE I--DEFINITIONS; RULEMAKING; EXPEDITED REGISTRATION

<DELETED>Sec. 101. Definitions under the Securities Act of 1933.
<DELETED>Sec. 102. Definitions under the Securities Exchange Act of 
1934.
<DELETED>Sec. 103. Definitions under the Commodity Exchange Act.
<DELETED>Sec. 104. Definitions under this Act.
<DELETED>Sec. 105. Rulemakings.
<DELETED>Sec. 106. Expedited registration for digital commodity 
exchanges, brokers, and dealers; 
provisional status.
<DELETED>Sec. 107. Commodity Exchange Act and securities laws savings 
provisions.
<DELETED>Sec. 108. Administrative requirements.
<DELETED>Sec. 109. Treatment of certain non-controlling blockchain 
developers.
<DELETED>Sec. 110. Application of the Bank Secrecy Act.
<DELETED>Sec. 111. Rule of construction.
<DELETED>Sec. 112. Implementation.
<DELETED>TITLE II--OFFERS AND SALES OF DIGITAL COMMODITIES

<DELETED>Sec. 201. Treatment of investment contract assets.
<DELETED>Sec. 202. Exempted primary transactions in digital 
commodities.
<DELETED>Sec. 203. Treatment of secondary transactions in digital 
commodities that originally involved 
investment contracts.
<DELETED>Sec. 204. Requirements for offers and sales of digital 
commodities by digital commodity related 
persons and digital commodity affiliated 
persons.
<DELETED>Sec. 205. Mature blockchain system requirements.
<DELETED>Sec. 206. Effective date.
<DELETED>TITLE III--REGISTRATION FOR INTERMEDIARIES AT THE SECURITIES 
AND EXCHANGE COMMISSION

<DELETED>Sec. 301. Treatment of digital commodities and permitted 
payment stablecoins.
<DELETED>Sec. 302. Anti-fraud authority over permitted payment 
stablecoins and certain digital commodity 
transactions.
<DELETED>Sec. 303. Eligibility of alternative trading systems.
<DELETED>Sec. 304. Rulemaking for dual-registered entities.
<DELETED>Sec. 305. Modernization of recordkeeping requirements.
<DELETED>Sec. 306. Exemptive authority.
<DELETED>Sec. 307. Additional registrations with the Commodity Futures 
Trading Commission.
<DELETED>Sec. 308. Exempting digital commodities from State securities 
laws.
<DELETED>Sec. 309. Exclusion for decentralized finance activities.
<DELETED>Sec. 310. Treatment of custody activities by banking 
institutions.
<DELETED>Sec. 311. Broker and dealer disclosures regarding the 
treatment of assets.
<DELETED>Sec. 312. Digital commodity activities that are financial in 
nature.
<DELETED>Sec. 313. Effective date; administration.
<DELETED>Sec. 314. Educational material requirements.
<DELETED>Sec. 315. Discretionary Surplus Fund.
<DELETED>TITLE IV--REGISTRATION FOR DIGITAL COMMODITY INTERMEDIARIES AT 
THE COMMODITY FUTURES TRADING COMMISSION

<DELETED>Sec. 401. Commission jurisdiction over digital commodity 
transactions.
<DELETED>Sec. 402. Requiring futures commission merchants to use 
qualified digital asset custodians.
<DELETED>Sec. 403. Trading certification and approval for digital 
commodities.
<DELETED>Sec. 404. Registration of digital commodity exchanges.
<DELETED>Sec. 405. Qualified digital asset custodians.
<DELETED>Sec. 406. Registration and regulation of digital commodity 
brokers and dealers.
<DELETED>Sec. 407. Registration of associated persons.
<DELETED>Sec. 408. Registration of commodity pool operators and 
commodity trading advisors.
<DELETED>Sec. 409. Exclusion for decentralized finance activities.
<DELETED>Sec. 410. Resources for implementation and enforcement.
<DELETED>Sec. 411. Requirements related to control persons.
<DELETED>Sec. 412. Other tradable assets.
<DELETED>Sec. 413. Conflict of interest rulemaking.
<DELETED>Sec. 414. Effective date.
<DELETED>Sec. 415. Sense of Congress.
<DELETED>TITLE V--INNOVATION AND TECHNOLOGY IMPROVEMENTS

<DELETED>Sec. 501. Findings; sense of Congress.
<DELETED>Sec. 502. Strategic Hub for Innovation and Financial 
Technology.
<DELETED>Sec. 503. Codification of LabCFTC.
<DELETED>Sec. 504. Study on decentralized finance.
<DELETED>Sec. 505. Study on non-fungible tokens.
<DELETED>Sec. 506. Study on expanding financial literacy amongst 
digital commodity holders.
<DELETED>Sec. 507. Study on financial market infrastructure 
improvements.
<DELETED>Sec. 508. Study on blockchain in payments.
<DELETED>Sec. 509. Study on illicit use of digital assets.
<DELETED>Sec. 510. GAO study on certain centralized intermediaries that 
are primarily located in foreign 
jurisdictions.
<DELETED>Sec. 511. Studies on foreign adversary participation.
<DELETED>Sec. 512. Conforming amendments.
<DELETED>TITLE VI--ANTI-CBDC SURVEILLANCE STATE ACT

<DELETED>Sec. 601. Short title.
<DELETED>Sec. 602. Prohibition on Federal reserve banks relating to 
certain products or services for 
individuals and prohibition on directly 
issuing a central bank digital currency.
<DELETED>Sec. 603. Prohibition on Federal reserve banks indirectly 
issuing a central bank digital currency.
<DELETED>Sec. 604. Prohibition with respect to central bank digital 
currency.
<DELETED>Sec. 605. Sense of Congress.

<DELETED>TITLE I--DEFINITIONS; RULEMAKING; EXPEDITED 
REGISTRATION</DELETED>

<DELETED>SEC. 101. DEFINITIONS UNDER THE SECURITIES ACT OF 
1933.</DELETED>

<DELETED> Section 2(a) of the Securities Act of 1933 (15 U.S.C. 
77b(a)) is amended by adding at the end the following:</DELETED>
<DELETED> ``(20) Blockchain.--The term `blockchain' means--
</DELETED>
<DELETED> ``(A) any technology--</DELETED>
<DELETED> ``(i) where data is--</DELETED>
<DELETED> ``(I) shared across a 
network to create a distributed ledger 
of independently verifiable 
transactions or information among 
network participants;</DELETED>
<DELETED> ``(II) linked using 
cryptography to maintain the integrity 
of the distributed ledger and to 
execute other functions; and</DELETED>
<DELETED> ``(III) propagated among 
network participants to reach consensus 
on the state of the distributed ledger 
and any other functions; and</DELETED>
<DELETED> ``(ii) composed of source code 
that is publicly available; and</DELETED>
<DELETED> ``(B) any similar technology to the 
technology described in subparagraph (A).</DELETED>
<DELETED> ``(21) Blockchain application.--The term 
`blockchain application' means any executable software that is 
deployed to a blockchain and composed of source code that is 
publicly available, including a smart contract or any network 
of smart contracts, or other similar technology.</DELETED>
<DELETED> ``(22) Blockchain protocol.--The term `blockchain 
protocol' means publicly available source code of a blockchain 
that is executed by the network participants of a blockchain to 
facilitate its functioning, or other similar 
technology.</DELETED>
<DELETED> ``(23) Blockchain system.--The term `blockchain 
system' means any blockchain, together with its blockchain 
protocol or any blockchain application or network of blockchain 
applications.</DELETED>
<DELETED> ``(24) Decentralized governance system.--
</DELETED>
<DELETED> ``(A) In general.--The term `decentralized 
governance system' means, with respect to a blockchain 
system, any transparent, rules-based system permitting 
persons to form consensus or reach agreement in the 
development, provision, publication, maintenance, or 
administration of such blockchain system, where 
participation is not limited to, or under the effective 
control of, any person or group of persons under common 
control.</DELETED>
<DELETED> ``(B) Relationship of persons to 
decentralized governance systems.--With respect to a 
decentralized governance system, the decentralized 
governance system and any persons participating in the 
decentralized governance system shall be treated as 
separate persons unless such persons are under common 
control or acting pursuant to an agreement to act in 
concert.</DELETED>
<DELETED> ``(C) Legal entities for decentralized 
governance systems.--The term `decentralized governance 
system' shall include a legal entity used to implement 
the rules-based system described in subparagraph (A), 
provided that the legal entity does not operate 
pursuant to centralized management. For the purposes of 
this subparagraph, the delegation of ministerial or 
administrative authority at the direction of the 
participants in a decentralized governance system shall 
not be construed to be centralized 
management.</DELETED>
<DELETED> ``(25) Digital asset.--The term `digital asset' 
means any digital representation of value which is recorded on 
a cryptographically-secured distributed ledger or other similar 
technology.</DELETED>
<DELETED> ``(26) Digital commodity.--The term `digital 
commodity' has the meaning given that term under section 1a of 
the Commodity Exchange Act (7 U.S.C. 1a).</DELETED>
<DELETED> ``(27) Digital commodity affiliated person.--The 
term `digital commodity affiliated person'--</DELETED>
<DELETED> ``(A) means a person (including a digital 
commodity related person) that, with respect to any 
digital commodity--</DELETED>
<DELETED> ``(i) acquires or has any right to 
acquire 5 percent or more of the total 
outstanding units of such digital commodity 
from a digital commodity issuer or an agent or 
underwriter thereof;</DELETED>
<DELETED> ``(ii) is a founder of the digital 
commodity issuer; or</DELETED>
<DELETED> ``(iii) is an executive officer, 
director, trustee, general partner, or person 
serving in a similar capacity of the digital 
commodity issuer or held such role at any point 
in the previous 12-month period; and</DELETED>
<DELETED> ``(B) does not include a decentralized 
governance system.</DELETED>
<DELETED> ``(28) Digital commodity issuer.--</DELETED>
<DELETED> ``(A) In general.--With respect to a 
digital commodity, the term `digital commodity issuer' 
means any person that--</DELETED>
<DELETED> ``(i) issues or causes to be 
issued, or proposes to issue or cause to be 
issued, a unit of such digital commodity to a 
person; or</DELETED>
<DELETED> ``(ii) offers or sells a right to 
a future issuance of a unit of such digital 
commodity to a person.</DELETED>
<DELETED> ``(B) Prohibition on evasion.--It shall be 
unlawful for any person to knowingly evade 
classification as a `digital commodity issuer' and 
facilitate an arrangement for the primary purpose of 
effecting an offer, sale, distribution, or other 
issuance of a digital commodity, including via any 
arrangement involving the transfer of intellectual 
property associated with the blockchain system to which 
the digital commodity relates.</DELETED>
<DELETED> ``(29) Digital commodity related person.--
</DELETED>
<DELETED> ``(A) In general.--With respect to a 
digital commodity issuer, the term `digital commodity 
related person'--</DELETED>
<DELETED> ``(i) means a person--</DELETED>
<DELETED> ``(I) that is or was in 
the previous 6-month period a promoter, 
senior employee, advisory board member, 
consultant, advisor, or person serving 
in a similar capacity; or</DELETED>
<DELETED> ``(II) that acquires or 
has any right to acquire 1 percent or 
more of the total outstanding units of 
such digital commodity from a digital 
commodity issuer or an agent or 
underwriter thereof; and</DELETED>
<DELETED> ``(ii) does not include a 
decentralized governance system.</DELETED>
<DELETED> ``(B) Senior employee defined.--In this 
paragraph and with respect to a digital commodity 
issuer, the term `senior employee' means any employee 
materially involved in the management of the digital 
commodity issuer, including management of the 
development of the blockchain system to which the 
digital commodity relates.</DELETED>
<DELETED> ``(30) End user distribution.--</DELETED>
<DELETED> ``(A) In general.--The term `end user 
distribution' means a distribution of a unit of a 
digital commodity that--</DELETED>
<DELETED> ``(i) does not involve an exchange 
of more than a nominal value of cash, property, 
or other assets; and</DELETED>
<DELETED> ``(ii) is distributed in a broad 
and equitable manner based on conditions 
capable of being satisfied by any participant 
in the blockchain system, including, as 
incentive-based rewards--</DELETED>
<DELETED> ``(I) to users of the 
digital commodity or any blockchain 
system to which the digital commodity 
relates;</DELETED>
<DELETED> ``(II) for activities 
directly related to the operation of 
the blockchain system, such as mining, 
validating, staking, or other activity 
directly tied to the operation of the 
blockchain system; or</DELETED>
<DELETED> ``(III) to the existing 
holders of another digital commodity, 
in proportion to the total units of 
such other digital commodity as are 
held by each person.</DELETED>
<DELETED> ``(B) Protocol consensus participation.--
The term `end user distribution' includes the 
following:</DELETED>
<DELETED> ``(i) Self staking.--The 
distribution of a unit of a digital commodity 
as a programmatic result of validating or 
staking activity for a blockchain system's 
consensus mechanism, including the staking of a 
digital commodity and the operation of a node 
or validator for such activity where the owner 
of the staked digital commodity and operator of 
the node or validator are the same person or 
entity.</DELETED>
<DELETED> ``(ii) Self-custodial staking with 
a third party.--The distribution of a unit of a 
digital commodity as a programmatic result of 
validating or staking activity for a blockchain 
system's consensus mechanism, including the 
staking of a digital commodity and the 
operation of a node or validator for such 
activity where--</DELETED>
<DELETED> ``(I) the owner of the 
staked digital commodity and operator 
of the node or validator for such 
activity are different persons or 
entities; and</DELETED>
<DELETED> ``(II) the operator of the 
node or validator does not maintain 
custody or control of the staked 
digital commodity.</DELETED>
<DELETED> ``(iii) Custodial and ancillary 
staking services.--Subject to the rules issued 
pursuant to subparagraph (C), the provision of 
custodial or ancillary staking services 
enabling the owner of a digital commodity to 
participate in validating or staking activity 
for a blockchain system's consensus mechanism 
that results in the programmatic distribution 
of a unit of a digital commodity, provided that 
such custodial or ancillary services are 
exclusively administrative or ministerial in 
nature.</DELETED>
<DELETED> ``(C) Rulemaking to define the custodial 
and ancillary staking services.--Not later than 270 
days after the date of the enactment of this paragraph, 
the Commission shall issue rules defining the custodial 
and ancillary staking services described in 
subparagraph (B)(iii) that are exclusively 
administrative or ministerial in nature, consistent 
with what is necessary or appropriate for the public 
interest or for the protection of investors.</DELETED>
<DELETED> ``(31) Mature blockchain system.--The term `mature 
blockchain system' means a blockchain system, together with its 
related digital commodity, that is not controlled by any person 
or group of persons under common control.</DELETED>
<DELETED> ``(32) Permitted payment stablecoin.--The term 
`permitted payment stablecoin' means a payment stablecoin (as 
defined in section 2 of the GENIUS Act) issued by a permitted 
payment stablecoin issuer.</DELETED>
<DELETED> ``(33) Permitted payment stablecoin issuer.--The 
term `permitted payment stablecoin issuer' has the meaning 
given that term in section 2 of the GENIUS Act.''.</DELETED>

<DELETED>SEC. 102. DEFINITIONS UNDER THE SECURITIES EXCHANGE ACT OF 
1934.</DELETED>

<DELETED> Section 3(a) of the Securities Exchange Act of 1934 (15 
U.S.C. 78c(a)) is amended--</DELETED>
<DELETED> (1) by redesignating the second paragraph (80) 
(relating to funding portals) as paragraph (81); and</DELETED>
<DELETED> (2) by adding at the end the following:</DELETED>
<DELETED> ``(82) Bank secrecy act.--The term `Bank Secrecy 
Act' means--</DELETED>
<DELETED> ``(A) section 21 of the Federal Deposit 
Insurance Act (12 U.S.C. 1829b);</DELETED>
<DELETED> ``(B) chapter 2 of title I of Public Law 
91-508 (12 U.S.C. 1951 et seq.); and</DELETED>
<DELETED> ``(C) subchapter II of chapter 53 of title 
31, United States Code.</DELETED>
<DELETED> ``(83) Additional digital commodity-related 
terms.--</DELETED>
<DELETED> ``(A) Securities act of 1933.--The terms 
`blockchain system', `decentralized governance system', 
`digital asset', `digital commodity affiliated person', 
`digital commodity issuer', `digital commodity related 
person', `end user distribution', `mature blockchain 
system', `permitted payment stablecoin', and `permitted 
payment stablecoin issuer' have the meaning given those 
terms, respectively, under section 2(a) of the 
Securities Act of 1933 (15 U.S.C. 77b(a)).</DELETED>
<DELETED> ``(B) Commodity exchange act.--The terms 
`digital commodity', `digital commodity broker', 
`digital commodity dealer', `digital commodity 
exchange', `decentralized finance messaging system', 
and `decentralized finance trading protocol' have the 
meaning given those terms, respectively, under section 
1a of the Commodity Exchange Act (7 U.S.C. 
1a).''.</DELETED>

SEC. 103. DEFINITIONS UNDER THE COMMODITY EXCHANGE ACT.

<DELETED> (a) In General.--Section 1a of the Commodity Exchange Act 
(7 U.S.C. 1a) is amended--</DELETED>
<DELETED> (1) in paragraph (10)--</DELETED>
<DELETED> (A) in subparagraph (A)--</DELETED>
<DELETED> (i) by redesignating clauses (iii) 
and (iv) as clauses (iv) and (v), respectively; 
and</DELETED>
<DELETED> (ii) by inserting after clause 
(ii) the following:</DELETED>
<DELETED> ``(iii) digital commodity;''; 
and</DELETED>
<DELETED> (B) by redesignating subparagraph (B) as 
subparagraph (C) and inserting after subparagraph (A) 
the following:</DELETED>
<DELETED> ``(B) Exclusion.--For purposes of this 
paragraph, the term `trading in commodity interests' 
shall not include transacting in digital commodities 
for the purpose of--</DELETED>
<DELETED> ``(i) acting as a digital 
commodity custodian;</DELETED>
<DELETED> ``(ii) establishing, maintaining, 
or managing inventory or payment instruments 
for commercial purposes; or</DELETED>
<DELETED> ``(iii) maintaining or supporting 
the operation of, or validating transactions 
on, a blockchain system.'';</DELETED>
<DELETED> (2) in paragraph (11)--</DELETED>
<DELETED> (A) in subparagraph (A)(i)--</DELETED>
<DELETED> (i) by redesignating subclauses 
(III) and (IV) as subclauses (IV) and (V), 
respectively; and</DELETED>
<DELETED> (ii) by inserting after subclause 
(II) the following:</DELETED>
<DELETED> ``(III) digital 
commodity;''; and</DELETED>
<DELETED> (B) by redesignating subparagraph (B) as 
subparagraph (C) and inserting after subparagraph (A) 
the following:</DELETED>
<DELETED> ``(B) Exclusion.--For purposes of this 
paragraph, the term `trading in commodity interests' 
shall not include transacting in digital commodities 
for the purpose of--</DELETED>
<DELETED> ``(i) acting as a digital 
commodity custodian;</DELETED>
<DELETED> ``(ii) establishing, maintaining, 
or managing inventory or payment instruments 
for commercial purposes; or</DELETED>
<DELETED> ``(iii) maintaining or supporting 
the operation of, or validating transactions 
on, a blockchain system.'';</DELETED>
<DELETED> (3) in paragraph (12)(A)(i)--</DELETED>
<DELETED> (A) in subclause (II), by adding at the 
end a semicolon;</DELETED>
<DELETED> (B) by redesignating subclauses (III) and 
(IV) as subclauses (IV) and (V), respectively; 
and</DELETED>
<DELETED> (C) by inserting after subclause (II) the 
following:</DELETED>
<DELETED> ``(III) a digital 
commodity;'';</DELETED>
<DELETED> (4) by redesignating paragraphs (16) through (51) 
as paragraphs (17) through (52), respectively, and inserting 
after paragraph (15) the following:</DELETED>
<DELETED> ``(16) Terms related to digital commodities.--
</DELETED>
<DELETED> ``(A) Associated person of a digital 
commodity broker.--</DELETED>
<DELETED> ``(i) In general.--Except as 
provided in clause (ii), the term `associated 
person of a digital commodity broker' means a 
person who is associated with a digital 
commodity broker as a partner, officer, 
employee, or agent (or any person occupying a 
similar status or performing similar functions) 
in any capacity that involves--</DELETED>
<DELETED> ``(I) the solicitation or 
acceptance of an order for the purchase 
or sale of a digital commodity; 
or</DELETED>
<DELETED> ``(II) the supervision of 
any person engaged in the solicitation 
or acceptance of an order for the 
purchase or sale of a digital 
commodity.</DELETED>
<DELETED> ``(ii) Exclusion.--The term 
`associated person of a digital commodity 
broker' does not include any person associated 
with a digital commodity broker the functions 
of which are solely clerical or 
ministerial.</DELETED>
<DELETED> ``(B) Associated person of a digital 
commodity dealer.--</DELETED>
<DELETED> ``(i) In general.--Except as 
provided in clause (ii), the term `associated 
person of a digital commodity dealer' means a 
person who is associated with a digital 
commodity dealer as a partner, officer, 
employee, or agent (or any person occupying a 
similar status or performing similar functions) 
in any capacity that involves--</DELETED>
<DELETED> ``(I) the solicitation or 
acceptance of a contract for the 
purchase or sale of a digital 
commodity; or</DELETED>
<DELETED> ``(II) the supervision of 
any person engaged in the solicitation 
or acceptance of a contract for the 
purchase or sale of a digital 
commodity.</DELETED>
<DELETED> ``(ii) Exclusion.--The term 
`associated person of a digital commodity 
dealer' does not include any person associated 
with a digital commodity dealer the functions 
of which are solely clerical or 
ministerial.</DELETED>
<DELETED> ``(C) Bank secrecy act.--The term `Bank 
Secrecy Act' means--</DELETED>
<DELETED> ``(i) section 21 of the Federal 
Deposit Insurance Act (12 U.S.C. 
1829b);</DELETED>
<DELETED> ``(ii) chapter 2 of title I of 
Public Law 91-508 (12 U.S.C. 1951 et seq.); 
and</DELETED>
<DELETED> ``(iii) subchapter II of chapter 
53 of title 31, United States Code.</DELETED>
<DELETED> ``(D) Decentralized finance messaging 
system.--</DELETED>
<DELETED> ``(i) In general.--The term 
`decentralized finance messaging system' means 
a software application that provides a user 
with the ability to create or submit an 
instruction, communication, or message to a 
decentralized finance trading protocol for the 
purpose of executing a transaction by the 
user.</DELETED>
<DELETED> ``(ii) Additional requirements.--
The term `decentralized finance messaging 
system' does not include any system that 
provides any person other than the user with 
control over--</DELETED>
<DELETED> ``(I) the funds of the 
user; or</DELETED>
<DELETED> ``(II) the execution of 
the transaction of the user.</DELETED>
<DELETED> ``(E) Decentralized finance trading 
protocol.--</DELETED>
<DELETED> ``(i) In general.--The term 
`decentralized finance trading protocol' means 
a blockchain system through which multiple 
participants can execute a financial 
transaction--</DELETED>
<DELETED> ``(I) in accordance with 
an automated rule or algorithm that is 
predetermined and non-discretionary; 
and</DELETED>
<DELETED> ``(II) without reliance on 
any other person to maintain control of 
the digital assets of the user during 
any part of the financial 
transaction.</DELETED>
<DELETED> ``(ii) Exclusions.--</DELETED>
<DELETED> ``(I) In general.--The 
term `decentralized finance trading 
protocol' does not include a blockchain 
system if--</DELETED>
<DELETED> ``(aa) a person or 
group of persons under common 
control or acting pursuant to 
an agreement to act in concert 
has the authority, directly or 
indirectly, through any 
contract, arrangement, 
understanding, relationship, or 
otherwise, to control or 
materially alter the 
functionality, operation, or 
rules of consensus or agreement 
of the blockchain system; 
or</DELETED>
<DELETED> ``(bb) the 
blockchain system does not 
operate, execute, and enforce 
its operations and transactions 
based solely on pre-
established, transparent rules 
encoded directly within the 
source code of the blockchain 
system.</DELETED>
<DELETED> ``(II) Special rule.--For 
purposes of subclause (I), a 
decentralized governance system shall 
not be considered to be a person or a 
group of persons under common control 
or acting pursuant to an agreement to 
act in concert.</DELETED>
<DELETED> ``(F) Digital commodity.--</DELETED>
<DELETED> ``(i) In general.--The term 
`digital commodity' means a digital asset that 
is intrinsically linked to a blockchain system, 
and the value of which is derived from or is 
reasonably expected to be derived from the use 
of the blockchain system.</DELETED>
<DELETED> ``(ii) Relationship to a 
blockchain system.--For purposes of this 
subparagraph, a digital asset is intrinsically 
linked to a blockchain system if the digital 
asset is directly related to the functionality 
or operation of the blockchain system or to the 
activities or services for which the blockchain 
system is created or utilized, including where 
the digital asset is--</DELETED>
<DELETED> ``(I) issued or generated 
by the programmatic functioning of the 
blockchain system;</DELETED>
<DELETED> ``(II) used to transfer 
value between participants in the 
blockchain system;</DELETED>
<DELETED> ``(III) used to access the 
activities or services of the 
blockchain system;</DELETED>
<DELETED> ``(IV) used to participate 
in the decentralized governance system 
of the blockchain system;</DELETED>
<DELETED> ``(V) used or removed from 
circulation in whole or in part to pay 
fees or otherwise verify or validate 
transactions on the blockchain 
system;</DELETED>
<DELETED> ``(VI) used as payment or 
incentive to participants in the 
blockchain system to engage in the 
activities of the blockchain system, 
provide services to other participants 
in the blockchain system, or otherwise 
participate in the functionality of the 
blockchain system; or</DELETED>
<DELETED> ``(VII) used as payment or 
incentive to participants in the 
blockchain system to validate 
transactions, secure the blockchain 
system, provide computational services, 
maintain or distribute information, or 
otherwise participate in the operations 
of the blockchain system.</DELETED>
<DELETED> ``(iii) Exclusion.--The term 
`digital commodity' does not include any of the 
following:</DELETED>
<DELETED> ``(I) Security.--
</DELETED>
<DELETED> ``(aa) Any 
security, other than a note, an 
investment contract, or a 
certificate of interest or 
participation in any profit-
sharing agreement.</DELETED>
<DELETED> ``(bb) A note, an 
investment contract, or a 
certificate of interest or 
participation in any profit-
sharing agreement that--
</DELETED>

<DELETED> ``(AA) 
represents or gives the 
holder an ownership 
interest or other 
interest in the 
revenues, profits, 
obligations, debts, 
assets, or assets or 
debts to be acquired of 
the issuer of the 
digital asset or 
another person (other 
than a decentralized 
governance 
system);</DELETED>

<DELETED> ``(BB) 
makes the holder a 
creditor of the issuer 
of the digital asset or 
another person; 
or</DELETED>

<DELETED> ``(CC) 
represents or gives the 
holder the right to 
receive interest or the 
return of principal 
from the issuer of the 
digital asset or 
another 
person.</DELETED>

<DELETED> ``(II) Security 
derivative.--A digital asset that, 
based on its terms and other 
characteristics, is, represents, or is 
functionally equivalent to an 
agreement, contract, or transaction 
that is--</DELETED>
<DELETED> ``(aa) a security 
future, as defined in section 
2a of the Securities Act of 
1933;</DELETED>
<DELETED> ``(bb) a security-
based swap, as defined in 
section 2a of the Securities 
Act of 1933;</DELETED>
<DELETED> ``(cc) a put, 
call, straddle, option, or 
privilege on any security, 
certificate of deposit, or 
group or index of securities 
(including any interest therein 
or based on the value thereof), 
as defined in section 2a of the 
Securities Act of 1933; 
or</DELETED>
<DELETED> ``(dd) a put, 
call, straddle, option, or 
privilege on any security, as 
defined in section 2a of the 
Securities Act of 
1933.</DELETED>
<DELETED> ``(III) Permitted payment 
stablecoin.--A digital asset that is a 
permitted payment stablecoin.</DELETED>
<DELETED> ``(IV) Banking deposit.--
</DELETED>
<DELETED> ``(aa) A deposit 
(as defined under section 3 of 
the Federal Deposit Insurance 
Act (12 U.S.C. 1813)), 
regardless of the technology 
used to record the 
deposit.</DELETED>
<DELETED> ``(bb) An account 
(as defined in section 101 of 
the Federal Credit Union Act 
(12 U.S.C. 1752)), regardless 
of the technology used to 
record the account.</DELETED>
<DELETED> ``(V) Commodity.--A 
digital asset that references, 
represents an interest in, or is 
functionally equivalent to--</DELETED>
<DELETED> ``(aa) an 
agricultural 
commodity;</DELETED>
<DELETED> ``(bb) an excluded 
commodity, other than a 
security; or</DELETED>
<DELETED> ``(cc) an exempt 
commodity, other than the 
digital commodity itself, as 
shall be further defined by the 
Commission.</DELETED>
<DELETED> ``(VI) Commodity 
derivative.--A digital asset that, 
based on its terms and other 
characteristics, is, represents, or is 
functionally equivalent to an 
agreement, contract, or transaction 
that is--</DELETED>
<DELETED> ``(aa) a contract 
of sale of a commodity for 
future delivery or an option 
thereon;</DELETED>
<DELETED> ``(bb) a security 
futures product;</DELETED>
<DELETED> ``(cc) a 
swap;</DELETED>
<DELETED> ``(dd) an 
agreement, contract, or 
transaction described in 
section 2(c)(2)(C)(i) or 
section 
2(c)(2)(D)(i);</DELETED>
<DELETED> ``(ee) a commodity 
option authorized under section 
4c; or</DELETED>
<DELETED> ``(ff) a leverage 
transaction authorized under 
section 19.</DELETED>
<DELETED> ``(VII) Pooled investment 
vehicle.--</DELETED>
<DELETED> ``(aa) In 
general.--A digital asset not 
described by subclause (I) 
that, based on its terms and 
other characteristics, is, 
represents, or is functionally 
equivalent to an interest in--
</DELETED>

<DELETED> ``(AA) a 
commodity pool, as 
defined in this Act; 
or</DELETED>

<DELETED> ``(BB) a 
pooled investment 
vehicle.</DELETED>

<DELETED> ``(bb) Pooled 
investment vehicle defined.--In 
this subclause, the term 
`pooled investment vehicle' 
means--</DELETED>

<DELETED> ``(AA) any 
investment company as 
defined in section 3(a) 
of the Investment 
Company Act of 1940 (15 
U.S.C. 80a-
3(a));</DELETED>

<DELETED> ``(BB) any 
company (as defined in 
section 2 of such Act 
(15 U.S.C. 80a-2)) that 
would be an investment 
company under section 
3(a) of such Act but 
for the exclusions 
provided from that 
definition by section 
3(c) of such Act, if 
for purposes of this 
subclause the company 
were assumed to be an 
issuer (as defined in 
section 2 of such Act); 
or</DELETED>

<DELETED> ``(CC) any 
entity or person that 
is not an investment 
company but holds or 
will hold assets other 
than 
securities.</DELETED>

<DELETED> ``(VIII) Good, 
collectible, and other non-commodity 
asset.--A digital asset that has value, 
utility, or significance beyond its 
mere existence as a digital asset, 
including the digital equivalent of a 
tangible or intangible good, such as--
</DELETED>
<DELETED> ``(aa) a work of 
art, a musical composition, a 
literary work, or other 
intellectual 
property;</DELETED>
<DELETED> ``(bb) 
collectibles, merchandise, 
virtual land, and video game 
assets;</DELETED>
<DELETED> ``(cc) affinity, 
rewards, or loyalty points, 
including airline miles or 
credit card points, that are 
not primarily speculative in 
nature; or</DELETED>
<DELETED> ``(dd) rights, 
licenses, and 
tickets.</DELETED>
<DELETED> ``(iv) Rule of construction.--No 
presumption shall exist that a digital asset is 
a security, nor shall a digital asset be 
excluded from being a digital commodity 
pursuant to clause (iii)(I), solely due to--
</DELETED>
<DELETED> ``(I) the digital asset 
providing voting or economic rights 
with respect to the blockchain system 
to which the digital asset relates or 
the decentralized governance system of 
the blockchain system to which the 
digital asset relates;</DELETED>
<DELETED> ``(II) the value of the 
digital asset having the potential to 
appreciate or depreciate in response to 
the efforts, operations, or financial 
performance of the blockchain system to 
which the digital asset relates or the 
decentralized governance system of the 
blockchain system to which the digital 
asset relates; or</DELETED>
<DELETED> ``(III) the value of the 
digital asset appreciating or 
depreciating due to the use of the 
blockchain system to which the digital 
asset relates or the decentralized 
governance system of the blockchain 
system to which the digital asset 
relates.</DELETED>
<DELETED> ``(G) Digital commodity broker.--
</DELETED>
<DELETED> ``(i) In general.--The term 
`digital commodity broker' means any person 
who, as a regular business--</DELETED>
<DELETED> ``(I) is engaged in--
</DELETED>
<DELETED> ``(aa) soliciting 
or accepting an order from a 
customer for--</DELETED>

<DELETED> ``(AA) the 
purchase or sale of a 
digital commodity; 
or</DELETED>

<DELETED> ``(BB) an 
agreement, contract, or 
transaction described 
in section 
2(c)(2)(D)(iv); 
and</DELETED>

<DELETED> ``(bb) in 
conjunction with the activities 
in item (aa), accepts or 
maintains control over--
</DELETED>

<DELETED> ``(AA) the 
funds of any customer; 
or</DELETED>

<DELETED> ``(BB) the 
execution of any 
transaction of a 
customer;</DELETED>

<DELETED> ``(II) is engaged in 
soliciting or accepting orders from a 
customer for the purchase or sale of a 
unit of a digital commodity on or 
subject to the rules of a registered 
entity; or</DELETED>
<DELETED> ``(III) is registered with 
the Commission as a digital commodity 
broker.</DELETED>
<DELETED> ``(ii) Exceptions.--The term 
`digital commodity broker' does not include a 
person solely because the person--</DELETED>
<DELETED> ``(I) solicits or accepts 
an order described in clause 
(i)(I)(aa)(AA) from a customer who is 
an eligible contract 
participant;</DELETED>
<DELETED> ``(II) enters into 1 or 
more digital commodity transactions 
that are attributable or solely 
incidental to making, sending, 
receiving, or facilitating payments, 
whether involving a payment service 
provider or on a peer-to-peer basis; 
or</DELETED>
<DELETED> ``(III) is a bank (as 
defined under section 3(a) of the 
Securities Exchange Act of 1934) 
engaging in certain banking activities 
with respect to a digital commodity in 
the same or a similar manner as a bank 
is excluded from the definition of a 
broker under such section, as 
determined by the Commission.</DELETED>
<DELETED> ``(iii) Further definition.--The 
Commission, by rule or regulation, may exclude 
from the term `digital commodity broker' any 
person or class of persons if the Commission 
determines that the rule or regulation will 
effectuate the purposes of this Act.</DELETED>
<DELETED> ``(H) Digital commodity dealer.--
</DELETED>
<DELETED> ``(i) In general.--The term 
`digital commodity dealer' means any person 
who, as a regular business--</DELETED>
<DELETED> ``(I) is, or offers to be 
a counterparty to a person for the 
purchase or sale of a digital commodity 
as a regular business, and in 
conjunction with the activities, 
accepts or maintains control over the 
funds of any counterparty; or</DELETED>
<DELETED> ``(II) is registered with 
the Commission as a digital commodity 
dealer.</DELETED>
<DELETED> ``(ii) Exception.--The term 
`digital commodity dealer' does not include a 
person solely because the person--</DELETED>
<DELETED> ``(I) is or offers to be a 
counterparty to a person who is an 
eligible contract 
participant;</DELETED>
<DELETED> ``(II) enters into a 
digital commodity transaction with an 
eligible contract 
participant;</DELETED>
<DELETED> ``(III) enters into a 
digital commodity transaction on or 
through a registered digital commodity 
exchange, with a registered digital 
commodity broker, or through a 
decentralized finance trading 
protocol;</DELETED>
<DELETED> ``(IV) enters into a 
digital commodity transaction for the 
person's own account, either 
individually or in a fiduciary 
capacity, but not as a part of a 
regular business;</DELETED>
<DELETED> ``(V) enters into 1 or 
more digital commodity transactions 
that are attributable or solely 
incidental to making, sending, 
receiving, or facilitating payments, 
whether involving a payment service 
provider or on a peer-to-peer basis; 
or</DELETED>
<DELETED> ``(VI) is a bank (as 
defined under section 3(a) of the 
Securities Exchange Act of 1934) 
engaging in certain banking activities 
with respect to a digital commodity in 
the same or a similar manner as a bank 
is excluded from the definition of a 
dealer under section 3(a)(5) of such 
Act, as determined by the 
Commission.</DELETED>
<DELETED> ``(iii) Further definition.--The 
Commission, by rule or regulation, may exclude 
from the term `digital commodity dealer' any 
person or class of persons if the Commission 
determines that the rule or regulation will 
effectuate the purposes of this Act.</DELETED>
<DELETED> ``(I) Digital commodity exchange.--The 
term `digital commodity exchange' means a trading 
facility that offers or seeks to offer a cash or spot 
market in at least 1 digital commodity.</DELETED>
<DELETED> ``(J) Mixed digital asset transaction.--
The term `mixed digital asset transaction' means a 
transaction in which a digital commodity is traded for 
a security.</DELETED>
<DELETED> ``(K) Terms defined under the securities 
act of 1933.--The terms `blockchain system', 
`decentralized governance system', `digital asset', 
`digital commodity issuer', `digital commodity 
affiliated person', `digital commodity related person', 
`end user distribution', `mature blockchain system', 
`permitted payment stablecoin', and `permitted payment 
stablecoin issuer' have the meaning given those terms, 
respectively, under section 2(a) of the Securities Act 
of 1933 (15 U.S.C. 77b(a)).''; and</DELETED>
<DELETED> (5) in paragraph (41) (as so redesignated by 
paragraph (4) of this subsection)--</DELETED>
<DELETED> (A) by striking ``and'' at the end of 
subparagraph (E);</DELETED>
<DELETED> (B) by striking the period at the end of 
subparagraph (F) and inserting ``; and''; and</DELETED>
<DELETED> (C) by adding at the end the 
following:</DELETED>
<DELETED> ``(G) a digital commodity exchange 
registered under section 5i.''.</DELETED>
<DELETED> (b) Conforming Amendments.--</DELETED>
<DELETED> (1) Each of the following provisions of law is 
amended by striking ``1a(18)'' and inserting 
``1a(19)'':</DELETED>
<DELETED> (A) Section 4s(h)(5)(A)(i) of the 
Commodity Exchange Act (7 U.S.C. 
6s(h)(5)(A)(i)).</DELETED>
<DELETED> (B) Section 5(e) of the Securities Act of 
1933 (15 U.S.C. 77e(e)).</DELETED>
<DELETED> (C) Section 6(g)(5)(B) of the Securities 
Exchange Act of 1934 (15 U.S.C. 
78f(g)(5)(B)).</DELETED>
<DELETED> (D) Section 15F(h)(5)(A)(i) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o-
10(h)(5)(A)(i)).</DELETED>
<DELETED> (2) Section 752 of the Wall Street Transparency 
and Accountability Act of 2010 (15 U.S.C. 8325) is amended by 
striking ``1a(39)'' and inserting ``1a(40)''.</DELETED>
<DELETED> (3) Section 4s(f)(1)(D) of the Commodity Exchange 
Act (7 U.S.C. 6s(f)(1)(D)) is amended by striking ``1a(47)(A)'' 
and inserting ``1a(48)(A)''.</DELETED>
<DELETED> (4) Each of the following provisions of the 
Commodity Exchange Act is amended by striking ``1a(47)(A)(v)'' 
and inserting ``1a(48)(A)(v)'':</DELETED>
<DELETED> (A) Section 4t(b)(1)(C) (7 U.S.C. 
6t(b)(1)(C)).</DELETED>
<DELETED> (B) Section 5(d)(23) (7 U.S.C. 
7(d)(23)).</DELETED>
<DELETED> (C) Section 5b(k)(3) (7 U.S.C. 7a-
1(k)(3)).</DELETED>
<DELETED> (D) Section 5h(f)(10)(A)(iii) (7 U.S.C. 
7b-3(f)(10)(A)(iii)).</DELETED>
<DELETED> (5) Section 21(f)(4)(C) of the Commodity Exchange 
Act (7 U.S.C. 24a(f)(4)(C)) is amended by striking ``1a(48)'' 
and inserting ``1a(49)''.</DELETED>
<DELETED> (6) Section 403 of the Legal Certainty for Bank 
Products Act of 2000 (7 U.S.C. 27a) is amended--</DELETED>
<DELETED> (A) in subsection (a)(2), by striking 
``1a(47)(A)(v)'' and inserting ``1a(48)(A)(v)''; 
and</DELETED>
<DELETED> (B) in each of subsections (b)(1) and 
(c)(2), by striking ``1a(47)'' and inserting 
``1a(48)''.</DELETED>
<DELETED> (7) Section 712 of the Wall Street Transparency 
and Accountability Act of 2010 (15 U.S.C. 8302) is amended--
</DELETED>
<DELETED> (A) in subsection (a)(8), by striking 
``1a(47)(D)'' each place it appears and inserting 
``1a(48)(D)''; and</DELETED>
<DELETED> (B) in subsection (d)(1), by striking 
``1a(47)(A)(v)'' each place it appears and inserting 
``1a(48)(A)(v)''.</DELETED>

<DELETED>SEC. 104. DEFINITIONS UNDER THIS ACT.</DELETED>

<DELETED> In this Act:</DELETED>
<DELETED> (1) Definitions under the commodity exchange 
act.--The terms ``decentralized finance messaging system'', 
``decentralized finance trading protocol'', ``digital 
commodity'', ``digital commodity broker'', ``digital commodity 
dealer'', ``digital commodity exchange'', and ``mixed digital 
asset transaction'' have the meaning given those terms, 
respectively, under section 1a of the Commodity Exchange Act (7 
U.S.C. 1a).</DELETED>
<DELETED> (2) Definitions under the securities act of 
1933.--The terms ``blockchain'', ``blockchain system'', 
``blockchain protocol'', ``decentralized governance system'', 
``digital asset'', ``digital commodity issuer'', ``end user 
distribution'', ``mature blockchain system'', ``permitted 
payment stablecoin'', and ``permitted payment stablecoin 
issuer'' have the meaning given those terms, respectively, 
under section 2(a) of the Securities Act of 1933 (15 U.S.C. 
77b(a)).</DELETED>
<DELETED> (3) Definitions under the securities exchange act 
of 1934.--The terms ``Bank Secrecy Act'', ``securities laws'', 
and ``self-regulatory organization'' have the meaning given 
those terms, respectively, under section 3(a) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78c(a)).</DELETED>

<DELETED>SEC. 105. RULEMAKINGS.</DELETED>

<DELETED> (a) Definitions.--The Commodity Futures Trading Commission 
and the Securities and Exchange Commission shall jointly issue rules to 
further define the following terms:</DELETED>
<DELETED> (1) The terms--</DELETED>
<DELETED> (A) ``blockchain'', ``blockchain 
application'', ``blockchain system'', ``blockchain 
protocol'', ``decentralized governance system'', 
``digital commodity affiliated person'', ``digital 
commodity issuer'', ``digital commodity related 
person'', ``end user distribution'', and ``mature 
blockchain system'', as defined under section 2(a) of 
the Securities Act of 1933;</DELETED>
<DELETED> (B) ``unilateral authority'', as such term 
is used in section 42 of the Securities Exchange Act of 
1934 and section 1a of the Commodity Exchange Act; 
and</DELETED>
<DELETED> (C) ``programmatic functioning'', as such 
term is used in sections 4C of the Securities Act of 
1933, section 42 of the Securities Exchange Act of 
1934, and section 1a of the Commodity Exchange 
Act.</DELETED>
<DELETED> (2) The terms ``digital commodity'', 
``decentralized finance messaging system'', and ``decentralized 
finance trading protocol'', as defined under section 1a of the 
Commodity Exchange Act.</DELETED>
<DELETED> (b) Joint Rulemaking for Mixed Digital Asset 
Transactions.--The Securities and Exchange Commission and the Commodity 
Futures Trading Commission shall jointly issue rules applicable to 
mixed digital asset transactions under this Act and the amendments made 
by this Act, including by further defining such term.</DELETED>
<DELETED> (c) Protection of Self-Custody.--</DELETED>
<DELETED> (1) In general.--A United States individual shall 
retain the right to--</DELETED>
<DELETED> (A) maintain a hardware wallet or software 
wallet for the purpose of facilitating the individual's 
own lawful custody of digital assets; and</DELETED>
<DELETED> (B) engage in direct, peer-to-peer 
transactions in digital assets with another individual 
or entity for the individual's own lawful purposes 
using a hardware wallet or software wallet, if--
</DELETED>
<DELETED> (i) such other individual or 
entity is not a financial institution (as 
defined in section 5312 of title 31, United 
States Code); and</DELETED>
<DELETED> (ii) the transactions do not 
involve any property or interests in property 
that are blocked pursuant to, or are otherwise 
prohibited by, United States 
sanctions.</DELETED>
<DELETED> (2) Application.--This subsection--</DELETED>
<DELETED> (A) applies solely to personal use by 
individuals; and</DELETED>
<DELETED> (B) does not apply to individuals acting 
in a custodial or fiduciary capacity for 
others.</DELETED>
<DELETED> (3) Rule of construction.--Nothing in this 
subsection shall be construed to limit the authority of the 
Secretary of the Treasury, the Securities and Exchange 
Commission, the Commodity Futures Trading Commission, the Board 
of Governors of the Federal Reserve System, the Comptroller of 
the Currency, the Federal Deposit Insurance Corporation, or the 
National Credit Union Administration to carry out any 
enforcement action or special measure authorized under 
applicable law, including--</DELETED>
<DELETED> (A) the Bank Secrecy Act, section 9714 of 
the Combating Russian Money Laundering Act (31 U.S.C. 
5318A note), and section 7213A of the Fentanyl 
Sanctions Act (21 U.S.C. 2313a); or</DELETED>
<DELETED> (B) any other law relating to illicit 
finance, money laundering, terrorism financing, or 
United States sanctions.</DELETED>
<DELETED> (d) Joint Rulemaking, Procedures, or Guidance for 
Delisting.--Not later than 180 days after the date of the enactment of 
this Act, the Commodity Futures Trading Commission and the Securities 
and Exchange Commission shall jointly issue rules, procedures, or 
guidance (as determined appropriate by the Commissions) regarding the 
process to delist an asset for trading under section 106 if the 
Commissions determine that the listing is inconsistent with the 
Commodity Exchange Act, the securities laws (including regulations 
under those laws), or this Act.</DELETED>
<DELETED> (e) Joint Rules for Portfolio Margining Determinations.--
</DELETED>
<DELETED> (1) In general.--Not later than 360 days after the 
date of the enactment of this Act, the Commodity Futures 
Trading Commission and the Securities and Exchange Commission 
shall jointly issue rules describing the process for persons 
registered with either such Commission to seek a joint order or 
determination with respect to margin, customer protection, 
segregation, or other requirements as necessary to facilitate 
portfolio margining of securities (including related extensions 
of credit), security-based swaps, contracts for future 
delivery, options on a contract for future delivery, swaps, and 
digital commodities, or any subset thereof, in--</DELETED>
<DELETED> (A) a securities account carried by a 
registered broker or dealer or a security-based swap 
account carried by a registered security-based swap 
dealer;</DELETED>
<DELETED> (B) a futures or cleared swap account 
carried by a registered futures commission 
merchant;</DELETED>
<DELETED> (C) a swap account carried by a swap 
dealer; or</DELETED>
<DELETED> (D) a digital commodity account carried by 
a registered digital commodity broker or digital 
commodity dealer that is also registered in such other 
capacity as is necessary to also carry the other 
customer or counterparty positions being held in the 
account.</DELETED>
<DELETED> (2) Process.--With respect to a joint order or 
determination described in paragraph (1), the rules required to 
be issued pursuant to paragraph (1) shall require--</DELETED>
<DELETED> (A) the joint order or determination to be 
issued only if the order or determination is in the 
public interest and provides for the appropriate 
protection of customers;</DELETED>
<DELETED> (B) applicants to file a standard 
application, in a form and manner determined by the 
Securities and Exchange Commission and the Commodity 
Futures Trading Commission, which shall include the 
information necessary to make the joint order or 
determination;</DELETED>
<DELETED> (C) the Securities and Exchange Commission 
and the Commodity Futures Trading Commission to make a 
final determination not later than 270 days after the 
filing of a completed application;</DELETED>
<DELETED> (D) the Securities and Exchange Commission 
and the Commodity Futures Trading Commission to 
consider the public interest of the joint order or 
determination through the solicitation of public 
comments; and</DELETED>
<DELETED> (E) the Securities and Exchange Commission 
and the Commodity Futures Trading Commission to consult 
with other relevant foreign or domestic regulators, 
including the Board of Governors of the Federal Reserve 
System, the Federal Deposit Insurance Corporation, and 
the Office of the Comptroller of the Currency, as 
appropriate.</DELETED>
<DELETED> (f) Capital Requirements to Address Netting Agreements.--
No later than 360 days following the date of enactment of this Act, the 
Board of Governors of the Federal Reserve System, the Comptroller of 
the Currency, and the Federal Deposit Insurance Corporation shall 
develop risk-based and leverage capital requirements for insured 
depository institutions, depository institution holding companies, and 
nonbank financial companies supervised by the Board of Governors that 
address netting agreements that provide for termination and close-out 
netting across multiple types of financial transactions, consistent 
with subsection (e), in the event of a counterparty's 
default.</DELETED>

<DELETED>SEC. 106. EXPEDITED REGISTRATION FOR DIGITAL COMMODITY 
EXCHANGES, BROKERS, AND DEALERS; PROVISIONAL 
STATUS.</DELETED>

<DELETED> (a) Registration.--</DELETED>
<DELETED> (1) In general.--Unless exempted from 
registration, a person shall not act as a digital commodity 
broker, digital commodity dealer, or digital commodity exchange 
after the end of the 90-day period beginning on the date the 
process described in paragraph (2) is adopted by the Commodity 
Futures Trading Commission, unless, as the case may be, the 
person is registered as a--</DELETED>
<DELETED> (A) digital commodity broker pursuant to 
section 4u of the Commodity Exchange Act;</DELETED>
<DELETED> (B) digital commodity dealer pursuant to 
section 4u of the Commodity Exchange Act; or</DELETED>
<DELETED> (C) digital commodity exchange pursuant to 
section 5i of the Commodity Exchange Act.</DELETED>
<DELETED> (2) Expedited process.--Within 180 days after the 
date of the enactment of this Act, the Commodity Futures 
Trading Commission shall adopt, by rule, regulation, or order, 
a process for expedited registration of persons required to be 
registered pursuant to paragraph (1).</DELETED>
<DELETED> (b) Provisional Status.--</DELETED>
<DELETED> (1) In general.--A person who is registered in 
accordance with subsection (a) of this section shall be in 
provisional status until--</DELETED>
<DELETED> (A) in the case of a digital commodity 
broker or dealer, 270 days after the final effective 
date of the rulemakings required under section 4u of 
the Commodity Exchange Act; or</DELETED>
<DELETED> (B) in the case of a digital commodity 
exchange, 270 days after the final effective date of 
the rulemakings required under section 5i of such 
Act.</DELETED>
<DELETED> (2) Payment of fees.--A person in provisional 
status shall pay all fees and penalties required under section 
410.</DELETED>
<DELETED> (c) Operations Prior to Regulations.--</DELETED>
<DELETED> (1) Requirements.--A person in provisional status 
shall be subject to the requirements of this section and the 
Commodity Exchange Act and any rules or regulations promulgated 
under this section or the Commodity Exchange Act, as 
applicable.</DELETED>
<DELETED> (2) Listings.--</DELETED>
<DELETED> (A) In general.--Except as provided in 
subparagraph (B), a person in provisional status may 
continue to offer, solicit, trade, facilitate, execute, 
clear, report, or otherwise deal in any digital asset 
offered on or through the facilities of the person 
before the date of registration under this section, 
until such time as the joint rulemaking on definitions 
required under section 105(a) is effective.</DELETED>
<DELETED> (B) Delisting.--Before the effective date 
of the joint rulemaking on definitions under section 
105(a), a person in provisional status shall cease 
offering, soliciting, trading, facilitating, executing, 
clearing, reporting, or otherwise dealing in any 
digital asset required to be delisted pursuant to a 
joint delisting process established under section 
105(d).</DELETED>
<DELETED> (3) Exemptive authority.--In order to promote 
responsible innovation and fair competition, or protect 
customers, the Commodity Futures Trading Commission may exempt 
any persons or class of persons registered pursuant to 
subsection (a) and in provisional status pursuant to subsection 
(b) from any requirements of this section or the Commodity 
Exchange Act or any rules or regulations promulgated under this 
section or the Commodity Exchange Act, as applicable.</DELETED>
<DELETED> (d) Customer Disclosure Before Registration.--</DELETED>
<DELETED> (1) In general.--Beginning 30 days after the date 
of the enactment of this Act, any person acting as a digital 
commodity exchange, digital commodity broker, or digital 
commodity dealer shall disclose to the customers of the person 
so acting, in the disclosure documents, offering documents, and 
promotional material of the person so acting, in a prominent 
manner, that the person is not registered with or regulated by 
the Commodity Futures Trading Commission.</DELETED>
<DELETED> (2) Expiration.--Paragraph (1) of this subsection 
shall not apply to any person who registers pursuant to 
subsection (a).</DELETED>

<DELETED>SEC. 107. COMMODITY EXCHANGE ACT AND SECURITIES LAWS SAVINGS 
PROVISIONS.</DELETED>

<DELETED> (a) In General.--Nothing in this Act shall affect or apply 
to, or be interpreted to affect or apply to--</DELETED>
<DELETED> (1) any agreement, contract, or transaction that 
is subject to the Commodity Exchange Act as--</DELETED>
<DELETED> (A) a contract of sale of a commodity for 
future delivery or an option on such a 
contract;</DELETED>
<DELETED> (B) a swap;</DELETED>
<DELETED> (C) a security futures product;</DELETED>
<DELETED> (D) an option authorized under section 4c 
of such Act;</DELETED>
<DELETED> (E) an agreement, contract, or transaction 
described in section 2(c)(2)(C)(i) of such Act; 
or</DELETED>
<DELETED> (F) a leverage transaction authorized 
under section 19 of such Act;</DELETED>
<DELETED> (2) any agreement, contract, or transaction that 
is subject to the securities laws as--</DELETED>
<DELETED> (A) a security-based swap;</DELETED>
<DELETED> (B) a security futures product; 
or</DELETED>
<DELETED> (C) an option on or based on the value of 
a security; or</DELETED>
<DELETED> (3) the activities of any person with respect to 
any such agreement, contract, or transaction.</DELETED>
<DELETED> (b) Prohibitions on Spot Digital Commodity Entities.--
Nothing in this Act authorizes, or shall be interpreted to authorize, a 
digital commodity exchange, digital commodity broker, or digital 
commodity dealer to engage in any activities involving any transaction, 
contract, or agreement described in subsection (a)(1), solely by virtue 
of being registered as a digital commodity exchange, digital commodity 
broker, or digital commodity dealer.</DELETED>
<DELETED> (c) Definitions.--In this section, each term shall have 
the meaning provided in the Commodity Exchange Act or the regulations 
prescribed under such Act.</DELETED>

<DELETED>SEC. 108. ADMINISTRATIVE REQUIREMENTS.</DELETED>

<DELETED> Section 4c(a) of the Commodity Exchange Act (7 U.S.C. 
6c(a)) is amended--</DELETED>
<DELETED> (1) in paragraph (3)--</DELETED>
<DELETED> (A) in subparagraph (B), by striking 
``or'' at the end;</DELETED>
<DELETED> (B) in subparagraph (C), by striking the 
period and inserting ``; or''; and</DELETED>
<DELETED> (C) by adding at the end the 
following:</DELETED>
<DELETED> ``(D) a contract of sale of a digital 
commodity.'';</DELETED>
<DELETED> (2) in paragraph (4)--</DELETED>
<DELETED> (A) in subparagraph (A)--</DELETED>
<DELETED> (i) in clause (ii), by striking 
``or'' at the end;</DELETED>
<DELETED> (ii) in clause (iii), by striking 
the period and inserting ``; or''; 
and</DELETED>
<DELETED> (iii) by adding at the end the 
following:</DELETED>
<DELETED> ``(iv) a contract of sale of a 
digital commodity.'';</DELETED>
<DELETED> (B) in subparagraph (B)--</DELETED>
<DELETED> (i) in clause (ii), by striking 
``or'' at the end;</DELETED>
<DELETED> (ii) in clause (iii), by striking 
the period and inserting ``; or''; 
and</DELETED>
<DELETED> (iii) by adding at the end the 
following:</DELETED>
<DELETED> ``(iv) a contract of sale of a 
digital commodity.''; and</DELETED>
<DELETED> (C) in subparagraph (C)--</DELETED>
<DELETED> (i) in clause (ii), by striking 
``or'' at the end;</DELETED>
<DELETED> (ii) by striking ``(iii) a swap, 
provided however,'' and inserting the 
following:</DELETED>
<DELETED> ``(iii) a swap; or</DELETED>
<DELETED> ``(iv) a contract of sale of a 
digital commodity,</DELETED>
<DELETED>provided, however,''; and</DELETED>
<DELETED> (iii) by striking ``clauses (i), 
(ii), or (iii)'' and insert ``any of clauses 
(i) through (iv)''.</DELETED>

<DELETED>SEC. 109. TREATMENT OF CERTAIN NON-CONTROLLING BLOCKCHAIN 
DEVELOPERS.</DELETED>

<DELETED> (a) In General.--Notwithstanding applicable law, a non-
controlling blockchain developer or provider of a blockchain service 
shall not be treated as a money transmitter or as engaged in ``money 
transmitting'' or, following the date of enactment of this Act, be 
otherwise subject to any new registration requirement that is 
substantially similar to the requirement that currently applies to 
money transmitters, solely on the basis of--</DELETED>
<DELETED> (1) creating or publishing software to facilitate 
the creation of, or provision of maintenance services to, a 
blockchain or blockchain service;</DELETED>
<DELETED> (2) providing hardware or software to facilitate a 
customer's own custody or safekeeping of the customer's digital 
assets; or</DELETED>
<DELETED> (3) providing infrastructure support to maintain a 
blockchain service.</DELETED>
<DELETED> (b) Rule of Construction.--Nothing in this section shall 
be construed to affect whether a blockchain developer or provider of a 
blockchain service is otherwise subject to classification or treatment 
as a money transmitter, or as engaged in ``money transmitting'', under 
applicable State or Federal law, including laws relating to anti-money 
laundering or countering the financing of terrorism, based on conduct 
outside the scope of subsection (a). Nothing in this section shall be 
construed to affect whether a blockchain developer or provider of a 
blockchain service is otherwise subject to classification or treatment 
as a financial institution under the Bank Secrecy Act, this Act, or any 
Act enacted after the date of enactment of this Act.</DELETED>
<DELETED> (c) Effect on Other Laws.--</DELETED>
<DELETED> (1) Intellectual property law.--Nothing in this 
section shall be construed to limit or expand any law 
pertaining to intellectual property.</DELETED>
<DELETED> (2) State law.--Nothing in this section shall be 
construed to prevent any State from enforcing any State law 
that is consistent with this section. No cause of action may be 
brought and no liability may be imposed under any State or 
local law that is inconsistent with this section.</DELETED>
<DELETED> (d) Definitions.--In this section:</DELETED>
<DELETED> (1) Blockchain developer.--The term ``blockchain 
developer'' means any person or business that creates or 
publishes software to facilitate the creation of, or provide 
maintenance to, a blockchain or a blockchain service.</DELETED>
<DELETED> (2) Blockchain service.--The term ``blockchain 
service'' means any information, transaction, or computing 
service or system that provides or enables access to a 
blockchain network by multiple users, including specifically a 
service or system that enables users to send, receive, 
exchange, or store digital assets described by blockchain 
networks.</DELETED>
<DELETED> (3) Non-controlling blockchain developer or 
provider of a blockchain service.--The term ``non-controlling 
blockchain developer or provider of a blockchain service'' 
means a blockchain developer or provider of a blockchain 
service that in the regular course of operations, does not have 
the legal right or the unilateral and independent ability to 
control, initiate upon demand, or effectuate transactions 
involving digital assets that users are entitled to, without 
the approval, consent, or direction of any other third 
party.</DELETED>

<DELETED>SEC. 110. APPLICATION OF THE BANK SECRECY ACT.</DELETED>

<DELETED> (a) In General.--Section 5312(c)(1)(A) of title 31, United 
States Code, is amended--</DELETED>
<DELETED> (1) by inserting ``digital commodity broker, 
digital commodity dealer,'' after ``futures commission 
merchant,''; and</DELETED>
<DELETED> (2) by inserting before the period the following: 
``and any digital commodity exchange registered, or required to 
register, under the Commodity Exchange Act which permits direct 
customer access''.</DELETED>
<DELETED> (b) Bank Secrecy Act Requirements.--</DELETED>
<DELETED> (1) Regulations.--The Secretary of the Treasury, 
acting through the Director of the Financial Crimes Enforcement 
Network, and in consultation with Commodity Futures Trading 
Commission, shall issue requirements consistent with the 
requirements of futures commission merchants to apply the Bank 
Secrecy Act to digital commodity brokers, digital commodity 
dealers, and digital commodity exchanges that are tailored to 
the size and complexity of such entities, including by 
requiring each such entity to--</DELETED>
<DELETED> (A) establish and maintain an anti-money 
laundering and countering the financing of terrorism 
program, which shall include--</DELETED>
<DELETED> (i) an appropriate risk 
assessment;</DELETED>
<DELETED> (ii) the development of internal 
policies, procedures, and controls;</DELETED>
<DELETED> (iii) the designation of a 
compliance officer;</DELETED>
<DELETED> (iv) an ongoing employee training 
program; and</DELETED>
<DELETED> (v) an independent audit function 
to test such program;</DELETED>
<DELETED> (B) retain appropriate records of 
transactions;</DELETED>
<DELETED> (C) monitor and report suspicious 
activity, which may include use of appropriate 
distributed ledger analytics; and</DELETED>
<DELETED> (D) maintain an effective customer 
identification program to identify and verify account 
holders and carry out appropriate customer due 
diligence.</DELETED>
<DELETED> (2) Compliance with sanctions.--A digital 
commodity broker, digital commodity dealer, or digital 
commodity exchange shall comply with all laws and regulations 
related to United States sanctions administered by the Office 
of Foreign Assets Control.</DELETED>

<DELETED>SEC. 111. RULE OF CONSTRUCTION.</DELETED>

<DELETED> Nothing in this Act, or the amendments made by this Act, 
shall be construed to limit or prevent the continued application of 
applicable ethics statutes and regulations administered by the Office 
of Government Ethics, or the ethics rules of the Senate and the House 
of Representatives, including section 208 of title 18, United States 
Code, and sections 2635.702 and 2635.802 of title 5, Code of Federal 
Regulations. For the avoidance of doubt, existing Office of Government 
Ethics laws and the ethics rules of the Senate and the House of 
Representatives prohibit any member of Congress or senior executive 
branch official from issuing a digital commodity during their time in 
public service. For the purposes of this section, an employee described 
in section 202 of title 18, United States Code, shall be deemed an 
executive branch employee for purposes of complying with section 208 of 
that title.</DELETED>

<DELETED>SEC. 112. IMPLEMENTATION.</DELETED>

<DELETED> (a) Global Rulemaking Timeframe.--Unless otherwise 
provided in this Act or an amendment made by this Act, the Commodity 
Futures Trading Commission and the Securities and Exchange Commission, 
or both, shall individually, and jointly where required, promulgate 
rules and regulations required of each Commission under this Act or an 
amendment made by this Act not later than 360 days after the date of 
enactment of this Act.</DELETED>
<DELETED> (b) Rules and Registration Before Final Effective Dates.--
</DELETED>
<DELETED> (1) In general.--In order to prepare for the 
implementation of this Act, the Commodity Futures Trading 
Commission and the Securities and Exchange Commission may, 
before any effective date provided in this Act--</DELETED>
<DELETED> (A) promulgate rules, regulations, or 
orders permitted or required by this Act;</DELETED>
<DELETED> (B) conduct studies and prepare reports 
and recommendations required by this Act;</DELETED>
<DELETED> (C) register persons under this Act; 
and</DELETED>
<DELETED> (D) exempt persons, agreements, contracts, 
or transactions from provisions of this Act, under the 
terms contained in this Act.</DELETED>
<DELETED> (2) Limitation on effectiveness.--An action by the 
Commodity Futures Trading Commission or the Securities and 
Exchange Commission under paragraph (1) shall not become 
effective before the effective date otherwise applicable to the 
action under this Act.</DELETED>

<DELETED>TITLE II--OFFERS AND SALES OF DIGITAL COMMODITIES</DELETED>

<DELETED>SEC. 201. TREATMENT OF INVESTMENT CONTRACT ASSETS.</DELETED>

<DELETED> (a) Securities Act of 1933.--Section 2(a) of the 
Securities Act of 1933 (15 U.S.C. 77b(a)), as amended by section 101, 
is further amended--</DELETED>
<DELETED> (1) in paragraph (1), by adding at the end the 
following: ``The term `investment contract' does not include an 
investment contract asset.''; and</DELETED>
<DELETED> (2) by adding at the end the following:</DELETED>
<DELETED> ``(36) The term `investment contract asset' means 
a digital commodity--</DELETED>
<DELETED> ``(A) that can be exclusively possessed 
and transferred, person to person, without necessary 
reliance on an intermediary, and is recorded on a 
blockchain; and</DELETED>
<DELETED> ``(B) sold or otherwise transferred, or 
intended to be sold or otherwise transferred, pursuant 
to an investment contract.''.</DELETED>
<DELETED> (b) Investment Advisers Act of 1940.--Section 202(a)(18) 
of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(18)) is 
amended by adding at the end the following: ``The term `investment 
contract' does not include an investment contract asset (as such term 
is defined under section 2(a) of the Securities Act of 
1933).''.</DELETED>
<DELETED> (c) Investment Company Act of 1940.--Section 2(a)(36) of 
the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(36)) is amended 
by adding at the end the following: ``The term `investment contract' 
does not include an investment contract asset (as such term is defined 
under section 2(a) of the Securities Act of 1933).''.</DELETED>
<DELETED> (d) Securities Exchange Act of 1934.--Section 3(a)(10) of 
the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(10)) is amended 
by adding at the end the following: ``The term `investment contract' 
does not include an investment contract asset (as such term is defined 
under section 2(a) of the Securities Act of 1933).''.</DELETED>
<DELETED> (e) Securities Investor Protection Act of 1970.--Section 
16(14) of the Securities Investor Protection Act of 1970 (15 U.S.C. 
78lll(14)) is amended by adding at the end the following: ``The term 
`investment contract' does not include an investment contract asset (as 
such term is defined under section 2(a) of the Securities Act of 
1933).''.</DELETED>

<DELETED>SEC. 202. EXEMPTED PRIMARY TRANSACTIONS IN DIGITAL 
COMMODITIES.</DELETED>

<DELETED> (a) In General.--The Securities Act of 1933 (15 U.S.C. 77a 
et seq.) is amended--</DELETED>
<DELETED> (1) in section 4(a), by adding at the end the 
following:</DELETED>
<DELETED> ``(8) the offer or sale of an investment contract 
involving units of a digital commodity by its digital commodity 
issuer (including all entities controlled by or under common 
control with the issuer), if--</DELETED>
<DELETED> ``(A) the blockchain system to which the 
digital commodity relates, together with the digital 
commodity, is certified as a mature blockchain system 
under section 42 of the Securities Exchange Act of 1934 
or the issuer intends for the blockchain system to 
which the digital commodity relates to be a mature 
blockchain system by the later of--</DELETED>
<DELETED> ``(i) the date that is four years 
after the first sale of the investment contract 
involving a unit of such digital commodity in 
reliance on the exemption provided under this 
paragraph, subject to any extensions as may be 
granted by the Commission; or</DELETED>
<DELETED> ``(ii) the date that is four years 
after the effective date of this 
paragraph;</DELETED>
<DELETED> ``(B) the sum of all cash and other 
consideration to be received by the digital commodity 
issuer in reliance on the exemption provided under this 
paragraph, during the 12-month period preceding the 
date of such offering, including the amount received in 
such offering, is not more than $50,000,000 (as such 
amount is annually adjusted by the Commission to 
reflect the change in the Consumer Price Index for All 
Urban Consumers published by the Bureau of Labor 
Statistics of the Department of Labor);</DELETED>
<DELETED> ``(C) after the completion of the 
transaction, a purchaser does not own more than 10 
percent of the total amount of the outstanding units of 
the digital commodity;</DELETED>
<DELETED> ``(D) the transaction does not involve the 
offer or sale of an investment contract involving units 
of a digital commodity by its digital commodity issuer 
that--</DELETED>
<DELETED> ``(i) is not organized under the 
laws of a State, a territory of the United 
States, or the District of Columbia;</DELETED>
<DELETED> ``(ii) is a development stage 
company that either--</DELETED>
<DELETED> ``(I) has no specific 
business plan or purpose; or</DELETED>
<DELETED> ``(II) has indicated that 
the business plan of the company is to 
merge with or acquire an unidentified 
company;</DELETED>
<DELETED> ``(iii) is an investment company, 
as defined in section 3 of the Investment 
Company Act of 1940 (15 U.S.C. 80a-3), or is 
excluded from the definition of investment 
company by section 3(c) of that Act (15 U.S.C. 
80a-3(b) or 80a-3(c));</DELETED>
<DELETED> ``(iv) is issuing fractional 
undivided interests in oil or gas rights, or a 
similar interest in other mineral 
rights;</DELETED>
<DELETED> ``(v) is, or has been, subject to 
any order of the Commission entered pursuant to 
section 12(j) of the Securities Exchange Act of 
1934 during the 5-year period before the filing 
of the offering statement; or</DELETED>
<DELETED> ``(vi) is disqualified pursuant to 
section 230.262 of title 17, Code of Federal 
Regulations; and</DELETED>
<DELETED> ``(E) the issuer meets the requirements of 
section 4B(b).''; and</DELETED>
<DELETED> (2) by inserting after section 4A the 
following:</DELETED>

<DELETED>``SEC. 4B. REQUIREMENTS WITH RESPECT TO CERTAIN DIGITAL 
COMMODITY TRANSACTIONS.</DELETED>

<DELETED> ``(a) Commission Jurisdiction.--For the purposes of this 
section:</DELETED>
<DELETED> ``(1) The Commission shall have jurisdiction and 
enforcement authority with respect to disclosures described in 
this section.</DELETED>
<DELETED> ``(2) Section 17 shall apply to a statement made 
in an offering statement, disclosure, or report filed under 
this section to the same extent as such section 17 applies to a 
statement made in any other offering statement, disclosure, or 
report filed under this Act.</DELETED>
<DELETED> ``(b) Requirements for Digital Commodity Issuers.--
</DELETED>
<DELETED> ``(1) Terms and conditions.--A digital commodity 
issuer offering or selling an investment contract involving 
units of a digital commodity in reliance on section 4(a)(8) 
shall file with the Commission an offering statement and any 
related documents, in such form and with such content as 
prescribed by the Commission, including financial information, 
a description of the issuer and the operations of the issuer, 
the financial condition of the issuer, a description of the 
plan of distribution of any unit of a digital commodity that is 
to be offered as well as the intended use of the offering 
proceeds, and a description of the development plan for the 
blockchain system, and the related digital commodity, to become 
a mature blockchain system, if such blockchain system is not 
already certified as a mature blockchain system pursuant to 
section 42 of the Securities Exchange Act of 1934 (15 U.S.C. 
78a et seq.).</DELETED>
<DELETED> ``(2) Information required for purchasers.--A 
digital commodity issuer that has filed a statement under 
paragraph (1) to offer and sell an investment contract 
involving a unit of a digital commodity in reliance on section 
4(a)(8) shall include in such statement the following 
information:</DELETED>
<DELETED> ``(A) Maturity status.--Whether the 
blockchain system to which the digital commodity 
relates has been certified as a mature blockchain 
system pursuant to section 42 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78a et seq.) and, where 
such blockchain system is not so certified, a statement 
of the digital commodity issuer's intent for the 
blockchain system to which the digital commodity 
relates to be a mature blockchain system within the 
time period described in section 4(a)(8)(A).</DELETED>
<DELETED> ``(B) Source code.--The source code, or a 
publicly accessible webpage displaying such source 
code, for any blockchain system to which the digital 
commodity relates, and whether the source code was 
sourced from an external third party, whether there are 
any existing external dependencies, and whether the 
code underwent a third-party security audit, along with 
material results of any such audit.</DELETED>
<DELETED> ``(C) Transaction history.--A description 
of the steps necessary to independently access, search, 
and verify the transaction history of any blockchain 
system to which the digital commodity relates, to the 
extent any such independent access, search, and 
verification activities are technically feasible with 
respect to such blockchain system.</DELETED>
<DELETED> ``(D) Digital commodity economics.--A 
description of the purpose of any blockchain system to 
which the digital commodity relates and the operation 
of any such blockchain system, including--</DELETED>
<DELETED> ``(i) information explaining the 
launch and supply process, including the number 
of units of the digital commodity to be issued 
in an initial allocation, the total number of 
units of the digital commodity to be created, 
the release schedule for the units of the 
digital commodity, and the total number of 
units of the digital commodity 
outstanding;</DELETED>
<DELETED> ``(ii) information explaining the 
technical requirements for holding, accessing, 
and transferring the digital 
commodity;</DELETED>
<DELETED> ``(iii) information on any 
applicable consensus mechanism or process for 
validating transactions, method of generating 
or mining digital commodities, and any process 
for burning or destroying units of the digital 
commodity on the blockchain system;</DELETED>
<DELETED> ``(iv) an explanation of any 
mechanism for driving value to the digital 
commodity of such blockchain system; 
and</DELETED>
<DELETED> ``(v) an explanation of governance 
mechanisms for implementing changes to the 
blockchain system or forming consensus among 
holders of units of such digital 
commodity.</DELETED>
<DELETED> ``(E) Plan of development.--The current 
state and timeline for the development of any 
blockchain system to which the digital commodity 
relates, detailing how and when the blockchain system 
is intended to be a mature blockchain system, if the 
blockchain system is not yet certified as a mature 
blockchain system, and the various roles that exist or 
are intended to exist in connection with the blockchain 
system, such as users, service providers, developers, 
transaction validators, and governance participants, 
including a discussion of any mechanisms by which 
control or authority are exerted with respect to the 
blockchain system or its related digital commodity, and 
any critical operational dependencies of the blockchain 
system or its related digital commodity.</DELETED>
<DELETED> ``(F) Ownership disclosures.--</DELETED>
<DELETED> ``(i) In general.--A list of all 
persons who are digital commodity related 
persons or digital commodity affiliated persons 
who have been issued a unit of the digital 
commodity by the digital commodity issuer or 
have a right to a unit of the digital commodity 
from the digital commodity issuer.</DELETED>
<DELETED> ``(ii) Confidentiality.--The 
Commission shall keep each list described under 
clause (i) confidential, consistent with what 
is necessary or appropriate in the public 
interest or for the protection of 
investors.</DELETED>
<DELETED> ``(G) Risk factor disclosures.--A 
description of the material risks surrounding ownership 
of a unit of a digital commodity.</DELETED>
<DELETED> ``(3) Ongoing disclosure requirements for maturing 
blockchain systems.--Subject to paragraph (5), the issuer of a 
digital commodity related to a blockchain system that is not 
yet certified as a mature blockchain system under section 42 of 
the Securities Exchange Act of 1934 that has filed a statement 
under paragraph (1) to offer and sell an investment contract 
involving a unit of a digital commodity in reliance on section 
4(a)(8) shall file the following with the Commission:</DELETED>
<DELETED> ``(A) Semiannual reports.--Every 6 months, 
a report containing--</DELETED>
<DELETED> ``(i) an updated description of 
the current state and timeline for the 
development of the blockchain system to which 
the digital commodity relates, showing how and 
when the blockchain is intended to be a mature 
blockchain system;</DELETED>
<DELETED> ``(ii) a description of the 
efforts of the issuer and digital commodity 
related persons in developing the blockchain 
system to which the digital commodity 
relates;</DELETED>
<DELETED> ``(iii) the amount of money raised 
by the digital commodity issuer in reliance on 
section 4(a)(8), how much of that money has 
been spent, and the general categories of 
activities for which that money has been spent 
and amounts spent per category; and</DELETED>
<DELETED> ``(iv) financial statements, where 
applicable.</DELETED>
<DELETED> ``(B) Current reports.--A current report 
reflecting any material changes relevant to the 
information previously reported to the Commission by 
the digital commodity issuer, which shall be filed as 
soon as practicable after the material change occurred, 
in accordance with such rules as the Commission may 
prescribe as necessary or appropriate in the public 
interest or for the protection of investors.</DELETED>
<DELETED> ``(4) Rulemaking.--Not later than 360 days after 
the date of the enactment of this section, the Commission shall 
prescribe rules on requirements applicable to issuers of 
digital commodities in reliance on section 4(a)(8).</DELETED>
<DELETED> ``(5) Termination of certain reporting 
requirements; post-maturity reporting requirements.--</DELETED>
<DELETED> ``(A) In general.--The ongoing reporting 
requirements under paragraph (3) shall not apply to a 
digital commodity issuer 180 days after the end of the 
covered fiscal year, if the information with respect to 
the digital commodity and the blockchain system to 
which it relates described in subparagraphs (A) through 
(C) of paragraph (2) is made publicly available and the 
disclosure requirements under subparagraph (C) of this 
paragraph are satisfied.</DELETED>
<DELETED> ``(B) Covered fiscal year defined.--In 
this paragraph, the term `covered fiscal year' means, 
with respect to a digital commodity, the first fiscal 
year of a digital commodity issuer in which the 
blockchain system to which such digital commodity 
relates is certified as a mature blockchain system 
under section 42 of the Securities Exchange Act of 
1934.</DELETED>
<DELETED> ``(C) Post-maturity reporting 
requirements.--After the blockchain system to which a 
digital commodity relates is certified as a mature 
blockchain system under section 42 of the Securities 
Exchange Act of 1934, any digital commodity issuer that 
has filed a statement under paragraph (1) to offer and 
sell an investment contract involving a unit of a 
digital commodity in reliance on section 4(a)(8) and is 
engaged in material ongoing efforts related to the 
mature blockchain system shall disclose, in a manner 
reasonably calculated to inform the public, and at such 
frequency as the Commission may prescribe, by rule, a 
description of such efforts, including--</DELETED>
<DELETED> ``(i) any participation in a 
decentralized governance system of such 
blockchain system;</DELETED>
<DELETED> ``(ii) any participation in 
alterations or proposed alterations to the 
functionality or operation of such blockchain 
system;</DELETED>
<DELETED> ``(iii) the use or planned use of 
any funds raised in reliance on section 4(a)(8) 
or any rulemaking pursuant to section 202(c) of 
the CLARITY Act of 2025 in such 
efforts;</DELETED>
<DELETED> ``(iv) the amount of units of the 
digital commodity, or rights thereto, owned and 
controlled by such issuer and any use, sale, 
trading, or other disposition thereof; 
and</DELETED>
<DELETED> ``(v) any affiliations of such 
issuer material to the efforts of such 
issuer.</DELETED>
<DELETED> ``(D) Termination of and exemption from 
post-maturity reporting requirements.--Not later than 
270 days after the date of the enactment of this 
section, the Commission shall issue rules--</DELETED>
<DELETED> ``(i) for terminating the 
disclosure requirements described in 
subparagraph (C) during the first fiscal year 
in which the digital commodity issuer does not 
engage in material ongoing efforts related to 
the mature blockchain system; and</DELETED>
<DELETED> ``(ii) to, as is necessary or 
appropriate in the public interest or for the 
protection of investors, exempt a digital 
commodity issuer from the requirements 
described in subparagraph (C) where only a de 
minimis amount of market activity involving the 
digital commodity of such digital commodity 
issuer is taking place.</DELETED>
<DELETED> ``(E) Rule of construction.--Nothing in 
subparagraph (C) may be construed to make any digital 
commodity described in such subparagraph a 
security.</DELETED>
<DELETED> ``(c) Requirements for Intermediaries.--A person acting as 
an intermediary in connection with the offer or sale of an investment 
contract involving units of a digital commodity in reliance on section 
4(a)(8) shall--</DELETED>
<DELETED> ``(1) register with the Commission as a broker or 
dealer; and</DELETED>
<DELETED> ``(2) be a member of a national securities 
association registered under section 15A of the Securities 
Exchange Act of 1934 (15 U.S.C. 78o-3).</DELETED>
<DELETED> ``(d) Disqualification Provisions.--The Commission shall 
issue rules to apply the disqualification provisions under section 
230.262 of title 17, Code of Federal Regulations, to the exemption 
provided under section 4(a)(8).</DELETED>
<DELETED> ``(e) Failure To Mature.--</DELETED>
<DELETED> ``(1) In general.--Not later than 270 days after 
the date of the enactment of this section, the Commission shall 
issue rules applying such additional obligations and 
disclosures for the digital commodity issuers, digital 
commodity related persons, and digital commodity affiliated 
persons of a blockchain system described under subsection 
(b)(1) that does not become a mature blockchain system within 
the time period described in section 4(a)(8)(A) as are 
necessary or appropriate in the public interest or for the 
protection of investors. Such obligations and disclosures shall 
include the following:</DELETED>
<DELETED> ``(A) Disclosures.--Disclosures regarding 
the following:</DELETED>
<DELETED> ``(i) Failure to mature.--A 
detailed explanation of the reason that the 
blockchain system has not become a mature 
blockchain system within the time period 
described in section 4(a)(8)(A).</DELETED>
<DELETED> ``(ii) Development plans.--The 
future plans of development of the blockchain 
system, including information required under 
subsection (b)(3).</DELETED>
<DELETED> ``(iii) Risk factor disclosures.--
The material risks surrounding ownership of a 
unit of a digital commodity that relates to a 
blockchain system described under subsection 
(b)(1) that has not become a mature blockchain 
system within the time period described in 
section 4(a)(8)(A).</DELETED>
<DELETED> ``(B) Obligations.--Transaction reporting 
and beneficial ownership disclosure obligations 
applicable to digital commodity related persons and 
digital commodity affiliated persons of such blockchain 
system.</DELETED>
<DELETED> ``(2) Qualification required.--The Commission may 
not permit any additional reliance on an exempt offering for 
the offer or sale of an investment contract involving a unit of 
a digital commodity by the issuer of the digital commodity 
related to a blockchain system described under subsection 
(a)(1) that has not become a mature blockchain system within 
the time period described in section 4(a)(8)(A) unless the 
Commission has qualified any offering statement related to such 
exempt offering.''.</DELETED>
<DELETED> (b) Additional Exemptions.--</DELETED>
<DELETED> (1) Certain registration requirements.--Section 
12(g)(6) of the Securities Exchange Act of 1934 (15 U.S.C. 
78l(g)(6)) is amended by striking ``under section 4(6)'' and 
inserting ``under section 4(a)(6) or 4(a)(8)''.</DELETED>
<DELETED> (2) Exemption from state regulation.--Section 
18(b)(4) of the Securities Act of 1933 (15 U.S.C. 77r(b)(4)) is 
amended--</DELETED>
<DELETED> (A) in subparagraph (B), by striking 
``section 4(4)'' and inserting ``section 
4(a)(4)'';</DELETED>
<DELETED> (B) in subparagraph (C), by striking 
``section 4(6)'' and inserting ``section 
4(a)(6)'';</DELETED>
<DELETED> (C) in subparagraph (F)--</DELETED>
<DELETED> (i) by striking ``section 4(2)'' 
each place such term appears and inserting 
``section 4(a)(2)''; and</DELETED>
<DELETED> (ii) by striking ``or'' at the 
end;</DELETED>
<DELETED> (D) in subparagraph (G), by striking the 
period and inserting ``; or''; and</DELETED>
<DELETED> (E) by adding at the end the 
following:</DELETED>
<DELETED> ``(H) section 4(a)(8).''.</DELETED>
<DELETED> (c) Use of Other Exemptions.--</DELETED>
<DELETED> (1) Rule of construction.--Except as provided in 
this subsection, nothing in this section or the amendments made 
by this section may be construed as prohibiting the offer or 
sale of an investment contract involving units of a digital 
commodity in reliance on an exemption from registration under 
the Securities Act of 1933, including as provided under section 
3, 4(a), or 19 of the Securities Act of 1933, other than that 
provided under section 4(a)(8) of the Securities Act of 
1933.</DELETED>
<DELETED> (2) Rulemakings.--</DELETED>
<DELETED> (A) The Securities and Exchange Commission 
may issue rules--</DELETED>
<DELETED> (i) to permit the issuer of a 
digital commodity related to a blockchain 
system described under section 4B(b)(1) of the 
Securities Act of 1933 that has not become a 
mature blockchain system within the time period 
described in section 4(a)(8)(A) of such Act, or 
the issuer of a digital commodity described in 
subparagraph (B)(iii), to utilize an exempt 
offering to offer or sell an investment 
contract involving the digital commodity, if 
the Commission qualifies any offering statement 
related to such exempt offering; and</DELETED>
<DELETED> (ii) for the offer and sale of 
investment contracts involving units of a 
digital commodity by issuers that are not 
organized under the laws of a State, a 
territory of the United States, or the District 
of Columbia.</DELETED>
<DELETED> (B) Not later than 270 days after the date 
of the enactment of this section, the Securities and 
Exchange Commission shall issue the following 
rules:</DELETED>
<DELETED> (i) A rule requiring a digital 
commodity issuer that last offered or sold an 
investment contract involving units of a 
digital commodity in reliance on an exemption 
from registration under the Securities Act of 
1933, including as provided under section 3, 
4(a), or 19 of the Securities Act of 1933, 
prior to the date of enactment of this Act, to 
file a comparable set of disclosures to those 
described under section 4B of the Securities 
Act of 1933 as the Commission determines 
appropriate based on the exemption, the 
maturity of the blockchain system to which such 
digital commodity relates, and any material 
ongoing efforts of such digital commodity 
issuer (provided that for blockchains certified 
as a mature blockchain system under section 42 
of the Securities Exchange Act of 1934, such 
disclosures shall be comparable to those under 
section 4B(b)(5)(C)), not later than the later 
of--</DELETED>
<DELETED> (I) one year after the 
effective date of this section; 
or</DELETED>
<DELETED> (II) the date of any 
secondary market sale of such digital 
commodity made in reliance on section 
203.</DELETED>
<DELETED> (ii) A rule requiring a digital 
commodity issuer that offers or sells an 
investment contract involving units of a 
digital commodity in reliance on an exemption 
from registration under the Securities Act of 
1933, including as provided under section 3, 
4(a), or 19 of the Securities Act of 1933, 
other than that provided under section 4(a)(8) 
of the Securities Act of 1933, on or after the 
date of enactment of this Act, to file a 
comparable set of disclosures to those 
described under section 4B of the Securities 
Act of 1933 as the Commission determines 
appropriate based on the exemption, the 
maturity of the blockchain system to which such 
digital commodity relates, and any material 
ongoing efforts of such digital commodity 
issuer, prior to the date of any secondary 
market sale of such digital commodity made in 
reliance on section 203.</DELETED>
<DELETED> (iii) With respect to a digital 
commodity where the digital commodity issuer is 
required to file disclosures under clause (i) 
or (ii) and where the blockchain system to 
which the digital commodity relates is not 
certified as a mature blockchain system 
pursuant to section 42 of the Securities 
Exchange Act of 1934 after the 4-year period 
beginning on the date that the first such 
disclosure is filed--</DELETED>
<DELETED> (I) a rule prohibiting the 
offer or sale of an investment contract 
involving units of the digital 
commodity unless the Commission has 
qualified any offering statement 
related to such offer or sale, where 
such offer or sale is permitted 
pursuant to subparagraph (A)(i); 
and</DELETED>
<DELETED> (II) a rule requiring the 
digital commodity issuer to make 
disclosures comparable to those 
described in 4B(e)(1)(A) of the 
Securities Act of 1933.</DELETED>
<DELETED> (iv) A rule permitting a successor 
to a digital commodity issuer, or such other 
appropriate person as designated by the 
Commission, to make the disclosures required 
under clause (i), where such issuer does not 
make the required disclosures.</DELETED>

<DELETED>SEC. 203. TREATMENT OF SECONDARY TRANSACTIONS IN DIGITAL 
COMMODITIES THAT ORIGINALLY INVOLVED INVESTMENT 
CONTRACTS.</DELETED>

<DELETED> (a) Secondary Market Treatment.--Notwithstanding any other 
provision of law, the offer or sale of a digital commodity that 
originally involved an investment contract by a person other than the 
issuer of such digital commodity, or an agent or underwriter thereof, 
shall be deemed not to be an offer or sale of such investment contract 
between the issuer of the investment contract involving the digital 
commodity, or an agent or underwriter thereof, and the purchaser of 
such digital commodity under--</DELETED>
<DELETED> (1) the Securities Act of 1933 (15 U.S.C. 77a et 
seq.);</DELETED>
<DELETED> (2) the Investment Advisers Act of 1940 (15 U.S.C. 
80b-1 et seq.);</DELETED>
<DELETED> (3) the Investment Company Act of 1940 (15 U.S.C. 
80a-1 et seq.);</DELETED>
<DELETED> (4) the Securities Exchange Act of 1934 (15 U.S.C. 
78a et seq.);</DELETED>
<DELETED> (5) the Securities Investor Protection Act of 1970 
(15 U.S.C. 78aaa et seq.); and</DELETED>
<DELETED> (6) any applicable provisions of State 
law.</DELETED>
<DELETED> (b) End User Distributions Not an Offer or Sale of a 
Security.--An end user distribution does not involve the offer or sale 
of a security.</DELETED>
<DELETED> (c) Agent Defined.--In this section and with respect to a 
digital commodity issuer, the term ``agent'' means any person directly 
or indirectly controlled by the issuer or under direct or indirect 
common control with the issuer.</DELETED>

<DELETED>SEC. 204. REQUIREMENTS FOR OFFERS AND SALES OF DIGITAL 
COMMODITIES BY DIGITAL COMMODITY RELATED PERSONS AND 
DIGITAL COMMODITY AFFILIATED PERSONS.</DELETED>

<DELETED> The Securities Act of 1933 (15 U.S.C. 77a et seq.), as 
amended by section 202, is further amended by inserting after section 
4B the following:</DELETED>

<DELETED>``SEC. 4C. REQUIREMENTS FOR OFFERS AND SALES OF DIGITAL 
COMMODITIES BY DIGITAL COMMODITY RELATED PERSONS AND 
DIGITAL COMMODITY AFFILIATED PERSONS.</DELETED>

<DELETED> ``(a) In General.--It shall be a violation of this Act for 
a digital commodity affiliated person or a digital commodity related 
person to offer or sell a digital commodity acquired directly from its 
issuer, or an agent or underwriter thereof, pursuant to an investment 
contract in reliance on section 4(a)(8) or another exemption under this 
Act, other than as provided in this section.</DELETED>
<DELETED> ``(b) Commission Jurisdiction.--</DELETED>
<DELETED> ``(1) Where a digital commodity affiliated person 
or a digital commodity related person offers or sells a digital 
commodity acquired directly from its issuer, or an agent or 
underwriter thereof, pursuant to an investment contract in 
reliance on section 4(a)(8), or another exemption under this 
Act, other than as provided in this section, such digital 
commodity affiliated person or digital commodity related person 
shall be considered an issuer of such investment 
contract.</DELETED>
<DELETED> ``(2) For the purposes of this section, the 
Commission shall have jurisdiction and enforcement authority 
with respect to an offer or sale of a digital commodity 
described in subsection (a).</DELETED>
<DELETED> ``(c) Restrictions on Digital Commodity Related Persons 
and Digital Commodity Affiliated Persons.--</DELETED>
<DELETED> ``(1) Prior to being a mature blockchain system.--
Prior to the blockchain system to which a digital commodity 
relates being certified as a mature blockchain system under 
section 42 of the Securities Exchange Act of 1934, units of the 
digital commodity acquired by a digital commodity related 
person or digital commodity affiliated person directly from its 
issuer (or an agent or underwriter thereof) pursuant to an 
investment contract in reliance on section 4(a)(8), or another 
exemption under this Act, may be offered or sold by such 
digital commodity related person or digital commodity 
affiliated person if--</DELETED>
<DELETED> ``(A) reports with respect to such digital 
commodity, where required under section 4B(b)(3) (or, 
with respect to a digital commodity not issued in 
reliance on section 4(a)(8), a comparable set of 
reports where required by the Commission) have been 
filed with the Commission;</DELETED>
<DELETED> ``(B) the digital commodity related person 
or digital commodity affiliated person has held the 
units for not less than 12 months; and</DELETED>
<DELETED> ``(C) the aggregate amount of the units of 
the digital commodity offered or sold by the digital 
commodity related person or digital commodity 
affiliated person is--</DELETED>
<DELETED> ``(i) in any 12-month period, or 
shorter period as the Commission may prescribe, 
not less than 5 percent or greater than 20 
percent of the total units of the digital 
commodity acquired directly from its issuer (or 
an agent or underwriter thereof) by the digital 
commodity related person or digital commodity 
affiliated person, as determined by the 
Commission pursuant to paragraph (3); 
and</DELETED>
<DELETED> ``(ii) an amount, as determined by 
the Commission pursuant to paragraph (3), not 
less than 30 percent or greater than 50 percent 
of the total units of the digital commodity 
acquired directly from its issuer (or an agent 
or underwriter thereof) by the digital 
commodity related person or digital commodity 
affiliated person.</DELETED>
<DELETED> ``(2) After becoming a mature blockchain system.--
After the blockchain system to which a digital commodity 
relates is certified as a mature blockchain system under 
section 42 of the Securities Exchange Act of 1934, units of the 
digital commodity acquired by a digital commodity related 
person or digital commodity affiliated person directly from its 
issuer (or an agent or underwriter thereof) pursuant to an 
investment contract in reliance on section 4(a)(8) or another 
exemption under this Act, may be--</DELETED>
<DELETED> ``(A) offered or sold by a digital 
commodity related person; or</DELETED>
<DELETED> ``(B) offered or sold by a digital 
commodity affiliated person if--</DELETED>
<DELETED> ``(i) information described in 
section 4B(b)(5)(C), where required (or, with 
respect to a digital commodity not issued in 
reliance on section 4(a)(8), a comparable set 
of information, where required) is publicly 
available;</DELETED>
<DELETED> ``(ii) the digital commodity 
affiliated person has held the units for not 
less than the earlier of--</DELETED>
<DELETED> ``(I) 12 months; 
or</DELETED>
<DELETED> ``(II) 3 months following 
the date on which the blockchain system 
is certified as a mature blockchain 
system under section 42 of the 
Securities Exchange Act of 1934; 
and</DELETED>
<DELETED> ``(iii) the aggregate amount of 
the units of the digital commodity offered or 
sold by the digital commodity affiliated person 
in any 12-month period is an amount, as 
determined by the Commission pursuant to 
paragraph (3), not less than 5 percent or 
greater than 10 percent of the total 
outstanding amount of the digital 
commodity.</DELETED>
<DELETED> ``(3) Rulemakings required.--Not later than 270 
days after the date of the enactment of this section, 
consistent with protecting investors, maintaining fair, 
orderly, and efficient markets, and facilitating capital 
formation, and to foster the development of mature blockchain 
systems, the Commission, by rule, after notice and comment--
</DELETED>
<DELETED> ``(A) shall set the percentage amounts 
described in paragraphs (1)(C)(i), (1)(C)(ii), and 
(2)(B)(iii); and</DELETED>
<DELETED> ``(B) may provide an exemption from the 
limitation described in paragraph (1)(C)(ii), if the 
Commission requires any offer or sale pursuant to such 
exemption of a digital commodity related to a 
blockchain system that has failed to become a mature 
blockchain system under this Act or any rule 
promulgated hereunder to be accompanied by the 
disclosures required under, as applicable, section 
4B(e)(1)(A) or section 202(c)(2)(B)(iii)(II) of the 
CLARITY Act of 2025.</DELETED>
<DELETED> ``(d) Rules of Construction.--For purposes of this 
section, the use of a digital commodity in the programmatic functioning 
of the blockchain system to which it relates is not an offer or sale of 
a digital commodity.</DELETED>
<DELETED> ``(e) Manipulative and Deceptive Devices; Reporting.--
</DELETED>
<DELETED> ``(1) In general.--It shall be unlawful for any 
digital commodity issuer, digital commodity related person, or 
digital commodity affiliated person, directly or indirectly, by 
the use of any means or instrumentality of interstate commerce 
or of the mails, to use or employ, in connection with the 
purchase or sale of any digital commodity, any manipulative or 
deceptive device or contrivance in contravention of such rules 
and regulations as the Commission may prescribe as necessary or 
appropriate in the public interest or for the protection of 
investors.</DELETED>
<DELETED> ``(2) Affirmative defense.--Not later than 270 
days after the date of the enactment of this section, the 
Commission shall issue rules to implement paragraph (1), 
including by providing any affirmative defenses to an 
enforcement action thereunder as the Commission may prescribe 
as necessary or appropriate in the public interest or for the 
protection of investors.</DELETED>
<DELETED> ``(3) Reporting.--Not later than 270 days after 
the date of the enactment of this section, the Commission shall 
issue rules to prescribe such transaction reporting and 
beneficial ownership disclosure obligations applicable to 
digital commodity related persons and digital commodity 
affiliated persons, as necessary or appropriate in the public 
interest or for the protection of investors.</DELETED>
<DELETED> ``(4) Differentiation between persons.--In issuing 
rules required under paragraphs (2) and (3), the Commission 
shall differentiate between digital commodity related persons 
and digital commodity affiliated persons, as necessary or 
appropriate in the public interest or for the protection of 
investors.</DELETED>
<DELETED> ``(f) Certain Units Received Prior to Enactment.--A unit 
of a digital commodity received from the digital commodity issuer prior 
to the date of the enactment of this section through an offer or sale 
of an investment contract involving units of a digital commodity in 
reliance on an exemption from registration under this Act, including as 
provided under section 3, 4(a), or 19, may be offered or sold by a 
digital commodity related person or digital commodity affiliated 
person, if--</DELETED>
<DELETED> ``(1) the digital commodity issuer is no longer 
engaged in material ongoing efforts related to the blockchain 
system to which the digital commodity relates and the 
blockchain system to which the digital commodity relates is 
certified as a mature blockchain system under section 42 of the 
Securities Exchange Act of 1934; or</DELETED>
<DELETED> ``(2) the appropriate disclosures required under 
section 202(c)(2)(B) of the CLARITY Act of 2025 have been made 
with the Commission.</DELETED>
<DELETED> ``(g) Rulemaking on Further Usage of Digital 
Commodities.-- The Commission, consistent with protecting investors, 
maintaining fair, orderly, and efficient markets, and facilitating 
capital formation, as well as fostering the development of mature 
blockchain systems, may, by rule, exempt unconditionally or on stated 
terms or conditions, a digital commodity related person or a digital 
commodity affiliated person, or any class thereof, from the 
requirements of this section for the offer or sale of a digital 
commodity, including for the purposes of promoting market 
liquidity.''.</DELETED>

<DELETED>SEC. 205. MATURE BLOCKCHAIN SYSTEM REQUIREMENTS.</DELETED>

<DELETED> Title I of the Securities Exchange Act of 1934 (15 U.S.C. 
78a et seq.) is amended by adding at the end the following:</DELETED>

<DELETED>``SEC. 42. MATURE BLOCKCHAIN SYSTEMS.</DELETED>

<DELETED> ``(a) Certification of Blockchain Systems.--</DELETED>
<DELETED> ``(1) Certification.--A digital commodity issuer, 
digital commodity related person, digital commodity affiliated 
person, decentralized governance system of the blockchain 
system, or a registered digital commodity exchange, or any 
other appropriate person as designated by the Commission, may 
certify to the Commission that the blockchain system to which a 
digital commodity relates is a mature blockchain 
system.</DELETED>
<DELETED> ``(2) Filing requirements.--A certification 
described under paragraph (1) shall be filed with the 
Commission, and include such information that is reasonably 
necessary to establish that the blockchain system is not 
controlled by any person or group of persons under common 
control, which may include information regarding--</DELETED>
<DELETED> ``(A) the operation of the blockchain 
system;</DELETED>
<DELETED> ``(B) the functionality of the related 
digital commodity;</DELETED>
<DELETED> ``(C) how the market value of the digital 
commodity is substantially derived from the 
programmatic functioning of such blockchain 
system;</DELETED>
<DELETED> ``(D) any decentralized governance system 
which relates to the blockchain system; and</DELETED>
<DELETED> ``(E) the current roles, if any, of the 
digital commodity issuer, digital commodity affiliated 
persons, and digital commodity related persons where 
such roles are material to the development or operation 
of such blockchain system or the decentralized 
governance system of such blockchain system.</DELETED>
<DELETED> ``(3) Rebuttable presumption.--The Commission may 
rebut a certification described under paragraph (1) with 
respect to a blockchain system if the Commission, within 60 
days of receiving such certification, determines that the 
blockchain system is not a mature blockchain system.</DELETED>
<DELETED> ``(4) Certification review.--</DELETED>
<DELETED> ``(A) In general.--Any blockchain system 
that relates to a digital commodity for which a 
certification has been made under paragraph (1) shall 
be considered a mature blockchain system 60 days after 
the date on which the Commission receives a 
certification under paragraph (1), unless the 
Commission notifies the person who made the 
certification within such time that the Commission is 
staying the certification due to--</DELETED>
<DELETED> ``(i) an inadequate explanation by 
the person making the certification; 
or</DELETED>
<DELETED> ``(ii) any novel or complex issues 
which require additional time to 
consider.</DELETED>
<DELETED> ``(B) Public notice.--The Commission shall 
make the following available to the public and provide 
a copy to the Commodity Futures Trading 
Commission:</DELETED>
<DELETED> ``(i) Each certification received 
under paragraph (1).</DELETED>
<DELETED> ``(ii) Each stay of the Commission 
under this subsection, and the reasons 
therefor.</DELETED>
<DELETED> ``(iii) Any response from a person 
making a certification under paragraph (1) to a 
stay of the certification by the 
Commission.</DELETED>
<DELETED> ``(C) Consolidation.--The Commission may 
consolidate and treat as one submission multiple 
certifications made under paragraph (1) for the same 
blockchain system which relates to a digital commodity 
which are received during the review period provided 
under this paragraph.</DELETED>
<DELETED> ``(5) Stay of certification.--</DELETED>
<DELETED> ``(A) In general.--A notification by the 
Commission pursuant to paragraph (4)(A) shall stay the 
certification once for up to an additional 120 days 
from the date of the notification.</DELETED>
<DELETED> ``(B) Public comment period.--Before the 
end of the 60-day period described under paragraph 
(4)(A), the Commission may begin a public comment 
period of at least 30 days in conjunction with a stay 
under this subsection.</DELETED>
<DELETED> ``(6) Disposition of certification.--A 
certification made under paragraph (1) shall--</DELETED>
<DELETED> ``(A) become effective--</DELETED>
<DELETED> ``(i) upon the publication of a 
notification from the Commission to the person 
who made the certification that the Commission 
does not object to the certification; 
or</DELETED>
<DELETED> ``(ii) at the expiration of the 
certification review period; and</DELETED>
<DELETED> ``(B) not become effective upon the 
publication of a notification from the Commission to 
the person who made the certification that the 
Commission has rebutted the certification.</DELETED>
<DELETED> ``(7) Recertification.--With respect to a 
blockchain system for which a certification has been rebutted 
under this subsection, no person may make a certification under 
paragraph (1) with respect to such blockchain system during the 
90-day period beginning on the date of such rebuttal.</DELETED>
<DELETED> ``(8) Appeal of rebuttal.--</DELETED>
<DELETED> ``(A) In general.--If a certification is 
rebutted under this section, the person making such 
certification may appeal the decision to the United 
States Court of Appeals for the District of Columbia, 
not later than 60 days after the notice of rebuttal is 
made.</DELETED>
<DELETED> ``(B) Review.--In an appeal under 
subparagraph (A), the court shall have de novo review 
of the determination to rebut the 
certification.</DELETED>
<DELETED> ``(b) Maturity Criteria.--</DELETED>
<DELETED> ``(1) Sense of congress.--It is the sense of the 
Congress that protecting investors, maintaining fair, orderly, 
and efficient markets, and facilitating capital formation 
necessitates establishing clear criteria for blockchain systems 
to be deemed mature, as well as enabling the Commission to 
develop, without prejudice to any such criteria codified in 
statute, alternative criteria by which blockchain systems may 
be considered not to be controlled by any person or group of 
persons under common control in order to accommodate changes in 
markets and technology.</DELETED>
<DELETED> ``(2) In general.--The Commission may issue rules 
identifying conditions by which a blockchain system, together 
with its related digital commodity, shall be considered a 
mature blockchain system, consistent with the protection of 
investors, maintenance of fair, orderly, and efficient markets, 
and the facilitation of capital formation.</DELETED>
<DELETED> ``(3) Rules of construction.--</DELETED>
<DELETED> ``(A) Nothing in this subsection may be 
construed to permit the Commission to impose additional 
criteria to the criteria in subsection (c) for 
certifying that a blockchain system is a mature 
blockchain system pursuant to subsection (c).</DELETED>
<DELETED> ``(B) Nothing in this subsection or 
subsection (c) may be construed to limit the 
Commission's ability to identify alternative conditions 
and criteria by which a blockchain system may be 
considered a mature blockchain system.</DELETED>
<DELETED> ``(c) Deemed Mature.--</DELETED>
<DELETED> ``(1) In general.--Notwithstanding subsection (b), 
for the purposes of subsection (a), a digital commodity issuer, 
digital commodity related person, digital commodity affiliated 
person, or decentralized governance system of the blockchain 
system may establish that a blockchain system, together with 
its related digital commodity, is not controlled by any person 
or group of persons under common control, if the blockchain 
system, together with its related digital asset, meets the 
requirements described in paragraph (2) or (3).</DELETED>
<DELETED> ``(2) Criteria for any blockchain system.--The 
requirements described in this paragraph are the 
following:</DELETED>
<DELETED> ``(A) System value.--</DELETED>
<DELETED> ``(i) Market value.--The digital 
commodity has a value that is substantially 
derived from the use and functioning of the 
blockchain system.</DELETED>
<DELETED> ``(ii) Development of value 
mechanism substantially completed.--Where the 
digital commodity issuer has made public a 
development plan describing how the digital 
commodity's value is reasonably expected to be 
derived from the programmatic functioning of 
the blockchain system, the development of such 
mechanisms has been substantially 
completed.</DELETED>
<DELETED> ``(B) Functional system.--The blockchain 
system allows network participants to engage in the 
activities the blockchain system is intended to 
provide, including--</DELETED>
<DELETED> ``(i) using, transmitting, or 
storing value, or otherwise executing 
transactions, on the blockchain 
system;</DELETED>
<DELETED> ``(ii) deploying, executing, or 
accessing software or services, or otherwise 
offering or participating in services, deployed 
on or integrated with the blockchain 
system;</DELETED>
<DELETED> ``(iii) participating in the 
consensus mechanism, transaction validation 
process, or decentralized governance system of 
the blockchain system; or</DELETED>
<DELETED> ``(iv) operating any client, node, 
validator, or other form of computational 
infrastructure with respect to the blockchain 
system.</DELETED>
<DELETED> ``(C) Open and interoperable system.--The 
blockchain system--</DELETED>
<DELETED> ``(i) is composed of source code 
that is open source; and</DELETED>
<DELETED> ``(ii) does not restrict or 
prohibit based on the exercise of unilateral 
authority any person, other than a digital 
commodity issuer, digital commodity related 
person, or digital commodity affiliated person 
from engaging in the activities the blockchain 
system is intended to provide, including the 
activities described in subparagraph 
(B).</DELETED>
<DELETED> ``(D) Programmatic system.--The blockchain 
system operates, executes, and enforces its operations 
and transactions based solely on pre-established, 
transparent rules encoded directly within the source 
code of the blockchain system.</DELETED>
<DELETED> ``(E) System governance.--No person or 
group of persons under common control--</DELETED>
<DELETED> ``(i) has the unilateral 
authority, directly or indirectly, through any 
contract, arrangement, understanding, 
relationship, or otherwise, to control or 
materially alter the functionality, operation, 
or rules of consensus or agreement of the 
blockchain system or its related digital 
commodity; or</DELETED>
<DELETED> ``(ii) has the unilateral 
authority to direct the voting, in the 
aggregate, of 20 percent or more of the 
outstanding voting power of such blockchain 
system by means of a related digital commodity, 
nodes or validators, a decentralized governance 
system, or otherwise, in a blockchain system 
which can be altered by a voting 
system.</DELETED>
<DELETED> ``(F) Impartial system.--No person or 
group of persons under common control possesses a 
unique permission or privilege with respect to 
functionality, operation, or rules of consensus or 
agreement of the blockchain system or its related 
digital commodity, unless such alteration--</DELETED>
<DELETED> ``(i) addresses errors, regular 
maintenance, or cybersecurity risks of the 
blockchain system that affect the programmatic 
functioning of the blockchain system; 
and</DELETED>
<DELETED> ``(ii) is adopted through the 
consensus or agreement of a decentralized 
governance system.</DELETED>
<DELETED> ``(G) Distributed ownership.--No digital 
commodity issuer, digital commodity related person, or 
digital commodity affiliated person beneficially owns, 
in the aggregate, 20 percent or more of the total 
amount of units of the digital commodity.</DELETED>
<DELETED> ``(3) Optional criteria for preexisting blockchain 
systems.--The requirements described in this paragraph are that 
the blockchain system--</DELETED>
<DELETED> ``(A) was created prior to the date of 
enactment of this section;</DELETED>
<DELETED> ``(B) met the requirements of 
subparagraphs (A) through (F) of paragraph (2) prior to 
the date of enactment of this section; and</DELETED>
<DELETED> ``(C) at least 50 percent of the units of 
the digital commodity related to the blockchain system 
are held by persons other than the digital commodity 
issuer, a digital commodity related person, or a 
digital commodity affiliated person.</DELETED>
<DELETED> ``(d) Decentralized Governance System.--</DELETED>
<DELETED> ``(1) For the purposes of this section, a 
decentralized governance system is not a `person' or a `group 
of persons under common control'.</DELETED>
<DELETED> ``(2) A blockchain system, together with its 
digital commodity, shall not be precluded from being considered 
a mature blockchain system solely based on a functional, 
administrative, clerical, or ministerial action of a 
decentralized governance system, including any such action 
taken by a person acting on behalf of and at the direction of 
the decentralized governance system, as determined by the 
Commission and consistent with the protection of investors, 
maintenance of fair, orderly, and efficient markets, and the 
facilitation of capital formation.</DELETED>
<DELETED> ``(e) Rulemaking.--Not more than 270 days after the date 
of enactment of this section, the Commission shall issue rules to carry 
out this section.''.</DELETED>

<DELETED>SEC. 206. EFFECTIVE DATE.</DELETED>

<DELETED> Unless otherwise provided in this title, this title and 
the amendments made by this title shall take effect 360 days after the 
date of enactment of this Act, except that, to the extent a provision 
of this title requires a rulemaking, the provision shall take effect on 
the later of--</DELETED>
<DELETED> (1) 360 days after the date of enactment of this 
Act; or</DELETED>
<DELETED> (2) 60 days after the publication in the Federal 
Register of the final rule implementing the 
provision.</DELETED>

<DELETED>TITLE III--REGISTRATION FOR INTERMEDIARIES AT THE SECURITIES 
AND EXCHANGE COMMISSION</DELETED>

<DELETED>SEC. 301. TREATMENT OF DIGITAL COMMODITIES AND PERMITTED 
PAYMENT STABLECOINS.</DELETED>

<DELETED> (a) Securities Act of 1933.--Section 2(a)(1) of the 
Securities Act of 1933 (15 U.S.C. 77b(a)(1)), as amended by the GENIUS 
Act, is amended by striking the final sentence and inserting the 
following: ``The term does not include a digital commodity or permitted 
payment stablecoin.''.</DELETED>
<DELETED> (b) Securities Exchange Act of 1934.--Section 3(a)(10) of 
the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)), as amended by 
the GENIUS Act, is amended by striking the final sentence and inserting 
the following: ``The term does not include a digital commodity or 
permitted payment stablecoin.''.</DELETED>
<DELETED> (c) Investment Advisers Act of 1940.--Section 202(a) of 
the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)) is amended--
</DELETED>
<DELETED> (1) in paragraph (18), as amended by the GENIUS 
Act, by striking the final sentence and inserting the 
following: ``The term does not include a digital commodity or 
permitted payment stablecoin.'';</DELETED>
<DELETED> (2) by redesignating the second paragraph (29) 
(relating to commodity pools) as paragraph (31); and</DELETED>
<DELETED> (3) by adding at the end, the following:</DELETED>
<DELETED> ``(32) Digital commodity-related terms.--The terms 
`digital commodity' and `permitted payment stablecoin' have the 
meaning given those terms, respectively, under section 2(a) of 
the Securities Act of 1933 (15 U.S.C. 77b(a)).''.</DELETED>
<DELETED> (d) Investment Company Act of 1940.--Section 2(a) of the 
Investment Company Act of 1940 (15 U.S.C. 80a-2) is amended--</DELETED>
<DELETED> (1) in paragraph (36), as amended by the GENIUS 
Act, by striking the final sentence and inserting the 
following: ``The term does not include a digital commodity or 
permitted payment stablecoin.''; and</DELETED>
<DELETED> (2) by adding at the end, the following:</DELETED>
<DELETED> ``(55) Digital commodity-related terms.--The terms 
`digital commodity' and `permitted payment stablecoin' have the 
meaning given those terms, respectively, under section 2(a) of 
the Securities Act of 1933 (15 U.S.C. 77b(a)).''.</DELETED>
<DELETED> (e) Securities Investor Protection Act of 1970.--Section 
16 of the Securities Investor Protection Act of 1970 (15 U.S.C. 78lll) 
is amended--</DELETED>
<DELETED> (1) in paragraph (14), as amended by the GENIUS 
Act, by striking the final sentence and inserting the 
following: ``The term does not include a digital commodity or 
permitted payment stablecoin, as such terms are defined, 
respectively, under section 2(a) of the Securities Act of 1933 
(15 U.S.C. 77b(a))''; and</DELETED>
<DELETED> (2) by adding at the end the following:</DELETED>
<DELETED> ``(15) Treatment of permitted payment 
stablecoins.--A permitted payment stablecoin, as defined in 
section 2(a) of the Securities Act of 1933, shall not qualify 
as `cash' and a claim for a permitted payment stablecoin shall 
not qualify as a `claim for cash'.''.</DELETED>

<DELETED>SEC. 302. ANTI-FRAUD AUTHORITY OVER PERMITTED PAYMENT 
STABLECOINS AND CERTAIN DIGITAL COMMODITY 
TRANSACTIONS.</DELETED>

<DELETED> (a) In General.--Section 10 of the Securities Exchange Act 
of 1934 (15 U.S.C. 78j) is amended--</DELETED>
<DELETED> (1) by moving subsection (c) so as to appear after 
subsection (b);</DELETED>
<DELETED> (2) by inserting after subsection (c) the 
following:</DELETED>
<DELETED> ``(d) To use or employ, in connection with the purchase or 
sale of any permitted payment stablecoin or digital commodity, by or 
through, as applicable, a broker, dealer, national securities exchange, 
or an alternative trading system, any manipulative or deceptive device 
or contrivance in contravention of such rules and regulations as the 
Commission may prescribe as necessary or appropriate in the public 
interest or for the protection of investors.''; and</DELETED>
<DELETED> (3) by adding at the end the following: ``Rules 
promulgated under subsection (b) that prohibit fraud, 
manipulation, or insider trading (but not rules imposing or 
specifying reporting or recordkeeping requirements, procedures, 
or standards as prophylactic measures against fraud, 
manipulation, or insider trading), and judicial precedents 
decided under subsection (b) and rules promulgated thereunder 
that prohibit fraud, manipulation, or insider trading, shall 
apply with respect to permitted payment stablecoin and digital 
commodity transactions engaged in by or through a broker or 
dealer or through an alternative trading system or, as 
applicable, a national securities exchange to the same extent 
as they apply to securities transactions. Judicial precedents 
decided under section 17(a) of the Securities Act of 1933 and 
sections 9, 15, 16, 20, and 21A of this title, and judicial 
precedents decided under applicable rules promulgated under 
such sections, shall apply to permitted payment stablecoins and 
digital commodities with respect to those circumstances in 
which the permitted payment stablecoins and digital commodities 
are, as applicable, brokered, traded, or custodied by or 
through a broker or dealer or through an alternative trading 
system or a national securities exchange to the same extent as 
they apply to securities.''.</DELETED>
<DELETED> (b) Treatment of Permitted Payment Stablecoins.--Title I 
of the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is 
amended by inserting after section 6 the following:</DELETED>

<DELETED>``SEC. 6A. TREATMENT OF TRANSACTIONS IN PERMITTED PAYMENT 
STABLECOINS.</DELETED>

<DELETED> ``(a) Authority To Broker, Trade, and Custody Permitted 
Payment Stablecoins.--Permitted payment stablecoins may be brokered, 
traded, or custodied by a broker or dealer or through an alternative 
trading system or national securities exchange.</DELETED>
<DELETED> ``(b) Commission Jurisdiction.--The Commission shall only 
have jurisdiction over a transaction in a permitted payment stablecoin 
with respect to those circumstances in which a permitted payment 
stablecoin is brokered, traded, or custodied--</DELETED>
<DELETED> ``(1) by a broker or dealer;</DELETED>
<DELETED> ``(2) through a national securities exchange; 
or</DELETED>
<DELETED> ``(3) through an alternative trading 
system.</DELETED>
<DELETED> ``(c) Limitation.--Subsection (b) shall only apply to a 
transaction described in subsection (b) for the purposes of regulating 
the offer, execution, solicitation, or acceptance of a permitted 
payment stablecoin in those circumstances in which the permitted 
payment stablecoin is brokered, traded, or custodied--</DELETED>
<DELETED> ``(1) by a broker or dealer;</DELETED>
<DELETED> ``(2) through a national securities exchange; 
or</DELETED>
<DELETED> ``(3) through an alternative trading 
system.''.</DELETED>

<DELETED>SEC. 303. ELIGIBILITY OF ALTERNATIVE TRADING 
SYSTEMS.</DELETED>

<DELETED> (a) In General.--Section 5 of the Securities Exchange Act 
of 1934 (15 U.S.C. 78e) is amended--</DELETED>
<DELETED> (1) by striking ``It'' and inserting the 
following:</DELETED>
<DELETED> ``(a) In General.--It''; and</DELETED>
<DELETED> (2) by adding at the end the following:</DELETED>
<DELETED> ``(b) Digital Commodity Protections.--</DELETED>
<DELETED> ``(1) In general.--The Commission may not preclude 
a trading platform from operating pursuant to a covered 
exemption to exchange registration under section 6 of this 
title on the basis that the assets traded or to be traded on 
such platform include--</DELETED>
<DELETED> ``(A) digital commodities or permitted 
payment stablecoins; and</DELETED>
<DELETED> ``(B) securities.</DELETED>
<DELETED> ``(2) Covered exemption.--In this subsection, the 
term `covered exemption' means an exemption--</DELETED>
<DELETED> ``(A) described in subsection (a)(2); 
or</DELETED>
<DELETED> ``(B) with respect to any other rule of 
the Commission relating to the definition of 
`exchange'.''.</DELETED>
<DELETED> (b) Securities Exchange Act of 1934.--Section 3(a)(2) of 
the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(2)) is amended by 
adding at the end the following: ``Neither an alternative trading 
system predominantly facilitating the trading of digital commodities, 
permitted payment stablecoins, or both, relative to its securities 
traded, nor a digital commodity exchange, is a `facility' of an 
exchange.''.</DELETED>
<DELETED> (c) Rule of Construction.--Nothing in this section, the 
amendments made by this section, or section 304 may be construed to--
</DELETED>
<DELETED> (1) prohibit a national securities exchange from 
owning or operating any other type of alternative trading 
system; or</DELETED>
<DELETED> (2) create a presumption that any other type of 
alternative trading system owned or operated by a national 
securities exchange is a facility of that exchange.</DELETED>

<DELETED>SEC. 304. RULEMAKING FOR DUAL-REGISTERED ENTITIES.</DELETED>

<DELETED> (a) Conflict of Interest Policies and Procedures.--Each 
person or entity dual-registered with the Commodity Futures Trading 
Commission as permitted under section 15(p) of the Securities Exchange 
Act of 1934 shall establish, maintain, and, as applicable, enforce and 
comply with written policies and procedures reasonably designed to 
mitigate any conflicts of interest, including with respect to 
transactions or arrangements with affiliates registered with the 
Securities and Exchange Commission, taking into consideration the 
nature of the business of such person or entity.</DELETED>
<DELETED> (b) Exemption From Duplicative, Conflicting, or Unduly 
Burdensome Provisions.--The Securities and Exchange Commission shall 
prescribe rules for a person or entity with multiple registrations, 
where at least one such registration includes any dual registration 
permitted under section 15(p) of the Securities Exchange Act of 1934, 
to exempt the person or entity from duplicative, conflicting, or unduly 
burdensome provisions of the Securities Exchange Act of 1934 and rules 
thereunder, to the extent such an exemption would protect investors, 
maintain fair, orderly, and efficient markets, and facilitate capital 
formation.</DELETED>
<DELETED> (c) Implementing Organizations.--The Securities and 
Exchange Commission shall require any registered national securities 
association that has as a member a registered broker or registered 
dealer that is registered with the Commodity Futures Trading Commission 
as a digital commodity broker or digital commodity dealer as permitted 
under section 15(p)(1) of the Securities Exchange Act of 1934 or 
otherwise transacts in permitted payment stablecoins to revise such 
rules as may be necessary to further the purposes of and compliance 
with this section.</DELETED>
<DELETED> (d) Memorandum of Understanding.--The Securities and 
Exchange Commission shall enter into a memorandum of understanding with 
the Commodity Futures Trading Commission to ensure--</DELETED>
<DELETED> (1) non-duplicative supervision and enforcement 
with respect to registrants of the Securities and Exchange 
Commission dual-registered with the Commodity Futures Trading 
Commission as permitted under section 15(p) of the Securities 
Exchange Act of 1934; and</DELETED>
<DELETED> (2) appropriate information sharing between the 
Commissions to further the purposes of and compliance with this 
section, the Securities Exchange Act of 1934, and the Commodity 
Exchange Act.</DELETED>
<DELETED> (e) Rule of Construction.--Nothing in this section shall 
be construed to limit the anti-fraud, anti-manipulation, or false 
reporting enforcement authorities of the Commodity Futures Trading 
Commission with respect to a contract of sale of a commodity and 
persons effecting such contracts.</DELETED>

<DELETED>SEC. 305. MODERNIZATION OF RECORDKEEPING 
REQUIREMENTS.</DELETED>

<DELETED> (a) In General.--For purposes of books and records 
requirements for brokers, dealers, transfer agents, national securities 
exchanges under the Securities and Exchange Act of 1934 (15 U.S.C. 78a 
et seq.), investment advisers under the Investment Advisers Act of 1940 
(15 U.S.C. 80b-1 et seq.), and investment companies under the 
Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), a person may, 
consistent with any rules promulgated under subsection (b), utilize 
records from a blockchain system.</DELETED>
<DELETED> (b) Revision of Rules.--Not later than 180 days after the 
date of enactment of this Act, the Securities and Exchange Commission 
shall issue and revise such rules as may be necessary to implement this 
section.</DELETED>

<DELETED>SEC. 306. EXEMPTIVE AUTHORITY.</DELETED>

<DELETED> Section 28 of the Securities Act of 1933 (15 U.S.C. 77z-3) 
is amended by striking ``by rule or regulation'' and inserting ``by 
rule, regulation, or order''.</DELETED>

<DELETED>SEC. 307. ADDITIONAL REGISTRATIONS WITH THE COMMODITY FUTURES 
TRADING COMMISSION.</DELETED>

<DELETED> Section 15 of the Securities Exchange Act of 1934 (15 
U.S.C. 78o) is amended by adding at the end the following:</DELETED>
<DELETED> ``(p) Additional Registrations With the Commodity Futures 
Trading Commission.--</DELETED>
<DELETED> ``(1) Registered brokers and dealers.--A 
registered broker or registered dealer shall be permitted to 
maintain a registration with the Commodity Futures Trading 
Commission as a digital commodity broker or digital commodity 
dealer.</DELETED>
<DELETED> ``(2) National securities exchanges.--A national 
securities exchange or affiliate thereof shall be permitted to 
maintain a registration with the Commodity Futures Trading 
Commission as a digital commodity exchange.</DELETED>
<DELETED> ``(3) Alternative trading systems.--An alternative 
trading system, and the operator thereof, shall be permitted to 
maintain a registration with the Commodity Futures Trading 
Commission as a digital commodity exchange.</DELETED>
<DELETED> ``(4) Notice of application.--Any person or entity 
described in paragraph (1) through (3) shall provide to the 
Securities and Exchange Commission, at such time and in such 
form and manner as the Securities and Exchange Commission shall 
prescribe, notice of any application to register with the 
Commodity Futures Trading Commission as a digital commodity 
broker, digital commodity dealer, or digital commodity 
exchange.''.</DELETED>

<DELETED>SEC. 308. EXEMPTING DIGITAL COMMODITIES FROM STATE SECURITIES 
LAWS.</DELETED>

<DELETED> (a) Covered Security.--Section 18(b) of the Securities Act 
of 1933 (15 U.S.C. 77r(b)) is amended by adding at the end the 
following:</DELETED>
<DELETED> ``(5) Exemption in connection with digital 
commodities.--A digital commodity shall be treated as a covered 
security.''.</DELETED>
<DELETED> (b) Rule of Construction.--Nothing in this section, 
section 202, or the amendments made by such sections may be construed 
to limit the existing authority described in section 18(c)(1) of the 
Securities Act of 1933 (15 U.S.C. 77r(c)(1)) of a securities commission 
(or any agency or office performing like functions) of any State with 
respect to a covered security or any security.</DELETED>

<DELETED>SEC. 309. EXCLUSION FOR DECENTRALIZED FINANCE 
ACTIVITIES.</DELETED>

<DELETED> The Securities Exchange Act of 1934 (15 U.S.C. 78a et 
seq.) is amended by inserting after section 15G the 
following:</DELETED>

<DELETED>``SEC. 15H. DECENTRALIZED FINANCE ACTIVITIES NOT SUBJECT TO 
THIS ACT.</DELETED>

<DELETED> ``(a) In General.--Notwithstanding any other provision of 
this Act, a person shall not be subject to this Act and the regulations 
promulgated under this Act based on the person directly or indirectly 
engaging in any of the following activities, whether singly or in 
combination, in relation to the operation of a blockchain system or in 
relation to a decentralized finance trading protocol:</DELETED>
<DELETED> ``(1) Compiling network transactions or relaying, 
searching, sequencing, validating, or acting in a similar 
capacity.</DELETED>
<DELETED> ``(2) Providing computational work, operating a 
node or oracle service, or procuring, offering, or utilizing 
network bandwidth, or providing other similar incidental 
services.</DELETED>
<DELETED> ``(3) Providing a user-interface that enables a 
user to read and access data about a blockchain 
system.</DELETED>
<DELETED> ``(4) Developing, publishing, constituting, 
administering, maintaining, or otherwise distributing a 
blockchain system or a decentralized finance trading 
protocol.</DELETED>
<DELETED> ``(5) Developing, publishing, constituting, 
administering, maintaining, or otherwise distributing a 
decentralized finance messaging system, or operating or 
participating in a liquidity pool, for the purpose of executing 
a spot contract for the purchase or sale of a digital commodity 
in relation to a decentralized finance trading 
protocol.</DELETED>
<DELETED> ``(6) Developing, publishing, constituting, 
administering, maintaining, or otherwise distributing software 
or systems that create or deploy hardware or software, 
including wallets or other systems, facilitating an individual 
user's own personal ability to keep, safeguard, or custody the 
user's digital assets or related private keys.</DELETED>
<DELETED> ``(b) Exceptions.--Subsection (a) shall not apply to the 
anti-fraud and anti-manipulation authorities of the 
Commission.''.</DELETED>

<DELETED>SEC. 310. TREATMENT OF CUSTODY ACTIVITIES BY BANKING 
INSTITUTIONS.</DELETED>

<DELETED> (a) Treatment of Custody Activities.--The appropriate 
Federal banking agency, the National Credit Union Administration (in 
the case of a credit union), and the Securities and Exchange Commission 
may not require a depository institution, national bank, Federal credit 
union, State credit union, trust company, broker, or dealer, or any 
affiliate thereof (the ``entity'')--</DELETED>
<DELETED> (1) to include assets held in custody that are not 
accounted for as assets of the entity as a liability on the 
financial statement or balance sheet of the entity, including 
digital commodity or permitted payment stablecoin custody or 
safekeeping services; and</DELETED>
<DELETED> (2) to hold regulatory capital against assets, 
including reserves backing such assets, in custody or 
safekeeping, except as necessary to mitigate against 
operational risks inherent with the custody or safekeeping 
services, as determined by--</DELETED>
<DELETED> (A) the appropriate Federal banking 
agency;</DELETED>
<DELETED> (B) the National Credit Union 
Administration (in the case of a credit 
union);</DELETED>
<DELETED> (C) a State bank supervisor;</DELETED>
<DELETED> (D) a State credit union supervisor (as 
defined in section 6003 of the Anti-Money Laundering 
Act of 2020 (31 U.S.C. 5311 note)); or</DELETED>
<DELETED> (E) the Securities and Exchange Commission 
(in the case of a broker or dealer).</DELETED>
<DELETED> (b) Definitions.--In this section:</DELETED>
<DELETED> (1) Banking terms.--The terms ``appropriate 
Federal banking agency'', ``depository institution'', 
``national bank'', and ``State bank supervisor'' have the 
meaning given those terms, respectively, under section 3 of the 
Federal Deposit Insurance Act (12 U.S.C. 1813).</DELETED>
<DELETED> (2) Credit union terms.--The terms ``Federal 
credit union'' and ``State credit union'' have the meaning 
given those terms, respectively, under section 101 of the 
Federal Credit Union Act (12 U.S.C. 1752).</DELETED>

<DELETED>SEC. 311. BROKER AND DEALER DISCLOSURES REGARDING THE 
TREATMENT OF ASSETS.</DELETED>

<DELETED> (a) In General.--Not later than 270 days after the date of 
the enactment of this Act, the Securities and Exchange Commission shall 
issue rules requiring written disclosures regarding the treatment of 
customer assets in the event of an insolvency, resolution, or 
liquidation proceeding to be provided by a registered broker or dealer 
to an investor before a digital commodity, a permitted payment 
stablecoin, or an investment contract involving a unit of a digital 
commodity is received, acquired, or held by the broker or dealer for 
the account of the investor, which shall include, as necessary or 
appropriate for the protection of investors--</DELETED>
<DELETED> (1) a description of the manner in which any 
digital commodity, permitted payment stablecoin, or investment 
contact involving a unit of a digital commodity received, 
acquired, or held by the broker or dealer for the account of 
such investor would be treated in an insolvency, resolution, or 
liquidation proceeding with respect to the broker or dealer 
under--</DELETED>
<DELETED> (A) title II of the Dodd-Frank Wall Street 
Reform and Consumer Protection Act (12 U.S.C. 5381 et 
seq.);</DELETED>
<DELETED> (B) the Securities Investor Protection Act 
of 1970 (15 U.S.C. 78aaa et seq.); or</DELETED>
<DELETED> (C) as applicable, chapter 7 or chapter 11 
of title 11, United States Code; and</DELETED>
<DELETED> (2) how the treatment described in paragraph (1) 
differs from the treatment of securities and cash received, 
acquired, or held by the broker or dealer for the account of 
such investor in the event of an insolvency, resolution, or 
liquidation proceeding with respect to the broker or dealer 
under each law described under subparagraph (A) through (C) of 
paragraph (1).</DELETED>

<DELETED>SEC. 312. DIGITAL COMMODITY ACTIVITIES THAT ARE FINANCIAL IN 
NATURE.</DELETED>

<DELETED> (a) Digital Commodity Activities That Are Financial in 
Nature.--Section 4(k)(4) of the Bank Holding Company Act of 1956 (12 
U.S.C. 1843(k)(4)) is amended--</DELETED>
<DELETED> (1) in subparagraph (A), by striking ``or 
securities'' and inserting ``, securities, or digital 
commodities''; and</DELETED>
<DELETED> (2) in subparagraph (E), by inserting ``or digital 
commodities'' before the period at the end.</DELETED>
<DELETED> (b) National Bank Activity.--</DELETED>
<DELETED> (1) In general.--A national bank may use a digital 
asset or blockchain system to perform, provide, or deliver any 
activity, function, product, or service that the national bank 
is otherwise authorized by law to perform, provide, or 
deliver.</DELETED>
<DELETED> (2) Rule of construction.--Nothing in this 
subsection may be construed to exempt a national bank's 
performance, provision, or delivery of an activity, function, 
product, or service from a requirement that would apply if the 
activity were not performed, provided, or delivered using a 
digital asset or blockchain system.</DELETED>
<DELETED> (c) Insured State Banks and Subsidiaries of Insured State 
Banks.--For purposes of sections 24(a) and 24(d) of the Federal Deposit 
Insurance Act (12 U.S.C. 1831a(a) and (d)), all of the activities 
authorized for a national bank under subsection (b) that are principal 
activities shall be permissible for an insured State bank and 
subsidiary of an insured State bank.</DELETED>

<DELETED>SEC. 313. EFFECTIVE DATE; ADMINISTRATION.</DELETED>

<DELETED> Except as otherwise provided under this title, this title 
and the amendments made by this title shall take effect 360 days after 
the date of enactment of this Act, except that, to the extent a 
provision of this title requires a rulemaking, the provision shall take 
effect on the later of--</DELETED>
<DELETED> (1) 360 days after the date of enactment of this 
Act; or</DELETED>
<DELETED> (2) 60 days after the publication in the Federal 
Register of the final rule implementing the 
provision.</DELETED>

<DELETED>SEC. 314. EDUCATIONAL MATERIAL REQUIREMENTS.</DELETED>

<DELETED> The Securities and Exchange Commission, in consultation 
with the Commodity Futures Trading Commission, shall require any 
registered entity that facilitates the trading of digital commodities 
or investment contracts involving units of a digital commodity to 
provide clear and accessible educational materials to the public, 
including--</DELETED>
<DELETED> (1) an overview of how blockchain technology 
functions;</DELETED>
<DELETED> (2) a description of common risks associated with 
digital commodities;</DELETED>
<DELETED> (3) a description of the differences between 
digital commodity markets and traditional financial 
markets;</DELETED>
<DELETED> (4) information on reporting requirements related 
to digital commodity transactions or investment contracts 
involving units of a digital commodity; and</DELETED>
<DELETED> (5) guidance on recognizing fraudulent schemes and 
instructions for reporting suspected fraud.</DELETED>

<DELETED>SEC. 315. DISCRETIONARY SURPLUS FUND.</DELETED>

<DELETED> (a) In General.--The dollar amount specified under section 
7(a)(3)(A) of the Federal Reserve Act (12 U.S.C. 289(a)(3)(A)) is 
reduced by $15,000,000.</DELETED>
<DELETED> (b) Effective Date.--The amendment made by subsection (a) 
shall take effect on September 30, 2035.</DELETED>

<DELETED>TITLE IV--REGISTRATION FOR DIGITAL COMMODITY INTERMEDIARIES AT 
THE COMMODITY FUTURES TRADING COMMISSION</DELETED>

<DELETED>SEC. 401. COMMISSION JURISDICTION OVER DIGITAL COMMODITY 
TRANSACTIONS.</DELETED>

<DELETED> (a) Savings Clause.--Section 2(a)(1) of the Commodity 
Exchange Act (7 U.S.C. 2(a)(1)) is amended by adding at the end the 
following:</DELETED>
<DELETED> ``(J) Except as expressly provided in this 
Act, nothing in the CLARITY Act of 2025 shall affect or 
apply to, or be interpreted to affect or apply to--
</DELETED>
<DELETED> ``(i) any agreement, contract, or 
transaction that is subject to this Act as--
</DELETED>
<DELETED> ``(I) a contract of sale 
of a commodity for future delivery or 
an option on such a contract;</DELETED>
<DELETED> ``(II) a swap;</DELETED>
<DELETED> ``(III) a security futures 
product;</DELETED>
<DELETED> ``(IV) an option 
authorized under section 4c of this 
Act;</DELETED>
<DELETED> ``(V) an agreement, 
contract, or transaction described in 
subparagraph (C)(i) or (D)(i) of 
subsection (c)(2) of this section; 
or</DELETED>
<DELETED> ``(VI) a leverage 
transaction authorized under section 
19; or</DELETED>
<DELETED> ``(ii) the activities of any 
person with respect to any such an agreement, 
contract, or transaction.''.</DELETED>
<DELETED> (b) Limitation on Authority Over Permitted Payment 
Stablecoins.--Section 2(c)(1) of the Commodity Exchange Act (7 U.S.C. 
2(c)(1)) is amended--</DELETED>
<DELETED> (1) in subparagraph (F), by striking ``or'' at the 
end;</DELETED>
<DELETED> (2) in subparagraph (G), by striking the period 
and inserting ``; or''; and</DELETED>
<DELETED> (3) by adding at the end the following:</DELETED>
<DELETED> ``(H) permitted payment 
stablecoins.''.</DELETED>
<DELETED> (c) Commission Jurisdiction Over Financing Agreements.--
Section 2(c)(2)(D) of the Commodity Exchange Act (7 U.S.C. 2(c)(2)(D)) 
is amended--</DELETED>
<DELETED> (1) in clause (ii)(I), by inserting after 
``paragraph (1)'' the following: ``(other than an agreement, 
contract, or transaction in a permitted payment stablecoin)''; 
and</DELETED>
<DELETED> (2) by redesignating clause (iv) as clause (v) and 
inserting after clause (iii) the following:</DELETED>
<DELETED> ``(iv) Agreements for margin 
financing.--Notwithstanding clause (iii), a 
digital commodity broker may, subject to the 
requirements of section 4u(c)(2), offer to or 
enter into an agreement for margin financing 
with a customer for the purchase or sale of a 
digital commodity, provided any purchase or 
sale made pursuant to the agreement shall 
result in the delivery of the digital commodity 
into or from an account carried for the 
customer by the digital commodity broker, as 
determined by the Commission by rule or 
regulation, based on commercial spot market 
practices.''.</DELETED>
<DELETED> (d) Commission Authority Over Certain Digital Commodity 
and Stablecoin Spot Transactions.--Section 2(c)(2) of the Commodity 
Exchange Act (7 U.S.C. 2(c)(2)) is amended by adding at the end the 
following:</DELETED>
<DELETED> ``(F) Commission jurisdiction with respect 
to digital commodity transactions.--</DELETED>
<DELETED> ``(i) In general.--Subject to 
sections 6d and 12(e), the Commission shall 
have exclusive jurisdiction with respect to any 
account, agreement, contract, or transaction 
involving a contract of sale of a digital 
commodity or tradable asset (as defined in 
section 4x) in interstate commerce, including 
in a digital commodity or tradable asset (as so 
defined) cash or spot market, that is offered, 
solicited, traded, facilitated, executed, 
cleared, reported, or otherwise dealt in--
</DELETED>
<DELETED> ``(I) on or subject to the 
rules of a registered entity or an 
entity that is required to be 
registered as a registered entity; 
or</DELETED>
<DELETED> ``(II) by any other entity 
registered, or required to be 
registered, with the 
Commission.</DELETED>
<DELETED> ``(ii) Limitations.--Clause (i) 
shall not apply with respect to--</DELETED>
<DELETED> ``(I) custodial or 
depository activities for a digital 
commodity of an entity regulated by an 
appropriate Federal banking agency or a 
State bank supervisor (within the 
meaning of section 3 of the Federal 
Deposit Insurance Act); or</DELETED>
<DELETED> ``(II) an offer or sale of 
an investment contract involving a 
digital commodity or of a securities 
offer or sale involving a digital 
commodity.</DELETED>
<DELETED> ``(iii) Mixed digital asset 
transactions.--</DELETED>
<DELETED> ``(I) In general.--Clause 
(i) shall not apply to a mixed digital 
asset transaction.</DELETED>
<DELETED> ``(II) Reports on mixed 
digital asset transactions.--A digital 
commodity issuer, digital commodity 
related person, digital commodity 
affiliated person, or other person 
registered with the Securities and 
Exchange Commission that engages in a 
mixed digital asset transaction, shall, 
on request of the Commission, open to 
inspection and examination by the 
Commission all books and records 
relating to the mixed digital asset 
transaction, subject to the 
confidentiality and disclosure 
requirements of section 8.</DELETED>
<DELETED> ``(G) Agreements, contracts, and 
transactions in stablecoins.--</DELETED>
<DELETED> ``(i) Treatment of permitted 
payment stablecoins on commission-registered 
entities.--Subject to clauses (ii) and (iii), 
the Commission shall have jurisdiction over a 
cash or spot agreement, contract, or 
transaction in a permitted payment stablecoin 
that is offered, offered to enter into, entered 
into, executed, solicited, or accepted, or for 
which the execution of is confirmed--</DELETED>
<DELETED> ``(I) on or subject to the 
rules of a registered entity; 
or</DELETED>
<DELETED> ``(II) by any other entity 
registered with the 
Commission.</DELETED>
<DELETED> ``(ii) Permitted payment 
stablecoin transaction rules.--This Act shall 
apply to a transaction described in clause (i) 
only for the purpose of regulating the offer, 
execution, solicitation, or acceptance of a 
cash or spot permitted payment stablecoin 
transaction on a registered entity or by any 
other entity registered with the Commission, as 
if the permitted payment stablecoin were a 
digital commodity.</DELETED>
<DELETED> ``(iii) No authority over 
permitted payment stablecoins.--Notwithstanding 
clauses (i) and (ii), the Commission shall not 
make a rule or regulation, impose a requirement 
or obligation on a registered entity or other 
entity registered with the Commission, or 
impose a requirement or obligation on a 
permitted payment stablecoin issuer, regarding 
the operation of a permitted payment stablecoin 
issuer or a permitted payment 
stablecoin.''.</DELETED>
<DELETED> (e) Conforming Amendments.--The Commodity Exchange Act is 
amended--</DELETED>
<DELETED> (1) in section 1a(9) (7 U.S.C. 1a(9)), as amended 
by the GENIUS Act, by striking the second sentence; 
and</DELETED>
<DELETED> (2) in section 2(a)(1)(A) (7 U.S.C. 2(a)(1)(A)), 
in the 1st sentence, by inserting ``subparagraphs (F) and (G) 
of subsection (c)(2) of this section or'' before ``section 
19''.</DELETED>

<DELETED>SEC. 402. REQUIRING FUTURES COMMISSION MERCHANTS TO USE 
QUALIFIED DIGITAL ASSET CUSTODIANS.</DELETED>

<DELETED> Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) is 
amended--</DELETED>
<DELETED> (1) in subsection (a)(2)--</DELETED>
<DELETED> (A) in the 1st proviso, by striking ``any 
bank or trust company'' and inserting ``any bank, trust 
company, or qualified digital asset custodian, as 
applicable,''; and</DELETED>
<DELETED> (B) by inserting ``: Provided further, 
That any such property that is a digital asset shall be 
held in a qualified digital asset custodian'' before 
the period at the end; and</DELETED>
<DELETED> (2) in subsection (f)(3)(A)(i), by striking ``any 
bank or trust company'' and inserting ``any bank, trust 
company, or qualified digital asset custodian''.</DELETED>

<DELETED>SEC. 403. TRADING CERTIFICATION AND APPROVAL FOR DIGITAL 
COMMODITIES.</DELETED>

<DELETED> Section 5c of the Commodity Exchange Act (7 U.S.C. 7a-2) 
is amended--</DELETED>
<DELETED> (1) in subsection (a), by striking ``5(d) and 
5b(c)(2)'' and inserting ``5(d), 5b(c)(2), and 
5i(c)'';</DELETED>
<DELETED> (2) in subsection (b)--</DELETED>
<DELETED> (A) in each of paragraphs (1) and (2), by 
inserting ``digital commodity exchange,'' before 
``derivatives''; and</DELETED>
<DELETED> (B) in paragraph (3), by inserting 
``digital commodity exchange,'' before ``derivatives'' 
each place it appears;</DELETED>
<DELETED> (3) in subsection (c)--</DELETED>
<DELETED> (A) in paragraph (2), by inserting ``or 
participants'' before ``(in a'';</DELETED>
<DELETED> (B) in paragraph (4)(B), by striking 
``1a(10)'' and inserting ``1a(9)''; and</DELETED>
<DELETED> (C) in paragraph (5), by adding at the end 
the following:</DELETED>
<DELETED> ``(D) Special rules for digital commodity 
contracts.--In certifying any new rule or rule 
amendment, or listing any new contract or instrument, 
in connection with a contract of sale of a commodity 
for future delivery, option, swap, or other agreement, 
contract, or transaction, that is based on or 
references a digital commodity, a registered entity 
shall make or rely on a certification under subsection 
(d) for the digital commodity.''; and</DELETED>
<DELETED> (4) by inserting after subsection (c) the 
following:</DELETED>
<DELETED> ``(d) Certifications for Digital Commodity Trading.--
</DELETED>
<DELETED> ``(1) In general.--Notwithstanding subsection (c), 
for the purposes of listing or offering a digital commodity for 
trading in a digital commodity cash or spot market, an eligible 
entity shall submit a written certification to the Commission 
that the digital commodity meets the requirements of this Act 
(including the regulations prescribed under this 
Act).</DELETED>
<DELETED> ``(2) Contents of the certification.--</DELETED>
<DELETED> ``(A) In general.--In making a written 
certification under this paragraph, the eligible entity 
shall furnish to the Commission an analysis of how the 
digital commodity meets the requirements of section 
5i(c)(3).</DELETED>
<DELETED> ``(B) Reliance on prior disclosures.--In 
making a certification under this subsection, an 
eligible entity may rely on the records and disclosures 
of any relevant person registered with the Securities 
and Exchange Commission or other State or Federal 
agency.</DELETED>
<DELETED> ``(3) Modifications.--</DELETED>
<DELETED> ``(A) In general.--An eligible entity 
shall modify a certification made under paragraph (1) 
to--</DELETED>
<DELETED> ``(i) account for significant 
changes in any information provided to the 
Commission under paragraph (2)(A)(ii); 
or</DELETED>
<DELETED> ``(ii) permit or restrict trading 
in units of a digital commodity held by a 
digital commodity related person or a digital 
commodity affiliated person.</DELETED>
<DELETED> ``(B) Recertification.--Modifications 
required by this subsection shall be subject to the 
same disapproval and review process as a new 
certification under paragraphs (4) and (5).</DELETED>
<DELETED> ``(4) Disapproval.--</DELETED>
<DELETED> ``(A) In general.--The written 
certification described in paragraph (1) shall become 
effective unless the Commission finds that the listing 
of the digital commodity is inconsistent with the 
requirements of this Act or the rules and regulations 
prescribed under this Act.</DELETED>
<DELETED> ``(B) Analysis required.--The Commission 
shall include, with any findings referred to in 
subparagraph (A), a detailed analysis of the factors on 
which the decision was based.</DELETED>
<DELETED> ``(C) Public findings.--The Commission 
shall make public any disapproval decision, and any 
related findings and analysis, made under this 
paragraph.</DELETED>
<DELETED> ``(5) Review.--</DELETED>
<DELETED> ``(A) In general.--Unless the Commission 
makes a disapproval decision under paragraph (4), the 
written certification described in paragraph (1) shall 
become effective, pursuant to the certification by the 
eligible entity and notice of the certification to the 
public (in a manner determined by the Commission) on 
the date that is--</DELETED>
<DELETED> ``(i) 20 business days after the 
date the Commission receives the certification 
(or such shorter period as determined by the 
Commission by rule or regulation), in the case 
of a digital commodity that has not been 
certified under this section or for which a 
certification is being modified under paragraph 
(3); or</DELETED>
<DELETED> ``(ii) 1 business day after the 
date the Commission receives the certification 
(or such shorter period as determined by the 
Commission by rule or regulation) for any 
digital commodity that has been certified under 
this section.</DELETED>
<DELETED> ``(B) Extensions.--The time for 
consideration under subparagraph (A) may be extended 
through notice to the eligible entity that there are 
novel or complex issues that require additional time to 
analyze, that the explanation by the submitting 
eligible entity is inadequate, or of a potential 
inconsistency with this Act--</DELETED>
<DELETED> ``(i) once, for 30 business days, 
through written notice to the eligible entity 
by the Commission; and</DELETED>
<DELETED> ``(ii) once, for an additional 30 
business days, through written notice to the 
eligible entity from the Commission that 
includes a description of any deficiencies with 
the certification, including any--</DELETED>
<DELETED> ``(I) novel or complex 
issues which require additional time to 
analyze;</DELETED>
<DELETED> ``(II) missing information 
or inadequate explanations; 
or</DELETED>
<DELETED> ``(III) potential 
inconsistencies with this 
Act.</DELETED>
<DELETED> ``(6) Prior approval before registration.--
</DELETED>
<DELETED> ``(A) In general.--A person applying for 
registration with the Commission for the purposes of 
listing or offering a digital commodity for trading in 
a digital commodity cash or spot market may request 
that the Commission grant prior approval for the person 
to list or offer the digital commodity on being 
registered with the Commission.</DELETED>
<DELETED> ``(B) Request for prior approval.--A 
person seeking prior approval under subparagraph (A) 
shall furnish the Commission with a written 
certification that the digital commodity meets the 
requirements of this Act (including the regulations 
prescribed under this Act) and the information 
described in paragraph (2).</DELETED>
<DELETED> ``(C) Deadline.--The Commission shall take 
final action on a request for prior approval not later 
than 90 business days after submission of the request, 
unless the person submitting the request agrees to an 
extension of the time limitation established under this 
subparagraph.</DELETED>
<DELETED> ``(D) Disapproval.--</DELETED>
<DELETED> ``(i) In general.--The Commission 
shall approve the listing of the digital 
commodity unless the Commission finds that the 
listing is inconsistent with this Act 
(including any regulation prescribed under this 
Act).</DELETED>
<DELETED> ``(ii) Analysis required.--The 
Commission shall include, with any findings 
made under clause (i), a detailed analysis of 
the factors on which the decision is 
based.</DELETED>
<DELETED> ``(iii) Public findings.--The 
Commission shall make public any disapproval 
decision, and any related findings and 
analysis, made under this paragraph.</DELETED>
<DELETED> ``(7) Eligible entity defined.--In this 
subsection, the term `eligible entity' means a registered 
entity or group of registered entities acting 
jointly.''.</DELETED>

<DELETED>SEC. 404. REGISTRATION OF DIGITAL COMMODITY 
EXCHANGES.</DELETED>

<DELETED> The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended 
by inserting after section 5h the following:</DELETED>

<DELETED>``SEC. 5I. REGISTRATION OF DIGITAL COMMODITY 
EXCHANGES.</DELETED>

<DELETED> ``(a) In General.--</DELETED>
<DELETED> ``(1) Registration.--</DELETED>
<DELETED> ``(A) In general.--A trading facility that 
offers or seeks to offer a cash or spot market in at 
least 1 digital commodity shall register with the 
Commission as a digital commodity exchange.</DELETED>
<DELETED> ``(B) Application.--A person desiring to 
register as a digital commodity exchange shall submit 
to the Commission an application in such form and 
containing such information as the Commission may 
require for the purpose of making the determinations 
required for approval.</DELETED>
<DELETED> ``(C) Exemptions.--A trading facility that 
offers or seeks to offer a cash or spot market in at 
least 1 digital commodity shall not be required to 
register under this section if the trading facility--
</DELETED>
<DELETED> ``(i) permits no more than a de 
minimis amount of trading activity, as the 
Commission may determine by rule or regulation, 
in a digital commodity; or</DELETED>
<DELETED> ``(ii) serves only customers in a 
single State, territory, or possession of the 
United States.</DELETED>
<DELETED> ``(2) Additional registrations.--</DELETED>
<DELETED> ``(A) With the commission.--In order to 
foster the development of fair and orderly markets, 
protect customers, and promote responsible innovation, 
the Commission--</DELETED>
<DELETED> ``(i) shall prescribe rules to 
exempt an entity registered with the Commission 
under more than 1 section of this Act from 
duplicative, conflicting, or unduly burdensome 
provisions of this Act and the rules under this 
Act;</DELETED>
<DELETED> ``(ii) shall prescribe rules to 
address conflicts of interests and activities 
of the entity; and</DELETED>
<DELETED> ``(iii) may, after an analysis of 
the risks and benefits, prescribe rules to 
provide for portfolio margining.</DELETED>
<DELETED> ``(B) With a registered futures 
association.--</DELETED>
<DELETED> ``(i) In general.--A registered 
digital commodity exchange shall become and 
remain a member of a registered futures 
association and comply with rules related to 
such activity, if the registered digital 
commodity exchange accepts customer funds 
required to be segregated under subsection 
(d).</DELETED>
<DELETED> ``(ii) Rulemaking required.--The 
Commission shall require any registered futures 
association with a digital commodity exchange 
as a member to provide such rules as may be 
necessary to further compliance with subsection 
(d), protect customers, and promote the public 
interest.</DELETED>
<DELETED> ``(C) Registration required.--A person 
required to be registered as a digital commodity 
exchange under this section shall register with the 
Commission as such regardless of whether the person is 
registered with another State or Federal 
regulator.</DELETED>
<DELETED> ``(b) Trading.--</DELETED>
<DELETED> ``(1) Prohibition on certain trading practices.--
</DELETED>
<DELETED> ``(A) Section 4b shall apply to any 
agreement, contract, or transaction in a digital 
commodity as if the agreement, contract, or transaction 
were a contract of sale of a commodity for future 
delivery.</DELETED>
<DELETED> ``(B) Section 4c shall apply to any 
agreement, contract, or transaction in a digital 
commodity as if the agreement, contract, or transaction 
were a transaction involving the purchase or sale of a 
commodity for future delivery.</DELETED>
<DELETED> ``(C) Section 4b-1 shall apply to any 
agreement, contract, or transaction in a digital 
commodity as if the agreement, contract, or transaction 
were a contract of sale of a commodity for future 
delivery.</DELETED>
<DELETED> ``(2) Prohibition on acting as a counterparty.--
</DELETED>
<DELETED> ``(A) In general.--A digital commodity 
exchange or any affiliate of such an exchange shall not 
trade on or subject to the rules of the digital 
commodity exchange for its own account.</DELETED>
<DELETED> ``(B) Exceptions.--Subject to any 
conditions, requirements, or limitations imposed by the 
Commission pursuant to subparagraph (C), a digital 
commodity exchange may engage in trading on the 
exchange so long as the trading is not solely for the 
purpose of the profit of the exchange, including the 
following:</DELETED>
<DELETED> ``(i) Customer direction.--A 
transaction for, or entered into at the 
direction of, or for the benefit of, an 
unaffiliated customer.</DELETED>
<DELETED> ``(ii) Risk management.--A 
transaction to manage the credit, market, and 
liquidity risks associated with the digital 
commodity business of the exchange.</DELETED>
<DELETED> ``(iii) Operational needs.--A 
transaction related to the operational needs of 
the business of the digital commodity exchange 
or its affiliate.</DELETED>
<DELETED> ``(iv) Functional use.--A 
transaction related to the functional operation 
of a blockchain system.</DELETED>
<DELETED> ``(C) Rulemaking.--The Commission may, by 
rule, establish conditions, requirements, or other 
limitations on the activities of a digital commodity 
exchange and its affiliate permitted pursuant to 
subparagraph (B) that are necessary for the protection 
of customers, the promotion of innovation, or the 
maintenance of fair, orderly, and efficient 
markets.</DELETED>
<DELETED> ``(D) Notice requirement.--In order for a 
digital commodity exchange or any affiliate of a 
digital commodity exchange to engage in trading on the 
affiliated exchange pursuant to subsection (B), notice 
must be given to the Commission that shall enumerate 
how any proposed activity is consistent with the 
exceptions in subsection (B) and the purposes of this 
Act.</DELETED>
<DELETED> ``(c) Core Principles for Digital Commodity Exchanges.--
</DELETED>
<DELETED> ``(1) Compliance with core principles.--</DELETED>
<DELETED> ``(A) In general.--To be registered, and 
maintain registration, as a digital commodity exchange, 
a digital commodity exchange shall comply with--
</DELETED>
<DELETED> ``(i) the core principles 
described in this subsection; and</DELETED>
<DELETED> ``(ii) any requirement that the 
Commission may impose by rule or regulation 
pursuant to section 8a(5).</DELETED>
<DELETED> ``(B) Reasonable discretion of a digital 
commodity exchange.--Unless otherwise determined by the 
Commission by rule or regulation, a digital commodity 
exchange described in subparagraph (A) shall have 
reasonable discretion in establishing the manner in 
which the digital commodity exchange complies with the 
core principles described in this subsection.</DELETED>
<DELETED> ``(2) Compliance with rules.--A digital commodity 
exchange shall--</DELETED>
<DELETED> ``(A) establish and enforce compliance 
with any rule of the digital commodity exchange, 
including--</DELETED>
<DELETED> ``(i) the terms and conditions of 
the trades traded or processed on or through 
the digital commodity exchange; and</DELETED>
<DELETED> ``(ii) any limitation on access to 
the digital commodity exchange;</DELETED>
<DELETED> ``(B) establish and enforce trading, trade 
processing, and participation rules that will deter 
abuses and have the capacity to detect, investigate, 
and enforce those rules, including means--</DELETED>
<DELETED> ``(i) to provide market 
participants with impartial access to the 
market; and</DELETED>
<DELETED> ``(ii) to capture information that 
may be used in establishing whether rule 
violations have occurred; and</DELETED>
<DELETED> ``(C) establish rules governing the 
operation of the exchange, including rules specifying 
trading procedures to be used in entering and executing 
orders traded or posted on the facility.</DELETED>
<DELETED> ``(3) Listing standards for digital commodities.--
</DELETED>
<DELETED> ``(A) In general.--A digital commodity 
exchange shall establish policies and procedures to 
permit trading in a digital commodity only if--
</DELETED>
<DELETED> ``(i) reports with respect to the 
digital commodity required under, as 
applicable, section 4B(b)(3) or 4B(b)(5)(C) of 
the Securities Act of 1933 (or, with respect to 
a digital commodity not issued in reliance on 
section 4(a)(8) of the Securities Act of 1933, 
a comparable set of reports, where required by 
the Securities and Exchange Commission) have 
been filed with the Securities and Exchange 
Commission; or</DELETED>
<DELETED> ``(ii) such other similar 
information as the Commission may, by rule or 
regulation require, that is related to the 
ongoing development plan of the blockchain 
system and is able to be publicly ascertained, 
has been provided to the public.</DELETED>
<DELETED> ``(B) Public information requirements.--
</DELETED>
<DELETED> ``(i) In general.--A digital 
commodity exchange shall--</DELETED>
<DELETED> ``(I) permit trading in a 
digital commodity only if the digital 
commodity exchange reasonably 
determines that the information 
required by clause (ii) is correct, 
current, and available to the public; 
and</DELETED>
<DELETED> ``(II) establish policies 
and procedures to determine that the 
information provided pursuant to clause 
(ii) is correct, current, and available 
to the public.</DELETED>
<DELETED> ``(ii) Required information.--With 
respect to a digital commodity and each 
blockchain system to which the digital 
commodity relates for which the digital 
commodity exchange will make the digital 
commodity available to the customers of the 
digital commodity exchange, the following 
information:</DELETED>
<DELETED> ``(I) Source code.--The 
source code for any blockchain system 
to which the digital commodity 
relates.</DELETED>
<DELETED> ``(II) Transaction 
history.--A description of the steps 
necessary to independently access, 
search, and verify the transaction 
history of any blockchain system to 
which the digital commodity relates, to 
the extent any such independent access, 
search, and verification activities are 
technically feasible with respect to 
the blockchain system.</DELETED>
<DELETED> ``(III) Digital commodity 
economics.--A narrative description of 
the purpose of any blockchain system to 
which the digital commodity relates and 
the operation of any such blockchain 
system, including--</DELETED>
<DELETED> ``(aa) information 
explaining the launch and 
supply process, including the 
number of digital assets to be 
issued in an initial 
allocation, the total number of 
digital commodities to be 
created, the release schedule 
for the digital commodities, 
and the total number of digital 
commodities then 
outstanding;</DELETED>
<DELETED> ``(bb) information 
detailing any applicable 
consensus mechanism or process 
for validating transactions, 
method of generating or mining 
digital commodities, and any 
process for burning or 
destroying digital commodities 
on the blockchain 
system;</DELETED>
<DELETED> ``(cc) an 
explanation of governance 
mechanisms for implementing 
changes to the blockchain 
system or forming consensus 
among holders of the digital 
commodities; and</DELETED>
<DELETED> ``(dd) sufficient 
information for a third party 
to create a tool for verifying 
the transaction history of the 
digital asset.</DELETED>
<DELETED> ``(IV) Trading volume and 
volatility.--The trading volume and 
volatility of the digital commodity on 
the exchange.</DELETED>
<DELETED> ``(V) Additional 
information.--Such additional 
information as the Commission may 
determine by rule to be necessary for a 
customer to understand the financial 
and operational risks of a digital 
commodity, and to be practically 
feasible to provide.</DELETED>
<DELETED> ``(iii) Format.--The Commission 
shall prescribe rules and regulations for the 
standardization and simplification of 
disclosures under clause (ii), including 
requiring that disclosures--</DELETED>
<DELETED> ``(I) be 
conspicuous;</DELETED>
<DELETED> ``(II) use plain language 
comprehensible to customers;</DELETED>
<DELETED> ``(III) are not drafted in 
a way that presumes the customer 
already has a base knowledge, 
familiarity, or understanding of the 
basic terminology, operation, and 
function of blockchain systems; 
and</DELETED>
<DELETED> ``(IV) succinctly explain 
the information that is required to be 
communicated to the customer.</DELETED>
<DELETED> ``(iv) Reliance on previous 
disclosures.--In complying with this 
subparagraph, a digital commodity exchange may 
rely on and make available to the public 
relevant information publicly disclosed to the 
Commission, the Securities and Exchange 
Commission, or an appropriate Federal banking 
agency.</DELETED>
<DELETED> ``(C) Digital commodities held by related 
and digital commodity affiliated persons.--A digital 
commodity exchange shall establish policies and 
procedures designed to permit the trading of a unit of 
a digital commodity acquired from the issuer and held 
by a digital commodity affiliated person or a digital 
commodity related person, only in accordance with the 
requirements of section 4C of the Securities Act of 
1933.</DELETED>
<DELETED> ``(4) Treatment of customer assets.--A digital 
commodity exchange shall establish policies and procedures that 
are designed to protect and ensure the safety of customer 
money, assets, and property.</DELETED>
<DELETED> ``(5) Monitoring of trading and trade 
processing.--</DELETED>
<DELETED> ``(A) In general.--A digital commodity 
exchange shall provide a competitive, open, and 
efficient market and mechanism for executing 
transactions that protects the price discovery process 
of trading on the exchange.</DELETED>
<DELETED> ``(B) Protection of markets and market 
participants.--A digital commodity exchange shall 
establish and enforce rules--</DELETED>
<DELETED> ``(i) to protect markets and 
market participants from abusive practices 
committed by any party, including abusive 
practices committed by a party acting as an 
agent for a participant; and</DELETED>
<DELETED> ``(ii) to promote fair and 
equitable trading on the exchange.</DELETED>
<DELETED> ``(C) Trading procedures.--A digital 
commodity exchange shall--</DELETED>
<DELETED> ``(i) establish and enforce rules 
or terms and conditions defining, or 
specifications detailing--</DELETED>
<DELETED> ``(I) trading procedures 
to be used in entering and executing 
orders traded on or through the 
facilities of the digital commodity 
exchange; and</DELETED>
<DELETED> ``(II) procedures for 
trade processing of digital commodities 
on or through the facilities of the 
digital commodity exchange; 
and</DELETED>
<DELETED> ``(ii) monitor trading in digital 
commodities to prevent manipulation, price 
distortion, and disruptions, through 
surveillance, compliance, and disciplinary 
practices and procedures, including methods for 
conducting real-time monitoring of trading and 
comprehensive and accurate trade 
reconstructions.</DELETED>
<DELETED> ``(6) Ability to obtain information.--A digital 
commodity exchange shall--</DELETED>
<DELETED> ``(A) establish and enforce rules that 
will allow the facility to obtain any necessary 
information to perform any of the functions described 
in this section;</DELETED>
<DELETED> ``(B) provide the information to the 
Commission on request; and</DELETED>
<DELETED> ``(C) have the capacity to carry out such 
international information-sharing agreements as the 
Commission may require.</DELETED>
<DELETED> ``(7) Emergency authority.--A digital commodity 
exchange shall adopt rules to provide for the exercise of 
emergency authority, in consultation or cooperation with the 
Commission or a registered entity, as is necessary and 
appropriate, including the authority to facilitate the 
liquidation or transfer of open positions in any digital 
commodity or to suspend or curtail trading in a digital 
commodity.</DELETED>
<DELETED> ``(8) Timely publication of trading information.--
</DELETED>
<DELETED> ``(A) In general.--A digital commodity 
exchange shall make public timely information on price, 
trading volume, and other trading data on digital 
commodities to the extent prescribed by the 
Commission.</DELETED>
<DELETED> ``(B) Capacity of digital commodity 
exchange.--A digital commodity exchange shall have the 
capacity to electronically capture and transmit trade 
information with respect to transactions executed on 
the exchange.</DELETED>
<DELETED> ``(9) Recordkeeping and reporting.--</DELETED>
<DELETED> ``(A) In general.--A digital commodity 
exchange shall--</DELETED>
<DELETED> ``(i) maintain records relating to 
the business of the exchange, including a 
complete audit trail, in a form and manner 
acceptable to the Commission for a period of 5 
years;</DELETED>
<DELETED> ``(ii) report to the Commission, 
in a form and manner acceptable to the 
Commission, such information as the Commission 
determines to be necessary or appropriate for 
the Commission to perform the duties of the 
Commission under this Act; and</DELETED>
<DELETED> ``(iii) keep any such records of 
digital commodities which relate to a security 
open to inspection and examination by the 
Securities and Exchange Commission.</DELETED>
<DELETED> ``(B) Information-sharing.--Subject to 
section 8, and on request, the Commission shall share 
information collected under subparagraph (A) with--
</DELETED>
<DELETED> ``(i) the Board;</DELETED>
<DELETED> ``(ii) the Securities and Exchange 
Commission;</DELETED>
<DELETED> ``(iii) each appropriate Federal 
banking agency;</DELETED>
<DELETED> ``(iv) each appropriate State bank 
supervisor (within the meaning of section 3 of 
the Federal Deposit Insurance Act);</DELETED>
<DELETED> ``(v) the Financial Stability 
Oversight Council;</DELETED>
<DELETED> ``(vi) the Department of Justice; 
and</DELETED>
<DELETED> ``(vii) any other person that the 
Commission determines to be appropriate, 
including--</DELETED>
<DELETED> ``(I) foreign financial 
supervisors (including foreign futures 
authorities);</DELETED>
<DELETED> ``(II) foreign central 
banks; and</DELETED>
<DELETED> ``(III) foreign 
ministries.</DELETED>
<DELETED> ``(C) Confidentiality agreement.--Before 
the Commission may share information with any entity 
described in subparagraph (B), the Commission shall 
receive a written agreement from the entity stating 
that the entity shall abide by the confidentiality 
requirements described in section 8 relating to the 
information on digital commodities that is 
provided.</DELETED>
<DELETED> ``(D) Providing information.--A digital 
commodity exchange shall provide to the Commission 
(including any designee of the Commission) information 
under subparagraph (A) in such form and at such 
frequency as is required by the Commission.</DELETED>
<DELETED> ``(10) Antitrust considerations.--Unless necessary 
or appropriate to achieve the purposes of this Act, a digital 
commodity exchange shall not--</DELETED>
<DELETED> ``(A) adopt any rules or take any actions 
that result in any unreasonable restraint of trade; 
or</DELETED>
<DELETED> ``(B) impose any material anticompetitive 
burden on trading.</DELETED>
<DELETED> ``(11) Conflicts of interest.--The digital 
commodity exchange shall establish and enforce rules--
</DELETED>
<DELETED> ``(A) to minimize conflicts of interest in 
the decision making processes of the contract market; 
and</DELETED>
<DELETED> ``(B) to establish a process for resolving 
conflicts of interest referred to in subparagraph 
(A).</DELETED>
<DELETED> ``(12) Financial resources.--</DELETED>
<DELETED> ``(A) In general.--A digital commodity 
exchange shall have adequate financial, operational, 
and managerial resources, as determined by the 
Commission, to discharge each responsibility of the 
digital commodity exchange.</DELETED>
<DELETED> ``(B) Minimum amount of financial 
resources.--A digital commodity exchange shall possess 
financial resources that, at a minimum, exceed the sum 
of--</DELETED>
<DELETED> ``(i) the total amount that would 
enable the digital commodity exchange to cover 
the operating costs of the digital commodity 
exchange for a 1-year period, as calculated on 
a rolling basis; and</DELETED>
<DELETED> ``(ii) the total amount necessary 
to meet the financial obligations of the 
digital commodity exchange to all customers of 
the digital commodity exchange.</DELETED>
<DELETED> ``(13) Disciplinary procedures.--A digital 
commodity exchange shall establish and enforce disciplinary 
procedures that authorize the digital commodity exchange to 
discipline, suspend, or expel members or market participants 
that violate the rules of the digital commodity exchange, or 
similar methods for performing the same functions, including 
delegation of the functions to third parties.</DELETED>
<DELETED> ``(14) Governance fitness standards.--</DELETED>
<DELETED> ``(A) Governance arrangements.--A digital 
commodity exchange shall establish governance 
arrangements that are transparent and designed to 
permit consideration of the views of market 
participants.</DELETED>
<DELETED> ``(B) Fitness standards.--A digital 
commodity exchange shall establish and enforce 
appropriate fitness standards for--</DELETED>
<DELETED> ``(i) officers and directors; 
and</DELETED>
<DELETED> ``(ii) any individual or entity 
with direct access to, or control of, customer 
assets.</DELETED>
<DELETED> ``(15) System safeguards.--A digital commodity 
exchange shall--</DELETED>
<DELETED> ``(A) establish and maintain a program of 
risk analysis and oversight to identify and minimize 
sources of operational and security risks, through the 
development of appropriate controls and procedures, and 
automated systems in accordance with industry 
standards, that--</DELETED>
<DELETED> ``(i) are reliable and secure; 
and</DELETED>
<DELETED> ``(ii) have adequate scalable 
capacity;</DELETED>
<DELETED> ``(B) establish and maintain emergency 
procedures, backup resources, and a plan for disaster 
recovery that allow for--</DELETED>
<DELETED> ``(i) the timely recovery and 
resumption of operations; and</DELETED>
<DELETED> ``(ii) the fulfillment of the 
responsibilities and obligations of the digital 
commodity exchange; and</DELETED>
<DELETED> ``(C) periodically conduct tests to verify 
that the backup resources of the digital commodity 
exchange are sufficient to ensure continued--</DELETED>
<DELETED> ``(i) order processing and trade 
matching;</DELETED>
<DELETED> ``(ii) price reporting;</DELETED>
<DELETED> ``(iii) market surveillance; 
and</DELETED>
<DELETED> ``(iv) maintenance of a 
comprehensive and accurate audit 
trail.</DELETED>
<DELETED> ``(d) Holding of Customer Assets.--</DELETED>
<DELETED> ``(1) In general.--A digital commodity exchange 
shall hold customer money, assets, and property in a manner to 
minimize the risk of loss to the customer or unreasonable delay 
in customer access to the money, assets, and property of the 
customer.</DELETED>
<DELETED> ``(2) Segregation of funds.--</DELETED>
<DELETED> ``(A) In general.--A digital commodity 
exchange shall treat and deal with all money, assets, 
and property that is received by the digital commodity 
exchange, or accrues to a customer as the result of 
trading in digital commodities, as belonging to the 
customer.</DELETED>
<DELETED> ``(B) Commingling prohibited.--Money, 
assets, and property described in subparagraph (A) 
shall be separately accounted for and shall not be 
commingled with the funds of the digital commodity 
exchange or be used to margin, secure, or guarantee any 
trades or accounts of any customer or person other than 
the person for whom the same are held.</DELETED>
<DELETED> ``(C) Exceptions.--</DELETED>
<DELETED> ``(i) Use of funds.--</DELETED>
<DELETED> ``(I) In general.--
Notwithstanding subparagraph (A), 
money, assets, and property described 
in subparagraph (A) may, for 
convenience, be commingled and 
deposited in the same account or 
accounts with any bank, trust company, 
derivatives clearing organization, or 
qualified digital asset 
custodian.</DELETED>
<DELETED> ``(II) Withdrawal.--
Notwithstanding subparagraph (A), such 
share of the money, assets, and 
property described in subparagraph (A) 
as in the normal course of business 
shall be necessary to margin, 
guarantee, secure, transfer, adjust, or 
settle a contract of sale of a digital 
commodity with a registered entity may 
be withdrawn and applied to such 
purposes, including the payment of 
commissions, brokerage, interest, 
taxes, storage, and other charges, 
lawfully accruing in connection with 
the contract.</DELETED>
<DELETED> ``(ii) Commission action.--
Notwithstanding subparagraph (A), in accordance 
with such terms and conditions as the 
Commission may prescribe by rule, regulation, 
or order, any money, assets, or property of the 
customers of a digital commodity exchange may 
be commingled and deposited in customer 
accounts with any other money, assets, or 
property received by the digital commodity 
exchange and required by the Commission to be 
separately accounted for and treated and dealt 
with as belonging to the customer of the 
digital commodity exchange.</DELETED>
<DELETED> ``(3) Permitted investments.--Money described in 
paragraph (2) may be invested in obligations of the United 
States, in general obligations of any State or of any political 
subdivision of a State, and in obligations fully guaranteed as 
to principal and interest by the United States, or in any other 
investment that the Commission may by rule or regulation 
prescribe, and such investments shall be made in accordance 
with such rules and regulations and subject to such conditions 
as the Commission may prescribe.</DELETED>
<DELETED> ``(4) Customer protection during bankruptcy.--
</DELETED>
<DELETED> ``(A) Customer property.--All assets held 
on behalf of a customer by a digital commodity 
exchange, and all money, assets, and property of any 
customer received by a digital commodity exchange for 
trading or custody, or to facilitate, margin, 
guarantee, or secure contracts of sale of a digital 
commodity (including money, assets, or property 
accruing to the customer as the result of the 
transactions), shall be considered customer property 
for purposes of section 761 of title 11, United States 
Code.</DELETED>
<DELETED> ``(B) Transactions.--A transaction 
involving the sale of a unit of a digital commodity 
occurring on or subject to the rules of a digital 
commodity exchange shall be considered a contract for 
the purchase or sale of a commodity for future 
delivery, on or subject to the rules of, a contract 
market or board of trade for purposes of the definition 
of `commodity contract' in section 761 of title 11, 
United States Code.</DELETED>
<DELETED> ``(C) Exchanges.--A digital commodity 
exchange shall be considered a futures commission 
merchant for purposes of section 761 of title 11, 
United States Code.</DELETED>
<DELETED> ``(D) Assets removed from segregation.--
Assets removed from segregation due to a customer 
election under paragraph (6) shall not be considered 
customer property for purposes of section 761 of title 
11, United States Code.</DELETED>
<DELETED> ``(5) Misuse of customer property.--</DELETED>
<DELETED> ``(A) In general.--It shall be unlawful--
</DELETED>
<DELETED> ``(i) for any digital commodity 
exchange that has received any customer money, 
assets, or property for custody to dispose of, 
or use any such money, assets, or property as 
belonging to the digital commodity exchange or 
any person other than a customer of the digital 
commodity exchange; or</DELETED>
<DELETED> ``(ii) for any other person, 
including any depository, other digital 
commodity exchange, or digital asset custodian 
that has received any customer money, assets, 
or property for deposit, to hold, dispose of, 
or use any such money, assets, or property, or 
property, as belonging to the depositing 
digital commodity exchange or any person other 
than the customers of the digital commodity 
exchange.</DELETED>
<DELETED> ``(B) Use further defined.--For purposes 
of this section, `use' of a digital commodity includes 
utilizing any unit of a digital asset to participate in 
a blockchain service defined in paragraph (6) or a 
decentralized governance system associated with the 
digital commodity or the blockchain system to which the 
digital commodity relates in any manner other than that 
expressly directed by the customer from whom the unit 
of a digital commodity was received.</DELETED>
<DELETED> ``(6) Participation in blockchain services.--
</DELETED>
<DELETED> ``(A) Use of funds.--A digital commodity 
exchange (or a designee of a digital commodity 
exchange) may use a unit of a digital commodity 
belonging to a customer to provide a blockchain service 
for a blockchain system to which the unit of the 
digital commodity relates if--</DELETED>
<DELETED> ``(i) the customer expressly 
permits the use, in writing to the digital 
commodity exchange; and</DELETED>
<DELETED> ``(ii) the digital commodity 
exchange complies with subparagraph 
(B).</DELETED>
<DELETED> ``(B) Limitations.--</DELETED>
<DELETED> ``(i) In general.--The Commission 
shall, by rule, establish notice and disclosure 
requirements, and may, by rule, establish any 
other limitations and rules related to a 
permission provided under subparagraph (A) that 
are reasonably necessary to protect customers, 
including eligible contract participants, non-
eligible contract participants, or any other 
class of customers.</DELETED>
<DELETED> ``(ii) Customer choice.--A digital 
commodity exchange may not require a customer 
to provide the permission referred to in 
subparagraph (A) as a condition of doing 
business on the exchange.</DELETED>
<DELETED> ``(C) Requirements.--The Commission may, 
by rule, waive or modify the requirements of paragraph 
(2) or subsection (h), to facilitate the use of a unit 
of a digital commodity belonging to a customer to 
provide a blockchain service.</DELETED>
<DELETED> ``(D) Blockchain service defined.--In this 
paragraph, the term `blockchain service' means any 
activity relating to validating transactions on a 
blockchain system, providing security for a blockchain 
system, or other similar activity, including protocol 
consensus participation activities described in section 
2(a)(30)(B) of the Securities Act of 1933, required for 
the ongoing operation of a blockchain system.</DELETED>
<DELETED> ``(e) Market Access Requirements.--The Commission may, by 
rule, impose any additional requirements related to the operations and 
activities of the digital commodity exchange and an affiliated digital 
commodity broker necessary to protect market participants, promote fair 
and equitable trading on the digital commodity exchange, and promote 
responsible innovation.</DELETED>
<DELETED> ``(f) Designation of Chief Compliance Officer.--</DELETED>
<DELETED> ``(1) In general.--A digital commodity exchange 
shall designate an individual to serve as a chief compliance 
officer.</DELETED>
<DELETED> ``(2) Duties.--The chief compliance officer 
shall--</DELETED>
<DELETED> ``(A) report directly to the board or to 
the senior officer of the exchange;</DELETED>
<DELETED> ``(B) review compliance with the core 
principles in this subsection;</DELETED>
<DELETED> ``(C) in consultation with the board of 
the exchange, a body performing a function similar to 
that of a board, or the senior officer of the exchange, 
resolve any conflicts of interest that may 
arise;</DELETED>
<DELETED> ``(D) establish and administer the 
policies and procedures required to be established 
pursuant to this section;</DELETED>
<DELETED> ``(E) ensure compliance with this Act and 
the rules and regulations issued under this Act, 
including rules prescribed by the Commission pursuant 
to this section; and</DELETED>
<DELETED> ``(F) establish procedures for the 
remediation of noncompliance issues found during 
compliance office reviews, look backs, internal or 
external audit findings, self-reported errors, or 
through validated complaints.</DELETED>
<DELETED> ``(3) Requirements for procedures.--In 
establishing procedures under paragraph (2)(F), the chief 
compliance officer shall design the procedures to establish the 
handling, management response, remediation, retesting, and 
closing of noncompliance issues.</DELETED>
<DELETED> ``(4) Annual reports.--</DELETED>
<DELETED> ``(A) In general.--In accordance with 
rules prescribed by the Commission, the chief 
compliance officer shall annually prepare and sign a 
report that contains a description of--</DELETED>
<DELETED> ``(i) the compliance of the 
digital commodity exchange with this Act; 
and</DELETED>
<DELETED> ``(ii) the policies and 
procedures, including the code of ethics and 
conflicts of interest policies, of the digital 
commodity exchange.</DELETED>
<DELETED> ``(B) Requirements.--The chief compliance 
officer shall--</DELETED>
<DELETED> ``(i) submit each report described 
in subparagraph (A) with the appropriate 
financial report of the digital commodity 
exchange that is required to be submitted to 
the Commission pursuant to this section; 
and</DELETED>
<DELETED> ``(ii) include in the report a 
certification that, under penalty of law, the 
report is accurate and complete.</DELETED>
<DELETED> ``(g) Appointment of Trustee.--</DELETED>
<DELETED> ``(1) In general.--If a proceeding under section 
5e results in the suspension or revocation of the registration 
of a digital commodity exchange, or if a digital commodity 
exchange withdraws from registration, the Commission, on notice 
to the digital commodity exchange, may apply to the appropriate 
United States district court where the digital commodity 
exchange is located for the appointment of a trustee.</DELETED>
<DELETED> ``(2) Assumption of jurisdiction.--If the 
Commission applies for appointment of a trustee under paragraph 
(1)--</DELETED>
<DELETED> ``(A) the court may take exclusive 
jurisdiction over the digital commodity exchange and 
the records and assets of the digital commodity 
exchange, wherever located; and</DELETED>
<DELETED> ``(B) if the court takes jurisdiction 
under subparagraph (A), the court shall appoint the 
Commission, or a person designated by the Commission, 
as trustee with power to take possession and continue 
to operate or terminate the operations of the digital 
commodity exchange in an orderly manner for the 
protection of customers subject to such terms and 
conditions as the court may prescribe.</DELETED>
<DELETED> ``(h) Qualified Digital Asset Custodian.--A digital 
commodity exchange shall hold in a qualified digital asset custodian 
each unit of a digital asset that is--</DELETED>
<DELETED> ``(1) the property of a customer of the digital 
commodity exchange;</DELETED>
<DELETED> ``(2) required to be held by the digital commodity 
exchange under subsection (c)(12) of this section; or</DELETED>
<DELETED> ``(3) otherwise so required by the Commission to 
reasonably protect customers.</DELETED>
<DELETED> ``(i) Exemptions.--</DELETED>
<DELETED> ``(1) In general.--In order to promote responsible 
innovation and fair competition, or protect customers, the 
Commission may (on its own initiative or on application of the 
digital commodity exchange) exempt, either unconditionally or 
on stated terms or conditions or for stated periods and either 
retroactively or prospectively, or both, a digital commodity 
exchange from the requirements of this Act, if the Commission 
determines that--</DELETED>
<DELETED> ``(A) the exemption would be consistent 
with the public interest and the purposes of this Act; 
and</DELETED>
<DELETED> ``(B) the exemption will not have a 
material adverse effect on the ability of the 
Commission or the digital commodity exchange to 
discharge regulatory or self-regulatory duties under 
this Act.</DELETED>
<DELETED> ``(2) Foreign exchanges.--The Commission may 
exempt, conditionally or unconditionally, a digital commodity 
exchange from registration under this section if the Commission 
finds that the digital commodity exchange is subject to 
comparable, comprehensive supervision and regulation on a 
consolidated basis by the appropriate governmental authorities 
in the home country of the facility.</DELETED>
<DELETED> ``(j) Customer Defined.--In this section, the term 
`customer' means any person that maintains an account for the trading 
of digital commodities directly with a digital commodity exchange 
(other than a person that is owned or controlled, directly or 
indirectly, by the digital commodity exchange) for its own behalf or on 
behalf of any other person.</DELETED>
<DELETED> ``(k) Federal Preemption.--Notwithstanding any other 
provision of law, the Commission shall have exclusive jurisdiction over 
any digital commodity exchange registered under this section with 
respect to activities and transactions subject to this 
Act.''.</DELETED>

<DELETED>SEC. 405. QUALIFIED DIGITAL ASSET CUSTODIANS.</DELETED>

<DELETED> The Commodity Exchange Act (7 U.S.C. 1 et seq.), as 
amended by the preceding provisions of this Act, is amended by 
inserting after section 5i the following:</DELETED>

<DELETED>``SEC. 5J. QUALIFIED DIGITAL ASSET CUSTODIANS.</DELETED>

<DELETED> ``(a) In General.--A person is a qualified digital asset 
custodian for purposes of this Act if the person--</DELETED>
<DELETED> ``(1) holds digital assets on behalf of a person 
registered under this Act or a customer of a person registered 
under this Act; and</DELETED>
<DELETED> ``(2) is in compliance with subsections (b) and 
(c).</DELETED>
<DELETED> ``(b) Supervision Requirement.--A person is in compliance 
with this subsection if the person is subject to--</DELETED>
<DELETED> ``(1) supervision and examination for custody and 
safekeeping of digital assets by an appropriate Federal banking 
agency, the National Credit Union Administration, the 
Commission, or the Securities and Exchange Commission; 
or</DELETED>
<DELETED> ``(2) adequate supervision and appropriate 
regulation for custody and safekeeping of digital assets by--
</DELETED>
<DELETED> ``(A) a State bank supervisor (within the 
meaning of section 3 of the Federal Deposit Insurance 
Act);</DELETED>
<DELETED> ``(B) a State officer, agency, or other 
entity which has primary regulatory authority over 
nondepository State trust companies;</DELETED>
<DELETED> ``(C) a State credit union supervisor, as 
defined under section 6003 of the Anti-Money Laundering 
Act of 2020; or</DELETED>
<DELETED> ``(D) an appropriate foreign governmental 
authority in the home country of such person.</DELETED>
<DELETED> ``(c) Other Requirements.--A person shall be in compliance 
with this subsection if:</DELETED>
<DELETED> ``(1) Not otherwise prohibited.--The person has 
not been prohibited by its supervisor from engaging in an 
activity with respect to the custody and safekeeping of digital 
assets.</DELETED>
<DELETED> ``(2) Information sharing.--</DELETED>
<DELETED> ``(A) In general.--The person shares 
information with the Commission on request and complies 
with such requirements for periodic sharing of 
information regarding customer accounts that the person 
holds on behalf of an entity registered with the 
Commission as the Commission determines by rule are 
reasonably necessary to effectuate any of the 
provisions, or to accomplish any of the purposes, of 
this Act.</DELETED>
<DELETED> ``(B) Provision of information.--If the 
person is subject to regulation and examination by an 
appropriate Federal banking agency, the person may 
satisfy any information request described in 
subparagraph (A) by providing the Commission with a 
detailed listing, in writing, of the digital assets of 
a customer in the custody of, or use by, the 
person.</DELETED>
<DELETED> ``(3) Rulemaking for cftc entities.--</DELETED>
<DELETED> ``(A) In general.--The Commission shall 
prescribe rules to permit a person registered with the 
Commission to be a qualified digital asset custodian in 
compliance with this section.</DELETED>
<DELETED> ``(B) Content.--In prescribing the rules 
under subparagraph (A), the Commission shall require a 
person registered with the Commission to--</DELETED>
<DELETED> ``(i) implement requirement 
consistent with the requirements in subsection 
(d)(1);</DELETED>
<DELETED> ``(ii) establish sufficient system 
safeguards;</DELETED>
<DELETED> ``(iii) prevent or mitigate 
conflicts of interest, as appropriate; 
and</DELETED>
<DELETED> ``(iv) establish separate 
governance arrangements for the custodial 
function of the entity.</DELETED>
<DELETED> ``(d) Adequate Supervision and Appropriate Regulation.--
</DELETED>
<DELETED> ``(1) In general.--For purposes of subsection (b), 
the terms `adequate supervision' and `appropriate regulation' 
mean such minimum standards for supervision and regulation as 
are reasonably necessary to protect the digital assets held by 
a person registered under this Act, including standards 
relating to the licensing, examination, and supervisory 
processes that require the person to, at a minimum--</DELETED>
<DELETED> ``(A) receive a review and evaluation of 
ownership, character and fitness, conflicts of 
interest, business model, financial statements, funding 
resources, and policies and procedures of the 
person;</DELETED>
<DELETED> ``(B) hold capital sufficient for the 
financial integrity of the person;</DELETED>
<DELETED> ``(C) protect customer assets;</DELETED>
<DELETED> ``(D) establish and maintain books and 
records regarding the business of the person;</DELETED>
<DELETED> ``(E) submit financial statements and 
audited financial statements to the applicable 
supervisor described in subsection (b);</DELETED>
<DELETED> ``(F) provide disclosures to the 
applicable supervisor described in subsection (b) 
regarding actions, proceedings, and other items as 
determined by the supervisor;</DELETED>
<DELETED> ``(G) maintain and enforce policies and 
procedures for compliance with applicable State and 
Federal laws, including those related to anti-money 
laundering and cybersecurity;</DELETED>
<DELETED> ``(H) establish a business continuity plan 
to ensure functionality in cases of disruption; 
and</DELETED>
<DELETED> ``(I) establish policies and procedures to 
resolve complaints.</DELETED>
<DELETED> ``(2) Rulemaking with respect to definitions.--
</DELETED>
<DELETED> ``(A) In general.--For purposes of this 
section, the Commission may, by rule, further define 
the terms `adequate supervision' and `appropriate 
regulation' as necessary and appropriate for the 
protection of customers, and consistent with the 
purposes of this Act.</DELETED>
<DELETED> ``(B) Existing digital asset custodians.--
A trust company operating as a digital asset custodian 
before the effective date of a rulemaking under 
subparagraph (A) is deemed subject to adequate 
supervision and appropriate regulation if--</DELETED>
<DELETED> ``(i) the trust company is 
expressly permitted by a State bank supervisor 
to engage in the custody and safekeeping of 
digital assets;</DELETED>
<DELETED> ``(ii) the State bank supervisor 
has established licensing, examination, and 
supervisory processes that require the trust 
company to, at a minimum, meet the conditions 
described in subparagraphs (A) through (I) of 
paragraph (1); and</DELETED>
<DELETED> ``(iii) the trust company is in 
good standing with its State bank 
supervisor.</DELETED>
<DELETED> ``(C) Transition period for certain 
custodians.--In implementing the rulemaking under 
subparagraph (A), the Commission shall provide a 
transition period of not less than 2 years for any 
trust company that is deemed subject to adequate 
supervision and appropriate regulation under 
subparagraph (B) on the effective date of the 
rulemaking.</DELETED>
<DELETED> ``(e) Authority to Temporarily Suspend Standards.--The 
Commission may, by rule or order, temporarily suspend, in whole or in 
part, any requirement imposed under, or any standard referred to in, 
this section, or any requirement to utilize a qualified digital asset 
custodian, if the Commission determines that the suspension would be 
consistent with the public interest and the purposes of this 
Act.''.</DELETED>

<DELETED>SEC. 406. REGISTRATION AND REGULATION OF DIGITAL COMMODITY 
BROKERS AND DEALERS.</DELETED>

<DELETED> The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended 
by inserting after section 4t the following:</DELETED>

<DELETED>``SEC. 4U. REGISTRATION AND REGULATION OF DIGITAL COMMODITY 
BROKERS AND DEALERS.</DELETED>

<DELETED> ``(a) Registration.--</DELETED>
<DELETED> ``(1) Requirement.--It shall be unlawful for any 
person to act as a digital commodity broker or digital 
commodity dealer unless the person is registered as such with 
the Commission.</DELETED>
<DELETED> ``(2) Additional registration.--</DELETED>
<DELETED> ``(A) Rules.--In order to foster the 
development of fair and orderly markets, protect 
customers, and promote responsible innovation, the 
Commission--</DELETED>
<DELETED> ``(i) shall prescribe rules to 
exempt an entity registered with the Commission 
under more than 1 section of this Act from 
duplicative, conflicting, or unduly burdensome 
provisions of this Act and the rules under this 
Act;</DELETED>
<DELETED> ``(ii) shall prescribe rules to 
address conflicts of interests and the 
activities of the entity; and</DELETED>
<DELETED> ``(iii) may after an analysis of 
the risks and benefits, prescribe rules to 
provide for portfolio margining.</DELETED>
<DELETED> ``(B) With membership in a registered 
futures association.--Any person required to be 
registered as a digital commodity broker or digital 
commodity dealer under this section shall become and 
remain a member of a registered futures 
association.</DELETED>
<DELETED> ``(b) Requirements.--</DELETED>
<DELETED> ``(1) In general.--A person shall register as a 
digital commodity broker or digital commodity dealer by filing 
a registration application with the Commission.</DELETED>
<DELETED> ``(2) Contents.--</DELETED>
<DELETED> ``(A) In general.--The application shall 
be made in such form and manner as is prescribed by the 
Commission, and shall contain such information as the 
Commission considers necessary concerning the business 
in which the applicant is or will be engaged.</DELETED>
<DELETED> ``(B) Continual reporting.--A person that 
is registered as a digital commodity broker or digital 
commodity dealer shall continue to submit to the 
Commission reports that contain such information 
pertaining to the business of the person as the 
Commission may require.</DELETED>
<DELETED> ``(3) Statutory disqualification.--Except to the 
extent otherwise specifically provided by rule, regulation, or 
order, it shall be unlawful for a digital commodity broker or 
digital commodity dealer to permit any person who is associated 
with a digital commodity broker or a digital commodity dealer 
and who is subject to a statutory disqualification to effect or 
be involved in effecting a contract of sale of a digital 
commodity on behalf of the digital commodity broker or the 
digital commodity dealer, respectively, if the digital 
commodity broker or digital commodity dealer, respectively, 
knew, or in the exercise of reasonable care should have known, 
of the statutory disqualification.</DELETED>
<DELETED> ``(c) Rulemaking.--</DELETED>
<DELETED> ``(1) In general.--The Commission shall prescribe 
such rules applicable to registered digital commodity brokers 
and registered digital commodity dealers as are appropriate to 
carry out this section, including rules in the public interest 
that limit the activities of digital commodity brokers and 
digital commodity dealers.</DELETED>
<DELETED> ``(2) Financing agreements.--</DELETED>
<DELETED> ``(A) In general.--The Commission shall 
prescribe rules and regulations applicable to digital 
commodity brokers or digital commodity dealers which 
shall set forth minimum requirements related to 
disclosure, recordkeeping, margin financing 
arrangements, rehypothecation, capital, reporting, 
business conduct, documentation, and supervision of 
employees and agents, in connection with--</DELETED>
<DELETED> ``(i) an agreement described in 
section 2(c)(2)(D)(iv); or</DELETED>
<DELETED> ``(ii) any other margined, 
leveraged, or financing arrangement for the 
purchase or sale of a digital commodity with an 
eligible contract participant.</DELETED>
<DELETED> ``(B) Specific authority.--Except as 
prohibited in section 2(c)(2)(G)(iii), the Commission 
may also make, promulgate, and enforce such rules and 
regulations as, in the judgment of the Commission, are 
reasonably necessary to effectuate any of the 
provisions of, or to accomplish any of the purposes of, 
this Act in connection with an agreement referred to in 
subparagraph (A) of this paragraph.</DELETED>
<DELETED> ``(d) Capital Requirements.--</DELETED>
<DELETED> ``(1) In general.--Each digital commodity broker 
and digital commodity dealer shall meet such minimum capital 
requirements as the Commission may prescribe to address the 
risks associated with digital commodity trading and to ensure 
that the digital commodity broker or digital commodity dealer, 
respectively, is able, at all times, to--</DELETED>
<DELETED> ``(A) meet, and continue to meet the 
obligations of such a registrant; and</DELETED>
<DELETED> ``(B) fulfill obligations to customers or 
counterparties for any margined, leveraged, or financed 
transactions.</DELETED>
<DELETED> ``(2) Futures commission merchants and other 
dealers.--Each futures commission merchant, introducing broker, 
digital commodity broker, digital commodity dealer, broker, and 
dealer shall maintain sufficient capital to comply with the 
stricter of any applicable capital requirements to which the 
futures commission merchant, introducing broker, digital 
commodity broker, digital commodity dealer, broker, or dealer, 
respectively, is subject under this Act or the Securities 
Exchange Act of 1934 (15 U.S.C. 78a et seq.).</DELETED>
<DELETED> ``(e) Reporting and Recordkeeping.--Each digital commodity 
broker and digital commodity dealer--</DELETED>
<DELETED> ``(1) shall make such reports as are required by 
the Commission by rule or regulation regarding the 
transactions, positions, and financial condition of the digital 
commodity broker or digital commodity dealer, 
respectively;</DELETED>
<DELETED> ``(2) shall keep books and records in such form 
and manner and for such period as may be prescribed by the 
Commission by rule or regulation; and</DELETED>
<DELETED> ``(3) shall keep the books and records open to 
inspection and examination by any representative of the 
Commission.</DELETED>
<DELETED> ``(f) Daily Trading Records.--</DELETED>
<DELETED> ``(1) In general.--Each digital commodity broker 
and digital commodity dealer shall maintain daily trading 
records of the transactions of the digital commodity broker or 
digital commodity dealer, respectively, and all related records 
(including related forward or derivatives transactions) and 
recorded communications, including electronic mail, instant 
messages, and recordings of telephone calls, for such period as 
the Commission may require by rule or regulation.</DELETED>
<DELETED> ``(2) Information requirements.--The daily trading 
records shall include such information as the Commission shall 
require by rule or regulation.</DELETED>
<DELETED> ``(3) Counterparty records.--Each digital 
commodity broker and digital commodity dealer shall maintain 
daily trading records for each customer or counterparty in a 
manner and form that is identifiable with each digital 
commodity transaction.</DELETED>
<DELETED> ``(4) Audit trail.--Each digital commodity broker 
and digital commodity dealer shall maintain a complete audit 
trail for conducting comprehensive and accurate trade 
reconstructions.</DELETED>
<DELETED> ``(g) Business Conduct Standards.--</DELETED>
<DELETED> ``(1) In general.--Each digital commodity broker 
and digital commodity dealer shall conform with such business 
conduct standards as the Commission, by rule or regulation, 
prescribes related to--</DELETED>
<DELETED> ``(A) fraud, manipulation, and other 
abusive practices involving spot or margined, 
leveraged, or financed digital commodity transactions 
(including transactions that are offered but not 
entered into);</DELETED>
<DELETED> ``(B) diligent supervision of the business 
of the registered digital commodity broker or digital 
commodity dealer, respectively; and</DELETED>
<DELETED> ``(C) such other matters as the Commission 
deems appropriate.</DELETED>
<DELETED> ``(2) Business conduct requirements.--The 
Commission shall, by rule, prescribe business conduct 
requirements which--</DELETED>
<DELETED> ``(A) require disclosure by a registered 
digital commodity broker and registered digital 
commodity dealer to any counterparty to the transaction 
(other than an eligible contract participant) of--
</DELETED>
<DELETED> ``(i) information about the 
material risks and characteristics of the 
digital commodity; and</DELETED>
<DELETED> ``(ii) information about the 
material risks and characteristics of the 
transaction;</DELETED>
<DELETED> ``(B) establish a duty for such a digital 
commodity broker and such a digital commodity dealer to 
communicate in a fair and balanced manner based on 
principles of fair dealing and good faith;</DELETED>
<DELETED> ``(C) establish standards governing 
digital commodity broker and digital commodity dealer 
marketing and advertising, including testimonials and 
endorsements; and</DELETED>
<DELETED> ``(D) establish such other standards and 
requirements as the Commission may determine are 
appropriate for the protection of customers.</DELETED>
<DELETED> ``(3) Prohibition on fraudulent practices.--It 
shall be unlawful for a digital commodity broker or digital 
commodity dealer to--</DELETED>
<DELETED> ``(A) employ any device, scheme, or 
artifice to defraud any customer or 
counterparty;</DELETED>
<DELETED> ``(B) engage in any transaction, practice, 
or course of business that operates as a fraud or 
deceit on any customer or counterparty; or</DELETED>
<DELETED> ``(C) engage in any act, practice, or 
course of business that is fraudulent, deceptive, or 
manipulative.</DELETED>
<DELETED> ``(h) Duties.--</DELETED>
<DELETED> ``(1) Risk management procedures.--Each digital 
commodity broker and digital commodity dealer shall establish 
robust and professional risk management systems adequate for 
managing the day-to-day business of the digital commodity 
broker or digital commodity dealer, respectively.</DELETED>
<DELETED> ``(2) Disclosure of general information.--Each 
digital commodity broker and digital commodity dealer shall 
disclose to the Commission information concerning--</DELETED>
<DELETED> ``(A) the terms and conditions of the 
transactions of the digital commodity broker or digital 
commodity dealer, respectively;</DELETED>
<DELETED> ``(B) the trading operations, mechanisms, 
and practices of the digital commodity broker or 
digital commodity dealer, respectively;</DELETED>
<DELETED> ``(C) financial integrity protections 
relating to the activities of the digital commodity 
broker or digital commodity dealer, respectively; 
and</DELETED>
<DELETED> ``(D) other information relevant to 
trading in digital commodities by the digital commodity 
broker or digital commodity dealer, 
respectively.</DELETED>
<DELETED> ``(3) Ability to obtain information.--Each digital 
commodity broker and digital commodity dealer shall--</DELETED>
<DELETED> ``(A) establish and enforce internal 
systems and procedures to obtain any necessary 
information to perform any of the functions described 
in this section; and</DELETED>
<DELETED> ``(B) provide the information to the 
Commission, on request.</DELETED>
<DELETED> ``(4) Conflicts of interest.--Each digital 
commodity broker and digital commodity dealer shall establish, 
maintain, and enforce written policies and procedures 
reasonably designed, taking into consideration the nature of 
the business of the person, to mitigate any conflicts of 
interest in transactions or arrangements with 
affiliates.</DELETED>
<DELETED> ``(5) Antitrust considerations.--Unless necessary 
or appropriate to achieve the purposes of this Act, a digital 
commodity broker or digital commodity dealer shall not--
</DELETED>
<DELETED> ``(A) adopt any process or take any action 
that results in any unreasonable restraint of trade; 
or</DELETED>
<DELETED> ``(B) impose any material anticompetitive 
burden on trading or clearing.</DELETED>
<DELETED> ``(i) Designation of Chief Compliance Officer.--</DELETED>
<DELETED> ``(1) In general.--Each digital commodity broker 
and digital commodity dealer shall designate an individual to 
serve as a chief compliance officer.</DELETED>
<DELETED> ``(2) Duties.--The chief compliance officer 
shall--</DELETED>
<DELETED> ``(A) report directly to the board or to 
the senior officer of the registered digital commodity 
broker or registered digital commodity 
dealer;</DELETED>
<DELETED> ``(B) review the compliance of the 
registered digital commodity broker or registered 
digital commodity dealer with respect to the registered 
digital commodity broker and registered digital 
commodity dealer requirements described in this 
section;</DELETED>
<DELETED> ``(C) in consultation with the board of 
directors, a body performing a function similar to the 
board, or the senior officer of the organization, 
resolve any conflicts of interest that may 
arise;</DELETED>
<DELETED> ``(D) be responsible for administering 
each policy and procedure that is required to be 
established pursuant to this section;</DELETED>
<DELETED> ``(E) ensure compliance with this Act 
(including regulations), including each rule prescribed 
by the Commission under this section;</DELETED>
<DELETED> ``(F) establish procedures for the 
remediation of noncompliance issues identified by the 
chief compliance officer through any--</DELETED>
<DELETED> ``(i) compliance office 
review;</DELETED>
<DELETED> ``(ii) look-back;</DELETED>
<DELETED> ``(iii) internal or external audit 
finding;</DELETED>
<DELETED> ``(iv) self-reported error; 
or</DELETED>
<DELETED> ``(v) validated complaint; 
and</DELETED>
<DELETED> ``(G) establish and follow appropriate 
procedures for the handling, management response, 
remediation, retesting, and closing of noncompliance 
issues.</DELETED>
<DELETED> ``(3) Annual reports.--</DELETED>
<DELETED> ``(A) In general.--In accordance with 
rules prescribed by the Commission, the chief 
compliance officer shall annually prepare and sign a 
report that contains a description of--</DELETED>
<DELETED> ``(i) the compliance of the 
registered digital commodity broker or 
registered digital commodity dealer with this 
Act (including regulations); and</DELETED>
<DELETED> ``(ii) each policy and procedure 
of the registered digital commodity broker or 
registered digital commodity dealer followed by 
the chief compliance officer (including the 
code of ethics and conflict of interest 
policies).</DELETED>
<DELETED> ``(B) Requirements.--The chief compliance 
officer shall ensure that a compliance report under 
subparagraph (A)--</DELETED>
<DELETED> ``(i) accompanies each appropriate 
financial report of the registered digital 
commodity broker or registered digital 
commodity dealer that is required to be 
furnished to the Commission pursuant to this 
section; and</DELETED>
<DELETED> ``(ii) includes a certification 
that, under penalty of law, the compliance 
report is accurate and complete.</DELETED>
<DELETED> ``(j) Segregation of Digital Commodities.--</DELETED>
<DELETED> ``(1) Holding of customer assets.--</DELETED>
<DELETED> ``(A) In general.--Each digital commodity 
broker and digital commodity dealer shall hold customer 
money, assets, and property in a manner to minimize the 
risk of loss to the customer or unreasonable delay in 
customer access to the money, assets, and property of 
the customer.</DELETED>
<DELETED> ``(B) Qualified digital asset custodian.--
Each digital commodity broker and digital commodity 
dealer shall hold in a qualified digital asset 
custodian each unit of a digital asset that is--
</DELETED>
<DELETED> ``(i) the property of a customer 
or counterparty of the digital commodity broker 
or digital commodity dealer, 
respectively;</DELETED>
<DELETED> ``(ii) required to be held by the 
digital commodity broker or digital commodity 
dealer under subsection (e); or</DELETED>
<DELETED> ``(iii) otherwise so required by 
the Commission to reasonably protect customers 
or promote the public interest.</DELETED>
<DELETED> ``(2) Segregation of funds.--</DELETED>
<DELETED> ``(A) In general.--Each digital commodity 
broker and digital commodity dealer shall treat and 
deal with all money, assets, and property that is 
received by the digital commodity broker or digital 
commodity dealer, or accrues to a customer as the 
result of trading in digital commodities, as belonging 
to the customer.</DELETED>
<DELETED> ``(B) Commingling prohibited.--</DELETED>
<DELETED> ``(i) In general.--Except as 
provided in clause (ii), each digital commodity 
broker and digital commodity dealer shall 
separately account for money, assets, and 
property of a digital commodity customer, and 
shall not commingle any such money, assets, or 
property with the funds of the digital 
commodity broker or digital commodity dealer, 
respectively, or use any such money, assets, or 
property to margin, secure, or guarantee any 
trades or accounts of any customer or person 
other than the person for whom the money, 
assets, or property are held.</DELETED>
<DELETED> ``(ii) Exceptions.--</DELETED>
<DELETED> ``(I) Use of funds.--
</DELETED>
<DELETED> ``(aa) In 
general.--A digital commodity 
broker or digital commodity 
dealer may, for convenience, 
commingle and deposit in the 
same account or accounts with 
any bank, trust company, 
derivatives clearing 
organization, or qualified 
digital asset custodian money, 
assets, and property of 
customers.</DELETED>
<DELETED> ``(bb) 
Withdrawal.--The share of the 
money, assets, and property 
described in item (aa) as in 
the normal course of business 
shall be necessary to margin, 
guarantee, secure, transfer, 
adjust, or settle a contract of 
sale of a digital commodity 
with a registered entity may be 
withdrawn and applied to such 
purposes, including the payment 
of commissions, brokerage, 
interest, taxes, storage, and 
other charges, lawfully 
accruing in connection with the 
contract.</DELETED>
<DELETED> ``(II) Commission 
action.--In accordance with such terms 
and conditions as the Commission may 
prescribe by rule, regulation, or 
order, any money, assets, or property 
of the customers of a digital commodity 
broker or digital commodity dealer may 
be commingled and deposited in customer 
accounts with any other money, assets, 
or property received by the digital 
commodity broker or digital commodity 
dealer, respectively, and required by 
the Commission to be separately 
accounted for and treated and dealt 
with as belonging to the customer of 
the digital commodity broker or digital 
commodity dealer, 
respectively.</DELETED>
<DELETED> ``(3) Permitted investments.--Money described in 
paragraph (2) may be invested in obligations of the United 
States, in general obligations of any State or of any political 
subdivision of a State, in obligations fully guaranteed as to 
principal and interest by the United States, or in any other 
investment that the Commission may by rule or regulation 
allow.</DELETED>
<DELETED> ``(4) Customer protection during bankruptcy.--
</DELETED>
<DELETED> ``(A) Customer property.--All money, 
assets, or property described in paragraph (2) shall be 
considered customer property for purposes of section 
761 of title 11, United States Code.</DELETED>
<DELETED> ``(B) Transactions.--A transaction 
involving a unit of a digital commodity occurring with 
a digital commodity broker or digital commodity dealer 
shall be considered a contract for the purchase or sale 
of a commodity for future delivery, on or subject to 
the rules of, a contract market or board of trade for 
purposes of the definition of a `commodity contract' in 
section 761 of title 11, United States Code.</DELETED>
<DELETED> ``(C) Brokers and dealers.--A digital 
commodity broker and a digital commodity dealer shall 
be considered a futures commission merchant for 
purposes of section 761 of title 11, United States 
Code.</DELETED>
<DELETED> ``(D) Assets removed from segregation.--
Assets removed from segregation due to a customer 
election under paragraph (6) shall not be considered 
customer property for purposes of section 761 of title 
11, United States Code.</DELETED>
<DELETED> ``(5) Misuse of customer property.--</DELETED>
<DELETED> ``(A) In general.--It shall be unlawful--
</DELETED>
<DELETED> ``(i) for any digital commodity 
broker or digital commodity dealer that has 
received any customer money, assets, or 
property for custody to dispose of, or use any 
such money, assets, or property as belonging to 
the digital commodity broker or digital 
commodity dealer, respectively, or any person 
other than a customer of the digital commodity 
broker or digital commodity dealer, 
respectively; or</DELETED>
<DELETED> ``(ii) for any other person, 
including any depository, digital commodity 
exchange, other digital commodity broker, other 
digital commodity dealer, or digital commodity 
custodian that has received any customer money, 
assets, or property for deposit, to hold, 
dispose of, or use any such money, assets, or 
property, as belonging to the depositing 
digital commodity broker or digital commodity 
dealer or any person other than the customers 
of the digital commodity broker or digital 
commodity dealer, respectively.</DELETED>
<DELETED> ``(B) Use further defined.--For purposes 
of this section, `use' of a digital commodity includes 
utilizing any unit of a digital asset to participate in 
a blockchain service defined in paragraph (6) or a 
decentralized governance system associated with the 
digital commodity or the blockchain system to which the 
digital commodity relates in any manner other than that 
expressly directed by the customer from whom the unit 
of a digital commodity was received.</DELETED>
<DELETED> ``(6) Participation in blockchain services.--
</DELETED>
<DELETED> ``(A) Use of funds.--A digital commodity 
broker or digital commodity dealer (or a designee of a 
digital commodity broker or a digital commodity dealer) 
may use a unit of a digital commodity belonging to a 
customer to provide a blockchain service for a 
blockchain system to which the unit of the digital 
commodity relates if--</DELETED>
<DELETED> ``(i) the customer expressly 
permits the use, in writing to the digital 
commodity broker or digital commodity dealer, 
as the case may be; and</DELETED>
<DELETED> ``(ii) the digital commodity 
broker or the digital commodity dealer, as the 
case may be, complies with subparagraph 
(B).</DELETED>
<DELETED> ``(B) Limitations.--</DELETED>
<DELETED> ``(i) In general.--The Commission 
shall, by rule, establish notice and disclosure 
requirements, and may, by rule, establish any 
other limitations and rules related to a 
permission provided under subparagraph (A) that 
are reasonably necessary to protect customers, 
including eligible contract participants, non-
eligible contract participants, or any other 
class of customers.</DELETED>
<DELETED> ``(ii) Customer choice.--A digital 
commodity broker or digital commodity dealer 
may not require a customer to provide the 
permission referred to in subparagraph (A) as a 
condition of doing business with the broker or 
dealer.</DELETED>
<DELETED> ``(C) Requirements.--The Commission may, 
by rule, waive or modify the requirements of paragraph 
(2) or subsection (h), to facilitate the use of a unit 
of a digital commodity belonging to a customer to 
provide a blockchain service.</DELETED>
<DELETED> ``(D) Blockchain service defined.--In this 
paragraph, the term `blockchain service' means any 
activity relating to validating transactions on a 
blockchain system, providing security for a blockchain 
system, or other similar activity, including protocol 
consensus participation activities described in section 
2(a)(30)(B) of the Securities Act of 1933, required for 
the ongoing operation of a blockchain system.</DELETED>
<DELETED> ``(k) Federal Preemption.--Notwithstanding any other 
provision of law, the Commission shall have exclusive jurisdiction over 
any digital commodity broker or digital commodity dealer registered 
under this section with respect to activities subject to this 
Act.</DELETED>
<DELETED> ``(l) Exemptions.--In order to promote responsible 
innovation and fair competition, or protect customers, the Commission 
may (on its own initiative or on application of the digital commodity 
broker or digital commodity dealer) exempt, unconditionally or on 
stated terms or conditions, or for stated periods, and retroactively or 
prospectively, or both, a digital commodity broker or digital commodity 
dealer from the requirements of this Act, if the Commission determines 
that--</DELETED>
<DELETED> ``(1)(A) the exemption would be consistent with 
the public interest and the purposes of this Act; and</DELETED>
<DELETED> ``(B) the exemption will not have a material 
adverse effect on the ability of the Commission to discharge 
regulatory duties under this Act; or</DELETED>
<DELETED> ``(2) the digital commodity broker or digital 
commodity dealer is subject to comparable, comprehensive 
supervision and regulation by the appropriate government 
authorities in the home country of the digital commodity broker 
or digital commodity dealer, respectively.''.</DELETED>

<DELETED>SEC. 407. REGISTRATION OF ASSOCIATED PERSONS.</DELETED>

<DELETED> (a) In General.--Section 4k of the Commodity Exchange Act 
(7 U.S.C. 6k) is amended--</DELETED>
<DELETED> (1) by redesignating subsections (4) through (6) 
as subsections (5) through (7), respectively;</DELETED>
<DELETED> (2) by inserting after subsection (3) the 
following:</DELETED>
<DELETED> ``(4) It shall be unlawful for any person to act as an 
associated person of a digital commodity broker or an associated person 
of a digital commodity dealer unless the person is registered with the 
Commission under this Act and such registration shall not have expired, 
been suspended (and the period of suspension has not expired), or been 
revoked. It shall be unlawful for a digital commodity broker or a 
digital commodity dealer to permit such a person to become or remain 
associated with the digital commodity broker or digital commodity 
dealer if the digital commodity broker or digital commodity dealer knew 
or should have known that the person was not so registered or that the 
registration had expired, been suspended (and the period of suspension 
has not expired), or been revoked.''; and</DELETED>
<DELETED> (3) in subsection (5) (as so redesignated), by 
striking ``or of a commodity trading advisor'' and inserting 
``of a commodity trading advisor, of a digital commodity 
broker, or of a digital commodity dealer''.</DELETED>
<DELETED> (b) Conforming Amendments.--The Commodity Exchange Act (7 
U.S.C. 1a et seq.) is amended by striking ``section 4k(6)'' each place 
it appears and inserting ``section 4k(7)''.</DELETED>

<DELETED>SEC. 408. REGISTRATION OF COMMODITY POOL OPERATORS AND 
COMMODITY TRADING ADVISORS.</DELETED>

<DELETED> (a) In General.--Section 4m(3) of the Commodity Exchange 
Act (7 U.S.C. 6m(3)) is amended--</DELETED>
<DELETED> (1) in subparagraph (A)--</DELETED>
<DELETED> (A) by striking ``any commodity trading 
advisor'' and inserting ``a commodity pool operator or 
commodity trading advisor''; and</DELETED>
<DELETED> (B) by striking ``acting as a commodity 
trading advisor'' and inserting ``acting as a commodity 
pool operator or commodity trading advisor''; 
and</DELETED>
<DELETED> (2) in subparagraph (C), by inserting ``digital 
commodities,'' after ``physical commodities,''.</DELETED>
<DELETED> (b) Exemptive Authority.--Section 4m of such Act (7 U.S.C. 
6m) is amended by adding at the end the following:</DELETED>
<DELETED> ``(4) Exemptive Authority.--The Commission shall 
promulgate rules to provide appropriate exemptions for commodity pool 
operators and commodity trading advisors, to provide relief from 
duplicative, conflicting, or unduly burdensome requirements or to 
promote responsible innovation, to the extent the exemptions foster the 
development of fair and orderly cash or spot digital commodity markets, 
are necessary or appropriate in the public interest, and are consistent 
with the protection of customers.''.</DELETED>

<DELETED>SEC. 409. EXCLUSION FOR DECENTRALIZED FINANCE 
ACTIVITIES.</DELETED>

<DELETED> The Commodity Exchange Act (7 U.S.C. 1 et seq.), as 
amended by the preceding provisions of this Act, is amended by 
inserting after section 4u the following:</DELETED>

<DELETED>``SEC. 4V. DECENTRALIZED FINANCE ACTIVITIES NOT SUBJECT TO 
THIS ACT.</DELETED>

<DELETED> ``(a) In General.--Notwithstanding any other provision of 
this Act, a person shall not be subject to this Act and the regulations 
promulgated under this Act based on the person directly or indirectly 
engaging in any of the following activities, whether singly or in 
combination, in relation to the operation of a blockchain system or in 
relation to decentralized finance trading protocol:</DELETED>
<DELETED> ``(1) Compiling network transactions or relaying, 
searching, sequencing, validating, or acting in a similar 
capacity.</DELETED>
<DELETED> ``(2) Providing computational work, operating a 
node or oracle service, or procuring, offering, or utilizing 
network bandwidth, or other similar incidental 
services.</DELETED>
<DELETED> ``(3) Providing a user-interface that enables a 
user to read, and access data about a blockchain 
system.</DELETED>
<DELETED> ``(4) Developing, publishing, or otherwise 
distributing a blockchain system or a decentralized finance 
messaging system.</DELETED>
<DELETED> ``(5) Constituting, administering, or maintaining 
a decentralized finance messaging system or decentralized 
finance trading protocol, or operating or participating in a 
liquidity pool with respect thereto, for the purpose of 
executing a spot transaction for the purchase or sale of a 
digital commodity.</DELETED>
<DELETED> ``(6) Developing, publishing, constituting, 
administering, maintaining, or otherwise distributing software 
or systems that create or deploy hardware or software, 
including wallets or other systems, facilitating an individual 
user's own personal ability to keep, safeguard, or custody the 
user's digital assets or related private keys.</DELETED>
<DELETED> ``(b) Exceptions.--Subsection (a) shall not be interpreted 
to apply to the anti-fraud, anti-manipulation, or false reporting 
enforcement authorities of the Commission.''.</DELETED>

<DELETED>SEC. 410. RESOURCES FOR IMPLEMENTATION AND 
ENFORCEMENT.</DELETED>

<DELETED> (a) Collection of Fees.--</DELETED>
<DELETED> (1) In general.--The Commodity Futures Trading 
Commission (in this section referred to as the ``Commission'') 
shall charge and collect a fee from each person in provisional 
status registered with the Commission pursuant to section 106, 
on--</DELETED>
<DELETED> (A) the filing of the initial application 
for registration; and</DELETED>
<DELETED> (B) an annual basis thereafter for 
maintaining provisional status.</DELETED>
<DELETED> (2) Amount.--The fees authorized under paragraph 
(1) may be collected and available for obligation only in the 
amounts provided in advance in an appropriation Act.</DELETED>
<DELETED> (3) Authority to adjust fees.--Notwithstanding the 
preceding provisions of this subsection, to promote fair 
competition or innovation, the Commission, in its sole 
discretion, may reduce or eliminate any fee otherwise required 
to be paid by a small or medium filer under this 
subsection.</DELETED>
<DELETED> (b) Fee Schedule.--</DELETED>
<DELETED> (1) In general.--The Commission shall publish in 
the Federal Register a schedule of the fees to be charged and 
collected under this section.</DELETED>
<DELETED> (2) Content.--The fee schedule for a fiscal year 
shall include a written analysis of the estimate of the 
Commission of the total costs of carrying out the functions of 
the Commission under this Act during the fiscal year.</DELETED>
<DELETED> (3) Submission to congress.--Before publishing the 
fee schedule for a fiscal year, the Commission shall submit a 
copy of the fee schedule to the Committees on Agriculture and 
on Appropriations of the House of Representatives and the 
Committees on Agriculture, Nutrition, and Forestry and on 
Appropriations of the Senate.</DELETED>
<DELETED> (4) Timing.--</DELETED>
<DELETED> (A) 1st fiscal year.--The Commission shall 
publish the fee schedule for the fiscal year in which 
this Act is enacted, within 30 days after the date of 
the enactment of this Act.</DELETED>
<DELETED> (B) Subsequent fiscal years.--The 
Commission shall publish the fee schedule for each 
subsequent fiscal year, not less than 90 days before 
the due date prescribed by the Commission for payment 
of the annual fee for the fiscal year.</DELETED>
<DELETED> (c) Late Payment Penalty.--</DELETED>
<DELETED> (1) In general.--The Commission may impose a 
penalty against a person that fails to pay an annual fee 
charged under this section, within 30 days after the due date 
prescribed by the Commission for payment of the fee.</DELETED>
<DELETED> (2) Amount.--The amount of the penalty shall be--
</DELETED>
<DELETED> (A) 5 percent of the amount of the fee 
due, multiplied by</DELETED>
<DELETED> (B) the whole number of consecutive 30-day 
periods that have elapsed since the due date.</DELETED>
<DELETED> (d) Reimbursement of Excess Fees.--To the extent that the 
total amount of fees collected under this section during a fiscal year 
that begins after the date of the enactment of this Act exceeds the 
amount provided under subsection (a)(2) with respect to the fiscal 
year, the Commission shall reimburse the excess amount to the persons 
who have timely paid their annual fees, on a pro-rata basis that 
excludes penalties, and shall do so within 60 days after the end of the 
fiscal year.</DELETED>
<DELETED> (e) Deposit of Fees Into the Treasury.--All amounts 
collected under this section shall be credited to the currently 
applicable appropriation, account, or fund of the Commission as 
discretionary offsetting collections, and shall be available for the 
purposes authorized in subsection (f) only to the extent and in the 
amounts provided in advance in appropriations Acts.</DELETED>
<DELETED> (f) Authorization of Appropriations.--In addition to 
amounts otherwise authorized to be appropriated to the Commission, 
there is authorized to be appropriated to the Commission amounts 
collected under this section to cover the costs of carrying out the 
functions of the Commission under this Act.</DELETED>
<DELETED> (g) Expedited Hiring Authority.--</DELETED>
<DELETED> (1) Appointment authority.--The Chairman, pursuant 
to section 6(a), may appoint individuals to a position 
described in paragraph (2) of this subsection--</DELETED>
<DELETED> (A) in accordance with the statutes, 
rules, and regulations governing appointments to 
positions in the excepted service (as defined in 
section 2103 of title 5, United States Code); 
and</DELETED>
<DELETED> (B) without regard to any statute, rule, 
or regulation governing appointments to positions in 
the competitive service (as defined in section 2102 of 
such title).</DELETED>
<DELETED> (2) Position described.--A position referred to in 
subparagraph (1) is a position at the Commission that--
</DELETED>
<DELETED> (A) is in the competitive service (as 
defined in section 2102 of such title); and</DELETED>
<DELETED> (B) requires specialized knowledge of 
digital commodities markets, financial and capital 
market formation or regulation, financial market 
structures or surveillance, data collection or 
analysis, or information technology, cybersecurity, or 
system safeguards.</DELETED>
<DELETED> (3) Rule of construction.--The appointment of a 
candidate to a position under this subsection shall not be 
considered to cause the position to be converted from the 
competitive service to the excepted service.</DELETED>
<DELETED> (h) Sunset.--The authorities provided by this section 
shall expire at the end of the 4th fiscal year that begins after the 
date of the enactment of this Act.</DELETED>

<DELETED>SEC. 411. REQUIREMENTS RELATED TO CONTROL PERSONS.</DELETED>

<DELETED> The Commodity Exchange Act (7 U.S.C. 1 et seq.), as 
amended the preceding provisions of this Act, is amended by inserting 
after section 4v the following:</DELETED>

<DELETED>``SEC. 4W. LIMITATION ON TRANSACTIONS BY BLOCKCHAIN CONTROL 
PERSONS.</DELETED>

<DELETED> ``(a) Limitation.--It shall be unlawful for a blockchain 
control person with respect to a blockchain system certified as a 
mature blockchain system in accordance with section 42 of the 
Securities Exchange Act of 1934 to sell a unit of a digital commodity 
related to the blockchain system unless the person files notice with 
the Commission, in a form and manner determined by the Commission, that 
the person has or intends to obtain an authority described in 
subsection (b)(1) with respect to the blockchain system, and complies 
with rules adopted by the Commission that require--</DELETED>
<DELETED> ``(1) disclosure of information to the Commission 
and the public about the material activities, as determined by 
the Commission, of the blockchain control person; and</DELETED>
<DELETED> ``(2)(A) the use of a digital commodity broker to 
effect the sale; or</DELETED>
<DELETED> ``(B) such other sales restrictions applicable to 
the blockchain control person, or any affiliated blockchain 
control person, to prevent manipulation and distortion of the 
value of the digital commodity and promote further maturity of 
the blockchain system to which the digital commodity 
relates.</DELETED>
<DELETED> ``(b) Definitions.--In this section:</DELETED>
<DELETED> ``(1) Blockchain control person.--The term 
`blockchain control person' means, with respect to a blockchain 
system, any person or group of persons under common control, 
other than a decentralized governance system, who--</DELETED>
<DELETED> ``(A) has the unilateral authority, 
directly or indirectly, through any contract, 
arrangement, understanding, relationship, or otherwise, 
to control or materially alter the functionality, 
operation, or rules of consensus or agreement of the 
blockchain system or its related digital commodity; 
or</DELETED>
<DELETED> ``(B) has the unilateral authority to 
direct the voting, in the aggregate, of 20 percent or 
more of the outstanding voting power of the blockchain 
system by means of a related digital commodity, nodes 
or validators, a decentralized governance system, or 
otherwise, in a blockchain system which can be altered 
by a voting system.</DELETED>
<DELETED> ``(2) Affiliated blockchain control person.--The 
term `affiliated blockchain control person' means any person 
directly or indirectly controlling, controlled by, or under 
common control with a blockchain control person, as the 
Commission by rule or regulation, may determine will effectuate 
the purposes of this section.''.</DELETED>

<DELETED>SEC. 412. OTHER TRADABLE ASSETS.</DELETED>

<DELETED> The Commodity Exchange Act (7 U.S.C. 1 et seq.), as 
amended by the preceding provisions of this Act, is amended--</DELETED>
<DELETED> (1) by inserting after section 4w the 
following:</DELETED>

<DELETED>``SEC. 4X. TRADING REQUIREMENTS FOR OTHER TRADABLE 
ASSETS.</DELETED>

<DELETED> ``(a) Limitation.--A contract of sale of a tradable asset 
shall not be offered, solicited, traded, facilitated, executed, 
cleared, reported, or otherwise dealt in, on or subject to the rules of 
a registered entity, or by any other entity registered with the 
Commission, except in accordance with subsection (b).</DELETED>
<DELETED> ``(b) Requirements.--</DELETED>
<DELETED> ``(1) Treatment of tradable assets.--A contract of 
sale of a tradable asset that is offered, solicited, traded, 
facilitated, executed, cleared, reported, or otherwise dealt in 
on or subject to the rules of a registered entity, or by any 
other entity registered with the Commission, shall be treated 
as a digital commodity for purposes of this Act.</DELETED>
<DELETED> ``(2) Additional rulemaking authority.--In 
addition to the other requirements of this Act, the Commission 
may, by rule or regulation, impose additional obligations on 
any person registered under this Act offering, soliciting, 
trading, facilitating, executing, clearing, reporting, or 
otherwise dealing in a contract of sale of a tradable asset, or 
class thereof, pursuant to paragraph (1) as are necessary for 
the protection of customers, the promotion of innovation, and 
the maintenance of fair, orderly, and efficient markets, 
including additional obligations related to--</DELETED>
<DELETED> ``(A) disclosure;</DELETED>
<DELETED> ``(B) recordkeeping;</DELETED>
<DELETED> ``(C) capital;</DELETED>
<DELETED> ``(D) reporting;</DELETED>
<DELETED> ``(E) business conduct;</DELETED>
<DELETED> ``(F) documentation;</DELETED>
<DELETED> ``(G) supervision of employees; 
and</DELETED>
<DELETED> ``(H) segregation.</DELETED>
<DELETED> ``(c) Tradable Asset Defined.--In this section, the term 
`tradable asset' means a digital asset other than--</DELETED>
<DELETED> ``(1) a digital commodity that is treated as such 
other than by reason of subsection (b)(1) of this section; 
or</DELETED>
<DELETED> ``(2) a digital asset excluded from the definition 
of digital commodity pursuant to subclause (I) through (VII) of 
section 1a(16)(F)(iii).''; and</DELETED>
<DELETED> (2) by inserting after section 6d the 
following:</DELETED>

<DELETED>``SEC. 6E. PROHIBITION ON TRADING CERTAIN DIGITAL 
ASSETS.</DELETED>

<DELETED> ``(a) In General.--A contract of sale of a digital 
commodity or tradable asset (as defined in section 4x) shall not be 
offered, solicited, traded, facilitated, executed, cleared, reported, 
or otherwise dealt in on or subject to the rules of a registered 
entity, or by any other entity registered with the Commission, if the 
primary purpose of the digital commodity or tradable asset is to be 
used to--</DELETED>
<DELETED> ``(1) commit fraud or market 
manipulation;</DELETED>
<DELETED> ``(2) further a scheme found in a final action by 
a court of competent jurisdiction to be in violation of 
campaign finance or government ethics laws; or</DELETED>
<DELETED> ``(3) engage in any other conduct that would 
result in abusive practices or be disruptive to market 
integrity.</DELETED>
<DELETED> ``(b) Guidance on Fraudulent, Manipulative, or Disruptive 
Tradable Assets.--The Commission may, after public notice and comment, 
issue guidance establishing criteria for determining if the primary 
purpose of a digital commodity or tradable asset (as so defined) is to 
be used to commit fraud or market manipulation, or engage in any other 
conduct that would result in abusive practices or be disruptive to 
market integrity.''.</DELETED>

<DELETED>SEC. 413. CONFLICT OF INTEREST RULEMAKING.</DELETED>

<DELETED> Not later than 360 days after the date of the enactment 
of this Act, the Commodity Futures Trading Commission shall issue rules 
establishing requirements for the identification, mitigation, and 
resolution of conflicts of interest among and across registered 
entities (within the meaning of the Commodity Exchange Act) and persons 
required to be registered with the Commission, including conflicts of 
interest related to vertically integrated market structures and their 
varying responsibilities.</DELETED>

<DELETED>SEC. 414. EFFECTIVE DATE.</DELETED>

<DELETED> Unless otherwise provided in this title, this title and 
the amendments made by this title shall take effect 270 days after the 
date of the enactment of this Act.</DELETED>

<DELETED>SEC. 415. SENSE OF CONGRESS.</DELETED>

<DELETED> It is the sense of Congress that nothing in this Act or 
any amendment made by this Act should be interpreted to authorize any 
entity to regulate any commodity, other than a digital commodity, on 
any spot market.</DELETED>

<DELETED>TITLE V--INNOVATION AND TECHNOLOGY IMPROVEMENTS</DELETED>

<DELETED>SEC. 501. FINDINGS; SENSE OF CONGRESS.</DELETED>

<DELETED> (a) Findings.--Congress finds the following:</DELETED>
<DELETED> (1) Entrepreneurs and innovators are building and 
deploying this next generation of the internet.</DELETED>
<DELETED> (2) Digital commodity networks represent a new way 
for people to join together and cooperate with one another to 
undertake certain activities.</DELETED>
<DELETED> (3) Digital commodities have the potential to be 
the foundational building blocks of these systems, aligning the 
economic incentive for individuals to cooperate with one 
another to achieve a common purpose.</DELETED>
<DELETED> (4) The digital commodity ecosystem has the 
potential to grow our economy and improve everyday lives of 
Americans by facilitating collaboration through the use of 
technology to manage activities, allocate resources, and 
facilitate decision making.</DELETED>
<DELETED> (5) Blockchain systems and the digital commodities 
they empower provide control, enhance transparency, reduce 
transaction costs, and increase efficiency if proper 
protections are put in place for investors, consumers, our 
financial system, and our national security.</DELETED>
<DELETED> (6) Blockchain technology facilitates new types of 
network participation which businesses in the United States may 
utilize in innovative ways.</DELETED>
<DELETED> (7) Other digital commodity companies are setting 
up their operations outside of the United States, where 
countries are establishing frameworks to embrace the potential 
of blockchain technology and digital commodities and provide 
safeguards for consumers.</DELETED>
<DELETED> (8) Digital commodities, despite the purported 
anonymity, provide law enforcement with an exceptional tracing 
tool to identify illicit activity and bring criminals to 
justice.</DELETED>
<DELETED> (9) The Financial Services Committee of the House 
of Representatives has held multiple hearings highlighting 
various risks that digital commodities can pose to the 
financial markets, consumers, and investors that must be 
addressed as we seek to harness the benefits of these 
innovations.</DELETED>
<DELETED> (b) Sense of Congress.--It is the sense of Congress that--
</DELETED>
<DELETED> (1) the United States should seek to prioritize 
understanding the potential opportunities of the next 
generation of the internet;</DELETED>
<DELETED> (2) the United States should seek to foster 
advances in technology that have robust evidence indicating 
they can improve our financial system and create more fair and 
equitable access to financial services for everyday Americans 
while protecting our financial system, investors, and 
consumers;</DELETED>
<DELETED> (3) the United States must support the responsible 
development of digital commodities and the underlying 
technology in the United States or risk the shifting of the 
development of such assets and technology outside of the United 
States, to less regulated countries;</DELETED>
<DELETED> (4) Congress should consult with public and 
private sector stakeholders to understand how to enact a 
functional framework tailored to the specific risks and unique 
benefits of different digital commodity-related activities, 
distributed ledger technology, distributed networks, and mature 
blockchain systems;</DELETED>
<DELETED> (5) Congress should enact a functional framework 
tailored to the specific risks of different digital commodity-
related activities and unique benefits of distributed ledger 
technology, distributed networks, and mature blockchain 
systems; and</DELETED>
<DELETED> (6) consumers and market participants will benefit 
from a framework for digital commodities consistent with 
longstanding investor protections in securities and commodities 
markets, yet tailored to the unique benefits and risks of the 
digital commodity ecosystem.</DELETED>

<DELETED>SEC. 502. STRATEGIC HUB FOR INNOVATION AND FINANCIAL 
TECHNOLOGY.</DELETED>

<DELETED> Section 4 of the Securities Exchange Act of 1934 (15 
U.S.C. 78d) is amended by adding at the end the following:</DELETED>
<DELETED> ``(k) Strategic Hub for Innovation and Financial 
Technology.--</DELETED>
<DELETED> ``(1) Establishment.--Not later than 180 days 
after the date of the enactment of this subsection, the 
Securities and Exchange Commission shall establish a committee 
to be known as the Strategic Hub for Innovation and Financial 
Technology (referred to in this subsection as the `FinHub') to 
support engagement on emerging technologies in the financial 
sector.</DELETED>
<DELETED> ``(2) Members.--The composition of FinHub shall be 
determined by the Commission, drawing from relevant divisions 
as appropriate, including the Division of Trading and Markets, 
Division of Corporate Finance, and Division of Investment 
Management.</DELETED>
<DELETED> ``(3) Responsibilities.--FinHub shall--</DELETED>
<DELETED> ``(A) serve as a resource for the 
Commission on emerging financial technology 
advancements;</DELETED>
<DELETED> ``(B) engage with market participants 
working on emerging financial technologies; 
and</DELETED>
<DELETED> ``(C) facilitate communication between the 
Commission and businesses working in emerging financial 
technology fields with information on the Commission, 
its rules, and regulations.</DELETED>
<DELETED> ``(4) Report to the commission.--</DELETED>
<DELETED> ``(A) In general.--Not later than October 
31 of each year after 2025, FinHub shall provide an 
annual summary of its engagement activities to the 
Commission, which shall be included in the Commission's 
annual report to Congress.</DELETED>
<DELETED> ``(B) Confidentiality.--Each report 
submitted under this paragraph shall not contain 
confidential information.''.</DELETED>

<DELETED>SEC. 503. CODIFICATION OF LABCFTC.</DELETED>

<DELETED> (a) In General.--Section 18 of the Commodity Exchange Act 
(7 U.S.C. 22) is amended by adding at the end the following:</DELETED>
<DELETED> ``(c) LabCFTC.--</DELETED>
<DELETED> ``(1) Establishment.--There is established in the 
Commission LabCFTC.</DELETED>
<DELETED> ``(2) Purpose.--The purposes of LabCFTC are to--
</DELETED>
<DELETED> ``(A) promote responsible financial 
technology innovation and fair competition for the 
benefit of the American public;</DELETED>
<DELETED> ``(B) serve as an information platform to 
inform the Commission about new financial technology 
innovation; and</DELETED>
<DELETED> ``(C) provide outreach to financial 
technology innovators to discuss their innovations and 
the regulatory framework established by this Act and 
the regulations promulgated thereunder.</DELETED>
<DELETED> ``(3) Director.--LabCFTC shall have a Director, 
who shall be appointed by the Commission and serve at the 
pleasure of the Commission. Notwithstanding section 2(a)(6)(A), 
the Director shall report directly to the Commission and 
perform such functions and duties as the Commission may 
prescribe.</DELETED>
<DELETED> ``(4) Duties.--LabCFTC shall--</DELETED>
<DELETED> ``(A) advise the Commission with respect 
to rulemakings or other agency or staff action 
regarding financial technology;</DELETED>
<DELETED> ``(B) provide internal education and 
training to the Commission regarding financial 
technology;</DELETED>
<DELETED> ``(C) advise the Commission regarding 
financial technology that would bolster the 
Commission's oversight functions;</DELETED>
<DELETED> ``(D) engage with academia, students, and 
professionals on financial technology issues, ideas, 
and technology relevant to activities under this 
Act;</DELETED>
<DELETED> ``(E) provide persons working in emerging 
technology fields with information on the Commission, 
its rules and regulations, and the role of a registered 
futures association; and</DELETED>
<DELETED> ``(F) encourage persons working in 
emerging technology fields to engage with the 
Commission and obtain feedback from the Commission on 
potential regulatory issues.</DELETED>
<DELETED> ``(5) Report to congress.--</DELETED>
<DELETED> ``(A) In general.--Not later than October 
31 of each year after 2025, LabCFTC shall submit to the 
Committee on Agriculture of the House of 
Representatives and the Committee on Agriculture, 
Nutrition, and Forestry of the Senate a report on its 
activities.</DELETED>
<DELETED> ``(B) Contents.--Each report required 
under paragraph (1) shall include--</DELETED>
<DELETED> ``(i) the total number of persons 
that met with LabCFTC;</DELETED>
<DELETED> ``(ii) a summary of general issues 
discussed during meetings with the 
person;</DELETED>
<DELETED> ``(iii) information on steps 
LabCFTC has taken to improve Commission 
services, including responsiveness to the 
concerns of persons;</DELETED>
<DELETED> ``(iv) recommendations made to the 
Commission with respect to the regulations, 
guidance, and orders of the Commission and such 
legislative actions as may be appropriate; 
and</DELETED>
<DELETED> ``(v) any other information 
determined appropriate by the Director of 
LabCFTC.</DELETED>
<DELETED> ``(C) Confidentiality.--A report under 
paragraph (A) shall abide by the confidentiality 
requirements in section 8.</DELETED>
<DELETED> ``(6) Records and engagement.--The Commission 
shall--</DELETED>
<DELETED> ``(A) maintain systems of records to track 
engagements with the public through LabCFTC;</DELETED>
<DELETED> ``(B) store communications and materials 
received in connection with any such engagement in 
accordance with Commission policies and procedures on 
data retention and confidentiality; and</DELETED>
<DELETED> ``(C) take reasonable steps to protect any 
confidential or proprietary information received 
through LabCFTC engagement.''.</DELETED>
<DELETED> (b) Conforming Amendments.--Section 2(a)(6)(A) of such Act 
(7 U.S.C. 2(a)(6)(A)) is amended--</DELETED>
<DELETED> (1) by striking ``paragraph and in'' and inserting 
``paragraph,''; and</DELETED>
<DELETED> (2) by inserting ``and section 18(c)(3),'' before 
``the executive''.</DELETED>
<DELETED> (c) Effective Date.--The Commodity Futures Trading 
Commission shall implement the amendments made by this section 
(including complying with section 18(c)(7) of the Commodity Exchange 
Act) within 180 days after the date of the enactment of this 
Act.</DELETED>

<DELETED>SEC. 504. STUDY ON DECENTRALIZED FINANCE.</DELETED>

<DELETED> (a) In General.--The Commodity Futures Trading Commission, 
the Securities and Exchange Commission, and the Secretary of the 
Treasury shall jointly carry out a study on decentralized finance that 
analyzes--</DELETED>
<DELETED> (1) the nature, size, role, and use of 
decentralized finance blockchain applications;</DELETED>
<DELETED> (2) the operation of blockchain applications that 
comprise decentralized finance;</DELETED>
<DELETED> (3) the interoperability of blockchain 
applications and other blockchain systems;</DELETED>
<DELETED> (4) the interoperability of blockchain 
applications and software-based systems, including websites and 
wallets;</DELETED>
<DELETED> (5) the decentralized governance systems through 
which blockchain applications may be developed, published, 
constituted, administered, maintained, or otherwise 
distributed, including--</DELETED>
<DELETED> (A) whether the systems enhance or detract 
from--</DELETED>
<DELETED> (i) the decentralization of the 
decentralized finance; and</DELETED>
<DELETED> (ii) the inherent benefits and 
risks of the decentralized governance system; 
and</DELETED>
<DELETED> (B) any procedures, requirements, or best 
practices that would mitigate the risks identified in 
subparagraph (A)(ii);</DELETED>
<DELETED> (6) the benefits of decentralized finance, 
including--</DELETED>
<DELETED> (A) operational resilience and 
availability of blockchain systems;</DELETED>
<DELETED> (B) interoperability of blockchain 
systems;</DELETED>
<DELETED> (C) market competition and 
innovation;</DELETED>
<DELETED> (D) transaction efficiency;</DELETED>
<DELETED> (E) transparency and traceability of 
transactions; and</DELETED>
<DELETED> (F) disintermediation;</DELETED>
<DELETED> (7) the risks of decentralized finance, 
including--</DELETED>
<DELETED> (A) pseudonymity of users and 
transactions;</DELETED>
<DELETED> (B) disintermediation; and</DELETED>
<DELETED> (C) cybersecurity 
vulnerabilities;</DELETED>
<DELETED> (8) the extent to which decentralized finance has 
integrated with the traditional financial markets and any 
potential risks or improvements to the stability of the 
markets;</DELETED>
<DELETED> (9) how the levels of illicit activity in 
decentralized finance compare with the levels of illicit 
activity in traditional financial markets;</DELETED>
<DELETED> (10) methods for addressing illicit activity in 
decentralized finance and traditional markets that are tailored 
to the unique attributes of each;</DELETED>
<DELETED> (11) how decentralized finance may increase the 
accessibility of cross-border transactions; and</DELETED>
<DELETED> (12) the feasibility of embedding self-executing 
compliance and risk controls into decentralized 
finance.</DELETED>
<DELETED> (b) Consultation.--In carrying out the study required 
under subsection (a), the Commodity Futures Trading Commission and the 
Securities and Exchange Commission shall consult with the Secretary of 
the Treasury on the factors described under paragraphs (7) through (10) 
of subsection (a).</DELETED>
<DELETED> (c) Report.--Not later than 1 year after the date of 
enactment of this Act, the Commodity Futures Trading Commission and the 
Securities and Exchange Commission shall jointly submit to the relevant 
congressional committees a report that includes the results of the 
study required by subsection (a).</DELETED>
<DELETED> (d) GAO Study.--The Comptroller General of the United 
States shall--</DELETED>
<DELETED> (1) carry out a study on decentralized finance 
that analyzes the information described under paragraphs (1) 
through (12) of subsection (a); and</DELETED>
<DELETED> (2) not later than 1 year after the date of 
enactment of this Act, submit to the relevant congressional 
committees a report that includes the results of the study 
required by paragraph (1).</DELETED>
<DELETED> (e) Definitions.--In this section:</DELETED>
<DELETED> (1) Decentralized finance.--</DELETED>
<DELETED> (A) In general.--The term ``decentralized 
finance'' means blockchain applications (including 
decentralized finance trading protocols and related 
decentralized finance messaging systems) that allow 
users to engage in financial transactions in a self-
directed manner so that a third-party intermediary does 
not effectuate the transactions or take custody of 
digital commodities of a user during any part of the 
transactions.</DELETED>
<DELETED> (B) Relationship to excluded activities.--
The term ``decentralized finance'' shall not be 
interpreted to limit or exclude any activity from the 
activities described in section 15I(a) of the 
Securities Exchange Act of 1934 or section 4v(a) of the 
Commodity Exchange Act.</DELETED>
<DELETED> (2) Relevant congressional committees.--The term 
``relevant congressional committees'' means--</DELETED>
<DELETED> (A) the Committees on Financial Services 
and Agriculture of the House of Representatives; 
and</DELETED>
<DELETED> (B) the Committees on Banking, Housing, 
and Urban Affairs and Agriculture, Nutrition, and 
Forestry of the Senate.</DELETED>

<DELETED>SEC. 505. STUDY ON NON-FUNGIBLE TOKENS.</DELETED>

<DELETED> (a) In General.--The Comptroller General of the United 
States shall carry out a study of non-fungible tokens that analyzes--
</DELETED>
<DELETED> (1) the nature, size, role, purpose, and use of 
non-fungible tokens;</DELETED>
<DELETED> (2) the similarities and differences between non-
fungible tokens and other digital commodities, including 
digital commodities and permitted payment stablecoins, and how 
the markets for those digital commodities intersect with each 
other;</DELETED>
<DELETED> (3) how non-fungible tokens are minted by issuers 
and subsequently administered to purchasers;</DELETED>
<DELETED> (4) how non-fungible tokens are stored after being 
purchased by a consumer;</DELETED>
<DELETED> (5) the interoperability of non-fungible tokens 
between different blockchain systems;</DELETED>
<DELETED> (6) the scalability of different non-fungible 
tokens marketplaces;</DELETED>
<DELETED> (7) the benefits of non-fungible tokens, including 
verifiable digital ownership;</DELETED>
<DELETED> (8) the risks of non-fungible tokens, including--
</DELETED>
<DELETED> (A) intellectual property 
rights;</DELETED>
<DELETED> (B) cybersecurity risks; and</DELETED>
<DELETED> (C) market risks;</DELETED>
<DELETED> (9) whether and how non-fungible tokens have 
integrated with traditional marketplaces, including those for 
music, real estate, gaming, events, and travel;</DELETED>
<DELETED> (10) whether and how non-fungible tokens can be 
used to facilitate commerce or other activities through the 
representation of documents, identification, contracts, 
licenses, and other commercial, government, or personal 
records;</DELETED>
<DELETED> (11) any potential risks to traditional markets 
from such integration; and</DELETED>
<DELETED> (12) the levels and types of illicit activity in 
non-fungible tokens markets.</DELETED>
<DELETED> (b) Report.--Not later than 1 year after the date of the 
enactment of this Act, the Comptroller General, shall make publicly 
available a report that includes the results of the study required by 
subsection (a).</DELETED>

<DELETED>SEC. 506. STUDY ON EXPANDING FINANCIAL LITERACY AMONGST 
DIGITAL COMMODITY HOLDERS.</DELETED>

<DELETED> (a) In General.--The Commodity Futures Trading Commission 
with the Securities and Exchange Commission shall jointly conduct a 
study to identify--</DELETED>
<DELETED> (1) the existing level of financial literacy among 
retail digital commodity holders, including subgroups of 
investors identified by the Commodity Futures Trading 
Commission with the Securities and Exchange 
Commission;</DELETED>
<DELETED> (2) methods to improve the timing, content, and 
format of financial literacy materials regarding digital 
commodities provided by the Commodity Futures Trading 
Commission and the Securities and Exchange 
Commission;</DELETED>
<DELETED> (3) methods to improve coordination between the 
Securities and Exchange Commission and the Commodity Futures 
Trading Commission with other agencies, including the Financial 
Literacy and Education Commission as well as nonprofit 
organizations and State and local jurisdictions, to better 
disseminate financial literacy materials;</DELETED>
<DELETED> (4) the efficacy of current financial literacy 
efforts with a focus on rural communities and communities with 
majority minority populations;</DELETED>
<DELETED> (5) the most useful and understandable relevant 
information, including clear disclosures, that retail digital 
commodity holders need to make informed financial decisions 
before engaging with or purchasing a digital commodity or 
service that is typically sold to retail investors of digital 
commodities;</DELETED>
<DELETED> (6) the most effective public-private partnerships 
in providing financial literacy regarding digital commodities 
to consumers;</DELETED>
<DELETED> (7) the most relevant metrics to measure 
successful improvement of the financial literacy of an 
individual after engaging with financial literacy efforts; 
and</DELETED>
<DELETED> (8) in consultation with the Financial Literacy 
and Education Commission, a strategy (including to the extent 
practicable, measurable goals and objectives) to increase 
financial literacy of investors regarding digital 
commodities.</DELETED>
<DELETED> (b) Report.--Not later than 1 year after the date of the 
enactment of this Act, the Commodity Futures Trading Commission and the 
Securities and Exchange Commission shall jointly submit a written 
report on the study required by subsection (a) to the Committees on 
Financial Services and on Agriculture of the House of Representatives 
and the Committees on Banking, Housing, and Urban Affairs and on 
Agriculture, Nutrition, and Forestry of the Senate.</DELETED>

<DELETED>SEC. 507. STUDY ON FINANCIAL MARKET INFRASTRUCTURE 
IMPROVEMENTS.</DELETED>

<DELETED> (a) In General.--The Commodity Futures Trading Commission 
and the Securities and Exchange Commission shall jointly conduct a 
study to assess whether additional guidance or rules are necessary to 
facilitate the development of tokenized securities and derivatives 
products, and to the extent such guidance or rules would foster the 
development of fair and orderly financial markets, be necessary or 
appropriate in the public interest, and be consistent with the 
protection of investors and customers.</DELETED>
<DELETED> (b) Report.--</DELETED>
<DELETED> (1) Time limit.--Not later than 1 year after the 
date of enactment of this Act, the Commodity Futures Trading 
Commission and the Securities and Exchange Commission shall 
jointly submit to the relevant congressional committees a 
report that includes the results of the study required by 
subsection (a).</DELETED>
<DELETED> (2) Relevant congressional committees defined.--In 
this section, the term ``relevant congressional committees'' 
means--</DELETED>
<DELETED> (A) the Committees on Financial Services 
and on Agriculture of the House of Representatives; 
and</DELETED>
<DELETED> (B) the Committees on Banking, Housing, 
and Urban Affairs and on Agriculture, Nutrition, and 
Forestry of the Senate.</DELETED>

<DELETED>SEC. 508. STUDY ON BLOCKCHAIN IN PAYMENTS.</DELETED>

<DELETED> (a) Study Required.--The Secretary of the Treasury shall 
conduct a study on the potential use of blockchain technology by the 
domestic private sector to address--</DELETED>
<DELETED> (1) fraud in payments;</DELETED>
<DELETED> (2) transaction costs and transaction 
times;</DELETED>
<DELETED> (3) automated payments; and</DELETED>
<DELETED> (4) efficiency in commercial 
transactions.</DELETED>
<DELETED> (b) Report to Congress.--Not later than one year after the 
date of enactment of this Act, the Secretary shall submit a report to 
the Committee on Financial Services of the House of Representatives and 
the Committee on Banking, Housing, and Urban Affairs of the Senate that 
summarizes the findings of the study required under subsection 
(a).</DELETED>
<DELETED> (c) Rule of Construction.--Nothing in this section shall 
be construed to mandate the use of blockchain technology by any public 
or private entity.</DELETED>

<DELETED>SEC. 509. STUDY ON ILLICIT USE OF DIGITAL ASSETS.</DELETED>

<DELETED> (a) In General.--One year after the date of the enactment 
of this Act, the Secretary of the Treasury, in consultation with the 
Securities and Exchange Commission and the Commodity Futures Trading 
Commission, shall conduct a comprehensive review of how Foreign 
Terrorist Organizations and Transnational Criminal Syndicates utilize 
digital assets in connection with illicit activities.</DELETED>
<DELETED> (b) Report.--Not later than 180 days after completing the 
review under subsection (a), the Secretary of the Treasury shall issue 
a report to the Committees on Agriculture and on Financial Services of 
the House of Representatives and the Committees on Agriculture, 
Nutrition, and Forestry and on Banking, Housing, and Urban Affairs of 
the Senate on the findings of the Secretary, including--</DELETED>
<DELETED> (1) an assessment of how Foreign Terrorist 
Organizations and Transnational Criminal Syndicates utilize 
digital assets in connection with illicit activities; 
and</DELETED>
<DELETED> (2) recommendations to assist the Securities and 
Exchange Commission and the Commodity Futures Trading 
Commission in strengthening compliance and enforcement of 
digital assets-related entities registered with their 
respective agencies.</DELETED>

<DELETED>SEC. 510. GAO STUDY ON CERTAIN CENTRALIZED INTERMEDIARIES THAT 
ARE PRIMARILY LOCATED IN FOREIGN JURISDICTIONS.</DELETED>

<DELETED> (a) In General.--The Comptroller General of the United 
States, in consultation with the Secretary of the Treasury, shall 
conduct a study to--</DELETED>
<DELETED> (1) assess the risks posed by centralized 
intermediaries that are primarily located in foreign 
jurisdictions that provide services to U.S. persons without 
regulatory requirements that are substantially similar to the 
requirements of the Bank Secrecy Act; and</DELETED>
<DELETED> (2) provide any regulatory or legislative 
recommendations to address these risks under paragraph 
(1).</DELETED>
<DELETED> (b) Report.--Not later than 1 year after the date of 
enactment of this Act, the Comptroller General shall issue a report to 
Congress containing all findings and determinations made in carrying 
out the study required under subsection (a).</DELETED>

<DELETED>SEC. 511. STUDIES ON FOREIGN ADVERSARY 
PARTICIPATION.</DELETED>

<DELETED> (a) In General.--The Secretary of the Treasury, in 
consultation with the Commodity Futures Trading Commission and the 
Securities and Exchange Commission, shall, not later than 1 year after 
date of the enactment of this section, conduct a study and submit a 
report to the relevant congressional committees that--</DELETED>
<DELETED> (1) identifies any digital commodity registrants 
which are owned by governments of foreign 
adversaries;</DELETED>
<DELETED> (2) determines whether any governments of foreign 
adversaries are collecting trading data about United States 
persons in the digital commodity markets; and</DELETED>
<DELETED> (3) evaluates whether any proprietary intellectual 
property of digital commodity registrants is being misused or 
stolen by any governments of foreign adversaries.</DELETED>
<DELETED> (b) GAO Study and Report.--</DELETED>
<DELETED> (1) In general.--The Comptroller General shall, 
not later than 1 year after date of the enactment of this 
section, conduct a study and submit a report to the relevant 
congressional committees that--</DELETED>
<DELETED> (A) identifies any digital commodity 
registrants which are owned by governments of foreign 
adversaries;</DELETED>
<DELETED> (B) determines whether any governments of 
foreign adversaries are collecting trading data about 
United States persons in the digital commodity markets; 
and</DELETED>
<DELETED> (C) evaluates whether any proprietary 
intellectual property of digital commodity registrants 
is being misused or stolen by any governments of 
foreign adversaries.</DELETED>
<DELETED> (c) Definitions.--In this section:</DELETED>
<DELETED> (1) Digital commodity registrant.--The term 
``digital commodity registrant'' means any person required to 
register as a digital commodity exchange, digital commodity 
broker, or digital commodity dealer under the Commodity 
Exchange Act.</DELETED>
<DELETED> (2) Foreign adversaries.--The term ``foreign 
adversaries'' means the foreign governments and foreign non-
government persons determined by the Secretary of Commerce to 
be foreign adversaries under section 7.4(a) of title 15, Code 
of Federal Regulations.</DELETED>
<DELETED> (3) Relevant congressional committees.--The term 
``relevant congressional committees'' means--</DELETED>
<DELETED> (A) the Committees on Financial Services 
and Agriculture of the House of Representatives; 
and</DELETED>
<DELETED> (B) the Committees on Banking, Housing, 
and Urban Affairs and Agriculture, Nutrition, and 
Forestry of the Senate.</DELETED>

<DELETED>SEC. 512. CONFORMING AMENDMENTS.</DELETED>

<DELETED> The GENIUS Act is amended--</DELETED>
<DELETED> (1) in section 2, by amending paragraph (7) to 
read as follows:</DELETED>
<DELETED> ``(7) Digital asset service provider.--The term 
`digital asset service provider' means any entity registered or 
required to be registered with the Securities and Exchange 
Commission or the Commodity Futures Trading 
Commission.'';</DELETED>
<DELETED> (2) in section 4(a)--</DELETED>
<DELETED> (A) by amending paragraph (3) to read as 
follows:</DELETED>
<DELETED> ``(3) Monthly certification; examination of 
reports by registered public accounting firm.--</DELETED>
<DELETED> ``(A) In general.--A permitted payment 
stablecoin issuer shall, each month, have the 
information disclosed in the previous month-end report 
required under paragraph (1)(C) examined by a 
registered public accounting firm and such examination 
shall be performed in accordance with standards for 
attestation engagements issued or adopted by the 
primary Federal payment stablecoin regulator or, in the 
case of a State qualified payment stablecoin issuer, 
the State payment stablecoin regulator.</DELETED>
<DELETED> ``(B) Certification.--Each month, the 
Chief Executive Officer and Chief Financial Officer of 
a permitted payment stablecoin issuer shall submit to, 
as applicable, the primary Federal payment stablecoin 
regulator or, in the case of a State qualified payment 
stablecoin issuer, the State payment stablecoin 
regulator, a certification that, based on such 
officers' knowledge, the previous monthly report 
required under paragraph (1)(C)--</DELETED>
<DELETED> ``(i) does not contain any untrue 
statement of material fact or omit to state a 
material fact necessary in order to make the 
statements made, in light of the circumstances 
under which such statements were made, not 
misleading; and</DELETED>
<DELETED> ``(ii) fairly presented in all 
material respects the information required 
under paragraph (1)(C) for the period presented 
in such report.</DELETED>
<DELETED> ``(C) Criminal penalty.--Any person who 
submits a certification required under subparagraph (B) 
knowing that such certification is false shall be 
subject to the same criminal penalties as those set 
forth under section 1350(c) of title 18, United States 
Code.</DELETED>
<DELETED> ``(D) Internal controls over permitted 
payment stablecoin issuer's requirements.--</DELETED>
<DELETED> ``(i) In general.--Management of a 
permitted payment stablecoin issuer shall 
establish and maintain an adequate internal 
control structure and procedures for the 
requirements under this paragraph and 
paragraphs (1) and (2) in accordance with a 
framework determined acceptable by the primary 
Federal payment stablecoin regulator or, in the 
case of a State qualified payment stablecoin 
issuer, the State payment stablecoin 
regulator.</DELETED>
<DELETED> ``(ii) Attestation report.--A 
permitted payment stablecoin issuer shall 
obtain an annual attestation report by an 
independent registered public accounting firm 
attesting to management's assertions concerning 
the effectiveness of the internal control 
structure and procedures for compliance with 
the requirements described in this paragraph 
and paragraphs (1) and (2). Such attestation 
shall be made in accordance with standards for 
attestation engagements issued or adopted by 
the primary Federal payment stablecoin 
regulator or, in the case of a State qualified 
payment stablecoin issuer, the State payment 
stablecoin regulator.''; and</DELETED>
<DELETED> (B) by amending paragraph (12) to read as 
follows:</DELETED>
<DELETED> ``(12) Non-financial companies.--</DELETED>
<DELETED> ``(A) Prohibition on non-financial company 
ownership.--It shall be unlawful for a company that 
derives a majority of its revenues from activities that 
are not financial activities to retain or acquire 
control of a nonbank entity that is--</DELETED>
<DELETED> ``(i) a Federal qualified payment 
stablecoin issuer; or</DELETED>
<DELETED> ``(ii) a State qualified payment 
stablecoin issuer.</DELETED>
<DELETED> ``(B) Financial activities defined.--
</DELETED>
<DELETED> ``(i) In general.--In this 
paragraph, the term `financial activities' 
means--</DELETED>
<DELETED> ``(I) a financial 
activity, within the meaning of section 
4(k) of the Bank Holding Company Act of 
1956 (12 U.S.C. 1843(k));</DELETED>
<DELETED> ``(II) issuing, redeeming, 
providing custodial or safekeeping 
services for, buying, selling, making a 
market in, or managing a reserve for 
payment stablecoins;</DELETED>
<DELETED> ``(III) providing 
electronic wallet services for payment 
stablecoins; or</DELETED>
<DELETED> ``(IV) an activity 
determined by the Board to be a 
financial activity pursuant to clause 
(ii).</DELETED>
<DELETED> ``(ii) Establishing additional 
financial activities.--Not later than 180 days 
after the date of enactment of the CLARITY Act 
of 2025, the Board, in consultation with the 
Secretary of the Treasury and the Comptroller, 
shall issue rules, consistent with the purposes 
of this Act, to establish--</DELETED>
<DELETED> ``(I) a list of additional 
activities that are financial 
activities for purposes of clause (i), 
including applicable digital asset 
activities that are financial 
activities; and</DELETED>
<DELETED> ``(II) a streamlined 
procedure for a nonbank entity to 
submit an activity to the Board for 
purposes of the Board determining 
whether such activity should be added 
to the list of additional activities 
that are financial activities for 
purposes of clause (i).''; 
and</DELETED>
<DELETED> (3) by adding at the end the following:</DELETED>

<DELETED>``SEC. 21. COMMODITY-BACKED PAYMENT STABLECOINS.</DELETED>

<DELETED> ``(a) Rule of Construction.--Nothing in this Act shall be 
construed to prohibit or limit a commodity-backed payment stablecoin 
issuer from issuing a commodity-backed payment stablecoin in accordance 
with regulations established by a State commodity-backed payment 
stablecoin regulator.</DELETED>
<DELETED> ``(b) Preservation of Federal Authority.--Nothing in this 
section shall be construed to alter or limit the jurisdiction of the 
Commodity Futures Trading Commission over any matter within the 
Commission's authority under applicable law.</DELETED>
<DELETED> ``(c) Definitions.--For purposes of this 
section:</DELETED>
<DELETED> ``(1) Commodity-backed payment stablecoin.--The 
term `commodity-backed payment stablecoin' means a digital 
asset--</DELETED>
<DELETED> ``(A) that is, or is designed to be, used 
as a means of payment or settlement;</DELETED>
<DELETED> ``(B) that is denominated in a highly 
liquid, publicly traded physical commodity, such as 
gold;</DELETED>
<DELETED> ``(C) the issuer of which is obligated 
to--</DELETED>
<DELETED> ``(i) convert, redeem, or 
repurchase for a fixed amount of the 
denominated highly liquid, publicly traded 
physical commodity; and</DELETED>
<DELETED> ``(ii) custody or cause to be 
custodied, for the benefit of the holders of 
the payment stablecoin, an amount of the 
physical commodity equal to or greater than the 
total amount of outstanding payment 
stablecoins, for the purpose of converting, 
redeeming, or repurchasing the digital asset; 
and</DELETED>
<DELETED> ``(D) that is not--</DELETED>
<DELETED> ``(i) a security issued by--
</DELETED>
<DELETED> ``(I) an investment 
company registered under section 8(a) 
of the Investment Company Act of 1940 
(15 U.S.C. 80a-8(a)); or</DELETED>
<DELETED> ``(II) a person that would 
be an investment company under the 
Investment Company Act of 1940 but for 
paragraphs (1) and (7) of section 3(c) 
of that Act (15 U.S.C. 80a-
3(c));</DELETED>
<DELETED> ``(ii) a deposit (as defined under 
section 3 of the Federal Deposit Insurance Act 
(12 U.S.C. 1813)), regardless of the technology 
used to record such deposit;</DELETED>
<DELETED> ``(iii) an account (as defined in 
section 101 of the Federal Credit Union Act (12 
U.S.C. 1752)), regardless of the technology 
used to record such account; or</DELETED>
<DELETED> ``(iv) an interest or 
participation in a commodity pool (as defined 
in section 1a(10) of the Commodity Exchange Act 
(7 U.S.C. 1a)).</DELETED>
<DELETED> ``(2) Commodity-backed payment stablecoin 
issuer.--The term `commodity-backed payment stablecoin issuer' 
means--</DELETED>
<DELETED> ``(A) an entity that issues a commodity-
backed payment stablecoin; and</DELETED>
<DELETED> ``(B) an entity that is approved to issue 
such commodity-backed payment stablecoins by a State 
commodity-backed payment stablecoin 
regulator.</DELETED>
<DELETED> ``(3) Physical commodity.--The term `physical 
commodity' means any exempt commodity (as defined in section 
1a(21) of the Commodity Exchange Act (7 U.S.C. 1a)) which can 
be physically delivered.</DELETED>
<DELETED> ``(4) State commodity-backed payment stablecoin 
regulator.--The term `State commodity-backed payment stablecoin 
regulator' means a State agency that has primary regulatory and 
supervisory authority over entities that issue commodity-backed 
payment stablecoins in such State.</DELETED>

<DELETED>``SEC. 22. PROTECTION OF SELF-CUSTODY.</DELETED>

<DELETED> ``(a) In General.--A United States individual shall retain 
the right to--</DELETED>
<DELETED> ``(1) maintain a hardware wallet or software 
wallet for the purpose of facilitating the individual's own 
lawful custody of digital assets; and</DELETED>
<DELETED> ``(2) engage in direct, peer-to-peer transactions 
in digital assets with another individual or entity for the 
individual's own lawful purposes using a hardware wallet or 
software wallet, if--</DELETED>
<DELETED> ``(A) such other individual or entity is 
not a financial institution (as defined in section 5312 
of title 31, United States Code); and</DELETED>
<DELETED> ``(B) the transactions do not involve any 
property or interests in property that are blocked 
pursuant to, or are otherwise prohibited by, United 
States sanctions.</DELETED>
<DELETED> ``(b) Application.--This section--</DELETED>
<DELETED> ``(1) applies solely to personal use by 
individuals; and</DELETED>
<DELETED> ``(2) does not apply to individuals acting in a 
custodial or fiduciary capacity for others.</DELETED>
<DELETED> ``(c) Rule of Construction.--Nothing in this section shall 
be construed to limit the authority of the Secretary of the Treasury, 
the Securities and Exchange Commission, the Commodity Futures Trading 
Commission, or the primary Federal payment stablecoin regulators to 
carry out any enforcement action or special measure authorized under 
applicable law, including--</DELETED>
<DELETED> ``(1) the Bank Secrecy Act, section 9714 of the 
Combating Russian Money Laundering Act (31 U.S.C. 5318A note), 
and section 7213A of the Fentanyl Sanctions Act (21 U.S.C. 
2313a); or</DELETED>
<DELETED> ``(2) any other law relating to illicit finance, 
money laundering, terrorism financing, or United States 
sanctions.''.</DELETED>

<DELETED>TITLE VI--ANTI-CBDC SURVEILLANCE STATE ACT</DELETED>

<DELETED>SEC. 601. SHORT TITLE.</DELETED>

<DELETED> This title may be cited as the ``Anti-CBDC Surveillance 
State Act''.</DELETED>

<DELETED>SEC. 602. PROHIBITION ON FEDERAL RESERVE BANKS RELATING TO 
CERTAIN PRODUCTS OR SERVICES FOR INDIVIDUALS AND 
PROHIBITION ON DIRECTLY ISSUING A CENTRAL BANK DIGITAL 
CURRENCY.</DELETED>

<DELETED> Section 16 of the Federal Reserve Act (12 U.S.C. 411 et 
seq.) is amended by adding at the end the following new 
paragraph:</DELETED>
<DELETED> ``(18)(A) A Federal reserve bank may not--</DELETED>
<DELETED> ``(i) offer financial products or services directly to an 
individual;</DELETED>
<DELETED> ``(ii) maintain an account on behalf of an individual; 
or</DELETED>
<DELETED> ``(iii) issue a central bank digital currency, or any 
digital asset that is substantially similar under any other name or 
label.</DELETED>
<DELETED> ``(B) In this paragraph, the term `central bank digital 
currency' has the meaning given that term under section 
10(11)(D).''.</DELETED>

<DELETED>SEC. 603. PROHIBITION ON FEDERAL RESERVE BANKS INDIRECTLY 
ISSUING A CENTRAL BANK DIGITAL CURRENCY.</DELETED>

<DELETED> Section 16 of the Federal Reserve Act (12 U.S.C. 411 et 
seq.), as amended by section 2, is further amended by adding at the end 
the following paragraph:</DELETED>
<DELETED> ``(19)(A) A Federal reserve bank may not offer a central 
bank digital currency, or any digital asset that is substantially 
similar under any other name or label, indirectly to an individual 
through a financial institution or other intermediary.</DELETED>
<DELETED> ``(B) In this paragraph, the term `central bank digital 
currency' has the meaning given that term under section 
10(11)(D).''.</DELETED>

<DELETED>SEC. 604. PROHIBITION WITH RESPECT TO CENTRAL BANK DIGITAL 
CURRENCY.</DELETED>

<DELETED> Section 10 of the Federal Reserve Act (12 U.S.C. 241 et 
seq.) is amended by inserting before paragraph (12) the 
following:</DELETED>
<DELETED> ``(11) Prohibition with respect to central bank 
digital currency.--</DELETED>
<DELETED> ``(A) In general.--The Board of Governors 
of the Federal Reserve System may not test, study, 
develop, create, or implement a central bank digital 
currency, or any digital asset that is substantially 
similar under any other name or label.</DELETED>
<DELETED> ``(B) Monetary policy.--The Board of 
Governors of the Federal Reserve System and the Federal 
Open Market Committee may not use a central bank 
digital currency to implement monetary policy, or any 
digital asset that is substantially similar under any 
other name or label.</DELETED>
<DELETED> ``(C) Exception.--Subparagraph (A) and 
sections 16(18)(A)(iii) and 16(19)(A) may not be 
construed to prohibit any dollar-denominated currency 
that is open, permissionless, and private, and fully 
preserves the privacy protections of United States 
coins and physical currency.</DELETED>
<DELETED> ``(D) Central bank digital currency 
defined.--In this paragraph, the term `central bank 
digital currency' means a form of digital money or 
monetary value that is--</DELETED>
<DELETED> ``(i) denominated in the national 
unit of account;</DELETED>
<DELETED> ``(ii) a direct liability of the 
Federal Reserve System; and</DELETED>
<DELETED> ``(iii) widely available to the 
general public.''.</DELETED>

<DELETED>SEC. 605. SENSE OF CONGRESS.</DELETED>

<DELETED> It is the sense of Congress that the Board of Governors of 
the Federal Reserve System currently does not have the authority to 
issue a central bank digital currency, or any digital asset that is 
substantially similar under any other name or label, and will not have 
such authority unless Congress grants it under Congress's Article 1 
Section 8 powers.</DELETED>

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Digital Asset 
Market Clarity Act''.
(b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.

TITLE I--RESPONSIBLE SECURITIES INNOVATION

Sec. 101. Short title.
Sec. 102. Disclosure requirements for certain transactions involving 
ancillary assets.
Sec. 103. Exemption and rulemaking for certain transactions involving 
ancillary assets.
Sec. 104. Special disposition restrictions by related persons.
Sec. 105. Characteristics of network tokens.
Sec. 106. Exemptive authority.
Sec. 107. Modernization of recordkeeping requirements.
Sec. 108. Modernization of securities regulations for digital asset 
activities.
Sec. 109. Insider trading with respect to ancillary asset transactions.
Sec. 110. Securities Investor Protection Corporation applicability.
Sec. 111. Investor and consumer protection enforcement.

TITLE II--PROTECTING AGAINST ILLICIT FINANCE

Sec. 201. Treatment under the Bank Secrecy Act and sanctions laws.
Sec. 202. Digital asset examination standards.
Sec. 203. Preventing Illicit Finance Through Partnership Act.
Sec. 204. Financial Technology Protection Act.
Sec. 205. Digital asset kiosks.
Sec. 206. Study on illicit use of digital assets.

TITLE III--RESPONSIBLE INNOVATION IN DECENTRALIZED FINANCE

Sec. 301. Rulemaking on application of existing securities intermediary 
requirements and existing Bank Secrecy Act 
requirements to non-decentralized finance 
trading protocols.
Sec. 302. Illicit finance obligations for distributed ledger messaging 
systems.
Sec. 303. Special measure relating to certain transmittals of funds.
Sec. 304. Offshore stablecoin report.
Sec. 305. Temporary hold for certain digital asset transactions.
Sec. 306. Voluntary cybersecurity program for decentralized finance 
trading protocols.
Sec. 307. Amendments to monetary instrument definition.
Sec. 308. Risk management standards for digital asset intermediaries.
Sec. 309. Study on digital asset mixers and tumblers.
Sec. 310. GAO study on intermediaries in foreign jurisdictions.
Sec. 311. Studies on foreign adversary activities.
Sec. 312. Treasury study on cybersecurity standards.
Sec. 313. Studies on financial stability risks of decentralized finance 
trading and credit in digital commodity 
markets.

TITLE IV--RESPONSIBLE BANKING INNOVATION

Sec. 401. Permissibility of digital asset activities.
Sec. 402. Joint rules for portfolio margining determinations.
Sec. 403. Capital requirements to address netting agreements.
Sec. 404. Prohibiting interest and yield on payment stablecoins.
Sec. 405. Expanded securities portfolio margin accounts under the 
Securities Investor Protection Act of 1970.

TITLE V--RESPONSIBLE REGULATORY INNOVATION

Sec. 501. CFTC-SEC Micro-Innovation Sandbox.
Sec. 502. International cooperation.
Sec. 503. Automated regulatory compliance study.
Sec. 504. Report on legislative recommendations.
Sec. 505. Tokenization of securities.
Sec. 506. Voluntary adoption of National Institute of Standards and 
Technology post-quantum cryptography 
standards.
Sec. 507. International coordination to combat digital asset illicit 
finance.
Sec. 508. Annual report on foreign digital asset trading volume, 
compliance with United States standards and 
remediation actions.
Sec. 509. AI innovation labs.

TITLE VI--PROTECTING SOFTWARE DEVELOPERS AND SOFTWARE INNOVATION

Sec. 601. Protecting software developers.
Sec. 602. Safe harbor for nonfungible tokens.
Sec. 603. Study on nonfungible tokens.
Sec. 604. Blockchain Regulatory Certainty Act.
Sec. 605. Keep Your Coins Act.

TITLE VII--PROTECTING CUSTOMER PROPERTY

Sec. 701. Customer property protections for ancillary assets and 
digital commodities in bankruptcy.
Sec. 702. Insolvency safe harbor.

TITLE VIII--CUSTOMER PROTECTION

Sec. 801. Educational materials.
Sec. 802. Savings clauses.
Sec. 803. Study on expanding financial literacy.
Sec. 804. Consultation with SIPC regarding mandatory broker-dealer 
disclosures to investors concerning the 
status of payment stablecoins and digital 
commodities.

TITLE IX--OTHER MATTERS

Sec. 901. Joint Advisory Committee on Digital Assets.
Sec. 902. Memorandum of understanding.
Sec. 903. FinCEN appropriations.
Sec. 904. Build Now Act.
Sec. 905. Rulemakings.
Sec. 906. Effective date.

SEC. 2. DEFINITIONS.

In this Act:
(1) Ancillary asset; ancillary asset originator; network 
token.--The terms ``ancillary asset'', ``ancillary asset 
originator'', and ``network token'' have the meanings given 
those terms in section 4B(a) of the Securities Act of 1933, as 
added by this Act.
(2) Bank secrecy act.--The term ``Bank Secrecy Act'' 
means--
(A) section 21 of the Federal Deposit Insurance Act 
(12 U.S.C. 1829b);
(B) chapter 2 of title I of Public Law 91-508 (12 
U.S.C. 1951 et seq.); and
(C) subchapter II of chapter 53 of title 31, United 
States Code.
(3) Commission.--Except where otherwise expressly provided, 
the term ``Commission'' means the Securities and Exchange 
Commission.
(4) Coordinated control.--With respect to any distributed 
ledger system and a related ancillary asset, the term 
``coordinated control'' has the meaning given the term by the 
Commission pursuant to rules adopted under section 104(b).
(5) Decentralized governance system.--
(A) In general.--The term ``decentralized 
governance system'' means, with respect to a 
distributed ledger system, any transparent, rules-based 
system permitting persons to form consensus or reach 
agreement in the development, provision, publication, 
maintenance, or administration of the distributed 
ledger system, in which participation is not limited 
to, or under the control of, any person or group of 
persons under common control.
(B) Relationship of persons to decentralized 
governance systems.--With respect to a decentralized 
governance system, the decentralized governance system 
and any persons participating in the decentralized 
governance system shall be treated as separate persons 
unless those persons are under common control or acting 
pursuant to an agreement to act in concert.
(C) Legal entities for decentralized governance 
systems.--The term ``decentralized governance system'' 
shall include a legal entity, including a decentralized 
unincorporated nonprofit association or other entity 
created pursuant to State law, used to implement the 
rules-based system described in subparagraph (A), 
provided that the legal entity does not operate 
pursuant to centralized management. For the purposes of 
this subparagraph, the delegation of ministerial or 
administrative authority at the direction of the 
participants in a decentralized governance system shall 
not be construed to be centralized management.
(D) Rule of construction.--For purposes of this 
Act, and the amendments made by this Act, a 
decentralized governance system shall not be deemed to 
be a person or a group of persons acting under common 
control.
(6) Digital asset; digital asset service provider.--The 
terms ``digital asset'' and ``digital asset service provider'' 
have the meanings given those terms in section 2 of the GENIUS 
Act (12 U.S.C. 5901).
(7) Digital asset intermediary.--The term ``digital asset 
intermediary'' means a person that is engaged in digital asset 
activities and required by law to register with the Commodity 
Futures Trading Commission or with the Commission under the 
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).
(8) Digital commodity.--The term ``digital commodity'' has 
the meaning given the term in section 1a of the Commodity 
Exchange Act (7 U.S.C. 1a), as added by this Act.
(9) Distributed ledger.--The term ``distributed ledger'' 
means technology--
(A) through which data is shared across a network 
that creates a public digital ledger of verified 
transactions or information among network participants; 
and
(B) in which cryptography is used to link the data 
described in subparagraph (A) to--
(i) maintain the integrity of the digital 
ledger described in that subparagraph; and
(ii) execute other functions.
(10) Distributed ledger application.--The term 
``distributed ledger application'' means executable software 
that is deployed to and maintained on a distributed ledger and 
composed of source code that is publicly available, including a 
smart contract or any network of smart contracts, or other 
similar technology.
(11) Distributed ledger protocol.--The term ``distributed 
ledger protocol'' means publicly available source code of a 
distributed ledger that is executed by the network participants 
of a distributed ledger to facilitate its functioning, or other 
similar technology.
(12) Distributed ledger system.--The term ``distributed 
ledger system'' means a distributed ledger (together with its 
distributed ledger protocol), a distributed ledger application, 
or a network of distributed ledger applications.
(13) Related person.--The term ``related person'', with 
respect to an ancillary asset originator or an ancillary 
asset--
(A) means--
(i) any person that is, or within the 
preceding 36-month period was--
(I) a founder or person serving in 
a similar capacity with respect to the 
ancillary asset originator; and
(II) a beneficial owner of not less 
than 4 percent of the total amount of 
outstanding units of an ancillary asset 
associated with the ancillary asset 
originator;
(ii) any person that is, or in the 
preceding 12-month period was, an executive 
officer, director, trustee, general partner, 
owner of more than 10 percent of any class of 
equity shares of the ancillary asset 
originator, or person serving in a similar 
capacity with respect to the ancillary asset 
originator;
(iii) any person, or group of persons under 
common control, that beneficially owns, or in 
the preceding 6-month period owned, 10 percent 
or more of the total amount of outstanding 
units of the ancillary asset; and
(iv) any person, or group of persons under 
common control, that beneficially owns, or in 
the preceding 6-month period owned, covered 
tokens (as that term is defined in section 
104(a)) that equal not less than 2 percent of 
the total amount of outstanding units of the 
ancillary asset; and
(B) does not include a decentralized governance 
system.
(14) Securities laws.--The term ``securities laws'' has the 
meaning given the term in section 3(a) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78c(a)).
(15) Smart contract.--The term ``smart contract'' means a 
self-executing contract or program that--
(A) is stored on a distributed ledger system; and
(B) automatically executes or enforces digital 
asset transactions upon the occurrence of explicit, 
pre-determined conditions encoded in the contract or 
program, without intervention, other than to provide 
data, by any entity or natural person.

TITLE I--RESPONSIBLE SECURITIES INNOVATION

SEC. 101. SHORT TITLE.

This title may be cited as the ``Lummis-Gillibrand Responsible 
Financial Innovation Act of 2026''.

SEC. 102. DISCLOSURE REQUIREMENTS FOR CERTAIN TRANSACTIONS INVOLVING 
ANCILLARY ASSETS.

(a) In General.--The Securities Act of 1933 (15 U.S.C. 77a et seq.) 
is amended by inserting after section 4A (15 U.S.C. 77d-1) the 
following:

``SEC. 4B. REQUIREMENTS WITH RESPECT TO CERTAIN TRANSACTIONS INVOLVING 
ANCILLARY ASSETS.

``(a) Definitions.--In this section:
``(1) Ancillary asset.--The term `ancillary asset' means a 
network token, the value of which is dependent upon the 
entrepreneurial or managerial efforts of an ancillary asset 
originator or a related person, as those concepts are further 
specified by the Commission by regulation.
``(2) Ancillary asset originator.--
``(A) In general.--The term `ancillary asset 
originator' means, with respect to a particular 
ancillary asset, a person that (whether directly or 
through 1 or more subsidiary or controlled entities)--
``(i) initially offers, sells, or 
distributes the ancillary asset; or
``(ii) during the 12-month period beginning 
on the date on which the ancillary asset is 
initially offered, sold, or distributed, 
controls or causes the initial offer, sale, or 
distribution of that ancillary asset.
``(B) Joint and several liability.--For the 
purposes of this paragraph, if the person that 
initially offered, sold, or distributed an ancillary 
asset (or otherwise sold, distributed, controlled, or 
caused the initial offer, sale, or distribution of the 
ancillary asset) did not receive the largest amount of 
those ancillary assets distributed in the 12-month 
period following the commencement of that offer, sale, 
or distribution, then that person, solely for purposes 
of subsection (c), shall be jointly and severally 
considered to be an ancillary asset originator with 
respect to that ancillary asset (with the person that 
controlled such offer, sale, or distribution) along 
with the person (including a person under direct or 
indirect control of that person) that received the 
largest amount of those ancillary assets in that 
period, other than ancillary assets received--
``(i) in an intermediary capacity;
``(ii) solely through a gratuitous 
distribution;
``(iii) through an offer, sale, or 
distribution of a security to the public 
registered under section 5; or
``(iv) otherwise in a broad and public 
manner that the Commission determines, pursuant 
to regulation, should not subject the person to 
disclosure requirements under subsection (d).
``(C) Rulemaking.--Not later than 360 days after 
the date of enactment of this section, the Commission 
shall, after providing notice and the opportunity for 
comment, issue rules regarding the circumstances under 
which persons that are jointly and severally considered 
an ancillary asset originator pursuant to subparagraph 
(B) are responsible for furnishing the disclosures 
required under subsection (d) on behalf of the 
ancillary asset originator.
``(3) Certification covered party.--The term `certification 
covered party' means--
``(A) an ancillary asset originator;
``(B) a subsidiary of the ancillary asset 
originator;
``(C) a related person of the ancillary asset 
originator; or
``(D) any entity that directly or indirectly 
controls or is controlled by a common entity with the 
ancillary asset originator.
``(4) Decentralized governance system; digital asset; 
digital asset intermediary; related person; securities laws.--
The terms `decentralized governance system', `digital asset', 
`digital asset intermediary', `related person', and `securities 
laws' have the meanings given those terms in section 2 of the 
Digital Asset Market Clarity Act.
``(5) Gratuitous distribution.--
``(A) In general.--The term `gratuitous 
distribution'--
``(i) means a distribution of a network 
token, including a distribution effected by an 
agent or other service provider engaged solely 
in an administrative or ministerial capacity, 
in exchange for not more than a nominal value 
of cash, property, services, or other assets in 
a broad, equitable, and non-discretionary 
manner; and
``(ii) includes, without limitation, the 
mechanisms and methods of distribution 
described in subparagraph (B).
``(B) Mechanisms and methods of distribution.--The 
mechanisms and methods of distribution described in 
this subparagraph are the following:
``(i) Self staking.--The distribution of a 
unit of a network token, as a programmatic 
result of validating or staking activity for a 
distributed ledger system's consensus 
mechanism, including the staking of a network 
token, and the operation of a node, validator, 
or substantially similar software for such 
activity where the owner of the staked network 
token and the operator of the node, validator, 
or substantially similar software are the same 
person or entity.
``(ii) Self-custodial staking with a third 
party.--The distribution of a unit of a network 
token, as a programmatic result of validating 
or staking activity for a distributed ledger 
system's consensus mechanism, including the 
staking of a network token, and the operation 
of a node, validator, or substantially similar 
software for such activity in which--
``(I) the owner of the staked 
network token, and operator of the 
node, validator, or substantially 
similar software for such activity are 
different persons or entities; and
``(II) the operator of the node, 
validator, or substantially similar 
software does not maintain custody or 
control of the staked network token.
``(iii) Liquid staking.--The distribution 
of network tokens, as the issuance, transfer, 
or redemption of liquid staking tokens 
representing a pro rata interest in staked 
network tokens, and their associated rewards, 
provided that such tokens are issued as 
administrative or ministerial receipts and are 
not providing discretionary management 
authority.
``(iv) Custodial and ancillary staking 
services.--
``(I) In general.--Subject to the 
rules issued pursuant to subclause 
(II), the provision of custodial or 
ancillary staking services enabling the 
owner of a network token to participate 
in validating or staking activity for a 
distributed ledger system's consensus 
mechanism that results in the 
programmatic distribution of a unit of 
a network token, provided that such 
custodial or ancillary services are 
exclusively administrative or 
ministerial in nature.
``(II) Rulemaking to define the 
custodial and ancillary staking 
services.--The Commission shall issue 
rules defining the custodial and 
ancillary staking services described in 
subclause (I) that are exclusively 
administrative or ministerial in 
nature, consistent with what is 
necessary or appropriate for the public 
interest or for the protection of 
investors.
``(v) Programmatic and automated 
distributions.--The automated, programmatic, 
protocol-defined, or rules-based distribution 
of network tokens achieved through the 
transparent functioning of a distributed ledger 
system, a distributed ledger, or distributed 
ledger applications, in which--
``(I) distributions occur pursuant 
to public, transparent, rules-based 
parameters that are publicly available 
and are accessible on a permissionless 
basis, without individualized or real-
time negotiation with recipients;
``(II) recipients receive network 
tokens as a direct, programmatic result 
of objective, verifiable network 
participation, consumption, or 
contribution, including consensus 
participation, data availability, 
bandwidth, governance, or use and 
interaction with the protocol or 
application;
``(III) the number of network 
tokens received is proportionate to the 
verifiable service, usage, or 
contribution;
``(IV) any expected utility or 
value of the network tokens arises 
primarily from decentralized network 
participation and market forces, rather 
than the discretionary actions of any 
single person or affiliated group; and
``(V) no person or group has 
unilateral authority to alter, 
restrict, or direct the issuance 
parameters or distribution mechanisms 
of the distributed ledger system, and 
any modification occurs only through a 
decentralized governance system.
``(vi) Technology-neutral clause.--The 
distribution employing a mechanism, protocol, 
or technology not specifically described in 
clauses (i) through (v), without regard to 
whether such mechanism, protocol, or technology 
is in existence at the time of enactment of 
this section, and without regard to terminology 
or underlying technical framework, provided 
such distribution meets the requirements 
described in subparagraph (A)(i).
``(6) Investment company.--The term `investment company' 
has the meaning given the term in section 3(a) of the 
Investment Company Act of 1940 (15 U.S.C. 80a-3(a)).
``(7) Network token.--
``(A) In general.--The term `network token' means a 
digital commodity that is intrinsically linked to a 
distributed ledger system and that derives, or is 
reasonably expected to derive, its value from the use 
of such distributed ledger system, and, pursuant to the 
Digital Asset Market Clarity Act and the amendments 
made by the Digital Asset Market Clarity Act, is 
treated as a non-security solely for purposes of the 
securities laws.
``(B) Disqualifying financial rights.--The term 
`network token' does not include any of the following:
``(i) Any security, consistent with the 
categories of disqualifying financial rights 
described in clause (ii).
``(ii) An investment contract or a 
certificate of interest or participation in any 
profit-sharing agreement that represents, gives 
the holder, or is substantially economically or 
functionally equivalent to, any of the 
following, as the Commission shall establish by 
rule:
``(I) A debt or equity interest, or 
an option on a debt or equity interest, 
in a person.
``(II) Liquidation rights with 
respect to a person.
``(III) An entitlement to, or a 
reasonable expectation of, an interest, 
dividend, or other payment, or direct 
or indirect transfer of value, from a 
person (other than a decentralized 
governance system).
``(IV) An express or implied 
financial interest in (including a 
limited partnership interest or 
interest in intellectual property of), 
or provided by, a person (other than a 
decentralized governance system).
``(iii) Any interest that is, represents, 
or is functionally equivalent to an interest in 
an investment company or a company (as defined 
in section 2 of the Investment Company Act of 
1940 (15 U.S.C. 80a-2)) that would be an 
investment company under section 3(a) of that 
Act (15 U.S.C. 80a-3(a)) but for the exclusions 
provided from that definition by section 3(c) 
of that Act (15 U.S.C. 80a-3(c)).
``(iv) Any interest that is, represents, or 
is functionally equivalent to an interest in 
any entity or person that is not an investment 
company but holds or will hold assets other 
than securities.
``(C) Rule of construction.--A digital commodity--
``(i) shall be deemed to be intrinsically 
linked to a distributed ledger system if the 
digital commodity is directly related to the 
functionality or operation of the distributed 
ledger system or to the activities or services 
for which the distributed ledger system is 
created or utilized; and
``(ii) shall not be disqualified from being 
deemed a network token due to the granting of 
economic interests or voting capabilities with 
respect to a distributed ledger system or its 
decentralized governance system, as further 
clarified by the Commission through the final 
rules adopted under section 105 of the Lummis-
Gillibrand Responsible Financial Innovation Act 
of 2026.
``(b) Treatment of Network Tokens and Transactions.--
``(1) In general.--The offer, sale, or distribution of an 
ancillary asset by, or caused by, an ancillary asset 
originator, including through an underwriter, shall be 
considered to be an offer, sale, or distribution of an 
investment contract involving an ancillary asset, except with 
respect to a gratuitous distribution.
``(2) Treatment as non-security.--Except as provided in 
this section, and subject to paragraph (3), a network token 
shall be treated as a non-security, to the extent materially 
consistent with the requirements and conditions of this 
section, for purposes of --
``(A) section 2(a)(1);
``(B) section 3(a) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78c(a));
``(C) section 2(a) of the Investment Company Act of 
1940 (15 U.S.C. 80a-2(a));
``(D) section 202(a) of the Investment Advisers Act 
of 1940 (15 U.S.C. 80b-2(a));
``(E) section 16 of the Securities Investor 
Protection Act of 1970 (15 U.S.C. 78lll); or
``(F) any applicable requirement of State law that 
is functionally equivalent to the provisions described 
in subparagraphs (A) through (E), including any 
provision of State law that directly or indirectly 
prohibits, limits, or imposes any conditions on the 
use, offer, sale, transfer, or disposition of a network 
token in a manner that is--
``(i) not substantially similar to 
prohibitions, limitations, or conditions 
imposed by that State relating to assets that 
are commodities under the laws of that State; 
and
``(ii) inconsistent with this section.
``(3) Secondary market treatment.--
``(A) In general.--Except as provided in this 
section (including the limitation under subparagraph 
(B)), and to the extent materially consistent with the 
requirements and conditions of this section, the offer, 
sale, or distribution of a network token by a person 
shall be treated as not involving the offer, sale, or 
distribution of a security under--
``(i) section 2(a)(1);
``(ii) the Securities Exchange Act of 1934 
(15 U.S.C. 78a et seq.);
``(iii) the Investment Company Act of 1940 
(15 U.S.C. 80a-1 et seq.);
``(iv) the Investment Advisers Act of 1940 
(15 U.S.C. 80b-1 et seq.);
``(v) the Securities Investor Protection 
Act of 1970 (15 U.S.C. 78aaa et seq.); and
``(vi) any applicable requirement of State 
law that is functionally equivalent to the 
provisions described in clauses (i) through 
(v), including any provision of State law that 
directly or indirectly prohibits, limits, or 
imposes any conditions on the use, offer, sale, 
transfer, or disposition of a network token in 
a manner that is--
``(I) not substantially similar to 
prohibitions, limitations, or 
conditions imposed by that State 
relating to assets that are commodities 
under the laws of that State; and
``(II) inconsistent with this 
section.
``(B) Limitation.--Subparagraph (A) shall not apply 
if the applicable network token is offered, sold, or 
distributed pursuant to the offer, sale, or 
distribution of a security by an ancillary asset 
originator or underwriter.
``(4) Treatment of gratuitous distributions.--
``(A) In general.--A gratuitous distribution, by 
itself, shall be presumed to not constitute an offer, 
sale, or distribution of a security for the purposes 
of--
``(i) section 2(a)(1);
``(ii) section 3(a) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78c(a));
``(iii) section 2(a) of the Investment 
Company Act of 1940 (15 U.S.C. 80a-2(a));
``(iv) section 202(a) of the Investment 
Advisers Act of 1940 (15 U.S.C. 80b-2(a));
``(v) section 16 of the Securities Investor 
Protection Act of 1970 (15 U.S.C. 78lll); or
``(vi) any applicable requirement of State 
law, or any provision of State law that is 
functionally equivalent to the provisions 
described in clauses (i) through (v), including 
any provision of State law that directly or 
indirectly prohibits, limits, or imposes any 
conditions on the use, offer, sale, transfer, 
or disposition of a network token in a manner 
that is--
``(I) not substantially similar to 
prohibitions, limitations, or 
conditions imposed by that State 
relating to assets that are commodities 
under the laws of that State; and
``(II) inconsistent with this 
section.
``(B) Savings clause.--Nothing in this paragraph 
may be construed to limit, impair, or otherwise affect 
the anti-fraud or anti-manipulation authorities of the 
Commission, the Commodity Futures Trading Commission, 
or a State regulator.
``(5) Prior certification.--
``(A) Submission and default treatment.--
``(i) In general.--
``(I) Presumption.--For purposes of 
this section, there shall be a 
rebuttable presumption that a network 
token, including a network token 
distributed in the manner described in 
paragraph (4), is an ancillary asset 
unless the originator of that network 
token, or a digital asset intermediary 
(as provided under subsection (c)(4)), 
submits to the Commission a completed 
written certification, supported by 
reasonable evidence, as defined by the 
Commission, sufficient to demonstrate 
that the network token is not an 
ancillary asset.
``(II) Contents.--A certification 
submitted under subclause (I) shall 
include a statement in accordance with 
subsection (d)(3)(B)(i).
``(ii) Notification.--The Commission shall 
notify the Commodity Futures Trading Commission 
of each certification made pursuant to clause 
(i) and of any final agency action with respect 
to that certification.
``(iii) Reciprocal notice.--The Commission 
shall receive a copy of any certification and 
supporting materials submitted to the Commodity 
Futures Trading Commission under section 203(d) 
of the Digital Commodity Intermediaries Act.
``(B) Automatic effectiveness.--A certification 
submitted under subparagraph (A) by an originator or a 
digital asset intermediary shall become effective upon 
the earlier of--
``(i) the date on which the Commission 
notifies the originator or digital asset 
intermediary in writing that the Commission 
does not object to the certification; or
``(ii) if the Commission has not issued a 
rebuttal to the originator or digital asset 
intermediary in accordance with subparagraph 
(C), 60 days after the date on which the 
originator or digital asset intermediary 
submits the certification.
``(C) Commission denial.--
``(i) Authority to deny.--Subject to 
clauses (ii) and (iii), the Commission may deny 
a certification submitted under subparagraph 
(A) by an originator or digital asset 
intermediary only during the 60-day period 
described in subparagraph (B)(ii) or upon 
determining, based on reasonable evidence, that 
a material change in circumstances has occurred 
after the submission of the certification, 
whether or not the certification has taken 
effect.
``(ii) Notice of intent to deny.--If the 
Commission intends to deny a certification 
submitted under subparagraph (A), the 
Commission shall--
``(I) either not later than 20 
business days after the date on which 
the certification is submitted, or 
promptly after determining that a 
material change in circumstances has 
occurred, provide to the applicable 
originator or digital asset 
intermediary notice of the intent of 
the Commission to deny that 
certification; and
``(II) provide to the applicable 
originator or digital asset 
intermediary a 10-day period following 
the provision of notice under subclause 
(I) during which--
``(aa) interested persons 
shall have an opportunity to 
submit written data, views, and 
arguments relating to that 
certification; and
``(bb) the Commodity 
Futures Trading Commission may, 
at the discretion of the 
Commodity Futures Trading 
Commission, submit input 
regarding whether the 
applicable asset--

``(AA) satisfies 
the requirements for 
being considered an 
ancillary asset; or

``(BB) includes any 
disqualifying financial 
right described in 
subsection (a)(7)(B).

``(iii) Requirements after notice of 
intent.--After the 10-day period described in 
clause (ii)(II), the Commission shall--
``(I) upon request of the 
applicable originator or digital asset 
intermediary, provide an opportunity 
for the oral presentation of data, 
views, and arguments by certification 
covered parties;
``(II) have a vote of the 
Commission (which, notwithstanding 
section 4A of the Securities Exchange 
Act of 1934 (15 U.S.C. 78d-1), may not 
be delegated to an employee or employee 
board or to any individual 
Commissioner) to deny the certification 
after a finding that the applicable 
asset--
``(aa) is an ancillary 
asset; or
``(bb) includes any 
disqualifying financial right 
described in subsection 
(a)(7)(B); and
``(III) notify the Commodity 
Futures Trading Commission of each 
denial made under subclause (II).
``(iv) Interested person.--For purposes of 
this subparagraph, the term `interested person' 
means, with respect to a network token--
``(I) the ancillary asset 
originator with respect to that network 
token (referred to in this clause as 
`the originator');
``(II) a subsidiary of the 
originator;
``(III) a related person of the 
originator;
``(IV) any entity that directly or 
indirectly controls or is controlled by 
a common entity with the originator;
``(V) any broker or dealer (as 
those terms are defined in section 3(a) 
of the Securities Exchange Act of 1934 
(15 U.S.C. 78c(a))), or an exchange 
registered pursuant to section 6 of 
that Act (15 U.S.C. 78f), that operates 
in connection with digital assets; or
``(VI) any person registered with 
the Commodity Futures Trading 
Commission that operates or proposes to 
operate in connection with digital 
assets.
``(D) Certification filed by digital asset 
intermediary.--
``(i) In general.--A certification 
submitted by a digital asset intermediary under 
this paragraph shall only become effective if--
``(I) the digital asset 
intermediary has--
``(aa) conducted a 
reasonable inquiry of publicly 
available information, 
appropriate under the 
circumstances, regarding 
whether the applicable 
originator has engaged in 
entrepreneurial and managerial 
efforts with respect to the 
applicable network token during 
the most recent 180-day period, 
or is likely to engage in those 
efforts in the future; and
``(bb) concluded that the 
efforts described in item (aa) 
have not occurred or are not 
reasonably likely to occur; and
``(II) subject to clause (ii), the 
applicable originator has certified 
that there is not (and, during the most 
recent 180-day period, there has not 
been) material, non-public information 
regarding entrepreneurial or managerial 
efforts with respect to the applicable 
network token in the possession of the 
originator or a related party.
``(ii) Limitation.--Clause (i)(II) shall 
not be required if the applicable digital asset 
intermediary, after a reasonable inquiry, 
appropriate under the circumstances, determines 
that the applicable originator, or any person 
jointly and severally liable pursuant to 
subsection (a)(2)(B), is not capable of 
submitting the applicable certification.
``(E) Final agency action.--Denial under this 
paragraph constitutes final agency action reviewable 
under applicable law.
``(F) Tolling.--Any applicable period specified in 
this paragraph may be tolled, for periods of not longer 
than 60 days, during the 3-year period following the 
effective date of the Digital Asset Market Clarity Act, 
upon a showing in writing that the originator or 
digital asset intermediary has not substantially 
responded to a request for information from the 
Commission within a reasonable time.
``(G) Withdrawal.--An originator or digital asset 
intermediary may withdraw a certification submitted 
under subparagraph (A) at any time before approval.
``(H) Designated commission office.--The Commission 
shall designate an office that shall--
``(i) acknowledge receipt of certifications 
submitted under subparagraph (A);
``(ii) support those seeking certification 
under subparagraph (A) by providing guidance 
regarding the mechanics of preparing and 
submitting those certifications; and
``(iii) route certifications submitted 
under subparagraph (A), together with any 
associated comments or recommendations, to the 
appropriate division or office of the 
Commission for review.
``(I) Misstatements or omissions.--Any material 
misstatement or omission to state a material fact, 
including with respect to continuing compliance, in a 
certification that has become effective under this 
paragraph shall constitute grounds for the Commission, 
consistent with the securities laws, to issue an order 
denying, suspending, or revoking the effectiveness of 
the certification and to pursue any appropriate 
enforcement action.
``(c) Disclosure Requirements for Certain Transactions Involving 
Ancillary Assets.--
``(1) Specified initial and periodic disclosure 
requirements.--
``(A) In general.--An ancillary asset originator 
shall be subject to the initial and periodic disclosure 
requirements under subsection (d) upon the occurrence 
of the earlier of the following:
``(i) Any offer, sale, or distribution of 
an ancillary asset after the effective date of 
the Digital Asset Market Clarity Act by, or 
that is caused by, that ancillary asset 
originator pursuant to--
``(I) Regulation Crypto, as adopted 
pursuant to section 103 of the Lummis-
Gillibrand Responsible Financial 
Innovation Act of 2026;
``(II) the filing of an effective 
registration statement under this Act;
``(III) the filing of an offering 
statement described in section 3(b)(2); 
or
``(IV) an offering conducted 
pursuant to section 4(a)(6).
``(ii)(I) The first secondary market offer, 
sale, or distribution of an ancillary asset in 
the United States after the effective date of 
the Digital Asset Market Clarity Act that 
constitutes a public offering, whether by the 
ancillary asset originator or any other person.
``(II) For the purposes of subclause (I), 
the term `public offering' shall be interpreted 
consistent with the meaning of that term under 
section 4(a)(2).
``(B) Exclusion.--Subparagraph (A) shall not apply 
if--
``(i) the aggregate gross proceeds from the 
offer, sale, or distribution of the applicable 
ancillary asset (together with any related 
assets sold in those offers, sales, or 
distributions) were $5,000,000 or less 
(adjusted for inflation) during the 12-month 
period immediately following the date of the 
first such offer, sale, or distribution; or
``(ii) the average daily aggregate value of 
trading in the applicable ancillary asset in 
all spot markets open to the public in the 
United States for which trading volume is 
generally available is $5,000,000 or less 
(adjusted for inflation) during the 12-month 
period (or such shorter period as the 
Commission may determine) immediately following 
the commencement of compliance with the 
disclosure requirements under subsection (d) 
(as determined pursuant to paragraph (2) of 
this subsection), based on the knowledge of the 
ancillary asset originator after due inquiry 
(or, if the ancillary asset has not yet traded 
on spot markets open to the public in the 
United States, the trading volume is reasonably 
expected to be $5,000,000 or less (adjusted for 
inflation) during the 12-month period 
immediately following the reporting date 
specified by paragraph (2)).
``(C) Calculation.--For the purposes of this 
paragraph, the calculation of daily aggregate value 
shall be based on a reasonable calculation of public 
data.
``(2) Commencement of compliance with specified initial and 
periodic disclosure requirements.--
``(A) In general.--An ancillary asset originator 
subject to the requirements of paragraph (1) shall 
comply with the disclosure requirements under 
subsection (d)--
``(i) before--
``(I) any initial offer, sale, or 
distribution described in paragraph 
(1)(A)(i); or
``(II) a secondary market offer, 
sale, or distribution described in 
paragraph (1)(A)(ii); and
``(ii) semiannually thereafter.
``(B) Exclusion.--The requirements of this 
paragraph shall not apply to an offer, sale, or 
distribution of an ancillary asset that occurs after 
the effective date of the Digital Asset Market Clarity 
Act if an ancillary asset originator has submitted a 
certification under subsection (d)(3)(B) and the 
Commission has not denied that certification within a 
60-day period after the completion of the process under 
that subsection.
``(3) Transition rule.--
``(A) In general.--An ancillary asset originator 
that initially offered, sold, or distributed (or 
otherwise controlled or caused the offer, sale, or 
distribution of) a security involving an ancillary 
asset before the effective date of the Digital Asset 
Market Clarity Act shall comply with the periodic 
disclosure requirements under subsection (d), if 
applicable, beginning on the date that is 1 year after 
that effective date.
``(B) Effect on certification.--An ancillary asset 
originator, or any other certification covered party, 
subject to this paragraph that meets the requirements 
of subsection (d)(3) may furnish a certification as 
provided in that subsection without complying with the 
periodic disclosure requirements under subsection (d), 
if the Commission has not denied that certification 
within a 60-day period after the completion of the 
process under that subsection.
``(C) Period of disclosures.--The disclosures 
required under subparagraph (A) shall apply with 
respect to the 3-year period preceding the effective 
date described in that subparagraph.
``(4) Digital asset intermediaries.--
``(A) In general.--Other than as provided under 
subparagraph (B), with respect to an ancillary asset 
that is listed for trading on a digital asset 
intermediary, that digital asset intermediary may, in 
lieu of the applicable ancillary asset originator, 
satisfy the requirements of subsection (d) in 
accordance with such rules as the Commission shall 
jointly adopt with the Commodity Futures Trading 
Commission.
``(B) Allocation of disclosure responsibility.--
``(i) Originator filings.--A digital asset 
intermediary may not satisfy the requirements 
of subsection (d) in lieu of the applicable 
ancillary asset originator, if--
``(I) the ancillary asset 
originator is incorporated, organized, 
or otherwise registered under the laws 
of the United States or of any State; 
and
``(II) the applicable ancillary 
asset is--
``(aa) offered, sold, or 
distributed after the effective 
date of the Digital Asset 
Market Clarity Act pursuant 
to--

``(AA) an 
investment contract 
that is offered, sold, 
or distributed pursuant 
to Regulation Crypto, 
as adopted pursuant to 
section 103 of the 
Lummis-Gillibrand 
Responsible Financial 
Innovation Act of 2026;

``(BB) the filing 
of an effective 
registration statement 
under this Act (other 
than a registration 
statement on the form 
described in section 
239.31 or 239.33 of 
title 17, Code of 
Federal Regulations, or 
the successor to either 
such form);

``(CC) the filing 
of an offering 
statement described in 
section 3(b)(2); or

``(DD) an offering 
conducted pursuant to 
section 4(a)(6); or

``(bb) first offered or 
sold after the effective date 
of the Digital Asset Market 
Clarity Act in a transaction 
described in paragraph 
(1)(A)(ii).
``(ii) Commission determination.--
``(I) In general.--If, after 
notice, comment, and the opportunity 
for a hearing, the Commission 
determines that it is in the public 
interest or necessary for the 
protection of investors, including with 
respect to an ancillary asset 
originator incorporated or organized in 
a foreign jurisdiction, the Commission 
may require an ancillary asset 
originator, after a transition period, 
to file the disclosures required under 
subsection (d).
``(II) Extraterritorial effect.--
Subclause (I) shall apply 
extraterritorially.
``(C) Standard of liability.--Notwithstanding any 
other provision of this Act, it shall be unlawful for a 
digital asset intermediary to file disclosures under 
subsection (d) pursuant to this paragraph that contain 
any material misstatement or omission to state a 
material fact required to be stated therein, or 
necessary to make the statements therein not 
misleading, unless that digital asset intermediary did 
not know (and, in the exercise of reasonable care, 
could not have known) of that misstatement or omission.
``(5) Failure to comply.--Subject to the requirements of 
this section, an ancillary asset shall not be listed for 
trading on a digital asset intermediary if the Commission and 
the Commodity Futures Trading Commission jointly find that the 
ancillary asset originator that initially offered, sold, or 
distributed the ancillary asset after the effective date of the 
Digital Asset Market Clarity Act (or, if a digital asset 
intermediary is satisfying the requirements of this subsection 
in lieu of that ancillary asset originator in accordance with 
paragraph (4), such digital asset intermediary) has materially 
failed to furnish the required disclosures under this 
subsection after a reasonable opportunity to cure, as provided 
by joint rule of the Commission and the Commodity Futures 
Trading Commission in a manner that is consistent with the 
considerations under subsection (d)(5).
``(d) Specified Initial and Periodic Disclosure Requirements.--
``(1) In general.--
``(A) Furnishing of information.--An ancillary 
asset originator that is subject to the requirements of 
paragraph (1) or (3) of subsection (c), or a digital 
asset intermediary acting in accordance with subsection 
(c)(4), shall furnish to the Commission, in such form 
as the Commission may prescribe by rule after providing 
notice and the opportunity for comment, and until the 
requirement terminates under paragraph (3) of this 
subsection, the information described in paragraph (2) 
of this subsection, to the extent that the information 
is material and known, or reasonably knowable, to the 
ancillary asset originator or digital asset 
intermediary.
``(B) Requirements for rules.--A rule prescribed 
under subparagraph (A) shall be reasonably tailored, 
including by adjusting the scope, form, and content of 
required disclosures, based on--
``(i) the size of the applicable ancillary 
asset originator in accordance with section 
108(a) of the Lummis-Gillibrand Responsible 
Financial Innovation Act of 2026;
``(ii) the aggregate amount of ancillary 
assets offered, sold, or distributed by the 
applicable ancillary asset originator to the 
public in the United States; and
``(iii) whether the applicable ancillary 
asset and any related distributed ledger system 
is subject to coordinated control, as defined 
by the Commission pursuant to rules adopted 
under section 104(b) of the Lummis-Gillibrand 
Responsible Financial Innovation Act of 2026.
``(2) Categories of information.--The information required 
under paragraph (1) shall include the following with respect to 
the applicable ancillary asset originator and the related 
ancillary asset:
``(A) Basic corporate information regarding the 
ancillary asset originator and the ancillary asset 
activities of the ancillary asset originator, which may 
include the following items, as the Commission shall 
determine by rule:
``(i) The experience of the ancillary asset 
originator (or persons controlling the 
ancillary asset originator) in developing 
ancillary assets.
``(ii) If the ancillary asset originator 
(or persons controlling the ancillary asset 
originator) has previously distributed 
ancillary assets, information on the subsequent 
distribution history of those ancillary assets, 
including price history, if the information is 
publicly available.
``(iii) The activities that the ancillary 
asset originator has taken in the relevant 
disclosure period, and is projecting to take in 
the 1-year period following the submission of 
the disclosure, with respect to promoting the 
use, value, or resale of the ancillary asset 
(including any activity to facilitate the 
creation or maintenance of a trading market for 
the ancillary asset and any distributed ledger 
system, application, or system that uses the 
ancillary asset).
``(iv) The anticipated cost of the 
activities of the ancillary asset originator 
described in clause (iii), whether the 
ancillary asset originator has unencumbered, 
liquid funds equal to that amount, and, if the 
ancillary asset originator does not have those 
funds, the anticipated plan of operations of 
the ancillary asset originator for the portion 
of time where those liquid funds are less than 
the anticipated cost of the activities of the 
ancillary asset originator.
``(v) The experience of the ancillary asset 
originator with the use of a distributed ledger 
system or distributed ledger technology.
``(vi) The identities and expertise of the 
board of directors (or equivalent body) and 
senior management of the ancillary asset 
originator, the experience or functions of whom 
are material to the development or value of the 
ancillary asset, as well as any personnel 
changes relating to the ancillary asset 
originator during the period covered by the 
disclosure.
``(vii) Financial statements of the 
ancillary asset originator that are--
``(I) if the aggregate amount of 
such ancillary assets offered, sold, or 
distributed to the public does not 
exceed $25,000,000 in gross proceeds, 
reviewed by a public accountant that is 
independent of the ancillary asset 
originator; or
``(II) if the aggregate amount of 
such ancillary assets offered, sold, or 
distributed to the public exceeds 
$25,000,000 in gross proceeds, audited 
by a public accountant that is 
independent of the ancillary asset 
originator.
``(viii) A description of any legal 
proceedings in which the ancillary asset 
originator is engaged.
``(ix) Risk factors arising from the 
activities of the ancillary asset originator 
with respect to the ancillary asset, and not 
generally applicable to other kinds of 
ancillary assets, that may limit the utility or 
liquidity of the ancillary asset, investor 
demand with respect to the ancillary asset, or 
the market price or value of the ancillary 
asset.
``(x) Information relating to ownership of 
the ancillary asset by--
``(I) persons owning not less than 
10 percent of any class of equity 
security or other ownership interest of 
the ancillary asset originator; and
``(II) the board of directors (or 
equivalent body) and senior management 
of the ancillary asset originator, if 
those individuals, in the aggregate, 
own not less than 5 percent of the 
ancillary asset.
``(xi) For any material transactions 
involving the ancillary asset between the 
ancillary asset originator and any related 
person, a description, in the aggregate, of the 
parties, the number of ancillary assets 
involved, and a summary of any material 
features of the transactions, including any 
material terms or ongoing obligations.
``(xii) A summary, in the aggregate by 
year, of transactions in ancillary assets 
during the 4-year period preceding the 
furnishing of the disclosure, by the ancillary 
asset originator and persons that directly or 
indirectly control the ancillary asset 
originator.
``(xiii) Purchases or similar acquisitions 
of ancillary assets by the ancillary asset 
originator and affiliates of the ancillary 
asset originator.
``(xiv) A statement, made in good faith, 
from the chief financial officer of the 
ancillary asset originator or equivalent 
official, stating whether the ancillary asset 
originator reasonably expects to maintain or 
have the financial resources to continue 
business as a going concern for the 12-month 
period following the furnishing of the 
disclosure, absent a change in circumstances.
``(xv) The current state and timeline for 
the development of the distributed ledger 
system to which the ancillary asset relates, 
detailing if, how, and when the distributed 
ledger system and the related ancillary asset 
are intended to no longer be subject to 
coordinated control, including by related 
persons, if the distributed ledger system has 
not yet received a certification under section 
104(d) of the Lummis-Gillibrand Responsible 
Financial Innovation Act of 2026.
``(B) Economic and technical information relating 
to the ancillary asset, which may include the following 
items, as the Commission shall determine by rule:
``(i) A general description of the 
ancillary asset and the distributed ledger 
system to which that ancillary asset relates, 
including--
``(I) a plain-English description 
of how the applicable distributed 
ledger, distributed ledger system, or 
distributed ledger application 
functions;
``(II) the intended or known 
functionality and uses of the ancillary 
asset and any associated fees for use 
or disposition of the ancillary asset;
``(III) the market for the 
ancillary asset;
``(IV) other assets or services 
that may compete with the ancillary 
asset;
``(V) the total supply of the 
ancillary asset or the manner and rate 
of the ongoing production or creation 
of the ancillary asset; and
``(VI) the governance and consensus 
mechanism for the ancillary asset and 
that distributed ledger system, if 
applicable, including for validating 
transactions and implementing changes 
to the distributed ledger system, the 
method of generating or mining 
ancillary assets, and any process for 
burning or destroying units of the 
ancillary asset on a distributed ledger 
system.
``(ii) If the ancillary asset originator 
has offered, sold, or otherwise provided 
ancillary assets to affiliates, investors, 
employees, intermediaries, or resellers, a 
description of the amount of assets offered, 
sold, or otherwise provided to such persons and 
a summary of any material resale restrictions 
or other material obligations arising from 
related contracts, agreements, or other 
arrangements.
``(iii) If ancillary assets were 
distributed by the ancillary asset originator 
without charge or upon meeting certain 
conditions, a description of the distributions, 
in the aggregate, along with the identity of 
any recipient that received more than 5 percent 
of the total amount of ancillary assets 
(calculated as a percentage of the total supply 
of such asset at the time of distribution).
``(iv) The amount of ancillary assets owned 
by the ancillary asset originator.
``(v) For the 12-month period following the 
furnishing of the disclosure, a description of 
the current state and anticipated timeline for 
the development of the distributed ledger 
system to which that ancillary asset relates, 
including--
``(I) plans of the ancillary asset 
originator to support (or to cease 
supporting) the use or development of 
the ancillary asset, including markets 
for the ancillary asset and that 
distributed ledger system;
``(II) the various roles that exist 
or are intended to exist in connection 
with any applicable distributed ledger, 
distributed ledger system, or 
distributed ledger application, such as 
users, service providers, developers, 
transaction validators, and governance 
participants;
``(III) a discussion of any 
mechanisms by which control or 
authority are exerted with respect to 
that distributed ledger system, if 
applicable, or the related ancillary 
asset; and
``(IV) any critical operational 
dependencies of any applicable 
distributed ledger, distributed ledger 
system, or distributed ledger 
application or of the related ancillary 
asset.
``(vi) Risk factors that may materially 
affect the liquidity of the ancillary asset, 
investor demand with respect to the ancillary 
asset, or the market price or value of the 
ancillary asset.
``(vii) To the extent available to the 
ancillary asset originator, the average daily 
price for a constant unit of value of the 
ancillary asset during the relevant reporting 
period, as well as the 12-month high and low 
prices for the ancillary asset, as calculated 
based on the 3 exchanges with the largest 
trading volume in that ancillary asset.
``(viii) If applicable, and subject to 
cybersecurity best practices, information 
relating to any external audit of the code and 
functionality of the ancillary asset, including 
the entity performing the audit and the 
experience of the entity in conducting similar 
audits.
``(ix) Information relating to custodial 
services available for the ancillary asset.
``(x) Information on intellectual property 
rights claimed or disputed relating to the 
ancillary asset.
``(xi) A description of the technology 
underlying the initial distribution and trading 
of the ancillary asset, including the source 
code for the ancillary asset, if applicable, 
and technical requirements for holding, 
accessing, and transferring the ancillary 
asset.
``(xii) If applicable, a description of the 
steps necessary to independently access, 
search, and verify the transaction history of 
the ancillary asset.
``(C) In addition to the information expressly 
required to be included under subparagraphs (A) and 
(B), the ancillary asset originator or digital asset 
intermediary, as applicable, shall provide such further 
material information, if any, as may be necessary to 
ensure that the statements made in the disclosure are 
not, in light of the circumstances under which the 
statements are made, materially misleading.
``(3) Termination of requirements.--
``(A) Termination.--The obligation of an ancillary 
asset originator to provide disclosures under paragraph 
(1) shall terminate on the date that a certification 
becomes effective under subparagraph (B), including 
through an approval or deemed approval.
``(B) Certification.--
``(i) In general.--A certification covered 
party may submit to the Commission a 
certification, based on the knowledge of the 
certification covered party after due inquiry 
and supported by reasonable evidence, that 
states--
``(I) that--
``(aa) during the 180-day 
period preceding the date on 
which the certification covered 
party submits the 
certification, and as of the 
date of submission, no 
certification covered party has 
engaged in more than a nominal 
level of entrepreneurial or 
managerial efforts (as defined 
by the Commission by rule), 
which shall not, for the 
purposes of this clause, 
include providing 
administrative services alone;
``(bb) any efforts 
described in item (aa) were not 
a primary factor in determining 
the value of the related 
ancillary asset (which may 
include that any essential 
promises made by the 
certification covered party 
have been fulfilled); and
``(cc) a certification is 
effective under section 104(d) 
of the Lummis-Gillibrand 
Responsible Financial 
Innovation Act of 2026;
``(II) in good faith that the 
certification covered party does not 
reasonably expect there to be any 
efforts that would render the 
certification covered party unable to 
provide a new certification following 
the date of the certification; and
``(III) that substantially all 
material information that is reasonably 
expected to contribute to the value of 
the ancillary assets offered, sold, or 
distributed to the public by the 
ancillary asset originator is, and is 
reasonably expected to remain, 
available to the public.
``(ii) Change in circumstances.--
``(I) Effectiveness of the 
certification.--A certification under 
clause (i) shall remain effective until 
the date on which any certification 
covered party engages in 
entrepreneurial or managerial efforts 
that would render the certification 
covered party unable to meet the 
standards of the certification.
``(II) New disclosures required.--
On and after the date described in 
subclause (I), the certification 
covered party undertaking efforts 
described in that subclause shall be 
responsible for furnishing to the 
Commission the disclosures required 
under paragraph (1), including a 
description of the change in 
circumstances.
``(III) Periodic disclosures.--The 
furnishing of disclosures pursuant to 
subclause (II) shall restart the 
schedule for periodic disclosures under 
paragraph (1).
``(IV) Prior certifications.--A 
certification submitted under clause 
(i) before a change in circumstances 
shall not be deemed false or misleading 
solely by reason of subsequent 
reengagement under this clause.
``(iii) Commission denial.--
``(I) In general.--The Commission 
may deny a certification submitted 
under clause (i) by a certification 
covered party by--
``(aa) issuing a written 
notice of objection to the 
certification submitted under 
clause (i) or upon determining 
that more than a nominal level 
of entrepreneurial or 
managerial efforts has been 
undertaken by any certification 
covered party after the 
submission of the 
certification; and
``(bb) providing to the 
certification covered party 10 
days notice of the intent of 
the Commission to deny that 
certification, during which 
period interested persons shall 
have an opportunity to submit 
written data, views, and 
arguments relating to that 
certification.
``(II) Requirements after notice of 
intent.--After the 10-day period 
described in subclause (I)(bb), the 
Commission shall--
``(aa) upon request of the 
certification covered party, 
provide an opportunity for the 
oral presentation of data, 
views, and arguments by any 
interested persons; and
``(bb) have a vote of the 
Commission on whether to grant 
or deny the certification, 
based on a finding as to 
whether the applicable 
ancillary asset meets the 
standard for certification 
under clause (i).
``(III) Final agency action.--
Denial under this clause constitutes 
final agency action reviewable under 
applicable law.
``(iv) Deemed approval.--If the Commission 
fails to issue a written notice of objection or 
non-objection within 90 days after submission 
of a certification under clause (i), the 
certification shall be deemed approved by the 
Commission.
``(v) Withdrawal.--A certification covered 
party may withdraw a certification submitted 
under clause (i) at any time before that 
certification is approved or denied.
``(vi) Designated commission office.--The 
Commission shall designate an office that 
shall--
``(I) acknowledge the receipt of 
certifications submitted under clause 
(i);
``(II) support certification 
covered parties seeking certification 
under clause (i) by providing guidance 
regarding the mechanics of preparing 
and submitting those certifications; 
and
``(III) route certifications 
submitted under clause (i), together 
with any associated comments or 
recommendations, to the appropriate 
division or office of the Commission 
for review.
``(vii) Advance review.--
``(I) In general.--A certification 
covered party may submit a 
certification under clause (i) before 
the offer, sale, or distribution of a 
network token.
``(II) Intended originator.--In 
submitting for a certification for 
advance review under subclause (I), a 
certification covered party shall 
identify the person intending to offer, 
sell, or distribute the applicable 
network token, and that person shall be 
treated as the applicable ancillary 
asset originator for the purposes of 
this subparagraph.
``(viii) Tolling.--Any applicable period 
specified in this subparagraph may be tolled, 
for periods of not longer than 60 days, during 
the 3-year period following the effective date 
of the Digital Asset Market Clarity Act, upon a 
showing in writing that the submitting 
certification covered party has not 
substantially responded to a request for 
information from the Commission within a 
reasonable time.
``(ix) Misstatements or omissions.--Any 
material misstatement or omission to state a 
material fact, including with respect to 
continuing compliance, in a certification that 
has become effective under this subparagraph 
shall constitute grounds for the Commission, 
consistent with the securities laws, to--
``(I) issue an order denying, 
suspending, or revoking the 
effectiveness of that certification; 
and
``(II) pursue any appropriate 
enforcement action.
``(4) Voluntary disclosure.--An ancillary asset originator 
may voluntarily furnish to the Commission the information 
required under this subsection if the ancillary asset 
originator determines that it is reasonably likely that the 
ancillary asset originator will become subject to the 
requirements of paragraph (1) or (3) of subsection (c) in the 
future.
``(5) Rulemaking considerations.--In adopting rules under 
this subsection, the Commission shall--
``(A) require only such information as the 
Commission finds to be necessary or appropriate to 
protect investors, maintain fair, orderly, and 
efficient markets, and facilitate capital formation, 
innovation, and efficiency;
``(B) include in any final versions of those rules 
a cost-benefit analysis evaluating the effects of any 
such rule on innovation, efficiency, competition, 
maintaining fair and orderly markets, and capital 
formation, including the competitiveness of United 
States market participants; and
``(C) act jointly with the Commodity Futures 
Trading Commission to establish a process for 
implementing the requirements of this subsection, 
including with respect to listing and disclosures, that 
is consistent and coordinated with the listing process 
for digital asset intermediaries.
``(6) Limitations.--Rules adopted under this subsection 
shall not require the inclusion of financial statements of an 
ancillary asset originator, except with respect to the 
disclosure of financial information under paragraph (2).
``(e) Exemptions.--The Commission may, by order, exempt an 
ancillary asset originator or digital asset intermediary, or any class 
of ancillary asset originators or digital asset intermediaries, from 
specified requirements under subsection (d) if it is in the public 
interest or for the protection of investors, consistent with the 
purposes of this section and subject to such conditions as the 
Commission determines necessary to protect investors and in the public 
interest.
``(f) Confidential Treatment of Certain Information.--Subject to 
Commission rules and procedures, an ancillary asset originator required 
to furnish to the Commission disclosures under subsection (d), or a 
digital asset intermediary furnishing those disclosures in lieu of such 
an ancillary asset originator, may submit a request for confidential 
treatment of information included in such disclosures pursuant to 
procedures the Commission shall establish and that are modeled on or 
identical to section 230.406 of title 17, Code of Federal Regulations, 
or any successor regulation.
``(g) Effect of Failure to Comply.--The failure of an ancillary 
asset originator or digital asset intermediary to comply with a 
provision of this section shall not, by itself, cause an ancillary 
asset offered, sold, or distributed by that ancillary asset originator 
(or that the ancillary asset originator caused to be offered, sold, or 
distributed) to be a security under any applicable law.
``(h) Liability for False or Misleading Statements.--
``(1) In general.--It shall be unlawful for an ancillary 
asset originator, in any initial and periodic disclosure, 
certification, or other document furnished under this section, 
to make an untrue statement of a material fact or omit to state 
a material fact required to be stated therein or necessary to 
make the statements therein not misleading.
``(2) Rule of construction.--Nothing in this subsection may 
be construed as limiting the application of section 240.10b-5 
of title 17, Code of Federal Regulations, or any successor 
regulation, to false or misleading disclosure statements or 
preventing any private right of action otherwise available 
under the securities laws.
``(i) Special Disposition Restrictions by Related Persons.--
``(1) In general.--The Commission shall adopt rules, 
consistent with section 104 of the Lummis-Gillibrand 
Responsible Financial Innovation Act of 2026, establishing 
limitations on the disposition of certain ancillary assets with 
specified characteristics by related persons.
``(2) Considerations.--In adopting rules under paragraph 
(1), the Commission shall consider what is necessary or 
appropriate to protect investors, promote capital formation, 
and maintain fair and orderly markets, which may include the 
prevention of insider self-dealing or other abuses of a 
privileged position.
``(j) Safe Harbor for Forward-Looking Statements.--In any action 
against an ancillary asset originator or digital asset intermediary 
arising under this Act that is based on an untrue statement of a 
material fact or omission of a material fact necessary to make the 
statement not misleading, no liability shall arise with respect to any 
forward-looking statement (including any statement of plans, 
objectives, projections, expectations, or assumptions concerning future 
performance, financial position, development milestones, asset utility, 
system adoption, or market conditions) made in an ancillary asset 
disclosure, statement, or other document furnished pursuant to this 
section, if the statement is--
``(1) identified as forward-looking; and
``(2) accompanied by meaningful cautionary language that 
identifies important factors that could cause actual results to 
differ materially.
``(k) Transactions Before Effective Date.--
``(1) Primary transactions.--Notwithstanding any other 
provision of law, neither the Commission nor any private 
plaintiff may initiate, pursue, or maintain any action, or an 
appeal of an action, for a violation of section 5 or 12(a)(1) 
of this Act arising from any offer, sale, or distribution of 
ancillary assets occurring before the effective date of the 
Digital Asset Market Clarity Act, provided that the ancillary 
asset originator or a certification covered party complies with 
any applicable requirements under subsection (c)(3).
``(2) Primary transactions related to fraud.--Nothing in 
paragraph (1) shall limit the ability of the Commission to 
bring an action based on the anti-fraud or anti-manipulation 
authorities of the Commission.
``(3) Secondary transactions.--Notwithstanding any other 
provision of law, the offer, sale, or distribution of a network 
token by a person occurring before the effective date of the 
Digital Asset Market Clarity Act shall be treated as not 
involving the offer, sale, or distribution of a security 
under--
``(A) section 2(a)(1);
``(B) section 3(a) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78c(a));
``(C) section 2(a) of the Investment Company Act of 
1940 (15 U.S.C. 80a-2(a));
``(D) section 202(a) of the Investment Advisers Act 
of 1940 (15 U.S.C. 80b-2(a));
``(E) section 16 of the Securities Investor 
Protection Act of 1970 (15 U.S.C. 78lll); or
``(F) any applicable requirement of State law that 
is functionally equivalent to the provisions described 
in subparagraphs (A) through (E), including any 
provision of State law that directly or indirectly 
prohibits, limits, or imposes any conditions on the 
use, offer, sale, transfer, or disposition of a network 
token in a manner that is--
``(i) not substantially similar to 
prohibitions, limitations, or conditions 
imposed by that State relating to assets that 
are commodities under the laws of that State; 
and
``(ii) inconsistent with this section.
``(4) No inference of liability.--Nothing in paragraph (1), 
(2), or (3) may be construed as an admission, acknowledgment, 
or inference of liability for any act, transaction, or conduct 
occurring before the effective date of the Digital Asset Market 
Clarity Act.
``(5) Rules of construction.--Nothing in this subsection 
may be construed to--
``(A) impair vested rights or contractual 
obligations lawfully established before the effective 
date of the Digital Asset Market Clarity Act; or
``(B) limit the authority of the Commission to 
bring an action against an ancillary asset originator 
or a related person for securities fraud or 
manipulation in connection with a statement, a 
disclosure, or conduct by that ancillary asset 
originator or related person, except that the 
Commission may not exercise that authority to treat a 
network token as a security or regulate secondary 
market trading.
``(l) Rules of Construction.--Nothing in this section may be 
construed to--
``(1) preclude the Commission from bringing an appropriate 
action or entering into a settlement agreement relating to a 
violation or alleged violation of this section;
``(2) permit compliance with this section to be used in any 
administrative or judicial proceeding as evidence that an 
ancillary asset is a security;
``(3) prohibit the offer, sale, or distribution of a 
digital asset in reliance on an exemption from registration 
under this Act, other than Regulation Crypto (as adopted 
pursuant to section 103 of the Lummis-Gillibrand Responsible 
Financial Innovation Act of 2026); or
``(4) require more than 1 person to furnish the disclosures 
required under subsection (d), unless otherwise provided by the 
Commission by rule.
``(m) Anti-Evasion.--
``(1) Anti-evasion.--The Commission may issue such 
regulations as the Commission considers necessary or 
appropriate in the public interest or for the protection of 
investors to administer and prevent willful evasion of--
``(A) this section;
``(B) sections 103 and 104 of the Lummis-Gillibrand 
Responsible Financial Innovation Act of 2026; and
``(C) with respect to an ancillary asset originator 
and related persons, the securities laws amended by the 
Lummis-Gillibrand Responsible Financial Innovation Act 
of 2026.
``(2) Considerations.--In adopting rules under this 
section--
``(A) the form, label, and written documentation of 
an agreement, contract, or transaction, or an entity, 
shall not be dispositive in determining whether the 
agreement, contract, or transaction, or the entity, has 
been entered into or structured to willfully evade the 
requirements of this section;
``(B) the Commission may consider whether, based on 
the totality of facts and circumstances, the principal 
purpose of any arrangement, allocation of rights, 
interposition of entities, or sequencing of steps is to 
willfully circumvent the requirements of this section 
or the restrictions set forth in section 104 of the 
Lummis-Gillibrand Responsible Financial Innovation Act 
of 2026, by satisfying the literal terms while 
defeating the purpose and policy of this section;
``(C) for purposes of subparagraph (B), factors 
that may be considered, without being dispositive, in 
determining whether a principal purpose to willfully 
circumvent this section exists may include--
``(i) removal of a disqualifying financial 
right described in subsection (a)(7)(B) from 
the instrument coupled with its re-introduction 
through a substantially equivalent right held 
by a related person or controlled vehicle, 
including, by way of example, any nominally 
independent foundation, decentralized 
autonomous organization, laboratory, or similar 
arrangement;
``(ii) circular or non-commercial flows of 
value among related persons designed to 
simulate network utility; and
``(iii) timing of steps designed to 
trigger, accelerate, or delay certification or 
termination of disclosure obligations without a 
material change in circumstances relating to 
the asset; and
``(D) the Commission shall provide that evasion 
shall not have occurred if an agreement, contract, or 
transaction is entered into for a legitimate business 
purpose and is not structured with a principal purpose 
of willfully circumventing the requirements of this 
section.
``(n) Fiduciary Obligations.--
``(1) Fiduciary duties under state law.--Nothing in this 
section, or in any rule issued under this section, may be 
construed to limit, preempt, or otherwise affect any fiduciary 
duty of an ancillary asset originator, or of any director, 
officer, or controlling person of an ancillary asset 
originator, arising under the laws of any State.
``(2) Preservation of fiduciary and other duties to 
customers, clients, and shareholders.--Nothing in this section, 
or in any rule issued under this section, may be construed to 
limit, preempt, or otherwise affect any fiduciary duty that any 
person owes to a customer, client, or shareholder under any 
other provision of Federal or State law, including in 
connection with the offer, sale, transfer, distribution, or 
custody of an ancillary asset.
``(o) Savings Clause.--Except as provided by the Digital Asset 
Market Clarity Act and the amendments made by that Act, nothing in this 
section may be construed to limit the authority of the Commission under 
the securities laws.''.
(b) Rulemaking.--Not later than 360 days after the date of 
enactment of this Act, the Commission shall conduct a notice and 
comment rulemaking as necessary or appropriate to carry out section 4B 
of the Securities Act of 1933, as added by subsection (a).

SEC. 103. EXEMPTION AND RULEMAKING FOR CERTAIN TRANSACTIONS INVOLVING 
ANCILLARY ASSETS.

(a) Adoption of Regulation Crypto.--The Commission shall adopt 
rules under the Securities Act of 1933 (15 U.S.C. 77a et seq.) and the 
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), which shall be 
referred to collectively as ``Regulation Crypto'', to implement 
subsections (b), (c), and (d) of this section.
(b) Exemption for Certain Transactions Involving Ancillary 
Assets.--
(1) Exemption.--
(A) In general.--Rules adopted by the Commission 
under this section shall provide that the registration 
requirements of the Securities Act of 1933 (15 U.S.C. 
77a et seq.) shall not apply to an offer, sale, or 
distribution of an investment contract involving an 
ancillary asset, if the offer, sale, or distribution 
does not exceed the greater of--
(i) $50,000,000 in gross proceeds per 
calendar year for a period of not longer than 4 
years; or
(ii) 10 percent of the total dollar value 
of those ancillary assets that are outstanding, 
as of the date of that offer, sale, or 
distribution.
(B) Continued application of certain provisions.--
Sections 12(a)(2) and 17 of the Securities Act of 1933 
(15 U.S.C. 77l(a)(2), 77q) shall apply with respect to 
an offer, sale, or distribution of an investment 
contract involving an ancillary asset that is described 
in subparagraph (A).
(2) Limitation.--An ancillary asset originator may not 
raise more than $200,000,000 in total gross proceeds in 
reliance on the rules adopted under subsection (a).
(3) Review and adjustment for inflation.--
(A) In general.--Not later than 2 years after the 
date of enactment of this Act, and every 2 years 
thereafter, the Commission shall--
(i) review the amounts described in 
paragraphs (1)(A)(i) and (2);
(ii) adjust the amounts described in 
paragraphs (1)(A)(i) and (2) to account for 
inflation; and
(iii) increase the amounts described in 
paragraphs (1)(A)(i) and (2) as the Commission 
determines appropriate, if that action would be 
in the public interest and consistent with the 
protection of investors.
(B) Report.--If the Commission, after conducting a 
review under subparagraph (A), determines not to 
increase the amount described in paragraph (1)(A)(i) or 
(2) (other than to adjust that amount for inflation, as 
required under subparagraph (A)(ii) of this paragraph), 
the Commission shall submit to the Committee on 
Banking, Housing, and Urban Affairs of the Senate and 
the Committee on Financial Services of the House of 
Representatives a report detailing the reasons that the 
Commission did not increase that amount.
(c) Conditions for Exemption.--The following conditions shall apply 
to the exemption provided under subsection (b):
(1) Initial disclosures.--Not later than 30 days before the 
date on which the applicable ancillary asset originator, any 
affiliate of the ancillary asset originator, or any underwriter 
of an investment contract, offers, sells, or distributes an 
ancillary asset in reliance on the rules adopted under 
subsection (a), the ancillary asset originator shall furnish to 
the Commission the disclosures required under section 4B(d) of 
the Securities Act of 1933, as added by this Act, subject to 
the periodic semiannual disclosure requirements of that 
section.
(2) Coordinated control.--If the applicable ancillary asset 
is reliant on a distributed ledger system that, together with 
that ancillary asset, is subject to coordinated control, 
including by related persons, the restrictions on disposition 
under section 104 shall apply.
(3) Criteria.--The applicable ancillary asset originator 
may not be--
(A) a company that is not organized under, and 
subject to, the laws of a State or territory of the 
United States or the District of Columbia;
(B) a development-stage company that either--
(i) has no specific business plan or 
purpose; or
(ii) has indicated that the business plan 
of the company is to merge with or acquire an 
unidentified company;
(C) an investment company (as defined in section 
3(a) of the Investment Company Act of 1940 (15 U.S.C. 
80a-3(a))) or a company (as defined in section 2 of 
that Act (15 U.S.C. 80a-2)) that would be an investment 
company under section 3(a) of that Act (15 U.S.C. 80a-
3(a)) but for the exclusions provided from that 
definition by section 3(c) of that Act (15 U.S.C. 80a-
3(c)), provided that, solely for the purposes of 
evaluating eligibility to rely on the exemption 
provided under subsection (b), an ancillary asset 
originator shall not be deemed to be an investment 
company solely by virtue of investing, reinvesting, 
owning, holding, or trading ancillary assets, including 
ancillary assets offered for sale by the ancillary 
asset originator;
(D) a person issuing fractional undivided interests 
in other commodities;
(E) a person that is or has been subject to any 
order of the Commission entered pursuant to section 
12(j) of the Securities Exchange Act of 1934 (15 U.S.C. 
78l(j)) after the date of enactment of this Act and 
during the 5-year period preceding the offer and sale;
(F) a person that is or has been disqualified 
pursuant to section 230.506(d) of title 17, Code of 
Federal Regulations, or any successor regulation, 
unless waived by order of the Commission;
(G) a person that is or has been disqualified 
pursuant to section 230.251 through 230.263 of title 
17, Code of Federal Regulations (commonly referred to 
as ``Regulation A''), or any successor regulations, 
unless waived by order of the Commission; or
(H) a person convicted of a felony offense 
involving insider trading, embezzlement, cybercrime, 
money laundering, financing of terrorism, or financial 
fraud, within the last 10 years.
(4) Furnishing notice of reliance.--The applicable 
ancillary asset originator shall electronically furnish to the 
Commission a notice of reliance on the rules adopted under 
subsection (a) not fewer than 30 days before the date on which 
the ancillary asset originator first offers, sells, or 
distributes an ancillary asset in reliance on those rules, 
which shall contain the following information:
(A) The name of the ancillary asset originator.
(B) A statement by a person duly authorized by the 
ancillary asset originator that the conditions of those 
rules are satisfied.
(C) The website where the summary documents of the 
ancillary asset originator, if any, may be found and 
made available for public consumption.
(D) An email address at which the ancillary asset 
originator may be contacted.
(5) Public availability.--The Commission shall require that 
the disclosures furnished to the Commission under section 4B(d) 
of the Securities Act of 1933, as added by this Act, be made 
publicly available in a manner that provides timely and 
continuing access.
(6) Form and manner.--The disclosures furnished to the 
Commission under section 4B(d) of the Securities Act of 1933, 
as added by this Act, shall be prepared, furnished, and made 
public in the form and manner prescribed by the Commission, 
including through the use of electronic furnishing, web 
posting, machine-readable formats, and plain-English legends, 
as the Commission determines necessary or appropriate in the 
public interest or for the protection of investors.
(d) Status Under Securities Laws.--
(1) In general.--A disclosure furnished under section 4B of 
the Securities Act of 1933, as added by this Act, including an 
initial or periodic disclosure furnished under subsection (d) 
of such section 4B, and any other document furnished under the 
rules adopted under subsection (a) of this section, shall be 
deemed to be--
(A) a ``prospectus'' solely--
(i) for purposes of section 12(a)(2) of the 
Securities Act of 1933 (15 U.S.C. 77l(a)(2)); 
and
(ii) with respect to the person that is the 
purchasing party in a transaction made in 
reliance on the rules adopted under subsection 
(a); and
(B) a ``statement'' solely for purposes of--
(i) section 17(a) of the Securities Act of 
1933 (15 U.S.C. 77q(a));
(ii) section 10(b) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78j(b)); and
(iii) section 240.10b-5 of title 17, Code 
of Federal Regulations, or any successor 
regulation.
(2) Registration statement.--
(A) In general.--A disclosure furnished under 
section 4B of the Securities Act of 1933, as added by 
this Act, including an initial or periodic disclosure 
furnished under subsection (d) of such section 4B, or 
any other document furnished pursuant to the rules 
adopted under subsection (a), shall not be deemed to be 
a ``registration statement'' for purposes of section 11 
of the Securities Act of 1933 (15 U.S.C. 77k) or to 
have been filed under the Securities Exchange Act of 
1934 (15 U.S.C. 78a et seq.).
(B) Civil liability.--Liability under section 
12(a)(2) of the Securities Act of 1933 (15 U.S.C. 
77l(a)(2)) relating to a disclosure furnished under 
section 4B of the Securities Act of 1933, as added by 
this Act, including an initial or periodic disclosure 
furnished under subsection (d) of such section 4B, or 
any other document furnished pursuant to the rules 
adopted under subsection (a), shall only apply to the 
person making statements in that disclosure or other 
document, and only a person that purchased an ancillary 
asset in a transaction involving disclosures provided 
pursuant to the rules adopted under subsection (a) 
shall have a claim under such section 12(a)(2).
(3) Forward-looking statements.--In any action against an 
ancillary asset originator under this title or the amendments 
made by this title that is based on an untrue statement of a 
material fact or omission of a material fact necessary to make 
the statement not misleading, no liability shall arise with 
respect to any forward-looking statement (including a statement 
of plans, objectives, projections, expectations, or assumptions 
concerning future performance, financial position, development 
milestones, digital asset utility, system adoption, or market 
conditions) made in a disclosure, statement, or other document 
furnished pursuant to section 4B of the Securities Act of 1933, 
as added by this Act, including an initial or periodic 
disclosure furnished under subsection (d) of such section 4B, 
or furnished under this section, if the statement is--
(A) identified as forward-looking; and
(B) accompanied by meaningful cautionary language 
that identifies important factors that could cause 
actual results to differ materially.

SEC. 104. SPECIAL DISPOSITION RESTRICTIONS BY RELATED PERSONS.

(a) Definitions.--In this section:
(1) Certification covered party.--The term ``certification 
covered party'' means, with respect to an ancillary asset--
(A) the ancillary asset originator;
(B) a subsidiary of the ancillary asset originator;
(C) a related person of the ancillary asset 
originator; or
(D) any entity that directly or indirectly controls 
or is controlled by a common entity with an ancillary 
asset originator.
(2) Covered token.--The term ``covered token'' means any 
unit of an ancillary asset that was acquired from the ancillary 
asset originator with respect to that ancillary asset or an 
agent or underwriter thereof.
(3) Distributed ledger control person.--The term 
``distributed ledger control person'' means, with respect to a 
distributed ledger system, any person or group of persons under 
common control, other than a decentralized governance system, 
that has the unilateral authority, directly or indirectly, 
through any contract, arrangement, understanding, relationship, 
or otherwise, to control or materially alter the functionality, 
operation, or rules of consensus or agreement of the 
distributed ledger system or a related ancillary asset.
(b) Coordinated Control.--
(1) In general.--The Commission shall adopt rules, based on 
the criteria described in paragraph (2), to define the 
circumstances under which a distributed ledger system, together 
with a related ancillary asset, is considered to be under 
coordinated control.
(2) Considerations.--In adopting rules under paragraph (1), 
the Commission shall consider the following criteria as indicia 
that a distributed ledger system described in that paragraph, 
together with the related ancillary asset, is considered to be 
under coordinated control:
(A) Open digital system.--The extent to which the 
distributed ledger system is not--
(i) a distributed ledger, the protocol of 
which is freely and publicly available;
(ii) a distributed ledger application the 
source code of which is--
(I) freely and publicly available 
via open-source code; and
(II) recorded on a distributed 
ledger described in clause (i); or
(iii) an analogue to a distributed ledger 
or distributed ledger application described in 
clause (i) or (ii), as determined by the 
Commission by rule or order.
(B) Permissionless and credibly neutral digital 
system.--The extent to which a person or group of 
persons under common control has--
(i) the unilateral authority, via operation 
of the distributed ledger system, to restrict, 
censor, or prohibit use of the distributed 
ledger system, including any applicable system-
based user activity; or
(ii) private permissions, hard-coded 
privileges, or similar capabilities granted by 
the source code of the distributed ledger 
system that provides preferential treatment 
compared to other similarly situated persons.
(C) Distributed digital network.--The extent to 
which a person or group of persons under common control 
has beneficial ownership of, in the aggregate, more 
than 49 percent of the total amount of outstanding 
units of the ancillary asset or voting power with 
respect to any governance system that relates to the 
distributed ledger system.
(D) Autonomous distributed ledger system.--The 
extent to which--
(i) the distributed ledger system has not 
yet reached an autonomous state; and
(ii) a person or group of persons under 
common control has the unilateral authority, 
directly or indirectly, to alter or change the 
functionality, operation, or rules of consensus 
or agreement of the distributed ledger system.
(E) Economic independence.--The extent to which the 
primary programmatic mechanisms of the distributed 
ledger system that are intended to facilitate 
substantial value accrual to the ancillary asset 
through the functioning of the distributed ledger 
system are not yet functional.
(3) Safe harbors.--
(A) In general.--The Commission shall establish 
safe harbors under which a distributed ledger system, 
together with a related ancillary asset, will not be 
considered to be under coordinated control for the 
purposes of section 103(c)(2).
(B) Decentralized governance systems.--
(i) In general.--For the purposes of this 
section, a decentralized governance system 
shall not be considered to be a person or a 
group of persons under common control.
(ii) Distributed ledger systems.--For the 
purposes of this section, a distributed ledger 
system, together with any related ancillary 
asset, shall not be precluded from being 
considered to not be under coordinated control 
solely based on a functional, administrative, 
clerical, or ministerial action of a 
decentralized governance system, including any 
such action taken by a person acting on behalf 
of and at the direction of that decentralized 
governance system, as determined by the 
Commission and consistent with the protection 
of investors, maintenance of fair, orderly, and 
efficient markets, and the facilitation of 
capital formation.
(C) Emergency measures.--For the purposes of this 
section, a pre-defined, temporary, rules-based 
cybersecurity emergency measure that is exercised by an 
incident response or security council exclusively in 
response to a specific and documented cybersecurity 
incident or imminent threat pursuant to publicly 
disclosed, on-chain authorization mechanisms, that is 
strictly limited in scope and duration solely to 
address that cybersecurity incident or imminent threat, 
and that is exercised without unilateral control by any 
single person, shall not alone constitute common 
control or an agreement to work in concert, if those 
rules and mechanisms, including the procedures and 
operational limits governing the emergency measure, are 
disclosed in publicly available written documentation 
reasonably available to the applicable Federal agency 
by a decentralized autonomous organization or similar 
legal entity sufficiently in advance of any exercise of 
the emergency measure.
(D) Nonexclusive.--The safe harbors established 
under subparagraphs (A), (B), and (C) shall not be 
exclusive and the Commission shall consider such other 
circumstances as the Commission finds in the public 
interest or for the protection of investors.
(4) Evidence.--The Commission may, in adopting rules under 
this subsection, require such certifications, third party 
verifications, or other evidence as the Commission determines 
necessary or appropriate to determine whether a distributed 
ledger system is under coordinated control for the purposes of 
section 103(c)(2).
(5) Rule of construction.--For purposes of this 
subsection--
(A) the existence or termination of coordinated 
control shall be determined independently of whether 
entrepreneurial or managerial efforts described in 
section 4B of the Securities Act of 1933, as added by 
this Act, have been completed; and
(B) the elimination of coordinated control shall be 
a prerequisite to the completion of efforts described 
in subparagraph (A).
(c) Special Restrictions on Disposition.--The Commission shall 
adopt rules that provide that, with respect to transactions involving 
an ancillary asset for which disclosures are required pursuant to 
section 4B(d) of the Securities Act of 1933, as added by this Act, when 
a sale of that ancillary asset is made by a related person, the 
following restrictions on that sale shall apply:
(1) Sales prior to certification.--If the covered token was 
acquired after the effective date of this Act and principally 
relies on a distributed ledger system, the covered token may be 
sold by a related person before that distributed ledger system 
is certified as not subject to coordinated control, pursuant to 
subsection (d), if--
(A) with respect to that distributed ledger system, 
the disclosures required pursuant to section 4B(d) of 
the Securities Act of 1933, as added by this Act, have 
been furnished;
(B) the holder of the covered token has held the 
units for not less than 12 months; and
(C) the amount of covered tokens sold in any 12-
month period by the related person is--
(i) not greater than an amount to be 
determined by the Commission pursuant to notice 
and comment rulemaking not later than 360 days 
after the date of enactment of this Act, which 
rulemaking shall consider what is necessary or 
appropriate in the public interest, including, 
among other things, the protection of 
investors, whether the action will promote 
efficiency, competition, and capital formation, 
and how to foster the development of 
distributed ledger systems that are not subject 
to coordinated control; and
(ii) in no case equal to or greater than 
the amount determined by the Commission 
pursuant to the rulemaking described in 
paragraph (2)(C).
(2) Sales after certification.--If the covered token was 
acquired after the effective date of this Act and principally 
relies on a distributed ledger system that is certified as not 
subject to coordinated control pursuant to subsection (d), the 
covered token may be sold by a related person, if--
(A) with respect to that distributed ledger system, 
the disclosures required pursuant to section 4B(d) of 
the Securities Act of 1933, as added by this Act, have 
been furnished;
(B) the holder of the covered token has held the 
units for not less than 6 months; and
(C) the amount of covered tokens sold in any 12-
month period by the related person is not greater than 
an amount to be determined by the Commission pursuant 
to rulemaking that shall not be less than 10 percent of 
the total amount of outstanding units of such ancillary 
assets.
(3) Sales of pre-existing covered tokens.--If the covered 
token was acquired before the effective date of this Act and 
principally relies on a distributed ledger system, the covered 
token may be sold by a related person if--
(A) in the case that the distributed ledger system 
has not been certified as not subject to coordinated 
control pursuant to subsection (d)--
(i) the disclosures required pursuant to 
section 4B(d) of the Securities Act of 1933, as 
added by this Act, have been furnished; and
(ii) the holder of the covered token has 
held the units for not less than 12 months; and
(B) in the case that the distributed ledger system 
has been certified as not subject to coordinated 
control pursuant to subsection (d), the holder of the 
covered token has held the units for not less than 6 
months.
(4) Limitations on transactions by distributed ledger 
control persons.--If the holder of an ancillary asset that 
principally relies on a distributed ledger system that has been 
certified as not subject to coordinated control is a 
distributed ledger control person with respect to that 
distributed ledger system, that control person may resell that 
ancillary asset if--
(A) that control person furnishes notice to the 
Commission, in a form and manner determined by the 
Commission, that the person has or intends to obtain an 
authority described in subparagraph (B) with respect to 
the distributed ledger system;
(B) that distributed ledger control person 
furnishes disclosures to the Commission, in a form and 
manner determined by the Commission, describing the 
material activities, as determined by the Commission, 
of the control person;
(C) with respect to that distributed ledger system, 
disclosures have been furnished pursuant to section 
4B(d) of the Securities Act of 1933, as added by this 
Act; and
(D) that control person has satisfied such other 
requirements applicable to that control person that may 
be established by the Commission to prevent 
manipulation or distortion of the value of the 
ancillary asset, including resale restrictions 
consistent with those applied to related persons that 
are not control persons.
(d) Certification of Non-Control by Related Persons.--
(1) Submission.--With respect to an ancillary asset, a 
certification covered party may furnish to the Commission a 
written certification, in such form and manner as the 
Commission may specify by rule consistent with subsection (b), 
stating that the distributed ledger system is not under 
coordinated control.
(2) Automatic effectiveness.--A certification furnished 
under paragraph (1) shall become effective, and the distributed 
ledger system shall be deemed not to be under coordinated 
control, on the date that is the earlier of--
(A) the date on which the Commission notifies the 
certification covered party in writing that the 
Commission does not object to the certification; or
(B) if the Commission has not denied the 
certification under paragraph (3), the date that is 90 
days after the date on which the certification is 
furnished, or such shorter period as the Commission may 
determine by rule.
(3) Denial.--
(A) In general.--The Commission may deny a 
certification furnished under paragraph (1)--
(i) only during the 90-day period beginning 
on the date on which the certification is 
furnished, or such shorter period as the 
Commission may determine by rule, or upon 
determining, based on reasonable evidence, that 
a material change in circumstances has occurred 
after the furnishing of the certification; and
(ii) by providing to the certification 
covered party 10 days notice of the intent of 
the Commission to deny that certification.
(B) Requirements after notice of intent.--After the 
10-day period described in subparagraph (A)(ii), the 
Commission shall--
(i) conduct a hearing; and
(ii) vote to deny the certification if 
there is a finding that the applicable 
ancillary asset does not meet the standard for 
certification that the operations of the 
distributed ledger system are not under such 
coordinated control.
(C) Final agency action.--Denial under this 
paragraph constitutes final agency action reviewable 
under applicable law.
(4) Verification.--The Commission may, by rule, require 
appropriate third-party verification of a certification 
furnished under paragraph (1).
(e) Disgorgement.--
(1) In general.--Any profit realized by a related person 
from the sale of an ancillary asset in violation of the 
restrictions under subsection (c) shall inure to, and be 
recoverable by, the holders of the ancillary asset, 
irrespective of any intention of holding the asset.
(2) Enforcement.--An action to recover profit described in 
paragraph (1)--
(A) may be instituted at law or in equity in any 
court of competent jurisdiction of the United States 
by--
(i) the applicable ancillary asset 
originator;
(ii) the owner of any units of the 
applicable ancillary asset; or
(iii) the owner of any units of the 
applicable ancillary asset, in the name and on 
behalf of the ancillary asset originator, if 
the ancillary asset originator--
(I) fails or refuses to bring the 
action within 60 days after a written 
request by any owner of not less than 5 
percent of the total amount of 
outstanding units of that ancillary 
asset; or
(II) fails to diligently prosecute 
the action; and
(B) shall be brought not later than 2 years after 
the date that profit was realized.
(f) Exemption From Disposition Restrictions.--The Commission shall 
adopt rules that provide for the following exemptions from, or waivers 
to, disposition restrictions described in subsection (c):
(1) Material hardship exemption.--
(A) In general.--Subject to subparagraph (B), the 
Commission shall adopt rules and procedures to exempt 
parties from related person restrictions with respect 
to an ancillary asset where those restrictions conflict 
with an obligation or requirement arising from one of 
the following material hardships on a related person 
with respect to the ancillary asset or the ancillary 
asset originator:
(i) The death of the related person.
(ii) The bankruptcy or insolvency of the 
related person.
(iii) The dissolution, merger, or 
acquisition of a corporate person.
(iv) Tax liability relating to the receipt 
of the applicable ancillary asset.
(v) Such other material hardships as may be 
designated by the Commission.
(B) Requirements.--The rules and procedures adopted 
under subparagraph (A) shall be designed to mitigate 
the risk that parties may seek to structure holdings to 
evade resale restrictions and exempt or waive the 
application of resale restrictions only to the extent 
necessary to address the identified material hardship.
(2) Liquidity provision exemption.--The Commission shall 
adopt rules to exempt from disposition restrictions parties 
buying or selling an ancillary asset through regular two-sided 
bidding and offering for the purposes of providing market 
liquidity, provided that such activities are not undertaken for 
the purpose of evading the requirements of this section.
(3) Agency exemption.--The Commission shall adopt rules 
that exempt a party acting as a custodian, trading platform, 
broker, dealer or other agent from being treated as the owner 
of customer or client assets or from being restricted in 
facilitating sales on behalf of a customer or client if the 
agent is otherwise determined to be a related person.
(4) Exchange-traded product and passive fund exemption.--
The Commission shall adopt rules to exempt from disposition 
restrictions, as appropriate--
(A) exchange-traded products, the shares of which 
are created and redeemed by authorized participants and 
registered with the Commission; and
(B) passive pooled investment vehicles, whether or 
not the shares of which are registered with the 
Commission.
(g) Related Person Disclosure Requirements.--The Commission shall 
adopt rules that provide for reporting to the Commission certain 
information with respect to ancillary asset holdings or transactions 
relating to ancillary assets by related persons, subject to the 
disposition restrictions provided in subsection (c):
(1) Disclosure reports.--
(A) Disclosure of related person status.--Any 
person, or group of persons under common control, 
directly or indirectly, that acquire beneficial 
ownership of 10 percent or more of the total amount of 
outstanding units of any such ancillary asset, measured 
as of the end of any calendar quarter, shall furnish 
initial and continuing reports as determined by the 
Commission.
(B) Sales of covered tokens by related person prior 
to certification of non-control.--Quarterly reports 
relating to the number of ancillary assets sold by a 
related person in a form as required by the Commission.
(C) Sales of covered tokens by related person after 
certification of non-control.--Quarterly reports 
relating to the number of ancillary assets sold by a 
related person that holds, at any point during the 
applicable calendar quarter, in excess of 5 percent of 
the total amount of outstanding units of such ancillary 
asset in a form as required by the Commission.
(D) Sales of pre-existing covered tokens by related 
person.--Quarterly reports relating to the number of 
ancillary assets sold by a related person that holds in 
excess of 5 percent of the total amount of outstanding 
units of such ancillary asset in a form as required by 
the Commission.
(2) Confidential treatment.--The Commission may provide for 
confidential treatment of information provided under this 
subsection, or may exempt certain related persons from the 
requirement to furnish a report required under this subsection, 
pursuant to procedures the Commission shall establish and that 
are modeled on or identical to section 230.406 of title 17, 
Code of Federal Regulations, or any successor regulation.
(3) Good-faith furnishing standard.--
(A) In general.--Any obligation to furnish 
information under this section applies only to the 
furnisher acting on its own behalf and is limited to 
information that is material and known, or reasonably 
knowable after due inquiry, to that furnisher.
(B) Reliance.--A furnisher described in 
subparagraph (A) may reasonably rely on public sources 
and third-party attestations where appropriate.
(C) Liability.--Furnishing in good faith pursuant 
to this section shall not create liability for 
information outside the furnisher's possession, 
custody, or control, or for omissions of information 
the furnisher could not reasonably obtain without 
breaching legal privilege, contractual confidentiality, 
or other applicable law.
(D) Other persons.--Any person other than the 
furnisher may, in good faith and absent knowledge to 
the contrary, presume that a report required under 
paragraph (1) has been timely furnished.
(4) Life cycle event considerations.--The Commission shall 
adopt rules establishing streamlined processes for the 
following life cycle events:
(A) Successor disclosures in corporate 
transactions.--The transfer of disclosure obligations 
under this section to a successor entity in the event 
of a merger, acquisition, or sale of substantially all 
assets relating to the ancillary asset activities, 
including a notice of succession.
(B) Cessation of work.--The cessation or suspension 
of ongoing disclosure obligations under this section 
where the ancillary asset originator or related person 
no longer engages, and does not reasonably expect to 
engage, in entrepreneurial or managerial efforts with 
respect to the ancillary asset or its associated 
distributed ledger system, including a notice of 
cessation of work.
(C) Contractual termination.--The termination of 
disclosure obligations under this section that attach 
solely by virtue of a person's status as a related 
person when a contractual arrangement with the 
ancillary asset originator or distributed ledger system 
has concluded, including a notice of cessation of 
contractual relationship.
(h) Rule of Construction.--Nothing in this section may be construed 
to--
(1) limit or impair the anti-fraud or anti-manipulation 
authorities of the Commission; or
(2) preclude reliance on Regulation Crypto, as adopted 
under section 103, or any other effective registration 
statement or exemption from registration under the Securities 
Act of 1933 (15 U.S.C. 77a et seq.), as amended by this Act.

SEC. 105. CHARACTERISTICS OF NETWORK TOKENS.

(a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Commission shall adopt rules that provide that--
(1) a network token shall not be considered as providing a 
disqualifying financial right under section 4B(a)(7)(B) of the 
Securities Act of 1933, as added by this Act, if the market 
value of the network token is primarily derived, or is 
reasonably expected to be primarily derived, from a distributed 
ledger system or from the broader adoption and use of such a 
system, including where--
(A) the mechanisms of the distributed ledger system 
collect, receive, accrue, or distribute consideration 
from the functioning of the distributed ledger system;
(B) the network token provides governance 
capabilities with respect to a distributed ledger 
system or a decentralized governance system;
(C) the value of the network token appreciates or 
depreciates due to the use of, or in response to the 
efforts, operations, or financial performance of, the 
distributed ledger system to which the network token 
relates or its decentralized governance system; or
(D) for a network token that meets the definition 
of an ancillary asset, the value of the network token 
appreciates or depreciates due to the efforts of the 
ancillary asset originator or related person; and
(2) participants in offers or sales of network tokens 
providing financial interests described in paragraph (1) shall 
not be precluded from relying on the exemption from 
registration under section 4B(b) of the Securities Act of 1933, 
as added by this Act.
(b) Effect of Rulings and Actions Before Date of Enactment.--
(1) In general.--If, before the date of enactment of this 
Act, a court of the United States, in a non-appealable final 
judgment, found that a digital asset transaction was not an 
offer, sale, or distribution of a security, a digital asset 
transferred pursuant to that offer, sale, or distribution shall 
not be considered to be a security under any provision of law 
described in subsection (b)(2) of section 4B of the Securities 
Act of 1933, as added by this Act.
(2) Network tokens.--A network token shall not be 
considered to be an ancillary asset, and shall not be 
considered to be a security under any provision of law 
described in subsection (b)(2) of section 4B of the Securities 
Act of 1933, as added by this Act, if, on January 1, 2026, any 
units of that network token were the principal asset of an 
exchange-traded product--
(A) not registered under the Investment Company Act 
of 1940 (15 U.S.C. 80a-1 et seq.); and
(B) the shares of which are listed and traded on a 
national securities exchange registered under section 6 
of the Securities Exchange Act of 1934 (15 U.S.C. 78f).

SEC. 106. EXEMPTIVE AUTHORITY.

(a) Continued Applicability.--Nothing in this Act, or any amendment 
made by this Act, may be construed to amend, limit, impair, or 
otherwise affect the authority of the Commission to grant an exemption 
pursuant to any provision of law that is in effect on the day before 
the date of enactment of this Act, including pursuant to any of the 
following:
(1) Section 28 of the Securities Act of 1933 (15 U.S.C. 
77z-3).
(2) Section 36 of the Securities Exchange Act of 1934 (15 
U.S.C. 78mm).
(3) Section 6(c) of the Investment Company Act of 1940 (15 
U.S.C. 80a-6(c)).
(4) Section 206A of the Investment Advisers Act of 1940 (15 
U.S.C. 80b-6a).
(5) Section 304(d) of the Trust Indenture Act of 1939 (15 
U.S.C. 77ddd(d)).
(6) Section 4(g) of the Securities Investor Protection Act 
of 1970 (15 U.S.C. 78ddd(g)).
(b) General Exemptive Authority.--Section 28 of the Securities Act 
of 1933 (15 U.S.C. 77z-3) is amended, in the matter preceding the 
matter relating to Schedule A--
(1) by striking ``by rule or regulation'' and inserting 
``by rule, regulation, or order''; and
(2) by adding at the end the following: ``The Commission 
shall, by rule or regulation, determine the procedures under 
which an exemptive order under this section shall be granted 
and may, in the sole discretion of the Commission, decline to 
entertain any application for an order of exemption under this 
section.''.

SEC. 107. MODERNIZATION OF RECORDKEEPING REQUIREMENTS.

The Commission shall adopt rules to modernize the recordkeeping 
requirements under the Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.), the Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et 
seq.), and the Investment Company Act of 1940 (15 U.S.C. 80a-1 et 
seq.), including to facilitate the utilization of distributed ledger 
records.

SEC. 108. MODERNIZATION OF SECURITIES REGULATIONS FOR DIGITAL ASSET 
ACTIVITIES.

(a) Tailoring of Existing Requirements.--The Commission shall--
(1) amend, rescind, replace, or supplement by rule, order, 
guidance, exemptive relief, or any other appropriate action 
(provided such action is consistent with chapter 5 of title 5, 
United States Code, and other applicable law) each regulation, 
form, interpretive statement, or other requirement within the 
jurisdiction of the Commission that is not otherwise amended by 
this Act (or required to be amended because of a provision of 
this Act or an amendment made by this Act), to the extent that 
such provision applies to any digital asset activity, including 
any activity involving a security that is issued, recorded, or 
transferred using distributed ledger technology, to the extent 
that the provision is outdated, unnecessary, or unduly 
burdensome in light of the unique technological characteristics 
of digital assets or substantially similar technology, which 
may include regulatory provisions governing--
(A) customer protection, including custody of 
digital assets or substantially similar technology;
(B) transfer agent rules;
(C) books and records, or recordkeeping 
requirements;
(D) clearance and settlement rules;
(E) broker-dealer, alternative trading system, and 
exchange rules;
(F) issuer disclosure and ongoing reporting 
requirements tailored to digital asset securities or 
substantially similar technology involving securities; 
and
(G) the use of vaults, digital asset receipts, or 
receipts involving substantially similar technology, 
vault tokens, or liquidity provider tokens; and
(2) in imposing future obligations as those obligations 
relate to digital assets or substantially similar technology, 
do so in a manner consistent with the requirements described in 
paragraph (1).
(b) Rule of Construction.--Nothing in this section may be construed 
to limit the authority of the Commission to pursue fraud, manipulation, 
or deceptive practices involving digital assets or substantially 
similar technology.
(c) Use of Existing Authority.--When considering, proposing, 
adopting, or engaging in any rule or program or developing new rules or 
programs, including those mandated or authorized under this Act, or any 
amendment made by this Act, the activities of the Commission (which may 
include the solicitation of data and other input from investors, 
regulated entities, and market participants or the representatives of 
any of those persons) shall be considered actions taken under 
subsection (e) of section 19 of the Securities Act of 1933 (15 U.S.C. 
77s) and shall be subject to subsection (f) of that section.
(d) Continued Applicability of State Consumer Protection Laws.--
Except as expressly provided by this Act, or an amendment made by this 
Act, nothing in this Act (or in any such amendment) shall preempt any 
State consumer protection law, including common law, or a remedy 
available under any such law.
(e) Preemption for Exemptions and Digital Asset Activities Under 
the Securities Act.--Section 18 of the Securities Act of 1933 (15 
U.S.C. 77r) is amended--
(1) in subsection (b)--
(A) in paragraph (3)--
(i) in the paragraph heading, by inserting 
``in qualified transactions or'' after 
``sales'';
(ii) in the first sentence, by inserting 
``in a qualified transaction or'' after ``the 
security''; and
(iii) in the second sentence--
(I) by striking ``term `qualified 
purchaser''' and inserting ``terms 
`qualified transaction' and `qualified 
purchaser''';
(II) by inserting ``and categories 
of transactions, including secondary 
transactions,'' after ``securities''; 
and
(III) by inserting ``and with due 
regard to the facilitation of capital 
formation and the promotion of 
innovation'' before the period at the 
end; and
(B) in paragraph (4)--
(i) in subparagraph (A), by inserting ``or, 
if the issuer is not required to file such 
reports, where the Commission otherwise 
determines, consistent with the public interest 
and the protection of investors and with due 
regard to the facilitation of capital formation 
and the promotion of innovation'' before the 
semicolon at the end;
(ii) in subparagraph (D)(ii), by inserting 
``in a qualified transaction or'' after 
``offered or sold'';
(iii) in subparagraph (F), by striking 
``or'' at the end;
(iv) in subparagraph (G), by striking the 
period at the end and inserting ``; or''; and
(v) by adding at the end the following:
``(H) Commission rules or regulations issued under 
section 28, except that this subparagraph does not 
apply to rules or regulations adopted before the date 
of enactment of this subparagraph.''.
(f) Exempting Network Tokens From State Securities Laws.--
(1) In general.--Section 18(b) of the Securities Act of 
1933 (15 U.S.C. 77r(b)) is amended by adding at the end the 
following:
``(5) Exemption in connection with network tokens.--A 
network token, as defined in section 4B(a), shall be treated as 
a covered security.''.
(2) Rule of construction.--Nothing in this section, section 
4B of the Securities Act of 1933 (as added by this Act), or the 
amendments made by this section may be construed to limit the 
authority (as of the day before the date of enactment of this 
Act) described in section 18(c)(1) of the Securities Act of 
1933 (15 U.S.C. 77r(c)(1)) of a securities commission (or any 
agency or office performing like functions) of any State with 
respect to a covered security or any security.
(g) Preemption for Ancillary Asset Activities Under the Securities 
Act of 1933.--Section 18(b) of the Securities Act of 1933 (15 U.S.C. 
77r(b)), as amended by subsection (f) is amended by adding at the end 
the following:
``(6) Limitations on state law regarding ancillary 
assets.--
``(A) Definitions.--In this paragraph, the term 
`ancillary asset' has the meaning given the term in 
section 4B(a).
``(B) Exemption in connection with ancillary 
assets.--An ancillary asset offered, sold, or 
distributed in reliance on Regulation Crypto, as 
adopted under section 103 of the Lummis-Gillibrand 
Responsible Financial Innovation Act of 2026, shall be 
treated as a covered security.''.
(h) Preservation of Regulation Best Interest.--
(1) In general.--Subject to paragraph (2), nothing in this 
Act, any amendment made by this Act, or any rule issued under 
this Act or pursuant to any such amendment may be construed to 
limit, preempt, or otherwise affect the obligations of a broker 
or dealer registered with the Commission under section 15 of 
the Securities Exchange Act of 1934 (15 U.S.C. 78o) or section 
240.15l-1 of title 17, Code of Federal Regulations (commonly 
known as ``Regulation Best Interest''), or any successor 
regulation.
(2) Application.--Paragraph (1) shall not apply with 
respect to any person registered with the Commodity Futures 
Trading Commission.
(i) Preservation of Investment Adviser Fiduciary Duties.--Nothing 
in this Act, any amendment made by this Act, or any rule issued under 
this Act or pursuant to any such amendment may be construed to limit, 
preempt, or otherwise affect the fiduciary duty that an investment 
adviser (as defined in section 202 of the Investment Advisers Act of 
1940 (15 U.S.C. 80b-2)) owes to a client under section 206 of the 
Investment Advisers Act of 1940 (15 U.S.C. 80b-6) or any other 
provision of Federal or State law, including in connection with 
investment advice regarding a digital commodity.

SEC. 109. INSIDER TRADING WITH RESPECT TO ANCILLARY ASSET TRANSACTIONS.

(a) Definition.--In this section, the term ``distributed ledger 
control person'' has the meaning given the term in section 104(a).
(b) Application of Securities Laws.--Any provision of the 
securities laws, or any regulation issued under the securities laws, 
including any duty that arises under the securities laws or under such 
a regulation, that applies with respect to a person that purchases, 
sells, or offers to sell a security, security-based swap, or security-
based swap agreement while in possession of material nonpublic 
information, or communicates such information in connection with or in 
the transaction, shall apply to any offer, sale, or purchase of a 
security, security-based swap, or security-based swap agreement in 
which an ancillary asset is offered, sold, or purchased, including any 
offer, sale, or purchase conducted pursuant to Regulation Crypto, as 
adopted pursuant to section 103, whether conducted by an ancillary 
asset originator, a related person, or any other person.
(c) Rulemaking.--
(1) In general.--The Commission shall adopt rules to 
implement subsection (b), which shall--
(A) include rules providing an affirmative defense 
for an offer, sale, or purchase of an ancillary asset 
made pursuant to a written plan adopted before the 
applicable person became aware of material nonpublic 
information, which shall be consistent with section 
240.10b5-1 of title 17, Code of Federal Regulations, or 
any successor regulation; and
(B) be interpreted and applied in a manner that is 
consistent with, and may not be construed to expand or 
contract, the principles of, and judicial precedent 
interpreting (by the Supreme Court of the United 
States), the securities laws and the regulations issued 
under the securities laws, as those principles and that 
judicial precedent are in effect, as of the day before 
the date of enactment of this Act.
(2) Considerations.--In adopting rules under paragraph (1), 
the Commission shall consider, subject to subsection (e), 
whether, and under what circumstances, an offer, sale, 
purchase, or communication should be addressed by those rules, 
including by--
(A) a distributed ledger control person, any person 
acting on behalf of, or in concert with, an ancillary 
asset originator, related person, or distributed ledger 
control person, or a person that obtained material 
nonpublic information in the course of a relationship 
of trust and confidence with an ancillary asset 
originator or related person, where material nonpublic 
information regarding an ancillary asset originator or 
an ancillary asset was--
(i) obtained pursuant to or in breach of a 
duty of trust or confidence;
(ii) deceptively obtained through theft, 
bribery, misrepresentation, or espionage or in 
violation of any Federal law protecting 
computer data; or
(iii) obtained from an ancillary asset 
originator or related person, the conduct of 
which is described in subparagraph (B); or
(B) an ancillary asset originator or related person 
that purchases, sells, or otherwise distributes an 
ancillary asset, or communicates material nonpublic 
information regarding an ancillary asset originator or 
ancillary asset, while aware of material nonpublic 
information that is required to be disclosed in any 
disclosure furnished, or required to be furnished, 
under section 4B of the Securities Act of 1933, as 
added by this Act, or Regulation Crypto, as adopted 
pursuant to section 103.
(d) Enforcement.--A violation of subsection (b), or any rule 
adopted under subsection (c), shall be treated as a violation of the 
securities laws and subject to the penalties under sections 21A and 32 
of the Securities Exchange Act of 1934 (15 U.S.C. 78u-1, 78ff) and to 
all other remedies available under the securities laws.
(e) Rule of Construction.--Consistent with section 4B(b)(3) of the 
Securities Act of 1933, as added by this Act, nothing in this section 
may be construed to apply the securities laws, or any regulation issued 
under the securities laws (including any rule adopted under subsection 
(c)), to any secondary market transaction in an ancillary asset that is 
not otherwise a transaction in a security, security-based swap, or 
security-based swap agreement.

SEC. 110. SECURITIES INVESTOR PROTECTION CORPORATION APPLICABILITY.

Section 16(14) of the Securities Investor Protection Act of 1970 
(15 U.S.C. 78lll(14)) is amended by inserting after the second sentence 
the following: ``The term `security' does not include a digital 
commodity.''.

SEC. 111. INVESTOR AND CONSUMER PROTECTION ENFORCEMENT.

(a) Preservation of Certain Rights, Authorities, Laws, and 
Obligations.--Subject to subsection (b), nothing in this Act, any 
amendment made by this Act, or any rule, requirement, or regulation 
promulgated pursuant to this Act may be construed to prohibit, limit, 
impair, or otherwise affect--
(1) any person from bringing a civil action to enforce any 
private right of action for fraud, deceit, manipulation, or 
deceptive practices, to the extent that such private right of 
action is expressly provided for in this Act or an amendment 
made by this Act, or is otherwise available under Federal law, 
including with respect to conduct involving an ancillary asset, 
network token, digital commodity, or any transaction, 
disclosure, certification, notice, report, statement, 
communication, or other document involving any such asset;
(2) except as expressly provided in this Act or an 
amendment made by this Act, any Federal or State regulator, 
acting within the scope of authority otherwise provided by law, 
from bringing an administrative or civil enforcement action 
under--
(A) the Commodity Exchange Act (7 U.S.C. 1 et 
seq.), including the provisions of that Act that are 
added by this Act and relate to digital commodities and 
the jurisdiction of the Commodity Futures Trading 
Commission;
(B) the Securities Act of 1933 (15 U.S.C. 77a et 
seq.), as amended by this Act, the Securities Exchange 
Act of 1934 (15 U.S.C. 78a et seq.), as amended by this 
Act, or the Investment Advisers Act of 1940 (15 U.S.C. 
80b-1 et seq.);
(C) State commodities laws, subject to the 
provisions of this Act, and the amendments made by this 
Act, relating to the jurisdiction of the Commodity 
Futures Trading Commission; or
(D) section 18(c)(1) of the Securities Act of 1933 
(15 U.S.C. 77r(c)(1)), or any functionally equivalent 
anti-fraud or anti-manipulation provision of State 
securities law (including any State securities law with 
respect to a security or a transaction in a security to 
the extent enforcement of that anti-fraud or anti-
manipulation provision of State securities law is not 
preempted by section 18 of the Securities Act of 1933 
(15 U.S.C. 77r)), with respect to an investment 
contract involving an ancillary asset, or other 
transaction involving any such asset, for which this 
Act or an amendment made by this Act expressly 
preserves or provides for the application of anti-fraud 
or anti-manipulation authority;
(3) except as expressly provided in this Act or an 
amendment made by this Act, any generally applicable State law, 
including a law relating to fraud, deceit, unfair or deceptive 
acts or practices, consumer protection, banking, payments, 
property, contracts, criminal law, or unlawful conduct or 
practices, or the remedies available under any such law, with 
respect to conduct involving a digital asset, ancillary asset, 
network token, or digital commodity, or any transaction, 
activity, person, or service involving any such asset, provided 
that such law does not impose any licensing, registration, 
qualification, or other requirement that is expressly 
preempted, or otherwise expressly limited, by this Act or an 
amendment made by this Act;
(4) the fiduciary obligations of an investment adviser, as 
defined in section 202(a) of the Investment Advisers Act of 
1940 (15 U.S.C. 80b-2(a)), under section 206 of that Act (15 
U.S.C. 80b-6), any rule or regulation issued under such section 
206, or any other provision of Federal or State law, including 
in connection with investment advice regarding a digital asset, 
ancillary asset, network token, digital commodity, or 
substantially similar technology; or
(5) any right or remedy under Federal consumer financial 
law, including under section 1011 of the Consumer Financial 
Protection Act of 2010 (12 U.S.C. 5491) or the Federal Trade 
Commission Act (15 U.S.C. 41 et seq.), or authority under 
Federal consumer financial law with respect to any person, 
subject to the limitations under section 1027 of the Consumer 
Financial Protection Act of 2010 (12 U.S.C. 5517), including 
subsections (i) and (j) of such section 1027.
(b) Limitations and Rules of Construction.--Nothing in subsection 
(a) may be construed to--
(1) preserve, create, or authorize any Federal or State 
registration, licensing, qualification, or merit-review 
requirement under State law with respect to an ancillary asset, 
network token, digital commodity, transaction, person, or 
activity, to the extent that such requirement is preempted or 
otherwise limited by this Act or an amendment made by this Act;
(2) create, preserve, or authorize any private right of 
action under Federal or State law with respect to an ancillary 
asset, network token, digital commodity, or transaction 
involving any such asset;
(3) permit any claim, action, proceeding, requirement, 
liability, obligation, or remedy to be brought, maintained, 
imposed, or enforced under Federal or State securities or 
commodities law to the extent that such claim, action, 
proceeding, requirement, liability, obligation, or remedy 
depends upon, is predicated on, or would require a 
determination that an ancillary asset, network token, digital 
commodity, or any transaction, activity, person, or service 
involving any such asset has a status or characterization under 
Federal or State securities or commodities law that is contrary 
to an express classification or treatment provided by this Act 
or an amendment made by this Act;
(4) expand, contract, or otherwise alter the jurisdiction, 
exclusive or otherwise, of the Commission, the Commodity 
Futures Trading Commission, or any State regulator;
(5) limit, impair, or otherwise affect the treatment of any 
asset, transaction, or interest as a covered security for 
purposes of section 18 of the Securities Act of 1933 (15 U.S.C. 
77r); or
(6) create any new private right of action under Federal or 
State law, except that nothing in this paragraph may be 
construed to limit, impair, or otherwise affect any private 
right of action preserved under subsection (a)(1), expressly 
provided in this Act or an amendment made by this Act, or 
otherwise available under Federal law.

TITLE II--PROTECTING AGAINST ILLICIT FINANCE

SEC. 201. TREATMENT UNDER THE BANK SECRECY ACT AND SANCTIONS LAWS.

(a) Amendment.--Section 5312(c)(1)(A) of title 31, United States 
Code, is amended--
(1) by inserting ``digital commodity broker, digital 
commodity dealer,'' after ``futures commission merchant,''; and
(2) by inserting before the period the following: ``and any 
digital commodity exchange registered, or required to register, 
under that Act that permits direct customer access''.
(b) Bank Secrecy Act Requirements.--
(1) Regulations.--The Secretary of the Treasury, acting 
through the Director of the Financial Crimes Enforcement 
Network, and in consultation with the Commodity Futures Trading 
Commission, shall issue requirements consistent with the 
requirements of futures commission merchants to apply the Bank 
Secrecy Act to digital commodity brokers, digital commodity 
dealers, and digital commodity exchanges that are tailored to 
the size and complexity of such entities, including by 
requiring each such entity to--
(A) establish and maintain an anti-money laundering 
and countering the financing of terrorism program, 
which shall include--
(i) an appropriate risk assessment;
(ii) the development of internal policies, 
procedures, and controls;
(iii) the designation of a compliance 
officer;
(iv) an ongoing employee training program; 
and
(v) an independent audit function to test 
such program;
(B) retain appropriate records of transactions;
(C) monitor and report suspicious activity, which 
may include use of appropriate distributed ledger 
analytics; and
(D) maintain an effective customer identification 
program to identify and verify account holders and 
carry out appropriate customer due diligence.
(2) Compliance with sanctions.--A digital commodity broker, 
digital commodity dealer, or digital commodity exchange shall 
comply with all laws and regulations related to United States 
sanctions administered by the Office of Foreign Assets Control.
(c) Sense of Congress.--It is the sense of Congress that nothing in 
this section shall limit the applicability of any law imposing or 
authorizing the imposition of economic sanctions by the United States.

SEC. 202. DIGITAL ASSET EXAMINATION STANDARDS.

(a) Definitions.--In this section:
(1) Federal functional regulator.--The term ``Federal 
functional regulator'' has the meaning given the term in 
section 509 of the Gramm-Leach-Bliley Act (15 U.S.C. 6809).
(2) Financial institution.--The term ``financial 
institution'' has the meaning given the term in section 
5312(a)(2) of title 31, United States Code.
(b) Examination and Review.--The Secretary of the Treasury, in 
consultation with Federal functional regulators, shall establish, 
coordinated to the extent feasible, risk-based examination standards to 
assess financial institutions involved in the digital asset sector for 
compliance with anti-money laundering and countering the financing of 
terrorism requirements under the Bank Secrecy Act.

SEC. 203. PREVENTING ILLICIT FINANCE THROUGH PARTNERSHIP ACT.

(a) Short Title.--This section may be cited as the ``Preventing 
Illicit Finance Through Partnership Act''.
(b) Definitions.--In this section:
(1) Bank.--The term ``bank'' has the meaning given the term 
in section 1010.100 of title 31, Code of Federal Regulations 
(or any corresponding similar regulation).
(2) Certified or recognized information-sharing or 
interdiction network.--The term ``certified or recognized 
information-sharing or interdiction network'' means a real-
time, secure, public-private mechanism that--
(A) facilitates the detection, interdiction, and 
prevention of illicit finance violations through rapid 
information exchange between government and regulated 
entities; and
(B) is--
(i) certified by the Secretary of the 
Treasury for the purpose of supporting 
interdiction and investigative actions 
consistent with law enforcement or regulatory 
authorities; or
(ii) recognized by the Secretary of the 
Treasury as an existing (as of the day before 
the date of enactment of this Act), effective 
public-private partnership network that meets 
standards for security, accountability, and 
participation that are equivalent to the 
standards that would be required by the 
Secretary of the Treasury for certification 
under clause (i).
(3) Covered agency.--The term ``covered agency'' means--
(A) the Department of Justice, including the 
Federal Bureau of Investigation and the Drug 
Enforcement Administration;
(B) the Department of the Treasury, including the 
Financial Crimes Enforcement Network, the Internal 
Revenue Service, and the Office of Foreign Assets 
Control; and
(C) the Department of Homeland Security.
(4) Designated private sector entity.--The term 
``designated private sector entity'' means a private sector 
entity designated under subsection (d).
(5) Director.--The term ``Director'' means the Director of 
the Financial Crimes Enforcement Network.
(6) Illicit finance violation.--The term ``illicit finance 
violation'' means the illicit use of digital assets.
(7) Illicit use.--The term ``illicit use'' includes fraud, 
money laundering, terrorist financing, the purchase and sale of 
illicit goods, trafficking of fentanyl (including fentanyl 
precursors and trade in other illicit drugs), sanctions 
evasion, theft of funds, funding of illegal activities, 
transactions relating to child sexual abuse material or elder 
fraud abuse, and any other financial transaction involving the 
proceeds of specified unlawful activity, as defined in section 
1956(c) of title 18, United States Code.
(8) Money services business.--The term ``money services 
business'' has the meaning given the term in section 1010.100 
of title 31, Code of Federal Regulations (or any corresponding 
similar regulation).
(c) Establishment of Program.--The Secretary of the Treasury shall 
establish a pilot program under which covered agencies and designated 
private sector entities securely share information focused on potential 
illicit finance violations and threats and emerging risks relating to 
illicit finance violations.
(d) Designation of Private Sector Entities.--
(1) Required action.--
(A) Initial companies.--Not later than 90 days 
after the date of enactment of this Act, the Director 
and the Secretary shall designate 10 private sector 
entities that are money services businesses, 10 private 
sector entities that are digital commodity brokers, 
digital commodity dealers, or digital commodity 
exchanges, and 10 private sector entities that are 
banks to participate in the pilot program established 
under subsection (c), if such entities agree and 
volunteer to participate in the program.
(B) Biannual review.--Not less frequently than once 
every 6 months, the Director shall review and, as 
appropriate, replace the private sector entities 
designated under this paragraph.
(C) Rule of construction.--Nothing in this section 
may be construed as--
(i) requiring an entity to participate in 
the pilot program established under this 
section; or
(ii) enabling the Director to select an 
entity to participate in the pilot program 
without the consent of such entity.
(2) Optional designation.--In addition to the 30 private 
sector entities designated under paragraph (1), the Director 
may designate--
(A) 1 or more information sharing and analysis 
centers to participate in the pilot program;
(B) 1 or more participants in a certified or 
recognized information sharing or interdiction network; 
or
(C) 1 or more private sector entities, as 
appropriate, relating to a particular type of illicit 
activity.
(e) Information Sharing With Private Sector Entities.--A covered 
agency that initiates an investigation into a potential illicit finance 
violation, or identifies a threat or emerging risk relating to an 
illicit finance violation, may share with any designated private sector 
entity such information about the investigation, threat, or emerging 
risk as the covered agency determines is appropriate.
(f) Use of Information by Private Sector Entities.--Information 
received by a designated private sector entity under this section may 
not be used for any purpose other than identifying and reporting on 
activities that may involve illicit finance violations or threats and 
emerging risks relating to illicit finance violations, unless otherwise 
prescribed by regulation or permitted by the covered agency sharing the 
information.
(g) Means of Sharing Information.--The covered agencies and 
designated private sector entities may share information about 
potential illicit finance violations, or threats and emerging risks 
relating to illicit finance violations, with each other--
(1) through a portal established by the Secretary of the 
Treasury or a similar mechanism determined appropriate by the 
Secretary of the Treasury;
(2) through secure email;
(3) at monthly meetings, which shall be facilitated by the 
Secretary of the Treasury; or
(4) through a certified or recognized information-sharing 
or interdiction network.
(h) Limitation on Liability.--A designated private sector entity 
that transmits, receives, or shares information for the purposes of 
identifying and reporting activities that may constitute illicit 
finance violations, or threats and emerging risks relating to illicit 
finance violations, shall not be liable to any person for such 
disclosure or for any failure to provide notice of such disclosure to 
the person who is the subject of such disclosure or any other person 
identified in such disclosure.
(i) Sunset.--The pilot program established under subsection (c) 
shall terminate on the date that is 5 years after the date of enactment 
of this Act, unless made permanent through notice and comment 
rulemaking by the Department of the Treasury.

SEC. 204. FINANCIAL TECHNOLOGY PROTECTION ACT.

(a) Short Title.--This section may be cited as the ``Financial 
Technology Protection Act''.
(b) Definitions.--In this section:
(1) Appropriate congressional committees.--The term 
``appropriate congressional committees'' means--
(A) the Committee on Banking, Housing, and Urban 
Affairs of the Senate;
(B) the Committee on Agriculture, Nutrition, and 
Forestry of the Senate;
(C) the Committee on Financial Services of the 
House of Representatives; and
(D) the Committee on Agriculture of the House of 
Representatives.
(2) Distributed ledger analytics company.--The term 
``distributed ledger analytics company'' means any business 
providing software, research, or other services (such as 
tracing tools, geofencing, transaction screening, the 
collection of business data, and sanctions screening) that--
(A) support private and public sector 
investigations and risk management activities; and
(B) involve cryptographically secured distributed 
ledgers or any similar technology or implementation.
(3) Emerging technologies.--The term ``emerging 
technologies'' means the critical and emerging technology areas 
listed in the Critical and Emerging Technologies List developed 
by the Fast Track Action Subcommittee on Critical and Emerging 
Technologies of the National Science and Technology Council, 
including any updates to such list.
(4) Foreign terrorist organization.--The term ``foreign 
terrorist organization'' means an organization that is 
designated as a foreign terrorist organization under section 
219 of the Immigration and Nationality Act (8 U.S.C. 1189).
(5) Illicit use.--The term ``illicit use'' includes fraud, 
money laundering, terrorist financing, the purchase and sale of 
illicit goods, trafficking of fentanyl (including fentanyl 
precursors and trade in other illicit drugs), sanctions 
evasion, theft of funds, funding of illegal activities, 
transactions related to child sexual abuse material or elder 
fraud abuse, and any other financial transaction involving the 
proceeds of specified unlawful activity (as defined in section 
1956(c) of title 18, United States Code).
(6) State sponsor of terrorism.--The term ``state sponsor 
of terrorism'' means a country determined by the Secretary of 
State to have repeatedly provided support for acts of 
international terrorism under section 40 of the Arms Export 
Control Act (22 U.S.C. 2780) or section 620A of the Foreign 
Assistance Act of 1961 (22 U.S.C. 2371).
(7) Terrorist.--The term ``terrorist'' includes a person 
carrying out domestic terrorism or international terrorism (as 
such terms are defined, respectively, under section 2331 of 
title 18, United States Code).
(8) Transnational organized crime.--The term 
``transnational organized crime'' has the meaning given the 
term in section 284 of title 10, United States Code.
(c) Independent Financial Technology Working Group to Combat 
Terrorism, Narcotics Trafficking, and Illicit Financing.--
(1) Establishment.--There is established the Independent 
Financial Technology Working Group to Combat Terrorism, 
Narcotics Trafficking, and Illicit Financing (in this section 
referred to as the ``Working Group'' ), which shall consist of 
the following:
(A) The Secretary of the Treasury or their 
designee, who shall serve as the chair of the Working 
Group.
(B) A senior-level representative from each of the 
following:
(i) The Department of the Treasury.
(ii) The Office of Terrorism and Financial 
Intelligence.
(iii) The Internal Revenue Service.
(iv) The Department of Justice.
(v) The Federal Bureau of Investigation.
(vi) The Drug Enforcement Administration.
(vii) The Department of Homeland Security.
(viii) The United States Secret Service.
(ix) The Department of State.
(x) The Office of the Director of National 
Intelligence.
(C) At least 5 individuals appointed by the 
Secretary of the Treasury to represent the following:
(i) Digital asset companies.
(ii) Distributed ledger analytics 
companies.
(iii) Financial institutions.
(iv) Institutions or organizations engaged 
in research.
(v) Institutions or organizations focused 
on individual privacy and civil liberties.
(D) Such additional individuals as the Secretary of 
the Treasury may appoint as necessary to accomplish the 
duties described in paragraph (2).
(2) Duties.--The Working Group shall--
(A) conduct research on the illicit use of digital 
assets and other related emerging technologies, 
including by terrorists, foreign terrorist 
organizations, state sponsors of terrorism, and 
transnational organized crime groups; and
(B) develop legislative and regulatory proposals to 
improve anti-money laundering, counter-terrorist, and 
other counter-illicit financing efforts in the United 
States.
(3) Reports.--
(A) In general.--Not later than 1 year after the 
date of enactment of this Act, and annually for the 3 
years thereafter, the Working Group shall submit to the 
Secretary of the Treasury, the heads of each agency 
represented in the Working Group pursuant to paragraph 
(1)(B), and the appropriate congressional committees a 
report containing the findings and determinations made 
by the Working Group in the previous year and any 
legislative and regulatory proposals developed by the 
Working Group.
(B) Final report.--Before the date on which the 
Working Group terminates under paragraph (4)(A), the 
Working Group shall submit to the appropriate 
congressional committees a final report detailing the 
findings, recommendations, and activities of the 
Working Group, including any final results from the 
research conducted by the Working Group.
(4) Sunset.--
(A) In general.--The Working Group shall terminate 
on the later of--
(i) the date that is 4 years after the date 
of enactment of this Act; or
(ii) the date on which the Working Group 
completes any wind-up activities described in 
subparagraph (B).
(B) Authority to wind up activities.--If there are 
research, proposals, or other related activities of the 
Working Group ongoing as of the date that is 4 years 
after the date of enactment of this Act, the Working 
Group may temporarily continue working in order to wind 
up such activities.
(C) Return of appropriated funds.--On the date on 
which the Working Group terminates under subparagraph 
(A), any unobligated funds appropriated to carry out 
this subsection shall be transferred to the Treasury.

SEC. 205. DIGITAL ASSET KIOSKS.

(a) Registration.--Section 5330 of title 31, United States Code, is 
amended--
(1) in subsection (d)--
(A) in paragraph (1)(A), by inserting ``, any 
person who owns, operates, or manages a digital asset 
kiosk in the United States or its territories,'' after 
``similar instruments''; and
(B) by adding at the end the following:
``(3) Digital asset; digital asset address; digital asset 
kiosk; digital asset kiosk operator.--The terms `digital 
asset', `digital asset address', `digital asset kiosk', and 
`digital asset kiosk operator' have the meanings given those 
terms, respectively, in section 5337.''; and
(2) by adding at the end the following:
``(f) Registration of Digital Asset Kiosk Locations.--
``(1) In general.--Not later than 90 days after the 
effective date of this subsection, and not less than once every 
90 days thereafter, the Secretary of the Treasury shall require 
digital asset kiosk operators to submit an updated list 
containing the physical address of each digital asset kiosk 
owned or operated by the digital asset kiosk operator.
``(2) Form and manner of registration.--Each submission by 
a digital asset kiosk operator pursuant to paragraph (1) shall 
include--
``(A) the legal name of the digital asset kiosk 
operator;
``(B) any fictitious or trade name of the digital 
asset kiosk operator;
``(C) the physical address of each digital asset 
kiosk owned, operated, or managed by the digital asset 
kiosk operator that is located in the United States or 
the territories of the United States;
``(D) the start date of operation of each digital 
asset kiosk;
``(E) the end date of operation of each digital 
asset kiosk, if applicable; and
``(F) each digital asset address used by the 
digital asset kiosk operator.
``(3) False and incomplete information.--The filing of 
false or materially incomplete information in a submission 
required under paragraph (1) shall be deemed a failure to 
comply with the requirements of this subsection.''.
(b) Preventing Fraudulent Transactions at Digital Asset Kiosks.--
(1) In general.--Subchapter II of chapter 53 of title 31, 
United States Code, is amended by adding at the end the 
following:
``Sec. 5337. Digital asset kiosk fraud prevention
``(a) Definitions.--In this section:
``(1) Customer.--The term `customer' means any person that 
purchases or sells digital assets through a digital asset 
kiosk.
``(2) Distributed ledger analytics.--The term `distributed 
ledger analytics' means the analysis of data from public 
distributed ledgers, and associated transaction information, to 
provide risk-specific information about digital asset 
transactions and digital asset addresses.
``(3) Digital asset.--The term `digital asset' has the 
meaning given the term in section 2 of the GENIUS Act (12 
U.S.C. 5901).
``(4) Digital asset address.--The term `digital asset 
address' means an alphanumeric identifier associated with a 
digital asset wallet identifying the location to which a 
digital asset purchased through a digital asset kiosk can be 
sent or from which a digital asset sold through a digital asset 
kiosk can be accessed.
``(5) Digital asset kiosk.--The term `digital asset kiosk' 
means a stand-alone machine that is capable of accepting or 
dispensing legal tender in exchange for digital assets.
``(6) Digital asset kiosk operator.--The term `digital 
asset kiosk operator' means a person who owns, operates, or 
manages a digital asset kiosk located in the United States or 
its territories.
``(7) Digital asset kiosk transaction.--The term `digital 
asset kiosk transaction' means the purchase or sale of digital 
assets via a digital asset kiosk.
``(8) Digital asset wallet.--The term `digital asset 
wallet' means a software application or other mechanism 
providing a means for holding, storing, and transferring 
digital assets.
``(9) FinCEN.--The term `FinCEN' means the Financial Crimes 
Enforcement Network of the Department of the Treasury.
``(10) New customer.--The term `new customer,' with respect 
to a digital asset kiosk operator, means a customer during the 
14-day period beginning on the date of the first digital asset 
kiosk transaction of the customer with the digital asset kiosk 
operator.
``(11) Transaction hash.--The term `transaction hash' means 
a unique identifier made up of a string of characters that act 
as a record of and provide proof that a transaction was 
verified and added to the distributed ledger.
``(b) Disclosures.--
``(1) In general.--Before entering into a digital asset 
transaction with a customer, a digital asset kiosk operator 
shall disclose in a clear, conspicuous, and easily readable 
manner--
``(A) all relevant terms and conditions of the 
digital asset kiosk transaction, including--
``(i) the amount of the digital asset kiosk 
transaction;
``(ii) the type and nature of the digital 
asset kiosk transaction;
``(iii) a warning that the digital asset 
kiosk transaction is final, is not refundable, 
and may not be reversed; and
``(iv) the type and amount of any fees or 
other expenses paid by the customer;
``(B) a warning relating to consumer fraud 
including--
``(i) that consumer fraud often starts with 
contact from a stranger, and that the customer 
should never send money to someone the customer 
does not know;
``(ii) the most common types of fraudulent 
schemes involving digital asset kiosks, such 
as--
``(I) impersonation of a government 
official or a bank representative;
``(II) threats of jail time or 
financial penalties;
``(III) offers of a job or reward 
in exchange for payment, or offers of 
deals that seem too good to be true;
``(IV) claims of a frozen bank 
account or credit card;
``(V) requests for donations to 
charity or disaster relief; or
``(VI) payment to an individual the 
customer has never met; and
``(iii) a statement that the customer 
should contact law enforcement if they suspect 
fraudulent activity, such as scams, including 
contact information for a relevant law 
enforcement or government agency.
``(2) Additional disclosures.--FinCEN may adopt rules 
relating to additional disclosures required to be made to 
customers prior to engaging in a transaction.
``(c) Acknowledgment of Disclosures.--Each time a customer uses a 
digital asset kiosk, the digital asset kiosk operator shall ensure 
acknowledgment of all disclosures required under subsection (b) via 
confirmation of consent of the customer at the digital asset kiosk.
``(d) Receipts.--Upon completion of each digital asset kiosk 
transaction, the digital asset kiosk operator shall provide the 
customer with a receipt, which shall include the following information:
``(1) The name and contact information of the digital asset 
kiosk operator, including a telephone number for a customer 
service helpline.
``(2) The name of the customer.
``(3) The type, value, date, and precise time of the 
digital asset kiosk transaction, transaction hash, and each 
applicable digital asset address.
``(4) The amount of the digital asset kiosk transaction 
expressed in United States dollars.
``(5) All fees charged.
``(6) A statement that the customer should contact law 
enforcement if they suspect fraudulent activity, such as scams, 
including contact information for a relevant law enforcement or 
government agency.
``(7) The exchange rate applied.
``(8) Any additional information the digital asset kiosk 
operator determines appropriate.
``(e) Physical Receipts Available.--A physical version of the 
receipt required under subsection (d) shall be issued to the customer 
at the time of the digital asset kiosk transaction, if the customer 
opts for such a physical version of the receipt.
``(f) Anti-Fraud Policy.--
``(1) In general.--Each digital asset kiosk operator shall 
establish, maintain, and implement a written anti-fraud policy 
if required by, and consistent with, applicable State law in 
those States where the digital asset kiosk operator is 
licensed.
``(2) Federal standard.--A digital asset kiosk operator 
operating in any State that does not require an anti-fraud 
policy under paragraph (1) shall establish, maintain, and 
implement an anti-fraud policy that, at a minimum, includes--
``(A) the identification and assessment of fraud-
related areas;
``(B) procedures and controls to protect against 
risks identified under subparagraph (A);
``(C) allocation of responsibility for monitoring 
the risks identified under subparagraph (A); and
``(D) procedures for the periodic evaluation and 
revision of the anti fraud procedures, controls, and 
monitoring mechanisms under subparagraphs (B) and (C).
``(g) Appointment of Compliance Officer.--Each digital asset kiosk 
operator shall designate and employ a compliance officer who--
``(1) is qualified to coordinate and monitor compliance 
with this section and all other applicable Federal and State 
laws, rules, and regulations;
``(2) is employed full-time by the digital asset kiosk 
operator;
``(3) is not the chief executive officer of the digital 
asset kiosk operator; and
``(4) does not own or control more than 10 percent of any 
interest in the digital asset kiosk operator.
``(h) Use of Distributed Ledger Analytics and Wallet Pinning.--
``(1) In general.--Each digital asset kiosk operator shall 
use distributed ledger analytics to prevent sending a digital 
asset to a digital asset wallet known to be affiliated with 
fraudulent activity at the time of a digital asset kiosk 
transaction and to detect transaction patterns indicative of 
fraud or other illicit activities.
``(2) Wallet pinning.--Each digital asset kiosk operator 
shall maintain restrictions that prevent more than 1 customer 
of the digital asset kiosk operator from using the same digital 
wallet address.
``(3) Compliance.--The Director of FinCEN may request 
evidence from any digital asset kiosk operator to confirm 
compliance with this subsection.
``(i) Confirmation Required Before New Customer Transactions.--
Before entering into a digital asset kiosk transaction valued at $500 
or more with a new customer, the digital asset kiosk operator shall 
obtain confirmation from the new customer that--
``(1) the new customer wishes to proceed with the digital 
asset kiosk transaction; and
``(2) the new customer is not being fraudulently induced 
into engaging in the transaction.
``(j) Holding Period.--No digital asset kiosk operator shall 
execute a transaction on behalf of a new customer that sends digital 
assets to a specific wallet address unless at least 72 hours have 
elapsed since the initiation of the transaction by the new customer.
``(k) Transaction Limits With Respect to New Customers.--The 
Secretary of the Treasury shall prescribe by regulation the threshold 
amounts for reporting or limiting digital asset kiosk transactions, 
including aggregate or single-day deposit and withdrawal limits, as the 
Secretary determines are reasonably necessary to deter fraud and 
illicit finance. Such regulations shall consider the unique risks and 
functionalities of digital asset kiosks and may provide for exceptions, 
adjustments, or exclusions as deemed appropriate by the Secretary.
``(l) Interim Transaction Limits.--Until the effective date of 
regulations prescribed under subsection (k), a digital asset kiosk 
operator shall not permit a new customer to conduct transactions 
exceeding $3,500 in the aggregate within any 24-hour period.
``(m) Refunds.--A digital asset kiosk operator shall issue a refund 
for a customer's transaction fees within 30 days if--
``(1) the customer was fraudulently induced into engaging 
in the digital asset kiosk transaction; and
``(2) the customer files a complaint to the digital asset 
kiosk operator, which includes--
``(A) the name, address, and phone number of the 
customer;
``(B) the transaction hash of the digital asset 
kiosk transaction or information sufficient to 
establish the type, value, date, and time of the 
digital asset kiosk transaction; and
``(C) a copy of a report to a State or local law 
enforcement or government agency made not later than 30 
days after the digital asset kiosk transaction.
``(n) Customer Service Helpline.--Each digital asset kiosk operator 
shall provide live customer service during business hours, the phone 
number for which is regularly monitored and displayed in a clear, 
conspicuous, and easily readable manner upon each digital asset kiosk. 
During non-business hours, the digital asset kiosk operator shall 
maintain an alternative customer service system that may include an 
automated chatbot, an online complaint reporting portal, or other 
customer service mechanism.
``(o) Communications With Law Enforcement.--Each digital asset 
kiosk operator performing business in the United States shall have a 
dedicated method of contact, such as a phone number, email address, or 
other contact method, for law enforcement and regulatory agencies to 
contact the digital asset kiosk operator. This contact method shall be 
displayed and available on the digital asset kiosk operator's website.
``(p) Civil Penalties and State Enforcement.--Any State regulator 
may bring a civil action or other appropriate proceeding to enforce the 
provisions of this section and may assess or collect civil penalties or 
other remedies for violations of this section, as provided under 
applicable State law.
``(q) Rule of Construction.--Nothing in this section may be 
construed to prohibit a State from enacting a law, rule, or regulation 
that provides greater protection to customers.''.
(2) Technical and conforming amendment.--The table of 
sections for subchapter II of chapter 53 of title 31, United 
States Code, is amended by adding at the end the following:

``5337. Digital asset kiosk fraud prevention.''.

SEC. 206. STUDY ON ILLICIT USE OF DIGITAL ASSETS.

(a) Definitions.--In this section:
(1) Foreign terrorist organization.--The term ``foreign 
terrorist organization'' means an organization that is 
designated as a foreign terrorist organization under section 
219 of the Immigration and Nationality Act (8 U.S.C. 1189).
(2) Transnational organized criminal.--The term 
``transnational organized criminal'' means an individual who 
participates in transnational organized crime, as defined in 
section 284(i) of title 10, United States Code.
(b) Review.--Not later than 1 year after the date of enactment of 
this Act, the Secretary of the Treasury, in consultation with the 
Attorney General, shall conduct a comprehensive review of how foreign 
terrorist organizations and transnational organized criminals utilize 
digital assets in connection with illicit activities.
(c) Report.--Not later than 180 days after completing the review 
under subsection (b), the Secretary of the Treasury shall submit to the 
Committee on Agriculture, Nutrition, and Forestry and the Committee on 
Banking, Housing, and Urban Affairs of the Senate and the Committee on 
Agriculture and the Committee on Financial Services of the House of 
Representatives a report on the findings of the Secretary, including--
(1) an assessment of how foreign terrorist organizations 
and transnational organized criminals utilize digital assets in 
connection with illicit activities; and
(2) recommendations to assist the Commission and the 
Commodity Futures Trading Commission in strengthening 
compliance and enforcement of digital assets-related entities 
registered with their respective agencies.
(d) Additional Agencies.--The Secretary of the Treasury may, in the 
sole discretion of the Secretary of the Treasury, solicit input for the 
report required under subsection (c) from any or all of the Federal 
functional regulators, as defined in section 509 of the Gramm-Leach-
Bliley Act (15 U.S.C. 6809), and the Commodity Futures Trading 
Commission.
(e) Classified Annex.--The report required under subsection (c) may 
include a classified annex, as appropriate.

TITLE III--RESPONSIBLE INNOVATION IN DECENTRALIZED FINANCE

SEC. 301. RULEMAKING ON APPLICATION OF EXISTING SECURITIES INTERMEDIARY 
REQUIREMENTS AND EXISTING BANK SECRECY ACT REQUIREMENTS 
TO NON-DECENTRALIZED FINANCE TRADING PROTOCOLS.

(a) Definitions.--In this section:
(1) Decentralized finance trading protocol.--The term 
``decentralized finance trading protocol'' means a distributed 
ledger system through which multiple participants can execute a 
financial transaction--
(A) in accordance with an automated rule or 
algorithm that is predetermined and non-discretionary; 
and
(B) without reliance on a person other than the 
user to maintain custody or control of any digital 
assets subject to the financial transaction.
(2) Non-decentralized finance trading protocol.--
(A) In general.--The term ``non-decentralized 
finance trading protocol'' means a decentralized 
finance trading protocol that meets 1 or more of the 
following:
(i) A person or group of persons under 
common control, or acting pursuant to an 
agreement, arrangement, or understanding to act 
in concert, has the authority, directly or 
indirectly, through any contract, arrangement, 
understanding, relationship, or otherwise, to 
control or materially alter the functionality, 
operation, or rules of consensus or agreement 
of the decentralized finance trading protocol.
(ii) The decentralized finance trading 
protocol does not operate, execute, and enforce 
its operations and transactions based solely on 
pre-established, transparent rules encoded 
directly within the source code of the 
distributed ledger system.
(iii) A person or group of persons under 
common control, or acting pursuant to an 
agreement, arrangement, or understanding to act 
in concert, has the authority, via operation of 
the decentralized finance trading protocol, to 
restrict, censor, or prohibit the use of the 
decentralized finance trading protocol, 
including any applicable system-based user 
activity.
(B) Special rule.--For purposes of subparagraph 
(A), a decentralized governance system, solely by 
virtue of the operation of the decentralized governance 
system, shall not be considered to be a person or a 
group of persons under common control or acting 
pursuant to an agreement, arrangement, or understanding 
to act in concert.
(C) Exclusions.--For purposes of this section, 
participation in an incident-response or security 
council, as described in subsection (f), shall not, by 
itself, be deemed to constitute control of a non-
decentralized finance trading protocol.
(D) Scoping.--In implementing this section, the 
Commission and the Department of the Treasury shall 
construe the term ``non-decentralized finance trading 
protocol'' in a manner consistent with section 15H of 
the Securities Exchange Act of 1934, as added by 
section 601.
(b) Rules.--
(1) In general.--The Commission, in consultation with the 
Department of the Treasury, shall adopt tailored, clear, and 
specific rules, after notice and comment, that clarify how a 
person, or group of persons under common control, or acting 
pursuant to an agreement, arrangement, or understanding to act 
in concert, that controls a non-decentralized finance trading 
protocol and is subject to the Securities Exchange Act of 1934 
(15 U.S.C. 78a et seq.), as amended by this Act, shall comply 
with applicable requirements under that Act, including with 
respect to registration, conduct, disclosure, recordkeeping, 
supervision, and other requirements under the securities laws.
(2) Requirements.--The rulemaking required under paragraph 
(1) shall--
(A) ensure that the rules adopted pursuant to that 
rulemaking are consistent with the purposes of the 
securities laws, including the public interest, the 
protection of investors, and the maintenance of fair 
and orderly markets;
(B) protect the rights of software developers, 
publishers, and users to create, publish, and use code 
and software in a manner consistent with the First 
Amendment to the Constitution of the United States;
(C) provide legal clarity for the development, 
publication, and operation of distributed ledger 
systems and the components therein in a manner 
consistent with the purposes of this section; and
(D) result in, by operation of law, the application 
and enforcement by the Department of the Treasury, 
where applicable and pursuant to existing law, as in 
effect on the day before the date of enactment of this 
Act, of anti-money laundering and countering the 
financing of terrorism requirements under the Bank 
Secrecy Act and other Federal law with respect to any 
person or group of persons that the Commission 
determines, through that rulemaking, is required to 
register, or comply as a registrant, under the 
Securities Exchange Act of 1934 (15 U.S.C. 78a et 
seq.).
(3) Application.--
(A) In general.--Any person or group of persons 
determined under this subsection to be required to 
register, or comply as a registrant, under the 
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 
(referred to in this paragraph as the ``Exchange Act'') 
shall be subject to that Act and the Bank Secrecy Act 
to the extent applicable under existing law, as in 
effect on the day before the date of enactment of this 
Act, consistent with the treatment of similarly 
situated participants under the Exchange Act.
(B) Rulemaking.--The Secretary of the Treasury, in 
consultation with the Commission, shall adopt tailored, 
clear, and specific rules, after providing notice and 
the opportunity to comment, that define compliance with 
obligations under the Bank Secrecy Act and other 
Federal laws relating to anti-money laundering and 
countering the financing of terrorism with respect to 
any person, or group of persons under common control 
(or acting pursuant to an agreement, arrangement, or 
understanding to act in concert), that--
(i) controls the operation of a non-
decentralized finance trading protocol 
identified in the rulemaking conducted under 
paragraph (1);
(ii) is required to register, or comply as 
a registrant, under the Exchange Act, as 
determined in the rulemaking conducted under 
paragraph (1); and
(iii) is caused to be treated as a 
financial institution under the Bank Secrecy 
Act pursuant to existing law, as in effect on 
the day before the date of enactment of this 
Act, as a result of registration or compliance 
described in clause (ii).
(c) Activity-Based Application.--Rules adopted under subsection 
(b)(1) shall require the Commission to determine the applicable 
requirements only with respect to securities-related activities, based 
on the functions performed by the controlling person or group of 
persons, including brokerage, dealing, trading, execution, clearing, or 
custody of securities, without regard to technological form, 
distributed architecture, or purportedly decentralized 
characterization.
(d) Rules of Construction.--
(1) Registration not required.--Nothing in this section, 
nor any rule adopted under this section, may be construed to--
(A) require a distributed ledger system or any 
software code to register with the Commission in its 
own capacity; or
(B) prohibit the launch, deployment, or operation 
of a distributed ledger system.
(2) No expansion of statutory authority.--Notwithstanding 
any rulemaking required under subsection (b), and 
notwithstanding any action the Commission or the Secretary of 
the Treasury may take under that subsection, nothing in this 
section, including any such rulemaking, may be construed to--
(A) expand or contract the statutory authority of 
the Commission or the Department of the Treasury, as in 
effect on the day before the date of enactment of this 
Act, under the Bank Secrecy Act; or
(B) limit the use of the authority described in 
subparagraph (A) to determine, pursuant to that 
rulemaking, the applicability of existing statutory 
requirements, as in effect on the day before the date 
of enactment of this Act, to persons or activities 
described in this section.
(3) No presumption of applicability.--Nothing in this 
section may be construed to create a presumption that any 
person or activity described in this section is or is not 
subject to the Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.) or the Bank Secrecy Act absent a determination made 
pursuant to a rulemaking required under this section.
(e) Preservation of Existing Authorities.--Nothing in this section 
may be construed to--
(1) limit the authority of the Commission under the 
securities laws to investigate violations, bring actions, or 
issue subpoenas with respect to persons determined, pursuant to 
rulemaking, to be subject to the securities laws under this 
section; or
(2) limit the authority of the Secretary of the Treasury 
under the Bank Secrecy Act, including to investigate violations 
or bring actions with respect to persons determined, pursuant 
to rulemaking, to be subject to the Bank Secrecy Act.
(f) Non-Decentralized Finance Trading Protocols.--
(1) In general.--In adopting rules under subsection (b), 
the Commission shall treat a decentralized governance system 
and any person participating in the decentralized governance 
system as separate persons unless such persons are under common 
control or acting pursuant to an agreement, arrangement, or 
understanding to act in concert.
(2) Emergency measures.--
(A) In general.--Pre-defined, temporary rules-based 
cybersecurity emergency measures exercised by an 
incident-response or security council exclusively in 
response to a specific and documented cybersecurity 
incident or imminent threat and pursuant to publicly 
disclosed, on-chain authorization mechanisms, strictly 
limited in scope and duration solely to address such 
specific and documented cybersecurity incident or 
imminent threat, and without unilateral control by any 
single person, shall not, by themselves, constitute 
common control or an agreement, arrangement, or 
understanding to act in concert, provided that such 
rules and authorities, including the procedures and 
operational limits governing such emergency measures, 
are disclosed in publicly available written 
documentation reasonably available to the applicable 
Federal regulator, by a decentralized governance system 
or similar legal entity sufficiently in advance of any 
exercise of such emergency powers.
(B) Prohibition.--The emergency measures described 
in subparagraph (A) may not be used to implement 
protocol upgrades, governance decisions, or economic 
changes that are unrelated to the mitigation of the 
applicable cybersecurity incident or imminent threat, 
as described in that subparagraph.
(3) Standards.--The standards criteria for temporary rules-
based cybersecurity emergency measures under paragraph (2) 
shall be established by rulemaking pursuant to subsection (b).

SEC. 302. ILLICIT FINANCE OBLIGATIONS FOR DISTRIBUTED LEDGER MESSAGING 
SYSTEMS.

(a) Definitions.--In this section:
(1) Distributed ledger messaging system.--The term 
``distributed ledger messaging system''--
(A) means a web-hosted software application that 
provides a user with the ability to create or submit an 
instruction, communication, or message to a distributed 
ledger application or decentralized finance trading 
protocol for the purpose of executing a transaction by 
the user; and
(B) does not include--
(i) a distributed ledger application;
(ii) a distributed ledger protocol;
(iii) a distributed ledger system;
(iv) a decentralized finance trading 
protocol;
(v) any client, node, validator, or other 
form of computational infrastructure with 
respect to a distributed ledger system; or
(vi) any software or hardware wallet that 
facilitates the custody of an individual of 
their digital assets.
(2) United States sanction law.--The term ``United States 
sanction law'' means any Federal law imposing, or authorizing 
the imposition of, economic sanctions.
(b) Guidance.--Not later than 360 days after the date of enactment 
of this Act, the Secretary of the Treasury shall issue guidance with 
respect to the economic sanctions and anti-money laundering and 
countering the financing of terrorism obligations, risk management 
practices, or compliance considerations, applicable to a distributed 
ledger messaging system that is owned or operated by a United States 
person, as defined in any law imposing or authorizing the imposition of 
economic sanctions, which may include--
(1) the use of commercially reasonable distributed ledger-
analytics screening measures, through industry-standard 
distributed ledger-analytics tools, to identify wallet 
addresses that are owned by sanctioned persons, involve 
jurisdictions or financial institutions subject to United 
States sanctions, or activity prohibited by United States 
sanctions;
(2) blocking, rejecting, preventing the routing of, or 
otherwise restricting attempted transactions prohibited by 
United States sanction laws;
(3) blocking or restricting transactions that exhibit 
indicators of ransomware activity, illicit finance typologies, 
or any other pattern that presents a significant and 
identifiable illicit finance risk based on a commercially 
reasonable distributed ledger-analytics assessment to identify 
transactions that involve ransomware activity and other illicit 
finance activity; and
(4) implementing and maintaining risk-based measures, 
consistent with applicable law, to identify, mitigate, and 
address anti-money laundering and countering the financing of 
terrorism risks, including--
(A) monitoring for risk indicators and limiting 
exposure to illicit-finance risks, which may include 
restricting, limiting, or otherwise mitigating exposure 
to high-risk transactions; and
(B) complying, as applicable, with special measures 
implemented by the Secretary of the Treasury under 
section 5318A of title 31, United States Code.
(c) Enforcement and Penalties.--The Secretary of the Treasury and 
any other Federal agency with relevant jurisdiction have the authority, 
as applicable, to enforce this section using their existing 
authorities, as of the day before the date of enactment of this Act, 
under applicable law.
(d) Rules of Construction.--Nothing in this section may be 
construed to--
(1) alter or amend any laws imposing or authorizing 
imposition of economic sanctions by the United States, 
including those that apply to United States persons that own or 
operate a distributed ledger messaging system;
(2) expand or contract the applicability of--
(A) economic sanctions, anti-money laundering, or 
any other illicit finance laws in effect as of the day 
before the date of enactment of this Act to any person, 
including any person that owns or operates a 
distributed ledger messaging system; or
(B) the definition of a ``financial institution'' 
under applicable laws, which shall not apply to non-
controlling developers or providers as defined in 
section 604(b)(3); or
(3) restrict the authority of the Secretary of the Treasury 
to implement, administer, and enforce, including by imposing 
civil money penalties, any law imposing or authorizing the 
imposition of economic sanctions or any law to prevent money 
laundering or illicit finance otherwise provided by Federal law 
to the Secretary of the Treasury.

SEC. 303. SPECIAL MEASURE RELATING TO CERTAIN TRANSMITTALS OF FUNDS.

Section 5318A of title 31, United States Code, is amended--
(1) in subsection (a)(2)(C), by striking ``subsection 
(b)(5)'' and inserting ``paragraph (5) or (6) of subsection 
(b)'' and
(2) in subsection (b), by adding at the end the following:
``(6) Special measure for certain transmittals of funds.--
If the Secretary of the Treasury finds that a jurisdiction 
outside of the United States, 1 or more financial institutions 
operating outside of the United States, or 1 or more classes of 
transactions within, or involving, a jurisdiction outside of 
the United States is of primary money laundering concern in 
connection with illicit finance through the use of digital 
assets, as defined in section 2 of the GENIUS Act (12 U.S.C. 
5901), the Secretary may, by order, regulation, or otherwise as 
permitted by law, prohibit, or impose conditions upon, certain 
transmittals of funds (to be defined by the Secretary by 
regulation) by any domestic financial institution or domestic 
financial agency, if such transmittal of funds involves any 
such institution, class of transaction, or type of account.''.

SEC. 304. OFFSHORE STABLECOIN REPORT.

(a) Definitions.--In this section:
(1) Material volume of transactions.--The term ``material 
volume of transactions'' means a sustained level of transaction 
activity that is--
(A) publicly observable;
(B) exceeds de minimis usage over a 12-month 
period; and
(C) is reasonably likely to affect the illicit 
finance or national security risk exposure of the 
United States.
(2) Payment stablecoin.--The term ``payment stablecoin'' 
has the meaning given the term in section 2 of the GENIUS Act 
(12 U.S.C. 5901).
(3) United states-dependent offshore stablecoin.--The term 
``United States-dependent offshore stablecoin'' means a payment 
stablecoin--
(A) that is not issued by a permitted payment 
stablecoin issuer or any foreign payment stablecoin 
issuer registered with the Comptroller (as those terms 
are defined in section 2 of the GENIUS Act (12 U.S.C. 
5901));
(B) that is issued by a person operating outside of 
the United States; and
(C) the value of which is supported or backed by a 
reserve of assets that has a substantial nexus to the 
United States, which may include--
(i) obligations of the United States, 
including United States Treasury securities and 
repurchase agreements backed by United States 
Treasury securities and funds held as deposits 
at any bank subject to the jurisdiction of the 
United States;
(ii) deposits maintained at a banking 
entity or insured depository institution 
located in the United States, including 
correspondent or payable-through accounts;
(iii) securities issued or guaranteed by 
the United States or any agency or 
instrumentality thereof; or
(iv) assets custodied, cleared, or settled 
through payment, clearing, or settlement 
systems located in the United States.
(b) Report.--Not later than June 30 of the second calendar year 
that begins after the date of enactment of this Act, and every 4 years 
thereafter for not more than 3 reports, the Secretary of the Treasury 
shall submit to the Committee on Banking, Housing, and Urban Affairs of 
the Senate and the Committee on Financial Services of the House of 
Representatives, and make available on the website of the Department of 
the Treasury, a report assessing whether there is credible, 
articulable, and publicly supportable evidence of significant illicit 
finance threats or vulnerabilities associated with any United States-
dependent offshore stablecoin employed in a material volume of 
transactions.
(c) Contents.--Each report required under subsection (b) shall 
include--
(1) an assessment of the illicit finance risk of each 
United States-dependent offshore stablecoin employed in a 
material volume of transactions;
(2) an assessment of the controls employed by the issuers 
of United States-dependent offshore stablecoins to address the 
use of such stablecoins in illicit finance, as available;
(3) data and information regarding the volume of United 
States-dependent offshore stablecoins assessed to be employed 
in connection with illicit finance, as available;
(4) a general description of the relationships between 
United States-dependent offshore stablecoins and the financial 
system of the United States, including principal channels of 
interaction; and
(5) such other information or analysis as the Secretary of 
the Treasury deems relevant to assessing the illicit finance 
risks of United States-dependent offshore stablecoins.
(d) Classified Annex.--Each report required under subsection (b) 
shall be submitted in unclassified form, but may contain a classified 
annex.
(e) National Strategy.--The reporting requirement under subsection 
(b) may be met as part of the national strategy for combating terrorist 
and other illicit financing required under sections 261 and 262 of the 
Countering America's Adversaries Through Sanctions Act (Public Law 115-
44; 131 Stat. 934) for the reporting years.
(f) Rule of Construction.--Nothing in this section may be construed 
to authorize--
(1) the disclosure of any information that is protected 
from disclosure under Federal law; and
(2) the collection or use of any information other than 
publicly available data or information lawfully obtained by the 
Department of the Treasury under existing authorities, as of 
the day before the date of enactment of this Act.

SEC. 305. TEMPORARY HOLD FOR CERTAIN DIGITAL ASSET TRANSACTIONS.

(a) Definitions.--In this section:
(1) Covered agency.--The term ``covered agency'' means any 
State or Federal law enforcement agency, including the 
Department of the Treasury.
(2) Covered person.--The term ``covered person'' means a 
person that is--
(A) a permitted payment stablecoin issuer;
(B) a foreign payment stablecoin issuer (as defined 
in section 2 of the GENIUS Act (12 U.S.C. 5901)) 
registered with the Office of the Comptroller of the 
Currency pursuant to section 18(c) of that Act (12 
U.S.C. 5916(c)); or
(C) a digital asset service provider, as that term 
is defined in section 2 of the GENIUS Act (12 U.S.C. 
5901).
(3) Payment stablecoin; permitted payment stablecoin 
issuer.--The terms ``payment stablecoin'' and ``permitted 
payment stablecoin issuer'' have the meanings given those terms 
in section 2 of the GENIUS Act (12 U.S.C. 5901).
(4) Qualified written request.--The term ``qualified 
written request'' means a written communication issued by an 
authorized official of a covered agency that--
(A) identifies a specific wallet, address, account, 
or transaction reasonably suspected of being linked to 
illicit activity;
(B) requests a covered person initiate an action 
with respect to the specified wallet, address, account, 
or transaction reasonably suspected of being linked to 
illicit activity, including delaying the execution of a 
transaction, conversion, or withdrawal involving 
digital assets; and
(C) includes a designated agency contact.
(5) Temporary hold.--The term ``temporary hold'' means a 
restriction applied by a covered person that delays execution 
of a transaction, conversion, or withdrawal involving digital 
assets for a reasonable period of time, not to exceed 30 
calendar days, which may be extended for an additional 150 
calendar days pursuant to a qualified written request.
(b) Protection From Private Causes of Action.--
(1) In general.--Any covered person that, in good faith and 
in compliance with this section, or any person complying with a 
temporary lawful order under subsection (c) that, voluntarily 
implements a temporary hold shall not be held liable pursuant 
to any Federal or State private right of action for 
implementing the temporary hold, provided that--
(A) the covered person or other person, as 
applicable--
(i) implements the temporary hold based on 
a reasonable belief the transaction, 
conversion, or withdrawal relates to a 
violation or attempted violation of State or 
Federal law; or
(ii) implements the temporary hold after 
receiving a qualified written request from a 
covered agency;
(B) the covered person--
(i) makes reasonable efforts to notify the 
affected customer of the temporary hold;
(ii) reasonably determines that 
notification would impede actual or potential 
law enforcement efforts; or
(iii) receives a qualified written request 
from a covered agency that requests 
notification not be attempted; and
(C) the covered person notifies as soon as 
reasonably practicable an appropriate State or Federal 
law enforcement agency or the Federal Trade Commission, 
provided that such notification is not required when 
the covered person has received a qualified written 
request from a covered agency.
(2) Documentation.--A covered person shall--
(A) maintain for the 3-year period following the 
implementation of a temporary hold documentation of the 
basis for applying a temporary hold; and
(B) make available the documentation described in 
subparagraph (A) upon the request of a covered agency 
or the Federal Trade Commission.
(c) Compliance With Temporary Lawful Orders.--A permitted payment 
stablecoin issuer shall comply with any valid writ, process, order, 
rule, decree, command, or other requirement issued or promulgated under 
Federal law by a court of competent jurisdiction that--
(1) requires a person to freeze or prevent the transfer of 
payment stablecoins;
(2) specifies the payment stablecoins or accounts subject 
to blocking with reasonable particularity; and
(3) is subject to judicial or administrative review or 
appeal, as provided by law.
(d) Rules of Construction.--Nothing in this section may be 
construed to--
(1) compel or require any covered person to take action to 
freeze, seize, or block digital assets that is not otherwise 
required under existing Federal or State law, as in effect on 
the day before the date of enactment of this Act;
(2) limit or alter the authority of any government agency, 
including with respect to authority to pursue enforcement 
actions;
(3) limit or affect the application of--
(A) section 5318(g)(3) of title 31, United States 
Code, and any regulation requiring any financial 
institution to report suspicious activity; or
(B) any lawful authority to seize or freeze assets 
pursuant to a lawful order or sanctions designation; or
(4) limit the ability of a covered person to apply a 
temporary hold to any wallet, address, account, or transaction 
located outside the United States.
(e) Reporting.--The Attorney General and the Federal Trade 
Commission may issue regulations or guidance relating to any 
notification by covered persons pursuant to this section to the 
Department of Justice and the Federal Trade Commission, respectively.

SEC. 306. VOLUNTARY CYBERSECURITY PROGRAM FOR DECENTRALIZED FINANCE 
TRADING PROTOCOLS.

(a) Definitions.--In this section:
(1) Covered activities.--The term ``covered activities'' 
means the activities described in section 15H(b) of the 
Securities Exchange Act of 1934, as added by section 601.
(2) Decentralized finance trading protocol.--The term 
``decentralized finance trading protocol'' has the meaning 
given the term in section 15H(a) of the Securities Exchange Act 
of 1934, as added by section 601.
(3) Director.--The term ``Director'' means the Director of 
NIST.
(4) NIST.--The term ``NIST'' means the National Institute 
of Standards and Technology.
(b) Establishment of Program.--The Director shall, in consultation 
with the Commission and the Commodity Futures Trading Commission, 
establish a voluntary program for the adoption by persons developing 
decentralized finance trading protocols or engaging in covered 
activities of applicable cybersecurity standards published by NIST.
(c) Development of Program Criteria.--
(1) Request for information.--The Director shall issue a 
request for information in the Federal Register to gather input 
from experts and industry stakeholders on--
(A) cybersecurity threats, vulnerabilities, and 
risks to decentralized finance trading protocols;
(B) auditing and code security standards, including 
best practices for code audits;
(C) consumer protection and code transparency best 
practices on decentralized finance trading protocols; 
and
(D) existing NIST standards, as of the day before 
the date of enactment of this Act, and their 
applicability to decentralized finance trading 
protocols.
(2) Report.--The Director shall develop a report on the 
software development of decentralized finance protocols to 
assess technical input from paragraph (1).
(3) Publication of program criteria.--After evaluating 
input provided under paragraph (1), the Director shall release 
a special publication containing a detailed evaluation of 
cybersecurity best practices and existing applicable standards, 
as of the day before the date of enactment of this Act, for 
decentralized finance trading protocols, to provide program 
criteria to software developers and industry stakeholders under 
the voluntary program, which shall include a summary of public 
comments and responses as to how input was incorporated.
(4) Requests for revision.--
(A) In general.--After the Director publishes the 
program criteria under paragraph (3), the Director 
shall issue a request for comment in the Federal 
Register to gather input on the workability of the 
program.
(B) Petition.--The public may petition the Director 
to reevaluate certain aspects of the program criteria 
published under paragraph (3).
(5) Program updates.--As the technology underpinning 
decentralized finance trading protocols evolves, the Director 
shall update the special publication under paragraph (3) in 
compliance with subsection (d).
(d) Program.--
(1) Application.--A person seeking evaluation of a 
decentralized finance trading protocol or a covered activity 
under the program established under subsection (b) shall submit 
to the Director an application at such time and in such manner 
as the Director considers appropriate for purposes of the 
program.
(2) Review.--In carrying out the program established under 
subsection (b), the Director shall review each application 
submitted by a person under paragraph (1) of this subsection.
(3) Determination.--In carrying out a review under 
paragraph (2) of an application regarding a decentralized 
finance trading protocol or covered activity, the Director 
shall determine whether the protocol or activity is in 
compliance with existing applicable standards, frameworks, and 
guidelines published by the Director under subsection (c).
(4) Notice.--For each determination made under paragraph 
(3) pursuant to an application by a person of a decentralized 
finance trading protocol or covered activity, the Director 
shall transmit to the person a notice of the determination.
(e) Benefits of Program.--
(1) Display.--A person that receives notice under 
subsection (d)(4) that the Director has determined that a 
decentralized finance trading protocol or a covered activity 
has adopted the applicable cybersecurity standards published by 
NIST, the person may publicly display a designation, seal, or 
other identifier issued by the Director.
(2) Treatment of adoption.--In adopting a regulation or 
guidance relating to this section, a Federal agency shall 
consider adoption of cybersecurity standards under the program 
required by subsection (b) as evidence of good faith compliance 
with the law.
(f) Rule of Construction Relating to Preemption.--Nothing in this 
section may be construed to preempt any otherwise applicable provision 
of law of a State.

SEC. 307. AMENDMENTS TO MONETARY INSTRUMENT DEFINITION.

(a) Definitions.--In this section:
(1) Self-hosted wallet.--The term ``self-hosted wallet'' 
means a digital interface--
(A) that is used to secure and transfer digital 
assets; and
(B) under which the owner of digital assets secured 
and transferred under subparagraph (A) retains 
independent control over those digital assets.
(2) United states sanction law.--The term ``United States 
sanction law'' has the meaning given the term in section 
302(a).
(b) Monetary Instruments.--Section 5312(a)(3)(D) of title 31, 
United States Code, is amended by inserting ``, including digital 
assets (as defined in section 2 of the GENIUS Act (12 U.S.C. 5901)), as 
may be applicable,'' after ``value''.
(c) Treasury Risk Assessment.--As part of the national strategy for 
combating terrorist and other illicit financing required under sections 
261 and 262 of the Countering America's Adversaries Through Sanctions 
Act (Public Law 115-44; 131 Stat. 934), the Secretary of the Treasury 
shall consider--
(1) illicit activity, such as money laundering and 
sanctions evasion, involving self-hosted wallets;
(2) the effectiveness of and gaps in existing (as of the 
day before the date of enactment of this Act) methods, 
techniques, and strategies used by regulated financial 
institutions in detecting illicit activity, such as money 
laundering, involving self-hosted wallets;
(3) any illicit actors, including nation state actors, that 
pose a high risk of facilitating illicit activity through the 
use of self-hosted wallets;
(4) the benefits of the use of self-hosted wallets to--
(A) enhance user privacy and civil liberties 
through direct asset custody; and
(B) expand financial inclusion and access for 
communities underserved by traditional financial 
institutions;
(5) end user and counterparty risks associated with self-
hosted wallets, including consumer fraud, cybersecurity, and 
identity verification;
(6) the use of hardware self-hosted wallets to smuggle 
digital assets for financing cross-border illicit activity;
(7) the use of hardware self-hosted wallets for tax evasion 
and asset concealment; and
(8) other considerations the Secretary may determine 
appropriate.
(d) Guidance.--The Secretary of the Treasury may issue guidance for 
financial institutions that transact with self-hosted wallets based on 
the results of the research on benefits and risks required under 
subsection (c), which shall not--
(1) require a regulated entity to collect, with respect to 
any transaction, personally identifiable information about the 
controller of a self-hosted wallet when the controller is not 
both the customer of the regulated entity and a party to such 
transaction, except as required by Federal law, including 
United States sanctions laws and regulations or lawful process; 
or
(2) be construed to hinder, restrict, or otherwise impair 
the authority of any Federal agency to investigate, detect, 
counteract, or prevent illegal activity.

SEC. 308. RISK MANAGEMENT STANDARDS FOR DIGITAL ASSET INTERMEDIARIES.

(a) In General.--Before conducting trading activity (including 
routing orders and executing trades) through a decentralized finance 
trading protocol, a digital asset intermediary shall implement risk 
management standards as described in subsection (b) with respect to 
trading using that decentralized finance trading protocol.
(b) Requirements.--The risk management standards applicable to a 
digital asset intermediary shall be comprised of the following:
(1) Conducting an effective risk analysis with respect to 
the decentralized finance trading protocol, including--
(A) money laundering and sanctions evasion risks, 
including whether trading will involve activity 
relating to a primary money laundering concern;
(B) fraud and market manipulation;
(C) operational and cybersecurity risk, including 
settlement; and
(D) implementing robust policies and procedures to 
mitigate the risks identified under this paragraph.
(2) Disclosing the risks identified under paragraph (1) 
using plain language to customers.
(3) Maintaining robust, risk-based capability to detect 
market manipulation, fraud, money laundering, and sanctions 
evasion occurring on the decentralized finance trading 
protocol, which may include the use of alternative tools that 
will properly target such risks, including distributed ledger 
analytics tools.
(4) Implementing an effective risk-based procedure for 
determining whether to execute, reject, or suspend an incoming 
or outgoing transaction relating to the decentralized finance 
trading protocol, as applicable, including a determination 
based on suspected risk of money laundering, sanctions evasion, 
fraud, or market manipulation.
(5) Consistent with this subsection, implementing other 
reasonable standards which may be required by rule.
(c) Examinations.--
(1) Compliance.--The Commission or the Commodity Futures 
Trading Commission, or other appropriate self-regulatory 
organization, shall verify compliance with the requirements of 
this section as part of a regular examination of the digital 
asset intermediary at the frequency and under the conditions 
otherwise provided by law or rule.
(2) Rule of construction.--Nothing in this section may be 
construed to limit the authority of the Financial Crimes 
Enforcement Network or the Office of Foreign Assets Control 
from conducting examinations, investigations, or enforcement 
actions relating to this section as otherwise provided by law.
(d) Rulemaking.--Rules shall be adopted to implement this section 
as follows:
(1) The Department of the Treasury, in consultation with 
the Commission and the Commodity Futures Trading Commission, 
shall adopt rules to implement the money laundering and 
sanctions evasion risk analysis standards of this section.
(2) The Commission and the Commodity Futures Trading 
Commission shall adopt rules to implement this section other 
than the provisions described in paragraph (1).
(3) Rules adopted under this paragraph shall be reasonably 
tailored to the size of the applicable digital asset 
intermediary and risks of the digital asset intermediary that 
are reasonably knowable to the digital asset intermediary.

SEC. 309. STUDY ON DIGITAL ASSET MIXERS AND TUMBLERS.

(a) Digital Asset Mixer and Tumbler Defined.--In this section, the 
term ``digital asset mixer and tumbler'' means a smart contract, or set 
of smart contracts, that obfuscate or eliminate the source or other 
forms of identification of the holder of a digital asset, including by 
pooling assets from different holders and redistributing those assets 
among holders.
(b) Report.--Not later than 1 year after the date of enactment of 
this Act, the Secretary of the Treasury shall submit to the Committee 
on Banking, Housing, and Urban Affairs of the Senate and the Committee 
on Financial Services of the House of Representatives a report that 
analyzes the following issues:
(1) Current (as of the date on which the report is 
submitted) typologies of digital asset mixers and tumblers and 
historical transaction volume.
(2) Estimates of the percentage of transactions relating to 
digital asset mixers and tumblers that are used by actors 
engaged in illicit finance.
(3) Estimates of the reliance, and financial exposure, of 
centralized exchanges and traditional financial institutions to 
digital asset mixers and tumblers, and the extent to which 
centralized exchanges and traditional financial institutions 
are adequately implementing anti-money laundering and economic 
sanctions compliance with respect to digital asset mixers and 
tumblers.
(4) An assessment of potential non-illicit uses of mixers 
and tumblers described in paragraph (1), including privacy 
benefits.
(5) An analysis of regulatory approaches employed by other 
jurisdictions relating to digital asset mixers and tumblers.
(6) Recommendations for legislation or regulation relating 
to digital asset mixers and tumblers.

SEC. 310. GAO STUDY ON INTERMEDIARIES IN FOREIGN JURISDICTIONS.

(a) In General.--The Comptroller General of the United States, in 
consultation with the Secretary of the Treasury, shall conduct a study 
to--
(1) assess the risks posed by digital asset intermediaries 
that--
(A) are primarily located in foreign jurisdictions 
that lack regulatory requirements that are 
substantially similar to the requirements of the Bank 
Secrecy Act; and
(B) provide services to United States persons; and
(2) provide any regulatory or legislative recommendations 
to address the risks described in paragraph (1).
(b) Report.--Not later than 1 year after the date of enactment of 
this Act, the Comptroller General of the United States shall submit to 
Congress a report containing all findings and determinations made in 
carrying out the study required under subsection (a).

SEC. 311. STUDIES ON FOREIGN ADVERSARY ACTIVITIES.

(a) Definitions.--In this section:
(1) Foreign adversary.--The term ``foreign adversary'' 
means a foreign government or foreign non-government person 
determined by the Secretary of Commerce to be a foreign 
adversary under section 791.4(a) of title 15, Code of Federal 
Regulations, or any successor regulation.
(2) Relevant congressional committees.--The term ``relevant 
congressional committees'' means--
(A) the Committee on Banking, Housing, and Urban 
Affairs of the Senate;
(B) the Committee on Agriculture, Nutrition, and 
Forestry of the Senate;
(C) the Select Committee on Intelligence of the 
Senate;
(D) the Committee on Financial Services of the 
House of Representatives;
(E) the Committee on Agriculture of the House of 
Representatives; and
(F) the Permanent Select Committee on Intelligence 
of the House of Representatives.
(b) Treasury Report.--Not later than 1 year after the date of 
enactment of this Act, the Secretary of the Treasury, in consultation 
with the Commodity Futures Trading Commission and the Commission, shall 
conduct a study and submit a report to the relevant congressional 
committees, which may include a classified annex, that--
(1) identifies any digital asset intermediary that is 
controlled by a government of a foreign adversary, or by 
individuals or entities acting at the direction of a foreign 
adversary;
(2) determines whether any government of a foreign 
adversary is collecting trading data about United States 
persons in digital asset markets; and
(3) evaluates whether any proprietary intellectual property 
of digital asset intermediaries is being misused or stolen by 
any government of a foreign adversary.
(c) GAO Study and Report.--Not later than 1 year after the date of 
enactment of this Act, the Comptroller General shall conduct a study 
and submit a report to the relevant congressional committees, which may 
include a classified annex, that--
(1) identifies any digital asset intermediary that is owned 
by a government of a foreign adversary, or by individuals or 
entities acting at the direction of a foreign adversary;
(2) determines whether any government of a foreign 
adversary is collecting trading data about United States 
persons in digital asset markets; and
(3) evaluates whether any proprietary intellectual property 
of digital asset intermediaries is being misused or stolen by 
any government of a foreign adversary.

SEC. 312. TREASURY STUDY ON CYBERSECURITY STANDARDS.

(a) Study.--The Secretary of the Treasury, in consultation with the 
Director of the Cybersecurity and Infrastructure Security Agency, the 
Director of the National Security Agency, and the Director of the 
National Institute of Standards and Technology, shall conduct a study 
on cybersecurity standards applicable to digital asset smart contracts, 
custody, key management, and smart contract deployment.
(b) Report.--
(1) In general.--Not later than 365 days after the date of 
enactment of this Act, the Secretary shall submit to the 
Committee on Banking, Housing, and Urban Affairs of the Senate 
and the Committee on Financial Services of the House of 
Representatives a report containing--
(A) the findings of the study under subsection (a); 
and
(B) any legislative recommendations.
(2) Classified annex.--The report under paragraph (1) may 
include a classified annex, as appropriate.

SEC. 313. STUDIES ON FINANCIAL STABILITY RISKS OF DECENTRALIZED FINANCE 
TRADING AND CREDIT IN DIGITAL COMMODITY MARKETS.

Not later than 1 year after the date of enactment of this Act, and 
every 4 years thereafter until 4 consecutive reports have been issued, 
the Secretary of the Treasury, the Board of Governors of the Federal 
Reserve System, the Commission, and the Commodity Futures Trading 
Commission shall--
(1) conduct a study examining--
(A) the role of decentralized finance protocols in 
the financial system, including--
(i) the functions of such protocols;
(ii) the use of such protocols to obtain 
leverage or financing;
(iii) the effects of such protocols on the 
pricing and trading of financial instruments, 
including descriptions of any linkages between 
such protocols and traditional financial 
instrument; and
(iv) the types and volumes of financial 
activity conducted through such protocols;
(B) the risks of decentralized finance protocols to 
financial stability, fair and orderly markets, and 
otherwise to the financial system of the United States, 
which shall include a quantification of those risks, to 
the extent possible;
(C) the strategies and guardrails regulators and 
market participants have used and are using to mitigate 
risks arising from the use of decentralized finance 
protocols; and
(D) an assessment of whether the regulatory 
framework adequately controls any risk with respect to 
decentralized finance protocols;
(2) conduct a separate study examining the risks to 
financial stability and orderly markets arising from the 
extension and maintenance of credit with respect to digital 
assets by digital asset service providers, including--
(A) the effect of gaps in the regulatory framework 
for credit extended on digital assets, such as risks 
arising from the extension and maintenance of credit on 
digital assets; and
(B) the interconnections between leverage in the 
market for digital assets and the financial system; and
(3) submit to the Committee on Banking, Housing, and Urban 
Affairs of the 

[Text truncated for length — see the official source above for the complete bill.]