S. 4064

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 4064 Placed on Calendar Senate (PCS)]

<DOC>

Calendar No. 355
119th CONGRESS
2d Session
S. 4064

To provide for a system of regulation of the offer and sale of digital 
commodities by the Commodity Futures Trading Commission, and for other 
purposes.

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

March 11, 2026

Mr. Boozman (for himself, Mr. Sullivan, and Mr. Tuberville) introduced 
the following bill; which was read the first time

March 12, 2026

Read the second time and placed on the calendar

_______________________________________________________________________

A BILL

To provide for a system of regulation of the offer and sale of digital 
commodities by the Commodity Futures Trading Commission, and for other 
purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.
TITLE I--DEFINITIONS; RULEMAKING

Sec. 101. Definitions under the Commodity Exchange Act.
Sec. 102. Definitions under this Act.
Sec. 103. Rulemakings.
Sec. 104. Expeditied registration for digital commodity exchanges, 
brokers, and dealers; provisional status.
Sec. 105. Commodity Exchange Act savings provisions.
Sec. 106. Administrative requirements.
Sec. 107. International cooperation.
Sec. 108. Implementation.
Sec. 109. Effective date.
Sec. 110. Sense of Congress.
TITLE II--REGISTRATION FOR DIGITAL COMMODITY INTERMEDIARIES AT THE 
COMMODITY FUTURES TRADING COMMISSION

Sec. 201. Commission jurisdiction over digital commodity transactions.
Sec. 202. Requiring Futures Commission merchants to use qualified 
digital asset custodians.
Sec. 203. Trading certification and approval for digital commodities.
Sec. 204. Registration of digital commodity exchanges.
Sec. 205. Registration and regulation of digital commodity brokers and 
dealers.
Sec. 206. Registration of associated persons.
Sec. 207. Software developer protections.
Sec. 208. Portfolio margining.
Sec. 209. Clarification on customer property.
Sec. 210. Resources for implementation.
Sec. 211. Digital commodity retail advocate.
Sec. 212. Report.

TITLE I--DEFINITIONS; RULEMAKING

SEC. 101. DEFINITIONS UNDER THE COMMODITY EXCHANGE ACT.

(a) In General.--Section 1a of the Commodity Exchange Act (7 U.S.C. 
1a) is amended--
(1) by redesignating paragraphs (3), (4), (5) through (14), 
(15), (16) through (34), (35) through (39), and (40) through 
(51) as paragraphs (5), (6), (11) through (20), (24), (31) 
through (49), (51) through (55), and (57) through (68), 
respectively;
(2) by inserting after paragraph (2) the following:
``(3) Associated person of a digital commodity broker.--
``(A) In general.--Except as provided in 
subparagraph (B), the term `associated person of a 
digital commodity broker' means a person who is 
associated with a digital commodity broker as a 
partner, officer, employee, or agent (or any person 
occupying a similar status or performing similar 
functions) in any capacity that involves--
``(i) the solicitation or acceptance of an 
order for the purchase or sale of a digital 
commodity; or
``(ii) the supervision of any person 
engaged in the solicitation or acceptance of an 
order for the purchase or sale of a digital 
commodity.
``(B) Exclusion.--The term `associated person of a 
digital commodity broker' does not include any person 
associated with a digital commodity broker the 
functions of which are solely clerical or ministerial.
``(4) Associated person of a digital commodity dealer.--
``(A) In general.--Except as provided in 
subparagraph (B), the term `associated person of a 
digital commodity dealer' means a person who is 
associated with a digital commodity dealer as a 
partner, officer, employee, or agent (or any person 
occupying a similar status or performing similar 
functions) in any capacity that involves--
``(i) the solicitation or acceptance of a 
contract for the purchase or sale of a digital 
commodity; or
``(ii) the supervision of any person 
engaged in the solicitation or acceptance of a 
contract for the purchase or sale of a digital 
commodity.
``(B) Exclusion.--The term `associated person of a 
digital commodity dealer' does not include any person 
associated with a digital commodity dealer the 
functions of which are solely clerical or 
ministerial.'';
(3) by inserting after paragraph (6) (as so redesignated) 
the following:
``(7) Blockchain.--The term `blockchain' means technology--
``(A) through which data is shared across a network 
that creates a public blockchain of verified 
transactions or information among network participants; 
and
``(B) in which cryptography is used to link the 
data described in subparagraph (A)--
``(i) to maintain the integrity of the 
blockchain described in that subparagraph; and
``(ii) to execute other functions.
``(8) Blockchain application.--The term `blockchain 
application' means any executable software that is deployed to 
and maintained on a blockchain and composed of a blockchain 
protocol, including a smart contract or any network of smart 
contracts, or other similar technology.
``(9) Blockchain protocol.--The term `blockchain protocol' 
means publicly available source code of a blockchain or 
blockchain application that is executed by the network 
participants of a blockchain to facilitate its functioning, or 
other similar technology.
``(10) Blockchain system.--The term `blockchain system' 
means any blockchain, blockchain application, or network of 
blockchain applications, together with its blockchain 
protocol.'';
(4) by inserting after paragraph (20) (as so redesignated) 
the following:
``(21) Decentralized finance messaging system.--
``(A) 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.
``(B) Additional requirements.--The term 
`decentralized finance messaging system' does not 
include any system that provides any person other than 
the user with--
``(i) control over the funds of the user; 
or
``(ii) the authority to execute any of the 
transactions of the user.
``(22) Decentralized finance trading protocol.--
``(A) In general.--The term `decentralized finance 
trading protocol' means a blockchain system through 
which multiple participants can execute a financial 
transaction--
``(i) in accordance with an automated rule 
or algorithm that is predetermined and 
nondiscretionary; and
``(ii) without reliance on a person other 
than the user to maintain custody or control of 
any digital assets subject to the financial 
transaction.
``(B) Exclusions.--
``(i) In general.--The term `decentralized 
finance trading protocol' does not include a 
blockchain system if--
``(I) 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;
``(II) 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; 
or
``(III) a person or group of 
persons under common control has the 
unilateral authority, via operation of 
the blockchain system, to restrict, 
censor, or prohibit the use of the 
blockchain system, including any 
applicable system-based user activity.
``(ii) Special rule.--For purposes of 
clause (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.
``(23) Decentralized governance system.--
``(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, in which 
participation is not limited to, or under the effective 
control of, any person or group of persons under common 
control (within the meaning of section 104(b) of the 
Digital Asset Market Clarity Act of 2026).
``(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.
``(C) Legal entities for decentralized governance 
systems.--
``(i) In general.--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.
``(ii) Effect of certain delegations.--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.'';
(5) by inserting after paragraph (24) (as so redesignated) 
the following:
``(25) Digital asset.--The term `digital asset' means any 
digital representation of value which is recorded on a 
cryptographically secured blockchain.
``(26) Digital asset custodian.--The term `digital asset 
custodian' means a person who, as a regular business, holds, 
maintains, or safeguards digital assets for others.
``(27) Digital commodity.--
``(A) In general.--The term `digital commodity' 
means any fungible digital asset that can be 
exclusively possessed and transferred, person to 
person, without necessary reliance on an intermediary, 
and is recorded on a blockchain.
``(B) Network tokens.--The term `digital commodity' 
includes a network token (as defined in section 4B(a) 
of the Securities Act of 1933) unless the network token 
is excluded from the definition under clauses (iii) 
through (vii) of subparagraph (D).
``(C) Meme coins.--
``(i) In general.--The term `digital 
commodity' includes a meme coin unless the meme 
coin is excluded from the definition under 
subparagraph (D).
``(ii) Definition.--For the purposes of 
this paragraph, the term `meme coin' means a 
digital asset inspired by an internet meme, 
character, current event, or trend for which 
the promoter seeks to attract an enthusiastic 
online community to purchase and engage in 
trading of the digital asset primarily for 
speculative purposes.
``(iii) Exclusions.--The Commission, by 
rule or regulation, may exclude from the term 
`meme coin' any digital asset or class of 
digital assets if the Commission determines 
that the rule or regulation will effectuate the 
purposes of this Act.
``(D) Exclusions.--The term `digital commodity' 
does not include any of the following:
``(i) Security.--Any security.
``(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--
``(I) a security future (as defined 
in section 2(a) of the Securities Act 
of 1933 (15 U.S.C. 77b(a)));
``(II) a security-based swap; or
``(III) 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) (within the meaning of section 
2(a)(1) of the Securities Act of 1933 
(15 U.S.C. 77b(a)(1))).
``(iii) Permitted payment stablecoin.--A 
payment stablecoin (as defined in section 2 of 
the GENIUS Act (Public Law 119-27; 139 Stat. 
419)) that is issued by a permitted payment 
stablecoin issuer (as defined in that section).
``(iv) Banking deposit.--
``(I) A deposit (as defined in 
section 3 of the Federal Deposit 
Insurance Act (12 U.S.C. 1813)), 
regardless of the technology used to 
record the deposit.
``(II) 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.
``(v) Commodity.--A digital asset that 
references, represents an interest in, or is 
functionally equivalent to--
``(I) an agricultural commodity;
``(II) an excluded commodity, other 
than a security; or
``(III) an exempt commodity, other 
than the digital commodity itself, as 
shall be further defined by the 
Commission.
``(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--
``(I) a contract of sale of a 
commodity for future delivery or an 
option thereon;
``(II) a security futures product;
``(III) a swap;
``(IV) an agreement, contract, or 
transaction described in subparagraph 
(C)(i) or (D)(i) of section 2(c)(2);
``(V) a commodity option authorized 
under section 4c; or
``(VI) a leverage transaction 
authorized under section 19.
``(vii) Pooled investment vehicle.--
``(I) In general.--A digital asset 
not described in clause (i) that, based 
on its terms and other characteristics, 
is, represents, or is functionally 
equivalent to an interest in--
``(aa) a commodity pool; or
``(bb) a pooled investment 
vehicle.
``(II) Pooled investment vehicle 
defined.--In this clause, the term 
`pooled investment vehicle' means--
``(aa) any investment 
company (as defined in section 
3(a) of the Investment Company 
Act of 1940 (15 U.S.C. 80a-
3(a)));
``(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 
(15 U.S.C. 80a-3(a)), but for 
the exclusions provided from 
that definition by section 3(c) 
of such Act (15 U.S.C. 80a-
3(c)), if for purposes of this 
subclause the company were 
assumed to be an issuer (as 
defined in section 2 of such 
Act (15 U.S.C. 80a-2)); or
``(cc) any entity or person 
that is not an investment 
company but holds or will hold 
assets other than securities.
``(viii) Good, collectible, and other 
noncommodity digital asset.--
``(I) In general.--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 or a nonfungible token 
(as defined in section 602(a) of the 
Digital Asset Market Clarity Act of 
2026), such as--
``(aa) a work of art, a 
musical composition, a literary 
work, or other intellectual 
property;
``(bb) collectibles, 
merchandise, virtual land, and 
in-game or in-application 
assets;
``(cc) affinity, rewards, 
or loyalty points, including 
airline miles or credit card 
points; or
``(dd) rights, licenses, 
and tickets.
``(II) Exception.--The Commission 
may determine, by rule or regulation or 
order, that a good, collectible, or 
other noncommodity digital asset or 
class of goods, collectibles, or other 
noncommodity digital assets is traded 
in such a manner or form that the asset 
or class of assets should be considered 
a digital commodity, such as a mass-
minted series of items with 
substantially similar or nearly 
identical traits that are marketed or 
sold interchangeably and are primarily 
speculative in nature.
``(28) Digital commodity broker.--
``(A) In general.--The term `digital commodity 
broker' means any person who--
``(i) as a regular business, in a digital 
commodity cash or spot market--
``(I)(aa) solicits or accepts an 
order from a person who is not an 
eligible contract participant for the 
purchase or sale of a unit of a digital 
commodity; and
``(bb) in conjunction with the 
activity described in item (aa), 
accepts or maintains control over the 
funds or other property or assets of 
the person or the execution of the 
transaction;
``(II) solicits or accepts an order 
from a person who is not an eligible 
contract participant on behalf of a 
digital commodity dealer for the 
purchase or sale of a unit of a digital 
commodity; or
``(III) solicits or accepts an 
order from a person who is not an 
eligible contract participant for the 
purchase or sale of a unit of a digital 
commodity on or subject to the rules of 
a registered digital commodity 
exchange; or
``(ii) is registered with the Commission as 
a digital commodity broker.
``(B) Exceptions.--The term `digital commodity 
broker' does not include a person solely because the 
person--
``(i) 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
``(ii) is a bank (as defined in section 
3(a) of the Securities Exchange Act of 1934 (15 
U.S.C. 78c(a))) 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 
section 3(a)(4) of that Act (15 U.S.C. 
78c(a)(4)), as determined by the Commission.
``(C) 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 is in 
the public interest and will effectuate the purposes of 
this Act.
``(29) Digital commodity dealer.--
``(A) In general.--The term `digital commodity 
dealer' means any person who--
``(i) as a regular business, in a spot or 
cash digital commodity market, enters into, or 
offers to enter into, a purchase or sale of a 
unit of a digital commodity--
``(I) with a counterparty that is 
not an eligible contract participant; 
and
``(II) not on or through a 
registered digital commodity exchange 
or decentralized finance trading 
protocol; or
``(ii) is registered with the Commission as 
a digital commodity dealer.
``(B) Exception.--The term `digital commodity 
dealer' does not include a person solely because the 
person--
``(i) 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
``(ii) is a bank (as defined in section 
3(a) of the Securities Exchange Act of 1934 (15 
U.S.C. 78c(a))) 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 that Act (15 U.S.C. 
78c(a)(5)), as determined by the Commission.
``(C) 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 is in 
the public interest and will effectuate the purposes of 
this Act.
``(30) 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.'';
(6) by inserting after paragraph (49) (as so redesignated) 
the following:
``(50) Mixed digital asset transaction.--The term `mixed 
digital asset transaction' means a transaction in which a 
digital commodity is traded for a security.'';
(7) by inserting after paragraph (55) (as so redesignated) 
the following:
``(56) Qualified digital asset custodian.--
``(A) In general.--The term `qualified digital 
asset custodian' means a digital asset custodian that--
``(i) holds digital assets on behalf of a 
person registered under this Act or a customer 
of a person registered under this Act; and
``(ii) is in compliance with subparagraphs 
(B) though (D).
``(B) Supervision requirement.--A digital asset 
custodian is in compliance with this subparagraph if 
the digital asset custodian is subject to--
``(i) 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
``(ii) adequate supervision and appropriate 
regulation for custody and safekeeping of 
digital assets by--
``(I) a State bank supervisor (as 
defined in section 3 of the Federal 
Deposit Insurance Act (12 U.S.C. 
1813));
``(II) a State officer, agency, or 
other entity that has primary 
regulatory authority over nondepository 
State trust companies;
``(III) a State credit union 
supervisor (as defined in section 6003 
of the Anti-Money Laundering Act of 
2020 (31 U.S.C. 5311 note; division F 
of Public Law 116-283)); or
``(IV) an appropriate foreign 
governmental authority in the home 
country of the digital asset custodian.
``(C) Other requirements.--A digital asset 
custodian is in compliance with this subparagraph if 
the following requirements are met:
``(i) Not otherwise prohibited.--The 
digital asset custodian has not been prohibited 
by the applicable supervisor described in 
subparagraph (B) from engaging in an activity 
with respect to the custody and safekeeping of 
digital assets.
``(ii) Information sharing.--
``(I) In general.--The digital 
asset custodian shares information with 
the Commission on request and complies 
with such requirements for periodic 
sharing of information regarding 
customer accounts that the digital 
asset custodian 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.
``(II) Provision of information.--
If the digital asset custodian is 
subject to regulation and examination 
by an appropriate Federal banking 
agency, the digital asset custodian may 
satisfy any information request 
described in subclause (I) 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 digital asset custodian.
``(D) Rulemaking.--
``(i) In general.--The Commission shall 
prescribe rules to permit a person registered 
with the Commission to be a qualified digital 
asset custodian.
``(ii) Content.--In prescribing the rules 
under clause (i), to be a qualified digital 
asset custodian, the Commission shall require a 
person registered with the Commission--
``(I) to implement requirements 
consistent with the requirements 
described in subparagraph (E)(i);
``(II) to establish sufficient 
system safeguards;
``(III) to prevent or mitigate 
conflicts of interest, as appropriate; 
and
``(IV) to establish separate 
governance arrangements for the 
custodial function of the entity.
``(E) Adequate supervision and appropriate 
regulation.--
``(i) In general.--For purposes of 
subparagraph (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--
``(I) 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 digital asset 
custodian;
``(II) hold capital sufficient to 
conduct an orderly wind-down and 
resolution of the digital asset 
custodian;
``(III) protect customer assets;
``(IV) establish and maintain books 
and records regarding the business of 
the digital asset custodian;
``(V) submit financial statements 
and audited financial statements to the 
applicable supervisor described in 
subparagraph (B);
``(VI) provide disclosures to the 
applicable supervisor described in 
subparagraph (B) regarding actions, 
proceedings, and other items as 
determined by the supervisor;
``(VII) maintain and enforce 
policies and procedures for compliance 
with applicable State and Federal laws, 
including those related to anti-money 
laundering and cybersecurity;
``(VIII) establish a business 
continuity plan to ensure functionality 
in cases of disruption; and
``(IX) establish policies and 
procedures to resolve complaints.
``(ii) Rulemaking with respect to 
definitions.--
``(I) In general.--For purposes of 
this paragraph, the Commission shall, 
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.
``(II) Existing digital asset 
custodians.--A State depository 
institution or a trust company 
operating as a digital asset custodian 
before the effective date of a 
rulemaking under subclause (I) is 
deemed subject to adequate supervision 
and appropriate regulation if--
``(aa) the State depository 
institution or trust company is 
expressly permitted by a State 
bank supervisor to engage in 
the custody and safekeeping of 
digital assets;
``(bb) the State bank 
supervisor has established 
licensing, examination, and 
supervisory processes that 
require the State depository 
institution or trust company 
to, at a minimum, meet the 
conditions described in 
subclauses (I) through (IX) of 
clause (i); and
``(cc) the State depository 
institution or trust company is 
in good standing with its State 
bank supervisor.
``(III) Transition period for 
certain custodians.--In implementing 
the rulemaking under subclause (I), the 
Commission shall provide a transition 
period of not less than 2 years for any 
State depository institution or trust 
company that is deemed subject to 
adequate supervision and appropriate 
regulation under subclause (II) on the 
effective date of the rulemaking.
``(F) 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.''; and
(8) in paragraph (57) (as so redesignated)--
(A) in subparagraph (E), by striking ``and'' at the 
end;
(B) in subparagraph (F), by striking the period at 
the end and inserting ``; and''; and
(C) by adding at the end the following:
``(G) a digital commodity exchange registered under 
section 5i.''.
(b) Conforming Amendments.--
(1) Section 1a of the Commodity Exchange Act (7 U.S.C. 1a) 
is amended--
(A) in paragraph (32)(A) (as redesignated by 
subsection (a)(1)), in the matter preceding clause (i), 
by striking ``(18)(A)'' and inserting ``(33)(A)''; and
(B) in paragraph (33)(A)(vii)(III)(aa) (as 
redesignated by subsection (a)(1)), by striking 
``(17)(A)'' and inserting ``(32)(A)''.
(2) Section 4(c)(1)(A)(i)(I) of the Commodity Exchange Act 
(7 U.S.C. 6(c)(1)(A)(i)(I)) is amended by striking ``paragraphs 
(2), (3), (4), (5), and (7), paragraph (18)(A)(vii)(III), 
paragraphs (23), (24), (31), (32), (38), (39), (41), (42), 
(46), (47), (48), and (49) of section 1a'' and inserting 
``paragraphs (2), (5), (6), (11), (13), (33)(A)(vii)(III), 
(38), (39), (46), (47), (54), (55), (58), (59), (63), (64), 
(65), and (66) of section 1a''.
(3) Section 4q(a)(1) of the Commodity Exchange Act (7 
U.S.C. 6q(a)(1)) is amended by striking ``1a(9)'' and inserting 
``1a(15)''.
(4) Section 4s of the Commodity Exchange Act (7 U.S.C. 6s) 
is amended--
(A) in subsection (f)(1)(D), by striking 
``1a(47)(A)(v)'' and inserting ``1a(64)(A)(v)''; and
(B) in subsection (h)(5)(A)(i), in the matter 
preceding subclause (I), by striking ``1a(18) of this 
Act'' and inserting ``1a(33)''.
(5) Section 4t(b)(1)(C) of the Commodity Exchange Act (7 
U.S.C. 6t(b)(1)(C)) is amended by striking ``1a(47)(A)(v)),'' 
and inserting ``1a(64)(A)(v)),''.
(6) Section 5 of the Commodity Exchange Act (7 U.S.C. 7) is 
amended--
(A) in subsection (d)(23), by striking 
``1a(47)(A)(v)'' and inserting ``1a(64)(A)(v)''; and
(B) in subsection (e)(1), by striking ``1a(9)'' and 
inserting ``1a(15)''.
(7) Section 5b(k)(3)(A) of the Commodity Exchange Act (7 
U.S.C. 7a-1(k)(3)(A)) is amended by striking ``1a(47)(A)(v))'' 
and inserting ``1a(64)(A)(v))''.
(8) Section 5h(f)(10)(A)(iii) of the Commodity Exchange Act 
(7 U.S.C. 7b-3(f)(10)(A)(iii)) is amended by striking 
``1a(47)(A)(v)'' and inserting ``1a(64)(A)(v)''.
(9) 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(65)''.
(10) Section 5(e) of the Securities Act of 1933 (15 U.S.C. 
77e(e)) is amended by striking ``section 1a(18) of the 
Commodity Exchange Act (7 U.S.C. 1a(18))'' and inserting 
``section 1a of the Commodity Exchange Act (7 U.S.C. 1a)''.
(11) Section 3C(g)(3)(A)(v) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78c-3(g)(3)(A)(v)) is amended by striking 
``section 1a(10) of the Commodity Exchange Act;'' and inserting 
``section 1a of the Commodity Exchange Act (7 U.S.C. 1a);''.
(12) Section 6(g)(5)(B)(i) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78f(g)(5)(B)(i)) is amended--
(A) in subclause (I), by striking ``section 
1a(18)(B)(ii) of the Commodity Exchange Act'' and 
inserting ``subparagraph (B)(ii) of section 1a(33) of 
the Commodity Exchange Act (7 U.S.C. 1a(33))''; and
(B) in subclause (II), by striking ``such section 
1a(18))'' and inserting ``that section)''.
(13) Section 15F(h)(5)(A)(i) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78o-10(h)(5)(A)(i)) is amended, in the 
matter preceding subclause (I), by striking ``1a(18)'' and 
inserting ``1a(33)''.
(14) Section 712 of the Wall Street Transparency and 
Accountability Act of 2010 (15 U.S.C. 8302) is amended--
(A) in subsection (a)(8), by striking ``1a(47)(D)'' 
each place it appears and inserting ``1a(64)(D)''; and
(B) in subsection (d)(1), by striking 
``1a(47)(A)(v)'' each place it appears and inserting 
``1a(64)(A)(v)''.
(15) Section 752(a) of the Dodd-Frank Wall Street Reform 
and Consumer Protection Act (15 U.S.C. 8325(a)) is amended by 
striking ``section 1a(39) of the Commodity Exchange Act),'' and 
inserting ``section 1a of the Commodity Exchange Act (7 U.S.C. 
1a)),''.
(16) Section 403 of the Legal Certainty for Bank Products 
Act of 2000 (7 U.S.C. 27a) is amended--
(A) in subsection (a)(2), by striking 
``1a(47)(A)(v)'' and inserting ``1a(64)(A)(v)''; and
(B) in each of subsections (b)(1) and (c)(2), by 
striking ``1a(47)'' and inserting ``1a(64)''.

SEC. 102. DEFINITIONS UNDER THIS ACT.

In this Act, the terms ``blockchain'', ``decentralized finance 
messaging system'', ``decentralized finance trading protocol'', 
``decentralized governance system'', ``digital asset'', ``digital 
commodity'', ``digital commodity broker'', ``digital commodity 
dealer'', ``digital commodity exchange'', and ``mixed digital asset 
transaction'' have the meanings given those terms, respectively, in 
section 1a of the Commodity Exchange Act (7 U.S.C. 1a).

SEC. 103. RULEMAKINGS.

(a) Definitions.--The Commodity Futures Trading Commission shall 
issue rules to further define the terms ``associated person of a 
digital commodity broker'', ``associated person of a digital commodity 
dealer'', ``blockchain'', ``blockchain application'', ``blockchain 
protocol'', ``blockchain system'', ``decentralized finance messaging 
system'', ``decentralized finance trading protocol'', ``decentralized 
governance system'', and ``digital commodity''(as defined in section 1a 
of the Commodity Exchange Act (7 U.S.C. 1a)).
(b) Joint Rulemaking for Exchanges and Intermediaries.--The 
Commodity Futures Trading Commission and the Securities and Exchange 
Commission shall jointly issue rules to exempt persons dually 
registered with the Commodity Futures Trading Commission and the 
Securities and Exchange Commission from duplicative, conflicting, or 
unduly burdensome provisions of this Act, the securities laws (as 
defined in section 3(a) of the Securities Exchange Act of 1934 (15 
U.S.C. 78c(a))), and the Commodity Exchange Act (7 U.S.C. 1 et seq.), 
and the rules under those Acts, to the extent that the exemption 
would--
(1) foster the development of fair and orderly markets in 
digital assets;
(2) be necessary or appropriate for the protection of 
customers; and
(3) be consistent with the protection of investors.
(c) Joint Rulemaking for Mixed Digital Asset Transactions.--The 
Commodity Futures Trading Commission and the Securities and Exchange 
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.
(d) Joint Rulemaking, Procedures, or Guidance for Delisting.--Not 
later than 180 days after the date of enactment of this Act, the 
Commodity Futures Trading Commission and the Securities and Exchange 
Commission (referred to in this subsection as the ``Commissions'') 
shall jointly issue rules, procedures, or guidance (as determined 
appropriate by the Commissions) regarding the process to delist an 
asset for trading under section 104 if the Commissions determine that 
the listing is inconsistent with the Commodity Exchange Act (7 U.S.C. 1 
et seq.), the securities laws (as defined in section 3(a) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78c(a))) (including 
regulations under those laws), or this Act.
(e) Joint Rules for Portfolio Margining Determinations.--
(1) In general.--Not later than 360 days after the date of 
enactment of this Act, the Commodity Futures Trading Commission 
and the Securities and Exchange Commission shall jointly issue 
rules 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--
(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;
(B) a futures or cleared swap account carried by a 
registered futures commission merchant (as defined in 
section 1a of the Commodity Exchange Act (7 U.S.C. 
1a));
(C) a swap account carried by a swap dealer; or
(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.
(2) Requirements.--With respect to a joint rulemaking 
described in paragraph (1)--
(A) the joint rule shall be in the public interest 
and provide for the appropriate protection of 
customers;
(B) the Commodity Futures Trading Commission and 
the Securities and Exchange Commission shall consider 
the public interest of the joint rule through the 
solicitation of public comments; and
(C) the Commodity Futures Trading Commission and 
the Securities and Exchange Commission shall 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.
(f) Conflicts of Interest Rulemaking.--
(1) Rulemaking.--Not later than 17 months after the date of 
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 (as defined in 
section 1a of the Commodity Exchange Act (7 U.S.C. 1a)) and 
persons required to be registered with the Commodity Futures 
Trading Commission, including conflicts of interest related to 
vertically integrated market structures.
(2) Minimum standards.--The rules issued under paragraph 
(1) shall, at a minimum--
(A) establish governance, personnel, and financial 
resource separation among affiliated entities that 
perform distinct regulated functions;
(B) prohibit trading facilities or intermediaries 
from acting as counterparties to customer transactions 
or otherwise engaging in self-dealing, except as 
provided in section 5i(b)(2)(B) of the Commodity 
Exchange Act;
(C) require appropriate safeguards for custody and 
use of customer assets to prevent conflicts arising 
from commingling or misuse;
(D) mandate disclosure and management of material 
conflicts, including those involving affiliated 
entities or proprietary trading; and
(E) ensure independent oversight and decision-
making in market operations and compliance.

SEC. 104. EXPEDITIED REGISTRATION FOR DIGITAL COMMODITY EXCHANGES, 
BROKERS, AND DEALERS; PROVISIONAL STATUS.

(a) Registration.--
(1) In general.--Unless exempted from registration, a 
person shall not act as a digital commodity exchange, digital 
commodity broker, or digital commodity dealer 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--
(A) digital commodity exchange pursuant to section 
5i of the Commodity Exchange Act;
(B) digital commodity broker pursuant to section 4u 
of the Commodity Exchange Act; or
(C) digital commodity dealer pursuant to section 4u 
of the Commodity Exchange Act.
(2) Expedited process.--Not later than 180 days after the 
date of 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).
(b) Provisional Status.--
(1) In general.--A person who is registered in accordance 
with subsection (a) shall be in provisional status until--
(A) in the case of a digital commodity broker or 
digital commodity dealer, the date that is 270 days 
after the final effective date of the rulemakings 
required under section 4u of the Commodity Exchange 
Act; or
(B) in the case of a digital commodity exchange, 
the date that is 270 days after the final effective 
date of the rulemakings required under section 5i of 
such Act.
(2) Payment of fees.--A person in provisional status shall 
pay all fees required of persons registered with the Commodity 
Futures Trading Commission under section 8e of the Commodity 
Exchange Act.
(c) Operations Prior to Regulations.--
(1) Requirements.--A person in provisional status pursuant 
to subsection (b) shall be subject to the requirements of this 
section and the Commodity Exchange Act (7 U.S.C. 1 et seq.) and 
any rules or regulations promulgated under this section or that 
Act, as applicable.
(2) Listings.--
(A) In general.--Except as provided in subparagraph 
(B), a person in provisional status pursuant to 
subsection (b) 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 
rulemaking on definitions required under section 103(a) 
is effective.
(B) Delisting.--Before the effective date of the 
rulemaking on definitions under section 103(a), a 
person in provisional status pursuant to subsection (b) 
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 103(e).
(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 in provisional status pursuant to subsection 
(b) from any requirements of this section or the Commodity 
Exchange Act (7 U.S.C. 1 et seq.) or any rules or regulations 
promulgated under this section or that Act, as applicable.
(d) Customer Disclosure Before Registration.--
(1) In general.--Beginning 30 days after the date of 
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.
(2) Exception.--Paragraph (1) shall not apply to any person 
who registers pursuant to subsection (a).

SEC. 105. COMMODITY EXCHANGE ACT SAVINGS PROVISIONS.

(a) In General.--Nothing in this Act or any amendment made by this 
Act shall affect or apply to, or be interpreted to affect or apply to--
(1) any agreement, contract, or transaction that is subject 
to the Commodity Exchange Act (7 U.S.C. 1a et seq.) as--
(A) a contract of sale of a commodity for future 
delivery or an option on such a contract (as those 
terms are defined in section 1a of the Commodity 
Exchange Act (7 U.S.C. 1a));
(B) a swap (as defined in that section);
(C) a security futures product (as defined in that 
section);
(D) an option authorized under section 4c of that 
Act (7 U.S.C. 6c);
(E) an agreement, contract, or transaction 
described in section 2(c)(2)(C)(i) of that Act (7 
U.S.C. 2(c)(2)(C)(i)); or
(F) a leverage transaction authorized under section 
19 of that Act (7 U.S.C. 23); or
(2) the activities of any person with respect to any 
agreement, contract, or transaction described in paragraph (1).
(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.
(c) Effect.--An agreement, contract, or transaction described in 
subsection (a)(1) shall not be regulated as a digital commodity 
agreement, contract, or transaction solely because it is issued, 
recorded, represented, or transferred on a blockchain or other similar 
technology.

SEC. 106. ADMINISTRATIVE REQUIREMENTS.

Section 4c(a) of the Commodity Exchange Act (7 U.S.C. 6c(a)) is 
amended--
(1) in paragraph (3)--
(A) in subparagraph (B), by striking ``or'' at the 
end;
(B) in subparagraph (C), by striking the period and 
inserting ``; or''; and
(C) by adding at the end the following:
``(D) a contract of sale of a digital commodity.''; 
and
(2) in paragraph (4)--
(A) in subparagraph (A)--
(i) in clause (ii), by striking ``or'' at 
the end;
(ii) in clause (iii), by striking the 
period and inserting ``; or''; and
(iii) by adding at the end the following:
``(iv) a contract of sale of a digital 
commodity.'';
(B) in subparagraph (B)--
(i) in clause (ii), by striking ``or'' at 
the end;
(ii) in clause (iii), by striking the 
period and inserting ``; or''; and
(iii) by adding at the end the following:
``(iv) a contract of sale of a digital 
commodity.''; and
(C) in subparagraph (C)--
(i) by redesignating clauses (i) through 
(iii) as subclauses (I) through (III), 
respectively, and indenting appropriately;
(ii) in the matter preceding subclause (I) 
(as so redesignated), by striking ``It shall'' 
and inserting the following:
``(i) In general.--It shall'';
(iii) in clause (i) (as so designated)--
(I) in subclause (II), by striking 
``or'' at the end; and
(II) in subclause (III), by 
striking ``a swap, provided, however, 
that nothing'' and inserting the 
following: ``a swap; or
``(IV) a contract of sale of a 
digital commodity.
``(ii) Effect.--Nothing''; and
(iv) in clause (ii) (as so designated), by 
striking ``clauses (i), (ii), or (iii)'' and 
inserting ``any of subclauses (I) through (IV) 
of clause (i)''.

SEC. 107. INTERNATIONAL COOPERATION.

In order to promote greater consistency in effective and consistent 
global regulation of digital commodities, the Commodity Futures Trading 
Commission, as appropriate--
(1) shall consult and coordinate with foreign regulatory 
authorities on the application of consistent international 
standards with respect to the regulation of digital 
commodities; and
(2) may enter into such information-sharing arrangements as 
are determined necessary or appropriate for the protection of 
investors, customers, and users of digital commodities.

SEC. 108. IMPLEMENTATION.

(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 17 months after the date of enactment 
of this Act.
(b) Rules and Registration Before Final Effective Dates.--
(1) In general.--In order to prepare for the implementation 
of this Act and the amendments made by this Act, the Commodity 
Futures Trading Commission and the Securities and Exchange 
Commission may, before any effective date provided in this Act 
or an amendment made by this Act--
(A) promulgate rules, regulations, or orders 
permitted or required by this Act or the amendments 
made by this Act;
(B) conduct studies and prepare reports and 
recommendations required by this Act or the amendments 
made by this Act;
(C) register persons under this Act or the 
amendments made by this Act; and
(D) exempt persons, agreements, contracts, or 
transactions from provisions of this Act or the 
amendments made by this Act, in accordance with this 
Act or those amendments.
(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 or the amendments made by this Act.
(c) Sense of Congress.--It is the sense of Congress that prior to 
implementation of this Act the Commodity Futures Trading Commission--
(1) be fully constituted as described in section 2(a)(2) of 
the Commodity Exchange Act (7 U.S.C. 2(a)(2)) to carry out all 
existing responsibilities and those directed by this Act, with 
not fewer than 2 of the Commissioners nominated, prior to such 
appointments, following consultation and coordination with the 
ranking minority member of the Committee on Agriculture, 
Nutrition, and Forestry of the Senate; and
(2) be appropriately staffed to ensure sufficient 
regulatory capacity, expertise, and enforcement readiness 
necessary to implement this Act and the amendments made by this 
Act.

SEC. 109. EFFECTIVE DATE.

(a) In General.--Except as provided in subsection (b) and as 
otherwise provided in this Act or an amendment made by this Act, this 
Act and the amendments made by this Act shall take effect on the date 
that is 17 months after the date of enactment of this Act.
(b) Rulemaking Provisions.--To the extent that a provision of this 
Act or an amendment made by this Act requires a rulemaking, the 
provision shall take effect on the later of--
(1) 17 months after the date of enactment of this Act; and
(2) 120 days after the publication in the Federal Register 
of the final rule implementing the provision.

SEC. 110. SENSE OF CONGRESS.

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.

TITLE II--REGISTRATION FOR DIGITAL COMMODITY INTERMEDIARIES AT THE 
COMMODITY FUTURES TRADING COMMISSION

SEC. 201. COMMISSION JURISDICTION OVER DIGITAL COMMODITY TRANSACTIONS.

(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:
``(J)(i) Except as expressly provided in this Act, 
nothing in the Digital Commodity Intermediaries Act or 
any amendment made by that Act shall affect or apply 
to, or be interpreted to affect or apply to--
``(I) any agreement, contract, or 
transaction that is subject to this Act as--
``(aa) a contract of sale of a 
commodity for future delivery or an 
option on such a contract;
``(bb) a swap;
``(cc) a security futures product;
``(dd) an option authorized under 
section 4c;
``(ee) an agreement, contract, or 
transaction described in subparagraph 
(C)(i) or (D)(i) of subsection (c)(2); 
or
``(ff) a leverage transaction 
authorized under section 19; or
``(II) the activities of any person with 
respect to any such agreement, contract, or 
transaction.
``(ii) An agreement, contract, or transaction 
described in clause (i)(I) shall not be regulated as a 
digital commodity agreement, contract, or transaction 
solely because it is issued, recorded, represented, or 
transferred on a blockchain or other similar 
technology.''.
(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--
(1) in the matter preceding subparagraph (A), by striking 
``section, 5b, or'' and inserting ``section 5b or'';
(2) in subparagraph (F), by striking ``or'' at the end;
(3) in subparagraph (G), by striking the period and 
inserting ``; or''; and
(4) by adding at the end the following:
``(H) a payment stablecoin (as defined in section 2 
of the GENIUS Act (Public Law 119-27; 139 Stat. 419)) 
that is issued by a permitted payment stablecoin issuer 
(as defined in that section) (referred to in this 
subsection as a `permitted payment stablecoin').''.
(c) Commission Jurisdiction Over Digital Commodity Transactions.--
Section 2(c)(2) of the Commodity Exchange Act (7 U.S.C. 2(c)(2)) is 
amended--
(1) in subparagraph (D)--
(A) in clause (ii)--
(i) in subclause (I), by inserting after 
``paragraph (1)'' the following: ``(other than 
an agreement, contract, or transaction in a 
permitted payment stablecoin)'';
(ii) by striking subclause (IV); and
(iii) by redesignating subclause (V) as 
subclause (IV);
(B) by redesignating clause (iv) as clause (v);
(C) by inserting after clause (iii) the following:
``(iv) Digital commodities; permitted 
payment stablecoins.--This subparagraph shall 
not apply to a contract of sale of a digital 
commodity or a permitted payment stablecoin 
that results in actual delivery within 2 days 
or such other period as the Commission may 
determine by rule or regulation based upon the 
typical commercial practice in cash or spot 
markets for the digital commodity or permitted 
payment stablecoin involved.''; and
(D) by inserting after clause (v) (as so 
redesignated) the following:
``(vi) Retail commodity transaction 
rulemaking.--The Commission shall, by rule or 
regulation, establish appropriate conditions, 
requirements, or limitations with respect to 
the extension of leverage, margin, or financing 
in connection with any cash or spot digital 
commodity agreement, contract, or transaction 
subject to this subparagraph.
``(vii) Further rulemaking authority.--In 
order to promote responsible innovation and 
fair competition, or protect customers, the 
Commission may by rule or regulation exempt, 
either unconditionally or on stated terms or 
conditions or for stated periods, and either 
retroactively or prospectively, or both, a 
digital commodity exchange or a digital 
commodity broker from the requirements of this 
subparagraph, if the Commission determines that 
the exemption would be consistent with the 
public interest and the purposes of this 
Act.''; and
(2) by adding at the end the following:
``(F) Commission jurisdiction with respect to 
digital commodity transactions.--
``(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 in 
interstate commerce, including in a digital 
commodity cash or spot market, that is offered, 
solicited, traded, facilitated, executed, 
cleared, reported, or otherwise dealt in--
``(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
``(II) by any other entity 
registered, or required to be 
registered, with the Commission.
``(ii) Limitations.--Clause (i) shall not 
apply with respect to--
``(I) custodial or depository 
activities for a digital commodity of 
an entity regulated by--
``(aa) an appropriate 
Federal banking agency; or
``(bb) a State bank 
supervisor (as defined in 
section 3 of the Federal 
Deposit Insurance Act (12 
U.S.C. 1813));
``(II) an offer or sale of an 
investment contract involving a digital 
commodity or a securities offer or sale 
involving a digital commodity; or
``(III) a mixed digital asset 
transaction.
``(G) Agreements, contracts, and transactions in 
stablecoins.--
``(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--
``(I) on or subject to the rules of 
a registered entity; or
``(II) by any other entity 
registered with the Commission.
``(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.
``(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.''.
(d) Network Tokens and Ancillary Assets.--Section 2 of the 
Commodity Exchange Act (7 U.S.C. 2) is amended by adding at the end the 
following:
``(k) Treatment of Secondary Market Network Tokens and Certified 
Ancillary Assets.--The secondary market offer or sale of a network 
token (as defined in section 4B(a) of the Securities Act of 1933) other 
than the offer or sale of an investment contract pursuant to which an 
ancillary asset is offered or sold by an ancillary asset originator, or 
an underwriter with respect to an investment contract pursuant to which 
such ancillary asset was originally sold, shall be considered an offer 
or sale of a digital commodity.''.
(e) Conforming Amendments.--
(1) Paragraph (15) of section 1a of the Commodity Exchange 
Act (7 U.S.C. 1a) (as amended by section 17(f) of the GENIUS 
Act (Public Law 119-27; 139 Stat. 463) and as redesignated by 
section 101(a)(1)) is amended by striking the second sentence.
(2) Section 2(a)(1)(A) of the Commodity Exchange Act (7 
U.S.C. 2(a)(1)(A)) is amended, in the first sentence, by 
striking ``section 19 of this Act'' and inserting 
``subparagraph (F) or (G) of subsection (c)(2) or section 19''.
(3) Section 4(c)(1) of the Commodity Exchange Act (7 U.S.C 
6(c)(1)) is amended by adding after subparagraph (B) the 
following:
``For purposes of this paragraph, an agreement, contract, or 
transaction that is subject to the jurisdiction of the Commission under 
any of the amendments made to this Act by the Digital Commodity 
Intermediaries Act shall be subject to subsection (a).''.

SEC. 202. REQUIRING FUTURES COMMISSION MERCHANTS TO USE QUALIFIED 
DIGITAL ASSET CUSTODIANS.

Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) is amended--
(1) in subsection (a)(2)--
(A) in the first proviso, by striking ``any bank or 
trust company'' and inserting ``any bank, trust 
company, or qualified digital asset custodian, as 
applicable,''; and
(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
(2) in subsection (f)(3)(A)(i), by striking ``any bank or 
trust company or with a'' and inserting ``any bank, trust 
company, qualified digital asset custodian, or''.

SEC. 203. TRADING CERTIFICATION AND APPROVAL FOR DIGITAL COMMODITIES.

Section 5c of the Commodity Exchange Act (7 U.S.C. 7a-2) is 
amended--
(1) in subsection (a)(1), by striking ``5(d) and 5b(c)(2)'' 
and inserting ``5(d), 5b(c)(2), and 5i(c)'';
(2) in subsection (b)--
(A) in each of paragraphs (1) and (2), by inserting 
``digital commodity exchange,'' before ``derivatives''; 
and
(B) in paragraph (3), by inserting ``digital 
commodity exchange,'' before ``derivatives'' each place 
it appears;
(3) in subsection (c)--
(A) in paragraph (2), by inserting ``or 
participants'' before ``(in'';
(B) in paragraph (4)(B), by striking ``1a(10)'' and 
inserting ``1a(16)''; and
(C) in paragraph (5), by adding at the end the 
following:
``(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 may 
make or rely on a certification under subsection (d) 
for the digital commodity.''; and
(4) by inserting after subsection (c) the following:
``(d) Certifications for Digital Commodity Trading.--
``(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).
``(2) Contents of the certification.--In making a written 
certification under this subsection, an eligible entity shall 
furnish to the Commission an analysis of how the digital 
commodity meets the requirements of section 5i(c)(3).
``(3) Modifications.--
``(A) In general.--An eligible entity shall modify 
a certification made under paragraph (1) to account for 
material changes in any information provided in 
connection with the requirements of section 5i(c)(3).
``(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).
``(4) Disapproval.--
``(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.
``(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.
``(C) Public findings.--The Commission shall make 
public any disapproval decision, and any related 
findings and analysis, made under this paragraph.
``(5) Review.--
``(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--
``(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
``(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.
``(B) Extensions.--The time for consideration under 
subparagraph (A) may be extended--
``(i) once, for 30 business days, through 
written notice to the eligible entity by the 
Commission--
``(I) that there are novel or 
complex issues that require additional 
time to analyze;
``(II) that the explanation by the 
submitting eligible entity is 
inadequate; or
``(III) of a potential 
inconsistency with this Act; and
``(ii) once, for an additional 30 business 
days, through written notice to the eligible 
entity from the Commission that includes a 
description of any issues with the 
certification, including any--
``(I) novel or complex issues that 
require additional time to analyze;
``(II) missing information or 
inadequate explanations; or
``(III) potential inconsistencies 
with this Act.
``(6) Prior approval before registration.--
``(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.
``(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).
``(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.
``(D) Disapproval.--
``(i) In general.--The Commission shall 
approve the listing of the digital commodity 
requested under subparagraph (A) unless the 
Commission finds that the listing is 
inconsistent with this Act or the rules and 
regulations prescribed under this Act.
``(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.
``(iii) Public findings.--The Commission 
shall make public any disapproval decision, and 
any related findings and analysis, made under 
this subparagraph.
``(7) Eligible entity defined.--In this subsection, the 
term `eligible entity' means a registered entity or group of 
registered entities acting jointly.''.

SEC. 204. REGISTRATION OF DIGITAL COMMODITY EXCHANGES.

(a) In General.--The Commodity Exchange Act is amended by inserting 
after section 5h (7 U.S.C. 7b-3) the following:

``SEC. 5I. REGISTRATION OF DIGITAL COMMODITY EXCHANGES.

``(a) In General.--
``(1) Registration.--
``(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.
``(B) Application.--
``(i) In general.--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 shall require for the purpose of 
making the determinations required for 
approval.
``(ii) Rulemaking required.--The Commission 
shall, by rule, prescribe the contents of an 
application under clause (i), including 
governance, resources, systems safeguards, 
surveillance, and conflict management.
``(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--
``(i) serves only customers in a single 
State, territory, or possession of the United 
States;
``(ii) 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
``(iii) is already registered as a 
designated contract market, provided that the 
trading facility shall--
``(I) provide reasonable notice to 
the Commission of its intention to 
engage in offering a cash or spot 
market in at least 1 digital commodity; 
and
``(II) comply with all other 
provisions of this Act and the rules 
promulgated thereunder as they apply to 
a digital commodity exchange.
``(2) Additional registrations.--
``(A) Rules.--In order to foster the development of 
fair and orderly markets, protect customers, and 
promote responsible innovation, the Commission shall--
``(i) 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;
``(ii) prescribe rules establishing 
requirements for the identification, 
mitigation, and resolution of conflicts of 
interest among and across affiliated entities 
or entities with multiple registrations under 
this Act, including conflicts of interest 
related to vertically integrated market 
structures and their varying responsibilities 
and activities; and
``(iii) after an analysis of the risks and 
benefits, prescribe rules to provide for 
portfolio margining in accordance with section 
103(e) of the Digital Commodity Intermediaries 
Act.
``(B) 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.
``(b) Trading.--
``(1) Prohibition on certain trading practices.--
``(A) Contracts designed to defraud or mislead.--
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.
``(B) Prohibited transactions.--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.
``(C) Enforcement authority.--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.
``(2) Prohibition on acting as a counterparty.--
``(A) In general.--A digital commodity exchange or 
any affiliate of a digital commodity exchange shall not 
trade on or subject to the rules of the digital 
commodity exchange for its own account.
``(B) Exceptions.--Subject to the limitations 
described in subparagraph (C), a digital commodity 
exchange or any affiliate of a digital commodity 
exchange may trade on the digital commodity exchange 
for its own account so long as the trading is not 
solely for the purpose of the profit of the digital 
commodity exchange, including the following 
transactions:
``(i) Customer direction.--A transaction 
for, or entered into at the direction of, or 
for the benefit of, an unaffiliated customer.
``(ii) Liquidity provision.--A transaction 
in connection with the provision of liquidity 
on the digital commodity exchange if conducted 
pursuant to policies and procedures reasonably 
designed to limit such activity to the 
reasonably expected customer demand for 
liquidity on the digital commodity exchange.
``(iii) Risk-mitigating hedging.--A 
transaction in connection with risk-mitigating 
hedging activities that are designed to reduce 
specific risks to the digital commodity 
exchange or its affiliate in connection with 
and related to its digital commodity 
activities.
``(C) Rulemaking.--The Commission shall adopt rules 
establishing appropriate conditions, requirements, or 
other limitations on the use of the exceptions 
described in subparagraph (B) that are necessary for 
the protection of customers, the promotion of 
innovation, or the maintenance of fair, orderly, and 
efficient markets, which shall require that the digital 
commodity exchange has put in place adequate 
protections against conflicts of interest, such as 
timely and effective disclosure to clients, customers, 
and counterparties of any material conflict of interest 
or information barriers reasonably designed to protect 
against such conflicts of interest.
``(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 digital commodity exchange pursuant to 
subparagraph (B), the digital commodity exchange or 
affiliate shall provide to the Commission notice that 
shall enumerate how any proposed activity is consistent 
with the exceptions described in subparagraph (B) and 
the purposes of this Act.
``(E) Commission visibility into liquidity 
provision.--A digital commodity exchange shall report 
to the Commission such quantitative metrics as the 
Commission determines, by rule, to be appropriate to 
provide the Commission with sufficient visibility into 
the activities of the digital commodity exchange or its 
affiliates in reliance on subparagraph (B)(ii).
``(c) Core Principles for Digital Commodity Exchanges.--
``(1) Compliance with core principles.--
``(A) In general.--To be registered, and maintain 
registration, as a digital commodity exchange, a 
digital commodity exchange shall comply with--
``(i) the core principles described in this 
subsection; and
``(ii) any requirement that the Commission 
may impose by rule or regulation pursuant to 
section 8a(5).
``(B) Reasonable discretion of a digital commodity 
exchange.--Unless otherwise determined by the 
Commission by rule or regulation, a digital commodity 
exchange shall have reasonable discretion in 
establishing the manner in which the digital commodity 
exchange complies with the core principles described in 
this subsection.
``(2) Compliance with rules.--A digital commodity exchange 
shall--
``(A) establish and enforce compliance with any 
rule of the digital commodity exchange, including--
``(i) the terms and conditions of the 
trades traded or processed on or through the 
digital commodity exchange; and
``(ii) any limitation on access to the 
digital commodity exchange;
``(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--
``(i) to provide market participants with 
impartial access to the market; and
``(ii) to capture information that may be 
used in establishing whether rule violations 
have occurred; and
``(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 exchange.
``(3) Listing standards for digital commodities.--
``(A) Not readily susceptible to manipulation.--A 
digital commodity exchange shall permit trading only in 
a digital commodity that is not readily susceptible to 
manipulation.
``(B) Disclosures to the securities and exchange 
commission.--A digital commodity exchange shall 
establish policies and procedures to permit trading in 
a digital commodity only if--
``(i) disclosures with respect to the 
digital commodity required under, as 
applicable, section 4B of the Securities Act of 
1933 have been filed with the Securities and 
Exchange Commission; or
``(ii) such other similar information that 
is related to the ongoing development plan of 
the blockchain system and is able to be 
publicly ascertained, as the Commission may, by 
rule or regulation, require, has been provided 
to the public.
``(C) Public information requirements.--
``(i) In general.--A digital commodity 
exchange shall--
``(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;
``(II) establish policies and 
procedures to determine that the 
information provided pursuant to clause 
(ii) is correct, current, and available 
to the public; and
``(III) communicate in a fair and 
balanced manner based on principles of 
fair dealing and good faith.
``(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 information required by this clause is the 
following:
``(I) Source code.--The source code 
for any blockchain system to which the 
digital commodity relates.
``(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 such 
blockchain system.
``(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--
``(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;
``(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;
``(cc) an explanation of 
governance mechanisms for 
implementing changes to the 
blockchain system or forming 
consensus among holders of the 
digital commodities; and
``(dd) sufficient 
information for a third party 
to create a tool for verifying 
the transaction history of the 
digital commodity.
``(IV) Trading volume and 
volatility.--The trading volume and 
volatility of the digital commodity on 
the exchange.
``(V) Customer protections.--
``(aa) Information about 
the material risks and 
characteristics of the digital 
commodity.
``(bb) Any material 
incentives or conflicts of 
interest that the digital 
commodity exchange may have in 
connection with the listing of 
the digital commodity.
``(cc) Information required 
by the Commission by rule or 
regulation pertaining to 
marketing and advertising, 
including testimonials and 
endorsements.
``(VI) Additional information.--
Such additional information as the 
Commission shall determine by rule or 
regulation to be necessary for a 
customer to understand the financial 
and operational risks of a digital 
commodity, and to be practically 
feasible to provide.
``(4) Monitoring of trading and trade processing.--
``(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.
``(B) Protection of markets and market 
participants.--A digital commodity exchange shall 
establish and enforce rules--
``(i) to protect markets and market 
participants from abusive practices committed 
by any party, including abusive practices 
committed by a party acting as an agent for a 
participant; and
``(ii) to promote fair and equitable 
trading on the exchange.
``(C) Trading procedures.--A digital commodity 
exchange shall--
``(i) establish and enforce rules or terms 
and conditions defining, or specifications 
detailing--
``(I) trading procedures to be used 
in entering and executing orders traded 
on or through the facilities of the 
digital commodity exchange; and
``(II) procedures for trade 
processing of digital commodities on or 
through the facilities of the digital 
commodity exchange; and
``(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.
``(5) Ability to obtain information.--A digital commodity 
exchange shall--
``(A) establish and enforce rules that will allow 
the exchange to obtain any necessary information to 
perform any of the functions described in this section;
``(B) provide the information to the Commission on 
request; and
``(C) have the capacity to carry out such 
international information-sharing agreements as the 
Commission may require.
``(6) 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.
``(7) Timely publication of trading information.--
``(A) In general.--A digital commodity exchange 
shall make public on its website timely information on 
price, trading volume, and other trading data on 
digital commodities to the extent prescribed by the 
Commission by rule or regulation.
``(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.
``(8) Recordkeeping and reporting.--
``(A) In general.--A digital commodity exchange 
shall--
``(i) maintain records relating to the 
business of the digital commodity exchange, 
including a complete audit trail, in a form and 
manner acceptable to the Commission for a 
period of 5 years;
``(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;
``(iii) keep any such records of digital 
commodities that relate to a security open to 
inspection and examination by the Securities 
and Exchange Commission; and
``(iv) provide to the Commission an annual 
financial statement certified by an independent 
public accountant.
``(B) 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.
``(9) Antitrust considerations.--Unless necessary or 
appropriate to achieve the purposes of this Act, a digital 
commodity exchange shall not--
``(A) adopt any rules or take any actions that 
result in any unreasonable restraint of trade; or
``(B) impose any material anticompetitive burden on 
trading.
``(10) Conflicts of interest.--A digital commodity exchange 
shall establish and enforce rules--
``(A) to minimize conflicts of interest in the 
decision-making processes of the digital commodity 
exchange, including conflicts of interest that might 
potentially bias the judgement or supervision of the 
digital commodity exchange and contravene the 
principles of fair and equitable trading;
``(B) to minimize conflicts of interest that might 
arise--
``(i) out of transactions or arrangements 
with affiliates (including affiliates engaging 
in digital commodity activities); or
``(ii) as a result of multiple 
registrations under this Act;
``(C) to establish a process for resolving 
conflicts of interest referred to in subparagraphs (A) 
and (B);
``(D) to require disclosure by the digital 
commodity exchange of any material incentives or 
conflicts of interest that the digital commodity 
exchange is unable to resolve, or prohibit the 
conditions giving rise to such conflicts of interest 
not able to be resolved, as the Commission may 
determine to be appropriate; and
``(E) relating to such additional matters as the 
Commission shall determine by rule or regulation to be 
necessary in the public interest.
``(F) Affiliates.--A digital commodity exchange may 
permit an affiliated digital commodity broker or 
digital commodity dealer to facilitate impartial access 
to the digital commodity exchange, subject to the rules 
prescribed by the Commission with respect to conflicts 
of interest regarding transactions or arrangements with 
affiliates.
``(11) Financial resources.--
``(A) In general.--A digital commodity exchange 
shall have adequate financial, operational, and 
managerial resources, as shall be determined by the 
Commission by rule or regulation, to discharge each 
responsibility of the digital commodity exchange.
``(B) Minimum amount of financial resources.--A 
digital commodity exchange shall possess financial 
resources that, at a minimum, exceed the sum of--
``(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
``(ii) the total amount necessary to meet 
the financial obligations of the digital 
commodity exchange to all customers of the 
digital commodity exchange.
``(C) Prohibition.--The resources used to meet the 
requirements under subparagraph (B) shall not include 
digital commodities originated by the digital commodity 
exchange or affiliates of the digital commodity 
exchange.
``(12) 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.
``(13) Governance fitness standards.--
``(A) Governance arrangements.--A digital commodity 
exchange shall establish governance arrangements that 
are transparent to fulfill public interest 
requirements.
``(B) Fitness standards.--A digital commodity 
exchange shall establish and enforce appropriate 
fitness standards for--
``(i) officers and directors;
``(ii) any individual or entity with direct 
access to, or control of, customer assets; and
``(iii) other persons, as determined by the 
Commission by rule or regulation.
``(C) Board of directors.--Except as otherwise 
provided by the Commission by rule, regulation, or 
order, a digital commodity exchange shall be governed 
by a board of directors, subject to the following 
requirements:
``(i) The composition of the board of 
directors shall be sufficient to maintain 
appropriate independence, as determined by the 
Commission.
``(ii) A digital commodity exchange shall 
endeavor to recruit individuals to serve on the 
board of directors from among, and to have the 
composition of the board reflect, a broad and 
culturally diverse pool of qualified 
candidates.
``(14) System safeguards.--A digital commodity exchange 
shall--
``(A) establish and maintain a program of risk 
analysis and oversight to identify and minimize sources 
of operational and security risks (including 
cybersecurity risks), through the development of 
appropriate controls and procedures, and automated 
systems that--
``(i) are reliable and secure; and
``(ii) have adequate scalable capacity;
``(B) establish and maintain emergency procedures, 
backup resources, and a plan for disaster recovery that 
allow for--
``(i) the timely recovery and resumption of 
operations;
``(ii) the fulfillment of the 
responsibilities and obligations of the digital 
commodity exchange; and
``(iii) the appropriate safeguarding and 
ability to access the private keys or other 
credentials necessary to transmit digital 
commodities in the possession, custody, or 
control of the digital commodity exchange; and
``(C) periodically conduct tests to verify that the 
backup resources of the digital commodity exchange are 
sufficient to ensure continued--
``(i) order processing and trade matching;
``(ii) price reporting;
``(iii) market surveillance;
``(iv) maintenance of a comprehensive and 
accurate audit trail; and
``(v) access and ability to transfer 
digital commodities in the possession, custody, 
or control of the digital commodity exchange.
``(15) Risk management procedures.--A digital commodity 
exchange shall establish robust and professional risk 
management systems adequate for managing the day-to-day 
business of the digital commodity exchange.
``(d) Consumer Protection.--The Commission shall adopt rules or 
regulations imposing customer protection requirements that--
``(1) require disclosure by a digital commodity exchange to 
a customer (other than another digital commodity exchange 
registered under this section), which shall be updated in a 
timely manner to reflect material changes, and in accordance 
with paragraph (5), of--
``(A) the underlying technology of any digital 
commodity that is listed on the digital commodity 
exchange;
``(B) the functionality and utility of any digital 
commodity that is listed on the digital commodity 
exchange;
``(C) the governance structure of any digital 
commodity that is listed on the digital commodity 
exchange;
``(D) the trading volume and volatility of any 
digital commodity that is listed on the digital 
commodity exchange;
``(E) information about the material risks and 
characteristics of any applicable digital commodities; 
and
``(F) any material incentives or conflicts of 
interest that the digital commodity exchange may have 
in connection with the listing of any applicable 
digital commodities;
``(2) establish a duty for a digital commodity exchange to 
communicate in a fair and balanced manner based on principles 
of fair dealing and good faith;
``(3) establish standards governing digital commodity 
exchange marketing and advertising, including testimonials and 
endorsements;
``(4) establish such other standards and requirements as 
the Commission may determine are--
``(A) appropriate for the protection of customers; 
or
``(B) otherwise in furtherance of the purposes of 
this Act; and
``(5) standardize and simplify disclosures under paragraph 
(1), including requiring that disclosures--
``(A) be conspicuous;
``(B) use plain language comprehensible to 
customers; and
``(C) succinctly explain the information that is 
required to be communicated to the customer.
``(e) Information-sharing.--
``(1) In general.--Subject to section 8, and on request, 
the Commission shall share information collected under 
subsection (c)(8)(A) with--
``(A) the Board of Governors of the Federal Reserve 
System;
``(B) the Securities and Exchange Commission;
``(C) each appropriate Federal banking agency;
``(D) each appropriate State bank supervisor (as 
defined in section 3 of the Federal Deposit Insurance 
Act (12 U.S.C. 1813));
``(E) the Financial Stability Oversight Council;
``(F) the Department of Justice;
``(G) State securities regulators; and
``(H) any other person that the Commission 
determines to be appropriate, including--
``(i) foreign financial supervisors 
(including foreign futures authorities);
``(ii) foreign central banks; and
``(iii) foreign ministries.
``(2) Confidentiality agreement.--Before the Commission may 
share information with any entity described in paragraph (1), 
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.
``(f) Holding of Customer Assets.--
``(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.
``(2) Qualified digital asset custodian.--Each digital 
commodity exchange shall hold in a qualified digital asset 
custodian each unit of a digital asset that is--
``(A) the property of a customer of the digital 
commodity exchange;
``(B) required to be held by the digital commodity 
exchange under subsection (c)(11); or
``(C) otherwise so required by the Commission to 
reasonably protect customers and customer assets or 
promote the public interest.
``(3) Segregation of funds.--
``(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.
``(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.
``(C) Exceptions.--
``(i) Use of funds.--
``(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.
``(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 of sale.
``(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.
``(4) Permitted investments.--Money described in paragraph 
(3) 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 high-
quality liquid asset 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 shall prescribe.
``(5) Customer protection during bankruptcy.--
``(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.
``(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.
``(C) Exchanges.--A digital commodity exchange 
shall be considered a futures commission merchant for 
purposes of section 761 of title 11, United States 
Code.
``(D) Assets removed from segregation.--Assets 
removed from segregation due to a customer election 
under paragraph (7) shall not be considered customer 
property for purposes of section 761 of title 11, 
United States Code.
``(6) Misuse of customer property.--
``(A) In general.--It shall be unlawful--
``(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 
asset exchange; or
``(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 as belonging to the 
depositing digital commodity exchange or any 
person other than the customers of the digital 
commodity exchange.
``(B) Use further defined.--For purposes of this 
paragraph, the term `use' with respect to a digital 
commodity, includes utilizing any unit of a digital 
asset to participate in a blockchain service (as 
defined in paragraph (7)(D)) 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.
``(7) Participation in blockchain services.--
``(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 
for each use--
``(i) the customer expressly permits the 
use, in writing, to the digital commodity 
exchange; and
``(ii) the digital commodity exchange 
complies with subparagraph (B).
``(B) Limitations.--
``(i) In general.--The Commission shall, by 
rule, establish notice and written disclosure 
requirements and any other limitations and 
rules related to a permission provided under 
subparagraph (A) or the treatment of customer 
assets in the event of an insolvency, 
resolution, or liquidation proceeding, 
including a description of the manner in which 
any digital commodity would be treated in an 
insolvency, resolution, or liquidation 
proceeding, and how the treatment of digital 
commodities differs from the treatment of any 
other assets in the event of an insolvency, 
resolution, or liquidation proceeding, that are 
reasonably necessary to protect customers, 
including eligible contract participants, non-
eligible contract participants, and any other 
class of customers.
``(ii) Customer choice.--A digital 
commodity exchange may not--
``(I) require a customer to provide 
the permission referred to in 
subparagraph (A) as a condition of 
doing business on the exchange; or
``(II) penalize a customer for not 
providing the permission referred to in 
subparagraph (A).
``(C) Requirements.--The Commission may, by rule, 
modify the requirements of paragraph (2) or (3) to 
facilitate the use of a unit of a digital commodity 
belonging to a customer to provide a blockchain 
service.
``(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 required for the 
ongoing operation of a blockchain system.
``(g) Market Access Requirements.--
``(1) Affiliated commodity brokers.--A registered digital 
commodity exchange may permit an affiliated digital commodity 
broker to facilitate impartial access to the digital commodity 
exchange.
``(2) Additional requirements.--The Commission shall, 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, provide market participants with 
impartial access to the market, protect customer funds, and 
promote responsible innovation.
``(h) Designation of Chief Compliance Officer.--
``(1) In general.--A digital commodity exchange shall 
designate an individual to serve as a chief compliance officer, 
who shall be solely responsible to the digital commodity 
exchange and not to any other affiliated entity or other entity 
regulated under this Act.
``(2) Duties.--The chief compliance officer of a digital 
commodity exchange shall--
``(A) report directly to the board or to the senior 
officer of the exchange;
``(B) review compliance with the core principles in 
this section;
``(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;
``(D) establish and administer the policies and 
procedures required to be established pursuant to this 
section;
``(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
``(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.
``(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.
``(4) Annual reports.--
``(A) In general.--In accordance with rules that 
shall be prescribed by the Commission, the chief 
compliance officer of a digital commodity exchange 
shall annually prepare and sign a report that contains 
a description of--
``(i) the compliance of the digital 
commodity exchange with this Act; and
``(ii) the policies and procedures, 
including the code of ethics and conflicts of 
interest policies, of the digital commodity 
exchange.
``(B) Requirements.--The chief compliance officer 
shall--
``(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
``(ii) include in the report a 
certification that, under penalty of law, the 
report is accurate and complete.
``(i) Appointment of Trustee.--
``(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 for the judicial district in which the 
digital commodity exchange is located for the appointment of a 
trustee.
``(2) Assumption of jurisdiction.--If the Commission 
applies for appointment of a trustee under paragraph (1)--
``(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
``(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.
``(j) Exemptions.--
``(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--
``(A) the exemption would be consistent with the 
public interest and the purposes of this Act; and
``(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.
``(2) Foreign exchanges.--
``(A) In general.--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 
digital commodity exchange.
``(B) Transition period.--The Commission may exempt 
a foreign digital commodity exchange from registration 
under this section for the 2-year period following the 
date of enactment of this section if--
``(i) the foreign digital commodity 
exchange--
``(I) keeps the books and records 
of the foreign digital commodity 
exchange open to inspection and 
examination by any representative of 
the Commission upon reasonable request; 
and
``(II) reports to the Commission, 
in a form and manner acceptable to the 
Commission, such information as the 
Commission determines to be reasonably 
necessary or appropriate for the 
Commission to perform the duties of the 
Commission under this Act; and
``(ii) the appropriate government 
authorities in the home country of the foreign 
digital commodity exchange--
``(I) certify that the foreign 
digital commodity exchange--
``(aa) is subject to--

``(AA) supervision 
and regulation on a 
consolidated basis by a 
governmental authority 
in its home country, 
including requirements 
relating to beneficial 
ownership, control 
persons, governance, 
risk management, 
financial reporting, 
and market integrity; 
and

``(BB) clear and 
enforceable managerial 
and supervisory 
responsibility at the 
consolidated level; and

``(bb) is in good standing 
and not subject to unresolved, 
material enforcement actions 
relating to market integrity, 
customer protection, or 
financial crime; and
``(II) enter into a memorandum of 
understanding with the Commission in 
which those appropriate government 
authorities agree to provide to the 
Commission information regarding the 
foreign digital commodity exchange that 
the Commission requests during that 2-
year period.
``(C) Suspension or revocation.--The Commission may 
suspend or revoke an exemption under subparagraph (B) 
if the Commission determines that the foreign digital 
commodity exchange or the appropriate government 
authority in the home country of the foreign digital 
commodity exchange fails to substantially comply with 
the requirements described in subparagraph (B).
``(k) Federal Preemption.--
``(1) In general.--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.
``(2) Preservation of authority.--Nothing in this 
subsection shall affect the ability of a State or local agency 
to investigate and bring enforcement actions regarding fraud, 
deceit, or unfair or deceptive acts or practices.
``(l) Regulations.--The Commission shall prescribe such rules and 
regulations as are appropriate for the implementation of this section.
``(m) 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.''.
(b) Private Rights of Action.--Section 22 of the Commodity Exchange 
Act (7 U.S.C. 25) is amended--
(1) in subsection (a)(1)--
(A) in subparagraph (B)--
(i) by striking ``commodity) or any swap;'' 
and inserting ``commodity), any swap, or any 
digital commodity transaction;''; and
(ii) by striking ``to make such contract'' 
and all that follows through the semicolon at 
the end and inserting ``to make such contract, 
any swap, or any digital commodity 
transaction;'';
(B) in subparagraph (C), by conforming the margin 
of clause (iv) to the margin of clauses (i) through 
(iii); and
(C) in subparagraph (D)--
(i) in the matter preceding clause (i), by 
striking ``subparagraph (B) hereof or swap'' 
and inserting ``subparagraph (B), a swap, or a 
digital commodity''; and
(ii) in clause (ii), by striking ``any such 
contract or swap'' and inserting ``any such 
contract, swap, or digital commodity''; and
(2) in subsection (b)(1)(A), by inserting ``5i,'' after 
``5h,''.

SEC. 205. REGISTRATION AND REGULATION OF DIGITAL COMMODITY BROKERS AND 
DEALERS.

The Commodity Exchange Act is amended by inserting after section 4t 
(7 U.S.C. 6t) the following:

``SEC. 4U. REGISTRATION AND REGULATION OF DIGITAL COMMODITY BROKERS AND 
DEALERS.

``(a) Registration.--
``(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.
``(2) Exemptions.--A person acting as a digital commodity 
broker or digital commodity dealer shall not be required to 
register under this section if the person--
``(A) engages in no more than a de minimis amount 
of brokering or dealing activity, as the Commission may 
determine by rule or regulation, in a digital 
commodity;
``(B) serves only customers in a single State or 
territory; or
``(C) is already registered as a futures commission 
merchant, provided that the person shall--
``(i) provide written notice to the 
Commission and to any self-regulatory 
organization of which it is a member of its 
intention to act as a digital commodity broker; 
and
``(ii) comply with all other provisions of 
this Act and the rules promulgated thereunder 
and any self-regulatory organization rules as 
they apply to a digital commodity broker.
``(3) Additional registration.--
``(A) Rules.--In order to foster the development of 
fair and orderly markets, protect customers, and 
promote responsible innovation, the Commission shall--
``(i) 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;
``(ii) prescribe rules establishing 
requirements for the identification, 
mitigation, and resolution of conflicts of 
interest among and across affiliated entities 
or entities with multiple registrations under 
this Act, including conflicts of interest 
related to vertically integrated market 
structures and their varying responsibilities 
and activities; and
``(iii) after an analysis of the risks and 
benefits, prescribe rules to provide for 
portfolio margining in accordance with section 
103(e) of the Digital Commodity Intermediaries 
Act.
``(B) 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.
``(C) Harmonization.--In prescribing rules for 
digital commodity brokers or digital commodity dealers, 
the Commission shall, to the greatest extent feasible, 
seek to avoid duplication, inconsistencies, or burdens 
for a person registered in multiple capacities.
``(b) Requirements.--
``(1) In general.--A person shall register as a digital 
commodity broker or digital commodity dealer by filing a 
registration application with the Commission.
``(2) Contents.--
``(A) In general.--The application under paragraph 
(1) 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.
``(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.
``(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.
``(c) Capital Requirements.--
``(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 meet and continue to 
meet the obligations of such a registrant.
``(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.).
``(d) Digital Commodity Trading Not Readily Susceptible to 
Manipulation.--A digital commodity broker or digital commodity dealer 
may only offer trades in digital commodities that are not readily 
susceptible to manipulation.
``(e) Execution.--The Commission shall prescribe rules and 
regulations regarding the execution of digital commodity transactions 
by a digital commodity broker or a digital commodity dealer with or on 
behalf of customers, which shall address--
``(1) fair and objective pricing;
``(2) the recording, maintaining, and disclosure of 
information;
``(3) the protection of the price discovery process; and
``(4) requirements specific to digital commodity 
transactions with or on behalf of a customer who is not an 
eligible contract participant.
``(f) Reporting and Recordkeeping.--Each digital commodity broker 
and digital commodity dealer shall--
``(1) 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;
``(2) keep books and records in such form and manner and 
for such period as shall be prescribed by the Commission by 
rule or regulation; and
``(3) keep the books and records open to inspection and 
examination by any representative of the Commission.
``(g) Daily Trading Records.--
``(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 shall require by rule or regulation.
``(2) Information requirements.--The daily trading records 
described in paragraph (1) shall include such information as 
the Commission shall require by rule or regulation.
``(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.
``(4) Audit trail.--Each digital commodity broker and 
digital commodity dealer shall maintain a complete audit trail 
for conducting comprehensive and accurate trade 
reconstructions.
``(h) Business Conduct Standards.--
``(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, 
shall prescribe related to--
``(A) fraud, manipulation, and other abusive 
practices involving spot digital commodity transactions 
(including transactions that are offered but not 
entered into);
``(B) diligent supervision of the business of the 
registered digital commodity broker or digital 
commodity dealer, respectively; and
``(C) such other matters as the Commission 
determines appropriate.
``(2) Business conduct requirements.--The Commission shall, 
by rule, prescribe business conduct requirements that--
``(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--
``(i) information about the material risks 
and characteristics of the digital commodity; 
and
``(ii) information about the material risks 
and characteristics of the transaction;
``(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;
``(C) establish standards governing digital 
commodity broker and digital commodity dealer marketing 
and advertising, including testimonials and 
endorsements;
``(D) establish a duty for digital commodity 
brokers and digital commodity dealers to provide fair, 
transparent, and objective pricing; and
``(E) establish such other standards and 
requirements as the Commission may determine are 
appropriate for the protection of customers.
``(3) Prohibition on fraudulent practices.--It shall be 
unlawful for a digital commodity broker or digital commodity 
dealer to--
``(A) employ any device, scheme, or artifice to 
defraud any customer or counterparty;
``(B) engage in any transaction, practice, or 
course of business that operates as a fraud or deceit 
on any customer or counterparty; or
``(C) engage in any act, practice, or course of 
business that is fraudulent, deceptive, or 
manipulative.
``(i) Duties.--
``(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.
``(2) Disclosure of general information.--Each digital 
commodity broker and digital commodity dealer shall disclose to 
the Commission information concerning--
``(A) the terms and conditions of the transactions 
of the digital commodity broker or digital commodity 
dealer, respectively;
``(B) the trading operations, mechanisms, and 
practices of the digital commodity broker or digital 
commodity dealer, respectively;
``(C) financial integrity protections relating to 
the activities of the digital commodity broker or 
digital commodity dealer, respectively; and
``(D) other information relevant to trading in 
digital commodities by the digital commodity broker or 
digital commodity dealer, respectively.
``(3) Ability to obtain information.--Each digital 
commodity broker and digital commodity dealer shall--
``(A) establish and enforce internal systems and 
procedures to obtain any necessary information to 
perform any of the functions described in this section; 
and
``(B) provide the information to the Commission, on 
request.
``(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, as a result of multiple registrations under this Act--
``(A) to establish a process for resolving 
conflicts of interest;
``(B) to require disclosure by a digital commodity 
broker or digital commodity dealer of any material 
incentives or conflicts of interest that the digital 
commodity broker or digital commodity dealer is unable 
to resolve, as the Commission may determine to be 
appropriate; and
``(C) to address such other issues as the 
Commission determines by rule or regulation to be 
necessary in the public interest.
``(5) Antitrust considerations.--Unless necessary or 
appropriate to achieve the purposes of this Act, a digital 
commodity broker or digital commodity dealer shall not--
``(A) adopt any process or take any action that 
results in any unreasonable restraint of trade; or
``(B) impose any material anticompetitive burden on 
trading or clearing.
``(j) Designation of Chief Compliance Officer.--
``(1) In general.--Each digital commodity broker and 
digital commodity dealer shall designate an individual to serve 
as a chief compliance officer, who shall be solely responsible 
to the digital commodity broker or digital commodity dealer and 
not to any other affiliated entity or other entity regulated 
under this Act.
``(2) Duties.--The chief compliance officer of a registered 
digital commodity broker or a registered digital commodity 
dealer shall--
``(A) report directly to the board or to the senior 
officer of the registered digital commodity broker or 
registered digital commodity dealer;
``(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;
``(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;
``(D) be responsible for administering each policy 
and procedure that is required to be established 
pursuant to this section;
``(E) ensure compliance with this Act (including 
regulations), including each rule prescribed by the 
Commission under this section;
``(F) establish procedures for the remediation of 
noncompliance issues identified by the chief compliance 
officer through any--
``(i) compliance office review;
``(ii) look-back;
``(iii) internal or external audit finding;
``(iv) self-reported error; or
``(v) validated complaint; and
``(G) establish and follow appropriate procedures 
for the handling, management response, remediation, 
retesting, and closing of noncompliance issues.
``(3) Annual reports.--
``(A) In general.--In accordance with rules that 
shall be prescribed by the Commission, the chief 
compliance officer of a registered digital commodity 
broker or a registered digital commodity dealer shall 
annually prepare and sign a report that contains a 
description of--
``(i) the compliance of the registered 
digital commodity broker or registered digital 
commodity dealer with this Act (including 
regulations); and
``(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).
``(B) Requirements.--The chief compliance officer 
shall ensure that a compliance report under 
subparagraph (A)--
``(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
``(ii) includes a certification that, under 
penalty of law, the compliance report is 
accurate and complete.
``(k) Segregation of Digital Commodities.--
``(1) Holding of customer assets.--
``(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.
``(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--
``(i) the property of a customer or 
counterparty of the digital commodity broker or 
digital commodity dealer, respectively;
``(ii) required to be held by the digital 
commodity broker or digital commodity dealer 
under subsection (c); or
``(iii) otherwise so required by the 
Commission to reasonably protect customers and 
customer assets or promote the public interest.
``(2) Segregation of funds.--
``(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.
``(B) Commingling prohibited.--
``(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.
``(ii) Exceptions.--
``(I) Use of funds.--
``(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.
``(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.
``(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.
``(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 high-
quality liquid asset that the Commission may by rule or 
regulation allow.
``(4) Customer protection during bankruptcy.--
``(A) Customer property.--All assets held on behalf 
of a customer by a digital commodity broker or digital 
commodity dealer, and all money, assets, and property 
of any customer received by a digital commodity broker 
or digital commodity dealer 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.
``(B) Transactions.--A purchase, sale, loan of, 
margin loan or other extension of credit on, 
repurchase, reverse repurchase, or other transaction 
involving a unit of a digital commodity occurring with 
a digital commodity broker or digital commodity dealer 
shall be considered--
``(i) 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, section 11 of the 
Federal Deposit Insurance Act (12 U.S.C. 1821), 
and section 210 of the Dodd-Frank Wall Street 
Reform and Consumer Protection Act (12 U.S.C. 
5390); and
``(ii) a `commodity contract' for purposes 
of section 5(b)(2)(C) of the Securities 
Investor Protection Act of 1970 (15 U.S.C. 
78eee(b)(2)(C)).
``(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, section 
11 of the Federal Deposit Insurance Act (12 U.S.C. 
1821), and section 210 of the Dodd-Frank Wall Street 
Reform and Consumer Protection Act (12 U.S.C. 5390).
``(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.
``(5) Misuse of customer property.--
``(A) In general.--It shall be unlawful--
``(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
``(ii) for any other person, including any 
depository, digital commodity exchange, other 
digital commodity broker, other digital 
commodity dealer, 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, 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.
``(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.
``(6) Participation in blockchain services.--
``(A) Use of funds.--A digital commodity broker or 
digital commodity dealer (or a designee of a digital 
commodity broker or 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--
``(i) the customer expressly permits the 
use, in writing, to the digital commodity 
broker or digital commodity dealer, as the case 
may be; and
``(ii) the digital commodity broker or 
digital commodity dealer, as the case may be, 
complies with subparagraph (B).
``(B) Limitations.--
``(i) In general.--The Commission shall, by 
rule, establish notice and written disclosure 
requirements and any other limitations and 
rules related to a permission provided under 
subparagraph (A) or the treatment of customer 
assets in the event of an insolvency, 
resolution, or liquidation proceeding, 
including a description of the manner in which 
any digital commodity would be treated in an 
insolvency, resolution, or liquidation 
proceeding, and how the treatment of digital 
commodities differs from the treatment of any 
other assets in the event of an insolvency, 
resolution, or liquidation proceeding, that are 
reasonably necessary to protect customers, 
including eligible contract participants, non-
eligible contract participants, and any other 
class of customers.
``(ii) Customer choice.--A digital 
commodity broker or digital commodity dealer 
may not--
``(I) require a customer to provide 
the permission referred to in 
subparagraph (A) as a condition of 
doing business with the digital 
commodity broker or digital commodity 
dealer; or
``(II) penalize a customer for not 
providing the permission referred to in 
subparagraph (A).
``(C) Requirements.--The Commission may, by rule, 
modify the requirements of paragraph (2) or subsection 
(g) to facilitate the use of a unit of a digital 
commodity belonging to a customer to provide a 
blockchain service.
``(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 required for the 
ongoing operation of a blockchain system.
``(7) Property held in portfolio margin accounts.--
``(A) In general.--Notwithstanding paragraph (2), 
and the rules and regulations thereunder, and pursuant 
to an exemption granted by the Commission under section 
4(c) or pursuant to a rule or regulation--
``(i) a digital commodity broker or digital 
commodity dealer registered under subsection 
(b)(1) and also registered as a futures 
commission merchant pursuant to section 
4f(a)(1) may, pursuant to a portfolio margining 
program approved by the Commission, hold 
digital commodity customer money, assets, and 
property in a portfolio margining account 
carried as a futures account or cleared swaps 
account; and
``(ii) a digital commodity broker or 
digital commodity dealer registered under 
subsection (b)(1) and also registered as a 
broker or dealer pursuant to section 15(b)(1) 
of the Securities Exchange Act of 1934 (15 
U.S.C. 78o(b)(1)) may, pursuant to a portfolio 
margining program approved by the Securities 
and Exchange Commission pursuant to section 
19(b) of that Act (15 U.S.C. 78s(b)), hold 
digital commodity customer money, assets, and 
property in a portfolio margining account 
carried as a securities account subject to 
section 15(c)(3) of that Act (15 U.S.C. 
78o(c)(3)) and the rules and regulations 
thereunder.
``(B) Consultation.--The Commission shall consult 
with the Securities and Exchange Commission to adopt 
rules to ensure that such transactions and accounts are 
subject to comparable requirements to the extent 
practical for similar products.
``(l) Federal Preemption.--
``(1) In general.--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.
``(2) Preservation of authority.--Nothing in this 
subsection shall affect the ability of a State or local agency 
to investigate and bring enforcement actions regarding fraud, 
deceit, or unfair or deceptive acts or practices.
``(m) 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--
``(1) the exemption--
``(A) would be consistent with the public interest 
and the purposes of this Act; and
``(B) will not have a material adverse effect on 
the ability of the Commission to discharge regulatory 
duties under this Act; or
``(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.
``(n) Regulations.--The Commission shall prescribe such rules and 
regulations as are appropriate for the implementation of this 
section.''.

SEC. 206. REGISTRATION OF ASSOCIATED PERSONS.

(a) In General.--Section 4k of the Commodity Exchange Act (7 U.S.C. 
6k) is amended by adding at the end the following:
``(7) Associated persons of digital commodity brokers and 
digital commodity dealers.--
``(A) In general.--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.
``(B) Duty of digital commodity brokers and 
dealers.--It shall be unlawful for a digital commodity 
broker or a digital commodity dealer to permit a person 
described in subparagraph (A) 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.''.
(b) Application.--Section 4k(4) of the Commodity Exchange Act (7 
U.S.C. 6k(4)) is amended, in the first sentence, 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''.

SEC. 207. SOFTWARE DEVELOPER PROTECTIONS.

The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by 
inserting after section 4u (as added by section 205) the following:

``SEC. 4V. APPLICATION TO SOFTWARE DEVELOPERS.

``(a) In General.--Notwithstanding any other provision of this Act, 
except as provided in subsection (b), 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:
``(1) Compiling network transactions or relaying, 
searching, sequencing, validating, or acting in a similar 
capacity.
``(2) Providing computational work, operating a node or 
oracle service, procuring, offering, or utilizing network 
bandwidth, or providing other similar incidental services.
``(3) Providing a user-interface that enables a user to 
read and access data about a blockchain system.
``(4) Developing, publishing, or otherwise distributing a 
blockchain system or a decentralized finance messaging system.
``(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.
``(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.
``(b) Exceptions.--Subsection (a) shall not be interpreted to apply 
to the anti-fraud, anti-manipulation, or false reporting enforcement 
authorities of the Commission.''.

SEC. 208. PORTFOLIO MARGINING.

(a) In General.--Section 4d(h) of the Commodity Exchange Act (7 
U.S.C. 6d(h)) is amended in the first sentence--
(1) by inserting ``or subsection (f)(2)'' after 
``subsection (a)(2)''; and
(2) by inserting ``or a cleared swap'' after ``an option on 
such a contract''.
(b) Commodity Broker Debtors.--Section 20(c) of the Commodity 
Exchange Act (7 U.S.C. 24(c)) is amended--
(1) by inserting ``and digital commodities'' after 
``securities''; and
(2) by inserting ``or cleared swaps account'' after 
``futures account''.

SEC. 209. CLARIFICATION ON CUSTOMER PROPERTY.

Section 20(a) of the Commodity Exchange Act (7 U.S.C. 24(a)) is 
amended--
(1) in paragraph (4), by striking ``and'' at the end;
(2) in paragraph (5), by striking the period at the end and 
inserting ``; and''; and
(3) by adding at the end the following:
``(6) that cash, securities, or other property of the 
estate of a commodity broker, including the trading or 
operating accounts of the commodity broker and commodities held 
in inventory by the commodity broker, shall, subject to any 
otherwise unavoidable security interest, or otherwise 
unavoidable contractual offset or netting rights of creditors 
(including rights set forth in a rule or bylaw of a derivatives 
clearing organization or a clearing agency) in respect of such 
property, be included in customer property, but only to the 
extent that the property that is otherwise customer property is 
insufficient to satisfy the net equity claims of public 
customers (as such term may be defined by the Commission by 
rule or regulation) of the commodity broker.''.

SEC. 210. RESOURCES FOR IMPLEMENTATION.

The Commodity Exchange Act is amended by inserting after section 
8d (7 U.S.C. 12d) the following:

``SEC. 8E. RESOURCES FOR IMPLEMENTATION REGARDING DIGITAL COMMODITY 
EXCHANGES, BROKERS, AND DEALERS.

``(a) Collection of Fees.--
``(1) In general.--The Commission shall, in accordance with 
this subsection, assess and collect fees from registered 
digital commodity brokers, digital commodity dealers, digital 
commodity exchanges, and qualified digital asset custodians--
``(A) on the filing of the initial application for 
registration; and
``(B) on an annual basis thereafter.
``(2) Purpose.--The fees under paragraph (1) shall be used 
to recover the annual costs of--
``(A) registering digital commodity exchanges, 
digital commodity brokers, digital commodity dealers, 
and qualified digital asset custodians;
``(B) conducting oversight of digital commodity 
exchanges, digital commodity brokers, digital commodity 
dealers, qualified digital asset custodians, and 
digital commodity transactions;
``(C) carrying out education and outreach under 
subsection (b); and
``(D) carrying out such other activities as are 
required by the Digital Commodity Intermediaries Act 
and the amendments made by that Act.
``(3) Determination of fee rates.--In determining fee rates 
under paragraph (1), the Commission shall consider--
``(A) the volume of business of the digital 
commodity exchange, digital commodity broker, digital 
commodity dealer, or qualified digital asset custodian; 
and
``(B) the registration category of the digital 
commodity exchange, digital commodity broker, digital 
commodity dealer, or qualified digital asset custodian.
``(4) Prohibition.--The Commission shall not require a 
digital commodity exchange, digital commodity broker, digital 
commodity dealer, or qualified digital asset custodian to 
collect directly from customers a transaction-based fee for 
each digital commodity transaction.
``(5) Publication.--
``(A) 1st fiscal year.--Not later than 30 days 
after the date of enactment of this section, the 
Commission shall publish the fee rates determined 
pursuant to this subsection for the fiscal year in 
which this section is enacted.
``(B) Subsequent fiscal years.--Not later than 60 
days after the date of enactment of an Act making a 
regular appropriation to the Commission for a fiscal 
year, the Commission shall publish in the Federal 
Register a notice of--
``(i) the fee rates determined pursuant to 
this subsection for that fiscal year; and
``(ii) any estimates or projections on 
which those fee rates are based.
``(6) Records and disclosure.--In carrying out this 
subsection, the Commission shall not be required to comply with 
section 553 of title 5, United States Code.
``(7) No judicial review.--A fee rate prescribed under this 
subsection shall not be subject to judicial review.
``(8) Deposit of fees.--Fees collected pursuant to this 
subsection for any fiscal year shall be deposited and credited 
as offsetting collections to the account providing 
appropriations to the Commission.
``(9) Annual adjustment.--For each fiscal year, the 
Commission shall, by order, determine fee rates pursuant to 
this subsection that are reasonably likely to produce aggregate 
fee collections that are equal to the annual appropriation to 
the Commission by Congress for the activities described in 
paragraph (2).
``(10) Lapse of appropriation.--If, on the first day of a 
fiscal year, a regular appropriation to the Commission has not 
been enacted, the Commission shall continue to collect (as 
offsetting collections) fees pursuant to this subsection at 
each of the rates in effect during the preceding fiscal year.
``(11) Budget requests.--The Commissions shall itemize in 
each budget submitted to the President or the Office of 
Management and Budget the estimated annual costs of--
``(A) registering digital commodity exchanges, 
digital commodity brokers, digital commodity dealers, 
and qualified digital asset custodians;
``(B) conducting oversight of digital commodity 
exchanges, digital commodity brokers, digital commodity 
dealers, qualified digital asset custodians, and 
digital commodity transactions;
``(C) carrying out education and outreach under 
subsection (b); and
``(D) carrying out such other activities as are 
required by the Digital Commodity Intermediaries Act 
and the amendments made by that Act.
``(12) Limitations.--
``(A) In general.--Fees may only be assessed and 
imposed pursuant to this subsection on digital 
commodity exchanges, digital commodity brokers, digital 
commodity dealers, and qualified digital asset 
custodians regulated by the Commission pursuant to the 
Digital Commodity Intermediaries Act and the amendments 
made by that Act.
``(B) Use of fees.--Fees authorized under this 
subsection are prohibited from funding any Commission 
activity not directly related to the activities 
described in paragraph (2).
``(b) Customer Education and Outreach.--The Commission shall 
provide education and outreach to customers participating in digital 
commodity markets.
``(c) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out the Digital Commodity Intermediaries Act and 
the amendments made by that Act $150,000,000, to remain available until 
expended, until the Commission has established and is collecting 
registration fees pursuant to subsection (a).
``(d) Expedited Hiring Authority.--
``(1) Appointment authority.--The Chairman of the 
Commission may appoint individuals to a position described in 
paragraph (2)--
``(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
``(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).
``(2) Position described.--A position referred to in 
paragraph (1) is a position at the Commission that--
``(A) is in the competitive service (as defined in 
section 2102 of title 5, United States Code); and
``(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.
``(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 
(as defined in section 2102 of title 5, United States Code) to 
the excepted service (as defined in section 2103 of such 
title).''.

SEC. 211. DIGITAL COMMODITY RETAIL ADVOCATE.

The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by 
adding at the end the following:

``SEC. 24. OFFICE OF THE DIGITAL COMMODITY RETAIL ADVOCATE.

``(a) Definitions.--In this section:
``(1) Chairman.--The term `Chairman' means the Chairman of 
the Commission.
``(2) Office.--The term `Office' means the Office of the 
Digital Commodity Retail Advocate established by subsection 
(b).
``(3) Retail participant.--The term `retail participant' 
means a person that--
``(A) is not an eligible contract participant;
``(B) is participating in a spot or cash digital 
commodity market; and
``(C) has engaged or is engaging in a digital 
commodity transaction with a person registered with the 
Commission.
``(b) Office Established.--There is established within the 
Commission the Office of the Digital Commodity Retail Advocate.
``(c) Digital Commodity Retail Advocate.--
``(1) In general.--The Digital Commodity Retail Advocate 
shall--
``(A) report directly to the Chairman; and
``(B) be appointed by the Chairman from among 
individuals with experience in advocating for the 
interests of digital commodity market retail 
participants.
``(2) Compensation.--The annual rate of pay for the Digital 
Commodity Retail Advocate shall be equal to the highest rate of 
annual pay for other senior executives who report to the 
Chairman.
``(3) Limitation on service.--An individual who serves as 
the Digital Commodity Retail Advocate may not be employed by 
the Commission--
``(A) during the 2-year period ending on the date 
of appointment as Digital Commodity Retail Advocate; or
``(B) during the 5-year period beginning on the 
date on which the person ceases to serve as the Digital 
Commodity Retail Advocate.
``(d) Functions of the Digital Commodity Retail Advocate.--The 
Digital Commodity Retail Advocate shall--
``(1) assist retail participants in resolving significant 
problems they may have with the Commission or a registered 
futures association;
``(2) identify areas in which retail participants would 
benefit from changes in the regulations of the Commission or 
the rules of registered futures associations;
``(3) identify problems that retail participants have with 
persons registered with the Commission;
``(4) analyze the potential impact on retail participants 
of--
``(A) proposed regulations of the Commission; and
``(B) proposed rules of registered futures 
associations;
``(5) to the extent practicable, propose to the Commission 
changes in the regulations or orders of the Commission, and to 
Congress any legislative, administrative, or personnel changes, 
that may be appropriate--
``(A) to mitigate problems identified under this 
subsection; and
``(B) to promote the interests of retail 
participants;
``(6) conduct research to identify and understand issues 
that affect retail participants; and
``(7) cooperate with and provide assistance to the Office 
of Customer Education and Outreach to conduct initiatives and 
outreach for retail participants.
``(e) Access to Documents.--
``(1) In general.--At the discretion of the Chairman, the 
Digital Commodity Retail Advocate shall have full access to the 
documents of the Commission and registered futures associations 
as necessary to carry out the functions of the Office.
``(2) Effect.--Nothing in the subsection authorizes the 
Digital Commodity Retail Advocate, or staff of the Office, to 
have access to, or to release publicly or internally within the 
Commission, proprietary or sensitive market data.
``(3) Policies and procedures.--The Office shall establish 
and make public on the website of the Commission policies and 
procedures in place to safeguard the confidentiality of any 
documents the Digital Commodity Retail Advocate or staff of the 
Office has access to.
``(f) Annual Reports.--
``(1) Report on objectives.--
``(A) In general.--Not later than June 30 of each 
year, the Digital Commodity Retail Advocate shall 
submit to the Committee on Agriculture, Nutrition, and 
Forestry of the Senate and the Committee on Agriculture 
of the House of Representatives a report describing the 
objectives of the Digital Commodity Retail Advocate for 
the following fiscal year.
``(B) Contents.--Each report required under 
subparagraph (A) shall contain full and substantive 
analysis and explanation.
``(2) Report on activities.--
``(A) In general.--Not later than December 31 of 
each year, the Digital Commodity Retail Advocate shall 
submit to the Committee on Agriculture, Nutrition, and 
Forestry of the Senate and the Committee on Agriculture 
of the House of Representatives a report describing the 
activities of the Digital Commodity Retail Advocate 
during the immediately preceding fiscal year.
``(B) Contents.--Each report required under 
subparagraph (A) shall include--
``(i) appropriate statistical information 
and full and substantive analysis;
``(ii) information on steps that the 
Digital Commodity Retail Advocate has taken 
during the reporting period to improve--
``(I) services to and communication 
with retail participants; and
``(II) the responsiveness of the 
Commission and registered futures 
associations to retail participant 
concerns;
``(iii) a summary of the most serious 
problems reported to the Office or the 
Commission by retail participants during the 
reporting period;
``(iv) an inventory of the items described 
in clause (iii) that includes--
``(I) identification of any action 
taken by the Commission or a registered 
futures association and the result of 
that action;
``(II) the period of time that each 
item has remained on the inventory; and
``(III) for items with respect to 
which no action has been taken, the 
reasons for inaction, and an 
identification of any official who is 
responsible for the action;
``(v) recommendations for such 
administrative and legislative actions as may 
be appropriate to resolve problems encountered 
by retail participants; and
``(vi) any other information, as determined 
appropriate by the Digital Commodity Retail 
Advocate.
``(C) Independence.--Each report required under 
subparagraph (A) shall be provided directly to the 
committees described in that subparagraph without any 
prior review or comment from the Commission, any 
Commissioner, any other officer or employee of the 
Commission, or the Office of Management and Budget.
``(D) Confidentiality.--No report required under 
subparagraph (A) may contain confidential information.
``(g) Ombudsman.--
``(1) Appointment.--Not later than 180 days after the date 
on which the first Digital Commodity Retail Advocate is 
appointed under subsection (c)(1)(B), the Digital Commodity 
Retail Advocate shall appoint an Ombudsman, who shall report 
directly to the Digital Commodity Retail Advocate.
``(2) Duties.--The Ombudsman appointed under paragraph (1) 
shall--
``(A) act as a liaison between the Commission and 
any retail participant in resolving problems the retail 
participant may have with the Commission or a 
registered futures association;
``(B) review and make recommendations regarding 
policies and procedures to encourage persons to present 
questions to the Digital Commodity Retail Advocate 
regarding compliance with this Act; and
``(C) establish safeguards to maintain the 
confidentiality of communications between the persons 
described in subparagraph (B) and the Ombudsman.
``(3) Limitation.--
``(A) Personnel.--In carrying out the duties of the 
Ombudsman under paragraph (2), the Ombudsman shall 
utilize personnel of the Commission, to the extent 
practicable.
``(B) Effect.--Nothing in this paragraph shall be 
construed as replacing, altering, or diminishing the 
activities of any ombudsman or similar office of any 
other agency.
``(4) Report.--
``(A) Report on activities.--The Ombudsman shall 
submit to the Digital Commodity Retail Advocate an 
annual report that describes the activities and 
evaluates the effectiveness of the Ombudsman during the 
preceding 1-year period.
``(B) Submission.--The Digital Commodity Retail 
Advocate shall include the reports required under 
subparagraph (A) in the reports required to be 
submitted by the Digital Commodity Retail Advocate 
under subsection (f).''.

SEC. 212. REPORT.

Not later than 180 days after the date of enactment of this Act, 
the Commodity Futures Trading Commission (referred to in this section 
as the ``Commission'') shall--
(1) examine the racial, ethnic, and gender demographics of 
customers participating in digital commodity markets;
(2) submit to the Committee on Agriculture, Nutrition, and 
Forestry of the Senate and the Committee on Agriculture of the 
House of Representatives a report--
(A) describing how those demographics will inform 
the rules and regulations of the Commission relating to 
customer protection;
(B) proposing ways in which the Commission can 
provide outreach to historically underserved customers 
participating in digital commodity markets; and
(C) containing policy recommendations relating to 
any other activities the Commission determines to be 
necessary to provide appropriate protection, outreach, 
or other similar activities relating to historically 
underserved customers participating in digital 
commodity markets; and
(3) in preparing the report under this subsection, seek and 
consider information and input from a broad range of 
stakeholders, including market participants, customers, and 
consumer advocates.
Calendar No. 355

119th CONGRESS

2d Session

S. 4064

_______________________________________________________________________

A BILL

To provide for a system of regulation of the offer and sale of digital 
commodities by the Commodity Futures Trading Commission, and for other 
purposes.

_______________________________________________________________________

March 12, 2026

Read the second time and placed on the calendar