H.R. 3633, Reported in Senate with an amendment in the nature of a substitute (Calendar No. 423) (Part 2 of 5)
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security.''.</DELETED>
<DELETED> (b) Rule of Construction.--Nothing in this section,
section 202, or the amendments made by such sections may be construed
to limit the existing authority described in section 18(c)(1) of the
Securities Act of 1933 (15 U.S.C. 77r(c)(1)) of a securities commission
(or any agency or office performing like functions) of any State with
respect to a covered security or any security.</DELETED>
<DELETED>SEC. 309. EXCLUSION FOR DECENTRALIZED FINANCE
ACTIVITIES.</DELETED>
<DELETED> The Securities Exchange Act of 1934 (15 U.S.C. 78a et
seq.) is amended by inserting after section 15G the
following:</DELETED>
<DELETED>``SEC. 15H. DECENTRALIZED FINANCE ACTIVITIES NOT SUBJECT TO
THIS ACT.</DELETED>
<DELETED> ``(a) In General.--Notwithstanding any other provision of
this Act, a person shall not be subject to this Act and the regulations
promulgated under this Act based on the person directly or indirectly
engaging in any of the following activities, whether singly or in
combination, in relation to the operation of a blockchain system or in
relation to a decentralized finance trading protocol:</DELETED>
<DELETED> ``(1) Compiling network transactions or relaying,
searching, sequencing, validating, or acting in a similar
capacity.</DELETED>
<DELETED> ``(2) Providing computational work, operating a
node or oracle service, or procuring, offering, or utilizing
network bandwidth, or providing other similar incidental
services.</DELETED>
<DELETED> ``(3) Providing a user-interface that enables a
user to read and access data about a blockchain
system.</DELETED>
<DELETED> ``(4) Developing, publishing, constituting,
administering, maintaining, or otherwise distributing a
blockchain system or a decentralized finance trading
protocol.</DELETED>
<DELETED> ``(5) Developing, publishing, constituting,
administering, maintaining, or otherwise distributing a
decentralized finance messaging system, or operating or
participating in a liquidity pool, for the purpose of executing
a spot contract for the purchase or sale of a digital commodity
in relation to a decentralized finance trading
protocol.</DELETED>
<DELETED> ``(6) Developing, publishing, constituting,
administering, maintaining, or otherwise distributing software
or systems that create or deploy hardware or software,
including wallets or other systems, facilitating an individual
user's own personal ability to keep, safeguard, or custody the
user's digital assets or related private keys.</DELETED>
<DELETED> ``(b) Exceptions.--Subsection (a) shall not apply to the
anti-fraud and anti-manipulation authorities of the
Commission.''.</DELETED>
<DELETED>SEC. 310. TREATMENT OF CUSTODY ACTIVITIES BY BANKING
INSTITUTIONS.</DELETED>
<DELETED> (a) Treatment of Custody Activities.--The appropriate
Federal banking agency, the National Credit Union Administration (in
the case of a credit union), and the Securities and Exchange Commission
may not require a depository institution, national bank, Federal credit
union, State credit union, trust company, broker, or dealer, or any
affiliate thereof (the ``entity'')--</DELETED>
<DELETED> (1) to include assets held in custody that are not
accounted for as assets of the entity as a liability on the
financial statement or balance sheet of the entity, including
digital commodity or permitted payment stablecoin custody or
safekeeping services; and</DELETED>
<DELETED> (2) to hold regulatory capital against assets,
including reserves backing such assets, in custody or
safekeeping, except as necessary to mitigate against
operational risks inherent with the custody or safekeeping
services, as determined by--</DELETED>
<DELETED> (A) the appropriate Federal banking
agency;</DELETED>
<DELETED> (B) the National Credit Union
Administration (in the case of a credit
union);</DELETED>
<DELETED> (C) a State bank supervisor;</DELETED>
<DELETED> (D) a State credit union supervisor (as
defined in section 6003 of the Anti-Money Laundering
Act of 2020 (31 U.S.C. 5311 note)); or</DELETED>
<DELETED> (E) the Securities and Exchange Commission
(in the case of a broker or dealer).</DELETED>
<DELETED> (b) Definitions.--In this section:</DELETED>
<DELETED> (1) Banking terms.--The terms ``appropriate
Federal banking agency'', ``depository institution'',
``national bank'', and ``State bank supervisor'' have the
meaning given those terms, respectively, under section 3 of the
Federal Deposit Insurance Act (12 U.S.C. 1813).</DELETED>
<DELETED> (2) Credit union terms.--The terms ``Federal
credit union'' and ``State credit union'' have the meaning
given those terms, respectively, under section 101 of the
Federal Credit Union Act (12 U.S.C. 1752).</DELETED>
<DELETED>SEC. 311. BROKER AND DEALER DISCLOSURES REGARDING THE
TREATMENT OF ASSETS.</DELETED>
<DELETED> (a) In General.--Not later than 270 days after the date of
the enactment of this Act, the Securities and Exchange Commission shall
issue rules requiring written disclosures regarding the treatment of
customer assets in the event of an insolvency, resolution, or
liquidation proceeding to be provided by a registered broker or dealer
to an investor before a digital commodity, a permitted payment
stablecoin, or an investment contract involving a unit of a digital
commodity is received, acquired, or held by the broker or dealer for
the account of the investor, which shall include, as necessary or
appropriate for the protection of investors--</DELETED>
<DELETED> (1) a description of the manner in which any
digital commodity, permitted payment stablecoin, or investment
contact involving a unit of a digital commodity received,
acquired, or held by the broker or dealer for the account of
such investor would be treated in an insolvency, resolution, or
liquidation proceeding with respect to the broker or dealer
under--</DELETED>
<DELETED> (A) title II of the Dodd-Frank Wall Street
Reform and Consumer Protection Act (12 U.S.C. 5381 et
seq.);</DELETED>
<DELETED> (B) the Securities Investor Protection Act
of 1970 (15 U.S.C. 78aaa et seq.); or</DELETED>
<DELETED> (C) as applicable, chapter 7 or chapter 11
of title 11, United States Code; and</DELETED>
<DELETED> (2) how the treatment described in paragraph (1)
differs from the treatment of securities and cash received,
acquired, or held by the broker or dealer for the account of
such investor in the event of an insolvency, resolution, or
liquidation proceeding with respect to the broker or dealer
under each law described under subparagraph (A) through (C) of
paragraph (1).</DELETED>
<DELETED>SEC. 312. DIGITAL COMMODITY ACTIVITIES THAT ARE FINANCIAL IN
NATURE.</DELETED>
<DELETED> (a) Digital Commodity Activities That Are Financial in
Nature.--Section 4(k)(4) of the Bank Holding Company Act of 1956 (12
U.S.C. 1843(k)(4)) is amended--</DELETED>
<DELETED> (1) in subparagraph (A), by striking ``or
securities'' and inserting ``, securities, or digital
commodities''; and</DELETED>
<DELETED> (2) in subparagraph (E), by inserting ``or digital
commodities'' before the period at the end.</DELETED>
<DELETED> (b) National Bank Activity.--</DELETED>
<DELETED> (1) In general.--A national bank may use a digital
asset or blockchain system to perform, provide, or deliver any
activity, function, product, or service that the national bank
is otherwise authorized by law to perform, provide, or
deliver.</DELETED>
<DELETED> (2) Rule of construction.--Nothing in this
subsection may be construed to exempt a national bank's
performance, provision, or delivery of an activity, function,
product, or service from a requirement that would apply if the
activity were not performed, provided, or delivered using a
digital asset or blockchain system.</DELETED>
<DELETED> (c) Insured State Banks and Subsidiaries of Insured State
Banks.--For purposes of sections 24(a) and 24(d) of the Federal Deposit
Insurance Act (12 U.S.C. 1831a(a) and (d)), all of the activities
authorized for a national bank under subsection (b) that are principal
activities shall be permissible for an insured State bank and
subsidiary of an insured State bank.</DELETED>
<DELETED>SEC. 313. EFFECTIVE DATE; ADMINISTRATION.</DELETED>
<DELETED> Except as otherwise provided under this title, this title
and the amendments made by this title shall take effect 360 days after
the date of enactment of this Act, except that, to the extent a
provision of this title requires a rulemaking, the provision shall take
effect on the later of--</DELETED>
<DELETED> (1) 360 days after the date of enactment of this
Act; or</DELETED>
<DELETED> (2) 60 days after the publication in the Federal
Register of the final rule implementing the
provision.</DELETED>
<DELETED>SEC. 314. EDUCATIONAL MATERIAL REQUIREMENTS.</DELETED>
<DELETED> The Securities and Exchange Commission, in consultation
with the Commodity Futures Trading Commission, shall require any
registered entity that facilitates the trading of digital commodities
or investment contracts involving units of a digital commodity to
provide clear and accessible educational materials to the public,
including--</DELETED>
<DELETED> (1) an overview of how blockchain technology
functions;</DELETED>
<DELETED> (2) a description of common risks associated with
digital commodities;</DELETED>
<DELETED> (3) a description of the differences between
digital commodity markets and traditional financial
markets;</DELETED>
<DELETED> (4) information on reporting requirements related
to digital commodity transactions or investment contracts
involving units of a digital commodity; and</DELETED>
<DELETED> (5) guidance on recognizing fraudulent schemes and
instructions for reporting suspected fraud.</DELETED>
<DELETED>SEC. 315. DISCRETIONARY SURPLUS FUND.</DELETED>
<DELETED> (a) In General.--The dollar amount specified under section
7(a)(3)(A) of the Federal Reserve Act (12 U.S.C. 289(a)(3)(A)) is
reduced by $15,000,000.</DELETED>
<DELETED> (b) Effective Date.--The amendment made by subsection (a)
shall take effect on September 30, 2035.</DELETED>
<DELETED>TITLE IV--REGISTRATION FOR DIGITAL COMMODITY INTERMEDIARIES AT
THE COMMODITY FUTURES TRADING COMMISSION</DELETED>
<DELETED>SEC. 401. COMMISSION JURISDICTION OVER DIGITAL COMMODITY
TRANSACTIONS.</DELETED>
<DELETED> (a) Savings Clause.--Section 2(a)(1) of the Commodity
Exchange Act (7 U.S.C. 2(a)(1)) is amended by adding at the end the
following:</DELETED>
<DELETED> ``(J) Except as expressly provided in this
Act, nothing in the CLARITY Act of 2025 shall affect or
apply to, or be interpreted to affect or apply to--
</DELETED>
<DELETED> ``(i) any agreement, contract, or
transaction that is subject to this Act as--
</DELETED>
<DELETED> ``(I) a contract of sale
of a commodity for future delivery or
an option on such a contract;</DELETED>
<DELETED> ``(II) a swap;</DELETED>
<DELETED> ``(III) a security futures
product;</DELETED>
<DELETED> ``(IV) an option
authorized under section 4c of this
Act;</DELETED>
<DELETED> ``(V) an agreement,
contract, or transaction described in
subparagraph (C)(i) or (D)(i) of
subsection (c)(2) of this section;
or</DELETED>
<DELETED> ``(VI) a leverage
transaction authorized under section
19; or</DELETED>
<DELETED> ``(ii) the activities of any
person with respect to any such an agreement,
contract, or transaction.''.</DELETED>
<DELETED> (b) Limitation on Authority Over Permitted Payment
Stablecoins.--Section 2(c)(1) of the Commodity Exchange Act (7 U.S.C.
2(c)(1)) is amended--</DELETED>
<DELETED> (1) in subparagraph (F), by striking ``or'' at the
end;</DELETED>
<DELETED> (2) in subparagraph (G), by striking the period
and inserting ``; or''; and</DELETED>
<DELETED> (3) by adding at the end the following:</DELETED>
<DELETED> ``(H) permitted payment
stablecoins.''.</DELETED>
<DELETED> (c) Commission Jurisdiction Over Financing Agreements.--
Section 2(c)(2)(D) of the Commodity Exchange Act (7 U.S.C. 2(c)(2)(D))
is amended--</DELETED>
<DELETED> (1) in clause (ii)(I), by inserting after
``paragraph (1)'' the following: ``(other than an agreement,
contract, or transaction in a permitted payment stablecoin)'';
and</DELETED>
<DELETED> (2) by redesignating clause (iv) as clause (v) and
inserting after clause (iii) the following:</DELETED>
<DELETED> ``(iv) Agreements for margin
financing.--Notwithstanding clause (iii), a
digital commodity broker may, subject to the
requirements of section 4u(c)(2), offer to or
enter into an agreement for margin financing
with a customer for the purchase or sale of a
digital commodity, provided any purchase or
sale made pursuant to the agreement shall
result in the delivery of the digital commodity
into or from an account carried for the
customer by the digital commodity broker, as
determined by the Commission by rule or
regulation, based on commercial spot market
practices.''.</DELETED>
<DELETED> (d) Commission Authority Over Certain Digital Commodity
and Stablecoin Spot Transactions.--Section 2(c)(2) of the Commodity
Exchange Act (7 U.S.C. 2(c)(2)) is amended by adding at the end the
following:</DELETED>
<DELETED> ``(F) Commission jurisdiction with respect
to digital commodity transactions.--</DELETED>
<DELETED> ``(i) In general.--Subject to
sections 6d and 12(e), the Commission shall
have exclusive jurisdiction with respect to any
account, agreement, contract, or transaction
involving a contract of sale of a digital
commodity or tradable asset (as defined in
section 4x) in interstate commerce, including
in a digital commodity or tradable asset (as so
defined) cash or spot market, that is offered,
solicited, traded, facilitated, executed,
cleared, reported, or otherwise dealt in--
</DELETED>
<DELETED> ``(I) on or subject to the
rules of a registered entity or an
entity that is required to be
registered as a registered entity;
or</DELETED>
<DELETED> ``(II) by any other entity
registered, or required to be
registered, with the
Commission.</DELETED>
<DELETED> ``(ii) Limitations.--Clause (i)
shall not apply with respect to--</DELETED>
<DELETED> ``(I) custodial or
depository activities for a digital
commodity of an entity regulated by an
appropriate Federal banking agency or a
State bank supervisor (within the
meaning of section 3 of the Federal
Deposit Insurance Act); or</DELETED>
<DELETED> ``(II) an offer or sale of
an investment contract involving a
digital commodity or of a securities
offer or sale involving a digital
commodity.</DELETED>
<DELETED> ``(iii) Mixed digital asset
transactions.--</DELETED>
<DELETED> ``(I) In general.--Clause
(i) shall not apply to a mixed digital
asset transaction.</DELETED>
<DELETED> ``(II) Reports on mixed
digital asset transactions.--A digital
commodity issuer, digital commodity
related person, digital commodity
affiliated person, or other person
registered with the Securities and
Exchange Commission that engages in a
mixed digital asset transaction, shall,
on request of the Commission, open to
inspection and examination by the
Commission all books and records
relating to the mixed digital asset
transaction, subject to the
confidentiality and disclosure
requirements of section 8.</DELETED>
<DELETED> ``(G) Agreements, contracts, and
transactions in stablecoins.--</DELETED>
<DELETED> ``(i) Treatment of permitted
payment stablecoins on commission-registered
entities.--Subject to clauses (ii) and (iii),
the Commission shall have jurisdiction over a
cash or spot agreement, contract, or
transaction in a permitted payment stablecoin
that is offered, offered to enter into, entered
into, executed, solicited, or accepted, or for
which the execution of is confirmed--</DELETED>
<DELETED> ``(I) on or subject to the
rules of a registered entity;
or</DELETED>
<DELETED> ``(II) by any other entity
registered with the
Commission.</DELETED>
<DELETED> ``(ii) Permitted payment
stablecoin transaction rules.--This Act shall
apply to a transaction described in clause (i)
only for the purpose of regulating the offer,
execution, solicitation, or acceptance of a
cash or spot permitted payment stablecoin
transaction on a registered entity or by any
other entity registered with the Commission, as
if the permitted payment stablecoin were a
digital commodity.</DELETED>
<DELETED> ``(iii) No authority over
permitted payment stablecoins.--Notwithstanding
clauses (i) and (ii), the Commission shall not
make a rule or regulation, impose a requirement
or obligation on a registered entity or other
entity registered with the Commission, or
impose a requirement or obligation on a
permitted payment stablecoin issuer, regarding
the operation of a permitted payment stablecoin
issuer or a permitted payment
stablecoin.''.</DELETED>
<DELETED> (e) Conforming Amendments.--The Commodity Exchange Act is
amended--</DELETED>
<DELETED> (1) in section 1a(9) (7 U.S.C. 1a(9)), as amended
by the GENIUS Act, by striking the second sentence;
and</DELETED>
<DELETED> (2) in section 2(a)(1)(A) (7 U.S.C. 2(a)(1)(A)),
in the 1st sentence, by inserting ``subparagraphs (F) and (G)
of subsection (c)(2) of this section or'' before ``section
19''.</DELETED>
<DELETED>SEC. 402. REQUIRING FUTURES COMMISSION MERCHANTS TO USE
QUALIFIED DIGITAL ASSET CUSTODIANS.</DELETED>
<DELETED> Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) is
amended--</DELETED>
<DELETED> (1) in subsection (a)(2)--</DELETED>
<DELETED> (A) in the 1st proviso, by striking ``any
bank or trust company'' and inserting ``any bank, trust
company, or qualified digital asset custodian, as
applicable,''; and</DELETED>
<DELETED> (B) by inserting ``: Provided further,
That any such property that is a digital asset shall be
held in a qualified digital asset custodian'' before
the period at the end; and</DELETED>
<DELETED> (2) in subsection (f)(3)(A)(i), by striking ``any
bank or trust company'' and inserting ``any bank, trust
company, or qualified digital asset custodian''.</DELETED>
<DELETED>SEC. 403. TRADING CERTIFICATION AND APPROVAL FOR DIGITAL
COMMODITIES.</DELETED>
<DELETED> Section 5c of the Commodity Exchange Act (7 U.S.C. 7a-2)
is amended--</DELETED>
<DELETED> (1) in subsection (a), by striking ``5(d) and
5b(c)(2)'' and inserting ``5(d), 5b(c)(2), and
5i(c)'';</DELETED>
<DELETED> (2) in subsection (b)--</DELETED>
<DELETED> (A) in each of paragraphs (1) and (2), by
inserting ``digital commodity exchange,'' before
``derivatives''; and</DELETED>
<DELETED> (B) in paragraph (3), by inserting
``digital commodity exchange,'' before ``derivatives''
each place it appears;</DELETED>
<DELETED> (3) in subsection (c)--</DELETED>
<DELETED> (A) in paragraph (2), by inserting ``or
participants'' before ``(in a'';</DELETED>
<DELETED> (B) in paragraph (4)(B), by striking
``1a(10)'' and inserting ``1a(9)''; and</DELETED>
<DELETED> (C) in paragraph (5), by adding at the end
the following:</DELETED>
<DELETED> ``(D) Special rules for digital commodity
contracts.--In certifying any new rule or rule
amendment, or listing any new contract or instrument,
in connection with a contract of sale of a commodity
for future delivery, option, swap, or other agreement,
contract, or transaction, that is based on or
references a digital commodity, a registered entity
shall make or rely on a certification under subsection
(d) for the digital commodity.''; and</DELETED>
<DELETED> (4) by inserting after subsection (c) the
following:</DELETED>
<DELETED> ``(d) Certifications for Digital Commodity Trading.--
</DELETED>
<DELETED> ``(1) In general.--Notwithstanding subsection (c),
for the purposes of listing or offering a digital commodity for
trading in a digital commodity cash or spot market, an eligible
entity shall submit a written certification to the Commission
that the digital commodity meets the requirements of this Act
(including the regulations prescribed under this
Act).</DELETED>
<DELETED> ``(2) Contents of the certification.--</DELETED>
<DELETED> ``(A) In general.--In making a written
certification under this paragraph, the eligible entity
shall furnish to the Commission an analysis of how the
digital commodity meets the requirements of section
5i(c)(3).</DELETED>
<DELETED> ``(B) Reliance on prior disclosures.--In
making a certification under this subsection, an
eligible entity may rely on the records and disclosures
of any relevant person registered with the Securities
and Exchange Commission or other State or Federal
agency.</DELETED>
<DELETED> ``(3) Modifications.--</DELETED>
<DELETED> ``(A) In general.--An eligible entity
shall modify a certification made under paragraph (1)
to--</DELETED>
<DELETED> ``(i) account for significant
changes in any information provided to the
Commission under paragraph (2)(A)(ii);
or</DELETED>
<DELETED> ``(ii) permit or restrict trading
in units of a digital commodity held by a
digital commodity related person or a digital
commodity affiliated person.</DELETED>
<DELETED> ``(B) Recertification.--Modifications
required by this subsection shall be subject to the
same disapproval and review process as a new
certification under paragraphs (4) and (5).</DELETED>
<DELETED> ``(4) Disapproval.--</DELETED>
<DELETED> ``(A) In general.--The written
certification described in paragraph (1) shall become
effective unless the Commission finds that the listing
of the digital commodity is inconsistent with the
requirements of this Act or the rules and regulations
prescribed under this Act.</DELETED>
<DELETED> ``(B) Analysis required.--The Commission
shall include, with any findings referred to in
subparagraph (A), a detailed analysis of the factors on
which the decision was based.</DELETED>
<DELETED> ``(C) Public findings.--The Commission
shall make public any disapproval decision, and any
related findings and analysis, made under this
paragraph.</DELETED>
<DELETED> ``(5) Review.--</DELETED>
<DELETED> ``(A) In general.--Unless the Commission
makes a disapproval decision under paragraph (4), the
written certification described in paragraph (1) shall
become effective, pursuant to the certification by the
eligible entity and notice of the certification to the
public (in a manner determined by the Commission) on
the date that is--</DELETED>
<DELETED> ``(i) 20 business days after the
date the Commission receives the certification
(or such shorter period as determined by the
Commission by rule or regulation), in the case
of a digital commodity that has not been
certified under this section or for which a
certification is being modified under paragraph
(3); or</DELETED>
<DELETED> ``(ii) 1 business day after the
date the Commission receives the certification
(or such shorter period as determined by the
Commission by rule or regulation) for any
digital commodity that has been certified under
this section.</DELETED>
<DELETED> ``(B) Extensions.--The time for
consideration under subparagraph (A) may be extended
through notice to the eligible entity that there are
novel or complex issues that require additional time to
analyze, that the explanation by the submitting
eligible entity is inadequate, or of a potential
inconsistency with this Act--</DELETED>
<DELETED> ``(i) once, for 30 business days,
through written notice to the eligible entity
by the Commission; and</DELETED>
<DELETED> ``(ii) once, for an additional 30
business days, through written notice to the
eligible entity from the Commission that
includes a description of any deficiencies with
the certification, including any--</DELETED>
<DELETED> ``(I) novel or complex
issues which require additional time to
analyze;</DELETED>
<DELETED> ``(II) missing information
or inadequate explanations;
or</DELETED>
<DELETED> ``(III) potential
inconsistencies with this
Act.</DELETED>
<DELETED> ``(6) Prior approval before registration.--
</DELETED>
<DELETED> ``(A) In general.--A person applying for
registration with the Commission for the purposes of
listing or offering a digital commodity for trading in
a digital commodity cash or spot market may request
that the Commission grant prior approval for the person
to list or offer the digital commodity on being
registered with the Commission.</DELETED>
<DELETED> ``(B) Request for prior approval.--A
person seeking prior approval under subparagraph (A)
shall furnish the Commission with a written
certification that the digital commodity meets the
requirements of this Act (including the regulations
prescribed under this Act) and the information
described in paragraph (2).</DELETED>
<DELETED> ``(C) Deadline.--The Commission shall take
final action on a request for prior approval not later
than 90 business days after submission of the request,
unless the person submitting the request agrees to an
extension of the time limitation established under this
subparagraph.</DELETED>
<DELETED> ``(D) Disapproval.--</DELETED>
<DELETED> ``(i) In general.--The Commission
shall approve the listing of the digital
commodity unless the Commission finds that the
listing is inconsistent with this Act
(including any regulation prescribed under this
Act).</DELETED>
<DELETED> ``(ii) Analysis required.--The
Commission shall include, with any findings
made under clause (i), a detailed analysis of
the factors on which the decision is
based.</DELETED>
<DELETED> ``(iii) Public findings.--The
Commission shall make public any disapproval
decision, and any related findings and
analysis, made under this paragraph.</DELETED>
<DELETED> ``(7) Eligible entity defined.--In this
subsection, the term `eligible entity' means a registered
entity or group of registered entities acting
jointly.''.</DELETED>
<DELETED>SEC. 404. REGISTRATION OF DIGITAL COMMODITY
EXCHANGES.</DELETED>
<DELETED> The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended
by inserting after section 5h the following:</DELETED>
<DELETED>``SEC. 5I. REGISTRATION OF DIGITAL COMMODITY
EXCHANGES.</DELETED>
<DELETED> ``(a) In General.--</DELETED>
<DELETED> ``(1) Registration.--</DELETED>
<DELETED> ``(A) In general.--A trading facility that
offers or seeks to offer a cash or spot market in at
least 1 digital commodity shall register with the
Commission as a digital commodity exchange.</DELETED>
<DELETED> ``(B) Application.--A person desiring to
register as a digital commodity exchange shall submit
to the Commission an application in such form and
containing such information as the Commission may
require for the purpose of making the determinations
required for approval.</DELETED>
<DELETED> ``(C) Exemptions.--A trading facility that
offers or seeks to offer a cash or spot market in at
least 1 digital commodity shall not be required to
register under this section if the trading facility--
</DELETED>
<DELETED> ``(i) permits no more than a de
minimis amount of trading activity, as the
Commission may determine by rule or regulation,
in a digital commodity; or</DELETED>
<DELETED> ``(ii) serves only customers in a
single State, territory, or possession of the
United States.</DELETED>
<DELETED> ``(2) Additional registrations.--</DELETED>
<DELETED> ``(A) With the commission.--In order to
foster the development of fair and orderly markets,
protect customers, and promote responsible innovation,
the Commission--</DELETED>
<DELETED> ``(i) shall prescribe rules to
exempt an entity registered with the Commission
under more than 1 section of this Act from
duplicative, conflicting, or unduly burdensome
provisions of this Act and the rules under this
Act;</DELETED>
<DELETED> ``(ii) shall prescribe rules to
address conflicts of interests and activities
of the entity; and</DELETED>
<DELETED> ``(iii) may, after an analysis of
the risks and benefits, prescribe rules to
provide for portfolio margining.</DELETED>
<DELETED> ``(B) With a registered futures
association.--</DELETED>
<DELETED> ``(i) In general.--A registered
digital commodity exchange shall become and
remain a member of a registered futures
association and comply with rules related to
such activity, if the registered digital
commodity exchange accepts customer funds
required to be segregated under subsection
(d).</DELETED>
<DELETED> ``(ii) Rulemaking required.--The
Commission shall require any registered futures
association with a digital commodity exchange
as a member to provide such rules as may be
necessary to further compliance with subsection
(d), protect customers, and promote the public
interest.</DELETED>
<DELETED> ``(C) Registration required.--A person
required to be registered as a digital commodity
exchange under this section shall register with the
Commission as such regardless of whether the person is
registered with another State or Federal
regulator.</DELETED>
<DELETED> ``(b) Trading.--</DELETED>
<DELETED> ``(1) Prohibition on certain trading practices.--
</DELETED>
<DELETED> ``(A) Section 4b shall apply to any
agreement, contract, or transaction in a digital
commodity as if the agreement, contract, or transaction
were a contract of sale of a commodity for future
delivery.</DELETED>
<DELETED> ``(B) Section 4c shall apply to any
agreement, contract, or transaction in a digital
commodity as if the agreement, contract, or transaction
were a transaction involving the purchase or sale of a
commodity for future delivery.</DELETED>
<DELETED> ``(C) Section 4b-1 shall apply to any
agreement, contract, or transaction in a digital
commodity as if the agreement, contract, or transaction
were a contract of sale of a commodity for future
delivery.</DELETED>
<DELETED> ``(2) Prohibition on acting as a counterparty.--
</DELETED>
<DELETED> ``(A) In general.--A digital commodity
exchange or any affiliate of such an exchange shall not
trade on or subject to the rules of the digital
commodity exchange for its own account.</DELETED>
<DELETED> ``(B) Exceptions.--Subject to any
conditions, requirements, or limitations imposed by the
Commission pursuant to subparagraph (C), a digital
commodity exchange may engage in trading on the
exchange so long as the trading is not solely for the
purpose of the profit of the exchange, including the
following:</DELETED>
<DELETED> ``(i) Customer direction.--A
transaction for, or entered into at the
direction of, or for the benefit of, an
unaffiliated customer.</DELETED>
<DELETED> ``(ii) Risk management.--A
transaction to manage the credit, market, and
liquidity risks associated with the digital
commodity business of the exchange.</DELETED>
<DELETED> ``(iii) Operational needs.--A
transaction related to the operational needs of
the business of the digital commodity exchange
or its affiliate.</DELETED>
<DELETED> ``(iv) Functional use.--A
transaction related to the functional operation
of a blockchain system.</DELETED>
<DELETED> ``(C) Rulemaking.--The Commission may, by
rule, establish conditions, requirements, or other
limitations on the activities of a digital commodity
exchange and its affiliate permitted pursuant to
subparagraph (B) that are necessary for the protection
of customers, the promotion of innovation, or the
maintenance of fair, orderly, and efficient
markets.</DELETED>
<DELETED> ``(D) Notice requirement.--In order for a
digital commodity exchange or any affiliate of a
digital commodity exchange to engage in trading on the
affiliated exchange pursuant to subsection (B), notice
must be given to the Commission that shall enumerate
how any proposed activity is consistent with the
exceptions in subsection (B) and the purposes of this
Act.</DELETED>
<DELETED> ``(c) Core Principles for Digital Commodity Exchanges.--
</DELETED>
<DELETED> ``(1) Compliance with core principles.--</DELETED>
<DELETED> ``(A) In general.--To be registered, and
maintain registration, as a digital commodity exchange,
a digital commodity exchange shall comply with--
</DELETED>
<DELETED> ``(i) the core principles
described in this subsection; and</DELETED>
<DELETED> ``(ii) any requirement that the
Commission may impose by rule or regulation
pursuant to section 8a(5).</DELETED>
<DELETED> ``(B) Reasonable discretion of a digital
commodity exchange.--Unless otherwise determined by the
Commission by rule or regulation, a digital commodity
exchange described in subparagraph (A) shall have
reasonable discretion in establishing the manner in
which the digital commodity exchange complies with the
core principles described in this subsection.</DELETED>
<DELETED> ``(2) Compliance with rules.--A digital commodity
exchange shall--</DELETED>
<DELETED> ``(A) establish and enforce compliance
with any rule of the digital commodity exchange,
including--</DELETED>
<DELETED> ``(i) the terms and conditions of
the trades traded or processed on or through
the digital commodity exchange; and</DELETED>
<DELETED> ``(ii) any limitation on access to
the digital commodity exchange;</DELETED>
<DELETED> ``(B) establish and enforce trading, trade
processing, and participation rules that will deter
abuses and have the capacity to detect, investigate,
and enforce those rules, including means--</DELETED>
<DELETED> ``(i) to provide market
participants with impartial access to the
market; and</DELETED>
<DELETED> ``(ii) to capture information that
may be used in establishing whether rule
violations have occurred; and</DELETED>
<DELETED> ``(C) establish rules governing the
operation of the exchange, including rules specifying
trading procedures to be used in entering and executing
orders traded or posted on the facility.</DELETED>
<DELETED> ``(3) Listing standards for digital commodities.--
</DELETED>
<DELETED> ``(A) In general.--A digital commodity
exchange shall establish policies and procedures to
permit trading in a digital commodity only if--
</DELETED>
<DELETED> ``(i) reports with respect to the
digital commodity required under, as
applicable, section 4B(b)(3) or 4B(b)(5)(C) of
the Securities Act of 1933 (or, with respect to
a digital commodity not issued in reliance on
section 4(a)(8) of the Securities Act of 1933,
a comparable set of reports, where required by
the Securities and Exchange Commission) have
been filed with the Securities and Exchange
Commission; or</DELETED>
<DELETED> ``(ii) such other similar
information as the Commission may, by rule or
regulation require, that is related to the
ongoing development plan of the blockchain
system and is able to be publicly ascertained,
has been provided to the public.</DELETED>
<DELETED> ``(B) Public information requirements.--
</DELETED>
<DELETED> ``(i) In general.--A digital
commodity exchange shall--</DELETED>
<DELETED> ``(I) permit trading in a
digital commodity only if the digital
commodity exchange reasonably
determines that the information
required by clause (ii) is correct,
current, and available to the public;
and</DELETED>
<DELETED> ``(II) establish policies
and procedures to determine that the
information provided pursuant to clause
(ii) is correct, current, and available
to the public.</DELETED>
<DELETED> ``(ii) Required information.--With
respect to a digital commodity and each
blockchain system to which the digital
commodity relates for which the digital
commodity exchange will make the digital
commodity available to the customers of the
digital commodity exchange, the following
information:</DELETED>
<DELETED> ``(I) Source code.--The
source code for any blockchain system
to which the digital commodity
relates.</DELETED>
<DELETED> ``(II) Transaction
history.--A description of the steps
necessary to independently access,
search, and verify the transaction
history of any blockchain system to
which the digital commodity relates, to
the extent any such independent access,
search, and verification activities are
technically feasible with respect to
the blockchain system.</DELETED>
<DELETED> ``(III) Digital commodity
economics.--A narrative description of
the purpose of any blockchain system to
which the digital commodity relates and
the operation of any such blockchain
system, including--</DELETED>
<DELETED> ``(aa) information
explaining the launch and
supply process, including the
number of digital assets to be
issued in an initial
allocation, the total number of
digital commodities to be
created, the release schedule
for the digital commodities,
and the total number of digital
commodities then
outstanding;</DELETED>
<DELETED> ``(bb) information
detailing any applicable
consensus mechanism or process
for validating transactions,
method of generating or mining
digital commodities, and any
process for burning or
destroying digital commodities
on the blockchain
system;</DELETED>
<DELETED> ``(cc) an
explanation of governance
mechanisms for implementing
changes to the blockchain
system or forming consensus
among holders of the digital
commodities; and</DELETED>
<DELETED> ``(dd) sufficient
information for a third party
to create a tool for verifying
the transaction history of the
digital asset.</DELETED>
<DELETED> ``(IV) Trading volume and
volatility.--The trading volume and
volatility of the digital commodity on
the exchange.</DELETED>
<DELETED> ``(V) Additional
information.--Such additional
information as the Commission may
determine by rule to be necessary for a
customer to understand the financial
and operational risks of a digital
commodity, and to be practically
feasible to provide.</DELETED>
<DELETED> ``(iii) Format.--The Commission
shall prescribe rules and regulations for the
standardization and simplification of
disclosures under clause (ii), including
requiring that disclosures--</DELETED>
<DELETED> ``(I) be
conspicuous;</DELETED>
<DELETED> ``(II) use plain language
comprehensible to customers;</DELETED>
<DELETED> ``(III) are not drafted in
a way that presumes the customer
already has a base knowledge,
familiarity, or understanding of the
basic terminology, operation, and
function of blockchain systems;
and</DELETED>
<DELETED> ``(IV) succinctly explain
the information that is required to be
communicated to the customer.</DELETED>
<DELETED> ``(iv) Reliance on previous
disclosures.--In complying with this
subparagraph, a digital commodity exchange may
rely on and make available to the public
relevant information publicly disclosed to the
Commission, the Securities and Exchange
Commission, or an appropriate Federal banking
agency.</DELETED>
<DELETED> ``(C) Digital commodities held by related
and digital commodity affiliated persons.--A digital
commodity exchange shall establish policies and
procedures designed to permit the trading of a unit of
a digital commodity acquired from the issuer and held
by a digital commodity affiliated person or a digital
commodity related person, only in accordance with the
requirements of section 4C of the Securities Act of
1933.</DELETED>
<DELETED> ``(4) Treatment of customer assets.--A digital
commodity exchange shall establish policies and procedures that
are designed to protect and ensure the safety of customer
money, assets, and property.</DELETED>
<DELETED> ``(5) Monitoring of trading and trade
processing.--</DELETED>
<DELETED> ``(A) In general.--A digital commodity
exchange shall provide a competitive, open, and
efficient market and mechanism for executing
transactions that protects the price discovery process
of trading on the exchange.</DELETED>
<DELETED> ``(B) Protection of markets and market
participants.--A digital commodity exchange shall
establish and enforce rules--</DELETED>
<DELETED> ``(i) to protect markets and
market participants from abusive practices
committed by any party, including abusive
practices committed by a party acting as an
agent for a participant; and</DELETED>
<DELETED> ``(ii) to promote fair and
equitable trading on the exchange.</DELETED>
<DELETED> ``(C) Trading procedures.--A digital
commodity exchange shall--</DELETED>
<DELETED> ``(i) establish and enforce rules
or terms and conditions defining, or
specifications detailing--</DELETED>
<DELETED> ``(I) trading procedures
to be used in entering and executing
orders traded on or through the
facilities of the digital commodity
exchange; and</DELETED>
<DELETED> ``(II) procedures for
trade processing of digital commodities
on or through the facilities of the
digital commodity exchange;
and</DELETED>
<DELETED> ``(ii) monitor trading in digital
commodities to prevent manipulation, price
distortion, and disruptions, through
surveillance, compliance, and disciplinary
practices and procedures, including methods for
conducting real-time monitoring of trading and
comprehensive and accurate trade
reconstructions.</DELETED>
<DELETED> ``(6) Ability to obtain information.--A digital
commodity exchange shall--</DELETED>
<DELETED> ``(A) establish and enforce rules that
will allow the facility to obtain any necessary
information to perform any of the functions described
in this section;</DELETED>
<DELETED> ``(B) provide the information to the
Commission on request; and</DELETED>
<DELETED> ``(C) have the capacity to carry out such
international information-sharing agreements as the
Commission may require.</DELETED>
<DELETED> ``(7) Emergency authority.--A digital commodity
exchange shall adopt rules to provide for the exercise of
emergency authority, in consultation or cooperation with the
Commission or a registered entity, as is necessary and
appropriate, including the authority to facilitate the
liquidation or transfer of open positions in any digital
commodity or to suspend or curtail trading in a digital
commodity.</DELETED>
<DELETED> ``(8) Timely publication of trading information.--
</DELETED>
<DELETED> ``(A) In general.--A digital commodity
exchange shall make public timely information on price,
trading volume, and other trading data on digital
commodities to the extent prescribed by the
Commission.</DELETED>
<DELETED> ``(B) Capacity of digital commodity
exchange.--A digital commodity exchange shall have the
capacity to electronically capture and transmit trade
information with respect to transactions executed on
the exchange.</DELETED>
<DELETED> ``(9) Recordkeeping and reporting.--</DELETED>
<DELETED> ``(A) In general.--A digital commodity
exchange shall--</DELETED>
<DELETED> ``(i) maintain records relating to
the business of the exchange, including a
complete audit trail, in a form and manner
acceptable to the Commission for a period of 5
years;</DELETED>
<DELETED> ``(ii) report to the Commission,
in a form and manner acceptable to the
Commission, such information as the Commission
determines to be necessary or appropriate for
the Commission to perform the duties of the
Commission under this Act; and</DELETED>
<DELETED> ``(iii) keep any such records of
digital commodities which relate to a security
open to inspection and examination by the
Securities and Exchange Commission.</DELETED>
<DELETED> ``(B) Information-sharing.--Subject to
section 8, and on request, the Commission shall share
information collected under subparagraph (A) with--
</DELETED>
<DELETED> ``(i) the Board;</DELETED>
<DELETED> ``(ii) the Securities and Exchange
Commission;</DELETED>
<DELETED> ``(iii) each appropriate Federal
banking agency;</DELETED>
<DELETED> ``(iv) each appropriate State bank
supervisor (within the meaning of section 3 of
the Federal Deposit Insurance Act);</DELETED>
<DELETED> ``(v) the Financial Stability
Oversight Council;</DELETED>
<DELETED> ``(vi) the Department of Justice;
and</DELETED>
<DELETED> ``(vii) any other person that the
Commission determines to be appropriate,
including--</DELETED>
<DELETED> ``(I) foreign financial
supervisors (including foreign futures
authorities);</DELETED>
<DELETED> ``(II) foreign central
banks; and</DELETED>
<DELETED> ``(III) foreign
ministries.</DELETED>
<DELETED> ``(C) Confidentiality agreement.--Before
the Commission may share information with any entity
described in subparagraph (B), the Commission shall
receive a written agreement from the entity stating
that the entity shall abide by the confidentiality
requirements described in section 8 relating to the
information on digital commodities that is
provided.</DELETED>
<DELETED> ``(D) Providing information.--A digital
commodity exchange shall provide to the Commission
(including any designee of the Commission) information
under subparagraph (A) in such form and at such
frequency as is required by the Commission.</DELETED>
<DELETED> ``(10) Antitrust considerations.--Unless necessary
or appropriate to achieve the purposes of this Act, a digital
commodity exchange shall not--</DELETED>
<DELETED> ``(A) adopt any rules or take any actions
that result in any unreasonable restraint of trade;
or</DELETED>
<DELETED> ``(B) impose any material anticompetitive
burden on trading.</DELETED>
<DELETED> ``(11) Conflicts of interest.--The digital
commodity exchange shall establish and enforce rules--
</DELETED>
<DELETED> ``(A) to minimize conflicts of interest in
the decision making processes of the contract market;
and</DELETED>
<DELETED> ``(B) to establish a process for resolving
conflicts of interest referred to in subparagraph
(A).</DELETED>
<DELETED> ``(12) Financial resources.--</DELETED>
<DELETED> ``(A) In general.--A digital commodity
exchange shall have adequate financial, operational,
and managerial resources, as determined by the
Commission, to discharge each responsibility of the
digital commodity exchange.</DELETED>
<DELETED> ``(B) Minimum amount of financial
resources.--A digital commodity exchange shall possess
financial resources that, at a minimum, exceed the sum
of--</DELETED>
<DELETED> ``(i) the total amount that would
enable the digital commodity exchange to cover
the operating costs of the digital commodity
exchange for a 1-year period, as calculated on
a rolling basis; and</DELETED>
<DELETED> ``(ii) the total amount necessary
to meet the financial obligations of the
digital commodity exchange to all customers of
the digital commodity exchange.</DELETED>
<DELETED> ``(13) Disciplinary procedures.--A digital
commodity exchange shall establish and enforce disciplinary
procedures that authorize the digital commodity exchange to
discipline, suspend, or expel members or market participants
that violate the rules of the digital commodity exchange, or
similar methods for performing the same functions, including
delegation of the functions to third parties.</DELETED>
<DELETED> ``(14) Governance fitness standards.--</DELETED>
<DELETED> ``(A) Governance arrangements.--A digital
commodity exchange shall establish governance
arrangements that are transparent and designed to
permit consideration of the views of market
participants.</DELETED>
<DELETED> ``(B) Fitness standards.--A digital
commodity exchange shall establish and enforce
appropriate fitness standards for--</DELETED>
<DELETED> ``(i) officers and directors;
and</DELETED>
<DELETED> ``(ii) any individual or entity
with direct access to, or control of, customer
assets.</DELETED>
<DELETED> ``(15) System safeguards.--A digital commodity
exchange shall--</DELETED>
<DELETED> ``(A) establish and maintain a program of
risk analysis and oversight to identify and minimize
sources of operational and security risks, through the
development of appropriate controls and procedures, and
automated systems in accordance with industry
standards, that--</DELETED>
<DELETED> ``(i) are reliable and secure;
and</DELETED>
<DELETED> ``(ii) have adequate scalable
capacity;</DELETED>
<DELETED> ``(B) establish and maintain emergency
procedures, backup resources, and a plan for disaster
recovery that allow for--</DELETED>
<DELETED> ``(i) the timely recovery and
resumption of operations; and</DELETED>
<DELETED> ``(ii) the fulfillment of the
responsibilities and obligations of the digital
commodity exchange; and</DELETED>
<DELETED> ``(C) periodically conduct tests to verify
that the backup resources of the digital commodity
exchange are sufficient to ensure continued--</DELETED>
<DELETED> ``(i) order processing and trade
matching;</DELETED>
<DELETED> ``(ii) price reporting;</DELETED>
<DELETED> ``(iii) market surveillance;
and</DELETED>
<DELETED> ``(iv) maintenance of a
comprehensive and accurate audit
trail.</DELETED>
<DELETED> ``(d) Holding of Customer Assets.--</DELETED>
<DELETED> ``(1) In general.--A digital commodity exchange
shall hold customer money, assets, and property in a manner to
minimize the risk of loss to the customer or unreasonable delay
in customer access to the money, assets, and property of the
customer.</DELETED>
<DELETED> ``(2) Segregation of funds.--</DELETED>
<DELETED> ``(A) In general.--A digital commodity
exchange shall treat and deal with all money, assets,
and property that is received by the digital commodity
exchange, or accrues to a customer as the result of
trading in digital commodities, as belonging to the
customer.</DELETED>
<DELETED> ``(B) Commingling prohibited.--Money,
assets, and property described in subparagraph (A)
shall be separately accounted for and shall not be
commingled with the funds of the digital commodity
exchange or be used to margin, secure, or guarantee any
trades or accounts of any customer or person other than
the person for whom the same are held.</DELETED>
<DELETED> ``(C) Exceptions.--</DELETED>
<DELETED> ``(i) Use of funds.--</DELETED>
<DELETED> ``(I) In general.--
Notwithstanding subparagraph (A),
money, assets, and property described
in subparagraph (A) may, for
convenience, be commingled and
deposited in the same account or
accounts with any bank, trust company,
derivatives clearing organization, or
qualified digital asset
custodian.</DELETED>
<DELETED> ``(II) Withdrawal.--
Notwithstanding subparagraph (A), such
share of the money, assets, and
property described in subparagraph (A)
as in the normal course of business
shall be necessary to margin,
guarantee, secure, transfer, adjust, or
settle a contract of sale of a digital
commodity with a registered entity may
be withdrawn and applied to such
purposes, including the payment of
commissions, brokerage, interest,
taxes, storage, and other charges,
lawfully accruing in connection with
the contract.</DELETED>
<DELETED> ``(ii) Commission action.--
Notwithstanding subparagraph (A), in accordance
with such terms and conditions as the
Commission may prescribe by rule, regulation,
or order, any money, assets, or property of the
customers of a digital commodity exchange may
be commingled and deposited in customer
accounts with any other money, assets, or
property received by the digital commodity
exchange and required by the Commission to be
separately accounted for and treated and dealt
with as belonging to the customer of the
digital commodity exchange.</DELETED>
<DELETED> ``(3) Permitted investments.--Money described in
paragraph (2) may be invested in obligations of the United
States, in general obligations of any State or of any political
subdivision of a State, and in obligations fully guaranteed as
to principal and interest by the United States, or in any other
investment that the Commission may by rule or regulation
prescribe, and such investments shall be made in accordance
with such rules and regulations and subject to such conditions
as the Commission may prescribe.</DELETED>
<DELETED> ``(4) Customer protection during bankruptcy.--
</DELETED>
<DELETED> ``(A) Customer property.--All assets held
on behalf of a customer by a digital commodity
exchange, and all money, assets, and property of any
customer received by a digital commodity exchange for
trading or custody, or to facilitate, margin,
guarantee, or secure contracts of sale of a digital
commodity (including money, assets, or property
accruing to the customer as the result of the
transactions), shall be considered customer property
for purposes of section 761 of title 11, United States
Code.</DELETED>
<DELETED> ``(B) Transactions.--A transaction
involving the sale of a unit of a digital commodity
occurring on or subject to the rules of a digital
commodity exchange shall be considered a contract for
the purchase or sale of a commodity for future
delivery, on or subject to the rules of, a contract
market or board of trade for purposes of the definition
of `commodity contract' in section 761 of title 11,
United States Code.</DELETED>
<DELETED> ``(C) Exchanges.--A digital commodity
exchange shall be considered a futures commission
merchant for purposes of section 761 of title 11,
United States Code.</DELETED>
<DELETED> ``(D) Assets removed from segregation.--
Assets removed from segregation due to a customer
election under paragraph (6) shall not be considered
customer property for purposes of section 761 of title
11, United States Code.</DELETED>
<DELETED> ``(5) Misuse of customer property.--</DELETED>
<DELETED> ``(A) In general.--It shall be unlawful--
</DELETED>
<DELETED> ``(i) for any digital commodity
exchange that has received any customer money,
assets, or property for custody to dispose of,
or use any such money, assets, or property as
belonging to the digital commodity exchange or
any person other than a customer of the digital
commodity exchange; or</DELETED>
<DELETED> ``(ii) for any other person,
including any depository, other digital
commodity exchange, or digital asset custodian
that has received any customer money, assets,
or property for deposit, to hold, dispose of,
or use any such money, assets, or property, or
property, as belonging to the depositing
digital commodity exchange or any person other
than the customers of the digital commodity
exchange.</DELETED>
<DELETED> ``(B) Use further defined.--For purposes
of this section, `use' of a digital commodity includes
utilizing any unit of a digital asset to participate in
a blockchain service defined in paragraph (6) or a
decentralized governance system associated with the
digital commodity or the blockchain system to which the
digital commodity relates in any manner other than that
expressly directed by the customer from whom the unit
of a digital commodity was received.</DELETED>
<DELETED> ``(6) Participation in blockchain services.--
</DELETED>
<DELETED> ``(A) Use of funds.--A digital commodity
exchange (or a designee of a digital commodity
exchange) may use a unit of a digital commodity
belonging to a customer to provide a blockchain service
for a blockchain system to which the unit of the
digital commodity relates if--</DELETED>
<DELETED> ``(i) the customer expressly
permits the use, in writing to the digital
commodity exchange; and</DELETED>
<DELETED> ``(ii) the digital commodity
exchange complies with subparagraph
(B).</DELETED>
<DELETED> ``(B) Limitations.--</DELETED>
<DELETED> ``(i) In general.--The Commission
shall, by rule, establish notice and disclosure
requirements, and may, by rule, establish any
other limitations and rules related to a
permission provided under subparagraph (A) that
are reasonably necessary to protect customers,
including eligible contract participants, non-
eligible contract participants, or any other
class of customers.</DELETED>
<DELETED> ``(ii) Customer choice.--A digital
commodity exchange may not require a customer
to provide the permission referred to in
subparagraph (A) as a condition of doing
business on the exchange.</DELETED>
<DELETED> ``(C) Requirements.--The Commission may,
by rule, waive or modify the requirements of paragraph
(2) or subsection (h), to facilitate the use of a unit
of a digital commodity belonging to a customer to
provide a blockchain service.</DELETED>
<DELETED> ``(D) Blockchain service defined.--In this
paragraph, the term `blockchain service' means any
activity relating to validating transactions on a
blockchain system, providing security for a blockchain
system, or other similar activity, including protocol
consensus participation activities described in section
2(a)(30)(B) of the Securities Act of 1933, required for
the ongoing operation of a blockchain system.</DELETED>
<DELETED> ``(e) Market Access Requirements.--The Commission may, by
rule, impose any additional requirements related to the operations and
activities of the digital commodity exchange and an affiliated digital
commodity broker necessary to protect market participants, promote fair
and equitable trading on the digital commodity exchange, and promote
responsible innovation.</DELETED>
<DELETED> ``(f) Designation of Chief Compliance Officer.--</DELETED>
<DELETED> ``(1) In general.--A digital commodity exchange
shall designate an individual to serve as a chief compliance
officer.</DELETED>
<DELETED> ``(2) Duties.--The chief compliance officer
shall--</DELETED>
<DELETED> ``(A) report directly to the board or to
the senior officer of the exchange;</DELETED>
<DELETED> ``(B) review compliance with the core
principles in this subsection;</DELETED>
<DELETED> ``(C) in consultation with the board of
the exchange, a body performing a function similar to
that of a board, or the senior officer of the exchange,
resolve any conflicts of interest that may
arise;</DELETED>
<DELETED> ``(D) establish and administer the
policies and procedures required to be established
pursuant to this section;</DELETED>
<DELETED> ``(E) ensure compliance with this Act and
the rules and regulations issued under this Act,
including rules prescribed by the Commission pursuant
to this section; and</DELETED>
<DELETED> ``(F) establish procedures for the
remediation of noncompliance issues found during
compliance office reviews, look backs, internal or
external audit findings, self-reported errors, or
through validated complaints.</DELETED>
<DELETED> ``(3) Requirements for procedures.--In
establishing procedures under paragraph (2)(F), the chief
compliance officer shall design the procedures to establish the
handling, management response, remediation, retesting, and
closing of noncompliance issues.</DELETED>
<DELETED> ``(4) Annual reports.--</DELETED>
<DELETED> ``(A) In general.--In accordance with
rules prescribed by the Commission, the chief
compliance officer shall annually prepare and sign a
report that contains a description of--</DELETED>
<DELETED> ``(i) the compliance of the
digital commodity exchange with this Act;
and</DELETED>
<DELETED> ``(ii) the policies and
procedures, including the code of ethics and
conflicts of interest policies, of the digital
commodity exchange.</DELETED>
<DELETED> ``(B) Requirements.--The chief compliance
officer shall--</DELETED>
<DELETED> ``(i) submit each report described
in subparagraph (A) with the appropriate
financial report of the digital commodity
exchange that is required to be submitted to
the Commission pursuant to this section;
and</DELETED>
<DELETED> ``(ii) include in the report a
certification that, under penalty of law, the
report is accurate and complete.</DELETED>
<DELETED> ``(g) Appointment of Trustee.--</DELETED>
<DELETED> ``(1) In general.--If a proceeding under section
5e results in the suspension or revocation of the registration
of a digital commodity exchange, or if a digital commodity
exchange withdraws from registration, the Commission, on notice
to the digital commodity exchange, may apply to the appropriate
United States district court where the digital commodity
exchange is located for the appointment of a trustee.</DELETED>
<DELETED> ``(2) Assumption of jurisdiction.--If the
Commission applies for appointment of a trustee under paragraph
(1)--</DELETED>
<DELETED> ``(A) the court may take exclusive
jurisdiction over the digital commodity exchange and
the records and assets of the digital commodity
exchange, wherever located; and</DELETED>
<DELETED> ``(B) if the court takes jurisdiction
under subparagraph (A), the court shall appoint the
Commission, or a person designated by the Commission,
as trustee with power to take possession and continue
to operate or terminate the operations of the digital
commodity exchange in an orderly manner for the
protection of customers subject to such terms and
conditions as the court may prescribe.</DELETED>
<DELETED> ``(h) Qualified Digital Asset Custodian.--A digital
commodity exchange shall hold in a qualified digital asset custodian
each unit of a digital asset that is--</DELETED>
<DELETED> ``(1) the property of a customer of the digital
commodity exchange;</DELETED>
<DELETED> ``(2) required to be held by the digital commodity
exchange under subsection (c)(12) of this section; or</DELETED>
<DELETED> ``(3) otherwise so required by the Commission to
reasonably protect customers.</DELETED>
<DELETED> ``(i) Exemptions.--</DELETED>
<DELETED> ``(1) In general.--In order to promote responsible
innovation and fair competition, or protect customers, the
Commission may (on its own initiative or on application of the
digital commodity exchange) exempt, either unconditionally or
on stated terms or conditions or for stated periods and either
retroactively or prospectively, or both, a digital commodity
exchange from the requirements of this Act, if the Commission
determines that--</DELETED>
<DELETED> ``(A) the exemption would be consistent
with the public interest and the purposes of this Act;
and</DELETED>
<DELETED> ``(B) the exemption will not have a
material adverse effect on the ability of the
Commission or the digital commodity exchange to
discharge regulatory or self-regulatory duties under
this Act.</DELETED>
<DELETED> ``(2) Foreign exchanges.--The Commission may
exempt, conditionally or unconditionally, a digital commodity
exchange from registration under this section if the Commission
finds that the digital commodity exchange is subject to
comparable, comprehensive supervision and regulation on a
consolidated basis by the appropriate governmental authorities
in the home country of the facility.</DELETED>
<DELETED> ``(j) Customer Defined.--In this section, the term
`customer' means any person that maintains an account for the trading
of digital commodities directly with a digital commodity exchange
(other than a person that is owned or controlled, directly or
indirectly, by the digital commodity exchange) for its own behalf or on
behalf of any other person.</DELETED>
<DELETED> ``(k) Federal Preemption.--Notwithstanding any other
provision of law, the Commission shall have exclusive jurisdiction over
any digital commodity exchange registered under this section with
respect to activities and transactions subject to this
Act.''.</DELETED>
<DELETED>SEC. 405. QUALIFIED DIGITAL ASSET CUSTODIANS.</DELETED>
<DELETED> The Commodity Exchange Act (7 U.S.C. 1 et seq.), as
amended by the preceding provisions of this Act, is amended by
inserting after section 5i the following:</DELETED>
<DELETED>``SEC. 5J. QUALIFIED DIGITAL ASSET CUSTODIANS.</DELETED>
<DELETED> ``(a) In General.--A person is a qualified digital asset
custodian for purposes of this Act if the person--</DELETED>
<DELETED> ``(1) holds digital assets on behalf of a person
registered under this Act or a customer of a person registered
under this Act; and</DELETED>
<DELETED> ``(2) is in compliance with subsections (b) and
(c).</DELETED>
<DELETED> ``(b) Supervision Requirement.--A person is in compliance
with this subsection if the person is subject to--</DELETED>
<DELETED> ``(1) supervision and examination for custody and
safekeeping of digital assets by an appropriate Federal banking
agency, the National Credit Union Administration, the
Commission, or the Securities and Exchange Commission;
or</DELETED>
<DELETED> ``(2) adequate supervision and appropriate
regulation for custody and safekeeping of digital assets by--
</DELETED>
<DELETED> ``(A) a State bank supervisor (within the
meaning of section 3 of the Federal Deposit Insurance
Act);</DELETED>
<DELETED> ``(B) a State officer, agency, or other
entity which has primary regulatory authority over
nondepository State trust companies;</DELETED>
<DELETED> ``(C) a State credit union supervisor, as
defined under section 6003 of the Anti-Money Laundering
Act of 2020; or</DELETED>
<DELETED> ``(D) an appropriate foreign governmental
authority in the home country of such person.</DELETED>
<DELETED> ``(c) Other Requirements.--A person shall be in compliance
with this subsection if:</DELETED>
<DELETED> ``(1) Not otherwise prohibited.--The person has
not been prohibited by its supervisor from engaging in an
activity with respect to the custody and safekeeping of digital
assets.</DELETED>
<DELETED> ``(2) Information sharing.--</DELETED>
<DELETED> ``(A) In general.--The person shares
information with the Commission on request and complies
with such requirements for periodic sharing of
information regarding customer accounts that the person
holds on behalf of an entity registered with the
Commission as the Commission determines by rule are
reasonably necessary to effectuate any of the
provisions, or to accomplish any of the purposes, of
this Act.</DELETED>
<DELETED> ``(B) Provision of information.--If the
person is subject to regulation and examination by an
appropriate Federal banking agency, the person may
satisfy any information request described in
subparagraph (A) by providing the Commission with a
detailed listing, in writing, of the digital assets of
a customer in the custody of, or use by, the
person.</DELETED>
<DELETED> ``(3) Rulemaking for cftc entities.--</DELETED>
<DELETED> ``(A) In general.--The Commission shall
prescribe rules to permit a person registered with the
Commission to be a qualified digital asset custodian in
compliance with this section.</DELETED>
<DELETED> ``(B) Content.--In prescribing the rules
under subparagraph (A), the Commission shall require a
person registered with the Commission to--</DELETED>
<DELETED> ``(i) implement requirement
consistent with the requirements in subsection
(d)(1);</DELETED>
<DELETED> ``(ii) establish sufficient system
safeguards;</DELETED>
<DELETED> ``(iii) prevent or mitigate
conflicts of interest, as appropriate;
and</DELETED>
<DELETED> ``(iv) establish separate
governance arrangements for the custodial
function of the entity.</DELETED>
<DELETED> ``(d) Adequate Supervision and Appropriate Regulation.--
</DELETED>
<DELETED> ``(1) In general.--For purposes of subsection (b),
the terms `adequate supervision' and `appropriate regulation'
mean such minimum standards for supervision and regulation as
are reasonably necessary to protect the digital assets held by
a person registered under this Act, including standards
relating to the licensing, examination, and supervisory
processes that require the person to, at a minimum--</DELETED>
<DELETED> ``(A) receive a review and evaluation of
ownership, character and fitness, conflicts of
interest, business model, financial statements, funding
resources, and policies and procedures of the
person;</DELETED>
<DELETED> ``(B) hold capital sufficient for the
financial integrity of the person;</DELETED>
<DELETED> ``(C) protect customer assets;</DELETED>
<DELETED> ``(D) establish and maintain books and
records regarding the business of the person;</DELETED>
<DELETED> ``(E) submit financial statements and
audited financial statements to the applicable
supervisor described in subsection (b);</DELETED>
<DELETED> ``(F) provide disclosures to the
applicable supervisor described in subsection (b)
regarding actions, proceedings, and other items as
determined by the supervisor;</DELETED>
<DELETED> ``(G) maintain and enforce policies and
procedures for compliance with applicable State and
Federal laws, including those related to anti-money
laundering and cybersecurity;</DELETED>
<DELETED> ``(H) establish a business continuity plan
to ensure functionality in cases of disruption;
and</DELETED>
<DELETED> ``(I) establish policies and procedures to
resolve complaints.</DELETED>
<DELETED> ``(2) Rulemaking with respect to definitions.--
</DELETED>
<DELETED> ``(A) In general.--For purposes of this
section, the Commission may, by rule, further define
the terms `adequate supervision' and `appropriate
regulation' as necessary and appropriate for the
protection of customers, and consistent with the
purposes of this Act.</DELETED>
<DELETED> ``(B) Existing digital asset custodians.--
A trust company operating as a digital asset custodian
before the effective date of a rulemaking under
subparagraph (A) is deemed subject to adequate
supervision and appropriate regulation if--</DELETED>
<DELETED> ``(i) the trust company is
expressly permitted by a State bank supervisor
to engage in the custody and safekeeping of
digital assets;</DELETED>
<DELETED> ``(ii) the State bank supervisor
has established licensing, examination, and
supervisory processes that require the trust
company to, at a minimum, meet the conditions
described in subparagraphs (A) through (I) of
paragraph (1); and</DELETED>
<DELETED> ``(iii) the trust company is in
good standing with its State bank
supervisor.</DELETED>
<DELETED> ``(C) Transition period for certain
custodians.--In implementing the rulemaking under
subparagraph (A), the Commission shall provide a
transition period of not less than 2 years for any
trust company that is deemed subject to adequate
supervision and appropriate regulation under
subparagraph (B) on the effective date of the
rulemaking.</DELETED>
<DELETED> ``(e) Authority to Temporarily Suspend Standards.--The
Commission may, by rule or order, temporarily suspend, in whole or in
part, any requirement imposed under, or any standard referred to in,
this section, or any requirement to utilize a qualified digital asset
custodian, if the Commission determines that the suspension would be
consistent with the public interest and the purposes of this
Act.''.</DELETED>
<DELETED>SEC. 406. REGISTRATION AND REGULATION OF DIGITAL COMMODITY
BROKERS AND DEALERS.</DELETED>
<DELETED> The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended
by inserting after section 4t the following:</DELETED>
<DELETED>``SEC. 4U. REGISTRATION AND REGULATION OF DIGITAL COMMODITY
BROKERS AND DEALERS.</DELETED>
<DELETED> ``(a) Registration.--</DELETED>
<DELETED> ``(1) Requirement.--It shall be unlawful for any
person to act as a digital commodity broker or digital
commodity dealer unless the person is registered as such with
the Commission.</DELETED>
<DELETED> ``(2) Additional registration.--</DELETED>
<DELETED> ``(A) Rules.--In order to foster the
development of fair and orderly markets, protect
customers, and promote responsible innovation, the
Commission--</DELETED>
<DELETED> ``(i) shall prescribe rules to
exempt an entity registered with the Commission
under more than 1 section of this Act from
duplicative, conflicting, or unduly burdensome
provisions of this Act and the rules under this
Act;</DELETED>
<DELETED> ``(ii) shall prescribe rules to
address conflicts of interests and the
activities of the entity; and</DELETED>
<DELETED> ``(iii) may after an analysis of
the risks and benefits, prescribe rules to
provide for portfolio margining.</DELETED>
<DELETED> ``(B) With membership in a registered
futures association.--Any person required to be
registered as a digital commodity broker or digital
commodity dealer under this section shall become and
remain a member of a registered futures
association.</DELETED>
<DELETED> ``(b) Requirements.--</DELETED>
<DELETED> ``(1) In general.--A person shall register as a
digital commodity broker or digital commodity dealer by filing
a registration application with the Commission.</DELETED>
<DELETED> ``(2) Contents.--</DELETED>
<DELETED> ``(A) In general.--The application shall
be made in such form and manner as is prescribed by the
Commission, and shall contain such information as the
Commission considers necessary concerning the business
in which the applicant is or will be engaged.</DELETED>
<DELETED> ``(B) Continual reporting.--A person that
is registered as a digital commodity broker or digital
commodity dealer shall continue to submit to the
Commission reports that contain such information
pertaining to the business of the person as the
Commission may require.</DELETED>
<DELETED> ``(3) Statutory disqualification.--Except to the
extent otherwise specifically provided by rule, regulation, or
order, it shall be unlawful for a digital commodity broker or
digital commodity dealer to permit any person who is associated
with a digital commodity broker or a digital commodity dealer
and who is subject to a statutory disqualification to effect or
be involved in effecting a contract of sale of a digital
commodity on behalf of the digital commodity broker or the
digital commodity dealer, respectively, if the digital
commodity broker or digital commodity dealer, respectively,
knew, or in the exercise of reasonable care should have known,
of the statutory disqualification.</DELETED>
<DELETED> ``(c) Rulemaking.--</DELETED>
<DELETED> ``(1) In general.--The Commission shall prescribe
such rules applicable to registered digital commodity brokers
and registered digital commodity dealers as are appropriate to
carry out this section, including rules in the public interest
that limit the activities of digital commodity brokers and
digital commodity dealers.</DELETED>
<DELETED> ``(2) Financing agreements.--</DELETED>
<DELETED> ``(A) In general.--The Commission shall
prescribe rules and regulations applicable to digital
commodity brokers or digital commodity dealers which
shall set forth minimum requirements related to
disclosure, recordkeeping, margin financing
arrangements, rehypothecation, capital, reporting,
business conduct, documentation, and supervision of
employees and agents, in connection with--</DELETED>
<DELETED> ``(i) an agreement described in
section 2(c)(2)(D)(iv); or</DELETED>
<DELETED> ``(ii) any other margined,
leveraged, or financing arrangement for the
purchase or sale of a digital commodity with an
eligible contract participant.</DELETED>
<DELETED> ``(B) Specific authority.--Except as
prohibited in section 2(c)(2)(G)(iii), the Commission
may also make, promulgate, and enforce such rules and
regulations as, in the judgment of the Commission, are
reasonably necessary to effectuate any of the
provisions of, or to accomplish any of the purposes of,
this Act in connection with an agreement referred to in
subparagraph (A) of this paragraph.</DELETED>
<DELETED> ``(d) Capital Requirements.--</DELETED>
<DELETED> ``(1) In general.--Each digital commodity broker
and digital commodity dealer shall meet such minimum capital
requirements as the Commission may prescribe to address the
risks associated with digital commodity trading and to ensure
that the digital commodity broker or digital commodity dealer,
respectively, is able, at all times, to--</DELETED>
<DELETED> ``(A) meet, and continue to meet the
obligations of such a registrant; and</DELETED>
<DELETED> ``(B) fulfill obligations to customers or
counterparties for any margined, leveraged, or financed
transactions.</DELETED>
<DELETED> ``(2) Futures commission merchants and other
dealers.--Each futures commission merchant, introducing broker,
digital commodity broker, digital commodity dealer, broker, and
dealer shall maintain sufficient capital to comply with the
stricter of any applicable capital requirements to which the
futures commission merchant, introducing broker, digital
commodity broker, digital commodity dealer, broker, or dealer,
respectively, is subject under this Act or the Securities
Exchange Act of 1934 (15 U.S.C. 78a et seq.).</DELETED>
<DELETED> ``(e) Reporting and Recordkeeping.--Each digital commodity
broker and digital commodity dealer--</DELETED>
<DELETED> ``(1) shall make such reports as are required by
the Commission by rule or regulation regarding the
transactions, positions, and financial condition of the digital
commodity broker or digital commodity dealer,
respectively;</DELETED>
<DELETED> ``(2) shall keep books and records in such form
and manner and for such period as may be prescribed by the
Commission by rule or regulation; and</DELETED>
<DELETED> ``(3) shall keep the books and records open to
inspection and examination by any representative of the
Commission.</DELETED>
<DELETED> ``(f) Daily Trading Records.--</DELETED>
<DELETED> ``(1) In general.--Each digital commodity broker
and digital commodity dealer shall maintain daily trading
records of the transactions of the digital commodity broker or
digital commodity dealer, respectively, and all related records
(including related forward or derivatives transactions) and
recorded communications, including electronic mail, instant
messages, and recordings of telephone calls, for such period as
the Commission may require by rule or regulation.</DELETED>
<DELETED> ``(2) Information requirements.--The daily trading
records shall include such information as the Commission shall
require by rule or regulation.</DELETED>
<DELETED> ``(3) Counterparty records.--Each digital
commodity broker and digital commodity dealer shall maintain
daily trading records for each customer or counterparty in a
manner and form that is identifiable with each digital
commodity transaction.</DELETED>
<DELETED> ``(4) Audit trail.--Each digital commodity broker
and digital commodity dealer shall maintain a complete audit
trail for conducting comprehensive and accurate trade
reconstructions.</DELETED>
<DELETED> ``(g) Business Conduct Standards.--</DELETED>
<DELETED> ``(1) In general.--Each digital commodity broker
and digital commodity dealer shall conform with such business
conduct standards as the Commission, by rule or regulation,
prescribes related to--</DELETED>
<DELETED> ``(A) fraud, manipulation, and other
abusive practices involving spot or margined,
leveraged, or financed digital commodity transactions
(including transactions that are offered but not
entered into);</DELETED>
<DELETED> ``(B) diligent supervision of the business
of the registered digital commodity broker or digital
commodity dealer, respectively; and</DELETED>
<DELETED> ``(C) such other matters as the Commission
deems appropriate.</DELETED>
<DELETED> ``(2) Business conduct requirements.--The
Commission shall, by rule, prescribe business conduct
requirements which--</DELETED>
<DELETED> ``(A) require disclosure by a registered
digital commodity broker and registered digital
commodity dealer to any counterparty to the transaction
(other than an eligible contract participant) of--
</DELETED>
<DELETED> ``(i) information about the
material risks and characteristics of the
digital commodity; and</DELETED>
<DELETED> ``(ii) information about the
material risks and characteristics of the
transaction;</DELETED>
<DELETED> ``(B) establish a duty for such a digital
commodity broker and such a digital commodity dealer to
communicate in a fair and balanced manner based on
principles of fair dealing and good faith;</DELETED>
<DELETED> ``(C) establish standards governing
digital commodity broker and digital commodity dealer
marketing and advertising, including testimonials and
endorsements; and</DELETED>
<DELETED> ``(D) establish such other standards and
requirements as the Commission may determine are
appropriate for the protection of customers.</DELETED>
<DELETED> ``(3) Prohibition on fraudulent practices.--It
shall be unlawful for a digital commodity broker or digital
commodity dealer to--</DELETED>
<DELETED> ``(A) employ any device, scheme, or
artifice to defraud any customer or
counterparty;</DELETED>
<DELETED> ``(B) engage in any transaction, practice,
or course of business that operates as a fraud or
deceit on any customer or counterparty; or</DELETED>
<DELETED> ``(C) engage in any act, practice, or
course of business that is fraudulent, deceptive, or
manipulative.</DELETED>
<DELETED> ``(h) Duties.--</DELETED>
<DELETED> ``(1) Risk management procedures.--Each digital
commodity broker and digital commodity dealer shall establish
robust and professional risk management systems adequate for
managing the day-to-day business of the digital commodity
broker or digital commodity dealer, respectively.</DELETED>
<DELETED> ``(2) Disclosure of general information.--Each
digital commodity broker and digital commodity dealer shall
disclose to the Commission information concerning--</DELETED>
<DELETED> ``(A) the terms and conditions of the
transactions of the digital commodity broker or digital
commodity dealer, respectively;</DELETED>
<DELETED> ``(B) the trading operations, mechanisms,
and practices of the digital commodity broker or
digital commodity dealer, respectively;</DELETED>
<DELETED> ``(C) financial integrity protections
relating to the activities of the digital commodity
broker or digital commodity dealer, respectively;
and</DELETED>
<DELETED> ``(D) other information relevant to
trading in digital commodities by the digital commodity
broker or digital commodity dealer,
respectively.</DELETED>
<DELETED> ``(3) Ability to obtain information.--Each digital
commodity broker and digital commodity dealer shall--</DELETED>
<DELETED> ``(A) establish and enforce internal
systems and procedures to obtain any necessary
information to perform any of the functions described
in this section; and</DELETED>
<DELETED> ``(B) provide the information to the
Commission, on request.</DELETED>
<DELETED> ``(4) Conflicts of interest.--Each digital
commodity broker and digital commodity dealer shall establish,
maintain, and enforce written policies and procedures
reasonably designed, taking into consideration the nature of
the business of the person, to mitigate any conflicts of
interest in transactions or arrangements with
affiliates.</DELETED>
<DELETED> ``(5) Antitrust considerations.--Unless necessary
or appropriate to achieve the purposes of this Act, a digital
commodity broker or digital commodity dealer shall not--
</DELETED>
<DELETED> ``(A) adopt any process or take any action
that results in any unreasonable restraint of trade;
or</DELETED>
<DELETED> ``(B) impose any material anticompetitive
burden on trading or clearing.</DELETED>
<DELETED> ``(i) Designation of Chief Compliance Officer.--</DELETED>
<DELETED> ``(1) In general.--Each digital commodity broker
and digital commodity dealer shall designate an individual to
serve as a chief compliance officer.</DELETED>
<DELETED> ``(2) Duties.--The chief compliance officer
shall--</DELETED>
<DELETED> ``(A) report directly to the board or to
the senior officer of the registered digital commodity
broker or registered digital commodity
dealer;</DELETED>
<DELETED> ``(B) review the compliance of the
registered digital commodity broker or registered
digital commodity dealer with respect to the registered
digital commodity broker and registered digital
commodity dealer requirements described in this
section;</DELETED>
<DELETED> ``(C) in consultation with the board of
directors, a body performing a function similar to the
board, or the senior officer of the organization,
resolve any conflicts of interest that may
arise;</DELETED>
<DELETED> ``(D) be responsible for administering
each policy and procedure that is required to be
established pursuant to this section;</DELETED>
<DELETED> ``(E) ensure compliance with this Act
(including regulations), including each rule prescribed
by the Commission under this section;</DELETED>
<DELETED> ``(F) establish procedures for the
remediation of noncompliance issues identified by the
chief compliance officer through any--</DELETED>
<DELETED> ``(i) compliance office
review;</DELETED>
<DELETED> ``(ii) look-back;</DELETED>
<DELETED> ``(iii) internal or external audit
finding;</DELETED>
<DELETED> ``(iv) self-reported error;
or</DELETED>
<DELETED> ``(v) validated complaint;
and</DELETED>
<DELETED> ``(G) establish and follow appropriate
procedures for the handling, management response,
remediation, retesting, and closing of noncompliance
issues.</DELETED>
<DELETED> ``(3) Annual reports.--</DELETED>
<DELETED> ``(A) In general.--In accordance with
rules prescribed by the Commission, the chief
compliance officer shall annually prepare and sign a
report that contains a description of--</DELETED>
<DELETED> ``(i) the compliance of the
registered digital commodity broker or
registered digital commodity dealer with this
Act (including regulations); and</DELETED>
<DELETED> ``(ii) each policy and procedure
of the registered digital commodity broker or
registered digital commodity dealer followed by
the chief compliance officer (including the
code of ethics and conflict of interest
policies).</DELETED>
<DELETED> ``(B) Requirements.--The chief compliance
officer shall ensure that a compliance report under
subparagraph (A)--</DELETED>
<DELETED> ``(i) accompanies each appropriate
financial report of the registered digital
commodity broker or registered digital
commodity dealer that is required to be
furnished to the Commission pursuant to this
section; and</DELETED>
<DELETED> ``(ii) includes a certification
that, under penalty of law, the compliance
report is accurate and complete.</DELETED>
<DELETED> ``(j) Segregation of Digital Commodities.--</DELETED>
<DELETED> ``(1) Holding of customer assets.--</DELETED>
<DELETED> ``(A) In general.--Each digital commodity
broker and digital commodity dealer shall hold customer
money, assets, and property in a manner to minimize the
risk of loss to the customer or unreasonable delay in
customer access to the money, assets, and property of
the customer.</DELETED>
<DELETED> ``(B) Qualified digital asset custodian.--
Each digital commodity broker and digital commodity
dealer shall hold in a qualified digital asset
custodian each unit of a digital asset that is--
</DELETED>
<DELETED> ``(i) the property of a customer
or counterparty of the digital commodity broker
or digital commodity dealer,
respectively;</DELETED>
<DELETED> ``(ii) required to be held by the
digital commodity broker or digital commodity
dealer under subsection (e); or</DELETED>
<DELETED> ``(iii) otherwise so required by
the Commission to reasonably protect customers
or promote the public interest.</DELETED>
<DELETED> ``(2) Segregation of funds.--</DELETED>
<DELETED> ``(A) In general.--Each digital commodity
broker and digital commodity dealer shall treat and
deal with all money, assets, and property that is
received by the digital commodity broker or digital
commodity dealer, or accrues to a customer as the
result of trading in digital commodities, as belonging
to the customer.</DELETED>
<DELETED> ``(B) Commingling prohibited.--</DELETED>
<DELETED> ``(i) In general.--Except as
provided in clause (ii), each digital commodity
broker and digital commodity dealer shall
separately account for money, assets, and
property of a digital commodity customer, and
shall not commingle any such money, assets, or
property with the funds of the digital
commodity broker or digital commodity dealer,
respectively, or use any such money, assets, or
property to margin, secure, or guarantee any
trades or accounts of any customer or person
other than the person for whom the money,
assets, or property are held.</DELETED>
<DELETED> ``(ii) Exceptions.--</DELETED>
<DELETED> ``(I) Use of funds.--
</DELETED>
<DELETED> ``(aa) In
general.--A digital commodity
broker or digital commodity
dealer may, for convenience,
commingle and deposit in the
same account or accounts with
any bank, trust company,
derivatives clearing
organization, or qualified
digital asset custodian money,
assets, and property of
customers.</DELETED>
<DELETED> ``(bb)
Withdrawal.--The share of the
money, assets, and property
described in item (aa) as in
the normal course of business
shall be necessary to margin,
guarantee, secure, transfer,
adjust, or settle a contract of
sale of a digital commodity
with a registered entity may be
withdrawn and applied to such
purposes, including the payment
of commissions, brokerage,
interest, taxes, storage, and
other charges, lawfully
accruing in connection with the
contract.</DELETED>
<DELETED> ``(II) Commission
action.--In accordance with such terms
and conditions as the Commission may
prescribe by rule, regulation, or
order, any money, assets, or property
of the customers of a digital commodity
broker or digital commodity dealer may
be commingled and deposited in customer
accounts with any other money, assets,
or property received by the digital
commodity broker or digital commodity
dealer, respectively, and required by
the Commission to be separately
accounted for and treated and dealt
with as belonging to the customer of
the digital commodity broker or digital
commodity dealer,
respectively.</DELETED>
<DELETED> ``(3) Permitted investments.--Money described in
paragraph (2) may be invested in obligations of the United
States, in general obligations of any State or of any political
subdivision of a State, in obligations fully guaranteed as to
principal and interest by the United States, or in any other
investment that the Commission may by rule or regulation
allow.</DELETED>
<DELETED> ``(4) Customer protection during bankruptcy.--
</DELETED>
<DELETED> ``(A) Customer property.--All money,
assets, or property described in paragraph (2) shall be
considered customer property for purposes of section
761 of title 11, United States Code.</DELETED>
<DELETED> ``(B) Transactions.--A transaction
involving a unit of a digital commodity occurring with
a digital commodity broker or digital commodity dealer
shall be considered a contract for the purchase or sale
of a commodity for future delivery, on or subject to
the rules of, a contract market or board of trade for
purposes of the definition of a `commodity contract' in
section 761 of title 11, United States Code.</DELETED>
<DELETED> ``(C) Brokers and dealers.--A digital
commodity broker and a digital commodity dealer shall
be considered a futures commission merchant for
purposes of section 761 of title 11, United States
Code.</DELETED>
<DELETED> ``(D) Assets removed from segregation.--
Assets removed from segregation due to a customer
election under paragraph (6) shall not be considered
customer property for purposes of section 761 of title
11, United States Code.</DELETED>
<DELETED> ``(5) Misuse of customer property.--</DELETED>
<DELETED> ``(A) In general.--It shall be unlawful--
</DELETED>
<DELETED> ``(i) for any digital commodity
broker or digital commodity dealer that has
received any customer money, assets, or
property for custody to dispose of, or use any
such money, assets, or property as belonging to
the digital commodity broker or digital
commodity dealer, respectively, or any person
other than a customer of the digital commodity
broker or digital commodity dealer,
respectively; or</DELETED>
<DELETED> ``(ii) for any other person,
including any depository, digital commodity
exchange, other digital commodity broker, other
digital commodity dealer, or digital commodity
custodian that has received any customer money,
assets, or property for deposit, to hold,
dispose of, or use any such money, assets, or
property, as belonging to the depositing
digital commodity broker or digital commodity
dealer or any person other than the customers
of the digital commodity broker or digital
commodity dealer, respectively.</DELETED>
<DELETED> ``(B) Use further defined.--For purposes
of this section, `use' of a digital commodity includes
utilizing any unit of a digital asset to participate in
a blockchain service defined in paragraph (6) or a
decentralized governance system associated with the
digital commodity or the blockchain system to which the
digital commodity relates in any manner other than that
expressly directed by the customer from whom the unit
of a digital commodity was received.</DELETED>
<DELETED> ``(6) Participation in blockchain services.--
</DELETED>
<DELETED> ``(A) Use of funds.--A digital commodity
broker or digital commodity dealer (or a designee of a
digital commodity broker or a digital commodity dealer)
may use a unit of a digital commodity belonging to a
customer to provide a blockchain service for a
blockchain system to which the unit of the digital
commodity relates if--</DELETED>
<DELETED> ``(i) the customer expressly
permits the use, in writing to the digital
commodity broker or digital commodity dealer,
as the case may be; and</DELETED>
<DELETED> ``(ii) the digital commodity
broker or the digital commodity dealer, as the
case may be, complies with subparagraph
(B).</DELETED>
<DELETED> ``(B) Limitations.--</DELETED>
<DELETED> ``(i) In general.--The Commission
shall, by rule, establish notice and disclosure
requirements, and may, by rule, establish any
other limitations and rules related to a
permission provided under subparagraph (A) that
are reasonably necessary to protect customers,
including eligible contract participants, non-
eligible contract participants, or any other
class of customers.</DELETED>
<DELETED> ``(ii) Customer choice.--A digital
commodity broker or digital commodity dealer
may not require a customer to provide the
permission referred to in subparagraph (A) as a
condition of doing business with the broker or
dealer.</DELETED>
<DELETED> ``(C) Requirements.--The Commission may,
by rule, waive or modify the requirements of paragraph
(2) or subsection (h), to facilitate the use of a unit
of a digital commodity belonging to a customer to
provide a blockchain service.</DELETED>
<DELETED> ``(D) Blockchain service defined.--In this
paragraph, the term `blockchain service' means any
activity relating to validating transactions on a
blockchain system, providing security for a blockchain
system, or other similar activity, including protocol
consensus participation activities described in section
2(a)(30)(B) of the Securities Act of 1933, required for
the ongoing operation of a blockchain system.</DELETED>
<DELETED> ``(k) Federal Preemption.--Notwithstanding any other
provision of law, the Commission shall have exclusive jurisdiction over
any digital commodity broker or digital commodity dealer registered
under this section with respect to activities subject to this
Act.</DELETED>
<DELETED> ``(l) Exemptions.--In order to promote responsible
innovation and fair competition, or protect customers, the Commission
may (on its own initiative or on application of the digital commodity
broker or digital commodity dealer) exempt, unconditionally or on
stated terms or conditions, or for stated periods, and retroactively or
prospectively, or both, a digital commodity broker or digital commodity
dealer from the requirements of this Act, if the Commission determines
that--</DELETED>
<DELETED> ``(1)(A) the exemption would be consistent with
the public interest and the purposes of this Act; and</DELETED>
<DELETED> ``(B) the exemption will not have a material
adverse effect on the ability of the Commission to discharge
regulatory duties under this Act; or</DELETED>
<DELETED> ``(2) the digital commodity broker or digital
commodity dealer is subject to comparable, comprehensive
supervision and regulation by the appropriate government
authorities in the home country of the digital commodity broker
or digital commodity dealer, respectively.''.</DELETED>
<DELETED>SEC. 407. REGISTRATION OF ASSOCIATED PERSONS.</DELETED>
<DELETED> (a) In General.--Section 4k of the Commodity Exchange Act
(7 U.S.C. 6k) is amended--</DELETED>
<DELETED> (1) by redesignating subsections (4) through (6)
as subsections (5) through (7), respectively;</DELETED>
<DELETED> (2) by inserting after subsection (3) the
following:</DELETED>
<DELETED> ``(4) It shall be unlawful for any person to act as an
associated person of a digital commodity broker or an associated person
of a digital commodity dealer unless the person is registered with the
Commission under this Act and such registration shall not have expired,
been suspended (and the period of suspension has not expired), or been
revoked. It shall be unlawful for a digital commodity broker or a
digital commodity dealer to permit such a person to become or remain
associated with the digital commodity broker or digital commodity
dealer if the digital commodity broker or digital commodity dealer knew
or should have known that the person was not so registered or that the
registration had expired, been suspended (and the period of suspension
has not expired), or been revoked.''; and</DELETED>
<DELETED> (3) in subsection (5) (as so redesignated), by
striking ``or of a commodity trading advisor'' and inserting
``of a commodity trading advisor, of a digital commodity
broker, or of a digital commodity dealer''.</DELETED>
<DELETED> (b) Conforming Amendments.--The Commodity Exchange Act (7
U.S.C. 1a et seq.) is amended by striking ``section 4k(6)'' each place
it appears and inserting ``section 4k(7)''.</DELETED>
<DELETED>SEC. 408. REGISTRATION OF COMMODITY POOL OPERATORS AND
COMMODITY TRADING ADVISORS.</DELETED>
<DELETED> (a) In General.--Section 4m(3) of the Commodity Exchange
Act (7 U.S.C. 6m(3)) is amended--</DELETED>
<DELETED> (1) in subparagraph (A)--</DELETED>
<DELETED> (A) by striking ``any commodity trading
advisor'' and inserting ``a commodity pool operator or
commodity trading advisor''; and</DELETED>
<DELETED> (B) by striking ``acting as a commodity
trading advisor'' and inserting ``acting as a commodity
pool operator or commodity trading advisor'';
and</DELETED>
<DELETED> (2) in subparagraph (C), by inserting ``digital
commodities,'' after ``physical commodities,''.</DELETED>
<DELETED> (b) Exemptive Authority.--Section 4m of such Act (7 U.S.C.
6m) is amended by adding at the end the following:</DELETED>
<DELETED> ``(4) Exemptive Authority.--The Commission shall
promulgate rules to provide appropriate exemptions for commodity pool
operators and commodity trading advisors, to provide relief from
duplicative, conflicting, or unduly burdensome requirements or to
promote responsible innovation, to the extent the exemptions foster the
development of fair and orderly cash or spot digital commodity markets,
are necessary or appropriate in the public interest, and are consistent
with the protection of customers.''.</DELETED>
<DELETED>SEC. 409. EXCLUSION FOR DECENTRALIZED FINANCE
ACTIVITIES.</DELETED>
<DELETED> The Commodity Exchange Act (7 U.S.C. 1 et seq.), as
amended by the preceding provisions of this Act, is amended by
inserting after section 4u the following:</DELETED>
<DELETED>``SEC. 4V. DECENTRALIZED FINANCE ACTIVITIES NOT SUBJECT TO
THIS ACT.</DELETED>
<DELETED> ``(a) In General.--Notwithstanding any other provision of
this Act, a person shall not be subject to this Act and the regulations
promulgated under this Act based on the person directly or indirectly
engaging in any of the following activities, whether singly or in
combination, in relation to the operation of a blockchain system or in
relation to decentralized finance trading protocol:</DELETED>
<DELETED> ``(1) Compiling network transactions or relaying,
searching, sequencing, validating, or acting in a similar
capacity.</DELETED>
<DELETED> ``(2) Providing computational work, operating a
node or oracle service, or procuring, offering, or utilizing
network bandwidth, or other similar incidental
services.</DELETED>
<DELETED> ``(3) Providing a user-interface that enables a
user to read, and access data about a blockchain
system.</DELETED>
<DELETED> ``(4) Developing, publishing, or otherwise
distributing a blockchain system or a decentralized finance
messaging system.</DELETED>
<DELETED> ``(5) Constituting, administering, or maintaining
a decentralized finance messaging system or decentralized
finance trading protocol, or operating or participating in a
liquidity pool with respect thereto, for the purpose of
executing a spot transaction for the purchase or sale of a
digital commodity.</DELETED>
<DELETED> ``(6) Developing, publishing, constituting,
administering, maintaining, or otherwise distributing software
or systems that create or deploy hardware or software,
including wallets or other systems, facilitating an individual
user's own personal ability to keep, safeguard, or custody the
user's digital assets or related private keys.</DELETED>
<DELETED> ``(b) Exceptions.--Subsection (a) shall not be interpreted
to apply to the anti-fraud, anti-manipulation, or false reporting
enforcement authorities of the Commission.''.</DELETED>
<DELETED>SEC. 410. RESOURCES FOR IMPLEMENTATION AND
ENFORCEMENT.</DELETED>
<DELETED> (a) Collection of Fees.--</DELETED>
<DELETED> (1) In general.--The Commodity Futures Trading
Commission (in this section referred to as the ``Commission'')
shall charge and collect a fee from each person in provisional
status registered with the Commission pursuant to section 106,
on--</DELETED>
<DELETED> (A) the filing of the initial application
for registration; and</DELETED>
<DELETED> (B) an annual basis thereafter for
maintaining provisional status.</DELETED>
<DELETED> (2) Amount.--The fees authorized under paragraph
(1) may be collected and available for obligation only in the
amounts provided in advance in an appropriation Act.</DELETED>
<DELETED> (3) Authority to adjust fees.--Notwithstanding the
preceding provisions of this subsection, to promote fair
competition or innovation, the Commission, in its sole
discretion, may reduce or eliminate any fee otherwise required
to be paid by a small or medium filer under this
subsection.</DELETED>
<DELETED> (b) Fee Schedule.--</DELETED>
<DELETED> (1) In general.--The Commission shall publish in
the Federal Register a schedule of the fees to be charged and
collected under this section.</DELETED>
<DELETED> (2) Content.--The fee schedule for a fiscal year
shall include a written analysis of the estimate of the
Commission of the total costs of carrying out the functions of
the Commission under this Act during the fiscal year.</DELETED>
<DELETED> (3) Submission to congress.--Before publishing the
fee schedule for a fiscal year, the Commission shall submit a
copy of the fee schedule to the Committees on Agriculture and
on Appropriations of the House of Representatives and the
Committees on Agriculture, Nutrition, and Forestry and on
Appropriations of the Senate.</DELETED>
<DELETED> (4) Timing.--</DELETED>
<DELETED> (A) 1st fiscal year.--The Commission shall
publish the fee schedule for the fiscal year in which
this Act is enacted, within 30 days after the date of
the enactment of this Act.</DELETED>
<DELETED> (B) Subsequent fiscal years.--The
Commission shall publish the fee schedule for each
subsequent fiscal year, not less than 90 days before
the due date prescribed by the Commission for payment
of the annual fee for the fiscal year.</DELETED>
<DELETED> (c) Late Payment Penalty.--</DELETED>
<DELETED> (1) In general.--The Commission may impose a
penalty against a person that fails to pay an annual fee
charged under this section, within 30 days after the due date
prescribed by the Commission for payment of the fee.</DELETED>
<DELETED> (2) Amount.--The amount of the penalty shall be--
</DELETED>
<DELETED> (A) 5 percent of the amount of the fee
due, multiplied by</DELETED>
<DELETED> (B) the whole number of consecutive 30-day
periods that have elapsed since the due date.</DELETED>
<DELETED> (d) Reimbursement of Excess Fees.--To the extent that the
total amount of fees collected under this section during a fiscal year
that begins after the date of the enactment of this Act exceeds the
amount provided under subsection (a)(2) with respect to the fiscal
year, the Commission shall reimburse the excess amount to the persons
who have timely paid their annual fees, on a pro-rata basis that
excludes penalties, and shall do so within 60 days after the end of the
fiscal year.</DELETED>
<DELETED> (e) Deposit of Fees Into the Treasury.--All amounts
collected under this section shall be credited to the currently
applicable appropriation, account, or fund of the Commission as
discretionary offsetting collections, and shall be available for the
purposes authorized in subsection (f) only to the extent and in the
amounts provided in advance in appropriations Acts.</DELETED>
<DELETED> (f) Authorization of Appropriations.--In addition to
amounts otherwise authorized to be appropriated to the Commission,
there is authorized to be appropriated to the Commission amounts
collected under this section to cover the costs of carrying out the
functions of the Commission under this Act.</DELETED>
<DELETED> (g) Expedited Hiring Authority.--</DELETED>
<DELETED> (1) Appointment authority.--The Chairman, pursuant
to section 6(a), may appoint individuals to a position
described in paragraph (2) of this subsection--</DELETED>
<DELETED> (A) in accordance with the statutes,
rules, and regulations governing appointments to
positions in the excepted service (as defined in
section 2103 of title 5, United States Code);
and</DELETED>
<DELETED> (B) without regard to any statute, rule,
or regulation governing appointments to positions in
the competitive service (as defined in section 2102 of
such title).</DELETED>
<DELETED> (2) Position described.--A position referred to in
subparagraph (1) is a position at the Commission that--
</DELETED>
<DELETED> (A) is in the competitive service (as
defined in section 2102 of such title); and</DELETED>
<DELETED> (B) requires specialized knowledge of
digital commodities markets, financial and capital
market formation or regulation, financial market
structures or surveillance, data collection or
analysis, or information technology, cybersecurity, or
system safeguards.</DELETED>
<DELETED> (3) Rule of construction.--The appointment of a
candidate to a position under this subsection shall not be
considered to cause the position to be converted from the
competitive service to the excepted service.</DELETED>
<DELETED> (h) Sunset.--The authorities provided by this section
shall expire at the end of the 4th fiscal year that begins after the
date of the enactment of this Act.</DELETED>
<DELETED>SEC. 411. REQUIREMENTS RELATED TO CONTROL PERSONS.</DELETED>
<DELETED> The Commodity Exchange Act (7 U.S.C. 1 et seq.), as
amended the preceding provisions of this Act, is amended by inserting
after section 4v the following:</DELETED>
<DELETED>``SEC. 4W. LIMITATION ON TRANSACTIONS BY BLOCKCHAIN CONTROL
PERSONS.</DELETED>
<DELETED> ``(a) Limitation.--It shall be unlawful for a blockchain
control person with respect to a blockchain system certified as a
mature blockchain system in accordance with section 42 of the
Securities Exchange Act of 1934 to sell a unit of a digital commodity
related to the blockchain system unless the person files notice with
the Commission, in a form and manner determined by the Commission, that
the person has or intends to obtain an authority described in
subsection (b)(1) with respect to the blockchain system, and complies
with rules adopted by the Commission that require--</DELETED>
<DELETED> ``(1) disclosure of information to the Commission
and the public about the material activities, as determined by
the Commission, of the blockchain control person; and</DELETED>
<DELETED> ``(2)(A) the use of a digital commodity broker to
effect the sale; or</DELETED>
<DELETED> ``(B) such other sales restrictions applicable to
the blockchain control person, or any affiliated blockchain
control person, to prevent manipulation and distortion of the
value of the digital commodity and promote further maturity of
the blockchain system to which the digital commodity
relates.</DELETED>
<DELETED> ``(b) Definitions.--In this section:</DELETED>
<DELETED> ``(1) Blockchain control person.--The term
`blockchain control person' means, with respect to a blockchain
system, any person or group of persons under common control,
other than a decentralized governance system, who--</DELETED>
<DELETED> ``(A) has the unilateral authority,
directly or indirectly, through any contract,
arrangement, understanding, relationship, or otherwise,
to control or materially alter the functionality,
operation, or rules of consensus or agreement of the
blockchain system or its related digital commodity;
or</DELETED>
<DELETED> ``(B) has the unilateral authority to
direct the voting, in the aggregate, of 20 percent or
more of the outstanding voting power of the blockchain
system by means of a related digital commodity, nodes
or validators, a decentralized governance system, or
otherwise, in a blockchain system which can be altered
by a voting system.</DELETED>
<DELETED> ``(2) Affiliated blockchain control person.--The
term `affiliated blockchain control person' means any person
directly or indirectly controlling, controlled by, or under
common control with a blockchain control person, as the
Commission by rule or regulation, may determine will effectuate
the purposes of this section.''.</DELETED>
<DELETED>SEC. 412. OTHER TRADABLE ASSETS.</DELETED>
<DELETED> The Commodity Exchange Act (7 U.S.C. 1 et seq.), as
amended by the preceding provisions of this Act, is amended--</DELETED>
<DELETED> (1) by inserting after section 4w the
following:</DELETED>
<DELETED>``SEC. 4X. TRADING REQUIREMENTS FOR OTHER TRADABLE
ASSETS.</DELETED>
<DELETED> ``(a) Limitation.--A contract of sale of a tradable asset
shall not be offered, solicited, traded, facilitated, executed,
cleared, reported, or otherwise dealt in, on or subject to the rules of
a registered entity, or by any other entity registered with the
Commission, except in accordance with subsection (b).</DELETED>
<DELETED> ``(b) Requirements.--</DELETED>
<DELETED> ``(1) Treatment of tradable assets.--A contract of
sale of a tradable asset that is offered, solicited, traded,
facilitated, executed, cleared, reported, or otherwise dealt in
on or subject to the rules of a registered entity, or by any
other entity registered with the Commission, shall be treated
as a digital commodity for purposes of this Act.</DELETED>
<DELETED> ``(2) Additional rulemaking authority.--In
addition to the other requirements of this Act, the Commission
may, by rule or regulation, impose additional obligations on
any person registered under this Act offering, soliciting,
trading, facilitating, executing, clearing, reporting, or
otherwise dealing in a contract of sale of a tradable asset, or
class thereof, pursuant to paragraph (1) as are necessary for
the protection of customers, the promotion of innovation, and
the maintenance of fair, orderly, and efficient markets,
including additional obligations related to--</DELETED>
<DELETED> ``(A) disclosure;</DELETED>
<DELETED> ``(B) recordkeeping;</DELETED>
<DELETED> ``(C) capital;</DELETED>
<DELETED> ``(D) reporting;</DELETED>
<DELETED> ``(E) business conduct;</DELETED>
<DELETED> ``(F) documentation;</DELETED>
<DELETED> ``(G) supervision of employees;
and</DELETED>
<DELETED> ``(H) segregation.</DELETED>
<DELETED> ``(c) Tradable Asset Defined.--In this section, the term
`tradable asset' means a digital asset other than--</DELETED>
<DELETED> ``(1) a digital commodity that is treated as such
other than by reason of subsection (b)(1) of this section;
or</DELETED>
<DELETED> ``(2) a digital asset excluded from the definition
of digital commodity pursuant to subclause (I) through (VII) of
section 1a(16)(F)(iii).''; and</DELETED>
<DELETED> (2) by inserting after section 6d the
following:</DELETED>
<DELETED>``SEC. 6E. PROHIBITION ON TRADING CERTAIN DIGITAL
ASSETS.</DELETED>
<DELETED> ``(a) In General.--A contract of sale of a digital
commodity or tradable asset (as defined in section 4x) shall not be
offered, solicited, traded, facilitated, executed, cleared, reported,
or otherwise dealt in on or subject to the rules of a registered
entity, or by any other entity registered with the Commission, if the
primary purpose of the digital commodity or tradable asset is to be
used to--</DELETED>
<DELETED> ``(1) commit fraud or market
manipulation;</DELETED>
<DELETED> ``(2) further a scheme found in a final action by
a court of competent jurisdiction to be in violation of
campaign finance or government ethics laws; or</DELETED>
<DELETED> ``(3) engage in any other conduct that would
result in abusive practices or be disruptive to market
integrity.</DELETED>
<DELETED> ``(b) Guidance on Fraudulent, Manipulative, or Disruptive
Tradable Assets.--The Commission may, after public notice and comment,
issue guidance establishing criteria for determining if the primary
purpose of a digital commodity or tradable asset (as so defined) is to
be used to commit fraud or market manipulation, or engage in any other
conduct that would result in abusive practices or be disruptive to
market integrity.''.</DELETED>
<DELETED>SEC. 413. CONFLICT OF INTEREST RULEMAKING.</DELETED>
<DELETED> Not later than 360 days after the date of the enactment
of this Act, the Commodity Futures Trading Commission shall issue rules
establishing requirements for the identification, mitigation, and
resolution of conflicts of interest among and across registered
entities (within the meaning of the Commodity Exchange Act) and persons
required to be registered with the Commission, including conflicts of
interest related to vertically integrated market structures and their
varying responsibilities.</DELETED>
<DELETED>SEC. 414. EFFECTIVE DATE.</DELETED>
<DELETED> Unless otherwise provided in this title, this title and
the amendments made by this title shall take effect 270 days after the
date of the enactment of this Act.</DELETED>
<DELETED>SEC. 415. SENSE OF CONGRESS.</DELETED>
<DELETED> It is the sense of Congress that nothing in this Act or
any amendment made by this Act should be interpreted to authorize any
entity to regulate any commodity, other than a digital commodity, on
any spot market.</DELETED>
<DELETED>TITLE V--INNOVATION AND TECHNOLOGY IMPROVEMENTS</DELETED>
<DELETED>SEC. 501. FINDINGS; SENSE OF CONGRESS.</DELETED>
<DELETED> (a) Findings.--Congress finds the following:</DELETED>
<DELETED> (1) Entrepreneurs and innovators are building and
deploying this next generation of the internet.</DELETED>
<DELETED> (2) Digital commodity networks represent a new way
for people to join together and cooperate with one another to
undertake certain activities.</DELETED>
<DELETED> (3) Digital commodities have the potential to be
the foundational building blocks of these systems, aligning the
economic incentive for individuals to cooperate with one
another to achieve a common purpose.</DELETED>
<DELETED> (4) The digital commodity ecosystem has the
potential to grow our economy and improve everyday lives of
Americans by facilitating collaboration through the use of
technology to manage activities, allocate resources, and
facilitate decision making.</DELETED>
<DELETED> (5) Blockchain systems and the digital commodities
they empower provide control, enhance transparency, reduce
transaction costs, and increase efficiency if proper
protections are put in place for investors, consumers, our
financial system, and our national security.</DELETED>
<DELETED> (6) Blockchain technology facilitates new types of
network participation which businesses in the United States may
utilize in innovative ways.</DELETED>
<DELETED> (7) Other digital commodity companies are setting
up their operations outside of the United States, where
countries are establishing frameworks to embrace the potential
of blockchain technology and digital commodities and provide
safeguards for consumers.</DELETED>
<DELETED> (8) Digital commodities, despite the purported
anonymity, provide law enforcement with an exceptional tracing
tool to identify illicit activity and bring criminals to
justice.</DELETED>
<DELETED> (9) The Financial Services Committee of the House
of Representatives has held multiple hearings highlighting
various risks that digital commodities can pose to the
financial markets, consumers, and investors that must be
addressed as we seek to harness the benefits of these
innovations.</DELETED>
<DELETED> (b) Sense of Congress.--It is the sense of Congress that--
</DELETED>
<DELETED> (1) the United States should seek to prioritize
understanding the potential opportunities of the next
generation of the internet;</DELETED>
<DELETED> (2) the United States should seek to foster
advances in technology that have robust evidence indicating
they can improve our financial system and create more fair and
equitable access to financial services for everyday Americans
while protecting our financial system, investors, and
consumers;</DELETED>
<DELETED> (3) the United States must support the responsible
development of digital commodities and the underlying
technology in the United States or risk the shifting of the
development of such assets and technology outside of the United
States, to less regulated countries;</DELETED>
<DELETED> (4) Congress should consult with public and
private sector stakeholders to understand how to enact a
functional framework tailored to the specific risks and unique
benefits of different digital commodity-related activities,
distributed ledger technology, distributed networks, and mature
blockchain systems;</DELETED>
<DELETED> (5) Congress should enact a functional framework
tailored to the specific risks of different digital commodity-
related activities and unique benefits of distributed ledger
technology, distributed networks, and mature blockchain
systems; and</DELETED>
<DELETED> (6) consumers and market participants will benefit
from a framework for digital commodities consistent with
longstanding investor protections in securities and commodities
markets, yet tailored to the unique benefits and risks of the
digital commodity ecosystem.</DELETED>
<DELETED>SEC. 502. STRATEGIC HUB FOR INNOVATION AND FINANCIAL
TECHNOLOGY.</DELETED>
<DELETED> Section 4 of the Securities Exchange Act of 1934 (15
U.S.C. 78d) is amended by adding at the end the following:</DELETED>
<DELETED> ``(k) Strategic Hub for Innovation and Financial
Technology.--</DELETED>
<DELETED> ``(1) Establishment.--Not later than 180 days
after the date of the enactment of this subsection, the
Securities and Exchange Commission shall establish a committee
to be known as the Strategic Hub for Innovation and Financial
Technology (referred to in this subsection as the `FinHub') to
support engagement on emerging technologies in the financial
sector.</DELETED>
<DELETED> ``(2) Members.--The composition of FinHub shall be
determined by the Commission, drawing from relevant divisions
as appropriate, including the Division of Trading and Markets,
Division of Corporate Finance, and Division of Investment
Management.</DELETED>
<DELETED> ``(3) Responsibilities.--FinHub shall--</DELETED>
<DELETED> ``(A) serve as a resource for the
Commission on emerging financial technology
advancements;</DELETED>
<DELETED> ``(B) engage with market participants
working on emerging financial technologies;
and</DELETED>
<DELETED> ``(C) facilitate communication between the
Commission and businesses working in emerging financial
technology fields with information on the Commission,
its rules, and regulations.</DELETED>
<DELETED> ``(4) Report to the commission.--</DELETED>
<DELETED> ``(A) In general.--Not later than October
31 of each year after 2025, FinHub shall provide an
annual summary of its engagement activities to the
Commission, which shall be included in the Commission's
annual report to Congress.</DELETED>
<DELETED> ``(B) Confidentiality.--Each report
submitted under this paragraph shall not contain
confidential information.''.</DELETED>
<DELETED>SEC. 503. CODIFICATION OF LABCFTC.</DELETED>
<DELETED> (a) In General.--Section 18 of the Commodity Exchange Act
(7 U.S.C. 22) is amended by adding at the end the following:</DELETED>
<DELETED> ``(c) LabCFTC.--</DELETED>
<DELETED> ``(1) Establishment.--There is established in the
Commission LabCFTC.</DELETED>
<DELETED> ``(2) Purpose.--The purposes of LabCFTC are to--
</DELETED>
<DELETED> ``(A) promote responsible financial
technology innovation and fair competition for the
benefit of the American public;</DELETED>
<DELETED> ``(B) serve as an information platform to
inform the Commission about new financial technology
innovation; and</DELETED>
<DELETED> ``(C) provide outreach to financial
technology innovators to discuss their innovations and
the regulatory framework established by this Act and
the regulations promulgated thereunder.</DELETED>
<DELETED> ``(3) Director.--LabCFTC shall have a Director,
who shall be appointed by the Commission and serve at the
pleasure of the Commission. Notwithstanding section 2(a)(6)(A),
the Director shall report directly to the Commission and
perform such functions and duties as the Commission may
prescribe.</DELETED>
<DELETED> ``(4) Duties.--LabCFTC shall--</DELETED>
<DELETED> ``(A) advise the Commission with respect
to rulemakings or other agency or staff action
regarding financial technology;</DELETED>
<DELETED> ``(B) provide internal education and
training to the Commission regarding financial
technology;</DELETED>
<DELETED> ``(C) advise the Commission regarding
financial technology that would bolster the
Commission's oversight functions;</DELETED>
<DELETED> ``(D) engage with academia, students, and
professionals on financial technology issues, ideas,
and technology relevant to activities under this
Act;</DELETED>
<DELETED> ``(E) provide persons working in emerging
technology fields with information on the Commission,
its rules and regulations, and the role of a registered
futures association; and</DELETED>
<DELETED> ``(F) encourage persons working in
emerging technology fields to engage with the
Commission and obtain feedback from the Commission on
potential regulatory issues.</DELETED>
<DELETED> ``(5) Report to congress.--</DELETED>
<DELETED> ``(A) In general.--Not later than October
31 of each year after 2025, LabCFTC shall submit to the
Committee on Agriculture of the House of
Representatives and the Committee on Agriculture,
Nutrition, and Forestry of the Senate a report on its
activities.</DELETED>
<DELETED> ``(B) Contents.--Each report required
under paragraph (1) shall include--</DELETED>
<DELETED> ``(i) the total number of persons
that met with LabCFTC;</DELETED>
<DELETED> ``(ii) a summary of general issues
discussed during meetings with the
person;</DELETED>
<DELETED> ``(iii) information on steps
LabCFTC has taken to improve Commission
services, including responsiveness to the
concerns of persons;</DELETED>
<DELETED> ``(iv) recommendations made to the
Commission with respect to the regulations,
guidance, and orders of the Commission and such
legislative actions as may be appropriate;
and</DELETED>
<DELETED> ``(v) any other information
determined appropriate by the Director of
LabCFTC.</DELETED>
<DELETED> ``(C) Confidentiality.--A report under
paragraph (A) shall abide by the confidentiality
requirements in section 8.</DELETED>
<DELETED> ``(6) Records and engagement.--The Commission
shall--</DELETED>
<DELETED> ``(A) maintain systems of records to track
engagements with the public through LabCFTC;</DELETED>
<DELETED> ``(B) store communications and materials
received in connection with any such engagement in
accordance with Commission policies and procedures on
data retention and confidentiality; and</DELETED>
<DELETED> ``(C) take reasonable steps to protect any
confidential or proprietary information received
through LabCFTC engagement.''.</DELETED>
<DELETED> (b) Conforming Amendments.--Section 2(a)(6)(A) of such Act
(7 U.S.C. 2(a)(6)(A)) is amended--</DELETED>
<DELETED> (1) by striking ``paragraph and in'' and inserting
``paragraph,''; and</DELETED>
<DELETED> (2) by inserting ``and section 18(c)(3),'' before
``the executive''.</DELETED>
<DELETED> (c) Effective Date.--The Commodity Futures Trading
Commission shall implement the amendments made by this section
(including complying with section 18(c)(7) of the Commodity Exchange
Act) within 180 days after the date of the enactment of this
Act.</DELETED>
<DELETED>SEC. 504. STUDY ON DECENTRALIZED FINANCE.</DELETED>
<DELETED> (a) In General.--The Commodity Futures Trading Commission,
the Securities and Exchange Commission, and the Secretary of the
Treasury shall jointly carry out a study on decentralized finance that
analyzes--</DELETED>
<DELETED> (1) the nature, size, role, and use of
decentralized finance blockchain applications;</DELETED>
<DELETED> (2) the operation of blockchain applications that
comprise decentralized finance;</DELETED>
<DELETED> (3) the interoperability of blockchain
applications and other blockchain systems;</DELETED>
<DELETED> (4) the interoperability of blockchain
applications and software-based systems, including websites and
wallets;</DELETED>
<DELETED> (5) the decentralized governance systems through
which blockchain applications may be developed, published,
constituted, administered, maintained, or otherwise
distributed, including--</DELETED>
<DELETED> (A) whether the systems enhance or detract
from--</DELETED>
<DELETED> (i) the decentralization of the
decentralized finance; and</DELETED>
<DELETED> (ii) the inherent benefits and
risks of the decentralized governance system;
and</DELETED>
<DELETED> (B) any procedures, requirements, or best
practices that would mitigate the risks identified in
subparagraph (A)(ii);</DELETED>
<DELETED> (6) the benefits of decentralized finance,
including--</DELETED>
<DELETED> (A) operational resilience and
availability of blockchain systems;</DELETED>
<DELETED> (B) interoperability of blockchain
systems;</DELETED>
<DELETED> (C) market competition and
innovation;</DELETED>
<DELETED> (D) transaction efficiency;</DELETED>
<DELETED> (E) transparency and traceability of
transactions; and</DELETED>
<DELETED> (F) disintermediation;</DELETED>
<DELETED> (7) the risks of decentralized finance,
including--</DELETED>
<DELETED> (A) pseudonymity of users and
transactions;</DELETED>
<DELETED> (B) disintermediation; and</DELETED>
<DELETED> (C) cybersecurity
vulnerabilities;</DELETED>
<DELETED> (8) the extent to which decentralized finance has
integrated with the traditional financial markets and any
potential risks or improvements to the stability of the
markets;</DELETED>
<DELETED> (9) how the levels of illicit activity in
decentralized finance compare with the levels of illicit
activity in traditional financial markets;</DELETED>
<DELETED> (10) methods for addressing illicit activity in
decentralized finance and traditional markets that are tailored
to the unique attributes of each;</DELETED>
<DELETED> (11) how decentralized finance may increase the
accessibility of cross-border transactions; and</DELETED>
<DELETED> (12) the feasibility of embedding self-executing
compliance and risk controls into decentralized
finance.</DELETED>
<DELETED> (b) Consultation.--In carrying out the study required
under subsection (a), the Commodity Futures Trading Commission and the
Securities and Exchange Commission shall consult with the Secretary of
the Treasury on the factors described under paragraphs (7) through (10)
of subsection (a).</DELETED>
<DELETED> (c) Report.--Not later than 1 year after the date of
enactment of this Act, the Commodity Futures Trading Commission and the
Securities and Exchange Commission shall jointly submit to the relevant
congressional committees a report that includes the results of the
study required by subsection (a).</DELETED>
<DELETED> (d) GAO Study.--The Comptroller General of the United
States shall--</DELETED>
<DELETED> (1) carry out a study on decentralized finance
that analyzes the information described under paragraphs (1)
through (12) of subsection (a); and</DELETED>
<DELETED> (2) not later than 1 year after the date of
enactment of this Act, submit to the relevant congressional
committees a report that includes the results of the study
required by paragraph (1).</DELETED>
<DELETED> (e) Definitions.--In this section:</DELETED>
<DELETED> (1) Decentralized finance.--</DELETED>
<DELETED> (A) In general.--The term ``decentralized
finance'' means blockchain applications (including
decentralized finance trading protocols and related
decentralized finance messaging systems) that allow
users to engage in financial transactions in a self-
directed manner so that a third-party intermediary does
not effectuate the transactions or take custody of
digital commodities of a user during any part of the
transactions.</DELETED>
<DELETED> (B) Relationship to excluded activities.--
The term ``decentralized finance'' shall not be
interpreted to limit or exclude any activity from the
activities described in section 15I(a) of the
Securities Exchange Act of 1934 or section 4v(a) of the
Commodity Exchange Act.</DELETED>
<DELETED> (2) Relevant congressional committees.--The term
``relevant congressional committees'' means--</DELETED>
<DELETED> (A) the Committees on Financial Services
and Agriculture of the House of Representatives;
and</DELETED>
<DELETED> (B) the Committees on Banking, Housing,
and Urban Affairs and Agriculture, Nutrition, and
Forestry of the Senate.</DELETED>
<DELETED>SEC. 505. STUDY ON NON-FUNGIBLE TOKENS.</DELETED>
<DELETED> (a) In General.--The Comptroller General of the United
States shall carry out a study of non-fungible tokens that analyzes--
</DELETED>
<DELETED> (1) the nature, size, role, purpose, and use of
non-fungible tokens;</DELETED>
<DELETED> (2) the similarities and differences between non-
fungible tokens and other digital commodities, including
digital commodities and permitted payment stablecoins, and how
the markets for those digital commodities intersect with each
other;</DELETED>
<DELETED> (3) how non-fungible tokens are minted by issuers
and subsequently administered to purchasers;</DELETED>
<DELETED> (4) how non-fungible tokens are stored after being
purchased by a consumer;</DELETED>
<DELETED> (5) the interoperability of non-fungible tokens
between different blockchain systems;</DELETED>
<DELETED> (6) the scalability of different non-fungible
tokens marketplaces;</DELETED>
<DELETED> (7) the benefits of non-fungible tokens, including
verifiable digital ownership;</DELETED>
<DELETED> (8) the risks of non-fungible tokens, including--
</DELETED>
<DELETED> (A) intellectual property
rights;</DELETED>
<DELETED> (B) cybersecurity risks; and</DELETED>
<DELETED> (C) market risks;</DELETED>
<DELETED> (9) whether and how non-fungible tokens have
integrated with traditional marketplaces, including those for
music, real estate, gaming, events, and travel;</DELETED>
<DELETED> (10) whether and how non-fungible tokens can be
used to facilitate commerce or other activities through the
representation of documents, identification, contracts,
licenses, and other commercial, government, or personal
records;</DELETED>
<DELETED> (11) any potential risks to traditional markets
from such integration; and</DELETED>
<DELETED> (12) the levels and types of illicit activity in
non-fungible tokens markets.</DELETED>
<DELETED> (b) Report.--Not later than 1 year after the date of the
enactment of this Act, the Comptroller General, shall make publicly
available a report that includes the results of the study required by
subsection (a).</DELETED>
<DELETED>SEC. 506. STUDY ON EXPANDING FINANCIAL LITERACY AMONGST
DIGITAL COMMODITY HOLDERS.</DELETED>
<DELETED> (a) In General.--The Commodity Futures Trading Commission
with the Securities and Exchange Commission shall jointly conduct a
study to identify--</DELETED>
<DELETED> (1) the existing level of financial literacy among
retail digital commodity holders, including subgroups of
investors identified by the Commodity Futures Trading
Commission with the Securities and Exchange
Commission;</DELETED>
<DELETED> (2) methods to improve the timing, content, and
format of financial literacy materials regarding digital
commodities provided by the Commodity Futures Trading
Commission and the Securities and Exchange
Commission;</DELETED>
<DELETED> (3) methods to improve coordination between the
Securities and Exchange Commission and the Commodity Futures
Trading Commission with other agencies, including the Financial
Literacy and Education Commission as well as nonprofit
organizations and State and local jurisdictions, to better
disseminate financial literacy materials;</DELETED>
<DELETED> (4) the efficacy of current financial literacy
efforts with a focus on rural communities and communities with
majority minority populations;</DELETED>
<DELETED> (5) the most useful and understandable relevant
information, including clear disclosures, that retail digital
commodity holders need to make informed financial decisions
before engaging with or purchasing a digital commodity or
service that is typically sold to retail investors of digital
commodities;</DELETED>
<DELETED> (6) the most effective public-private partnerships
in providing financial literacy regarding digital commodities
to consumers;</DELETED>
<DELETED> (7) the most relevant metrics to measure
successful improvement of the financial literacy of an
individual after engaging with financial literacy efforts;
and</DELETED>
<DELETED> (8) in consultation with the Financial Literacy
and Education Commission, a strategy (including to the extent
practicable, measurable goals and objectives) to increase
financial literacy of investors regarding digital
commodities.</DELETED>
<DELETED> (b) Report.--Not later than 1 year after the date of the
enactment of this Act, the Commodity Futures Trading Commission and the
Securities and Exchange Commission shall jointly submit a written
report on the study required by subsection (a) to the Committees on
Financial Services and on Agriculture of the House of Representatives
and the Committees on Banking, Housing, and Urban Affairs and on
Agriculture, Nutrition, and Forestry of the Senate.</DELETED>
<DELETED>SEC. 507. STUDY ON FINANCIAL MARKET INFRASTRUCTURE
IMPROVEMENTS.</DELETED>
<DELETED> (a) In General.--The Commodity Futures Trading Commission
and the Securities and Exchange Commission shall jointly conduct a
study to assess whether additional guidance or rules are necessary to
facilitate the development of tokenized securities and derivatives
products, and to the extent such guidance or rules would foster the
development of fair and orderly financial markets, be necessary or
appropriate in the public interest, and be consistent with the
protection of investors and customers.</DELETED>
<DELETED> (b) Report.--</DELETED>
<DELETED> (1) Time limit.--Not later than 1 year after the
date of enactment of this Act, the Commodity Futures Trading
Commission and the Securities and Exchange Commission shall
jointly submit to the relevant congressional committees a
report that includes the results of the study required by
subsection (a).</DELETED>
<DELETED> (2) Relevant congressional committees defined.--In
this section, the term ``relevant congressional committees''
means--</DELETED>
<DELETED> (A) the Committees on Financial Services
and on Agriculture of the House of Representatives;
and</DELETED>
<DELETED> (B) the Committees on Banking, Housing,
and Urban Affairs and on Agriculture, Nutrition, and
Forestry of the Senate.</DELETED>
<DELETED>SEC. 508. STUDY ON BLOCKCHAIN IN PAYMENTS.</DELETED>
<DELETED> (a) Study Required.--The Secretary of the Treasury shall
conduct a study on the potential use of blockchain technology by the
domestic private sector to address--</DELETED>
<DELETED> (1) fraud in payments;</DELETED>
<DELETED> (2) transaction costs and transaction
times;</DELETED>
<DELETED> (3) automated payments; and</DELETED>
<DELETED> (4) efficiency in commercial
transactions.</DELETED>
<DELETED> (b) Report to Congress.--Not later than one year after the
date of enactment of this Act, the Secretary shall submit a report to
the Committee on Financial Services of the House of Representatives and
the Committee on Banking, Housing, and Urban Affairs of the Senate that
summarizes the findings of the study required under subsection
(a).</DELETED>
<DELETED> (c) Rule of Construction.--Nothing in this section shall
be construed to mandate the use of blockchain technology by any public
or private entity.</DELETED>
<DELETED>SEC. 509. STUDY ON ILLICIT USE OF DIGITAL ASSETS.</DELETED>
<DELETED> (a) In General.--One year after the date of the enactment
of this Act, the Secretary of the Treasury, in consultation with the
Securities and Exchange Commission and the Commodity Futures Trading
Commission, shall conduct a comprehensive review of how Foreign
Terrorist Organizations and Transnational Criminal Syndicates utilize
digital assets in connection with illicit activities.</DELETED>
<DELETED> (b) Report.--Not later than 180 days after completing the
review under subsection (a), the Secretary of the Treasury shall issue
a report to the Committees on Agriculture and on Financial Services of
the House of Representatives and the Committees on Agriculture,
Nutrition, and Forestry and on Banking, Housing, and Urban Affairs of
the Senate on the findings of the Secretary, including--</DELETED>
<DELETED> (1) an assessment of how Foreign Terrorist
Organizations and Transnational Criminal Syndicates utilize
digital assets in connection with illicit activities;
and</DELETED>
<DELETED> (2) recommendations to assist the Securities and
Exchange Commission and the Commodity Futures Trading
Commission in strengthening compliance and enforcement of
digital assets-related entities registered with their
respective agencies.</DELETED>
<DELETED>SEC. 510. GAO STUDY ON CERTAIN CENTRALIZED INTERMEDIARIES THAT
ARE PRIMARILY LOCATED IN FOREIGN JURISDICTIONS.</DELETED>
<DELETED> (a) In General.--The Comptroller General of the United
States, in consultation with the Secretary of the Treasury, shall
conduct a study to--</DELETED>
<DELETED> (1) assess the risks posed by centralized
intermediaries that are primarily located in foreign
jurisdictions that provide services to U.S. persons without
regulatory requirements that are substantially similar to the
requirements of the Bank Secrecy Act; and</DELETED>
<DELETED> (2) provide any regulatory or legislative
recommendations to address these risks under paragraph
(1).</DELETED>
<DELETED> (b) Report.--Not later than 1 year after the date of
enactment of this Act, the Comptroller General shall issue a report to
Congress containing all findings and determinations made in carrying
out the study required under subsection (a).</DELETED>
<DELETED>SEC. 511. STUDIES ON FOREIGN ADVERSARY
PARTICIPATION.</DELETED>
<DELETED> (a) In General.--The Secretary of the Treasury, in
consultation with the Commodity Futures Trading Commission and the
Securities and Exchange Commission, shall, not later than 1 year after
date of the enactment of this section, conduct a study and submit a
report to the relevant congressional committees that--</DELETED>
<DELETED> (1) identifies any digital commodity registrants
which are owned by governments of foreign
adversaries;</DELETED>
<DELETED> (2) determines whether any governments of foreign
adversaries are collecting trading data about United States
persons in the digital commodity markets; and</DELETED>
<DELETED> (3) evaluates whether any proprietary intellectual
property of digital commodity registrants is being misused or
stolen by any governments of foreign adversaries.</DELETED>
<DELETED> (b) GAO Study and Report.--</DELETED>
<DELETED> (1) In general.--The Comptroller General shall,
not later than 1 year after date of the enactment of this
section, conduct a study and submit a report to the relevant
congressional committees that--</DELETED>
<DELETED> (A) identifies any digital commodity
registrants which are owned by governments of foreign
adversaries;</DELETED>
<DELETED> (B) determines whether any governments of
foreign adversaries are collecting trading data about
United States persons in the digital commodity markets;
and</DELETED>
<DELETED> (C) evaluates whether any proprietary
intellectual property of digital commodity registrants
is being misused or stolen by any governments of
foreign adversaries.</DELETED>
<DELETED> (c) Definitions.--In this section:</DELETED>
<DELETED> (1) Digital commodity registrant.--The term
``digital commodity registrant'' means any person required to
register as a digital commodity exchange, digital commodity
broker, or digital commodity dealer under the Commodity
Exchange Act.</DELETED>
<DELETED> (2) Foreign adversaries.--The term ``foreign
adversaries'' means the foreign governments and foreign non-
government persons determined by the Secretary of Commerce to
be foreign adversaries under section 7.4(a) of title 15, Code
of Federal Regulations.</DELETED>
<DELETED> (3) Relevant congressional committees.--The term
``relevant congressional committees'' means--</DELETED>
<DELETED>