H.R. 3633, Digital Asset Market Clarity Act of 2025, Engrossed in House (Part 1 of 2)
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[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3633 Engrossed in House (EH)]
<DOC>
119th CONGRESS
1st Session
H. R. 3633
_______________________________________________________________________
AN ACT
To provide for a system of regulation of the offer and sale of digital
commodities by the Securities and Exchange Commission and the Commodity
Futures Trading Commission, to amend the Federal Reserve Act to
prohibit the Federal reserve banks from offering certain products or
services directly to an individual, to prohibit the use of central bank
digital currency for monetary policy, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLES; TABLE OF CONTENTS.
(a) Short Titles.--This Act may be cited as the ``Digital Asset
Market Clarity Act of 2025'' or the ``CLARITY Act of 2025'' and the
``Anti-CBDC Surveillance State Act''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short titles; table of contents.
TITLE I--DEFINITIONS; RULEMAKING; EXPEDITED REGISTRATION
Sec. 101. Definitions under the Securities Act of 1933.
Sec. 102. Definitions under the Securities Exchange Act of 1934.
Sec. 103. Definitions under the Commodity Exchange Act.
Sec. 104. Definitions under this Act.
Sec. 105. Rulemakings.
Sec. 106. Expedited registration for digital commodity exchanges,
brokers, and dealers; provisional status.
Sec. 107. Commodity Exchange Act and securities laws savings
provisions.
Sec. 108. Administrative requirements.
Sec. 109. Treatment of certain non-controlling blockchain developers.
Sec. 110. Application of the Bank Secrecy Act.
Sec. 111. Rule of construction.
Sec. 112. Implementation.
TITLE II--OFFERS AND SALES OF DIGITAL COMMODITIES
Sec. 201. Treatment of investment contract assets.
Sec. 202. Exempted primary transactions in digital commodities.
Sec. 203. Treatment of secondary transactions in digital commodities
that originally involved investment
contracts.
Sec. 204. Requirements for offers and sales of digital commodities by
digital commodity related persons and
digital commodity affiliated persons.
Sec. 205. Mature blockchain system requirements.
Sec. 206. Effective date.
TITLE III--REGISTRATION FOR INTERMEDIARIES AT THE SECURITIES AND
EXCHANGE COMMISSION
Sec. 301. Treatment of digital commodities and permitted payment
stablecoins.
Sec. 302. Anti-fraud authority over permitted payment stablecoins and
certain digital commodity transactions.
Sec. 303. Eligibility of alternative trading systems.
Sec. 304. Rulemaking for dual-registered entities.
Sec. 305. Modernization of recordkeeping requirements.
Sec. 306. Exemptive authority.
Sec. 307. Additional registrations with the Commodity Futures Trading
Commission.
Sec. 308. Exempting digital commodities from State securities laws.
Sec. 309. Exclusion for decentralized finance activities.
Sec. 310. Treatment of custody activities by banking institutions.
Sec. 311. Broker and dealer disclosures regarding the treatment of
assets.
Sec. 312. Digital commodity activities that are financial in nature.
Sec. 313. Effective date; administration.
Sec. 314. Educational material requirements.
Sec. 315. Discretionary Surplus Fund.
TITLE IV--REGISTRATION FOR DIGITAL COMMODITY INTERMEDIARIES AT THE
COMMODITY FUTURES TRADING COMMISSION
Sec. 401. Commission jurisdiction over digital commodity transactions.
Sec. 402. Requiring futures commission merchants to use qualified
digital asset custodians.
Sec. 403. Trading certification and approval for digital commodities.
Sec. 404. Registration of digital commodity exchanges.
Sec. 405. Qualified digital asset custodians.
Sec. 406. Registration and regulation of digital commodity brokers and
dealers.
Sec. 407. Registration of associated persons.
Sec. 408. Registration of commodity pool operators and commodity
trading advisors.
Sec. 409. Exclusion for decentralized finance activities.
Sec. 410. Resources for implementation and enforcement.
Sec. 411. Requirements related to control persons.
Sec. 412. Other tradable assets.
Sec. 413. Conflict of interest rulemaking.
Sec. 414. Effective date.
Sec. 415. Sense of Congress.
TITLE V--INNOVATION AND TECHNOLOGY IMPROVEMENTS
Sec. 501. Findings; sense of Congress.
Sec. 502. Strategic Hub for Innovation and Financial Technology.
Sec. 503. Codification of LabCFTC.
Sec. 504. Study on decentralized finance.
Sec. 505. Study on non-fungible tokens.
Sec. 506. Study on expanding financial literacy amongst digital
commodity holders.
Sec. 507. Study on financial market infrastructure improvements.
Sec. 508. Study on blockchain in payments.
Sec. 509. Study on illicit use of digital assets.
Sec. 510. GAO study on certain centralized intermediaries that are
primarily located in foreign jurisdictions.
Sec. 511. Studies on foreign adversary participation.
Sec. 512. Conforming amendments.
TITLE VI--ANTI-CBDC SURVEILLANCE STATE ACT
Sec. 601. Short title.
Sec. 602. Prohibition on Federal reserve banks relating to certain
products or services for individuals and
prohibition on directly issuing a central
bank digital currency.
Sec. 603. Prohibition on Federal reserve banks indirectly issuing a
central bank digital currency.
Sec. 604. Prohibition with respect to central bank digital currency.
Sec. 605. Sense of Congress.
TITLE I--DEFINITIONS; RULEMAKING; EXPEDITED REGISTRATION
SEC. 101. DEFINITIONS UNDER THE SECURITIES ACT OF 1933.
Section 2(a) of the Securities Act of 1933 (15 U.S.C. 77b(a)) is
amended by adding at the end the following:
``(20) Blockchain.--The term `blockchain' means--
``(A) any technology--
``(i) where data is--
``(I) shared across a network to
create a distributed ledger of
independently verifiable transactions
or information among network
participants;
``(II) linked using cryptography to
maintain the integrity of the
distributed ledger and to execute other
functions; and
``(III) propagated among network
participants to reach consensus on the
state of the distributed ledger and any
other functions; and
``(ii) composed of source code that is
publicly available; and
``(B) any similar technology to the technology
described in subparagraph (A).
``(21) Blockchain application.--The term `blockchain
application' means any executable software that is deployed to
a blockchain and composed of source code that is publicly
available, including a smart contract or any network of smart
contracts, or other similar technology.
``(22) Blockchain protocol.--The term `blockchain protocol'
means publicly available source code of a blockchain that is
executed by the network participants of a blockchain to
facilitate its functioning, or other similar technology.
``(23) Blockchain system.--The term `blockchain system'
means any blockchain, together with its blockchain protocol or
any blockchain application or network of blockchain
applications.
``(24) Decentralized governance system.--
``(A) In general.--The term `decentralized
governance system' means, with respect to a blockchain
system, any transparent, rules-based system permitting
persons to form consensus or reach agreement in the
development, provision, publication, maintenance, or
administration of such blockchain system, where
participation is not limited to, or under the effective
control of, any person or group of persons under common
control.
``(B) Relationship of persons to decentralized
governance systems.--With respect to a decentralized
governance system, the decentralized governance system
and any persons participating in the decentralized
governance system shall be treated as separate persons
unless such persons are under common control or acting
pursuant to an agreement to act in concert.
``(C) Legal entities for decentralized governance
systems.--The term `decentralized governance system'
shall include a legal entity used to implement the
rules-based system described in subparagraph (A),
provided that the legal entity does not operate
pursuant to centralized management. For the purposes of
this subparagraph, the delegation of ministerial or
administrative authority at the direction of the
participants in a decentralized governance system shall
not be construed to be centralized management.
``(25) Digital asset.--The term `digital asset' means any
digital representation of value which is recorded on a
cryptographically-secured distributed ledger or other similar
technology.
``(26) Digital commodity.--The term `digital commodity' has
the meaning given that term under section 1a of the Commodity
Exchange Act (7 U.S.C. 1a).
``(27) Digital commodity affiliated person.--The term
`digital commodity affiliated person'--
``(A) means a person (including a digital commodity
related person) that, with respect to any digital
commodity--
``(i) acquires or has any right to acquire
5 percent or more of the total outstanding
units of such digital commodity from a digital
commodity issuer or an agent or underwriter
thereof;
``(ii) is a founder of the digital
commodity issuer; or
``(iii) is an executive officer, director,
trustee, general partner, or person serving in
a similar capacity of the digital commodity
issuer or held such role at any point in the
previous 12-month period; and
``(B) does not include a decentralized governance
system.
``(28) Digital commodity issuer.--
``(A) In general.--With respect to a digital
commodity, the term `digital commodity issuer' means
any person that--
``(i) issues or causes to be issued, or
proposes to issue or cause to be issued, a unit
of such digital commodity to a person; or
``(ii) offers or sells a right to a future
issuance of a unit of such digital commodity to
a person.
``(B) Prohibition on evasion.--It shall be unlawful
for any person to knowingly evade classification as a
`digital commodity issuer' and facilitate an
arrangement for the primary purpose of effecting an
offer, sale, distribution, or other issuance of a
digital commodity, including via any arrangement
involving the transfer of intellectual property
associated with the blockchain system to which the
digital commodity relates.
``(29) Digital commodity related person.--
``(A) In general.--With respect to a digital
commodity issuer, the term `digital commodity related
person'--
``(i) means a person--
``(I) that is or was in the
previous 6-month period a promoter,
senior employee, advisory board member,
consultant, advisor, or person serving
in a similar capacity; or
``(II) that acquires or has any
right to acquire 1 percent or more of
the total outstanding units of such
digital commodity from a digital
commodity issuer or an agent or
underwriter thereof; and
``(ii) does not include a decentralized
governance system.
``(B) Senior employee defined.--In this paragraph
and with respect to a digital commodity issuer, the
term `senior employee' means any employee materially
involved in the management of the digital commodity
issuer, including management of the development of the
blockchain system to which the digital commodity
relates.
``(30) End user distribution.--
``(A) In general.--The term `end user distribution'
means a distribution of a unit of a digital commodity
that--
``(i) does not involve an exchange of more
than a nominal value of cash, property, or
other assets; and
``(ii) is distributed in a broad and
equitable manner based on conditions capable of
being satisfied by any participant in the
blockchain system, including, as incentive-
based rewards--
``(I) to users of the digital
commodity or any blockchain system to
which the digital commodity relates;
``(II) for activities directly
related to the operation of the
blockchain system, such as mining,
validating, staking, or other activity
directly tied to the operation of the
blockchain system; or
``(III) to the existing holders of
another digital commodity, in
proportion to the total units of such
other digital commodity as are held by
each person.
``(B) Protocol consensus participation.--The term
`end user distribution' includes the following:
``(i) Self staking.--The distribution of a
unit of a digital commodity as a programmatic
result of validating or staking activity for a
blockchain system's consensus mechanism,
including the staking of a digital commodity
and the operation of a node or validator for
such activity where the owner of the staked
digital commodity and operator of the node or
validator are the same person or entity.
``(ii) Self-custodial staking with a third
party.--The distribution of a unit of a digital
commodity as a programmatic result of
validating or staking activity for a blockchain
system's consensus mechanism, including the
staking of a digital commodity and the
operation of a node or validator for such
activity where--
``(I) the owner of the staked
digital commodity and operator of the
node or validator for such activity are
different persons or entities; and
``(II) the operator of the node or
validator does not maintain custody or
control of the staked digital
commodity.
``(iii) Custodial and ancillary staking
services.--Subject to the rules issued pursuant
to subparagraph (C), the provision of custodial
or ancillary staking services enabling the
owner of a digital commodity to participate in
validating or staking activity for a blockchain
system's consensus mechanism that results in
the programmatic distribution of a unit of a
digital commodity, provided that such custodial
or ancillary services are exclusively
administrative or ministerial in nature.
``(C) Rulemaking to define the custodial and
ancillary staking services.--Not later than 270 days
after the date of the enactment of this paragraph, the
Commission shall issue rules defining the custodial and
ancillary staking services described in subparagraph
(B)(iii) that are exclusively administrative or
ministerial in nature, consistent with what is
necessary or appropriate for the public interest or for
the protection of investors.
``(31) Mature blockchain system.--The term `mature
blockchain system' means a blockchain system, together with its
related digital commodity, that is not controlled by any person
or group of persons under common control.
``(32) Permitted payment stablecoin.--The term `permitted
payment stablecoin' means a payment stablecoin (as defined in
section 2 of the GENIUS Act) issued by a permitted payment
stablecoin issuer.
``(33) Permitted payment stablecoin issuer.--The term
`permitted payment stablecoin issuer' has the meaning given
that term in section 2 of the GENIUS Act.''.
SEC. 102. DEFINITIONS UNDER THE SECURITIES EXCHANGE ACT OF 1934.
Section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C.
78c(a)) is amended--
(1) by redesignating the second paragraph (80) (relating to
funding portals) as paragraph (81); and
(2) by adding at the end the following:
``(82) Bank secrecy act.--The term `Bank Secrecy Act'
means--
``(A) section 21 of the Federal Deposit Insurance
Act (12 U.S.C. 1829b);
``(B) chapter 2 of title I of Public Law 91-508 (12
U.S.C. 1951 et seq.); and
``(C) subchapter II of chapter 53 of title 31,
United States Code.
``(83) Additional digital commodity-related terms.--
``(A) Securities act of 1933.--The terms
`blockchain system', `decentralized governance system',
`digital asset', `digital commodity affiliated person',
`digital commodity issuer', `digital commodity related
person', `end user distribution', `mature blockchain
system', `permitted payment stablecoin', and `permitted
payment stablecoin issuer' have the meaning given those
terms, respectively, under section 2(a) of the
Securities Act of 1933 (15 U.S.C. 77b(a)).
``(B) Commodity exchange act.--The terms `digital
commodity', `digital commodity broker', `digital
commodity dealer', `digital commodity exchange',
`decentralized finance messaging system', and
`decentralized finance trading protocol' have the
meaning given those terms, respectively, under section
1a of the Commodity Exchange Act (7 U.S.C. 1a).''.
SEC. 103. DEFINITIONS UNDER THE COMMODITY EXCHANGE ACT.
(a) In General.--Section 1a of the Commodity Exchange Act (7 U.S.C.
1a) is amended--
(1) in paragraph (10)--
(A) in subparagraph (A)--
(i) by redesignating clauses (iii) and (iv)
as clauses (iv) and (v), respectively; and
(ii) by inserting after clause (ii) the
following:
``(iii) digital commodity;''; and
(B) by redesignating subparagraph (B) as
subparagraph (C) and inserting after subparagraph (A)
the following:
``(B) Exclusion.--For purposes of this paragraph,
the term `trading in commodity interests' shall not
include transacting in digital commodities for the
purpose of--
``(i) acting as a digital commodity
custodian;
``(ii) establishing, maintaining, or
managing inventory or payment instruments for
commercial purposes; or
``(iii) maintaining or supporting the
operation of, or validating transactions on, a
blockchain system.'';
(2) in paragraph (11)--
(A) in subparagraph (A)(i)--
(i) by redesignating subclauses (III) and
(IV) as subclauses (IV) and (V), respectively;
and
(ii) by inserting after subclause (II) the
following:
``(III) digital commodity;''; and
(B) by redesignating subparagraph (B) as
subparagraph (C) and inserting after subparagraph (A)
the following:
``(B) Exclusion.--For purposes of this paragraph,
the term `trading in commodity interests' shall not
include transacting in digital commodities for the
purpose of--
``(i) acting as a digital commodity
custodian;
``(ii) establishing, maintaining, or
managing inventory or payment instruments for
commercial purposes; or
``(iii) maintaining or supporting the
operation of, or validating transactions on, a
blockchain system.'';
(3) in paragraph (12)(A)(i)--
(A) in subclause (II), by adding at the end a
semicolon;
(B) by redesignating subclauses (III) and (IV) as
subclauses (IV) and (V), respectively; and
(C) by inserting after subclause (II) the
following:
``(III) a digital commodity;'';
(4) by redesignating paragraphs (16) through (51) as
paragraphs (17) through (52), respectively, and inserting after
paragraph (15) the following:
``(16) Terms related to digital commodities.--
``(A) Associated person of a digital commodity
broker.--
``(i) In general.--Except as provided in
clause (ii), the term `associated person of a
digital commodity broker' means a person who is
associated with a digital commodity broker as a
partner, officer, employee, or agent (or any
person occupying a similar status or performing
similar functions) in any capacity that
involves--
``(I) the solicitation or
acceptance of an order for the purchase
or sale of a digital commodity; or
``(II) the supervision of any
person engaged in the solicitation or
acceptance of an order for the purchase
or sale of a digital commodity.
``(ii) Exclusion.--The term `associated
person of a digital commodity broker' does not
include any person associated with a digital
commodity broker the functions of which are
solely clerical or ministerial.
``(B) Associated person of a digital commodity
dealer.--
``(i) In general.--Except as provided in
clause (ii), the term `associated person of a
digital commodity dealer' means a person who is
associated with a digital commodity dealer as a
partner, officer, employee, or agent (or any
person occupying a similar status or performing
similar functions) in any capacity that
involves--
``(I) the solicitation or
acceptance of a contract for the
purchase or sale of a digital
commodity; or
``(II) the supervision of any
person engaged in the solicitation or
acceptance of a contract for the
purchase or sale of a digital
commodity.
``(ii) Exclusion.--The term `associated
person of a digital commodity dealer' does not
include any person associated with a digital
commodity dealer the functions of which are
solely clerical or ministerial.
``(C) Bank secrecy act.--The term `Bank Secrecy
Act' means--
``(i) section 21 of the Federal Deposit
Insurance Act (12 U.S.C. 1829b);
``(ii) chapter 2 of title I of Public Law
91-508 (12 U.S.C. 1951 et seq.); and
``(iii) subchapter II of chapter 53 of
title 31, United States Code.
``(D) Decentralized finance messaging system.--
``(i) In general.--The term `decentralized
finance messaging system' means a software
application that provides a user with the
ability to create or submit an instruction,
communication, or message to a decentralized
finance trading protocol for the purpose of
executing a transaction by the user.
``(ii) Additional requirements.--The term
`decentralized finance messaging system' does
not include any system that provides any person
other than the user with control over--
``(I) the funds of the user; or
``(II) the execution of the
transaction of the user.
``(E) Decentralized finance trading protocol.--
``(i) In general.--The term `decentralized
finance trading protocol' means a blockchain
system through which multiple participants can
execute a financial transaction--
``(I) in accordance with an
automated rule or algorithm that is
predetermined and non-discretionary;
and
``(II) without reliance on any
other person to maintain control of the
digital assets of the user during any
part of the financial transaction.
``(ii) Exclusions.--
``(I) In general.--The term
`decentralized finance trading
protocol' does not include a blockchain
system if--
``(aa) a person or group of
persons under common control or
acting pursuant to an agreement
to act in concert has the
authority, directly or
indirectly, through any
contract, arrangement,
understanding, relationship, or
otherwise, to control or
materially alter the
functionality, operation, or
rules of consensus or agreement
of the blockchain system; or
``(bb) the blockchain
system does not operate,
execute, and enforce its
operations and transactions
based solely on pre-
established, transparent rules
encoded directly within the
source code of the blockchain
system.
``(II) Special rule.--For purposes
of subclause (I), a decentralized
governance system shall not be
considered to be a person or a group of
persons under common control or acting
pursuant to an agreement to act in
concert.
``(F) Digital commodity.--
``(i) In general.--The term `digital
commodity' means a digital asset that is
intrinsically linked to a blockchain system,
and the value of which is derived from or is
reasonably expected to be derived from the use
of the blockchain system.
``(ii) Relationship to a blockchain
system.--For purposes of this subparagraph, a
digital asset is intrinsically linked to a
blockchain system if the digital asset is
directly related to the functionality or
operation of the blockchain system or to the
activities or services for which the blockchain
system is created or utilized, including where
the digital asset is--
``(I) issued or generated by the
programmatic functioning of the
blockchain system;
``(II) used to transfer value
between participants in the blockchain
system;
``(III) used to access the
activities or services of the
blockchain system;
``(IV) used to participate in the
decentralized governance system of the
blockchain system;
``(V) used or removed from
circulation in whole or in part to pay
fees or otherwise verify or validate
transactions on the blockchain system;
``(VI) used as payment or incentive
to participants in the blockchain
system to engage in the activities of
the blockchain system, provide services
to other participants in the blockchain
system, or otherwise participate in the
functionality of the blockchain system;
or
``(VII) used as payment or
incentive to participants in the
blockchain system to validate
transactions, secure the blockchain
system, provide computational services,
maintain or distribute information, or
otherwise participate in the operations
of the blockchain system.
``(iii) Exclusion.--The term `digital
commodity' does not include any of the
following:
``(I) Security.--
``(aa) Any security, other
than a note, an investment
contract, or a certificate of
interest or participation in
any profit-sharing agreement.
``(bb) A note, an
investment contract, or a
certificate of interest or
participation in any profit-
sharing agreement that--
``(AA) represents
or gives the holder an
ownership interest or
other interest in the
revenues, profits,
obligations, debts,
assets, or assets or
debts to be acquired of
the issuer of the
digital asset or
another person (other
than a decentralized
governance system);
``(BB) makes the
holder a creditor of
the issuer of the
digital asset or
another person; or
``(CC) represents
or gives the holder the
right to receive
interest or the return
of principal from the
issuer of the digital
asset or another
person.
``(II) Security derivative.--A
digital asset that, based on its terms
and other characteristics, is,
represents, or is functionally
equivalent to an agreement, contract,
or transaction that is--
``(aa) a security future,
as defined in section 2a of the
Securities Act of 1933;
``(bb) a security-based
swap, as defined in section 2a
of the Securities Act of 1933;
``(cc) a put, call,
straddle, option, or privilege
on any security, certificate of
deposit, or group or index of
securities (including any
interest therein or based on
the value thereof), as defined
in section 2a of the Securities
Act of 1933; or
``(dd) a put, call,
straddle, option, or privilege
on any security, as defined in
section 2a of the Securities
Act of 1933.
``(III) Permitted payment
stablecoin.--A digital asset that is a
permitted payment stablecoin.
``(IV) Banking deposit.--
``(aa) A deposit (as
defined under section 3 of the
Federal Deposit Insurance Act
(12 U.S.C. 1813)), regardless
of the technology used to
record the deposit.
``(bb) An account (as
defined in section 101 of the
Federal Credit Union Act (12
U.S.C. 1752)), regardless of
the technology used to record
the account.
``(V) Commodity.--A digital asset
that references, represents an interest
in, or is functionally equivalent to--
``(aa) an agricultural
commodity;
``(bb) an excluded
commodity, other than a
security; or
``(cc) an exempt commodity,
other than the digital
commodity itself, as shall be
further defined by the
Commission.
``(VI) Commodity derivative.--A
digital asset that, based on its terms
and other characteristics, is,
represents, or is functionally
equivalent to an agreement, contract,
or transaction that is--
``(aa) a contract of sale
of a commodity for future
delivery or an option thereon;
``(bb) a security futures
product;
``(cc) a swap;
``(dd) an agreement,
contract, or transaction
described in section
2(c)(2)(C)(i) or section
2(c)(2)(D)(i);
``(ee) a commodity option
authorized under section 4c; or
``(ff) a leverage
transaction authorized under
section 19.
``(VII) Pooled investment
vehicle.--
``(aa) In general.--A
digital asset not described by
subclause (I) that, based on
its terms and other
characteristics, is,
represents, or is functionally
equivalent to an interest in--
``(AA) a commodity
pool, as defined in
this Act; or
``(BB) a pooled
investment vehicle.
``(bb) Pooled investment
vehicle defined.--In this
subclause, the term `pooled
investment vehicle' means--
``(AA) any
investment company as
defined in section 3(a)
of the Investment
Company Act of 1940 (15
U.S.C. 80a-3(a));
``(BB) any company
(as defined in section
2 of such Act (15
U.S.C. 80a-2)) that
would be an investment
company under section
3(a) of such Act but
for the exclusions
provided from that
definition by section
3(c) of such Act, if
for purposes of this
subclause the company
were assumed to be an
issuer (as defined in
section 2 of such Act);
or
``(CC) any entity
or person that is not
an investment company
but holds or will hold
assets other than
securities.
``(VIII) Good, collectible, and
other non-commodity asset.--A digital
asset that has value, utility, or
significance beyond its mere existence
as a digital asset, including the
digital equivalent of a tangible or
intangible good, such as--
``(aa) a work of art, a
musical composition, a literary
work, or other intellectual
property;
``(bb) collectibles,
merchandise, virtual land, and
video game assets;
``(cc) affinity, rewards,
or loyalty points, including
airline miles or credit card
points, that are not primarily
speculative in nature; or
``(dd) rights, licenses,
and tickets.
``(iv) Rule of construction.--No
presumption shall exist that a digital asset is
a security, nor shall a digital asset be
excluded from being a digital commodity
pursuant to clause (iii)(I), solely due to--
``(I) the digital asset providing
voting or economic rights with respect
to the blockchain system to which the
digital asset relates or the
decentralized governance system of the
blockchain system to which the digital
asset relates;
``(II) the value of the digital
asset having the potential to
appreciate or depreciate in response to
the efforts, operations, or financial
performance of the blockchain system to
which the digital asset relates or the
decentralized governance system of the
blockchain system to which the digital
asset relates; or
``(III) the value of the digital
asset appreciating or depreciating due
to the use of the blockchain system to
which the digital asset relates or the
decentralized governance system of the
blockchain system to which the digital
asset relates.
``(G) Digital commodity broker.--
``(i) In general.--The term `digital
commodity broker' means any person who, as a
regular business--
``(I) is engaged in--
``(aa) soliciting or
accepting an order from a
customer for--
``(AA) the purchase
or sale of a digital
commodity; or
``(BB) an
agreement, contract, or
transaction described
in section
2(c)(2)(D)(iv); and
``(bb) in conjunction with
the activities in item (aa),
accepts or maintains control
over--
``(AA) the funds of
any customer; or
``(BB) the
execution of any
transaction of a
customer;
``(II) is engaged in soliciting or
accepting orders from a customer for
the purchase or sale of a unit of a
digital commodity on or subject to the
rules of a registered entity; or
``(III) is registered with the
Commission as a digital commodity
broker.
``(ii) Exceptions.--The term `digital
commodity broker' does not include a person
solely because the person--
``(I) solicits or accepts an order
described in clause (i)(I)(aa)(AA) from
a customer who is an eligible contract
participant;
``(II) enters into 1 or more
digital commodity transactions that are
attributable or solely incidental to
making, sending, receiving, or
facilitating payments, whether
involving a payment service provider or
on a peer-to-peer basis; or
``(III) is a bank (as defined under
section 3(a) of the Securities Exchange
Act of 1934) engaging in certain
banking activities with respect to a
digital commodity in the same or a
similar manner as a bank is excluded
from the definition of a broker under
such section, as determined by the
Commission.
``(iii) Further definition.--The
Commission, by rule or regulation, may exclude
from the term `digital commodity broker' any
person or class of persons if the Commission
determines that the rule or regulation will
effectuate the purposes of this Act.
``(H) Digital commodity dealer.--
``(i) In general.--The term `digital
commodity dealer' means any person who, as a
regular business--
``(I) is, or offers to be a
counterparty to a person for the
purchase or sale of a digital commodity
as a regular business, and in
conjunction with the activities,
accepts or maintains control over the
funds of any counterparty; or
``(II) is registered with the
Commission as a digital commodity
dealer.
``(ii) Exception.--The term `digital
commodity dealer' does not include a person
solely because the person--
``(I) is or offers to be a
counterparty to a person who is an
eligible contract participant;
``(II) enters into a digital
commodity transaction with an eligible
contract participant;
``(III) enters into a digital
commodity transaction on or through a
registered digital commodity exchange,
with a registered digital commodity
broker, or through a decentralized
finance trading protocol;
``(IV) enters into a digital
commodity transaction for the person's
own account, either individually or in
a fiduciary capacity, but not as a part
of a regular business;
``(V) enters into 1 or more digital
commodity transactions that are
attributable or solely incidental to
making, sending, receiving, or
facilitating payments, whether
involving a payment service provider or
on a peer-to-peer basis; or
``(VI) is a bank (as defined under
section 3(a) of the Securities Exchange
Act of 1934) engaging in certain
banking activities with respect to a
digital commodity in the same or a
similar manner as a bank is excluded
from the definition of a dealer under
section 3(a)(5) of such Act, as
determined by the Commission.
``(iii) Further definition.--The
Commission, by rule or regulation, may exclude
from the term `digital commodity dealer' any
person or class of persons if the Commission
determines that the rule or regulation will
effectuate the purposes of this Act.
``(I) Digital commodity exchange.--The term
`digital commodity exchange' means a trading facility
that offers or seeks to offer a cash or spot market in
at least 1 digital commodity.
``(J) Mixed digital asset transaction.--The term
`mixed digital asset transaction' means a transaction
in which a digital commodity is traded for a security.
``(K) Terms defined under the securities act of
1933.--The terms `blockchain system', `decentralized
governance system', `digital asset', `digital commodity
issuer', `digital commodity affiliated person',
`digital commodity related person', `end user
distribution', `mature blockchain system', `permitted
payment stablecoin', and `permitted payment stablecoin
issuer' have the meaning given those terms,
respectively, under section 2(a) of the Securities Act
of 1933 (15 U.S.C. 77b(a)).''; and
(5) in paragraph (41) (as so redesignated by paragraph (4)
of this subsection)--
(A) by striking ``and'' at the end of subparagraph
(E);
(B) by striking the period at the end of
subparagraph (F) and inserting ``; and''; and
(C) by adding at the end the following:
``(G) a digital commodity exchange registered under
section 5i.''.
(b) Conforming Amendments.--
(1) Each of the following provisions of law is amended by
striking ``1a(18)'' and inserting ``1a(19)'':
(A) Section 4s(h)(5)(A)(i) of the Commodity
Exchange Act (7 U.S.C. 6s(h)(5)(A)(i)).
(B) Section 5(e) of the Securities Act of 1933 (15
U.S.C. 77e(e)).
(C) Section 6(g)(5)(B) of the Securities Exchange
Act of 1934 (15 U.S.C. 78f(g)(5)(B)).
(D) Section 15F(h)(5)(A)(i) of the Securities
Exchange Act of 1934 (15 U.S.C. 78o-10(h)(5)(A)(i)).
(2) Section 752 of the Wall Street Transparency and
Accountability Act of 2010 (15 U.S.C. 8325) is amended by
striking ``1a(39)'' and inserting ``1a(40)''.
(3) Section 4s(f)(1)(D) of the Commodity Exchange Act (7
U.S.C. 6s(f)(1)(D)) is amended by striking ``1a(47)(A)'' and
inserting ``1a(48)(A)''.
(4) Each of the following provisions of the Commodity
Exchange Act is amended by striking ``1a(47)(A)(v)'' and
inserting ``1a(48)(A)(v)'':
(A) Section 4t(b)(1)(C) (7 U.S.C. 6t(b)(1)(C)).
(B) Section 5(d)(23) (7 U.S.C. 7(d)(23)).
(C) Section 5b(k)(3) (7 U.S.C. 7a-1(k)(3)).
(D) Section 5h(f)(10)(A)(iii) (7 U.S.C. 7b-
3(f)(10)(A)(iii)).
(5) Section 21(f)(4)(C) of the Commodity Exchange Act (7
U.S.C. 24a(f)(4)(C)) is amended by striking ``1a(48)'' and
inserting ``1a(49)''.
(6) Section 403 of the Legal Certainty for Bank Products
Act of 2000 (7 U.S.C. 27a) is amended--
(A) in subsection (a)(2), by striking
``1a(47)(A)(v)'' and inserting ``1a(48)(A)(v)''; and
(B) in each of subsections (b)(1) and (c)(2), by
striking ``1a(47)'' and inserting ``1a(48)''.
(7) Section 712 of the Wall Street Transparency and
Accountability Act of 2010 (15 U.S.C. 8302) is amended--
(A) in subsection (a)(8), by striking ``1a(47)(D)''
each place it appears and inserting ``1a(48)(D)''; and
(B) in subsection (d)(1), by striking
``1a(47)(A)(v)'' each place it appears and inserting
``1a(48)(A)(v)''.
SEC. 104. DEFINITIONS UNDER THIS ACT.
In this Act:
(1) Definitions under the commodity exchange act.--The
terms ``decentralized finance messaging system'',
``decentralized finance trading protocol'', ``digital
commodity'', ``digital commodity broker'', ``digital commodity
dealer'', ``digital commodity exchange'', and ``mixed digital
asset transaction'' have the meaning given those terms,
respectively, under section 1a of the Commodity Exchange Act (7
U.S.C. 1a).
(2) Definitions under the securities act of 1933.--The
terms ``blockchain'', ``blockchain system'', ``blockchain
protocol'', ``decentralized governance system'', ``digital
asset'', ``digital commodity issuer'', ``end user
distribution'', ``mature blockchain system'', ``permitted
payment stablecoin'', and ``permitted payment stablecoin
issuer'' have the meaning given those terms, respectively,
under section 2(a) of the Securities Act of 1933 (15 U.S.C.
77b(a)).
(3) Definitions under the securities exchange act of
1934.--The terms ``Bank Secrecy Act'', ``securities laws'', and
``self-regulatory organization'' have the meaning given those
terms, respectively, under section 3(a) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a)).
SEC. 105. RULEMAKINGS.
(a) Definitions.--The Commodity Futures Trading Commission and the
Securities and Exchange Commission shall jointly issue rules to further
define the following terms:
(1) The terms--
(A) ``blockchain'', ``blockchain application'',
``blockchain system'', ``blockchain protocol'',
``decentralized governance system'', ``digital
commodity affiliated person'', ``digital commodity
issuer'', ``digital commodity related person'', ``end
user distribution'', and ``mature blockchain system'',
as defined under section 2(a) of the Securities Act of
1933;
(B) ``unilateral authority'', as such term is used
in section 42 of the Securities Exchange Act of 1934
and section 1a of the Commodity Exchange Act; and
(C) ``programmatic functioning'', as such term is
used in sections 4C of the Securities Act of 1933,
section 42 of the Securities Exchange Act of 1934, and
section 1a of the Commodity Exchange Act.
(2) The terms ``digital commodity'', ``decentralized
finance messaging system'', and ``decentralized finance trading
protocol'', as defined under section 1a of the Commodity
Exchange Act.
(b) Joint Rulemaking for Mixed Digital Asset Transactions.--The
Securities and Exchange Commission and the Commodity Futures Trading
Commission shall jointly issue rules applicable to mixed digital asset
transactions under this Act and the amendments made by this Act,
including by further defining such term.
(c) Protection of Self-Custody.--
(1) In general.--A United States individual shall retain
the right to--
(A) maintain a hardware wallet or software wallet
for the purpose of facilitating the individual's own
lawful custody of digital assets; and
(B) engage in direct, peer-to-peer transactions in
digital assets with another individual or entity for
the individual's own lawful purposes using a hardware
wallet or software wallet, if--
(i) such other individual or entity is not
a financial institution (as defined in section
5312 of title 31, United States Code); and
(ii) the transactions do not involve any
property or interests in property that are
blocked pursuant to, or are otherwise
prohibited by, United States sanctions.
(2) Application.--This subsection--
(A) applies solely to personal use by individuals;
and
(B) does not apply to individuals acting in a
custodial or fiduciary capacity for others.
(3) Rule of construction.--Nothing in this subsection shall
be construed to limit the authority of the Secretary of the
Treasury, the Securities and Exchange Commission, the Commodity
Futures Trading Commission, the Board of Governors of the
Federal Reserve System, the Comptroller of the Currency, the
Federal Deposit Insurance Corporation, or the National Credit
Union Administration to carry out any enforcement action or
special measure authorized under applicable law, including--
(A) the Bank Secrecy Act, section 9714 of the
Combating Russian Money Laundering Act (31 U.S.C. 5318A
note), and section 7213A of the Fentanyl Sanctions Act
(21 U.S.C. 2313a); or
(B) any other law relating to illicit finance,
money laundering, terrorism financing, or United States
sanctions.
(d) Joint Rulemaking, Procedures, or Guidance for Delisting.--Not
later than 180 days after the date of the enactment of this Act, the
Commodity Futures Trading Commission and the Securities and Exchange
Commission shall jointly issue rules, procedures, or guidance (as
determined appropriate by the Commissions) regarding the process to
delist an asset for trading under section 106 if the Commissions
determine that the listing is inconsistent with the Commodity Exchange
Act, the securities laws (including regulations under those laws), or
this Act.
(e) Joint Rules for Portfolio Margining Determinations.--
(1) In general.--Not later than 360 days after the date of
the enactment of this Act, the Commodity Futures Trading
Commission and the Securities and Exchange Commission shall
jointly issue rules describing the process for persons
registered with either such Commission to seek a joint order or
determination with respect to margin, customer protection,
segregation, or other requirements as necessary to facilitate
portfolio margining of securities (including related extensions
of credit), security-based swaps, contracts for future
delivery, options on a contract for future delivery, swaps, and
digital commodities, or any subset thereof, in--
(A) a securities account carried by a registered
broker or dealer or a security-based swap account
carried by a registered security-based swap dealer;
(B) a futures or cleared swap account carried by a
registered futures commission merchant;
(C) a swap account carried by a swap dealer; or
(D) a digital commodity account carried by a
registered digital commodity broker or digital
commodity dealer that is also registered in such other
capacity as is necessary to also carry the other
customer or counterparty positions being held in the
account.
(2) Process.--With respect to a joint order or
determination described in paragraph (1), the rules required to
be issued pursuant to paragraph (1) shall require--
(A) the joint order or determination to be issued
only if the order or determination is in the public
interest and provides for the appropriate protection of
customers;
(B) applicants to file a standard application, in a
form and manner determined by the Securities and
Exchange Commission and the Commodity Futures Trading
Commission, which shall include the information
necessary to make the joint order or determination;
(C) the Securities and Exchange Commission and the
Commodity Futures Trading Commission to make a final
determination not later than 270 days after the filing
of a completed application;
(D) the Securities and Exchange Commission and the
Commodity Futures Trading Commission to consider the
public interest of the joint order or determination
through the solicitation of public comments; and
(E) the Securities and Exchange Commission and the
Commodity Futures Trading Commission to consult with
other relevant foreign or domestic regulators,
including the Board of Governors of the Federal Reserve
System, the Federal Deposit Insurance Corporation, and
the Office of the Comptroller of the Currency, as
appropriate.
(f) Capital Requirements to Address Netting Agreements.--No later
than 360 days following the date of enactment of this Act, the Board of
Governors of the Federal Reserve System, the Comptroller of the
Currency, and the Federal Deposit Insurance Corporation shall develop
risk-based and leverage capital requirements for insured depository
institutions, depository institution holding companies, and nonbank
financial companies supervised by the Board of Governors that address
netting agreements that provide for termination and close-out netting
across multiple types of financial transactions, consistent with
subsection (e), in the event of a counterparty's default.
SEC. 106. EXPEDITED REGISTRATION FOR DIGITAL COMMODITY EXCHANGES,
BROKERS, AND DEALERS; PROVISIONAL STATUS.
(a) Registration.--
(1) In general.--Unless exempted from registration, a
person shall not act as a digital commodity broker, digital
commodity dealer, or digital commodity exchange after the end
of the 90-day period beginning on the date the process
described in paragraph (2) is adopted by the Commodity Futures
Trading Commission, unless, as the case may be, the person is
registered as a--
(A) digital commodity broker pursuant to section 4u
of the Commodity Exchange Act;
(B) digital commodity dealer pursuant to section 4u
of the Commodity Exchange Act; or
(C) digital commodity exchange pursuant to section
5i of the Commodity Exchange Act.
(2) Expedited process.--Within 180 days after the date of
the enactment of this Act, the Commodity Futures Trading
Commission shall adopt, by rule, regulation, or order, a
process for expedited registration of persons required to be
registered pursuant to paragraph (1).
(b) Provisional Status.--
(1) In general.--A person who is registered in accordance
with subsection (a) of this section shall be in provisional
status until--
(A) in the case of a digital commodity broker or
dealer, 270 days after the final effective date of the
rulemakings required under section 4u of the Commodity
Exchange Act; or
(B) in the case of a digital commodity exchange,
270 days after the final effective date of the
rulemakings required under section 5i of such Act.
(2) Payment of fees.--A person in provisional status shall
pay all fees and penalties required under section 410.
(c) Operations Prior to Regulations.--
(1) Requirements.--A person in provisional status shall be
subject to the requirements of this section and the Commodity
Exchange Act and any rules or regulations promulgated under
this section or the Commodity Exchange Act, as applicable.
(2) Listings.--
(A) In general.--Except as provided in subparagraph
(B), a person in provisional status may continue to
offer, solicit, trade, facilitate, execute, clear,
report, or otherwise deal in any digital asset offered
on or through the facilities of the person before the
date of registration under this section, until such
time as the joint rulemaking on definitions required
under section 105(a) is effective.
(B) Delisting.--Before the effective date of the
joint rulemaking on definitions under section 105(a), a
person in provisional status shall cease offering,
soliciting, trading, facilitating, executing, clearing,
reporting, or otherwise dealing in any digital asset
required to be delisted pursuant to a joint delisting
process established under section 105(d).
(3) Exemptive authority.--In order to promote responsible
innovation and fair competition, or protect customers, the
Commodity Futures Trading Commission may exempt any persons or
class of persons registered pursuant to subsection (a) and in
provisional status pursuant to subsection (b) from any
requirements of this section or the Commodity Exchange Act or
any rules or regulations promulgated under this section or the
Commodity Exchange Act, as applicable.
(d) Customer Disclosure Before Registration.--
(1) In general.--Beginning 30 days after the date of the
enactment of this Act, any person acting as a digital commodity
exchange, digital commodity broker, or digital commodity dealer
shall disclose to the customers of the person so acting, in the
disclosure documents, offering documents, and promotional
material of the person so acting, in a prominent manner, that
the person is not registered with or regulated by the Commodity
Futures Trading Commission.
(2) Expiration.--Paragraph (1) of this subsection shall not
apply to any person who registers pursuant to subsection (a).
SEC. 107. COMMODITY EXCHANGE ACT AND SECURITIES LAWS SAVINGS
PROVISIONS.
(a) In General.--Nothing in this Act shall affect or apply to, or
be interpreted to affect or apply to--
(1) any agreement, contract, or transaction that is subject
to the Commodity Exchange Act as--
(A) a contract of sale of a commodity for future
delivery or an option on such a contract;
(B) a swap;
(C) a security futures product;
(D) an option authorized under section 4c of such
Act;
(E) an agreement, contract, or transaction
described in section 2(c)(2)(C)(i) of such Act; or
(F) a leverage transaction authorized under section
19 of such Act;
(2) any agreement, contract, or transaction that is subject
to the securities laws as--
(A) a security-based swap;
(B) a security futures product; or
(C) an option on or based on the value of a
security; or
(3) the activities of any person with respect to any such
agreement, contract, or transaction.
(b) Prohibitions on Spot Digital Commodity Entities.--Nothing in
this Act authorizes, or shall be interpreted to authorize, a digital
commodity exchange, digital commodity broker, or digital commodity
dealer to engage in any activities involving any transaction, contract,
or agreement described in subsection (a)(1), solely by virtue of being
registered as a digital commodity exchange, digital commodity broker,
or digital commodity dealer.
(c) Definitions.--In this section, each term shall have the meaning
provided in the Commodity Exchange Act or the regulations prescribed
under such Act.
SEC. 108. ADMINISTRATIVE REQUIREMENTS.
Section 4c(a) of the Commodity Exchange Act (7 U.S.C. 6c(a)) is
amended--
(1) in paragraph (3)--
(A) in subparagraph (B), by striking ``or'' at the
end;
(B) in subparagraph (C), by striking the period and
inserting ``; or''; and
(C) by adding at the end the following:
``(D) a contract of sale of a digital commodity.'';
(2) in paragraph (4)--
(A) in subparagraph (A)--
(i) in clause (ii), by striking ``or'' at
the end;
(ii) in clause (iii), by striking the
period and inserting ``; or''; and
(iii) by adding at the end the following:
``(iv) a contract of sale of a digital
commodity.'';
(B) in subparagraph (B)--
(i) in clause (ii), by striking ``or'' at
the end;
(ii) in clause (iii), by striking the
period and inserting ``; or''; and
(iii) by adding at the end the following:
``(iv) a contract of sale of a digital
commodity.''; and
(C) in subparagraph (C)--
(i) in clause (ii), by striking ``or'' at
the end;
(ii) by striking ``(iii) a swap, provided
however,'' and inserting the following:
``(iii) a swap; or
``(iv) a contract of sale of a digital
commodity,
provided, however,''; and
(iii) by striking ``clauses (i), (ii), or
(iii)'' and insert ``any of clauses (i) through
(iv)''.
SEC. 109. TREATMENT OF CERTAIN NON-CONTROLLING BLOCKCHAIN DEVELOPERS.
(a) In General.--Notwithstanding applicable law, a non-controlling
blockchain developer or provider of a blockchain service shall not be
treated as a money transmitter or as engaged in ``money transmitting''
or, following the date of enactment of this Act, be otherwise subject
to any new registration requirement that is substantially similar to
the requirement that currently applies to money transmitters, solely on
the basis of--
(1) creating or publishing software to facilitate the
creation of, or provision of maintenance services to, a
blockchain or blockchain service;
(2) providing hardware or software to facilitate a
customer's own custody or safekeeping of the customer's digital
assets; or
(3) providing infrastructure support to maintain a
blockchain service.
(b) Rule of Construction.--Nothing in this section shall be
construed to affect whether a blockchain developer or provider of a
blockchain service is otherwise subject to classification or treatment
as a money transmitter, or as engaged in ``money transmitting'', under
applicable State or Federal law, including laws relating to anti-money
laundering or countering the financing of terrorism, based on conduct
outside the scope of subsection (a). Nothing in this section shall be
construed to affect whether a blockchain developer or provider of a
blockchain service is otherwise subject to classification or treatment
as a financial institution under the Bank Secrecy Act, this Act, or any
Act enacted after the date of enactment of this Act.
(c) Effect on Other Laws.--
(1) Intellectual property law.--Nothing in this section
shall be construed to limit or expand any law pertaining to
intellectual property.
(2) State law.--Nothing in this section shall be construed
to prevent any State from enforcing any State law that is
consistent with this section. No cause of action may be brought
and no liability may be imposed under any State or local law
that is inconsistent with this section.
(d) Definitions.--In this section:
(1) Blockchain developer.--The term ``blockchain
developer'' means any person or business that creates or
publishes software to facilitate the creation of, or provide
maintenance to, a blockchain or a blockchain service.
(2) Blockchain service.--The term ``blockchain service''
means any information, transaction, or computing service or
system that provides or enables access to a blockchain network
by multiple users, including specifically a service or system
that enables users to send, receive, exchange, or store digital
assets described by blockchain networks.
(3) Non-controlling blockchain developer or provider of a
blockchain service.--The term ``non-controlling blockchain
developer or provider of a blockchain service'' means a
blockchain developer or provider of a blockchain service that
in the regular course of operations, does not have the legal
right or the unilateral and independent ability to control,
initiate upon demand, or effectuate transactions involving
digital assets that users are entitled to, without the
approval, consent, or direction of any other third party.
SEC. 110. APPLICATION OF THE BANK SECRECY ACT.
(a) In General.--Section 5312(c)(1)(A) of title 31, United States
Code, is amended--
(1) by inserting ``digital commodity broker, digital
commodity dealer,'' after ``futures commission merchant,''; and
(2) by inserting before the period the following: ``and any
digital commodity exchange registered, or required to register,
under the Commodity Exchange Act which permits direct customer
access''.
(b) Bank Secrecy Act Requirements.--
(1) Regulations.--The Secretary of the Treasury, acting
through the Director of the Financial Crimes Enforcement
Network, and in consultation with Commodity Futures Trading
Commission, shall issue requirements consistent with the
requirements of futures commission merchants to apply the Bank
Secrecy Act to digital commodity brokers, digital commodity
dealers, and digital commodity exchanges that are tailored to
the size and complexity of such entities, including by
requiring each such entity to--
(A) establish and maintain an anti-money laundering
and countering the financing of terrorism program,
which shall include--
(i) an appropriate risk assessment;
(ii) the development of internal policies,
procedures, and controls;
(iii) the designation of a compliance
officer;
(iv) an ongoing employee training program;
and
(v) an independent audit function to test
such program;
(B) retain appropriate records of transactions;
(C) monitor and report suspicious activity, which
may include use of appropriate distributed ledger
analytics; and
(D) maintain an effective customer identification
program to identify and verify account holders and
carry out appropriate customer due diligence.
(2) Compliance with sanctions.--A digital commodity broker,
digital commodity dealer, or digital commodity exchange shall
comply with all laws and regulations related to United States
sanctions administered by the Office of Foreign Assets Control.
SEC. 111. RULE OF CONSTRUCTION.
Nothing in this Act, or the amendments made by this Act, shall be
construed to limit or prevent the continued application of applicable
ethics statutes and regulations administered by the Office of
Government Ethics, or the ethics rules of the Senate and the House of
Representatives, including section 208 of title 18, United States Code,
and sections 2635.702 and 2635.802 of title 5, Code of Federal
Regulations. For the avoidance of doubt, existing Office of Government
Ethics laws and the ethics rules of the Senate and the House of
Representatives prohibit any member of Congress or senior executive
branch official from issuing a digital commodity during their time in
public service. For the purposes of this section, an employee described
in section 202 of title 18, United States Code, shall be deemed an
executive branch employee for purposes of complying with section 208 of
that title.
SEC. 112. IMPLEMENTATION.
(a) Global Rulemaking Timeframe.--Unless otherwise provided in this
Act or an amendment made by this Act, the Commodity Futures Trading
Commission and the Securities and Exchange Commission, or both, shall
individually, and jointly where required, promulgate rules and
regulations required of each Commission under this Act or an amendment
made by this Act not later than 360 days after the date of enactment of
this Act.
(b) Rules and Registration Before Final Effective Dates.--
(1) In general.--In order to prepare for the implementation
of this Act, the Commodity Futures Trading Commission and the
Securities and Exchange Commission may, before any effective
date provided in this Act--
(A) promulgate rules, regulations, or orders
permitted or required by this Act;
(B) conduct studies and prepare reports and
recommendations required by this Act;
(C) register persons under this Act; and
(D) exempt persons, agreements, contracts, or
transactions from provisions of this Act, under the
terms contained in this Act.
(2) Limitation on effectiveness.--An action by the
Commodity Futures Trading Commission or the Securities and
Exchange Commission under paragraph (1) shall not become
effective before the effective date otherwise applicable to the
action under this Act.
TITLE II--OFFERS AND SALES OF DIGITAL COMMODITIES
SEC. 201. TREATMENT OF INVESTMENT CONTRACT ASSETS.
(a) Securities Act of 1933.--Section 2(a) of the Securities Act of
1933 (15 U.S.C. 77b(a)), as amended by section 101, is further
amended--
(1) in paragraph (1), by adding at the end the following:
``The term `investment contract' does not include an investment
contract asset.''; and
(2) by adding at the end the following:
``(36) The term `investment contract asset' means a digital
commodity--
``(A) that can be exclusively possessed and
transferred, person to person, without necessary
reliance on an intermediary, and is recorded on a
blockchain; and
``(B) sold or otherwise transferred, or intended to
be sold or otherwise transferred, pursuant to an
investment contract.''.
(b) Investment Advisers Act of 1940.--Section 202(a)(18) of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(18)) is amended by
adding at the end the following: ``The term `investment contract' does
not include an investment contract asset (as such term is defined under
section 2(a) of the Securities Act of 1933).''.
(c) Investment Company Act of 1940.--Section 2(a)(36) of the
Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(36)) is amended by
adding at the end the following: ``The term `investment contract' does
not include an investment contract asset (as such term is defined under
section 2(a) of the Securities Act of 1933).''.
(d) Securities Exchange Act of 1934.--Section 3(a)(10) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(10)) is amended by
adding at the end the following: ``The term `investment contract' does
not include an investment contract asset (as such term is defined under
section 2(a) of the Securities Act of 1933).''.
(e) Securities Investor Protection Act of 1970.--Section 16(14) of
the Securities Investor Protection Act of 1970 (15 U.S.C. 78lll(14)) is
amended by adding at the end the following: ``The term `investment
contract' does not include an investment contract asset (as such term
is defined under section 2(a) of the Securities Act of 1933).''.
SEC. 202. EXEMPTED PRIMARY TRANSACTIONS IN DIGITAL COMMODITIES.
(a) In General.--The Securities Act of 1933 (15 U.S.C. 77a et seq.)
is amended--
(1) in section 4(a), by adding at the end the following:
``(8) the offer or sale of an investment contract involving
units of a digital commodity by its digital commodity issuer
(including all entities controlled by or under common control
with the issuer), if--
``(A) the blockchain system to which the digital
commodity relates, together with the digital commodity,
is certified as a mature blockchain system under
section 42 of the Securities Exchange Act of 1934 or
the issuer intends for the blockchain system to which
the digital commodity relates to be a mature blockchain
system by the later of--
``(i) the date that is four years after the
first sale of the investment contract involving
a unit of such digital commodity in reliance on
the exemption provided under this paragraph,
subject to any extensions as may be granted by
the Commission; or
``(ii) the date that is four years after
the effective date of this paragraph;
``(B) the sum of all cash and other consideration
to be received by the digital commodity issuer in
reliance on the exemption provided under this
paragraph, during the 12-month period preceding the
date of such offering, including the amount received in
such offering, is not more than $50,000,000 (as such
amount is annually adjusted by the Commission to
reflect the change in the Consumer Price Index for All
Urban Consumers published by the Bureau of Labor
Statistics of the Department of Labor);
``(C) after the completion of the transaction, a
purchaser does not own more than 10 percent of the
total amount of the outstanding units of the digital
commodity;
``(D) the transaction does not involve the offer or
sale of an investment contract involving units of a
digital commodity by its digital commodity issuer
that--
``(i) is not organized under the laws of a
State, a territory of the United States, or the
District of Columbia;
``(ii) is a development stage company that
either--
``(I) has no specific business plan
or purpose; or
``(II) has indicated that the
business plan of the company is to
merge with or acquire an unidentified
company;
``(iii) is an investment company, as
defined in section 3 of the Investment Company
Act of 1940 (15 U.S.C. 80a-3), or is excluded
from the definition of investment company by
section 3(c) of that Act (15 U.S.C. 80a-3(b) or
80a-3(c));
``(iv) is issuing fractional undivided
interests in oil or gas rights, or a similar
interest in other mineral rights;
``(v) is, or has been, subject to any order
of the Commission entered pursuant to section
12(j) of the Securities Exchange Act of 1934
during the 5-year period before the filing of
the offering statement; or
``(vi) is disqualified pursuant to section
230.262 of title 17, Code of Federal
Regulations; and
``(E) the issuer meets the requirements of section
4B(b).''; and
(2) by inserting after section 4A the following:
``SEC. 4B. REQUIREMENTS WITH RESPECT TO CERTAIN DIGITAL COMMODITY
TRANSACTIONS.
``(a) Commission Jurisdiction.--For the purposes of this section:
``(1) The Commission shall have jurisdiction and
enforcement authority with respect to disclosures described in
this section.
``(2) Section 17 shall apply to a statement made in an
offering statement, disclosure, or report filed under this
section to the same extent as such section 17 applies to a
statement made in any other offering statement, disclosure, or
report filed under this Act.
``(b) Requirements for Digital Commodity Issuers.--
``(1) Terms and conditions.--A digital commodity issuer
offering or selling an investment contract involving units of a
digital commodity in reliance on section 4(a)(8) shall file
with the Commission an offering statement and any related
documents, in such form and with such content as prescribed by
the Commission, including financial information, a description
of the issuer and the operations of the issuer, the financial
condition of the issuer, a description of the plan of
distribution of any unit of a digital commodity that is to be
offered as well as the intended use of the offering proceeds,
and a description of the development plan for the blockchain
system, and the related digital commodity, to become a mature
blockchain system, if such blockchain system is not already
certified as a mature blockchain system pursuant to section 42
of the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).
``(2) Information required for purchasers.--A digital
commodity issuer that has filed a statement under paragraph (1)
to offer and sell an investment contract involving a unit of a
digital commodity in reliance on section 4(a)(8) shall include
in such statement the following information:
``(A) Maturity status.--Whether the blockchain
system to which the digital commodity relates has been
certified as a mature blockchain system pursuant to
section 42 of the Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.) and, where such blockchain system
is not so certified, a statement of the digital
commodity issuer's intent for the blockchain system to
which the digital commodity relates to be a mature
blockchain system within the time period described in
section 4(a)(8)(A).
``(B) Source code.--The source code, or a publicly
accessible webpage displaying such source code, for any
blockchain system to which the digital commodity
relates, and whether the source code was sourced from
an external third party, whether there are any existing
external dependencies, and whether the code underwent a
third-party security audit, along with material results
of any such audit.
``(C) Transaction history.--A description of the
steps necessary to independently access, search, and
verify the transaction history of any blockchain system
to which the digital commodity relates, to the extent
any such independent access, search, and verification
activities are technically feasible with respect to
such blockchain system.
``(D) Digital commodity economics.--A description
of the purpose of any blockchain system to which the
digital commodity relates and the operation of any such
blockchain system, including--
``(i) information explaining the launch and
supply process, including the number of units
of the digital commodity to be issued in an
initial allocation, the total number of units
of the digital commodity to be created, the
release schedule for the units of the digital
commodity, and the total number of units of the
digital commodity outstanding;
``(ii) information explaining the technical
requirements for holding, accessing, and
transferring the digital commodity;
``(iii) information on any applicable
consensus mechanism or process for validating
transactions, method of generating or mining
digital commodities, and any process for
burning or destroying units of the digital
commodity on the blockchain system;
``(iv) an explanation of any mechanism for
driving value to the digital commodity of such
blockchain system; and
``(v) an explanation of governance
mechanisms for implementing changes to the
blockchain system or forming consensus among
holders of units of such digital commodity.
``(E) Plan of development.--The current state and
timeline for the development of any blockchain system
to which the digital commodity relates, detailing how
and when the blockchain system is intended to be a
mature blockchain system, if the blockchain system is
not yet certified as a mature blockchain system, and
the various roles that exist or are intended to exist
in connection with the blockchain system, such as
users, service providers, developers, transaction
validators, and governance participants, including a
discussion of any mechanisms by which control or
authority are exerted with respect to the blockchain
system or its related digital commodity, and any
critical operational dependencies of the blockchain
system or its related digital commodity.
``(F) Ownership disclosures.--
``(i) In general.--A list of all persons
who are digital commodity related persons or
digital commodity affiliated persons who have
been issued a unit of the digital commodity by
the digital commodity issuer or have a right to
a unit of the digital commodity from the
digital commodity issuer.
``(ii) Confidentiality.--The Commission
shall keep each list described under clause (i)
confidential, consistent with what is necessary
or appropriate in the public interest or for
the protection of investors.
``(G) Risk factor disclosures.--A description of
the material risks surrounding ownership of a unit of a
digital commodity.
``(3) Ongoing disclosure requirements for maturing
blockchain systems.--Subject to paragraph (5), the issuer of a
digital commodity related to a blockchain system that is not
yet certified as a mature blockchain system under section 42 of
the Securities Exchange Act of 1934 that has filed a statement
under paragraph (1) to offer and sell an investment contract
involving a unit of a digital commodity in reliance on section
4(a)(8) shall file the following with the Commission:
``(A) Semiannual reports.--Every 6 months, a report
containing--
``(i) an updated description of the current
state and timeline for the development of the
blockchain system to which the digital
commodity relates, showing how and when the
blockchain is intended to be a mature
blockchain system;
``(ii) a description of the efforts of the
issuer and digital commodity related persons in
developing the blockchain system to which the
digital commodity relates;
``(iii) the amount of money raised by the
digital commodity issuer in reliance on section
4(a)(8), how much of that money has been spent,
and the general categories of activities for
which that money has been spent and amounts
spent per category; and
``(iv) financial statements, where
applicable.
``(B) Current reports.--A current report reflecting
any material changes relevant to the information
previously reported to the Commission by the digital
commodity issuer, which shall be filed as soon as
practicable after the material change occurred, in
accordance with such rules as the Commission may
prescribe as necessary or appropriate in the public
interest or for the protection of investors.
``(4) Rulemaking.--Not later than 360 days after the date
of the enactment of this section, the Commission shall
prescribe rules on requirements applicable to issuers of
digital commodities in reliance on section 4(a)(8).
``(5) Termination of certain reporting requirements; post-
maturity reporting requirements.--
``(A) In general.--The ongoing reporting
requirements under paragraph (3) shall not apply to a
digital commodity issuer 180 days after the end of the
covered fiscal year, if the information with respect to
the digital commodity and the blockchain system to
which it relates described in subparagraphs (A) through
(C) of paragraph (2) is made publicly available and the
disclosure requirements under subparagraph (C) of this
paragraph are satisfied.
``(B) Covered fiscal year defined.--In this
paragraph, the term `covered fiscal year' means, with
respect to a digital commodity, the first fiscal year
of a digital commodity issuer in which the blockchain
system to which such digital commodity relates is
certified as a mature blockchain system under section
42 of the Securities Exchange Act of 1934.
``(C) Post-maturity reporting requirements.--After
the blockchain system to which a digital commodity
relates is certified as a mature blockchain system
under section 42 of the Securities Exchange Act of
1934, any digital commodity issuer that has filed a
statement under paragraph (1) to offer and sell an
investment contract involving a unit of a digital
commodity in reliance on section 4(a)(8) and is engaged
in material ongoing efforts related to the mature
blockchain system shall disclose, in a manner
reasonably calculated to inform the public, and at such
frequency as the Commission may prescribe, by rule, a
description of such efforts, including--
``(i) any participation in a decentralized
governance system of such blockchain system;
``(ii) any participation in alterations or
proposed alterations to the functionality or
operation of such blockchain system;
``(iii) the use or planned use of any funds
raised in reliance on section 4(a)(8) or any
rulemaking pursuant to section 202(c) of the
CLARITY Act of 2025 in such efforts;
``(iv) the amount of units of the digital
commodity, or rights thereto, owned and
controlled by such issuer and any use, sale,
trading, or other disposition thereof; and
``(v) any affiliations of such issuer
material to the efforts of such issuer.
``(D) Termination of and exemption from post-
maturity reporting requirements.--Not later than 270
days after the date of the enactment of this section,
the Commission shall issue rules--
``(i) for terminating the disclosure
requirements described in subparagraph (C)
during the first fiscal year in which the
digital commodity issuer does not engage in
material ongoing efforts related to the mature
blockchain system; and
``(ii) to, as is necessary or appropriate
in the public interest or for the protection of
investors, exempt a digital commodity issuer
from the requirements described in subparagraph
(C) where only a de minimis amount of market
activity involving the digital commodity of
such digital commodity issuer is taking place.
``(E) Rule of construction.--Nothing in
subparagraph (C) may be construed to make any digital
commodity described in such subparagraph a security.
``(c) Requirements for Intermediaries.--A person acting as an
intermediary in connection with the offer or sale of an investment
contract involving units of a digital commodity in reliance on section
4(a)(8) shall--
``(1) register with the Commission as a broker or dealer;
and
``(2) be a member of a national securities association
registered under section 15A of the Securities Exchange Act of
1934 (15 U.S.C. 78o-3).
``(d) Disqualification Provisions.--The Commission shall issue
rules to apply the disqualification provisions under section 230.262 of
title 17, Code of Federal Regulations, to the exemption provided under
section 4(a)(8).
``(e) Failure To Mature.--
``(1) In general.--Not later than 270 days after the date
of the enactment of this section, the Commission shall issue
rules applying such additional obligations and disclosures for
the digital commodity issuers, digital commodity related
persons, and digital commodity affiliated persons of a
blockchain system described under subsection (b)(1) that does
not become a mature blockchain system within the time period
described in section 4(a)(8)(A) as are necessary or appropriate
in the public interest or for the protection of investors. Such
obligations and disclosures shall include the following:
``(A) Disclosures.--Disclosures regarding the
following:
``(i) Failure to mature.--A detailed
explanation of the reason that the blockchain
system has not become a mature blockchain
system within the time period described in
section 4(a)(8)(A).
``(ii) Development plans.--The future plans
of development of the blockchain system,
including information required under subsection
(b)(3).
``(iii) Risk factor disclosures.--The
material risks surrounding ownership of a unit
of a digital commodity that relates to a
blockchain system described under subsection
(b)(1) that has not become a mature blockchain
system within the time period described in
section 4(a)(8)(A).
``(B) Obligations.--Transaction reporting and
beneficial ownership disclosure obligations applicable
to digital commodity related persons and digital
commodity affiliated persons of such blockchain system.
``(2) Qualification required.--The Commission may not
permit any additional reliance on an exempt offering for the
offer or sale of an investment contract involving a unit of a
digital commodity by the issuer of the digital commodity
related to a blockchain system described under subsection
(a)(1) that has not become a mature blockchain system within
the time period described in section 4(a)(8)(A) unless the
Commission has qualified any offering statement related to such
exempt offering.''.
(b) Additional Exemptions.--
(1) Certain registration requirements.--Section 12(g)(6) of
the Securities Exchange Act of 1934 (15 U.S.C. 78l(g)(6)) is
amended by striking ``under section 4(6)'' and inserting
``under section 4(a)(6) or 4(a)(8)''.
(2) Exemption from state regulation.--Section 18(b)(4) of
the Securities Act of 1933 (15 U.S.C. 77r(b)(4)) is amended--
(A) in subparagraph (B), by striking ``section
4(4)'' and inserting ``section 4(a)(4)'';
(B) in subparagraph (C), by striking ``section
4(6)'' and inserting ``section 4(a)(6)'';
(C) in subparagraph (F)--
(i) by striking ``section 4(2)'' each place
such term appears and inserting ``section
4(a)(2)''; and
(ii) by striking ``or'' at the end;
(D) in subparagraph (G), by striking the period and
inserting ``; or''; and
(E) by adding at the end the following:
``(H) section 4(a)(8).''.
(c) Use of Other Exemptions.--
(1) Rule of construction.--Except as provided in this
subsection, nothing in this section or the amendments made by
this section may be construed as prohibiting the offer or sale
of an investment contract involving units of a digital
commodity in reliance on an exemption from registration under
the Securities Act of 1933, including as provided under section
3, 4(a), or 19 of the Securities Act of 1933, other than that
provided under section 4(a)(8) of the Securities Act of 1933.
(2) Rulemakings.--
(A) The Securities and Exchange Commission may
issue rules--
(i) to permit the issuer of a digital
commodity related to a blockchain system
described under section 4B(b)(1) of the
Securities Act of 1933 that has not become a
mature blockchain system within the time period
described in section 4(a)(8)(A) of such Act, or
the issuer of a digital commodity described in
subparagraph (B)(iii), to utilize an exempt
offering to offer or sell an investment
contract involving the digital commodity, if
the Commission qualifies any offering statement
related to such exempt offering; and
(ii) for the offer and sale of investment
contracts involving units of a digital
commodity by issuers that are not organized
under the laws of a State, a territory of the
United States, or the District of Columbia.
(B) Not later than 270 days after the date of the
enactment of this section, the Securities and Exchange
Commission shall issue the following rules:
(i) A rule requiring a digital commodity
issuer that last offered or sold an investment
contract involving units of a digital commodity
in reliance on an exemption from registration
under the Securities Act of 1933, including as
provided under section 3, 4(a), or 19 of the
Securities Act of 1933, prior to the date of
enactment of this Act, to file a comparable set
of disclosures to those described under section
4B of the Securities Act of 1933 as the
Commission determines appropriate based on the
exemption, the maturity of the blockchain
system to which such digital commodity relates,
and any material ongoing efforts of such
digital commodity issuer (provided that for
blockchains certified as a mature blockchain
system under section 42 of the Securities
Exchange Act of 1934, such disclosures shall be
comparable to those under section 4B(b)(5)(C)),
not later than the later of--
(I) one year after the effective
date of this section; or
(II) the date of any secondary
market sale of such digital commodity
made in reliance on section 203.
(ii) A rule requiring a digital commodity
issuer that offers or sells an investment
contract involving units of a digital commodity
in reliance on an exemption from registration
under the Securities Act of 1933, including as
provided under section 3, 4(a), or 19 of the
Securities Act of 1933, other than that
provided under section 4(a)(8) of the
Securities Act of 1933, on or after the date of
enactment of this Act, to file a comparable set
of disclosures to those described under section
4B of the Securities Act of 1933 as the
Commission determines appropriate based on the
exemption, the maturity of the blockchain
system to which such digital commodity relates,
and any material ongoing efforts of such
digital commodity issuer, prior to the date of
any secondary market sale of such digital
commodity made in reliance on section 203.
(iii) With respect to a digital commodity
where the digital commodity issuer is required
to file disclosures under clause (i) or (ii)
and where the blockchain system to which the
digital commodity relates is not certified as a
mature blockchain system pursuant to section 42
of the Securities Exchange Act of 1934 after
the 4-year period beginning on the date that
the first such disclosure is filed--
(I) a rule prohibiting the offer or
sale of an investment contract
involving units of the digital
commodity unless the Commission has
qualified any offering statement
related to such offer or sale, where
such offer or sale is permitted
pursuant to subparagraph (A)(i); and
(II) a rule requiring the digital
commodity issuer to make disclosures
comparable to those described in
4B(e)(1)(A) of the Securities Act of
1933.
(iv) A rule permitting a successor to a
digital commodity issuer, or such other
appropriate person as designated by the
Commission, to make the disclosures required
under clause (i), where such issuer does not
make the required disclosures.
SEC. 203. TREATMENT OF SECONDARY TRANSACTIONS IN DIGITAL COMMODITIES
THAT ORIGINALLY INVOLVED INVESTMENT CONTRACTS.
(a) Secondary Market Treatment.--Notwithstanding any other
provision of law, the offer or sale of a digital commodity that
originally involved an investment contract by a person other than the
issuer of such digital commodity, or an agent or underwriter thereof,
shall be deemed not to be an offer or sale of such investment contract
between the issuer of the investment contract involving the digital
commodity, or an agent or underwriter thereof, and the purchaser of
such digital commodity under--
(1) the Securities Act of 1933 (15 U.S.C. 77a et seq.);
(2) the Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et
seq.);
(3) the Investment Company Act of 1940 (15 U.S.C. 80a-1 et
seq.);
(4) the Securities Exchange Act of 1934 (15 U.S.C. 78a et
seq.);
(5) the Securities Investor Protection Act of 1970 (15
U.S.C. 78aaa et seq.); and
(6) any applicable provisions of State law.
(b) End User Distributions Not an Offer or Sale of a Security.--An
end user distribution does not involve the offer or sale of a security.
(c) Agent Defined.--In this section and with respect to a digital
commodity issuer, the term ``agent'' means any person directly or
indirectly controlled by the issuer or under direct or indirect common
control with the issuer.
SEC. 204. REQUIREMENTS FOR OFFERS AND SALES OF DIGITAL COMMODITIES BY
DIGITAL COMMODITY RELATED PERSONS AND DIGITAL COMMODITY
AFFILIATED PERSONS.
The Securities Act of 1933 (15 U.S.C. 77a et seq.), as amended by
section 202, is further amended by inserting after section 4B the
following:
``SEC. 4C. REQUIREMENTS FOR OFFERS AND SALES OF DIGITAL COMMODITIES BY
DIGITAL COMMODITY RELATED PERSONS AND DIGITAL COMMODITY
AFFILIATED PERSONS.
``(a) In General.--It shall be a violation of this Act for a
digital commodity affiliated person or a digital commodity related
person to offer or sell a digital commodity acquired directly from its
issuer, or an agent or underwriter thereof, pursuant to an investment
contract in reliance on section 4(a)(8) or another exemption under this
Act, other than as provided in this section.
``(b) Commission Jurisdiction.--
``(1) Where a digital commodity affiliated person or a
digital commodity related person offers or sells a digital
commodity acquired directly from its issuer, or an agent or
underwriter thereof, pursuant to an investment contract in
reliance on section 4(a)(8), or another exemption under this
Act, other than as provided in this section, such digital
commodity affiliated person or digital commodity related person
shall be considered an issuer of such investment contract.
``(2) For the purposes of this section, the Commission
shall have jurisdiction and enforcement authority with respect
to an offer or sale of a digital commodity described in
subsection (a).
``(c) Restrictions on Digital Commodity Related Persons and Digital
Commodity Affiliated Persons.--
``(1) Prior to being a mature blockchain system.--Prior to
the blockchain system to which a digital commodity relates
being certified as a mature blockchain system under section 42
of the Securities Exchange Act of 1934, units of the digital
commodity acquired by a digital commodity related person or
digital commodity affiliated person directly from its issuer
(or an agent or underwriter thereof) pursuant to an investment
contract in reliance on section 4(a)(8), or another exemption
under this Act, may be offered or sold by such digital
commodity related person or digital commodity affiliated person
if--
``(A) reports with respect to such digital
commodity, where required under section 4B(b)(3) (or,
with respect to a digital commodity not issued in
reliance on section 4(a)(8), a comparable set of
reports where required by the Commission) have been
filed with the Commission;
``(B) the digital commodity related person or
digital commodity affiliated person has held the units
for not less than 12 months; and
``(C) the aggregate amount of the units of the
digital commodity offered or sold by the digital
commodity related person or digital commodity
affiliated person is--
``(i) in any 12-month period, or shorter
period as the Commission may prescribe, not
less than 5 percent or greater than 20 percent
of the total units of the digital commodity
acquired directly from its issuer (or an agent
or underwriter thereof) by the digital
commodity related person or digital commodity
affiliated person, as determined by the
Commission pursuant to paragraph (3); and
``(ii) an amount, as determined by the
Commission pursuant to paragraph (3), not less
than 30 percent or greater than 50 percent of
the total units of the digital commodity
acquired directly from its issuer (or an agent
or underwriter thereof) by the digital
commodity related person or digital commodity
affiliated person.
``(2) After becoming a mature blockchain system.--After the
blockchain system to which a digital commodity relates is
certified as a mature blockchain system under section 42 of the
Securities Exchange Act of 1934, units of the digital commodity
acquired by a digital commodity related person or digital
commodity affiliated person directly from its issuer (or an
agent or underwriter thereof) pursuant to an investment
contract in reliance on section 4(a)(8) or another exemption
under this Act, may be--
``(A) offered or sold by a digital commodity
related person; or
``(B) offered or sold by a digital commodity
affiliated person if--
``(i) information described in section
4B(b)(5)(C), where required (or, with respect
to a digital commodity not issued in reliance
on section 4(a)(8), a comparable set of
information, where required) is publicly
available;
``(ii) the digital commodity affiliated
person has held the units for not less than the
earlier of--
``(I) 12 months; or
``(II) 3 months following the date
on which the blockchain system is
certified as a mature blockchain system
under section 42 of the Securities
Exchange Act of 1934; and
``(iii) the aggregate amount of the units
of the digital commodity offered or sold by the
digital commodity affiliated person in any 12-
month period is an amount, as determined by the
Commission pursuant to paragraph (3), not less
than 5 percent or greater than 10 percent of
the total outstanding amount of the digital
commodity.
``(3) Rulemakings required.--Not later than 270 days after
the date of the enactment of this section, consistent with
protecting investors, maintaining fair, orderly, and efficient
markets, and facilitating capital formation, and to foster the
development of mature blockchain systems, the Commission, by
rule, after notice and comment--
``(A) shall set the percentage amounts described in
paragraphs (1)(C)(i), (1)(C)(ii), and (2)(B)(iii); and
``(B) may provide an exemption from the limitation
described in paragraph (1)(C)(ii), if the Commission
requires any offer or sale pursuant to such exemption
of a digital commodity related to a blockchain system
that has failed to become a mature blockchain system
under this Act or any rule promulgated hereunder to be
accompanied by the disclosures required under, as
applicable, section 4B(e)(1)(A) or section
202(c)(2)(B)(iii)(II) of the CLARITY Act of 2025.
``(d) Rules of Construction.--For purposes of this section, the use
of a digital commodity in the programmatic functioning of the
blockchain system to which it relates is not an offer or sale of a
digital commodity.
``(e) Manipulative and Deceptive Devices; Reporting.--
``(1) In general.--It shall be unlawful for any digital
commodity issuer, digital commodity related person, or digital
commodity affiliated person, directly or indirectly, by the use
of any means or instrumentality of interstate commerce or of
the mails, to use or employ, in connection with the purchase or
sale of any digital commodity, any manipulative or deceptive
device or contrivance in contravention of such rules and
regulations as the Commission may prescribe as necessary or
appropriate in the public interest or for the protection of
investors.
``(2) Affirmative defense.--Not later than 270 days after
the date of the enactment of this section, the Commission shall
issue rules to implement paragraph (1), including by providing
any affirmative defenses to an enforcement action thereunder as
the Commission may prescribe as necessary or appropriate in the
public interest or for the protection of investors.
``(3) Reporting.--Not later than 270 days after the date of
the enactment of this section, the Commission shall issue rules
to prescribe such transaction reporting and beneficial
ownership disclosure obligations applicable to digital
commodity related persons and digital commodity affiliated
persons, as necessary or appropriate in the public interest or
for the protection of investors.
``(4) Differentiation between persons.--In issuing rules
required under paragraphs (2) and (3), the Commission shall
differentiate between digital commodity related persons and
digital commodity affiliated persons, as necessary or
appropriate in the public interest or for the protection of
investors.
``(f) Certain Units Received Prior to Enactment.--A unit of a
digital commodity received from the digital commodity issuer prior to
the date of the enactment of this section through an offer or sale of
an investment contract involving units of a digital commodity in
reliance on an exemption from registration under this Act, including as
provided under section 3, 4(a), or 19, may be offered or sold by a
digital commodity related person or digital commodity affiliated
person, if--
``(1) the digital commodity issuer is no longer engaged in
material ongoing efforts related to the blockchain system to
which the digital commodity relates and the blockchain system
to which the digital commodity relates is certified as a mature
blockchain system under section 42 of the Securities Exchange
Act of 1934; or
``(2) the appropriate disclosures required under section
202(c)(2)(B) of the CLARITY Act of 2025 have been made with the
Commission.
``(g) Rulemaking on Further Usage of Digital Commodities.-- The
Commission, consistent with protecting investors, maintaining fair,
orderly, and efficient markets, and facilitating capital formation, as
well as fostering the development of mature blockchain systems, may, by
rule, exempt unconditionally or on stated terms or conditions, a
digital commodity related person or a digital commodity affiliated
person, or any class thereof, from the requirements of this section for
the offer or sale of a digital commodity, including for the purposes of
promoting market liquidity.''.
SEC. 205. MATURE BLOCKCHAIN SYSTEM REQUIREMENTS.
Title I of the Securities Exchange Act of 1934 (15 U.S.C. 78a et
seq.) is amended by adding at the end the following:
``SEC. 42. MATURE BLOCKCHAIN SYSTEMS.
``(a) Certification of Blockchain Systems.--
``(1) Certification.--A digital commodity issuer, digital
commodity related person, digital commodity affiliated person,
decentralized governance system of the blockchain system, or a
registered digital commodity exchange, or any other appropriate
person as designated by the Commission, may certify to the
Commission that the blockchain system to which a digital
commodity relates is a mature blockchain system.
``(2) Filing requirements.--A certification described under
paragraph (1) shall be filed with the Commission, and include
such information that is reasonably necessary to establish that
the blockchain system is not controlled by any person or group
of persons under common control, which may include information
regarding--
``(A) the operation of the blockchain system;
``(B) the functionality of the related digital
commodity;
``(C) how the market value of the digital commodity
is substantially derived from the programmatic
functioning of such blockchain system;
``(D) any decentralized governance system which
relates to the blockchain system; and
``(E) the current roles, if any, of the digital
commodity issuer, digital commodity affiliated persons,
and digital commodity related persons where such roles
are material to the development or operation of such
blockchain system or the decentralized governance
system of such blockchain system.
``(3) Rebuttable presumption.--The Commission may rebut a
certification described under paragraph (1) with respect to a
blockchain system if the Commission, within 60 days of
receiving such certification, determines that the blockchain
system is not a mature blockchain system.
``(4) Certification review.--
``(A) In general.--Any blockchain system that
relates to a digital commodity for which a
certification has been made under paragraph (1) shall
be considered a mature blockchain system 60 days after
the date on which the Commission receives a
certification under paragraph (1), unless the
Commission notifies the person who made the
certification within such time that the Commission is
staying the certification due to--
``(i) an inadequate explanation by the
person making the certification; or
``(ii) any novel or complex issues which
require additional time to consider.
``(B) Public notice.--The Commission shall make the
following available to the public and provide a copy to
the Commodity Futures Trading Commission:
``(i) Each certification received under
paragraph (1).
``(ii) Each stay of the Commission under
this subsection, and the reasons therefor.
``(iii) Any response from a person making a
certification under paragraph (1) to a stay of
the certification by the Commission.
``(C) Consolidation.--The Commission may
consolidate and treat as one submission multiple
certifications made under paragraph (1) for the same
blockchain system which relates to a digital commodity
which are received during the review period provided
under this paragraph.
``(5) Stay of certification.--
``(A) In general.--A notification by the Commission
pursuant to paragraph (4)(A) shall stay the
certification once for up to an additional 120 days
from the date of the notification.
``(B) Public comment period.--Before the end of the
60-day period described under paragraph (4)(A), the
Commission may begin a public comment period of at
least 30 days in conjunction with a stay under this
subsection.
``(6) Disposition of certification.--A certification made
under paragraph (1) shall--
``(A) become effective--
``(i) upon the publication of a
notification from the Commission to the person
who made the certification that the Commission
does not object to the certification; or
``(ii) at the expiration of the
certification review period; and
``(B) not become effective upon the publication of
a notification from the Commission to the person who
made the certification that the Commission has rebutted
the certification.
``(7) Recertification.--With respect to a blockchain system
for which a certification has been rebutted under this
subsection, no person may make a certification under paragraph
(1) with respect to such blockchain system during the 90-day
period beginning on the date of such rebuttal.
``(8) Appeal of rebuttal.--
``(A) In general.--If a certification is rebutted
under this section, the person making such
certification may appeal the decision to the United
States Court of Appeals for the District of Columbia,
not later than 60 days after the notice of rebuttal is
made.
``(B) Review.--In an appeal under subparagraph (A),
the court shall have de novo review of the
determination to rebut the certification.
``(b) Maturity Criteria.--
``(1) Sense of congress.--It is the sense of the Congress
that protecting investors, maintaining fair, orderly, and
efficient markets, and facilitating capital formation
necessitates establishing clear criteria for blockchain systems
to be deemed mature, as well as enabling the Commission to
develop, without prejudice to any such criteria codified in
statute, alternative criteria by which blockchain systems may
be considered not to be controlled by any person or group of
persons under common control in order to accommodate changes in
markets and technology.
``(2) In general.--The Commission may issue rules
identifying conditions by which a blockchain system, together
with its related digital commodity, shall be considered a
mature blockchain system, consistent with the protection of
investors, maintenance of fair, orderly, and efficient markets,
and the facilitation of capital formation.
``(3) Rules of construction.--
``(A) Nothing in this subsection may be construed
to permit the Commission to impose additional criteria
to the criteria in subsection (c) for certifying that a
blockchain system is a mature blockchain system
pursuant to subsection (c).
``(B) Nothing in this subsection or subsection (c)
may be construed to limit the Commission's ability to
identify alternative conditions and criteria by which a
blockchain system may be considered a mature blockchain
system.
``(c) Deemed Mature.--
``(1) In general.--Notwithstanding subsection (b), for the
purposes of subsection (a), a digital commodity issuer, digital
commodity related person, digital commodity affiliated person,
or decentralized governance system of the blockchain system may
establish that a blockchain system, together with its related
digital commodity, is not controlled by any person or group of
persons under common control, if the blockchain system,
together with its related digital asset, meets the requirements
described in paragraph (2) or (3).
``(2) Criteria for any blockchain system.--The requirements
described in this paragraph are the following:
``(A) System value.--
``(i) Market value.--The digital commodity
has a value that is substantially derived from
the use and functioning of the blockchain
system.
``(ii) Development of value mechanism
substantially completed.--Where the digital
commodity issuer has made public a development
plan describing how the digital commodity's
value is reasonably expected to be derived from
the programmatic functioning of the blockchain
system, the development of such mechanisms has
been substantially completed.
``(B) Functional system.--The blockchain system
allows network participants to engage in the activities
the blockchain system is intended to provide,
including--
``(i) using, transmitting, or storing
value, or otherwise executing transactions, on
the blockchain system;
``(ii) deploying, executing, or accessing
software or services, or otherwise offering or
participating in services, deployed on or
integrated with the blockchain system;
``(iii) participating in the consensus
mechanism, transaction validation process, or
decentralized governance system of the
blockchain system; or
``(iv) operating any client, node,
validator, or other form of computational
infrastructure with respect to the blockchain
system.
``(C) Open and interoperable system.--The
blockchain system--
``(i) is composed of source code that is
open source; and
``(ii) does not restrict or prohibit based
on the exercise of unilateral authority any
person, other than a digital commodity issuer,
digital commodity related person, or digital
commodity affiliated person from engaging in
the activities the blockchain system is
intended to provide, including the activities
described in subparagraph (B).
``(D) Programmatic system.--The blockchain system
operates, executes, and enforces its operations and
transactions based solely on pre-established,
transparent rules encoded directly within the source
code of the blockchain system.
``(E) System governance.--No person or group of
persons under common control--
``(i) has the unilateral authority,
directly or indirectly, through any contract,
arrangement, understanding, relationship, or
otherwise, to control or materially alter the
functionality, operation, or rules of consensus
or agreement of the blockchain system or its
related digital commodity; or
``(ii) has the unilateral authority to
direct the voting, in the aggregate, of 20
percent or more of the outstanding voting power
of such blockchain system by means of a related
digital commodity, nodes or validators, a
decentralized governance system, or otherwise,
in a blockchain system which can be altered by
a voting system.
``(F) Impartial system.--No person or group of
persons under common control possesses a unique
permission or privilege with respect to functionality,
operation, or rules of consensus or agreement of the
blockchain system or its related digital commodity,
unless such alteration--
``(i) addresses errors, regular
maintenance, or cybersecurity risks of the
blockchain system that affect the programmatic
functioning of the blockchain system; and
``(ii) is adopted through the consensus or
agreement of a decentralized governance system.
``(G) Distributed ownership.--No digital commodity
issuer, digital commodity related person, or digital
commodity affiliated person beneficially owns, in the
aggregate, 20 percent or more of the total amount of
units of the digital commodity.
``(3) Optional criteria for preexisting blockchain
systems.--The requirements described in this paragraph are that
the blockchain system--
``(A) was created prior to the date of enactment of
this section;
``(B) met the requirements of subparagraphs (A)
through (F) of paragraph (2) prior to the date of
enactment of this section; and
``(C) at least 50 percent of the units of the
digital commodity related to the blockchain system are
held by persons other than the digital commodity
issuer, a digital commodity related person, or a
digital commodity affiliated person.
``(d) Decentralized Governance System.--
``(1) For the purposes of this section, a decentralized
governance system is not a `person' or a `group of persons
under common control'.
``(2) A blockchain system, together with its digital
commodity, shall not be precluded from being considered a
mature blockchain system solely based on a functional,
administrative, clerical, or ministerial action of a
decentralized governance system, including any such action
taken by a person acting on behalf of and at the direction of
the decentralized governance system, as determined by the
Commission and consistent with the protection of investors,
maintenance of fair, orderly, and efficient markets, and the
facilitation of capital formation.
``(e) Rulemaking.--Not more than 270 days after the date of
enactment of this section, the Commission shall issue rules to carry
out this section.''.
SEC. 206. EFFECTIVE DATE.
Unless otherwise provided in this title, this title and the
amendments made by this title shall take effect 360 days after the date
of enactment of this Act, except that, to the extent a provision of
this title requires a rulemaking, the provision shall take effect on
the later of--
(1) 360 days after the date of enactment of this Act; or
(2) 60 days after the publication in the Federal Register
of the final rule implementing the provision.
TITLE III--REGISTRATION FOR INTERMEDIARIES AT THE SECURITIES AND
EXCHANGE COMMISSION
SEC. 301. TREATMENT OF DIGITAL COMMODITIES AND PERMITTED PAYMENT
STABLECOINS.
(a) Securities Act of 1933.--Section 2(a)(1) of the Securities Act
of 1933 (15 U.S.C. 77b(a)(1)), as amended by the GENIUS Act, is amended
by striking the final sentence and inserting the following: ``The term
does not include a digital commodity or permitted payment
stablecoin.''.
(b) Securities Exchange Act of 1934.--Section 3(a)(10) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)), as amended by the
GENIUS Act, is amended by striking the final sentence and inserting the
following: ``The term does not include a digital commodity or permitted
payment stablecoin.''.
(c) Investment Advisers Act of 1940.--Section 202(a) of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)) is amended--
(1) in paragraph (18), as amended by the GENIUS Act, by
striking the final sentence and inserting the following: ``The
term does not include a digital commodity or permitted payment
stablecoin.'';
(2) by redesignating the second paragraph (29) (relating to
commodity pools) as paragraph (31); and
(3) by adding at the end, the following:
``(32) Digital commodity-related terms.--The terms `digital
commodity' and `permitted payment stablecoin' have the meaning
given those terms, respectively, under section 2(a) of the
Securities Act of 1933 (15 U.S.C. 77b(a)).''.
(d) Investment Company Act of 1940.--Section 2(a) of the Investment
Company Act of 1940 (15 U.S.C. 80a-2) is amended--
(1) in paragraph (36), as amended by the GENIUS Act, by
striking the final sentence and inserting the following: ``The
term does not include a digital commodity or permitted payment
stablecoin.''; and
(2) by adding at the end, the following:
``(55) Digital commodity-related terms.--The terms `digital
commodity' and `permitted payment stablecoin' have the meaning
given those terms, respectively, under section 2(a) of the
Securities Act of 1933 (15 U.S.C. 77b(a)).''.
(e) Securities Investor Protection Act of 1970.--Section 16 of the
Securities Investor Protection Act of 1970 (15 U.S.C. 78lll) is
amended--
(1) in paragraph (14), as amended by the GENIUS Act, by
striking the final sentence and inserting the following: ``The
term does not include a digital commodity or permitted payment
stablecoin, as such terms are defined, respectively, under
section 2(a) of the Securities Act of 1933 (15 U.S.C.
77b(a))''; and
(2) by adding at the end the following:
``(15) Treatment of permitted payment stablecoins.--A
permitted payment stablecoin, as defined in section 2(a) of the
Securities Act of 1933, shall not qualify as `cash' and a claim
for a permitted payment stablecoin shall not qualify as a
`claim for cash'.''.
SEC. 302. ANTI-FRAUD AUTHORITY OVER PERMITTED PAYMENT STABLECOINS AND
CERTAIN DIGITAL COMMODITY TRANSACTIONS.
(a) In General.--Section 10 of the Securities Exchange Act of 1934
(15 U.S.C. 78j) is amended--
(1) by moving subsection (c) so as to appear after
subsection (b);
(2) by inserting after subsection (c) the following:
``(d) To use or employ, in connection with the purchase or sale of
any permitted payment stablecoin or digital commodity, by or through,
as applicable, a broker, dealer, national securities exchange, or an
alternative trading system, any manipulative or deceptive device or
contrivance in contravention of such rules and regulations as the
Commission may prescribe as necessary or appropriate in the public
interest or for the protection of investors.''; and
(3) by adding at the end the following: ``Rules promulgated
under subsection (b) that prohibit fraud, manipulation, or
insider trading (but not rules imposing or specifying reporting
or recordkeeping requirements, procedures, or standards as
prophylactic measures against fraud, manipulation, or insider
trading), and judicial precedents decided under subsection (b)
and rules promulgated thereunder that prohibit fraud,
manipulation, or insider trading, shall apply with respect to
permitted payment stablecoin and digital commodity transactions
engaged in by or through a broker or dealer or through an
alternative trading system or, as applicable, a national
securities exchange to the same extent as they apply to
securities transactions. Judicial precedents decided under
section 17(a) of the Securities Act of 1933 and sections 9, 15,
16, 20, and 21A of this title, and judicial precedents decided
under applicable rules promulgated under such sections, shall
apply to permitted payment stablecoins and digital commodities
with respect to those circumstances in which the permitted
payment stablecoins and digital commodities are, as applicable,
brokered, traded, or custodied by or through a broker or dealer
or through an alternative trading system or a national
securities exchange to the same extent as they apply to
securities.''.''.
(b) Treatment of Permitted Payment Stablecoins.--Title I of the
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by
inserting after section 6 the following:
``SEC. 6A. TREATMENT OF TRANSACTIONS IN PERMITTED PAYMENT STABLECOINS.
``(a) Authority To Broker, Trade, and Custody Permitted Payment
Stablecoins.--Permitted payment stablecoins may be brokered, traded, or
custodied by a broker or dealer or through an alternative trading
system or national securities exchange.
``(b) Commission Jurisdiction.--The Commission shall only have
jurisdiction over a transaction in a permitted payment stablecoin with
respect to those circumstances in which a permitted payment stablecoin
is brokered, traded, or custodied--
``(1) by a broker or dealer;
``(2) through a national securities exchange; or
``(3) through an alternative trading system.
``(c) Limitation.--Subsection (b) shall only apply to a transaction
described in subsection (b) for the purposes of regulating the offer,
execution, solicitation, or acceptance of a permitted payment
stablecoin in those circumstances in which the permitted payment
stablecoin is brokered, traded, or custodied--
``(1) by a broker or dealer;
``(2) through a national securities exchange; or
``(3) through an alternative trading system.''.
SEC. 303. ELIGIBILITY OF ALTERNATIVE TRADING SYSTEMS.
(a) In General.--Section 5 of the Securities Exchange Act of 1934
(15 U.S.C. 78e) is amended--
(1) by striking ``It'' and inserting the following:
``(a) In General.--It''; and
(2) by adding at the end the following:
``(b) Digital Commodity Protections.--
``(1) In general.--The Commission may not preclude a
trading platform from operating pursuant to a covered exemption
to exchange registration under section 6 of this title on the
basis that the assets traded or to be traded on such platform
include--
``(A) digital commodities or permitted payment
stablecoins; and
``(B) securities.
``(2) Covered exemption.--In this subsection, the term
`covered exemption' means an exemption--
``(A) described in subsection (a)(2); or
``(B) with respect to any other rule of the
Commission relating to the definition of `exchange'.''.
(b) Securities Exchange Act of 1934.--Section 3(a)(2) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(2)) is amended by
adding at the end the following: ``Neither an alternative trading
system predominantly facilitating the trading of digital commodities,
permitted payment stablecoins, or both, relative to its securities
traded, nor a digital commodity exchange, is a `facility' of an
exchange.''.
(c) Rule of Construction.--Nothing in this section, the amendments
made by this section, or section 304 may be construed to--
(1) prohibit a national securities exchange from owning or
operating any other type of alternative trading system; or
(2) create a presumption that any other type of alternative
trading system owned or operated by a national securities
exchange is a facility of that exchange.
SEC. 304. RULEMAKING FOR DUAL-REGISTERED ENTITIES.
(a) Conflict of Interest Policies and Procedures.--Each person or
entity dual-registered with the Commodity Futures Trading Commission as
permitted under section 15(p) of the Securities Exchange Act of 1934
shall establish, maintain, and, as applicable, enforce and comply with
written policies and procedures reasonably designed to mitigate any
conflicts of interest, including with respect to transactions or
arrangements with affiliates registered with the Securities and
Exchange Commission, taking into consideration the nature of the
business of such person or entity.
(b) Exemption From Duplicative, Conflicting, or Unduly Burdensome
Provisions.--The Securities and Exchange Commission shall prescribe
rules for a person or entity with multiple registrations, where at
least one such registration includes any dual registration permitted
under section 15(p) of the Securities Exchange Act of 1934, to exempt
the person or entity from duplicative, conflicting, or unduly
burdensome provisions of the Securities Exchange Act of 1934 and rules
thereunder, to the extent such an exemption would protect investors,
maintain fair, orderly, and efficient markets, and facilitate capital
formation.
(c) Implementing Organizations.--The Securities and Exchange
Commission shall require any registered national securities association
that has as a member a registered broker or registered dealer that is
registered with the Commodity Futures Trading Commission as a digital
commodity broker or digital commodity dealer as permitted under section
15(p)(1) of the Securities Exchange Act of 1934 or otherwise transacts
in permitted payment stablecoins to revise such rules as may be
necessary to further the purposes of and compliance with this section.
(d) Memorandum of Understanding.--The Securities and Exchange
Commission shall enter into a memorandum of understanding with the
Commodity Futures Trading Commission to ensure--
(1) non-duplicative supervision and enforcement with
respect to registrants of the Securities and Exchange
Commission dual-registered with the Commodity Futures Trading
Commission as permitted under section 15(p) of the Securities
Exchange Act of 1934; and
(2) appropriate information sharing between the Commissions
to further the purposes of and compliance with this section,
the Securities Exchange Act of 1934, and the Commodity Exchange
Act.
(e) Rule of Construction.--Nothing in this section shall be
construed to limit the anti-fraud, anti-manipulation, or false
reporting enforcement authorities of the Commodity Futures Trading
Commission with respect to a contract of sale of a commodity and
persons effecting such contracts.
SEC. 305. MODERNIZATION OF RECORDKEEPING REQUIREMENTS.
(a) In General.--For purposes of books and records requirements for
brokers, dealers, transfer agents, national securities exchanges under
the Securities and Exchange Act of 1934 (15 U.S.C. 78a et seq.),
investment advisers under the Investment Advisers Act of 1940 (15
U.S.C. 80b-1 et seq.), and investment companies under the Investment
Company Act of 1940 (15 U.S.C. 80a-1 et seq.), a person may, consistent
with any rules promulgated under subsection (b), utilize records from a
blockchain system.
(b) Revision of Rules.--Not later than 180 days after the date of
enactment of this Act, the Securities and Exchange Commission shall
issue and revise such rules as may be necessary to implement this
section.
SEC. 306. EXEMPTIVE AUTHORITY.
Section 28 of the Securities Act of 1933 (15 U.S.C. 77z-3) is
amended by striking ``by rule or regulation'' and inserting ``by rule,
regulation, or order''.
SEC. 307. ADDITIONAL REGISTRATIONS WITH THE COMMODITY FUTURES TRADING
COMMISSION.
Section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o)
is amended by adding at the end the following:
``(p) Additional Registrations With the Commodity Futures Trading
Commission.--
``(1) Registered brokers and dealers.--A registered broker
or registered dealer shall be permitted to maintain a
registration with the Commodity Futures Trading Commission as a
digital commodity broker or digital commodity dealer.
``(2) National securities exchanges.--A national securities
exchange or affiliate thereof shall be permitted to maintain a
registration with the Commodity Futures Trading Commission as a
digital commodity exchange.
``(3) Alternative trading systems.--An alternative trading
system, and the operator thereof, shall be permitted to
maintain a registration with the Commodity Futures Trading
Commission as a digital commodity exchange.
``(4) Notice of application.--Any person or entity
described in paragraph (1) through (3) shall provide to the
Securities and Exchange Commission, at such time and in such
form and manner as the Securities and Exchange Commission shall
prescribe, notice of any application to register with the
Commodity Futures Trading Commission as a digital commodity
broker, digital commodity dealer, or digital commodity
exchange.''.
SEC. 308. EXEMPTING DIGITAL COMMODITIES FROM STATE SECURITIES LAWS.
(a) Covered Security.--Section 18(b) of the Securities Act of 1933
(15 U.S.C. 77r(b)) is amended by adding at the end the following:
``(5) Exemption in connection with digital commodities.--A
digital commodity shall be treated as a covered security.''.
(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.
SEC. 309. EXCLUSION FOR DECENTRALIZED FINANCE ACTIVITIES.
The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
amended by inserting after section 15G the following:
``SEC. 15H. DECENTRALIZED FINANCE ACTIVITIES NOT SUBJECT TO THIS ACT.
``(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:
``(1) Compiling network transactions or relaying,
searching, sequencing, validating, or acting in a similar
capacity.
``(2) Providing computational work, operating a node or
oracle service, or procuring, offering, or utilizing network
bandwidth, or providing other similar incidental services.
``(3) Providing a user-interface that enables a user to
read and access data about a blockchain system.
``(4) Developing, publishing, constituting, administering,
maintaining, or otherwise distributing a blockchain system or a
decentralized finance trading protocol.
``(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.
``(6) Developing, publishing, constituting, administering,
maintaining, or otherwise distributing software or systems that
create or deploy hardware or software, including wallets or
other systems, facilitating an individual user's own personal
ability to keep, safeguard, or custody the user's digital
assets or related private keys.
``(b) Exceptions.--Subsection (a) shall not apply to the anti-fraud
and anti-manipulation authorities of the Commission.''.
SEC. 310. TREATMENT OF CUSTODY ACTIVITIES BY BANKING INSTITUTIONS.
(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'')--
(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
(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--
(A) the appropriate Federal banking agency;
(B) the National Credit Union Administration (in
the case of a credit union);
(C) a State bank supervisor;
(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
(E) the Securities and Exchange Commission (in the
case of a broker or dealer).
(b) Definitions.--In this section:
(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).
(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).
SEC. 311. BROKER AND DEALER DISCLOSURES REGARDING THE TREATMENT OF
ASSETS.
(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--
(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--
(A) title II of the Dodd-Frank Wall Street Reform
and Consumer Protection Act (12 U.S.C. 5381 et seq.);
(B) the Securities Investor Protection Act of 1970
(15 U.S.C. 78aaa et seq.); or
(C) as applicable, chapter 7 or chapter 11 of title
11, United States Code; and
(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).
SEC. 312. DIGITAL COMMODITY ACTIVITIES THAT ARE FINANCIAL IN NATURE.
(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--
(1) in subparagraph (A), by striking ``or securities'' and
inserting ``, securities, or digital commodities''; and
(2) in subparagraph (E), by inserting ``or digital
commodities'' before the period at the end.
(b) National Bank Activity.--
(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.
(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.
(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.
SEC. 313. EFFECTIVE DATE; ADMINISTRATION.
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--
(1) 360 days after the date of enactment of this Act; or
(2) 60 days after the publication in the Federal Register
of the final rule implementing the provision.
SEC. 314. EDUCATIONAL MATERIAL REQUIREMENTS.
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--
(1) an overview of how blockchain technology functions;
(2) a description of common risks associated with digital
commodities;
(3) a description of the differences between digital
commodity markets and traditional financial markets;
(4) information on reporting requirements related to
digital commodity transactions or investment contracts
involving units of a digital commodity; and
(5) guidance on recognizing fraudulent schemes and
instructions for reporting suspected fraud.
SEC. 315. DISCRETIONARY SURPLUS FUND.
(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.
(b) Effective Date.--The amendment made by subsection (a) shall
take effect on September 30, 2035.
TITLE IV--REGISTRATION FOR DIGITAL COMMODITY INTERMEDIARIES AT THE
COMMODITY FUTURES TRADING COMMISSION
SEC. 401. COMMISSION JURISDICTION OVER DIGITAL COMMODITY TRANSACTIONS.
(a) Savings Clause.--Section 2(a)(1) of the Commodity Exchange Act
(7 U.S.C. 2(a)(1)) is amended by adding at the end the following:
``(J) 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--
``(i) any agreement, contract, or
transaction that is subject to this Act as--
``(I) a contract of sale of a
commodity for future delivery or an
option on such a contract;
``(II) a swap;
``(III) a security futures product;
``(IV) an option authorized under
section 4c of this Act;
``(V) an agreement, contract, or
transaction described in subparagraph
(C)(i) or (D)(i) of subsection (c)(2)
of this section; or
``(VI) a leverage transaction
authorized under section 19; or
``(ii) the activities of any person with
respect to any such an agreement, contract, or
transaction.''.
(b) Limitation on Authority Over Permitted Payment Stablecoins.--
Section 2(c)(1) of the Commodity Exchange Act (7 U.S.C. 2(c)(1)) is
amended--
(1) in subparagraph (F), by striking ``or'' at the end;
(2) in subparagraph (G), by striking the period and
inserting ``; or''; and
(3) by adding at the end the following:
``(H) permitted payment stablecoins.''.
(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--
(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
(2) by redesignating clause (iv) as clause (v) and
inserting after clause (iii) the following:
``(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.''.
(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:
``(F) Commission jurisdiction with respect to
digital commodity transactions.--
``(i) In general.--Subject to sections 6d
and 12(e), the Commission shall have exclusive
jurisdiction with respect to any account,
agreement, contract, or transaction involving a
contract of sale of a digital commodity 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--
``(I) on or subject to the rules of
a registered entity or an entity that
is required to be registered as a
registered entity; or
``(II) by any other entity
registered, or required to be
registered, with the Commission.
``(ii) Limitations.--Clause (i) shall not
apply with respect to--
``(I) custodial or depository
activities for a digital commodity of
an entity regulated by an appropriate
Federal banking agency or a State bank
supervisor (within the meaning of
section 3 of the Federal Deposit
Insurance Act); or
``(II) an offer or sale of an
investment contract involving a digital
commodity or of a securities offer or
sale involving a digital commodity.
``(iii) Mixed digital asset transactions.--
``(I) In general.--Clause (i) shall
not apply to a mixed digital asset
transaction.
``(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.
``(G) Agreements, contracts, and transactions in
stablecoins.--
``(i) Treatment of permitted payment
stablecoins on commission-registered
entities.--Subject to clauses (ii) and (iii),
the Commission shall have jurisdiction over a
cash or spot agreement, contract, or
transaction in a permitted payment stablecoin
that is offered, offered to enter into, entered
into, executed, solicited, or accepted, or for
which the execution of is confirmed--
``(I) on or subject to the rules of
a registered entity; or
``(II) by any other entity
registered with the Commission.
``(ii) Permitted payment stablecoin
transaction rules.--This Act shall apply to a
transaction described in clause (i) only for
the purpose of regulating the offer, execution,
solicitation, or acceptance of a cash or spot
permitted payment stablecoin transaction on a
registered entity or by any other entity
registered with the Commission, as if the
permitted payment stablecoin were a digital
commodity.
``(iii) No authority over permitted payment
stablecoins.--Notwithstanding clauses (i) and
(ii), the Commission shall not make a rule or
regulation, impose a requirement or obligation
on a registered entity or other entity
registered with the Commission, or impose a
requirement or obligation on a permitted
payment stablecoin issuer, regarding the
operation of a permitted payment stablecoin
issuer or a permitted payment stablecoin.''.
(e) Conforming Amendments.--The Commodity Exchange Act is amended--
(1) in section 1a(9) (7 U.S.C. 1a(9)), as amended by the