H.R. 3633, Reported in Senate with an amendment in the nature of a substitute (Calendar No. 423) (Part 1 of 5)
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[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3633 Reported in Senate (RS)]
<DOC>
Calendar No. 423
119th CONGRESS
2d Session
H. R. 3633
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 18 (legislative day, September 16), 2025
Received; read twice and referred to the Committee on Banking,
Housing, and Urban Affairs
June 1, 2026
Reported by Mr. Scott of South Carolina, with an amendment
[Strike out all after the enacting clause and insert the part printed
in italic]
_______________________________________________________________________
AN ACT
To provide for a system of regulation of the offer and sale of digital
commodities by the Securities and Exchange Commission and the Commodity
Futures Trading Commission, to amend the Federal Reserve Act to
prohibit the Federal reserve banks from offering certain products or
services directly to an individual, to prohibit the use of central bank
digital currency for monetary policy, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
<DELETED>SECTION 1. SHORT TITLES; TABLE OF CONTENTS.</DELETED>
<DELETED> (a) Short Titles.--This Act may be cited as the ``Digital
Asset Market Clarity Act of 2025'' or the ``CLARITY Act of 2025'' and
the ``Anti-CBDC Surveillance State Act''.</DELETED>
<DELETED> (b) Table of Contents.--The table of contents for this Act
is as follows:</DELETED>
<DELETED>Sec. 1. Short titles; table of contents.
<DELETED>TITLE I--DEFINITIONS; RULEMAKING; EXPEDITED REGISTRATION
<DELETED>Sec. 101. Definitions under the Securities Act of 1933.
<DELETED>Sec. 102. Definitions under the Securities Exchange Act of
1934.
<DELETED>Sec. 103. Definitions under the Commodity Exchange Act.
<DELETED>Sec. 104. Definitions under this Act.
<DELETED>Sec. 105. Rulemakings.
<DELETED>Sec. 106. Expedited registration for digital commodity
exchanges, brokers, and dealers;
provisional status.
<DELETED>Sec. 107. Commodity Exchange Act and securities laws savings
provisions.
<DELETED>Sec. 108. Administrative requirements.
<DELETED>Sec. 109. Treatment of certain non-controlling blockchain
developers.
<DELETED>Sec. 110. Application of the Bank Secrecy Act.
<DELETED>Sec. 111. Rule of construction.
<DELETED>Sec. 112. Implementation.
<DELETED>TITLE II--OFFERS AND SALES OF DIGITAL COMMODITIES
<DELETED>Sec. 201. Treatment of investment contract assets.
<DELETED>Sec. 202. Exempted primary transactions in digital
commodities.
<DELETED>Sec. 203. Treatment of secondary transactions in digital
commodities that originally involved
investment contracts.
<DELETED>Sec. 204. Requirements for offers and sales of digital
commodities by digital commodity related
persons and digital commodity affiliated
persons.
<DELETED>Sec. 205. Mature blockchain system requirements.
<DELETED>Sec. 206. Effective date.
<DELETED>TITLE III--REGISTRATION FOR INTERMEDIARIES AT THE SECURITIES
AND EXCHANGE COMMISSION
<DELETED>Sec. 301. Treatment of digital commodities and permitted
payment stablecoins.
<DELETED>Sec. 302. Anti-fraud authority over permitted payment
stablecoins and certain digital commodity
transactions.
<DELETED>Sec. 303. Eligibility of alternative trading systems.
<DELETED>Sec. 304. Rulemaking for dual-registered entities.
<DELETED>Sec. 305. Modernization of recordkeeping requirements.
<DELETED>Sec. 306. Exemptive authority.
<DELETED>Sec. 307. Additional registrations with the Commodity Futures
Trading Commission.
<DELETED>Sec. 308. Exempting digital commodities from State securities
laws.
<DELETED>Sec. 309. Exclusion for decentralized finance activities.
<DELETED>Sec. 310. Treatment of custody activities by banking
institutions.
<DELETED>Sec. 311. Broker and dealer disclosures regarding the
treatment of assets.
<DELETED>Sec. 312. Digital commodity activities that are financial in
nature.
<DELETED>Sec. 313. Effective date; administration.
<DELETED>Sec. 314. Educational material requirements.
<DELETED>Sec. 315. Discretionary Surplus Fund.
<DELETED>TITLE IV--REGISTRATION FOR DIGITAL COMMODITY INTERMEDIARIES AT
THE COMMODITY FUTURES TRADING COMMISSION
<DELETED>Sec. 401. Commission jurisdiction over digital commodity
transactions.
<DELETED>Sec. 402. Requiring futures commission merchants to use
qualified digital asset custodians.
<DELETED>Sec. 403. Trading certification and approval for digital
commodities.
<DELETED>Sec. 404. Registration of digital commodity exchanges.
<DELETED>Sec. 405. Qualified digital asset custodians.
<DELETED>Sec. 406. Registration and regulation of digital commodity
brokers and dealers.
<DELETED>Sec. 407. Registration of associated persons.
<DELETED>Sec. 408. Registration of commodity pool operators and
commodity trading advisors.
<DELETED>Sec. 409. Exclusion for decentralized finance activities.
<DELETED>Sec. 410. Resources for implementation and enforcement.
<DELETED>Sec. 411. Requirements related to control persons.
<DELETED>Sec. 412. Other tradable assets.
<DELETED>Sec. 413. Conflict of interest rulemaking.
<DELETED>Sec. 414. Effective date.
<DELETED>Sec. 415. Sense of Congress.
<DELETED>TITLE V--INNOVATION AND TECHNOLOGY IMPROVEMENTS
<DELETED>Sec. 501. Findings; sense of Congress.
<DELETED>Sec. 502. Strategic Hub for Innovation and Financial
Technology.
<DELETED>Sec. 503. Codification of LabCFTC.
<DELETED>Sec. 504. Study on decentralized finance.
<DELETED>Sec. 505. Study on non-fungible tokens.
<DELETED>Sec. 506. Study on expanding financial literacy amongst
digital commodity holders.
<DELETED>Sec. 507. Study on financial market infrastructure
improvements.
<DELETED>Sec. 508. Study on blockchain in payments.
<DELETED>Sec. 509. Study on illicit use of digital assets.
<DELETED>Sec. 510. GAO study on certain centralized intermediaries that
are primarily located in foreign
jurisdictions.
<DELETED>Sec. 511. Studies on foreign adversary participation.
<DELETED>Sec. 512. Conforming amendments.
<DELETED>TITLE VI--ANTI-CBDC SURVEILLANCE STATE ACT
<DELETED>Sec. 601. Short title.
<DELETED>Sec. 602. Prohibition on Federal reserve banks relating to
certain products or services for
individuals and prohibition on directly
issuing a central bank digital currency.
<DELETED>Sec. 603. Prohibition on Federal reserve banks indirectly
issuing a central bank digital currency.
<DELETED>Sec. 604. Prohibition with respect to central bank digital
currency.
<DELETED>Sec. 605. Sense of Congress.
<DELETED>TITLE I--DEFINITIONS; RULEMAKING; EXPEDITED
REGISTRATION</DELETED>
<DELETED>SEC. 101. DEFINITIONS UNDER THE SECURITIES ACT OF
1933.</DELETED>
<DELETED> Section 2(a) of the Securities Act of 1933 (15 U.S.C.
77b(a)) is amended by adding at the end the following:</DELETED>
<DELETED> ``(20) Blockchain.--The term `blockchain' means--
</DELETED>
<DELETED> ``(A) any technology--</DELETED>
<DELETED> ``(i) where data is--</DELETED>
<DELETED> ``(I) shared across a
network to create a distributed ledger
of independently verifiable
transactions or information among
network participants;</DELETED>
<DELETED> ``(II) linked using
cryptography to maintain the integrity
of the distributed ledger and to
execute other functions; and</DELETED>
<DELETED> ``(III) propagated among
network participants to reach consensus
on the state of the distributed ledger
and any other functions; and</DELETED>
<DELETED> ``(ii) composed of source code
that is publicly available; and</DELETED>
<DELETED> ``(B) any similar technology to the
technology described in subparagraph (A).</DELETED>
<DELETED> ``(21) Blockchain application.--The term
`blockchain application' means any executable software that is
deployed to a blockchain and composed of source code that is
publicly available, including a smart contract or any network
of smart contracts, or other similar technology.</DELETED>
<DELETED> ``(22) Blockchain protocol.--The term `blockchain
protocol' means publicly available source code of a blockchain
that is executed by the network participants of a blockchain to
facilitate its functioning, or other similar
technology.</DELETED>
<DELETED> ``(23) Blockchain system.--The term `blockchain
system' means any blockchain, together with its blockchain
protocol or any blockchain application or network of blockchain
applications.</DELETED>
<DELETED> ``(24) Decentralized governance system.--
</DELETED>
<DELETED> ``(A) In general.--The term `decentralized
governance system' means, with respect to a blockchain
system, any transparent, rules-based system permitting
persons to form consensus or reach agreement in the
development, provision, publication, maintenance, or
administration of such blockchain system, where
participation is not limited to, or under the effective
control of, any person or group of persons under common
control.</DELETED>
<DELETED> ``(B) Relationship of persons to
decentralized governance systems.--With respect to a
decentralized governance system, the decentralized
governance system and any persons participating in the
decentralized governance system shall be treated as
separate persons unless such persons are under common
control or acting pursuant to an agreement to act in
concert.</DELETED>
<DELETED> ``(C) Legal entities for decentralized
governance systems.--The term `decentralized governance
system' shall include a legal entity used to implement
the rules-based system described in subparagraph (A),
provided that the legal entity does not operate
pursuant to centralized management. For the purposes of
this subparagraph, the delegation of ministerial or
administrative authority at the direction of the
participants in a decentralized governance system shall
not be construed to be centralized
management.</DELETED>
<DELETED> ``(25) Digital asset.--The term `digital asset'
means any digital representation of value which is recorded on
a cryptographically-secured distributed ledger or other similar
technology.</DELETED>
<DELETED> ``(26) Digital commodity.--The term `digital
commodity' has the meaning given that term under section 1a of
the Commodity Exchange Act (7 U.S.C. 1a).</DELETED>
<DELETED> ``(27) Digital commodity affiliated person.--The
term `digital commodity affiliated person'--</DELETED>
<DELETED> ``(A) means a person (including a digital
commodity related person) that, with respect to any
digital commodity--</DELETED>
<DELETED> ``(i) acquires or has any right to
acquire 5 percent or more of the total
outstanding units of such digital commodity
from a digital commodity issuer or an agent or
underwriter thereof;</DELETED>
<DELETED> ``(ii) is a founder of the digital
commodity issuer; or</DELETED>
<DELETED> ``(iii) is an executive officer,
director, trustee, general partner, or person
serving in a similar capacity of the digital
commodity issuer or held such role at any point
in the previous 12-month period; and</DELETED>
<DELETED> ``(B) does not include a decentralized
governance system.</DELETED>
<DELETED> ``(28) Digital commodity issuer.--</DELETED>
<DELETED> ``(A) In general.--With respect to a
digital commodity, the term `digital commodity issuer'
means any person that--</DELETED>
<DELETED> ``(i) issues or causes to be
issued, or proposes to issue or cause to be
issued, a unit of such digital commodity to a
person; or</DELETED>
<DELETED> ``(ii) offers or sells a right to
a future issuance of a unit of such digital
commodity to a person.</DELETED>
<DELETED> ``(B) Prohibition on evasion.--It shall be
unlawful for any person to knowingly evade
classification as a `digital commodity issuer' and
facilitate an arrangement for the primary purpose of
effecting an offer, sale, distribution, or other
issuance of a digital commodity, including via any
arrangement involving the transfer of intellectual
property associated with the blockchain system to which
the digital commodity relates.</DELETED>
<DELETED> ``(29) Digital commodity related person.--
</DELETED>
<DELETED> ``(A) In general.--With respect to a
digital commodity issuer, the term `digital commodity
related person'--</DELETED>
<DELETED> ``(i) means a person--</DELETED>
<DELETED> ``(I) that is or was in
the previous 6-month period a promoter,
senior employee, advisory board member,
consultant, advisor, or person serving
in a similar capacity; or</DELETED>
<DELETED> ``(II) that acquires or
has any right to acquire 1 percent or
more of the total outstanding units of
such digital commodity from a digital
commodity issuer or an agent or
underwriter thereof; and</DELETED>
<DELETED> ``(ii) does not include a
decentralized governance system.</DELETED>
<DELETED> ``(B) Senior employee defined.--In this
paragraph and with respect to a digital commodity
issuer, the term `senior employee' means any employee
materially involved in the management of the digital
commodity issuer, including management of the
development of the blockchain system to which the
digital commodity relates.</DELETED>
<DELETED> ``(30) End user distribution.--</DELETED>
<DELETED> ``(A) In general.--The term `end user
distribution' means a distribution of a unit of a
digital commodity that--</DELETED>
<DELETED> ``(i) does not involve an exchange
of more than a nominal value of cash, property,
or other assets; and</DELETED>
<DELETED> ``(ii) is distributed in a broad
and equitable manner based on conditions
capable of being satisfied by any participant
in the blockchain system, including, as
incentive-based rewards--</DELETED>
<DELETED> ``(I) to users of the
digital commodity or any blockchain
system to which the digital commodity
relates;</DELETED>
<DELETED> ``(II) for activities
directly related to the operation of
the blockchain system, such as mining,
validating, staking, or other activity
directly tied to the operation of the
blockchain system; or</DELETED>
<DELETED> ``(III) to the existing
holders of another digital commodity,
in proportion to the total units of
such other digital commodity as are
held by each person.</DELETED>
<DELETED> ``(B) Protocol consensus participation.--
The term `end user distribution' includes the
following:</DELETED>
<DELETED> ``(i) Self staking.--The
distribution of a unit of a digital commodity
as a programmatic result of validating or
staking activity for a blockchain system's
consensus mechanism, including the staking of a
digital commodity and the operation of a node
or validator for such activity where the owner
of the staked digital commodity and operator of
the node or validator are the same person or
entity.</DELETED>
<DELETED> ``(ii) Self-custodial staking with
a third party.--The distribution of a unit of a
digital commodity as a programmatic result of
validating or staking activity for a blockchain
system's consensus mechanism, including the
staking of a digital commodity and the
operation of a node or validator for such
activity where--</DELETED>
<DELETED> ``(I) the owner of the
staked digital commodity and operator
of the node or validator for such
activity are different persons or
entities; and</DELETED>
<DELETED> ``(II) the operator of the
node or validator does not maintain
custody or control of the staked
digital commodity.</DELETED>
<DELETED> ``(iii) Custodial and ancillary
staking services.--Subject to the rules issued
pursuant to subparagraph (C), the provision of
custodial or ancillary staking services
enabling the owner of a digital commodity to
participate in validating or staking activity
for a blockchain system's consensus mechanism
that results in the programmatic distribution
of a unit of a digital commodity, provided that
such custodial or ancillary services are
exclusively administrative or ministerial in
nature.</DELETED>
<DELETED> ``(C) Rulemaking to define the custodial
and ancillary staking services.--Not later than 270
days after the date of the enactment of this paragraph,
the Commission shall issue rules defining the custodial
and ancillary staking services described in
subparagraph (B)(iii) that are exclusively
administrative or ministerial in nature, consistent
with what is necessary or appropriate for the public
interest or for the protection of investors.</DELETED>
<DELETED> ``(31) Mature blockchain system.--The term `mature
blockchain system' means a blockchain system, together with its
related digital commodity, that is not controlled by any person
or group of persons under common control.</DELETED>
<DELETED> ``(32) Permitted payment stablecoin.--The term
`permitted payment stablecoin' means a payment stablecoin (as
defined in section 2 of the GENIUS Act) issued by a permitted
payment stablecoin issuer.</DELETED>
<DELETED> ``(33) Permitted payment stablecoin issuer.--The
term `permitted payment stablecoin issuer' has the meaning
given that term in section 2 of the GENIUS Act.''.</DELETED>
<DELETED>SEC. 102. DEFINITIONS UNDER THE SECURITIES EXCHANGE ACT OF
1934.</DELETED>
<DELETED> Section 3(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78c(a)) is amended--</DELETED>
<DELETED> (1) by redesignating the second paragraph (80)
(relating to funding portals) as paragraph (81); and</DELETED>
<DELETED> (2) by adding at the end the following:</DELETED>
<DELETED> ``(82) Bank secrecy act.--The term `Bank Secrecy
Act' means--</DELETED>
<DELETED> ``(A) section 21 of the Federal Deposit
Insurance Act (12 U.S.C. 1829b);</DELETED>
<DELETED> ``(B) chapter 2 of title I of Public Law
91-508 (12 U.S.C. 1951 et seq.); and</DELETED>
<DELETED> ``(C) subchapter II of chapter 53 of title
31, United States Code.</DELETED>
<DELETED> ``(83) Additional digital commodity-related
terms.--</DELETED>
<DELETED> ``(A) Securities act of 1933.--The terms
`blockchain system', `decentralized governance system',
`digital asset', `digital commodity affiliated person',
`digital commodity issuer', `digital commodity related
person', `end user distribution', `mature blockchain
system', `permitted payment stablecoin', and `permitted
payment stablecoin issuer' have the meaning given those
terms, respectively, under section 2(a) of the
Securities Act of 1933 (15 U.S.C. 77b(a)).</DELETED>
<DELETED> ``(B) Commodity exchange act.--The terms
`digital commodity', `digital commodity broker',
`digital commodity dealer', `digital commodity
exchange', `decentralized finance messaging system',
and `decentralized finance trading protocol' have the
meaning given those terms, respectively, under section
1a of the Commodity Exchange Act (7 U.S.C.
1a).''.</DELETED>
SEC. 103. DEFINITIONS UNDER THE COMMODITY EXCHANGE ACT.
<DELETED> (a) In General.--Section 1a of the Commodity Exchange Act
(7 U.S.C. 1a) is amended--</DELETED>
<DELETED> (1) in paragraph (10)--</DELETED>
<DELETED> (A) in subparagraph (A)--</DELETED>
<DELETED> (i) by redesignating clauses (iii)
and (iv) as clauses (iv) and (v), respectively;
and</DELETED>
<DELETED> (ii) by inserting after clause
(ii) the following:</DELETED>
<DELETED> ``(iii) digital commodity;'';
and</DELETED>
<DELETED> (B) by redesignating subparagraph (B) as
subparagraph (C) and inserting after subparagraph (A)
the following:</DELETED>
<DELETED> ``(B) Exclusion.--For purposes of this
paragraph, the term `trading in commodity interests'
shall not include transacting in digital commodities
for the purpose of--</DELETED>
<DELETED> ``(i) acting as a digital
commodity custodian;</DELETED>
<DELETED> ``(ii) establishing, maintaining,
or managing inventory or payment instruments
for commercial purposes; or</DELETED>
<DELETED> ``(iii) maintaining or supporting
the operation of, or validating transactions
on, a blockchain system.'';</DELETED>
<DELETED> (2) in paragraph (11)--</DELETED>
<DELETED> (A) in subparagraph (A)(i)--</DELETED>
<DELETED> (i) by redesignating subclauses
(III) and (IV) as subclauses (IV) and (V),
respectively; and</DELETED>
<DELETED> (ii) by inserting after subclause
(II) the following:</DELETED>
<DELETED> ``(III) digital
commodity;''; and</DELETED>
<DELETED> (B) by redesignating subparagraph (B) as
subparagraph (C) and inserting after subparagraph (A)
the following:</DELETED>
<DELETED> ``(B) Exclusion.--For purposes of this
paragraph, the term `trading in commodity interests'
shall not include transacting in digital commodities
for the purpose of--</DELETED>
<DELETED> ``(i) acting as a digital
commodity custodian;</DELETED>
<DELETED> ``(ii) establishing, maintaining,
or managing inventory or payment instruments
for commercial purposes; or</DELETED>
<DELETED> ``(iii) maintaining or supporting
the operation of, or validating transactions
on, a blockchain system.'';</DELETED>
<DELETED> (3) in paragraph (12)(A)(i)--</DELETED>
<DELETED> (A) in subclause (II), by adding at the
end a semicolon;</DELETED>
<DELETED> (B) by redesignating subclauses (III) and
(IV) as subclauses (IV) and (V), respectively;
and</DELETED>
<DELETED> (C) by inserting after subclause (II) the
following:</DELETED>
<DELETED> ``(III) a digital
commodity;'';</DELETED>
<DELETED> (4) by redesignating paragraphs (16) through (51)
as paragraphs (17) through (52), respectively, and inserting
after paragraph (15) the following:</DELETED>
<DELETED> ``(16) Terms related to digital commodities.--
</DELETED>
<DELETED> ``(A) Associated person of a digital
commodity broker.--</DELETED>
<DELETED> ``(i) In general.--Except as
provided in clause (ii), the term `associated
person of a digital commodity broker' means a
person who is associated with a digital
commodity broker as a partner, officer,
employee, or agent (or any person occupying a
similar status or performing similar functions)
in any capacity that involves--</DELETED>
<DELETED> ``(I) the solicitation or
acceptance of an order for the purchase
or sale of a digital commodity;
or</DELETED>
<DELETED> ``(II) the supervision of
any person engaged in the solicitation
or acceptance of an order for the
purchase or sale of a digital
commodity.</DELETED>
<DELETED> ``(ii) Exclusion.--The term
`associated person of a digital commodity
broker' does not include any person associated
with a digital commodity broker the functions
of which are solely clerical or
ministerial.</DELETED>
<DELETED> ``(B) Associated person of a digital
commodity dealer.--</DELETED>
<DELETED> ``(i) In general.--Except as
provided in clause (ii), the term `associated
person of a digital commodity dealer' means a
person who is associated with a digital
commodity dealer as a partner, officer,
employee, or agent (or any person occupying a
similar status or performing similar functions)
in any capacity that involves--</DELETED>
<DELETED> ``(I) the solicitation or
acceptance of a contract for the
purchase or sale of a digital
commodity; or</DELETED>
<DELETED> ``(II) the supervision of
any person engaged in the solicitation
or acceptance of a contract for the
purchase or sale of a digital
commodity.</DELETED>
<DELETED> ``(ii) Exclusion.--The term
`associated person of a digital commodity
dealer' does not include any person associated
with a digital commodity dealer the functions
of which are solely clerical or
ministerial.</DELETED>
<DELETED> ``(C) Bank secrecy act.--The term `Bank
Secrecy Act' means--</DELETED>
<DELETED> ``(i) section 21 of the Federal
Deposit Insurance Act (12 U.S.C.
1829b);</DELETED>
<DELETED> ``(ii) chapter 2 of title I of
Public Law 91-508 (12 U.S.C. 1951 et seq.);
and</DELETED>
<DELETED> ``(iii) subchapter II of chapter
53 of title 31, United States Code.</DELETED>
<DELETED> ``(D) Decentralized finance messaging
system.--</DELETED>
<DELETED> ``(i) In general.--The term
`decentralized finance messaging system' means
a software application that provides a user
with the ability to create or submit an
instruction, communication, or message to a
decentralized finance trading protocol for the
purpose of executing a transaction by the
user.</DELETED>
<DELETED> ``(ii) Additional requirements.--
The term `decentralized finance messaging
system' does not include any system that
provides any person other than the user with
control over--</DELETED>
<DELETED> ``(I) the funds of the
user; or</DELETED>
<DELETED> ``(II) the execution of
the transaction of the user.</DELETED>
<DELETED> ``(E) Decentralized finance trading
protocol.--</DELETED>
<DELETED> ``(i) In general.--The term
`decentralized finance trading protocol' means
a blockchain system through which multiple
participants can execute a financial
transaction--</DELETED>
<DELETED> ``(I) in accordance with
an automated rule or algorithm that is
predetermined and non-discretionary;
and</DELETED>
<DELETED> ``(II) without reliance on
any other person to maintain control of
the digital assets of the user during
any part of the financial
transaction.</DELETED>
<DELETED> ``(ii) Exclusions.--</DELETED>
<DELETED> ``(I) In general.--The
term `decentralized finance trading
protocol' does not include a blockchain
system if--</DELETED>
<DELETED> ``(aa) a person or
group of persons under common
control or acting pursuant to
an agreement to act in concert
has the authority, directly or
indirectly, through any
contract, arrangement,
understanding, relationship, or
otherwise, to control or
materially alter the
functionality, operation, or
rules of consensus or agreement
of the blockchain system;
or</DELETED>
<DELETED> ``(bb) the
blockchain system does not
operate, execute, and enforce
its operations and transactions
based solely on pre-
established, transparent rules
encoded directly within the
source code of the blockchain
system.</DELETED>
<DELETED> ``(II) Special rule.--For
purposes of subclause (I), a
decentralized governance system shall
not be considered to be a person or a
group of persons under common control
or acting pursuant to an agreement to
act in concert.</DELETED>
<DELETED> ``(F) Digital commodity.--</DELETED>
<DELETED> ``(i) In general.--The term
`digital commodity' means a digital asset that
is intrinsically linked to a blockchain system,
and the value of which is derived from or is
reasonably expected to be derived from the use
of the blockchain system.</DELETED>
<DELETED> ``(ii) Relationship to a
blockchain system.--For purposes of this
subparagraph, a digital asset is intrinsically
linked to a blockchain system if the digital
asset is directly related to the functionality
or operation of the blockchain system or to the
activities or services for which the blockchain
system is created or utilized, including where
the digital asset is--</DELETED>
<DELETED> ``(I) issued or generated
by the programmatic functioning of the
blockchain system;</DELETED>
<DELETED> ``(II) used to transfer
value between participants in the
blockchain system;</DELETED>
<DELETED> ``(III) used to access the
activities or services of the
blockchain system;</DELETED>
<DELETED> ``(IV) used to participate
in the decentralized governance system
of the blockchain system;</DELETED>
<DELETED> ``(V) used or removed from
circulation in whole or in part to pay
fees or otherwise verify or validate
transactions on the blockchain
system;</DELETED>
<DELETED> ``(VI) used as payment or
incentive to participants in the
blockchain system to engage in the
activities of the blockchain system,
provide services to other participants
in the blockchain system, or otherwise
participate in the functionality of the
blockchain system; or</DELETED>
<DELETED> ``(VII) used as payment or
incentive to participants in the
blockchain system to validate
transactions, secure the blockchain
system, provide computational services,
maintain or distribute information, or
otherwise participate in the operations
of the blockchain system.</DELETED>
<DELETED> ``(iii) Exclusion.--The term
`digital commodity' does not include any of the
following:</DELETED>
<DELETED> ``(I) Security.--
</DELETED>
<DELETED> ``(aa) Any
security, other than a note, an
investment contract, or a
certificate of interest or
participation in any profit-
sharing agreement.</DELETED>
<DELETED> ``(bb) A note, an
investment contract, or a
certificate of interest or
participation in any profit-
sharing agreement that--
</DELETED>
<DELETED> ``(AA)
represents or gives the
holder an ownership
interest or other
interest in the
revenues, profits,
obligations, debts,
assets, or assets or
debts to be acquired of
the issuer of the
digital asset or
another person (other
than a decentralized
governance
system);</DELETED>
<DELETED> ``(BB)
makes the holder a
creditor of the issuer
of the digital asset or
another person;
or</DELETED>
<DELETED> ``(CC)
represents or gives the
holder the right to
receive interest or the
return of principal
from the issuer of the
digital asset or
another
person.</DELETED>
<DELETED> ``(II) Security
derivative.--A digital asset that,
based on its terms and other
characteristics, is, represents, or is
functionally equivalent to an
agreement, contract, or transaction
that is--</DELETED>
<DELETED> ``(aa) a security
future, as defined in section
2a of the Securities Act of
1933;</DELETED>
<DELETED> ``(bb) a security-
based swap, as defined in
section 2a of the Securities
Act of 1933;</DELETED>
<DELETED> ``(cc) a put,
call, straddle, option, or
privilege on any security,
certificate of deposit, or
group or index of securities
(including any interest therein
or based on the value thereof),
as defined in section 2a of the
Securities Act of 1933;
or</DELETED>
<DELETED> ``(dd) a put,
call, straddle, option, or
privilege on any security, as
defined in section 2a of the
Securities Act of
1933.</DELETED>
<DELETED> ``(III) Permitted payment
stablecoin.--A digital asset that is a
permitted payment stablecoin.</DELETED>
<DELETED> ``(IV) Banking deposit.--
</DELETED>
<DELETED> ``(aa) A deposit
(as defined under section 3 of
the Federal Deposit Insurance
Act (12 U.S.C. 1813)),
regardless of the technology
used to record the
deposit.</DELETED>
<DELETED> ``(bb) An account
(as defined in section 101 of
the Federal Credit Union Act
(12 U.S.C. 1752)), regardless
of the technology used to
record the account.</DELETED>
<DELETED> ``(V) Commodity.--A
digital asset that references,
represents an interest in, or is
functionally equivalent to--</DELETED>
<DELETED> ``(aa) an
agricultural
commodity;</DELETED>
<DELETED> ``(bb) an excluded
commodity, other than a
security; or</DELETED>
<DELETED> ``(cc) an exempt
commodity, other than the
digital commodity itself, as
shall be further defined by the
Commission.</DELETED>
<DELETED> ``(VI) Commodity
derivative.--A digital asset that,
based on its terms and other
characteristics, is, represents, or is
functionally equivalent to an
agreement, contract, or transaction
that is--</DELETED>
<DELETED> ``(aa) a contract
of sale of a commodity for
future delivery or an option
thereon;</DELETED>
<DELETED> ``(bb) a security
futures product;</DELETED>
<DELETED> ``(cc) a
swap;</DELETED>
<DELETED> ``(dd) an
agreement, contract, or
transaction described in
section 2(c)(2)(C)(i) or
section
2(c)(2)(D)(i);</DELETED>
<DELETED> ``(ee) a commodity
option authorized under section
4c; or</DELETED>
<DELETED> ``(ff) a leverage
transaction authorized under
section 19.</DELETED>
<DELETED> ``(VII) Pooled investment
vehicle.--</DELETED>
<DELETED> ``(aa) In
general.--A digital asset not
described by subclause (I)
that, based on its terms and
other characteristics, is,
represents, or is functionally
equivalent to an interest in--
</DELETED>
<DELETED> ``(AA) a
commodity pool, as
defined in this Act;
or</DELETED>
<DELETED> ``(BB) a
pooled investment
vehicle.</DELETED>
<DELETED> ``(bb) Pooled
investment vehicle defined.--In
this subclause, the term
`pooled investment vehicle'
means--</DELETED>
<DELETED> ``(AA) any
investment company as
defined in section 3(a)
of the Investment
Company Act of 1940 (15
U.S.C. 80a-
3(a));</DELETED>
<DELETED> ``(BB) any
company (as defined in
section 2 of such Act
(15 U.S.C. 80a-2)) that
would be an investment
company under section
3(a) of such Act but
for the exclusions
provided from that
definition by section
3(c) of such Act, if
for purposes of this
subclause the company
were assumed to be an
issuer (as defined in
section 2 of such Act);
or</DELETED>
<DELETED> ``(CC) any
entity or person that
is not an investment
company but holds or
will hold assets other
than
securities.</DELETED>
<DELETED> ``(VIII) Good,
collectible, and other non-commodity
asset.--A digital asset that has value,
utility, or significance beyond its
mere existence as a digital asset,
including the digital equivalent of a
tangible or intangible good, such as--
</DELETED>
<DELETED> ``(aa) a work of
art, a musical composition, a
literary work, or other
intellectual
property;</DELETED>
<DELETED> ``(bb)
collectibles, merchandise,
virtual land, and video game
assets;</DELETED>
<DELETED> ``(cc) affinity,
rewards, or loyalty points,
including airline miles or
credit card points, that are
not primarily speculative in
nature; or</DELETED>
<DELETED> ``(dd) rights,
licenses, and
tickets.</DELETED>
<DELETED> ``(iv) Rule of construction.--No
presumption shall exist that a digital asset is
a security, nor shall a digital asset be
excluded from being a digital commodity
pursuant to clause (iii)(I), solely due to--
</DELETED>
<DELETED> ``(I) the digital asset
providing voting or economic rights
with respect to the blockchain system
to which the digital asset relates or
the decentralized governance system of
the blockchain system to which the
digital asset relates;</DELETED>
<DELETED> ``(II) the value of the
digital asset having the potential to
appreciate or depreciate in response to
the efforts, operations, or financial
performance of the blockchain system to
which the digital asset relates or the
decentralized governance system of the
blockchain system to which the digital
asset relates; or</DELETED>
<DELETED> ``(III) the value of the
digital asset appreciating or
depreciating due to the use of the
blockchain system to which the digital
asset relates or the decentralized
governance system of the blockchain
system to which the digital asset
relates.</DELETED>
<DELETED> ``(G) Digital commodity broker.--
</DELETED>
<DELETED> ``(i) In general.--The term
`digital commodity broker' means any person
who, as a regular business--</DELETED>
<DELETED> ``(I) is engaged in--
</DELETED>
<DELETED> ``(aa) soliciting
or accepting an order from a
customer for--</DELETED>
<DELETED> ``(AA) the
purchase or sale of a
digital commodity;
or</DELETED>
<DELETED> ``(BB) an
agreement, contract, or
transaction described
in section
2(c)(2)(D)(iv);
and</DELETED>
<DELETED> ``(bb) in
conjunction with the activities
in item (aa), accepts or
maintains control over--
</DELETED>
<DELETED> ``(AA) the
funds of any customer;
or</DELETED>
<DELETED> ``(BB) the
execution of any
transaction of a
customer;</DELETED>
<DELETED> ``(II) is engaged in
soliciting or accepting orders from a
customer for the purchase or sale of a
unit of a digital commodity on or
subject to the rules of a registered
entity; or</DELETED>
<DELETED> ``(III) is registered with
the Commission as a digital commodity
broker.</DELETED>
<DELETED> ``(ii) Exceptions.--The term
`digital commodity broker' does not include a
person solely because the person--</DELETED>
<DELETED> ``(I) solicits or accepts
an order described in clause
(i)(I)(aa)(AA) from a customer who is
an eligible contract
participant;</DELETED>
<DELETED> ``(II) enters into 1 or
more digital commodity transactions
that are attributable or solely
incidental to making, sending,
receiving, or facilitating payments,
whether involving a payment service
provider or on a peer-to-peer basis;
or</DELETED>
<DELETED> ``(III) is a bank (as
defined under section 3(a) of the
Securities Exchange Act of 1934)
engaging in certain banking activities
with respect to a digital commodity in
the same or a similar manner as a bank
is excluded from the definition of a
broker under such section, as
determined by the Commission.</DELETED>
<DELETED> ``(iii) Further definition.--The
Commission, by rule or regulation, may exclude
from the term `digital commodity broker' any
person or class of persons if the Commission
determines that the rule or regulation will
effectuate the purposes of this Act.</DELETED>
<DELETED> ``(H) Digital commodity dealer.--
</DELETED>
<DELETED> ``(i) In general.--The term
`digital commodity dealer' means any person
who, as a regular business--</DELETED>
<DELETED> ``(I) is, or offers to be
a counterparty to a person for the
purchase or sale of a digital commodity
as a regular business, and in
conjunction with the activities,
accepts or maintains control over the
funds of any counterparty; or</DELETED>
<DELETED> ``(II) is registered with
the Commission as a digital commodity
dealer.</DELETED>
<DELETED> ``(ii) Exception.--The term
`digital commodity dealer' does not include a
person solely because the person--</DELETED>
<DELETED> ``(I) is or offers to be a
counterparty to a person who is an
eligible contract
participant;</DELETED>
<DELETED> ``(II) enters into a
digital commodity transaction with an
eligible contract
participant;</DELETED>
<DELETED> ``(III) enters into a
digital commodity transaction on or
through a registered digital commodity
exchange, with a registered digital
commodity broker, or through a
decentralized finance trading
protocol;</DELETED>
<DELETED> ``(IV) enters into a
digital commodity transaction for the
person's own account, either
individually or in a fiduciary
capacity, but not as a part of a
regular business;</DELETED>
<DELETED> ``(V) enters into 1 or
more digital commodity transactions
that are attributable or solely
incidental to making, sending,
receiving, or facilitating payments,
whether involving a payment service
provider or on a peer-to-peer basis;
or</DELETED>
<DELETED> ``(VI) is a bank (as
defined under section 3(a) of the
Securities Exchange Act of 1934)
engaging in certain banking activities
with respect to a digital commodity in
the same or a similar manner as a bank
is excluded from the definition of a
dealer under section 3(a)(5) of such
Act, as determined by the
Commission.</DELETED>
<DELETED> ``(iii) Further definition.--The
Commission, by rule or regulation, may exclude
from the term `digital commodity dealer' any
person or class of persons if the Commission
determines that the rule or regulation will
effectuate the purposes of this Act.</DELETED>
<DELETED> ``(I) Digital commodity exchange.--The
term `digital commodity exchange' means a trading
facility that offers or seeks to offer a cash or spot
market in at least 1 digital commodity.</DELETED>
<DELETED> ``(J) Mixed digital asset transaction.--
The term `mixed digital asset transaction' means a
transaction in which a digital commodity is traded for
a security.</DELETED>
<DELETED> ``(K) Terms defined under the securities
act of 1933.--The terms `blockchain system',
`decentralized governance system', `digital asset',
`digital commodity issuer', `digital commodity
affiliated person', `digital commodity related person',
`end user distribution', `mature blockchain system',
`permitted payment stablecoin', and `permitted payment
stablecoin issuer' have the meaning given those terms,
respectively, under section 2(a) of the Securities Act
of 1933 (15 U.S.C. 77b(a)).''; and</DELETED>
<DELETED> (5) in paragraph (41) (as so redesignated by
paragraph (4) of this subsection)--</DELETED>
<DELETED> (A) by striking ``and'' at the end of
subparagraph (E);</DELETED>
<DELETED> (B) by striking the period at the end of
subparagraph (F) and inserting ``; and''; and</DELETED>
<DELETED> (C) by adding at the end the
following:</DELETED>
<DELETED> ``(G) a digital commodity exchange
registered under section 5i.''.</DELETED>
<DELETED> (b) Conforming Amendments.--</DELETED>
<DELETED> (1) Each of the following provisions of law is
amended by striking ``1a(18)'' and inserting
``1a(19)'':</DELETED>
<DELETED> (A) Section 4s(h)(5)(A)(i) of the
Commodity Exchange Act (7 U.S.C.
6s(h)(5)(A)(i)).</DELETED>
<DELETED> (B) Section 5(e) of the Securities Act of
1933 (15 U.S.C. 77e(e)).</DELETED>
<DELETED> (C) Section 6(g)(5)(B) of the Securities
Exchange Act of 1934 (15 U.S.C.
78f(g)(5)(B)).</DELETED>
<DELETED> (D) Section 15F(h)(5)(A)(i) of the
Securities Exchange Act of 1934 (15 U.S.C. 78o-
10(h)(5)(A)(i)).</DELETED>
<DELETED> (2) Section 752 of the Wall Street Transparency
and Accountability Act of 2010 (15 U.S.C. 8325) is amended by
striking ``1a(39)'' and inserting ``1a(40)''.</DELETED>
<DELETED> (3) Section 4s(f)(1)(D) of the Commodity Exchange
Act (7 U.S.C. 6s(f)(1)(D)) is amended by striking ``1a(47)(A)''
and inserting ``1a(48)(A)''.</DELETED>
<DELETED> (4) Each of the following provisions of the
Commodity Exchange Act is amended by striking ``1a(47)(A)(v)''
and inserting ``1a(48)(A)(v)'':</DELETED>
<DELETED> (A) Section 4t(b)(1)(C) (7 U.S.C.
6t(b)(1)(C)).</DELETED>
<DELETED> (B) Section 5(d)(23) (7 U.S.C.
7(d)(23)).</DELETED>
<DELETED> (C) Section 5b(k)(3) (7 U.S.C. 7a-
1(k)(3)).</DELETED>
<DELETED> (D) Section 5h(f)(10)(A)(iii) (7 U.S.C.
7b-3(f)(10)(A)(iii)).</DELETED>
<DELETED> (5) Section 21(f)(4)(C) of the Commodity Exchange
Act (7 U.S.C. 24a(f)(4)(C)) is amended by striking ``1a(48)''
and inserting ``1a(49)''.</DELETED>
<DELETED> (6) Section 403 of the Legal Certainty for Bank
Products Act of 2000 (7 U.S.C. 27a) is amended--</DELETED>
<DELETED> (A) in subsection (a)(2), by striking
``1a(47)(A)(v)'' and inserting ``1a(48)(A)(v)'';
and</DELETED>
<DELETED> (B) in each of subsections (b)(1) and
(c)(2), by striking ``1a(47)'' and inserting
``1a(48)''.</DELETED>
<DELETED> (7) Section 712 of the Wall Street Transparency
and Accountability Act of 2010 (15 U.S.C. 8302) is amended--
</DELETED>
<DELETED> (A) in subsection (a)(8), by striking
``1a(47)(D)'' each place it appears and inserting
``1a(48)(D)''; and</DELETED>
<DELETED> (B) in subsection (d)(1), by striking
``1a(47)(A)(v)'' each place it appears and inserting
``1a(48)(A)(v)''.</DELETED>
<DELETED>SEC. 104. DEFINITIONS UNDER THIS ACT.</DELETED>
<DELETED> In this Act:</DELETED>
<DELETED> (1) Definitions under the commodity exchange
act.--The terms ``decentralized finance messaging system'',
``decentralized finance trading protocol'', ``digital
commodity'', ``digital commodity broker'', ``digital commodity
dealer'', ``digital commodity exchange'', and ``mixed digital
asset transaction'' have the meaning given those terms,
respectively, under section 1a of the Commodity Exchange Act (7
U.S.C. 1a).</DELETED>
<DELETED> (2) Definitions under the securities act of
1933.--The terms ``blockchain'', ``blockchain system'',
``blockchain protocol'', ``decentralized governance system'',
``digital asset'', ``digital commodity issuer'', ``end user
distribution'', ``mature blockchain system'', ``permitted
payment stablecoin'', and ``permitted payment stablecoin
issuer'' have the meaning given those terms, respectively,
under section 2(a) of the Securities Act of 1933 (15 U.S.C.
77b(a)).</DELETED>
<DELETED> (3) Definitions under the securities exchange act
of 1934.--The terms ``Bank Secrecy Act'', ``securities laws'',
and ``self-regulatory organization'' have the meaning given
those terms, respectively, under section 3(a) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a)).</DELETED>
<DELETED>SEC. 105. RULEMAKINGS.</DELETED>
<DELETED> (a) Definitions.--The Commodity Futures Trading Commission
and the Securities and Exchange Commission shall jointly issue rules to
further define the following terms:</DELETED>
<DELETED> (1) The terms--</DELETED>
<DELETED> (A) ``blockchain'', ``blockchain
application'', ``blockchain system'', ``blockchain
protocol'', ``decentralized governance system'',
``digital commodity affiliated person'', ``digital
commodity issuer'', ``digital commodity related
person'', ``end user distribution'', and ``mature
blockchain system'', as defined under section 2(a) of
the Securities Act of 1933;</DELETED>
<DELETED> (B) ``unilateral authority'', as such term
is used in section 42 of the Securities Exchange Act of
1934 and section 1a of the Commodity Exchange Act;
and</DELETED>
<DELETED> (C) ``programmatic functioning'', as such
term is used in sections 4C of the Securities Act of
1933, section 42 of the Securities Exchange Act of
1934, and section 1a of the Commodity Exchange
Act.</DELETED>
<DELETED> (2) The terms ``digital commodity'',
``decentralized finance messaging system'', and ``decentralized
finance trading protocol'', as defined under section 1a of the
Commodity Exchange Act.</DELETED>
<DELETED> (b) Joint Rulemaking for Mixed Digital Asset
Transactions.--The Securities and Exchange Commission and the Commodity
Futures Trading Commission shall jointly issue rules applicable to
mixed digital asset transactions under this Act and the amendments made
by this Act, including by further defining such term.</DELETED>
<DELETED> (c) Protection of Self-Custody.--</DELETED>
<DELETED> (1) In general.--A United States individual shall
retain the right to--</DELETED>
<DELETED> (A) maintain a hardware wallet or software
wallet for the purpose of facilitating the individual's
own lawful custody of digital assets; and</DELETED>
<DELETED> (B) engage in direct, peer-to-peer
transactions in digital assets with another individual
or entity for the individual's own lawful purposes
using a hardware wallet or software wallet, if--
</DELETED>
<DELETED> (i) such other individual or
entity is not a financial institution (as
defined in section 5312 of title 31, United
States Code); and</DELETED>
<DELETED> (ii) the transactions do not
involve any property or interests in property
that are blocked pursuant to, or are otherwise
prohibited by, United States
sanctions.</DELETED>
<DELETED> (2) Application.--This subsection--</DELETED>
<DELETED> (A) applies solely to personal use by
individuals; and</DELETED>
<DELETED> (B) does not apply to individuals acting
in a custodial or fiduciary capacity for
others.</DELETED>
<DELETED> (3) Rule of construction.--Nothing in this
subsection shall be construed to limit the authority of the
Secretary of the Treasury, the Securities and Exchange
Commission, the Commodity Futures Trading Commission, the Board
of Governors of the Federal Reserve System, the Comptroller of
the Currency, the Federal Deposit Insurance Corporation, or the
National Credit Union Administration to carry out any
enforcement action or special measure authorized under
applicable law, including--</DELETED>
<DELETED> (A) the Bank Secrecy Act, section 9714 of
the Combating Russian Money Laundering Act (31 U.S.C.
5318A note), and section 7213A of the Fentanyl
Sanctions Act (21 U.S.C. 2313a); or</DELETED>
<DELETED> (B) any other law relating to illicit
finance, money laundering, terrorism financing, or
United States sanctions.</DELETED>
<DELETED> (d) Joint Rulemaking, Procedures, or Guidance for
Delisting.--Not later than 180 days after the date of the enactment of
this Act, the Commodity Futures Trading Commission and the Securities
and Exchange Commission shall jointly issue rules, procedures, or
guidance (as determined appropriate by the Commissions) regarding the
process to delist an asset for trading under section 106 if the
Commissions determine that the listing is inconsistent with the
Commodity Exchange Act, the securities laws (including regulations
under those laws), or this Act.</DELETED>
<DELETED> (e) Joint Rules for Portfolio Margining Determinations.--
</DELETED>
<DELETED> (1) In general.--Not later than 360 days after the
date of the enactment of this Act, the Commodity Futures
Trading Commission and the Securities and Exchange Commission
shall jointly issue rules describing the process for persons
registered with either such Commission to seek a joint order or
determination with respect to margin, customer protection,
segregation, or other requirements as necessary to facilitate
portfolio margining of securities (including related extensions
of credit), security-based swaps, contracts for future
delivery, options on a contract for future delivery, swaps, and
digital commodities, or any subset thereof, in--</DELETED>
<DELETED> (A) a securities account carried by a
registered broker or dealer or a security-based swap
account carried by a registered security-based swap
dealer;</DELETED>
<DELETED> (B) a futures or cleared swap account
carried by a registered futures commission
merchant;</DELETED>
<DELETED> (C) a swap account carried by a swap
dealer; or</DELETED>
<DELETED> (D) a digital commodity account carried by
a registered digital commodity broker or digital
commodity dealer that is also registered in such other
capacity as is necessary to also carry the other
customer or counterparty positions being held in the
account.</DELETED>
<DELETED> (2) Process.--With respect to a joint order or
determination described in paragraph (1), the rules required to
be issued pursuant to paragraph (1) shall require--</DELETED>
<DELETED> (A) the joint order or determination to be
issued only if the order or determination is in the
public interest and provides for the appropriate
protection of customers;</DELETED>
<DELETED> (B) applicants to file a standard
application, in a form and manner determined by the
Securities and Exchange Commission and the Commodity
Futures Trading Commission, which shall include the
information necessary to make the joint order or
determination;</DELETED>
<DELETED> (C) the Securities and Exchange Commission
and the Commodity Futures Trading Commission to make a
final determination not later than 270 days after the
filing of a completed application;</DELETED>
<DELETED> (D) the Securities and Exchange Commission
and the Commodity Futures Trading Commission to
consider the public interest of the joint order or
determination through the solicitation of public
comments; and</DELETED>
<DELETED> (E) the Securities and Exchange Commission
and the Commodity Futures Trading Commission to consult
with other relevant foreign or domestic regulators,
including the Board of Governors of the Federal Reserve
System, the Federal Deposit Insurance Corporation, and
the Office of the Comptroller of the Currency, as
appropriate.</DELETED>
<DELETED> (f) Capital Requirements to Address Netting Agreements.--
No later than 360 days following the date of enactment of this Act, the
Board of Governors of the Federal Reserve System, the Comptroller of
the Currency, and the Federal Deposit Insurance Corporation shall
develop risk-based and leverage capital requirements for insured
depository institutions, depository institution holding companies, and
nonbank financial companies supervised by the Board of Governors that
address netting agreements that provide for termination and close-out
netting across multiple types of financial transactions, consistent
with subsection (e), in the event of a counterparty's
default.</DELETED>
<DELETED>SEC. 106. EXPEDITED REGISTRATION FOR DIGITAL COMMODITY
EXCHANGES, BROKERS, AND DEALERS; PROVISIONAL
STATUS.</DELETED>
<DELETED> (a) Registration.--</DELETED>
<DELETED> (1) In general.--Unless exempted from
registration, a person shall not act as a digital commodity
broker, digital commodity dealer, or digital commodity exchange
after the end of the 90-day period beginning on the date the
process described in paragraph (2) is adopted by the Commodity
Futures Trading Commission, unless, as the case may be, the
person is registered as a--</DELETED>
<DELETED> (A) digital commodity broker pursuant to
section 4u of the Commodity Exchange Act;</DELETED>
<DELETED> (B) digital commodity dealer pursuant to
section 4u of the Commodity Exchange Act; or</DELETED>
<DELETED> (C) digital commodity exchange pursuant to
section 5i of the Commodity Exchange Act.</DELETED>
<DELETED> (2) Expedited process.--Within 180 days after the
date of the enactment of this Act, the Commodity Futures
Trading Commission shall adopt, by rule, regulation, or order,
a process for expedited registration of persons required to be
registered pursuant to paragraph (1).</DELETED>
<DELETED> (b) Provisional Status.--</DELETED>
<DELETED> (1) In general.--A person who is registered in
accordance with subsection (a) of this section shall be in
provisional status until--</DELETED>
<DELETED> (A) in the case of a digital commodity
broker or dealer, 270 days after the final effective
date of the rulemakings required under section 4u of
the Commodity Exchange Act; or</DELETED>
<DELETED> (B) in the case of a digital commodity
exchange, 270 days after the final effective date of
the rulemakings required under section 5i of such
Act.</DELETED>
<DELETED> (2) Payment of fees.--A person in provisional
status shall pay all fees and penalties required under section
410.</DELETED>
<DELETED> (c) Operations Prior to Regulations.--</DELETED>
<DELETED> (1) Requirements.--A person in provisional status
shall be subject to the requirements of this section and the
Commodity Exchange Act and any rules or regulations promulgated
under this section or the Commodity Exchange Act, as
applicable.</DELETED>
<DELETED> (2) Listings.--</DELETED>
<DELETED> (A) In general.--Except as provided in
subparagraph (B), a person in provisional status may
continue to offer, solicit, trade, facilitate, execute,
clear, report, or otherwise deal in any digital asset
offered on or through the facilities of the person
before the date of registration under this section,
until such time as the joint rulemaking on definitions
required under section 105(a) is effective.</DELETED>
<DELETED> (B) Delisting.--Before the effective date
of the joint rulemaking on definitions under section
105(a), a person in provisional status shall cease
offering, soliciting, trading, facilitating, executing,
clearing, reporting, or otherwise dealing in any
digital asset required to be delisted pursuant to a
joint delisting process established under section
105(d).</DELETED>
<DELETED> (3) Exemptive authority.--In order to promote
responsible innovation and fair competition, or protect
customers, the Commodity Futures Trading Commission may exempt
any persons or class of persons registered pursuant to
subsection (a) and in provisional status pursuant to subsection
(b) from any requirements of this section or the Commodity
Exchange Act or any rules or regulations promulgated under this
section or the Commodity Exchange Act, as applicable.</DELETED>
<DELETED> (d) Customer Disclosure Before Registration.--</DELETED>
<DELETED> (1) In general.--Beginning 30 days after the date
of the enactment of this Act, any person acting as a digital
commodity exchange, digital commodity broker, or digital
commodity dealer shall disclose to the customers of the person
so acting, in the disclosure documents, offering documents, and
promotional material of the person so acting, in a prominent
manner, that the person is not registered with or regulated by
the Commodity Futures Trading Commission.</DELETED>
<DELETED> (2) Expiration.--Paragraph (1) of this subsection
shall not apply to any person who registers pursuant to
subsection (a).</DELETED>
<DELETED>SEC. 107. COMMODITY EXCHANGE ACT AND SECURITIES LAWS SAVINGS
PROVISIONS.</DELETED>
<DELETED> (a) In General.--Nothing in this Act shall affect or apply
to, or be interpreted to affect or apply to--</DELETED>
<DELETED> (1) any agreement, contract, or transaction that
is subject to the Commodity Exchange Act as--</DELETED>
<DELETED> (A) a contract of sale of a commodity for
future delivery or an option on such a
contract;</DELETED>
<DELETED> (B) a swap;</DELETED>
<DELETED> (C) a security futures product;</DELETED>
<DELETED> (D) an option authorized under section 4c
of such Act;</DELETED>
<DELETED> (E) an agreement, contract, or transaction
described in section 2(c)(2)(C)(i) of such Act;
or</DELETED>
<DELETED> (F) a leverage transaction authorized
under section 19 of such Act;</DELETED>
<DELETED> (2) any agreement, contract, or transaction that
is subject to the securities laws as--</DELETED>
<DELETED> (A) a security-based swap;</DELETED>
<DELETED> (B) a security futures product;
or</DELETED>
<DELETED> (C) an option on or based on the value of
a security; or</DELETED>
<DELETED> (3) the activities of any person with respect to
any such agreement, contract, or transaction.</DELETED>
<DELETED> (b) Prohibitions on Spot Digital Commodity Entities.--
Nothing in this Act authorizes, or shall be interpreted to authorize, a
digital commodity exchange, digital commodity broker, or digital
commodity dealer to engage in any activities involving any transaction,
contract, or agreement described in subsection (a)(1), solely by virtue
of being registered as a digital commodity exchange, digital commodity
broker, or digital commodity dealer.</DELETED>
<DELETED> (c) Definitions.--In this section, each term shall have
the meaning provided in the Commodity Exchange Act or the regulations
prescribed under such Act.</DELETED>
<DELETED>SEC. 108. ADMINISTRATIVE REQUIREMENTS.</DELETED>
<DELETED> Section 4c(a) of the Commodity Exchange Act (7 U.S.C.
6c(a)) is amended--</DELETED>
<DELETED> (1) in paragraph (3)--</DELETED>
<DELETED> (A) in subparagraph (B), by striking
``or'' at the end;</DELETED>
<DELETED> (B) in subparagraph (C), by striking the
period and inserting ``; or''; and</DELETED>
<DELETED> (C) by adding at the end the
following:</DELETED>
<DELETED> ``(D) a contract of sale of a digital
commodity.'';</DELETED>
<DELETED> (2) in paragraph (4)--</DELETED>
<DELETED> (A) in subparagraph (A)--</DELETED>
<DELETED> (i) in clause (ii), by striking
``or'' at the end;</DELETED>
<DELETED> (ii) in clause (iii), by striking
the period and inserting ``; or'';
and</DELETED>
<DELETED> (iii) by adding at the end the
following:</DELETED>
<DELETED> ``(iv) a contract of sale of a
digital commodity.'';</DELETED>
<DELETED> (B) in subparagraph (B)--</DELETED>
<DELETED> (i) in clause (ii), by striking
``or'' at the end;</DELETED>
<DELETED> (ii) in clause (iii), by striking
the period and inserting ``; or'';
and</DELETED>
<DELETED> (iii) by adding at the end the
following:</DELETED>
<DELETED> ``(iv) a contract of sale of a
digital commodity.''; and</DELETED>
<DELETED> (C) in subparagraph (C)--</DELETED>
<DELETED> (i) in clause (ii), by striking
``or'' at the end;</DELETED>
<DELETED> (ii) by striking ``(iii) a swap,
provided however,'' and inserting the
following:</DELETED>
<DELETED> ``(iii) a swap; or</DELETED>
<DELETED> ``(iv) a contract of sale of a
digital commodity,</DELETED>
<DELETED>provided, however,''; and</DELETED>
<DELETED> (iii) by striking ``clauses (i),
(ii), or (iii)'' and insert ``any of clauses
(i) through (iv)''.</DELETED>
<DELETED>SEC. 109. TREATMENT OF CERTAIN NON-CONTROLLING BLOCKCHAIN
DEVELOPERS.</DELETED>
<DELETED> (a) In General.--Notwithstanding applicable law, a non-
controlling blockchain developer or provider of a blockchain service
shall not be treated as a money transmitter or as engaged in ``money
transmitting'' or, following the date of enactment of this Act, be
otherwise subject to any new registration requirement that is
substantially similar to the requirement that currently applies to
money transmitters, solely on the basis of--</DELETED>
<DELETED> (1) creating or publishing software to facilitate
the creation of, or provision of maintenance services to, a
blockchain or blockchain service;</DELETED>
<DELETED> (2) providing hardware or software to facilitate a
customer's own custody or safekeeping of the customer's digital
assets; or</DELETED>
<DELETED> (3) providing infrastructure support to maintain a
blockchain service.</DELETED>
<DELETED> (b) Rule of Construction.--Nothing in this section shall
be construed to affect whether a blockchain developer or provider of a
blockchain service is otherwise subject to classification or treatment
as a money transmitter, or as engaged in ``money transmitting'', under
applicable State or Federal law, including laws relating to anti-money
laundering or countering the financing of terrorism, based on conduct
outside the scope of subsection (a). Nothing in this section shall be
construed to affect whether a blockchain developer or provider of a
blockchain service is otherwise subject to classification or treatment
as a financial institution under the Bank Secrecy Act, this Act, or any
Act enacted after the date of enactment of this Act.</DELETED>
<DELETED> (c) Effect on Other Laws.--</DELETED>
<DELETED> (1) Intellectual property law.--Nothing in this
section shall be construed to limit or expand any law
pertaining to intellectual property.</DELETED>
<DELETED> (2) State law.--Nothing in this section shall be
construed to prevent any State from enforcing any State law
that is consistent with this section. No cause of action may be
brought and no liability may be imposed under any State or
local law that is inconsistent with this section.</DELETED>
<DELETED> (d) Definitions.--In this section:</DELETED>
<DELETED> (1) Blockchain developer.--The term ``blockchain
developer'' means any person or business that creates or
publishes software to facilitate the creation of, or provide
maintenance to, a blockchain or a blockchain service.</DELETED>
<DELETED> (2) Blockchain service.--The term ``blockchain
service'' means any information, transaction, or computing
service or system that provides or enables access to a
blockchain network by multiple users, including specifically a
service or system that enables users to send, receive,
exchange, or store digital assets described by blockchain
networks.</DELETED>
<DELETED> (3) Non-controlling blockchain developer or
provider of a blockchain service.--The term ``non-controlling
blockchain developer or provider of a blockchain service''
means a blockchain developer or provider of a blockchain
service that in the regular course of operations, does not have
the legal right or the unilateral and independent ability to
control, initiate upon demand, or effectuate transactions
involving digital assets that users are entitled to, without
the approval, consent, or direction of any other third
party.</DELETED>
<DELETED>SEC. 110. APPLICATION OF THE BANK SECRECY ACT.</DELETED>
<DELETED> (a) In General.--Section 5312(c)(1)(A) of title 31, United
States Code, is amended--</DELETED>
<DELETED> (1) by inserting ``digital commodity broker,
digital commodity dealer,'' after ``futures commission
merchant,''; and</DELETED>
<DELETED> (2) by inserting before the period the following:
``and any digital commodity exchange registered, or required to
register, under the Commodity Exchange Act which permits direct
customer access''.</DELETED>
<DELETED> (b) Bank Secrecy Act Requirements.--</DELETED>
<DELETED> (1) Regulations.--The Secretary of the Treasury,
acting through the Director of the Financial Crimes Enforcement
Network, and in consultation with Commodity Futures Trading
Commission, shall issue requirements consistent with the
requirements of futures commission merchants to apply the Bank
Secrecy Act to digital commodity brokers, digital commodity
dealers, and digital commodity exchanges that are tailored to
the size and complexity of such entities, including by
requiring each such entity to--</DELETED>
<DELETED> (A) establish and maintain an anti-money
laundering and countering the financing of terrorism
program, which shall include--</DELETED>
<DELETED> (i) an appropriate risk
assessment;</DELETED>
<DELETED> (ii) the development of internal
policies, procedures, and controls;</DELETED>
<DELETED> (iii) the designation of a
compliance officer;</DELETED>
<DELETED> (iv) an ongoing employee training
program; and</DELETED>
<DELETED> (v) an independent audit function
to test such program;</DELETED>
<DELETED> (B) retain appropriate records of
transactions;</DELETED>
<DELETED> (C) monitor and report suspicious
activity, which may include use of appropriate
distributed ledger analytics; and</DELETED>
<DELETED> (D) maintain an effective customer
identification program to identify and verify account
holders and carry out appropriate customer due
diligence.</DELETED>
<DELETED> (2) Compliance with sanctions.--A digital
commodity broker, digital commodity dealer, or digital
commodity exchange shall comply with all laws and regulations
related to United States sanctions administered by the Office
of Foreign Assets Control.</DELETED>
<DELETED>SEC. 111. RULE OF CONSTRUCTION.</DELETED>
<DELETED> Nothing in this Act, or the amendments made by this Act,
shall be construed to limit or prevent the continued application of
applicable ethics statutes and regulations administered by the Office
of Government Ethics, or the ethics rules of the Senate and the House
of Representatives, including section 208 of title 18, United States
Code, and sections 2635.702 and 2635.802 of title 5, Code of Federal
Regulations. For the avoidance of doubt, existing Office of Government
Ethics laws and the ethics rules of the Senate and the House of
Representatives prohibit any member of Congress or senior executive
branch official from issuing a digital commodity during their time in
public service. For the purposes of this section, an employee described
in section 202 of title 18, United States Code, shall be deemed an
executive branch employee for purposes of complying with section 208 of
that title.</DELETED>
<DELETED>SEC. 112. IMPLEMENTATION.</DELETED>
<DELETED> (a) Global Rulemaking Timeframe.--Unless otherwise
provided in this Act or an amendment made by this Act, the Commodity
Futures Trading Commission and the Securities and Exchange Commission,
or both, shall individually, and jointly where required, promulgate
rules and regulations required of each Commission under this Act or an
amendment made by this Act not later than 360 days after the date of
enactment of this Act.</DELETED>
<DELETED> (b) Rules and Registration Before Final Effective Dates.--
</DELETED>
<DELETED> (1) In general.--In order to prepare for the
implementation of this Act, the Commodity Futures Trading
Commission and the Securities and Exchange Commission may,
before any effective date provided in this Act--</DELETED>
<DELETED> (A) promulgate rules, regulations, or
orders permitted or required by this Act;</DELETED>
<DELETED> (B) conduct studies and prepare reports
and recommendations required by this Act;</DELETED>
<DELETED> (C) register persons under this Act;
and</DELETED>
<DELETED> (D) exempt persons, agreements, contracts,
or transactions from provisions of this Act, under the
terms contained in this Act.</DELETED>
<DELETED> (2) Limitation on effectiveness.--An action by the
Commodity Futures Trading Commission or the Securities and
Exchange Commission under paragraph (1) shall not become
effective before the effective date otherwise applicable to the
action under this Act.</DELETED>
<DELETED>TITLE II--OFFERS AND SALES OF DIGITAL COMMODITIES</DELETED>
<DELETED>SEC. 201. TREATMENT OF INVESTMENT CONTRACT ASSETS.</DELETED>
<DELETED> (a) Securities Act of 1933.--Section 2(a) of the
Securities Act of 1933 (15 U.S.C. 77b(a)), as amended by section 101,
is further amended--</DELETED>
<DELETED> (1) in paragraph (1), by adding at the end the
following: ``The term `investment contract' does not include an
investment contract asset.''; and</DELETED>
<DELETED> (2) by adding at the end the following:</DELETED>
<DELETED> ``(36) The term `investment contract asset' means
a digital commodity--</DELETED>
<DELETED> ``(A) that can be exclusively possessed
and transferred, person to person, without necessary
reliance on an intermediary, and is recorded on a
blockchain; and</DELETED>
<DELETED> ``(B) sold or otherwise transferred, or
intended to be sold or otherwise transferred, pursuant
to an investment contract.''.</DELETED>
<DELETED> (b) Investment Advisers Act of 1940.--Section 202(a)(18)
of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(18)) is
amended by adding at the end the following: ``The term `investment
contract' does not include an investment contract asset (as such term
is defined under section 2(a) of the Securities Act of
1933).''.</DELETED>
<DELETED> (c) Investment Company Act of 1940.--Section 2(a)(36) of
the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(36)) is amended
by adding at the end the following: ``The term `investment contract'
does not include an investment contract asset (as such term is defined
under section 2(a) of the Securities Act of 1933).''.</DELETED>
<DELETED> (d) Securities Exchange Act of 1934.--Section 3(a)(10) of
the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(10)) is amended
by adding at the end the following: ``The term `investment contract'
does not include an investment contract asset (as such term is defined
under section 2(a) of the Securities Act of 1933).''.</DELETED>
<DELETED> (e) Securities Investor Protection Act of 1970.--Section
16(14) of the Securities Investor Protection Act of 1970 (15 U.S.C.
78lll(14)) is amended by adding at the end the following: ``The term
`investment contract' does not include an investment contract asset (as
such term is defined under section 2(a) of the Securities Act of
1933).''.</DELETED>
<DELETED>SEC. 202. EXEMPTED PRIMARY TRANSACTIONS IN DIGITAL
COMMODITIES.</DELETED>
<DELETED> (a) In General.--The Securities Act of 1933 (15 U.S.C. 77a
et seq.) is amended--</DELETED>
<DELETED> (1) in section 4(a), by adding at the end the
following:</DELETED>
<DELETED> ``(8) the offer or sale of an investment contract
involving units of a digital commodity by its digital commodity
issuer (including all entities controlled by or under common
control with the issuer), if--</DELETED>
<DELETED> ``(A) the blockchain system to which the
digital commodity relates, together with the digital
commodity, is certified as a mature blockchain system
under section 42 of the Securities Exchange Act of 1934
or the issuer intends for the blockchain system to
which the digital commodity relates to be a mature
blockchain system by the later of--</DELETED>
<DELETED> ``(i) the date that is four years
after the first sale of the investment contract
involving a unit of such digital commodity in
reliance on the exemption provided under this
paragraph, subject to any extensions as may be
granted by the Commission; or</DELETED>
<DELETED> ``(ii) the date that is four years
after the effective date of this
paragraph;</DELETED>
<DELETED> ``(B) the sum of all cash and other
consideration to be received by the digital commodity
issuer in reliance on the exemption provided under this
paragraph, during the 12-month period preceding the
date of such offering, including the amount received in
such offering, is not more than $50,000,000 (as such
amount is annually adjusted by the Commission to
reflect the change in the Consumer Price Index for All
Urban Consumers published by the Bureau of Labor
Statistics of the Department of Labor);</DELETED>
<DELETED> ``(C) after the completion of the
transaction, a purchaser does not own more than 10
percent of the total amount of the outstanding units of
the digital commodity;</DELETED>
<DELETED> ``(D) the transaction does not involve the
offer or sale of an investment contract involving units
of a digital commodity by its digital commodity issuer
that--</DELETED>
<DELETED> ``(i) is not organized under the
laws of a State, a territory of the United
States, or the District of Columbia;</DELETED>
<DELETED> ``(ii) is a development stage
company that either--</DELETED>
<DELETED> ``(I) has no specific
business plan or purpose; or</DELETED>
<DELETED> ``(II) has indicated that
the business plan of the company is to
merge with or acquire an unidentified
company;</DELETED>
<DELETED> ``(iii) is an investment company,
as defined in section 3 of the Investment
Company Act of 1940 (15 U.S.C. 80a-3), or is
excluded from the definition of investment
company by section 3(c) of that Act (15 U.S.C.
80a-3(b) or 80a-3(c));</DELETED>
<DELETED> ``(iv) is issuing fractional
undivided interests in oil or gas rights, or a
similar interest in other mineral
rights;</DELETED>
<DELETED> ``(v) is, or has been, subject to
any order of the Commission entered pursuant to
section 12(j) of the Securities Exchange Act of
1934 during the 5-year period before the filing
of the offering statement; or</DELETED>
<DELETED> ``(vi) is disqualified pursuant to
section 230.262 of title 17, Code of Federal
Regulations; and</DELETED>
<DELETED> ``(E) the issuer meets the requirements of
section 4B(b).''; and</DELETED>
<DELETED> (2) by inserting after section 4A the
following:</DELETED>
<DELETED>``SEC. 4B. REQUIREMENTS WITH RESPECT TO CERTAIN DIGITAL
COMMODITY TRANSACTIONS.</DELETED>
<DELETED> ``(a) Commission Jurisdiction.--For the purposes of this
section:</DELETED>
<DELETED> ``(1) The Commission shall have jurisdiction and
enforcement authority with respect to disclosures described in
this section.</DELETED>
<DELETED> ``(2) Section 17 shall apply to a statement made
in an offering statement, disclosure, or report filed under
this section to the same extent as such section 17 applies to a
statement made in any other offering statement, disclosure, or
report filed under this Act.</DELETED>
<DELETED> ``(b) Requirements for Digital Commodity Issuers.--
</DELETED>
<DELETED> ``(1) Terms and conditions.--A digital commodity
issuer offering or selling an investment contract involving
units of a digital commodity in reliance on section 4(a)(8)
shall file with the Commission an offering statement and any
related documents, in such form and with such content as
prescribed by the Commission, including financial information,
a description of the issuer and the operations of the issuer,
the financial condition of the issuer, a description of the
plan of distribution of any unit of a digital commodity that is
to be offered as well as the intended use of the offering
proceeds, and a description of the development plan for the
blockchain system, and the related digital commodity, to become
a mature blockchain system, if such blockchain system is not
already certified as a mature blockchain system pursuant to
section 42 of the Securities Exchange Act of 1934 (15 U.S.C.
78a et seq.).</DELETED>
<DELETED> ``(2) Information required for purchasers.--A
digital commodity issuer that has filed a statement under
paragraph (1) to offer and sell an investment contract
involving a unit of a digital commodity in reliance on section
4(a)(8) shall include in such statement the following
information:</DELETED>
<DELETED> ``(A) Maturity status.--Whether the
blockchain system to which the digital commodity
relates has been certified as a mature blockchain
system pursuant to section 42 of the Securities
Exchange Act of 1934 (15 U.S.C. 78a et seq.) and, where
such blockchain system is not so certified, a statement
of the digital commodity issuer's intent for the
blockchain system to which the digital commodity
relates to be a mature blockchain system within the
time period described in section 4(a)(8)(A).</DELETED>
<DELETED> ``(B) Source code.--The source code, or a
publicly accessible webpage displaying such source
code, for any blockchain system to which the digital
commodity relates, and whether the source code was
sourced from an external third party, whether there are
any existing external dependencies, and whether the
code underwent a third-party security audit, along with
material results of any such audit.</DELETED>
<DELETED> ``(C) Transaction history.--A description
of the steps necessary to independently access, search,
and verify the transaction history of any blockchain
system to which the digital commodity relates, to the
extent any such independent access, search, and
verification activities are technically feasible with
respect to such blockchain system.</DELETED>
<DELETED> ``(D) Digital commodity economics.--A
description of the purpose of any blockchain system to
which the digital commodity relates and the operation
of any such blockchain system, including--</DELETED>
<DELETED> ``(i) information explaining the
launch and supply process, including the number
of units of the digital commodity to be issued
in an initial allocation, the total number of
units of the digital commodity to be created,
the release schedule for the units of the
digital commodity, and the total number of
units of the digital commodity
outstanding;</DELETED>
<DELETED> ``(ii) information explaining the
technical requirements for holding, accessing,
and transferring the digital
commodity;</DELETED>
<DELETED> ``(iii) information on any
applicable consensus mechanism or process for
validating transactions, method of generating
or mining digital commodities, and any process
for burning or destroying units of the digital
commodity on the blockchain system;</DELETED>
<DELETED> ``(iv) an explanation of any
mechanism for driving value to the digital
commodity of such blockchain system;
and</DELETED>
<DELETED> ``(v) an explanation of governance
mechanisms for implementing changes to the
blockchain system or forming consensus among
holders of units of such digital
commodity.</DELETED>
<DELETED> ``(E) Plan of development.--The current
state and timeline for the development of any
blockchain system to which the digital commodity
relates, detailing how and when the blockchain system
is intended to be a mature blockchain system, if the
blockchain system is not yet certified as a mature
blockchain system, and the various roles that exist or
are intended to exist in connection with the blockchain
system, such as users, service providers, developers,
transaction validators, and governance participants,
including a discussion of any mechanisms by which
control or authority are exerted with respect to the
blockchain system or its related digital commodity, and
any critical operational dependencies of the blockchain
system or its related digital commodity.</DELETED>
<DELETED> ``(F) Ownership disclosures.--</DELETED>
<DELETED> ``(i) In general.--A list of all
persons who are digital commodity related
persons or digital commodity affiliated persons
who have been issued a unit of the digital
commodity by the digital commodity issuer or
have a right to a unit of the digital commodity
from the digital commodity issuer.</DELETED>
<DELETED> ``(ii) Confidentiality.--The
Commission shall keep each list described under
clause (i) confidential, consistent with what
is necessary or appropriate in the public
interest or for the protection of
investors.</DELETED>
<DELETED> ``(G) Risk factor disclosures.--A
description of the material risks surrounding ownership
of a unit of a digital commodity.</DELETED>
<DELETED> ``(3) Ongoing disclosure requirements for maturing
blockchain systems.--Subject to paragraph (5), the issuer of a
digital commodity related to a blockchain system that is not
yet certified as a mature blockchain system under section 42 of
the Securities Exchange Act of 1934 that has filed a statement
under paragraph (1) to offer and sell an investment contract
involving a unit of a digital commodity in reliance on section
4(a)(8) shall file the following with the Commission:</DELETED>
<DELETED> ``(A) Semiannual reports.--Every 6 months,
a report containing--</DELETED>
<DELETED> ``(i) an updated description of
the current state and timeline for the
development of the blockchain system to which
the digital commodity relates, showing how and
when the blockchain is intended to be a mature
blockchain system;</DELETED>
<DELETED> ``(ii) a description of the
efforts of the issuer and digital commodity
related persons in developing the blockchain
system to which the digital commodity
relates;</DELETED>
<DELETED> ``(iii) the amount of money raised
by the digital commodity issuer in reliance on
section 4(a)(8), how much of that money has
been spent, and the general categories of
activities for which that money has been spent
and amounts spent per category; and</DELETED>
<DELETED> ``(iv) financial statements, where
applicable.</DELETED>
<DELETED> ``(B) Current reports.--A current report
reflecting any material changes relevant to the
information previously reported to the Commission by
the digital commodity issuer, which shall be filed as
soon as practicable after the material change occurred,
in accordance with such rules as the Commission may
prescribe as necessary or appropriate in the public
interest or for the protection of investors.</DELETED>
<DELETED> ``(4) Rulemaking.--Not later than 360 days after
the date of the enactment of this section, the Commission shall
prescribe rules on requirements applicable to issuers of
digital commodities in reliance on section 4(a)(8).</DELETED>
<DELETED> ``(5) Termination of certain reporting
requirements; post-maturity reporting requirements.--</DELETED>
<DELETED> ``(A) In general.--The ongoing reporting
requirements under paragraph (3) shall not apply to a
digital commodity issuer 180 days after the end of the
covered fiscal year, if the information with respect to
the digital commodity and the blockchain system to
which it relates described in subparagraphs (A) through
(C) of paragraph (2) is made publicly available and the
disclosure requirements under subparagraph (C) of this
paragraph are satisfied.</DELETED>
<DELETED> ``(B) Covered fiscal year defined.--In
this paragraph, the term `covered fiscal year' means,
with respect to a digital commodity, the first fiscal
year of a digital commodity issuer in which the
blockchain system to which such digital commodity
relates is certified as a mature blockchain system
under section 42 of the Securities Exchange Act of
1934.</DELETED>
<DELETED> ``(C) Post-maturity reporting
requirements.--After the blockchain system to which a
digital commodity relates is certified as a mature
blockchain system under section 42 of the Securities
Exchange Act of 1934, any digital commodity issuer that
has filed a statement under paragraph (1) to offer and
sell an investment contract involving a unit of a
digital commodity in reliance on section 4(a)(8) and is
engaged in material ongoing efforts related to the
mature blockchain system shall disclose, in a manner
reasonably calculated to inform the public, and at such
frequency as the Commission may prescribe, by rule, a
description of such efforts, including--</DELETED>
<DELETED> ``(i) any participation in a
decentralized governance system of such
blockchain system;</DELETED>
<DELETED> ``(ii) any participation in
alterations or proposed alterations to the
functionality or operation of such blockchain
system;</DELETED>
<DELETED> ``(iii) the use or planned use of
any funds raised in reliance on section 4(a)(8)
or any rulemaking pursuant to section 202(c) of
the CLARITY Act of 2025 in such
efforts;</DELETED>
<DELETED> ``(iv) the amount of units of the
digital commodity, or rights thereto, owned and
controlled by such issuer and any use, sale,
trading, or other disposition thereof;
and</DELETED>
<DELETED> ``(v) any affiliations of such
issuer material to the efforts of such
issuer.</DELETED>
<DELETED> ``(D) Termination of and exemption from
post-maturity reporting requirements.--Not later than
270 days after the date of the enactment of this
section, the Commission shall issue rules--</DELETED>
<DELETED> ``(i) for terminating the
disclosure requirements described in
subparagraph (C) during the first fiscal year
in which the digital commodity issuer does not
engage in material ongoing efforts related to
the mature blockchain system; and</DELETED>
<DELETED> ``(ii) to, as is necessary or
appropriate in the public interest or for the
protection of investors, exempt a digital
commodity issuer from the requirements
described in subparagraph (C) where only a de
minimis amount of market activity involving the
digital commodity of such digital commodity
issuer is taking place.</DELETED>
<DELETED> ``(E) Rule of construction.--Nothing in
subparagraph (C) may be construed to make any digital
commodity described in such subparagraph a
security.</DELETED>
<DELETED> ``(c) Requirements for Intermediaries.--A person acting as
an intermediary in connection with the offer or sale of an investment
contract involving units of a digital commodity in reliance on section
4(a)(8) shall--</DELETED>
<DELETED> ``(1) register with the Commission as a broker or
dealer; and</DELETED>
<DELETED> ``(2) be a member of a national securities
association registered under section 15A of the Securities
Exchange Act of 1934 (15 U.S.C. 78o-3).</DELETED>
<DELETED> ``(d) Disqualification Provisions.--The Commission shall
issue rules to apply the disqualification provisions under section
230.262 of title 17, Code of Federal Regulations, to the exemption
provided under section 4(a)(8).</DELETED>
<DELETED> ``(e) Failure To Mature.--</DELETED>
<DELETED> ``(1) In general.--Not later than 270 days after
the date of the enactment of this section, the Commission shall
issue rules applying such additional obligations and
disclosures for the digital commodity issuers, digital
commodity related persons, and digital commodity affiliated
persons of a blockchain system described under subsection
(b)(1) that does not become a mature blockchain system within
the time period described in section 4(a)(8)(A) as are
necessary or appropriate in the public interest or for the
protection of investors. Such obligations and disclosures shall
include the following:</DELETED>
<DELETED> ``(A) Disclosures.--Disclosures regarding
the following:</DELETED>
<DELETED> ``(i) Failure to mature.--A
detailed explanation of the reason that the
blockchain system has not become a mature
blockchain system within the time period
described in section 4(a)(8)(A).</DELETED>
<DELETED> ``(ii) Development plans.--The
future plans of development of the blockchain
system, including information required under
subsection (b)(3).</DELETED>
<DELETED> ``(iii) Risk factor disclosures.--
The material risks surrounding ownership of a
unit of a digital commodity that relates to a
blockchain system described under subsection
(b)(1) that has not become a mature blockchain
system within the time period described in
section 4(a)(8)(A).</DELETED>
<DELETED> ``(B) Obligations.--Transaction reporting
and beneficial ownership disclosure obligations
applicable to digital commodity related persons and
digital commodity affiliated persons of such blockchain
system.</DELETED>
<DELETED> ``(2) Qualification required.--The Commission may
not permit any additional reliance on an exempt offering for
the offer or sale of an investment contract involving a unit of
a digital commodity by the issuer of the digital commodity
related to a blockchain system described under subsection
(a)(1) that has not become a mature blockchain system within
the time period described in section 4(a)(8)(A) unless the
Commission has qualified any offering statement related to such
exempt offering.''.</DELETED>
<DELETED> (b) Additional Exemptions.--</DELETED>
<DELETED> (1) Certain registration requirements.--Section
12(g)(6) of the Securities Exchange Act of 1934 (15 U.S.C.
78l(g)(6)) is amended by striking ``under section 4(6)'' and
inserting ``under section 4(a)(6) or 4(a)(8)''.</DELETED>
<DELETED> (2) Exemption from state regulation.--Section
18(b)(4) of the Securities Act of 1933 (15 U.S.C. 77r(b)(4)) is
amended--</DELETED>
<DELETED> (A) in subparagraph (B), by striking
``section 4(4)'' and inserting ``section
4(a)(4)'';</DELETED>
<DELETED> (B) in subparagraph (C), by striking
``section 4(6)'' and inserting ``section
4(a)(6)'';</DELETED>
<DELETED> (C) in subparagraph (F)--</DELETED>
<DELETED> (i) by striking ``section 4(2)''
each place such term appears and inserting
``section 4(a)(2)''; and</DELETED>
<DELETED> (ii) by striking ``or'' at the
end;</DELETED>
<DELETED> (D) in subparagraph (G), by striking the
period and inserting ``; or''; and</DELETED>
<DELETED> (E) by adding at the end the
following:</DELETED>
<DELETED> ``(H) section 4(a)(8).''.</DELETED>
<DELETED> (c) Use of Other Exemptions.--</DELETED>
<DELETED> (1) Rule of construction.--Except as provided in
this subsection, nothing in this section or the amendments made
by this section may be construed as prohibiting the offer or
sale of an investment contract involving units of a digital
commodity in reliance on an exemption from registration under
the Securities Act of 1933, including as provided under section
3, 4(a), or 19 of the Securities Act of 1933, other than that
provided under section 4(a)(8) of the Securities Act of
1933.</DELETED>
<DELETED> (2) Rulemakings.--</DELETED>
<DELETED> (A) The Securities and Exchange Commission
may issue rules--</DELETED>
<DELETED> (i) to permit the issuer of a
digital commodity related to a blockchain
system described under section 4B(b)(1) of the
Securities Act of 1933 that has not become a
mature blockchain system within the time period
described in section 4(a)(8)(A) of such Act, or
the issuer of a digital commodity described in
subparagraph (B)(iii), to utilize an exempt
offering to offer or sell an investment
contract involving the digital commodity, if
the Commission qualifies any offering statement
related to such exempt offering; and</DELETED>
<DELETED> (ii) for the offer and sale of
investment contracts involving units of a
digital commodity by issuers that are not
organized under the laws of a State, a
territory of the United States, or the District
of Columbia.</DELETED>
<DELETED> (B) Not later than 270 days after the date
of the enactment of this section, the Securities and
Exchange Commission shall issue the following
rules:</DELETED>
<DELETED> (i) A rule requiring a digital
commodity issuer that last offered or sold an
investment contract involving units of a
digital commodity in reliance on an exemption
from registration under the Securities Act of
1933, including as provided under section 3,
4(a), or 19 of the Securities Act of 1933,
prior to the date of enactment of this Act, to
file a comparable set of disclosures to those
described under section 4B of the Securities
Act of 1933 as the Commission determines
appropriate based on the exemption, the
maturity of the blockchain system to which such
digital commodity relates, and any material
ongoing efforts of such digital commodity
issuer (provided that for blockchains certified
as a mature blockchain system under section 42
of the Securities Exchange Act of 1934, such
disclosures shall be comparable to those under
section 4B(b)(5)(C)), not later than the later
of--</DELETED>
<DELETED> (I) one year after the
effective date of this section;
or</DELETED>
<DELETED> (II) the date of any
secondary market sale of such digital
commodity made in reliance on section
203.</DELETED>
<DELETED> (ii) A rule requiring a digital
commodity issuer that offers or sells an
investment contract involving units of a
digital commodity in reliance on an exemption
from registration under the Securities Act of
1933, including as provided under section 3,
4(a), or 19 of the Securities Act of 1933,
other than that provided under section 4(a)(8)
of the Securities Act of 1933, on or after the
date of enactment of this Act, to file a
comparable set of disclosures to those
described under section 4B of the Securities
Act of 1933 as the Commission determines
appropriate based on the exemption, the
maturity of the blockchain system to which such
digital commodity relates, and any material
ongoing efforts of such digital commodity
issuer, prior to the date of any secondary
market sale of such digital commodity made in
reliance on section 203.</DELETED>
<DELETED> (iii) With respect to a digital
commodity where the digital commodity issuer is
required to file disclosures under clause (i)
or (ii) and where the blockchain system to
which the digital commodity relates is not
certified as a mature blockchain system
pursuant to section 42 of the Securities
Exchange Act of 1934 after the 4-year period
beginning on the date that the first such
disclosure is filed--</DELETED>
<DELETED> (I) a rule prohibiting the
offer or sale of an investment contract
involving units of the digital
commodity unless the Commission has
qualified any offering statement
related to such offer or sale, where
such offer or sale is permitted
pursuant to subparagraph (A)(i);
and</DELETED>
<DELETED> (II) a rule requiring the
digital commodity issuer to make
disclosures comparable to those
described in 4B(e)(1)(A) of the
Securities Act of 1933.</DELETED>
<DELETED> (iv) A rule permitting a successor
to a digital commodity issuer, or such other
appropriate person as designated by the
Commission, to make the disclosures required
under clause (i), where such issuer does not
make the required disclosures.</DELETED>
<DELETED>SEC. 203. TREATMENT OF SECONDARY TRANSACTIONS IN DIGITAL
COMMODITIES THAT ORIGINALLY INVOLVED INVESTMENT
CONTRACTS.</DELETED>
<DELETED> (a) Secondary Market Treatment.--Notwithstanding any other
provision of law, the offer or sale of a digital commodity that
originally involved an investment contract by a person other than the
issuer of such digital commodity, or an agent or underwriter thereof,
shall be deemed not to be an offer or sale of such investment contract
between the issuer of the investment contract involving the digital
commodity, or an agent or underwriter thereof, and the purchaser of
such digital commodity under--</DELETED>
<DELETED> (1) the Securities Act of 1933 (15 U.S.C. 77a et
seq.);</DELETED>
<DELETED> (2) the Investment Advisers Act of 1940 (15 U.S.C.
80b-1 et seq.);</DELETED>
<DELETED> (3) the Investment Company Act of 1940 (15 U.S.C.
80a-1 et seq.);</DELETED>
<DELETED> (4) the Securities Exchange Act of 1934 (15 U.S.C.
78a et seq.);</DELETED>
<DELETED> (5) the Securities Investor Protection Act of 1970
(15 U.S.C. 78aaa et seq.); and</DELETED>
<DELETED> (6) any applicable provisions of State
law.</DELETED>
<DELETED> (b) End User Distributions Not an Offer or Sale of a
Security.--An end user distribution does not involve the offer or sale
of a security.</DELETED>
<DELETED> (c) Agent Defined.--In this section and with respect to a
digital commodity issuer, the term ``agent'' means any person directly
or indirectly controlled by the issuer or under direct or indirect
common control with the issuer.</DELETED>
<DELETED>SEC. 204. REQUIREMENTS FOR OFFERS AND SALES OF DIGITAL
COMMODITIES BY DIGITAL COMMODITY RELATED PERSONS AND
DIGITAL COMMODITY AFFILIATED PERSONS.</DELETED>
<DELETED> The Securities Act of 1933 (15 U.S.C. 77a et seq.), as
amended by section 202, is further amended by inserting after section
4B the following:</DELETED>
<DELETED>``SEC. 4C. REQUIREMENTS FOR OFFERS AND SALES OF DIGITAL
COMMODITIES BY DIGITAL COMMODITY RELATED PERSONS AND
DIGITAL COMMODITY AFFILIATED PERSONS.</DELETED>
<DELETED> ``(a) In General.--It shall be a violation of this Act for
a digital commodity affiliated person or a digital commodity related
person to offer or sell a digital commodity acquired directly from its
issuer, or an agent or underwriter thereof, pursuant to an investment
contract in reliance on section 4(a)(8) or another exemption under this
Act, other than as provided in this section.</DELETED>
<DELETED> ``(b) Commission Jurisdiction.--</DELETED>
<DELETED> ``(1) Where a digital commodity affiliated person
or a digital commodity related person offers or sells a digital
commodity acquired directly from its issuer, or an agent or
underwriter thereof, pursuant to an investment contract in
reliance on section 4(a)(8), or another exemption under this
Act, other than as provided in this section, such digital
commodity affiliated person or digital commodity related person
shall be considered an issuer of such investment
contract.</DELETED>
<DELETED> ``(2) For the purposes of this section, the
Commission shall have jurisdiction and enforcement authority
with respect to an offer or sale of a digital commodity
described in subsection (a).</DELETED>
<DELETED> ``(c) Restrictions on Digital Commodity Related Persons
and Digital Commodity Affiliated Persons.--</DELETED>
<DELETED> ``(1) Prior to being a mature blockchain system.--
Prior to the blockchain system to which a digital commodity
relates being certified as a mature blockchain system under
section 42 of the Securities Exchange Act of 1934, units of the
digital commodity acquired by a digital commodity related
person or digital commodity affiliated person directly from its
issuer (or an agent or underwriter thereof) pursuant to an
investment contract in reliance on section 4(a)(8), or another
exemption under this Act, may be offered or sold by such
digital commodity related person or digital commodity
affiliated person if--</DELETED>
<DELETED> ``(A) reports with respect to such digital
commodity, where required under section 4B(b)(3) (or,
with respect to a digital commodity not issued in
reliance on section 4(a)(8), a comparable set of
reports where required by the Commission) have been
filed with the Commission;</DELETED>
<DELETED> ``(B) the digital commodity related person
or digital commodity affiliated person has held the
units for not less than 12 months; and</DELETED>
<DELETED> ``(C) the aggregate amount of the units of
the digital commodity offered or sold by the digital
commodity related person or digital commodity
affiliated person is--</DELETED>
<DELETED> ``(i) in any 12-month period, or
shorter period as the Commission may prescribe,
not less than 5 percent or greater than 20
percent of the total units of the digital
commodity acquired directly from its issuer (or
an agent or underwriter thereof) by the digital
commodity related person or digital commodity
affiliated person, as determined by the
Commission pursuant to paragraph (3);
and</DELETED>
<DELETED> ``(ii) an amount, as determined by
the Commission pursuant to paragraph (3), not
less than 30 percent or greater than 50 percent
of the total units of the digital commodity
acquired directly from its issuer (or an agent
or underwriter thereof) by the digital
commodity related person or digital commodity
affiliated person.</DELETED>
<DELETED> ``(2) After becoming a mature blockchain system.--
After the blockchain system to which a digital commodity
relates is certified as a mature blockchain system under
section 42 of the Securities Exchange Act of 1934, units of the
digital commodity acquired by a digital commodity related
person or digital commodity affiliated person directly from its
issuer (or an agent or underwriter thereof) pursuant to an
investment contract in reliance on section 4(a)(8) or another
exemption under this Act, may be--</DELETED>
<DELETED> ``(A) offered or sold by a digital
commodity related person; or</DELETED>
<DELETED> ``(B) offered or sold by a digital
commodity affiliated person if--</DELETED>
<DELETED> ``(i) information described in
section 4B(b)(5)(C), where required (or, with
respect to a digital commodity not issued in
reliance on section 4(a)(8), a comparable set
of information, where required) is publicly
available;</DELETED>
<DELETED> ``(ii) the digital commodity
affiliated person has held the units for not
less than the earlier of--</DELETED>
<DELETED> ``(I) 12 months;
or</DELETED>
<DELETED> ``(II) 3 months following
the date on which the blockchain system
is certified as a mature blockchain
system under section 42 of the
Securities Exchange Act of 1934;
and</DELETED>
<DELETED> ``(iii) the aggregate amount of
the units of the digital commodity offered or
sold by the digital commodity affiliated person
in any 12-month period is an amount, as
determined by the Commission pursuant to
paragraph (3), not less than 5 percent or
greater than 10 percent of the total
outstanding amount of the digital
commodity.</DELETED>
<DELETED> ``(3) Rulemakings required.--Not later than 270
days after the date of the enactment of this section,
consistent with protecting investors, maintaining fair,
orderly, and efficient markets, and facilitating capital
formation, and to foster the development of mature blockchain
systems, the Commission, by rule, after notice and comment--
</DELETED>
<DELETED> ``(A) shall set the percentage amounts
described in paragraphs (1)(C)(i), (1)(C)(ii), and
(2)(B)(iii); and</DELETED>
<DELETED> ``(B) may provide an exemption from the
limitation described in paragraph (1)(C)(ii), if the
Commission requires any offer or sale pursuant to such
exemption of a digital commodity related to a
blockchain system that has failed to become a mature
blockchain system under this Act or any rule
promulgated hereunder to be accompanied by the
disclosures required under, as applicable, section
4B(e)(1)(A) or section 202(c)(2)(B)(iii)(II) of the
CLARITY Act of 2025.</DELETED>
<DELETED> ``(d) Rules of Construction.--For purposes of this
section, the use of a digital commodity in the programmatic functioning
of the blockchain system to which it relates is not an offer or sale of
a digital commodity.</DELETED>
<DELETED> ``(e) Manipulative and Deceptive Devices; Reporting.--
</DELETED>
<DELETED> ``(1) In general.--It shall be unlawful for any
digital commodity issuer, digital commodity related person, or
digital commodity affiliated person, directly or indirectly, by
the use of any means or instrumentality of interstate commerce
or of the mails, to use or employ, in connection with the
purchase or sale of any digital commodity, any manipulative or
deceptive device or contrivance in contravention of such rules
and regulations as the Commission may prescribe as necessary or
appropriate in the public interest or for the protection of
investors.</DELETED>
<DELETED> ``(2) Affirmative defense.--Not later than 270
days after the date of the enactment of this section, the
Commission shall issue rules to implement paragraph (1),
including by providing any affirmative defenses to an
enforcement action thereunder as the Commission may prescribe
as necessary or appropriate in the public interest or for the
protection of investors.</DELETED>
<DELETED> ``(3) Reporting.--Not later than 270 days after
the date of the enactment of this section, the Commission shall
issue rules to prescribe such transaction reporting and
beneficial ownership disclosure obligations applicable to
digital commodity related persons and digital commodity
affiliated persons, as necessary or appropriate in the public
interest or for the protection of investors.</DELETED>
<DELETED> ``(4) Differentiation between persons.--In issuing
rules required under paragraphs (2) and (3), the Commission
shall differentiate between digital commodity related persons
and digital commodity affiliated persons, as necessary or
appropriate in the public interest or for the protection of
investors.</DELETED>
<DELETED> ``(f) Certain Units Received Prior to Enactment.--A unit
of a digital commodity received from the digital commodity issuer prior
to the date of the enactment of this section through an offer or sale
of an investment contract involving units of a digital commodity in
reliance on an exemption from registration under this Act, including as
provided under section 3, 4(a), or 19, may be offered or sold by a
digital commodity related person or digital commodity affiliated
person, if--</DELETED>
<DELETED> ``(1) the digital commodity issuer is no longer
engaged in material ongoing efforts related to the blockchain
system to which the digital commodity relates and the
blockchain system to which the digital commodity relates is
certified as a mature blockchain system under section 42 of the
Securities Exchange Act of 1934; or</DELETED>
<DELETED> ``(2) the appropriate disclosures required under
section 202(c)(2)(B) of the CLARITY Act of 2025 have been made
with the Commission.</DELETED>
<DELETED> ``(g) Rulemaking on Further Usage of Digital
Commodities.-- The Commission, consistent with protecting investors,
maintaining fair, orderly, and efficient markets, and facilitating
capital formation, as well as fostering the development of mature
blockchain systems, may, by rule, exempt unconditionally or on stated
terms or conditions, a digital commodity related person or a digital
commodity affiliated person, or any class thereof, from the
requirements of this section for the offer or sale of a digital
commodity, including for the purposes of promoting market
liquidity.''.</DELETED>
<DELETED>SEC. 205. MATURE BLOCKCHAIN SYSTEM REQUIREMENTS.</DELETED>
<DELETED> Title I of the Securities Exchange Act of 1934 (15 U.S.C.
78a et seq.) is amended by adding at the end the following:</DELETED>
<DELETED>``SEC. 42. MATURE BLOCKCHAIN SYSTEMS.</DELETED>
<DELETED> ``(a) Certification of Blockchain Systems.--</DELETED>
<DELETED> ``(1) Certification.--A digital commodity issuer,
digital commodity related person, digital commodity affiliated
person, decentralized governance system of the blockchain
system, or a registered digital commodity exchange, or any
other appropriate person as designated by the Commission, may
certify to the Commission that the blockchain system to which a
digital commodity relates is a mature blockchain
system.</DELETED>
<DELETED> ``(2) Filing requirements.--A certification
described under paragraph (1) shall be filed with the
Commission, and include such information that is reasonably
necessary to establish that the blockchain system is not
controlled by any person or group of persons under common
control, which may include information regarding--</DELETED>
<DELETED> ``(A) the operation of the blockchain
system;</DELETED>
<DELETED> ``(B) the functionality of the related
digital commodity;</DELETED>
<DELETED> ``(C) how the market value of the digital
commodity is substantially derived from the
programmatic functioning of such blockchain
system;</DELETED>
<DELETED> ``(D) any decentralized governance system
which relates to the blockchain system; and</DELETED>
<DELETED> ``(E) the current roles, if any, of the
digital commodity issuer, digital commodity affiliated
persons, and digital commodity related persons where
such roles are material to the development or operation
of such blockchain system or the decentralized
governance system of such blockchain system.</DELETED>
<DELETED> ``(3) Rebuttable presumption.--The Commission may
rebut a certification described under paragraph (1) with
respect to a blockchain system if the Commission, within 60
days of receiving such certification, determines that the
blockchain system is not a mature blockchain system.</DELETED>
<DELETED> ``(4) Certification review.--</DELETED>
<DELETED> ``(A) In general.--Any blockchain system
that relates to a digital commodity for which a
certification has been made under paragraph (1) shall
be considered a mature blockchain system 60 days after
the date on which the Commission receives a
certification under paragraph (1), unless the
Commission notifies the person who made the
certification within such time that the Commission is
staying the certification due to--</DELETED>
<DELETED> ``(i) an inadequate explanation by
the person making the certification;
or</DELETED>
<DELETED> ``(ii) any novel or complex issues
which require additional time to
consider.</DELETED>
<DELETED> ``(B) Public notice.--The Commission shall
make the following available to the public and provide
a copy to the Commodity Futures Trading
Commission:</DELETED>
<DELETED> ``(i) Each certification received
under paragraph (1).</DELETED>
<DELETED> ``(ii) Each stay of the Commission
under this subsection, and the reasons
therefor.</DELETED>
<DELETED> ``(iii) Any response from a person
making a certification under paragraph (1) to a
stay of the certification by the
Commission.</DELETED>
<DELETED> ``(C) Consolidation.--The Commission may
consolidate and treat as one submission multiple
certifications made under paragraph (1) for the same
blockchain system which relates to a digital commodity
which are received during the review period provided
under this paragraph.</DELETED>
<DELETED> ``(5) Stay of certification.--</DELETED>
<DELETED> ``(A) In general.--A notification by the
Commission pursuant to paragraph (4)(A) shall stay the
certification once for up to an additional 120 days
from the date of the notification.</DELETED>
<DELETED> ``(B) Public comment period.--Before the
end of the 60-day period described under paragraph
(4)(A), the Commission may begin a public comment
period of at least 30 days in conjunction with a stay
under this subsection.</DELETED>
<DELETED> ``(6) Disposition of certification.--A
certification made under paragraph (1) shall--</DELETED>
<DELETED> ``(A) become effective--</DELETED>
<DELETED> ``(i) upon the publication of a
notification from the Commission to the person
who made the certification that the Commission
does not object to the certification;
or</DELETED>
<DELETED> ``(ii) at the expiration of the
certification review period; and</DELETED>
<DELETED> ``(B) not become effective upon the
publication of a notification from the Commission to
the person who made the certification that the
Commission has rebutted the certification.</DELETED>
<DELETED> ``(7) Recertification.--With respect to a
blockchain system for which a certification has been rebutted
under this subsection, no person may make a certification under
paragraph (1) with respect to such blockchain system during the
90-day period beginning on the date of such rebuttal.</DELETED>
<DELETED> ``(8) Appeal of rebuttal.--</DELETED>
<DELETED> ``(A) In general.--If a certification is
rebutted under this section, the person making such
certification may appeal the decision to the United
States Court of Appeals for the District of Columbia,
not later than 60 days after the notice of rebuttal is
made.</DELETED>
<DELETED> ``(B) Review.--In an appeal under
subparagraph (A), the court shall have de novo review
of the determination to rebut the
certification.</DELETED>
<DELETED> ``(b) Maturity Criteria.--</DELETED>
<DELETED> ``(1) Sense of congress.--It is the sense of the
Congress that protecting investors, maintaining fair, orderly,
and efficient markets, and facilitating capital formation
necessitates establishing clear criteria for blockchain systems
to be deemed mature, as well as enabling the Commission to
develop, without prejudice to any such criteria codified in
statute, alternative criteria by which blockchain systems may
be considered not to be controlled by any person or group of
persons under common control in order to accommodate changes in
markets and technology.</DELETED>
<DELETED> ``(2) In general.--The Commission may issue rules
identifying conditions by which a blockchain system, together
with its related digital commodity, shall be considered a
mature blockchain system, consistent with the protection of
investors, maintenance of fair, orderly, and efficient markets,
and the facilitation of capital formation.</DELETED>
<DELETED> ``(3) Rules of construction.--</DELETED>
<DELETED> ``(A) Nothing in this subsection may be
construed to permit the Commission to impose additional
criteria to the criteria in subsection (c) for
certifying that a blockchain system is a mature
blockchain system pursuant to subsection (c).</DELETED>
<DELETED> ``(B) Nothing in this subsection or
subsection (c) may be construed to limit the
Commission's ability to identify alternative conditions
and criteria by which a blockchain system may be
considered a mature blockchain system.</DELETED>
<DELETED> ``(c) Deemed Mature.--</DELETED>
<DELETED> ``(1) In general.--Notwithstanding subsection (b),
for the purposes of subsection (a), a digital commodity issuer,
digital commodity related person, digital commodity affiliated
person, or decentralized governance system of the blockchain
system may establish that a blockchain system, together with
its related digital commodity, is not controlled by any person
or group of persons under common control, if the blockchain
system, together with its related digital asset, meets the
requirements described in paragraph (2) or (3).</DELETED>
<DELETED> ``(2) Criteria for any blockchain system.--The
requirements described in this paragraph are the
following:</DELETED>
<DELETED> ``(A) System value.--</DELETED>
<DELETED> ``(i) Market value.--The digital
commodity has a value that is substantially
derived from the use and functioning of the
blockchain system.</DELETED>
<DELETED> ``(ii) Development of value
mechanism substantially completed.--Where the
digital commodity issuer has made public a
development plan describing how the digital
commodity's value is reasonably expected to be
derived from the programmatic functioning of
the blockchain system, the development of such
mechanisms has been substantially
completed.</DELETED>
<DELETED> ``(B) Functional system.--The blockchain
system allows network participants to engage in the
activities the blockchain system is intended to
provide, including--</DELETED>
<DELETED> ``(i) using, transmitting, or
storing value, or otherwise executing
transactions, on the blockchain
system;</DELETED>
<DELETED> ``(ii) deploying, executing, or
accessing software or services, or otherwise
offering or participating in services, deployed
on or integrated with the blockchain
system;</DELETED>
<DELETED> ``(iii) participating in the
consensus mechanism, transaction validation
process, or decentralized governance system of
the blockchain system; or</DELETED>
<DELETED> ``(iv) operating any client, node,
validator, or other form of computational
infrastructure with respect to the blockchain
system.</DELETED>
<DELETED> ``(C) Open and interoperable system.--The
blockchain system--</DELETED>
<DELETED> ``(i) is composed of source code
that is open source; and</DELETED>
<DELETED> ``(ii) does not restrict or
prohibit based on the exercise of unilateral
authority any person, other than a digital
commodity issuer, digital commodity related
person, or digital commodity affiliated person
from engaging in the activities the blockchain
system is intended to provide, including the
activities described in subparagraph
(B).</DELETED>
<DELETED> ``(D) Programmatic system.--The blockchain
system operates, executes, and enforces its operations
and transactions based solely on pre-established,
transparent rules encoded directly within the source
code of the blockchain system.</DELETED>
<DELETED> ``(E) System governance.--No person or
group of persons under common control--</DELETED>
<DELETED> ``(i) has the unilateral
authority, directly or indirectly, through any
contract, arrangement, understanding,
relationship, or otherwise, to control or
materially alter the functionality, operation,
or rules of consensus or agreement of the
blockchain system or its related digital
commodity; or</DELETED>
<DELETED> ``(ii) has the unilateral
authority to direct the voting, in the
aggregate, of 20 percent or more of the
outstanding voting power of such blockchain
system by means of a related digital commodity,
nodes or validators, a decentralized governance
system, or otherwise, in a blockchain system
which can be altered by a voting
system.</DELETED>
<DELETED> ``(F) Impartial system.--No person or
group of persons under common control possesses a
unique permission or privilege with respect to
functionality, operation, or rules of consensus or
agreement of the blockchain system or its related
digital commodity, unless such alteration--</DELETED>
<DELETED> ``(i) addresses errors, regular
maintenance, or cybersecurity risks of the
blockchain system that affect the programmatic
functioning of the blockchain system;
and</DELETED>
<DELETED> ``(ii) is adopted through the
consensus or agreement of a decentralized
governance system.</DELETED>
<DELETED> ``(G) Distributed ownership.--No digital
commodity issuer, digital commodity related person, or
digital commodity affiliated person beneficially owns,
in the aggregate, 20 percent or more of the total
amount of units of the digital commodity.</DELETED>
<DELETED> ``(3) Optional criteria for preexisting blockchain
systems.--The requirements described in this paragraph are that
the blockchain system--</DELETED>
<DELETED> ``(A) was created prior to the date of
enactment of this section;</DELETED>
<DELETED> ``(B) met the requirements of
subparagraphs (A) through (F) of paragraph (2) prior to
the date of enactment of this section; and</DELETED>
<DELETED> ``(C) at least 50 percent of the units of
the digital commodity related to the blockchain system
are held by persons other than the digital commodity
issuer, a digital commodity related person, or a
digital commodity affiliated person.</DELETED>
<DELETED> ``(d) Decentralized Governance System.--</DELETED>
<DELETED> ``(1) For the purposes of this section, a
decentralized governance system is not a `person' or a `group
of persons under common control'.</DELETED>
<DELETED> ``(2) A blockchain system, together with its
digital commodity, shall not be precluded from being considered
a mature blockchain system solely based on a functional,
administrative, clerical, or ministerial action of a
decentralized governance system, including any such action
taken by a person acting on behalf of and at the direction of
the decentralized governance system, as determined by the
Commission and consistent with the protection of investors,
maintenance of fair, orderly, and efficient markets, and the
facilitation of capital formation.</DELETED>
<DELETED> ``(e) Rulemaking.--Not more than 270 days after the date
of enactment of this section, the Commission shall issue rules to carry
out this section.''.</DELETED>
<DELETED>SEC. 206. EFFECTIVE DATE.</DELETED>
<DELETED> Unless otherwise provided in this title, this title and
the amendments made by this title shall take effect 360 days after the
date of enactment of this Act, except that, to the extent a provision
of this title requires a rulemaking, the provision shall take effect on
the later of--</DELETED>
<DELETED> (1) 360 days after the date of enactment of this
Act; or</DELETED>
<DELETED> (2) 60 days after the publication in the Federal
Register of the final rule implementing the
provision.</DELETED>
<DELETED>TITLE III--REGISTRATION FOR INTERMEDIARIES AT THE SECURITIES
AND EXCHANGE COMMISSION</DELETED>
<DELETED>SEC. 301. TREATMENT OF DIGITAL COMMODITIES AND PERMITTED
PAYMENT STABLECOINS.</DELETED>
<DELETED> (a) Securities Act of 1933.--Section 2(a)(1) of the
Securities Act of 1933 (15 U.S.C. 77b(a)(1)), as amended by the GENIUS
Act, is amended by striking the final sentence and inserting the
following: ``The term does not include a digital commodity or permitted
payment stablecoin.''.</DELETED>
<DELETED> (b) Securities Exchange Act of 1934.--Section 3(a)(10) of
the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)), as amended by
the GENIUS Act, is amended by striking the final sentence and inserting
the following: ``The term does not include a digital commodity or
permitted payment stablecoin.''.</DELETED>
<DELETED> (c) Investment Advisers Act of 1940.--Section 202(a) of
the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)) is amended--
</DELETED>
<DELETED> (1) in paragraph (18), as amended by the GENIUS
Act, by striking the final sentence and inserting the
following: ``The term does not include a digital commodity or
permitted payment stablecoin.'';</DELETED>
<DELETED> (2) by redesignating the second paragraph (29)
(relating to commodity pools) as paragraph (31); and</DELETED>
<DELETED> (3) by adding at the end, the following:</DELETED>
<DELETED> ``(32) Digital commodity-related terms.--The terms
`digital commodity' and `permitted payment stablecoin' have the
meaning given those terms, respectively, under section 2(a) of
the Securities Act of 1933 (15 U.S.C. 77b(a)).''.</DELETED>
<DELETED> (d) Investment Company Act of 1940.--Section 2(a) of the
Investment Company Act of 1940 (15 U.S.C. 80a-2) is amended--</DELETED>
<DELETED> (1) in paragraph (36), as amended by the GENIUS
Act, by striking the final sentence and inserting the
following: ``The term does not include a digital commodity or
permitted payment stablecoin.''; and</DELETED>
<DELETED> (2) by adding at the end, the following:</DELETED>
<DELETED> ``(55) Digital commodity-related terms.--The terms
`digital commodity' and `permitted payment stablecoin' have the
meaning given those terms, respectively, under section 2(a) of
the Securities Act of 1933 (15 U.S.C. 77b(a)).''.</DELETED>
<DELETED> (e) Securities Investor Protection Act of 1970.--Section
16 of the Securities Investor Protection Act of 1970 (15 U.S.C. 78lll)
is amended--</DELETED>
<DELETED> (1) in paragraph (14), as amended by the GENIUS
Act, by striking the final sentence and inserting the
following: ``The term does not include a digital commodity or
permitted payment stablecoin, as such terms are defined,
respectively, under section 2(a) of the Securities Act of 1933
(15 U.S.C. 77b(a))''; and</DELETED>
<DELETED> (2) by adding at the end the following:</DELETED>
<DELETED> ``(15) Treatment of permitted payment
stablecoins.--A permitted payment stablecoin, as defined in
section 2(a) of the Securities Act of 1933, shall not qualify
as `cash' and a claim for a permitted payment stablecoin shall
not qualify as a `claim for cash'.''.</DELETED>
<DELETED>SEC. 302. ANTI-FRAUD AUTHORITY OVER PERMITTED PAYMENT
STABLECOINS AND CERTAIN DIGITAL COMMODITY
TRANSACTIONS.</DELETED>
<DELETED> (a) In General.--Section 10 of the Securities Exchange Act
of 1934 (15 U.S.C. 78j) is amended--</DELETED>
<DELETED> (1) by moving subsection (c) so as to appear after
subsection (b);</DELETED>
<DELETED> (2) by inserting after subsection (c) the
following:</DELETED>
<DELETED> ``(d) To use or employ, in connection with the purchase or
sale of any permitted payment stablecoin or digital commodity, by or
through, as applicable, a broker, dealer, national securities exchange,
or an alternative trading system, any manipulative or deceptive device
or contrivance in contravention of such rules and regulations as the
Commission may prescribe as necessary or appropriate in the public
interest or for the protection of investors.''; and</DELETED>
<DELETED> (3) by adding at the end the following: ``Rules
promulgated under subsection (b) that prohibit fraud,
manipulation, or insider trading (but not rules imposing or
specifying reporting or recordkeeping requirements, procedures,
or standards as prophylactic measures against fraud,
manipulation, or insider trading), and judicial precedents
decided under subsection (b) and rules promulgated thereunder
that prohibit fraud, manipulation, or insider trading, shall
apply with respect to permitted payment stablecoin and digital
commodity transactions engaged in by or through a broker or
dealer or through an alternative trading system or, as
applicable, a national securities exchange to the same extent
as they apply to securities transactions. Judicial precedents
decided under section 17(a) of the Securities Act of 1933 and
sections 9, 15, 16, 20, and 21A of this title, and judicial
precedents decided under applicable rules promulgated under
such sections, shall apply to permitted payment stablecoins and
digital commodities with respect to those circumstances in
which the permitted payment stablecoins and digital commodities
are, as applicable, brokered, traded, or custodied by or
through a broker or dealer or through an alternative trading
system or a national securities exchange to the same extent as
they apply to securities.''.</DELETED>
<DELETED> (b) Treatment of Permitted Payment Stablecoins.--Title I
of the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
amended by inserting after section 6 the following:</DELETED>
<DELETED>``SEC. 6A. TREATMENT OF TRANSACTIONS IN PERMITTED PAYMENT
STABLECOINS.</DELETED>
<DELETED> ``(a) Authority To Broker, Trade, and Custody Permitted
Payment Stablecoins.--Permitted payment stablecoins may be brokered,
traded, or custodied by a broker or dealer or through an alternative
trading system or national securities exchange.</DELETED>
<DELETED> ``(b) Commission Jurisdiction.--The Commission shall only
have jurisdiction over a transaction in a permitted payment stablecoin
with respect to those circumstances in which a permitted payment
stablecoin is brokered, traded, or custodied--</DELETED>
<DELETED> ``(1) by a broker or dealer;</DELETED>
<DELETED> ``(2) through a national securities exchange;
or</DELETED>
<DELETED> ``(3) through an alternative trading
system.</DELETED>
<DELETED> ``(c) Limitation.--Subsection (b) shall only apply to a
transaction described in subsection (b) for the purposes of regulating
the offer, execution, solicitation, or acceptance of a permitted
payment stablecoin in those circumstances in which the permitted
payment stablecoin is brokered, traded, or custodied--</DELETED>
<DELETED> ``(1) by a broker or dealer;</DELETED>
<DELETED> ``(2) through a national securities exchange;
or</DELETED>
<DELETED> ``(3) through an alternative trading
system.''.</DELETED>
<DELETED>SEC. 303. ELIGIBILITY OF ALTERNATIVE TRADING
SYSTEMS.</DELETED>
<DELETED> (a) In General.--Section 5 of the Securities Exchange Act
of 1934 (15 U.S.C. 78e) is amended--</DELETED>
<DELETED> (1) by striking ``It'' and inserting the
following:</DELETED>
<DELETED> ``(a) In General.--It''; and</DELETED>
<DELETED> (2) by adding at the end the following:</DELETED>
<DELETED> ``(b) Digital Commodity Protections.--</DELETED>
<DELETED> ``(1) In general.--The Commission may not preclude
a trading platform from operating pursuant to a covered
exemption to exchange registration under section 6 of this
title on the basis that the assets traded or to be traded on
such platform include--</DELETED>
<DELETED> ``(A) digital commodities or permitted
payment stablecoins; and</DELETED>
<DELETED> ``(B) securities.</DELETED>
<DELETED> ``(2) Covered exemption.--In this subsection, the
term `covered exemption' means an exemption--</DELETED>
<DELETED> ``(A) described in subsection (a)(2);
or</DELETED>
<DELETED> ``(B) with respect to any other rule of
the Commission relating to the definition of
`exchange'.''.</DELETED>
<DELETED> (b) Securities Exchange Act of 1934.--Section 3(a)(2) of
the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(2)) is amended by
adding at the end the following: ``Neither an alternative trading
system predominantly facilitating the trading of digital commodities,
permitted payment stablecoins, or both, relative to its securities
traded, nor a digital commodity exchange, is a `facility' of an
exchange.''.</DELETED>
<DELETED> (c) Rule of Construction.--Nothing in this section, the
amendments made by this section, or section 304 may be construed to--
</DELETED>
<DELETED> (1) prohibit a national securities exchange from
owning or operating any other type of alternative trading
system; or</DELETED>
<DELETED> (2) create a presumption that any other type of
alternative trading system owned or operated by a national
securities exchange is a facility of that exchange.</DELETED>
<DELETED>SEC. 304. RULEMAKING FOR DUAL-REGISTERED ENTITIES.</DELETED>
<DELETED> (a) Conflict of Interest Policies and Procedures.--Each
person or entity dual-registered with the Commodity Futures Trading
Commission as permitted under section 15(p) of the Securities Exchange
Act of 1934 shall establish, maintain, and, as applicable, enforce and
comply with written policies and procedures reasonably designed to
mitigate any conflicts of interest, including with respect to
transactions or arrangements with affiliates registered with the
Securities and Exchange Commission, taking into consideration the
nature of the business of such person or entity.</DELETED>
<DELETED> (b) Exemption From Duplicative, Conflicting, or Unduly
Burdensome Provisions.--The Securities and Exchange Commission shall
prescribe rules for a person or entity with multiple registrations,
where at least one such registration includes any dual registration
permitted under section 15(p) of the Securities Exchange Act of 1934,
to exempt the person or entity from duplicative, conflicting, or unduly
burdensome provisions of the Securities Exchange Act of 1934 and rules
thereunder, to the extent such an exemption would protect investors,
maintain fair, orderly, and efficient markets, and facilitate capital
formation.</DELETED>
<DELETED> (c) Implementing Organizations.--The Securities and
Exchange Commission shall require any registered national securities
association that has as a member a registered broker or registered
dealer that is registered with the Commodity Futures Trading Commission
as a digital commodity broker or digital commodity dealer as permitted
under section 15(p)(1) of the Securities Exchange Act of 1934 or
otherwise transacts in permitted payment stablecoins to revise such
rules as may be necessary to further the purposes of and compliance
with this section.</DELETED>
<DELETED> (d) Memorandum of Understanding.--The Securities and
Exchange Commission shall enter into a memorandum of understanding with
the Commodity Futures Trading Commission to ensure--</DELETED>
<DELETED> (1) non-duplicative supervision and enforcement
with respect to registrants of the Securities and Exchange
Commission dual-registered with the Commodity Futures Trading
Commission as permitted under section 15(p) of the Securities
Exchange Act of 1934; and</DELETED>
<DELETED> (2) appropriate information sharing between the
Commissions to further the purposes of and compliance with this
section, the Securities Exchange Act of 1934, and the Commodity
Exchange Act.</DELETED>
<DELETED> (e) Rule of Construction.--Nothing in this section shall
be construed to limit the anti-fraud, anti-manipulation, or false
reporting enforcement authorities of the Commodity Futures Trading
Commission with respect to a contract of sale of a commodity and
persons effecting such contracts.</DELETED>
<DELETED>SEC. 305. MODERNIZATION OF RECORDKEEPING
REQUIREMENTS.</DELETED>
<DELETED> (a) In General.--For purposes of books and records
requirements for brokers, dealers, transfer agents, national securities
exchanges under the Securities and Exchange Act of 1934 (15 U.S.C. 78a
et seq.), investment advisers under the Investment Advisers Act of 1940
(15 U.S.C. 80b-1 et seq.), and investment companies under the
Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), a person may,
consistent with any rules promulgated under subsection (b), utilize
records from a blockchain system.</DELETED>
<DELETED> (b) Revision of Rules.--Not later than 180 days after the
date of enactment of this Act, the Securities and Exchange Commission
shall issue and revise such rules as may be necessary to implement this
section.</DELETED>
<DELETED>SEC. 306. EXEMPTIVE AUTHORITY.</DELETED>
<DELETED> Section 28 of the Securities Act of 1933 (15 U.S.C. 77z-3)
is amended by striking ``by rule or regulation'' and inserting ``by
rule, regulation, or order''.</DELETED>
<DELETED>SEC. 307. ADDITIONAL REGISTRATIONS WITH THE COMMODITY FUTURES
TRADING COMMISSION.</DELETED>
<DELETED> Section 15 of the Securities Exchange Act of 1934 (15
U.S.C. 78o) is amended by adding at the end the following:</DELETED>
<DELETED> ``(p) Additional Registrations With the Commodity Futures
Trading Commission.--</DELETED>
<DELETED> ``(1) Registered brokers and dealers.--A
registered broker or registered dealer shall be permitted to
maintain a registration with the Commodity Futures Trading
Commission as a digital commodity broker or digital commodity
dealer.</DELETED>
<DELETED> ``(2) National securities exchanges.--A national
securities exchange or affiliate thereof shall be permitted to
maintain a registration with the Commodity Futures Trading
Commission as a digital commodity exchange.</DELETED>
<DELETED> ``(3) Alternative trading systems.--An alternative
trading system, and the operator thereof, shall be permitted to
maintain a registration with the Commodity Futures Trading
Commission as a digital commodity exchange.</DELETED>
<DELETED> ``(4) Notice of application.--Any person or entity
described in paragraph (1) through (3) shall provide to the
Securities and Exchange Commission, at such time and in such
form and manner as the Securities and Exchange Commission shall
prescribe, notice of any application to register with the
Commodity Futures Trading Commission as a digital commodity
broker, digital commodity dealer, or digital commodity
exchange.''.</DELETED>
<DELETED>SEC. 308. EXEMPTING DIGITAL COMMODITIES FROM STATE SECURITIES
LAWS.</DELETED>
<DELETED> (a) Covered Security.--Section 18(b) of the Securities Act
of 1933 (15 U.S.C. 77r(b)) is amended by adding at the end the
following:</DELETED>
<DELETED> ``(5) Exemption in connection with digital
commodities.--A digital commodity shall be treated as a covered