Union Calendar No. 134
119th CONGRESS 1st Session |
[Report No. 119–168, Parts I and II]
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, and for other purposes.
May 29, 2025
Mr. Hill of Arkansas (for himself, Mr. Thompson of Pennsylvania, Ms. Craig, Mr. Emmer, Mr. Johnson of South Dakota, Mr. Davis of North Carolina, Mr. Steil, Mr. Torres of New York, and Mr. Davidson) introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on Agriculture, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned
June 23, 2025
Additional sponsors: Mr. Gottheimer, Mr. Huizenga, Mr. Nunn of Iowa, Mr. Lawler, Mr. Meuser, Mr. Carter of Georgia, Mr. Moore of West Virginia, Mr. Begich, Ms. McDonald Rivet, Mr. Thanedar, Mr. Messmer, Mr. Bresnahan, and Ms. Stevens
June 23, 2025
Reported from the Committee on Agriculture with an amendment
[Strike out all after the enacting clause and insert the part printed in italic]
June 23, 2025
Reported from the Committee on Financial Services with an amendment; committed to the Committee of the Whole House on the State of the Union and ordered to be printed
[Strike out all after the enacting clause and insert the part printed in boldface roman]
[For text of introduced bill, see copy of bill as introduced on May 29, 2025]
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, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
(a) Short title.—This Act may be cited as the “Digital Asset Market Clarity Act of 2025” or the “CLARITY Act of 2025”.
(b) Table of contents.—The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 101. Definitions under the Securities Act of 1933.
Sec. 102. Definitions under the Securities Exchange Act of 1934.
Sec. 103. Definitions under the Commodity Exchange Act.
Sec. 104. Definitions under this Act.
Sec. 105. Rulemakings.
Sec. 106. Registration for digital commodity exchanges, brokers, and dealers; provisional status.
Sec. 107. Commodity Exchange Act and securities laws savings provisions.
Sec. 108. Administrative requirements.
Sec. 109. International cooperation.
Sec. 110. Application of the Bank Secrecy Act.
Sec. 111. Implementation.
Sec. 201. Treatment of investment contract assets.
Sec. 202. Exempted primary transactions in digital commodities.
Sec. 203. Treatment of secondary transactions in digital commodities that originally involved investment contracts.
Sec. 204. Requirements for offers and sales of digital commodities by digital commodity related persons and digital commodity affiliated persons.
Sec. 205. Mature blockchain system requirements.
Sec. 206. Effective date.
Sec. 301. Treatment of digital commodities and permitted payment stablecoins.
Sec. 302. Anti-fraud authority over permitted payment stablecoins and certain digital commodity transactions.
Sec. 303. Eligibility of alternative trading systems.
Sec. 304. Operation of alternative trading systems.
Sec. 305. Modernization of recordkeeping requirements.
Sec. 306. Exemptive authority.
Sec. 307. Additional registrations with the Commodity Futures Trading Commission.
Sec. 308. Exempting digital commodities from State securities laws.
Sec. 309. Exclusion for decentralized finance activities.
Sec. 310. Treatment of custody activities by banking institutions.
Sec. 311. Digital commodity activities that are financial in nature.
Sec. 312. Effective date; administration.
Sec. 313. Studies on foreign adversary participation.
Sec. 401. Commission jurisdiction over digital commodity transactions.
Sec. 402. Requiring futures commission merchants to use qualified digital asset custodians.
Sec. 403. Trading certification and approval for digital commodities.
Sec. 404. Registration of digital commodity exchanges.
Sec. 405. Qualified digital asset custodians.
Sec. 406. Registration and regulation of digital commodity brokers and dealers.
Sec. 407. Registration of associated persons.
Sec. 408. Registration of commodity pool operators and commodity trading advisors.
Sec. 409. Exclusion for decentralized finance activities.
Sec. 410. Resources for implementation and enforcement.
Sec. 411. Digital commodity activities by SEC-registered entities.
Sec. 412. Requirements related to control persons.
Sec. 413. Other tradable assets.
Sec. 414. Effective date.
Sec. 415. Sense of Congress.
Sec. 501. Findings; sense of Congress.
Sec. 502. Modernization of the Securities and Exchange Commission mission.
Sec. 503. Strategic Hub for Innovation and Financial Technology.
Sec. 504. Codification of LabCFTC.
Sec. 505. Study on decentralized finance.
Sec. 506. Study on non-fungible tokens.
Sec. 507. Study on expanding financial literacy amongst digital commodity holders.
Sec. 508. Study on financial market infrastructure improvements.
Sec. 509. Study on illicit use of digital assets.
Sec. 510. Conflict of interest rulemaking.
Section 2(a) of the Securities Act of 1933 (15 U.S.C. 77b(a)) is amended by adding at the end the following:
“(20) BLOCKCHAIN.—The term ‘blockchain’ means—
“(A) any technology—
“(21) BLOCKCHAIN APPLICATION.—The term ‘blockchain application’ means any executable software deployed to a blockchain composed of source code that is publicly available, including a smart contract or any network of smart contracts, or other similar technology.
“(22) BLOCKCHAIN PROTOCOL.—The term ‘blockchain protocol’ means the freely and publicly available source code of a blockchain that is executed by the network participants of a blockchain to facilitate its functioning, or other similar technology.
“(23) BLOCKCHAIN SYSTEM.—The term ‘blockchain system’ means any blockchain, together with its blockchain protocol or any blockchain application or network of blockchain applications.
“(24) DECENTRALIZED GOVERNANCE SYSTEM.—
“(A) IN GENERAL.—The term ‘decentralized governance system’ means, with respect to a blockchain system, any transparent, rules-based system permitting persons to form consensus or reach agreement in the development, provision, publication, management, or administration of such blockchain system, where participation is not limited to, or under the effective control of, any person or group of persons under common control.
“(B) RELATIONSHIP OF PERSONS TO DECENTRALIZED GOVERNANCE SYSTEMS.—With respect to a decentralized governance system, the decentralized governance system and any persons participating in the decentralized governance system shall be treated as separate persons unless such persons are under common control.
“(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 organizing and governing laws of such legal entity do not create or require centralized and hierarchical management of such legal entity. 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 and hierarchical management.
“(25) DIGITAL ASSET.—The term ‘digital asset’ means any digital representation of value which is recorded on a cryptographically-secured distributed ledger or other similar technology.
“(26) DIGITAL COMMODITY.—The term ‘digital commodity’ has the meaning given that term under section 1a of the Commodity Exchange Act (7 U.S.C. 1a).
“(27) DIGITAL COMMODITY AFFILIATED PERSON.—The term ‘digital commodity affiliated person’ means a person (including a digital commodity related person) that, with respect to any digital commodity—
“(28) DIGITAL COMMODITY ISSUER.—With respect to a digital commodity, the term ‘digital commodity issuer’ means any person that—
“(29) DIGITAL COMMODITY RELATED PERSON.—
“(A) IN GENERAL.—With respect to a digital commodity issuer, the term ‘digital commodity related person’ means—
“(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 or planning of the digital commodity issuer or the development of the blockchain system to which the digital commodity relates.
“(30) END USER DISTRIBUTION.—The term ‘end user distribution’ means a distribution of a unit of a digital commodity that—
“(A) does not involve an exchange of more than a nominal value of cash, property, or other assets; and
“(B) is distributed in a broad and equitable manner based on conditions capable of being satisfied by any participant in the blockchain system, including, as incentive-based rewards—
“(i) to users of the digital commodity or any blockchain system to which the digital commodity relates;
“(31) MATURE BLOCKCHAIN SYSTEM.—The term ‘mature blockchain system’ means a blockchain system, together with its related digital commodity, that is not controlled by any person or group of persons under common control.
“(32) PERMITTED PAYMENT STABLECOIN.—
“(A) IN GENERAL.—The term ‘permitted payment stablecoin’ means a digital asset—
“(iii) the issuer of which is subject to the regulatory and supervisory authority of a State or Federal agency;
“(v) that is not—
“(II) a security issued by—
“(aa) an investment company registered under section 8(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–8(a)); or
“(bb) a person that would be an investment company under the Investment Company Act of 1940 but for paragraphs (1) and (7) of section 3(c) of that Act (15 U.S.C. 80a–3(c));
“(III) a deposit (as defined under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)), regardless of the technology used to record such deposit; or
“(IV) an account (as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752)), regardless of the technology used to record such account.
“(B) MONETARY VALUE DEFINED.—The term ‘monetary value’—
“(i) means—
“(II) a deposit (as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)) that is denominated in a national currency; or
“(III) an account (as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752)); and
“(ii) does not include any agricultural or other physical commodity (as defined in section 1a of the Commodity Exchange Act (7 U.S.C. 1a)).
“(33) SECURITIES LAWS.—The term ‘securities laws’ has the meaning given that term under section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).”.
Section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) is amended—
(2) by adding at the end the following:
“(82) BANK SECRECY ACT.—The term ‘Bank Secrecy Act’ means—
“(A) section 21 of the Federal Deposit Insurance Act (12 U.S.C. 1829b);
“(B) chapter 2 of title I of Public Law 91–508 (12 U.S.C. 1951 et seq.); and
“(C) subchapter II of chapter 53 of title 31, United States Code.
“(83) ADDITIONAL DIGITAL COMMODITY-RELATED TERMS.—
“(A) SECURITIES ACT OF 1933.—The terms ‘blockchain system’, ‘decentralized governance system’, ‘digital asset’, ‘digital commodity affiliated person’, ‘digital commodity issuer’, ‘digital commodity related person’, ‘end user distribution’, ‘mature blockchain system’, 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)).
“(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).”.
(a) In general.—Section 1a of the Commodity Exchange Act (7 U.S.C. 1a) is amended—
(1) in paragraph (10)—
(B) by redesignating subparagraph (B) as subparagraph (C) and inserting after subparagraph (A) the following:
(2) in paragraph (11)—
(B) by redesignating subparagraph (B) as subparagraph (C) and inserting after subparagraph (A) the following:
(4) by redesignating paragraphs (16) through (51) as paragraphs (17) through (52), respectively, and inserting after paragraph (15) the following:
“(16) TERMS RELATED TO DIGITAL COMMODITIES.—
“(A) ASSOCIATED PERSON OF A DIGITAL COMMODITY BROKER.—
“(i) IN GENERAL.—Except as provided in clause (ii), the term ‘associated person of a digital commodity broker’ means a person who is associated with a digital commodity broker as a partner, officer, employee, or agent (or any person occupying a similar status or performing similar functions) in any capacity that involves—
“(B) ASSOCIATED PERSON OF A DIGITAL COMMODITY DEALER.—
“(i) IN GENERAL.—Except as provided in clause (ii), the term ‘associated person of a digital commodity dealer’ means a person who is associated with a digital commodity dealer as a partner, officer, employee, or agent (or any person occupying a similar status or performing similar functions) in any capacity that involves—
“(C) BANK SECRECY ACT.—The term ‘Bank Secrecy Act’ means—
“(i) section 21 of the Federal Deposit Insurance Act (12 U.S.C. 1829b);
“(ii) chapter 2 of title I of Public Law 91–508 (12 U.S.C. 1951 et seq.); and
“(iii) subchapter II of chapter 53 of title 31, United States Code.
“(D) DECENTRALIZED FINANCE MESSAGING SYSTEM.—
“(E) DECENTRALIZED FINANCE TRADING PROTOCOL.—
“(i) IN GENERAL.—The term ‘decentralized finance trading protocol’ means a blockchain system through which multiple participants can execute a financial transaction—
“(ii) EXCLUSIONS.—
“(I) IN GENERAL.—The term ‘decentralized finance trading protocol’ does not include a blockchain system if—
“(aa) a person or group of persons under common control or acting pursuant to an agreement to act in concert has the authority, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, to control or materially alter the functionality, operation, or rules of consensus or agreement of the blockchain system; or
“(F) DIGITAL COMMODITY.—
“(i) IN GENERAL.—The term ‘digital commodity’ means a digital asset that is intrinsically linked to a blockchain system, and the value of which is derived from or is reasonably expected to be derived from the use of the blockchain system.
“(ii) RELATIONSHIP TO A BLOCKCHAIN SYSTEM.—For purposes of this subparagraph, a digital asset is intrinsically linked to a blockchain system if the digital asset is directly related to the functionality or operation of the blockchain system or to the activities or services for which the blockchain system is created or utilized, including where the digital asset is—
“(V) used or removed from circulation in whole or in part to pay fees or otherwise verify or validate transactions on the blockchain system;
“(iii) EXCLUSION.—The term ‘digital commodity’ does not include any of the following:
“(I) SECURITY.—
“(aa) Any security, other than a note, an investment contract, or a certificate of interest or participation in any profit-sharing agreement.
“(bb) A note, an investment contract, or a certificate of interest or participation in any profit-sharing agreement that—
“(AA) represents or gives the holder an ownership interest or other interest in the revenues, profits, obligations, debts, assets, or assets or debts to be acquired of the issuer of the digital asset or another person (other than a decentralized governance system);
“(BB) makes the holder a creditor of the issuer of the digital asset or another person; or
“(CC) represents or gives the holder the right to receive interest or the return of principal from the issuer of the digital asset or another person.
“(II) SECURITY DERIVATIVE.—A digital asset that, based on its terms and other characteristics, is, represents, or is functionally equivalent to an agreement, contract, or transaction that is—
“(IV) BANKING DEPOSIT.—
“(aa) A deposit (as defined under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)), regardless of the technology used to record the deposit.
“(bb) An account (as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752)), regardless of the technology used to record the account.
“(V) COMMODITY.—A digital asset that references, represents an interest in, or is functionally equivalent to—
“(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—
“(VII) POOLED INVESTMENT VEHICLE.—
“(aa) IN GENERAL.—A digital asset that, based on its terms and other characteristics, is, represents, or is functionally equivalent to—
“(AA) a commodity pool, as defined in this Act; or
“(BB) a pooled investment vehicle.
“(bb) POOLED INVESTMENT VEHICLE DEFINED.—In this subclause, the term ‘pooled investment vehicle’ means—
“(AA) any investment company as defined in section 3(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–3(a));
“(BB) any company that would be an investment company under section 3(a) of such Act but for the exclusion provided from that definition by paragraph (1), (7), or (9) of section 3(c) of such Act (15 U.S.C. 80a–3(c)(1), (7), or (9)); or
“(CC) any entity or person that is not an investment company but holds or will hold assets other than securities.
“(VIII) GOOD, COLLECTIBLE, AND OTHER NON-COMMODITY ASSET.—A digital asset that has value, utility, or significance beyond its mere existence as a digital asset, including the digital equivalent of a tangible or intangible good, such as—
“(iv) RULE OF CONSTRUCTION.—No presumption shall exist that a digital asset is a security, nor shall a digital asset be excluded from being a digital commodity pursuant to clause (iii)(I), solely due to—
“(I) the digital asset providing voting or economic rights with respect to the blockchain system to which the digital asset relates or the decentralized governance system of the blockchain system to which the digital asset relates;
“(II) the value of the digital asset having the potential to appreciate or depreciate in response to the efforts, operations, or financial performance of the blockchain system to which the digital asset relates or the decentralized governance system of the blockchain system to which the digital asset relates; or
“(G) DIGITAL COMMODITY BROKER.—
“(i) IN GENERAL.—The term ‘digital commodity broker’ means any person who, as a regular business—
“(I) is engaged in—
“(ii) EXCEPTIONS.—The term ‘digital commodity broker’ does not include a person solely because the person—
“(I) solicits or accepts an order described in clause (i)(I)(aa)(AA) from a customer who is an eligible contract participant;
“(II) enters into 1 or more digital commodity transactions that are attributable or solely incidental to making, sending, receiving, or facilitating payments, whether involving a payment service provider or on a peer-to-peer basis; or
“(III) is a bank (as defined under section 3(a) of the Securities Exchange Act of 1934) engaging in certain banking activities with respect to a digital commodity in the same or a similar manner as a bank is excluded from the definition of a broker under such section, as determined by the Commission.
“(H) DIGITAL COMMODITY DEALER.—
“(i) IN GENERAL.—The term ‘digital commodity dealer’ means any person who, as a regular business—
“(ii) EXCEPTION.—The term ‘digital commodity dealer’ does not include a person solely because the person—
“(III) enters into a digital commodity transaction on or through a registered digital commodity exchange, with a registered digital commodity broker, or through a decentralized finance trading protocol;
“(IV) enters into a digital commodity transaction for the person’s own account, either individually or in a fiduciary capacity, but not as a part of a regular business;
“(V) enters into 1 or more digital commodity transactions that are attributable or solely incidental to making, sending, receiving, or facilitating payments, whether involving a payment service provider or on a peer-to-peer basis; or
“(VI) is a bank (as defined under section 3(a) of the Securities Exchange Act of 1934) engaging in certain banking activities with respect to a digital commodity in the same or a similar manner as a bank is excluded from the definition of a dealer under section 3(a)(5) of such Act, as determined by the Commission.
“(I) DIGITAL COMMODITY EXCHANGE.—The term ‘digital commodity exchange’ means a trading facility that offers or seeks to offer a cash or spot market in at least 1 digital commodity.
“(J) MIXED DIGITAL ASSET TRANSACTION.—The term ‘mixed digital asset transaction’ means a transaction in which a digital commodity is traded for a security.
“(K) TERMS DEFINED UNDER THE SECURITIES ACT OF 1933.—The terms ‘blockchain system’, ‘decentralized governance system’, ‘digital asset’, ‘digital commodity issuer’, ‘digital commodity affiliated person’, ‘digital commodity related person’, ‘end user distribution’, ‘mature blockchain system’, 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)).”; and
(b) Conforming amendments.—
(1) Each of the following provisions of law is amended by striking “1a(18)” and inserting “1a(19)”:
(A) Section 4s(h)(5)(A)(i) of the Commodity Exchange Act (7 U.S.C. 6s(h)(5)(A)(i)).
(B) Section 5(e) of the Securities Act of 1933 (15 U.S.C. 77e(e)).
(C) Section 6(g)(5)(B) of the Securities Exchange Act of 1934 (15 U.S.C. 78f(g)(5)(B)).
(D) Section 15F(h)(5)(A)(i) of the Securities Exchange Act of 1934 (15 U.S.C. 78o–10(h)(5)(A)(i)).
(2) Section 752 of the Wall Street Transparency and Accountability Act of 2010 (15 U.S.C. 8325) is amended by striking “1a(39)” and inserting “1a(40)”.
(3) Section 4s(f)(1)(D) of the Commodity Exchange Act (7 U.S.C. 6s(f)(1)(D)) is amended by striking “1a(47)(A)” and inserting “1a(48)(A)”.
(4) Each of the following provisions of the Commodity Exchange Act is amended by striking “1a(47)(A)(v)” and inserting “1a(48)(A)(v)”:
(A) Section 4t(b)(1)(C) (7 U.S.C. 6t(b)(1)(C)).
(B) Section 5(d)(23) (7 U.S.C. 7(d)(23)).
(C) Section 5b(k)(3) (7 U.S.C. 7a–1(k)(3)).
(D) Section 5h(f)(10)(A)(iii) (7 U.S.C. 7b–3(f)(10)(A)(iii)).
(5) Section 21(f)(4)(C) of the Commodity Exchange Act (7 U.S.C. 24a(f)(4)(C)) is amended by striking “1a(48)” and inserting “1a(49)”.
(6) Section 403 of the Legal Certainty for Bank Products Act of 2000 (7 U.S.C. 27a) is amended—
(7) Section 712 of the Wall Street Transparency and Accountability Act of 2010 (15 U.S.C. 8302) is amended—
In this Act:
(1) DEFINITIONS UNDER THE COMMODITY EXCHANGE ACT.—The terms “decentralized finance messaging system”, “decentralized finance trading protocol”, “digital commodity”, “digital commodity broker”, “digital commodity dealer”, “digital commodity exchange”, and “mixed digital asset transaction” have the meaning given those terms, respectively, under section 1a of the Commodity Exchange Act (7 U.S.C. 1a).
(2) DEFINITIONS UNDER THE SECURITIES ACT OF 1933.—The terms “blockchain”, “blockchain system”, “blockchain protocol”, “decentralized governance system”, “digital asset”, “digital commodity issuer”, “end user distribution”, “mature blockchain system”, “permitted payment stablecoin”, and “securities laws” have the meaning given those terms, respectively, under section 2(a) of the Securities Act of 1933 (15 U.S.C. 77b(a)).
(3) DEFINITIONS UNDER THE SECURITIES EXCHANGE ACT OF 1934.—The terms “Bank Secrecy Act”, “securities laws”, and “self-regulatory organization” have the meaning given those terms, respectively, under section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).
(a) Definitions.—The Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly issue rules to further define the following terms:
(1) The terms—
(A) “blockchain”, “blockchain application”, “blockchain system”, “blockchain protocol”, “decentralized governance system”, “digital commodity affiliated person”, “digital commodity issuer”, “digital commodity related person”, “end user distribution”, and “mature blockchain system”, as defined under section 2(a) of the Securities Act of 1933;
(b) Joint rulemaking for mixed digital asset transactions.—The Securities and Exchange Commission and the Commodity Futures Trading Commission shall jointly issue rules applicable to mixed digital asset transactions under this Act and the amendments made by this Act, including by further defining such term.
(c) Protection of self-Custody.—
(1) IN GENERAL.—A United States individual shall retain the right to—
(A) maintain a hardware wallet or software wallet for the purpose of facilitating the individual’s own lawful custody of digital assets; and
(B) engage in direct, peer-to-peer transactions in digital assets with another individual or entity for the individual’s own lawful purposes using a hardware wallet or software wallet, if—
(3) RULE OF CONSTRUCTION.—Nothing in this subsection shall be construed to limit the authority of the Secretary of the Treasury, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, or the National Credit Union Administration to carry out any enforcement action or special measure authorized under applicable law, including—
(A) the Bank Secrecy Act, section 9714 of the Combating Russian Money Laundering Act (31 U.S.C. 5318A note), and section 7213A of the Fentanyl Sanctions Act (21 U.S.C. 2313a); or
(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 of this Act if the Commissions determine that the listing is inconsistent with the Commodity Exchange Act, the securities laws (including regulations under those laws), or this Act.
(e) Joint rules for portfolio margining determinations.—
(1) IN GENERAL.—Not later than 360 days after the date of the enactment of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly issue rules describing the process for persons registered with either such Commission to seek a joint order or determination with respect to margin, customer protection, segregation, or other requirements as necessary to facilitate portfolio margining of securities (including related extensions of credit), security-based swaps, contracts for future delivery, options on a contract for future delivery, swaps, and digital commodities, or any subset thereof, in—
(2) PROCESS.—With respect to a joint order or determination described in paragraph (1), the rules required to be issued pursuant to paragraph (1) shall require—
(A) the joint order or determination to be issued only if the order or determination is in the public interest and provides for the appropriate protection of customers;
(B) applicants to file a standard application, in a form and manner determined by the Securities and Exchange Commission and the Commodity Futures Trading Commission, which shall include the information necessary to make the joint order or determination;
(C) the Securities and Exchange Commission and the Commodity Futures Trading Commission to make a final determination not later than 270 days after the filing of a completed application;
(D) the Securities and Exchange Commission and the Commodity Futures Trading Commission to consider the public interest of the joint order or determination through the solicitation of public comments; and
(E) the Securities and Exchange Commission and the Commodity Futures Trading Commission to consult with other relevant foreign or domestic regulators, including the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, as appropriate.
(a) Registration.—
(1) IN GENERAL.—Unless exempted from registration under section 5k of the Commodity Exchange Act, a person shall not act as a digital commodity broker, digital commodity dealer, or digital commodity exchange after the end of the 270-day period beginning on the date of the enactment of this Act, unless, as the case may be, the person is registered as a—
(b) Provisional status.—
(1) IN GENERAL.—A person who is registered in accordance with subsection (a) of this section shall be in provisional status until—
(c) Operations prior to regulations.—
(1) REQUIREMENTS.—A person in provisional status shall apply and be subject to the statutory requirements of this Act and any rules or regulations promulgated under this Act, as applicable.
(2) LISTINGS.—
(A) IN GENERAL.—Except as provided in subparagraph (B), a person in provisional status may continue to offer, solicit, trade, facilitate, execute, clear, report, or otherwise deal in any digital asset offered on or through the facilities of the person before the date of registration under this section, until such time as the joint rulemaking on definitions required under section 105(a) is effective.
(B) DELISTING.—Before the effective date of the joint rulemaking on definitions under section 105(a), person in provisional status shall cease offering, soliciting, trading, facilitating, executing, clearing, reporting, or otherwise dealing in any digital asset required to be delisted pursuant to a joint delisting process established under section 105(d).
(3) EXEMPTIVE AUTHORITY.—In order to promote responsible innovation and fair competition, or protect customers, the Commodity Futures Trading Commission may exempt any persons or class of persons registered pursuant to subsection (a) and in provisional status pursuant to subsection (b) from any requirements of this Act and any rules and regulations promulgated under this Act.
(d) Customer disclosure before registration.—
(1) IN GENERAL.—Beginning 30 days after the date of the enactment of this Act, any person acting as a digital commodity exchange, digital commodity broker, or digital commodity dealer shall disclose to the customers of the person so acting, in the disclosure documents, offering documents, and promotional material of the person so acting, in a prominent manner, that the person is not registered with or regulated by the Commodity Futures Trading Commission.
(a) In general.—Nothing in this Act shall affect or apply to, or be interpreted to affect or apply to—
(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.
Section 4c(a) of the Commodity Exchange Act (7 U.S.C. 6c(a)) is amended—
In order to promote greater consistency in effective and consistent global regulation of digital assets, the Commodity Futures Trading Commission and the Securities and Exchange Commission, as appropriate—
(a) In general.—Section 5312(c)(1)(A) of title 31, United States Code, is amended—
(b) GAO study.—
(1) IN GENERAL.—The Comptroller General of the United States, in consultation with the Secretary of the Treasury, shall conduct a study to—
(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.
(a) Securities Act of 1933.—Section 2(a) of the Securities Act of 1933 (15 U.S.C. 77b(a)), as amended by section 101, is further amended—
(1) in paragraph (1), by adding at the end the following: “The term ‘investment contract’ does not include an investment contract asset.”; and
(b) Investment Advisers Act of 1940.—Section 202(a)(18) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–2(a)(18)) is amended by adding at the end the following: “The term ‘investment contract’ does not include an investment contract asset (as such term is defined under section 2(a) of the Securities Act of 1933).”.
(c) Investment Company Act of 1940.—Section 2(a)(36) of the Investment Company Act of 1940 (15 U.S.C. 80a–2(a)(36)) is amended by adding at the end the following: “The term ‘investment contract’ does not include an investment contract asset (as such term is defined under section 2(a) of the Securities Act of 1933).”.
(d) Securities Exchange Act of 1934.—Section 3(a)(10) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(10)) is amended by adding at the end the following: “The term ‘investment contract’ does not include an investment contract asset (as such term is defined under section 2(a) of the Securities Act of 1933).”.
(e) Securities Investor Protection Act of 1970.—Section 16(14) of the Securities Investor Protection Act of 1970 (15 U.S.C. 78lll(14)) is amended by adding at the end the following: “The term ‘investment contract’ does not include an investment contract asset (as such term is defined under section 2(a) of the Securities Act of 1933).”.
(a) In general.—The Securities Act of 1933 (15 U.S.C. 77a et seq.) is amended—
(1) in section 4(a), by adding at the end the following:
“(8) the offer or sale of an investment contract involving units of a digital commodity by its digital commodity issuer (including all entities controlled by or under common control with the issuer), if—
“(A) the blockchain system to which the digital commodity relates, together with the digital commodity, is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934 or the issuer intends for the blockchain system to which the digital commodity relates to be a mature blockchain system by the later of—
“(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 $75,000,000 (as such amount is annually adjusted by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor);
“(C) after the completion of the transaction, a purchaser does not own more than 10 percent of the total amount of the outstanding units of the digital commodity;
“(D) the transaction does not involve the offer or sale of an investment contract involving units of a digital commodity by its digital commodity issuer that—
“(i) is not organized under the laws of a State, a territory of the United States, or the District of Columbia;
“(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(b) or section 3(c) of that Act (15 U.S.C. 80a–3(b) or 80a–3(c));
“(iv) is issuing fractional undivided interests in oil or gas rights, or a similar interest in other mineral rights;
(2) by inserting after section 4A the following:
“SEC. 4B. Requirements with respect to certain digital commodity transactions.
“(a) Commission jurisdiction.—For the purposes of this section:
“(b) Requirements for digital commodity issuers.—
“(1) TERMS AND CONDITIONS.—A digital commodity issuer offering or selling an investment contract involving units of a digital commodity in reliance on section 4(a)(8) shall file with the Commission an offering statement and any related documents, in such form and with such content as prescribed by the Commission, including financial information, a description of the issuer and the operations of the issuer, the financial condition of the issuer, a description of the plan of distribution of any unit of a digital commodity that is to be offered as well as the intended use of the offering proceeds, and a description of the development plan for the blockchain system, and the related digital commodity, to become a mature blockchain system, if such blockchain system is not already certified as a mature blockchain system pursuant to section 42 of the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).
“(2) INFORMATION REQUIRED FOR PURCHASERS.—A digital commodity issuer that has filed a statement under paragraph (1) to offer and sell an investment contract involving a unit of a digital commodity in reliance on section 4(a)(8) shall include in such statement the following information:
“(A) MATURITY STATUS.—Whether the blockchain system to which the digital commodity relates has been certified as a mature blockchain system pursuant to section 42 of the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) and, where such blockchain system is not so certified, a statement of the digital commodity issuer’s intent for the blockchain system to which the digital commodity relates to be a mature blockchain system within the time period described in section 4(a)(8)(A).
“(B) SOURCE CODE.—The source code, or a publicly accessible webpage displaying such source code, for any blockchain system to which the digital commodity relates, and whether the source code was sourced from an external third party, whether there are any existing external dependencies, and whether the code underwent a third-party security audit.
“(C) TRANSACTION HISTORY.—A description of the steps necessary to independently access, search, and verify the transaction history of any blockchain system to which the digital commodity relates, to the extent any such independent access, search, and verification activities are technically feasible with respect to such blockchain system.
“(D) DIGITAL COMMODITY ECONOMICS.—A description of the purpose of any blockchain system to which the digital commodity relates and the operation of any such blockchain system, including—
“(i) information explaining the launch and supply process, including the number of units of the digital commodity to be issued in an initial allocation, the total number of units of the digital commodity to be created, the release schedule for the units of the digital commodity, and the total number of units of the digital commodity outstanding;
“(ii) information explaining the technical requirements for holding, accessing, and transferring the digital commodity;
“(iii) information on any applicable consensus mechanism or process for validating transactions, method of generating or mining digital commodities, and any process for burning or destroying units of the digital commodity on the blockchain system;
“(E) PLAN OF DEVELOPMENT.—The current state and timeline for the development of any blockchain system to which the digital commodity relates, detailing how and when the blockchain system is intended to be a mature blockchain system, if the blockchain system is not yet certified as a mature blockchain system, and the various roles that exist or are intended to exist in connection with the blockchain system, such as users, service providers, developers, transaction validators, and governance participants, including a discussion of any mechanisms by which control or authority are exerted with respect to the blockchain system or its related digital commodity, and any critical operational dependencies of the blockchain system or its related digital commodity.
“(F) OWNERSHIP DISCLOSURES.—
“(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 that has filed a statement under paragraph (1) to offer and sell an investment contract involving a unit of a digital commodity in reliance on section 4(a)(8) shall file the following with the Commission:
“(A) SEMIANNUAL REPORTS.—Every 6 months, a report containing—
“(i) an updated description of the current state and timeline for the development of the blockchain system to which the digital commodity relates, showing how and when the blockchain is intended to be a mature blockchain system;
“(B) CURRENT REPORTS.—A current report reflecting any material changes relevant to the information previously reported to the Commission by the digital commodity issuer, which shall be filed as soon as practicable after the material change occurred, in accordance with such rules as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.
“(4) RULEMAKING.—Not later than 360 days after the date of the enactment of this section, the Commission shall prescribe rules on requirements applicable to issuers of digital commodities in reliance on section 4(a)(8).
“(5) TERMINATION OF CERTAIN REPORTING REQUIREMENTS; POST-MATURITY REPORTING REQUIREMENTS.—
“(A) IN GENERAL.—The ongoing reporting requirements under paragraph (3) shall not apply to a digital commodity issuer 180 days after the end of the covered fiscal year, if the information with respect to the digital commodity and the blockchain system to which it relates described in subparagraphs (A) through (C) of paragraph (2) is made publicly available and the disclosure requirements under subparagraph (C) of this paragraph are satisfied.
“(B) COVERED FISCAL YEAR DEFINED.—In this paragraph, the term ‘covered fiscal year’ means, with respect to a digital commodity, the first fiscal year of a digital commodity issuer in which the blockchain system to which such digital commodity relates is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934.
“(C) POST-MATURITY REPORTING REQUIREMENTS.—After the blockchain system to which a digital commodity relates is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934, any digital commodity issuer that has filed a statement under paragraph (1) to offer and sell an investment contract involving a unit of a digital commodity in reliance on section 4(a)(8) and is engaged in material ongoing efforts related to the mature blockchain system shall disclose, in a manner reasonably calculated to inform the public, and at such frequency as the Commission may prescribe, by rule, a description of such efforts, including—
“(ii) any participation in alterations or proposed alterations to the functionality or operation of such blockchain system;
“(iii) the use or planned use of any funds raised in reliance on section 4(a)(8) or any rulemaking pursuant to section 202(d) of the CLARITY Act of 2025 in such efforts;
“(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—
“(2) be a member of a national securities association registered under section 15A of the Securities Exchange Act of 1934 (15 U.S.C. 78o–3).
“(d) Disqualification provisions.—The Commission shall issue rules to apply the disqualification provisions under section 230.262 of title 17, Code of Federal Regulations, to the exemption provided under section 4(a)(8).
“(e) Failure To mature.—
“(1) IN GENERAL.—Not later than 270 days after the date of the enactment of this section, the Commission shall issue rules applying such additional obligations and disclosures for the digital commodity issuers, digital commodity related persons, and digital commodity affiliated persons of a blockchain system described under subsection (b)(1) that does not become a mature blockchain system within the time period described in section 4(a)(8)(A) as are necessary or appropriate in the public interest or for the protection of investors. Such obligations and disclosures shall include the following:
“(A) DISCLOSURES.—Disclosures regarding the following:
“(i) FAILURE TO MATURE.—The material reasons that the blockchain system has not become a mature blockchain system within the time period described in section 4(a)(8)(A).
“(2) QUALIFICATION REQUIRED.—The Commission may not permit any additional raising of capital by the issuer of a 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 additional raising of capital.”.
(b) Additional exemptions.—
(1) CERTAIN REGISTRATION REQUIREMENTS.—Section 12(g)(6) of the Securities Exchange Act of 1934 (15 U.S.C. 78l(g)(6)) is amended by striking “under section 4(6)” and inserting “under section 4(a)(6) or 4(a)(8)”.
(2) EXEMPTION FROM STATE REGULATION.—Section 18(b)(4) of the Securities Act of 1933 (15 U.S.C. 77r(b)(4)) is amended—
(c) Prior issuers.—
(1) REPORTING EXCEPTION.—With respect to a digital commodity, the digital commodity issuer shall not be required to file the reports otherwise required under section 4B(b)(3) of the Securities Act of 1933 (or, with respect to a digital commodity not issued in reliance on section 4(a)(8) of the Securities Act of 1933, a comparable set of reports specified by the Securities and Exchange Commission), if the digital commodity issuer—
(2) REPORTING APPLICATION DATE FOR CERTAIN PRIOR ISSUERS.—With respect to a digital commodity, if the digital commodity issuer is engaged in material ongoing efforts related to the blockchain system to which the digital commodity relates and last offered and sold an investment contract involving a unit of the digital commodity between January 1, 2020, and June 1, 2025, the digital commodity issuer shall file with the Commission a comparable set of reports to the reports described under, as applicable, section 4B(b)(3) or 4B(b)(5)(C) of the Securities Act of 1933, where required by the Commission, not later than one year after the effective date of this section.
(d) Use of other exemptions.—
(1) RULE OF CONSTRUCTION.—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 provided under section 3, 4(a), or 19 of the Securities Act of 1933 other than that provided under section 4(a)(8) of the Securities Act of 1933.
(2) RULEMAKING.—The Securities and Exchange Commission may issue rules—
(A) 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 to raise capital pursuant to an exempt offering, if the Commission qualifies any offering statement related to such raising of capital; and
(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 the investment contract originally involving the digital commodity between the issuer of the investment contract involving the digital commodity, or an agent or underwriter thereof, and the purchaser of such digital commodity under—
(1) the Securities Act of 1933 (15 U.S.C. 77a et seq.);
(2) the Investment Advisers Act of 1940 (15 U.S.C. 80b–1 et seq.);
(3) the Investment Company Act of 1940 (15 U.S.C. 80a–1 et seq.);
(4) the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.);
(5) the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.); and
The Securities Act of 1933 (15 U.S.C. 77a et seq.), as amended by section 202, is further amended by inserting after section 4B the following:
“SEC. 4C. Requirements for offers and sales of digital commodities by digital commodity related persons and digital commodity affiliated persons.
“(a) In general.—It shall be a violation of this Act for a digital commodity affiliated person or a digital commodity related person to offer or sell a digital commodity acquired directly from its issuer, or an agent or underwriter thereof, pursuant to an investment contract in reliance on section 4(a)(8) or another exemption under this Act, other than as provided in this section.
“(b) Commission jurisdiction.—
“(1) Where a digital commodity affiliated person or a digital commodity related person offers or sells a digital commodity acquired directly from its issuer, or an agent or underwriter thereof, pursuant to an investment contract in reliance on section 4(a)(8), or another exemption under this Act, other than as provided in this section, such digital commodity affiliated person or digital commodity related person shall be considered an issuer of such investment contract.
“(c) Restrictions on digital commodity related persons and digital commodity affiliated persons.—
“(1) PRIOR TO BEING A MATURE BLOCKCHAIN SYSTEM.—Prior to the blockchain system to which a digital commodity relates being certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934, units of the digital commodity acquired by a digital commodity related person or digital commodity affiliated person directly from its issuer, or an agent or underwriter thereof, pursuant to an investment contract in reliance on section 4(a)(8), or another exemption under this Act, may be offered or sold by such digital commodity related person or digital commodity affiliated person if—
“(A) reports with respect to such digital commodity, where required under section 4B(b)(3) (or, with respect to a digital commodity not issued in reliance on section 4(a)(8), a comparable set of reports where required by the Commission) have been filed with the Commission;
“(B) the digital commodity related person or digital commodity affiliated person has held the units for not less than 12 months from the date the units were delivered; and
“(C) the aggregate amount of the units of the digital commodity offered or sold by the digital commodity related person or digital commodity affiliated person is—
“(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 the issuer’s agent or underwriter, pursuant to an investment contract in reliance on section 4(a)(8) or another exemption under this Act, may be—
“(B) offered or sold by a digital commodity affiliated person if—
“(i) information described in section 4B(b)(5)(C), where required (or, with respect to a digital commodity not issued in reliance on section 4(a)(8), a comparable set of information, where required) is publicly available;
“(d) Use of a digital commodity in the programmatic functioning of the blockchain system.—For purposes of this section, the use of a digital commodity in the programmatic functioning of the blockchain system to which it relates is not an offer or sale of a digital commodity.
“(e) Manipulative and deceptive devices; reporting.—
“(1) IN GENERAL.—It shall be unlawful for any digital commodity issuer, digital commodity related person, or digital commodity affiliated person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, to use or employ, in connection with the purchase or sale of any digital commodity, any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.
“(2) AFFIRMATIVE DEFENSE.—Not later than 270 days after the date of the enactment of this section, the Commission shall issue rules to implement paragraph (1), including by providing any affirmative defenses to an enforcement action thereunder as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.
“(3) REPORTING.—Not later than 270 days after the date of the enactment of this section, the Commission shall issue rules to prescribe such transaction reporting and beneficial ownership disclosure obligations applicable to digital commodity related persons and digital commodity affiliated persons, as necessary or appropriate in the public interest or for the protection of investors.
“(f) Rules for previously-Issued digital commodities.—
“(1) UNITS RECEIVED PRIOR TO JANUARY 1, 2020.—If a unit of a digital commodity was received by a digital commodity related person or digital commodity affiliated person prior to January 1, 2020, the unit of the digital commodity may be offered or sold by the digital commodity related person or digital commodity affiliated person without condition.
“(2) CERTAIN UNITS RELATED TO A NON-MATURE BLOCKCHAIN SYSTEM.—If a unit of a digital commodity was received by a digital commodity related person or digital commodity affiliated person between January 1, 2020, and June 1, 2025, and the blockchain system to which the digital commodity relates is not certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934, the unit of the digital asset may be offered or sold by a digital commodity related person or digital commodity affiliated person if—
“(A) reports with respect to such digital commodity comparable to the reports described under section 4B(b)(3), where required by the Commission, have been filed with the Commission;
“(3) CERTAIN UNITS RELATED TO A MATURE BLOCKCHAIN SYSTEM.—If a unit of a digital commodity was received by a digital commodity related person or digital commodity affiliated person between January 1, 2020, and June 1, 2025, 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, it may be offered or sold by a digital commodity related person or digital commodity affiliated person if—
“(g) Rulemaking on further usage of digital commodities.—Not later than 270 days after the date of enactment of this section, the Commission may issue rules to exempt, unconditionally or on stated terms or conditions, a digital commodity related person or a digital commodity affiliated person from the requirements of this section for the offer or sale of a digital commodity in order to foster the development of mature blockchain systems and fair and orderly markets.”.
Title I of the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by adding at the end the following:
“SEC. 42. Mature blockchain systems.
“(a) Certification of blockchain systems.—
“(1) CERTIFICATION.—For purposes of sections 4(a)(8), 4B, and 4C of the Securities Act of 1933 any digital commodity issuer, digital commodity related person, digital commodity affiliated person, or decentralized governance system of the blockchain system may certify to the Securities and Exchange Commission that the blockchain system to which a digital commodity relates is a mature blockchain system.
“(2) FILING REQUIREMENTS.—A certification described under paragraph (1) shall be filed with the Commission, and include such information that is reasonably necessary to establish that the blockchain system is not controlled by any person or group of persons under common control, which may include information regarding—
“(3) REBUTTABLE PRESUMPTION.—The Commission may rebut a certification described under paragraph (1) with respect to a blockchain system if the Commission, within 60 days of receiving such certification, determines that the blockchain system is not a mature blockchain system.
“(4) CERTIFICATION REVIEW.—
“(A) IN GENERAL.—Any blockchain system that relates to a digital commodity for which a certification has been made under paragraph (1) shall be considered a mature blockchain system 60 days after the date on which the Commission receives a certification under paragraph (1), unless the Commission notifies the person who made the certification within such time that the Commission is staying the certification due to—
“(5) STAY OF CERTIFICATION.—
“(6) DISPOSITION OF CERTIFICATION.—A certification made under paragraph (1) shall—
“(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.
“(b) Maturity criteria.—
“(1) SENSE OF CONGRESS.—It is the sense of the Congress that protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation necessitates establishing clear criteria for blockchain systems to be deemed mature, as well as enabling the Commission to develop, without prejudice to any such criteria codified in statute, alternative criteria by which blockchain systems may be considered not to be controlled by any person or group of persons under common control in order to accommodate changes in markets and technology.
“(2) IN GENERAL.—The Commission may issue rules identifying conditions by which a blockchain system, together with its related digital commodity, shall be considered a mature blockchain system, consistent with the protection of investors, maintenance of fair, orderly, and efficient markets, and the facilitation of capital formation.
“(c) Deemed mature.—
“(1) IN GENERAL.—Notwithstanding subsection (b), for the purposes of subsection (a), a digital commodity issuer, digital commodity related person, digital commodity affiliated person, or decentralized governance system of the blockchain system may establish that a blockchain system, together with its related digital commodity, is not controlled by any person or group of persons under common control, if the blockchain system, together with its related digital asset, meets the requirements described in paragraph (2) or (3).
“(2) CRITERIA FOR ANY BLOCKCHAIN SYSTEM.—The requirements described in this paragraph are the following:
“(A) SYSTEM VALUE.—
“(i) MARKET VALUE.—The digital commodity has a value that is substantially derived from the adoption, use, and functioning of the blockchain system.
“(ii) DEVELOPMENT OF VALUE MECHANISM SUBSTANTIALLY COMPLETED.—Where the digital commodity issuer has made public a development plan describing how the digital commodity’s value is reasonably expected to be derived from the programmatic functioning of the blockchain system, the development of such mechanisms has been substantially completed.
“(B) FUNCTIONAL SYSTEM.—The blockchain system allows network participants to engage in the activities the blockchain system is intended to provide, including—
“(i) using, transmitting, or storing value, or otherwise executing transactions, on the blockchain system;
“(ii) deploying, executing, or accessing software or services, or otherwise offering or participating in services, deployed on or integrated with the blockchain system;
“(C) OPEN AND INTEROPERABLE SYSTEM.—The blockchain system—
“(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 a digital commodity affiliated person from engaging in the activities the blockchain system is intended to provide, including the activities described in subparagraph (B).
“(D) PROGRAMMATIC SYSTEM.—The blockchain system operates, executes, and enforces its operations and transactions based solely on pre-established, transparent rules encoded directly within the source code of the blockchain system.
“(E) SYSTEM GOVERNANCE.—No person or group of persons under common control—
“(i) has the unilateral authority, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, to control or materially alter the functionality, operation, or rules of consensus or agreement of the blockchain system or its related digital commodity; or
“(ii) has the unilateral authority to direct the voting, in the aggregate, of 20 percent or more of the outstanding voting power of such blockchain system by means of a related digital commodity, nodes or validators, a decentralized governance system, or otherwise, in a blockchain system which can be altered by a voting system.
“(F) IMPARTIAL SYSTEM.—No person or group of persons under common control possesses a unique permission or privilege to alter the functionality, operation, or rules of consensus or agreement of the blockchain system or its related digital commodity, unless such alteration—
“(d) Decentralized governance system.—
“(1) For the purposes of this section, a decentralized governance system is not a ‘person’ or a ‘group of persons under common control’.
“(2) A blockchain system, together with its digital commodity, shall not be precluded from being considered a mature blockchain system solely based on a functional, administrative, clerical, or ministerial action of a decentralized governance system, including any such action taken by a person acting on behalf of and at the direction of the decentralized governance system, as determined by the Commission and consistent with the protection of investors, maintenance of fair, orderly, and efficient markets, and the facilitation of capital formation.
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—
(a) Securities Act of 1933.—Section 2(a)(1) of the Securities Act of 1933 (15 U.S.C. 77b(a)(1)) is amended by adding at the end the following: “The term does not include a digital commodity or permitted payment stablecoin.”.
(b) Securities Exchange Act of 1934.—Section 3(a)(10) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) is amended by adding at the end the following: “The term does not include a digital commodity or permitted payment stablecoin.”
(c) Investment Advisers Act of 1940.—Section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–2(a)) is amended—
(1) in paragraph (18), by adding at the end the following: “The term does not include a digital commodity or permitted payment stablecoin.”;
(3) by adding at the end, the following:
“(32) DIGITAL COMMODITY-RELATED TERMS.—The terms ‘digital commodity’ and ‘permitted payment stablecoin’ have the meaning given those terms, respectively, under section 2(a) of the Securities Act of 1933 (15 U.S.C. 77b(a)).”.
(d) Investment Company Act of 1940.—Section 2(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–2) is amended—
(1) in paragraph (36), by adding at the end the following: “The term does not include a digital commodity or permitted payment stablecoin.”; and
(2) by adding at the end, the following:
“(55) DIGITAL COMMODITY-RELATED TERMS.—The terms ‘digital commodity’ and ‘permitted payment stablecoin’ have the meaning given those terms, respectively, under section 2(a) of the Securities Act of 1933 (15 U.S.C. 77b(a)).”.
(e) Securities Investor Protection Act of 1970.—Section 16(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 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))”.
(a) In general.—Section 10 of the Securities Exchange Act of 1934 (15 U.S.C. 78j) is amended—
(3) by adding at the end the following:
“(e) (1) 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 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.
“(2) 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 brokered, traded, or custodied by 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.”.
(b) Treatment of permitted payment stablecoins.—Title I of the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by inserting after section 6 the following:
“SEC. 6A. Treatment of transactions in permitted payment stablecoins.
“(a) Authority To broker, trade, and custody permitted payment stablecoins.—Permitted payment stablecoins may be brokered, traded, or custodied by a broker, dealer or through an alternative trading system or national securities exchange.
“(b) Commission jurisdiction.—The Commission shall only have jurisdiction over a transaction in a permitted payment stablecoin with respect to those circumstances in which a permitted payment stablecoin is brokered, traded, or custodied—
“(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—
(a) In general.—Section 5 of the Securities Exchange Act of 1934 (15 U.S.C. 78e) is amended—
(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: “An alternative trading system primarily facilitating the trading of digital commodities, permitted payment stablecoins, or both, is not a ‘facility’ of an exchange.”.
(a) Commission authority.—The Securities and Exchange Commission shall have jurisdiction over digital commodity activities and transactions engaged in by—
(b) Rulemaking authority.—The Securities and Exchange Commission shall have authority to issue rules governing any digital commodity activities and transactions engaged in by a broker, dealer, or national securities exchange registered with the Securities and Exchange Commission and exempt from registration with the Commodity Futures Trading Commission pursuant to section 5k of the Commodity Exchange Act, consistent with this section and what is necessary or appropriate in the public interest or for the protection of investors.
(c) National securities exchanges.—Not later than 270 days after the date of the enactment of this Act, the Securities and Exchange Commission shall revise the covered regulations to permit a national securities exchange or affiliate thereof to operate an alternative trading system that permits the trading of digital commodities, permitted payment stablecoins, or both by registered brokers or registered dealers that are exempt from registration with the Commodity Futures Trading Commission pursuant section 5k of the Commodity Exchange Act, consistent with this section and what is necessary or appropriate in the public interest or for the protection of investors.
(d) Registered brokers and registered dealers.—Not later than 270 days after the date of the enactment of this Act, the Securities and Exchange Commission shall revise the covered regulations to permit a registered broker or registered dealer that is exempt from registration with the Commodity Futures Trading Commission pursuant to section 5k of the Commodity Exchange Act to operate an alternative trading system that permits the trading of digital commodities, permitted payment stablecoins, or both, consistent with this section and what is necessary or appropriate in the public interest or for the protection of investors.
(e) Permitted trading.—
(1) IN GENERAL.—An alternative trading system operated pursuant to this section and the regulations promulgated hereunder shall be permitted to trade upon notice to the Securities and Exchange Commission in a manner prescribed by the Securities and Exchange Commission any digital commodity that has been listed by a digital commodity exchange in compliance with section 5i(c)(3) of the Commodity Exchange Act.
(2) COMMISSION AUTHORITY.—Digital commodity transactions offered on an alternative trading system operating pursuant to this section shall be subject to the jurisdiction of the Securities and Exchange Commission. The Securities and Exchange Commission shall have authority to promulgate rules governing such digital commodity transactions of alternative trading systems, consistent with this section and what is necessary or appropriate in the public interest or for the protection of investors.
(f) Order display and execution reporting.—Not later than 270 days after the date of the enactment of this Act, the Securities and Exchange Commission shall issue and revise rules, as necessary or appropriate in the public interest or for the protection of investors, regarding whether alternative trading systems operating pursuant to subsections (c) and (d) have an obligation to provide the prices and sizes of orders displayed to more than one person in such alternative trading system of digital commodities to self-regulatory organizations with members who trade in digital commodities or permitted payment stablecoins.
(g) Principles of trade.—Not later than 270 days after the date of the enactment of this Act, the Securities and Exchange Commission shall issue and revise rules, as necessary or appropriate in the public interest or for the protection of investors, to—
(1) apply the rules and standards promulgated pursuant to paragraph (2) to the appropriate market participants, including—
(2) apply, as appropriate to the market participants described in subparagraph (1) and customers thereof rules and standards to—
(B) foster cooperation and coordination with persons engaged in regulating, settling, processing information with respect to, and facilitating transactions in digital commodities or permitted payment stablecoins traded, as applicable, on or by any alternative trading system operating pursuant to subsection (c) or (d), or any registered broker or registered dealer;
(h) 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 operates an alternative trading system pursuant to subsection (d) or otherwise transacts in digital commodities or permitted payment stablecoins to adopt such rules as may be necessary to further compliance with this section, including subsection (g)(2), protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.
(i) Rule of construction.—The enumeration of any category of rules or regulations in this section shall not be construed to limit the authority of the Securities and Exchange Commission to promulgate such rules as may be necessary or appropriate to implement this section and the purposes of this Act, including over—
(j) Memorandum of understanding.—Consistent with section 5k of the Commodity Exchange Act and to carry out this Act, the Securities and Exchange Commission shall enter into a memorandum of understanding with the Commodity Futures Trading Commission to ensure—
(1) requirements imposed on registered brokers or registered dealers operating an alternative trading system pursuant to subsection (c) or otherwise transacting in digital commodities or permitted payment stablecoins are consistent with the substantive requirements under section 4u of the Commodity Exchange Act;
(a) In general.—For purposes of books and records requirements for brokers, dealers, and exchanges under the Securities and Exchange Act of 1934 (15 U.S.C. 78a et seq.), a person may consider records from a blockchain system.
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”.
Section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o) is amended by adding at the end the following:
“(p) Additional registrations with the Commodity Futures Trading Commission.—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, to list or trade contracts of sale for digital commodities.”.
Section 18(b) of the Securities Act of 1933 (15 U.S.C. 77r(b)) is amended by adding at the end the following:
The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by inserting after section 15G the following:
“SEC. 15H. Decentralized finance activities not subject to this Act.
“(a) In general.—Notwithstanding any other provision of this Act, a person shall not be subject to this Act and the regulations promulgated under this Act based on the person directly or indirectly engaging in any of the following activities, whether singly or in combination, in relation to the operation of a blockchain system or in relation to a decentralized finance trading protocol:
“(1) Compiling network transactions or relaying, searching, sequencing, validating, or acting in a similar capacity.
“(2) Providing computational work, operating a node or oracle service, or procuring, offering, or utilizing network bandwidth, or providing other similar incidental services.
“(3) Providing a user-interface that enables a user to read and access data about a blockchain system.
“(4) Developing, publishing, constituting, administering, maintaining, or otherwise distributing a blockchain system or a decentralized finance trading protocol.
“(5) Developing, publishing, constituting, administering, maintaining, or otherwise distributing a decentralized finance messaging system, or operating or participating in a liquidity pool, for the purpose of executing a contract of sale of a digital commodity.
“(6) Developing, publishing, constituting, administering, maintaining, or otherwise distributing software or systems that create or deploy hardware or software, including wallets or other systems, facilitating an individual user’s own personal ability to keep, safeguard, or custody the user’s digital assets or related private keys.
(a) Treatment of custody activities.—The appropriate Federal banking agency, the National Credit Union Administration (in the case of a credit union), and the Securities and Exchange Commission may not require a depository institution, national bank, Federal credit union, State credit union, trust company, broker, or dealer, or any affiliate thereof (the “entity”)—
(1) to include assets held in custody that are not owned by the entity as a liability on the financial statement or balance sheet of the entity, including digital commodity or permitted payment stablecoin custody or safekeeping services;
(2) to hold regulatory capital against assets, including reserves backing such assets, in custody or safekeeping, except as necessary to mitigate against operational risks inherent with the custody or safekeeping services, as determined by—
(D) a State credit union supervisor (as defined in section 6003 of the Anti-Money Laundering Act of 2020 (31 U.S.C. 5311 note)); or
(b) Definitions.—In this section:
(1) BANKING TERMS.—The terms “appropriate Federal banking agency”, “depository institution”, “national bank”, and “State bank supervisor” have the meaning given those terms, respectively, under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).
(2) CREDIT UNION TERMS.—The terms “Federal credit union” and “State credit union” have the meaning given those terms, respectively, under section 101 of the Federal Credit Union Act (12 U.S.C. 1752).
Section 4(k)(4) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)(4)) is amended—
Except as otherwise provided under this title, this title and the amendments made by this title shall take effect 360 days after the date of enactment of this Act, except that, to the extent a provision of this title requires a rulemaking, the provision shall take effect on the later of—
(a) In general.—The Secretary of the Treasury, in consultation with the Commodity Futures Trading Commission and the Securities and Exchange Commission, shall, not later than 1 year after date of the enactment of this section, conduct a study and submit a report to the relevant congressional committees that—
(1) identifies any digital commodity registrants which are owned by governments of foreign adversaries;
(b) GAO study and report.—
(1) IN GENERAL.—The Comptroller General shall, not later than 1 year after date of the enactment of this section, conduct a study and submit a report to the relevant congressional committees that—
(A) identifies any digital commodity registrants which are owned by governments of foreign adversaries;
(c) Definitions.—In this section:
(1) DIGITAL COMMODITY REGISTRANT.—The term “digital commodity registrant” means any person required to register as a digital commodity exchange, digital commodity broker, or digital commodity dealer under the Commodity Exchange Act.
(a) Savings clause.—Section 2(a)(1) of the Commodity Exchange Act (7 U.S.C. 2(a)(1)) is amended by adding at the end the following:
“(J) Except as expressly provided in this Act, nothing in the CLARITY Act of 2025 shall affect or apply to, or be interpreted to affect or apply to—
(b) Limitation on authority over permitted payment stablecoins.—Section 2(c)(1) of the Commodity Exchange Act (7 U.S.C. 2(c)(1)) is amended—
(c) Commission jurisdiction over financing agreements.—Section 2(c)(2) of the Commodity Exchange Act (7 U.S.C. 2(c)(2)) is amended—
(1) in subparagraph (D)—
(A) in clause (ii)(I), by inserting after “paragraph (1)” the following: “(other than an agreement, contract, or transaction in a permitted payment stablecoin)”; and
(B) by redesignating clause (iv) as clause (v) and inserting after clause (iii) the following:
“(iv) AGREEMENTS FOR MARGIN FINANCING.—Notwithstanding clause (iii), a digital commodity broker may, subject to the requirements of section 4u(c)(2), offer to or enter into an agreement for margin financing with a customer for the purchase or sale of a digital commodity, provided any purchase or sale made pursuant to the agreement shall result in the delivery of the digital commodity into or from an account carried for the customer, as determined by the Commission by rule or regulation, based on commercial spot market practices.”; and
(2) by adding at the end the following:
“(F) COMMISSION JURISDICTION WITH RESPECT TO DIGITAL COMMODITY TRANSACTIONS.—
“(i) IN GENERAL.—Subject to sections 6d and 12(e), the Commission shall have exclusive jurisdiction with respect to any account, agreement, contract, or transaction involving a contract of sale of a digital commodity in interstate commerce, including in a digital commodity cash or spot market, that is offered, solicited, traded, facilitated, executed, cleared, reported, or otherwise dealt in—
“(ii) LIMITATIONS.—Clause (i) shall not apply with respect to—
“(iii) MIXED DIGITAL ASSET TRANSACTIONS.—
“(II) REPORTS ON MIXED DIGITAL ASSET TRANSACTIONS.—A digital commodity issuer, digital commodity related person, digital commodity affiliated person, or other person registered with the Securities and Exchange Commission that engages in a mixed digital asset transaction, shall, on request of the Commission, open to inspection and examination by the Commission all books and records relating to the mixed digital asset transaction, subject to the confidentiality and disclosure requirements of section 8.
“(G) AGREEMENTS, CONTRACTS, AND TRANSACTIONS IN STABLECOINS.—
“(i) TREATMENT OF PERMITTED PAYMENT STABLECOINS ON COMMISSION-REGISTERED ENTITIES.—Subject to clauses (ii) and (iii), the Commission shall have jurisdiction over a cash or spot agreement, contract, or transaction in a permitted payment stablecoin that is offered, offered to enter into, entered into, executed, confirmed the execution of, solicited, or accepted—
“(ii) PERMITTED PAYMENT STABLECOIN TRANSACTION RULES.—This Act shall apply to a transaction described in clause (i) only for the purpose of regulating the offer, execution, solicitation, or acceptance of a cash or spot permitted payment stablecoin transaction on a registered entity or by any other entity registered with the Commission, as if the permitted payment stablecoin were a digital commodity.
“(iii) NO AUTHORITY OVER PERMITTED PAYMENT STABLECOINS.—Notwithstanding clauses (i) and (ii), the Commission shall not make a rule or regulation, impose a requirement or obligation on a registered entity or other entity registered with the Commission, or impose a requirement or obligation on a permitted payment stablecoin issuer, regarding the operation of a permitted payment stablecoin issuer or a permitted payment stablecoin.”.
(d) Conforming amendment.—Section 2(a)(1)(A) of such Act (7 U.S.C. 2(a)(1)(A)) is amended in the 1st sentence by inserting “subparagraphs (F) and (G) of subsection (c)(2) of this section or” before “section 19”.
Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) is amended—
Section 5c of the Commodity Exchange Act (7 U.S.C. 7a–2) is amended—
(2) in subsection (b)—
(3) in subsection (c)—
(C) in paragraph (5), by adding at the end the following:
“(D) SPECIAL RULES FOR DIGITAL COMMODITY CONTRACTS.—In certifying any new rule or rule amendment, or listing any new contract or instrument, in connection with a contract of sale of a commodity for future delivery, option, swap, or other agreement, contract, or transaction, that is based on or references a digital commodity, a registered entity shall make or rely on a certification under subsection (d) for the digital commodity.”; and
(4) by inserting after subsection (c) the following:
“(d) Certifications for digital commodity trading.—
“(1) IN GENERAL.—Notwithstanding subsection (c), for the purposes of listing or offering a digital commodity for trading in a digital commodity cash or spot market, an eligible entity shall submit a written certification to the Commission that the digital commodity meets the requirements of this Act (including the regulations prescribed under this Act).
“(2) CONTENTS OF THE CERTIFICATION.—
“(3) MODIFICATIONS.—
“(4) DISAPPROVAL.—
“(A) IN GENERAL.—The written certification described in paragraph (1) shall become effective unless the Commission finds that the listing of the digital commodity is inconsistent with the requirements of this Act or the rules and regulations prescribed under this Act.
“(5) REVIEW.—
“(A) IN GENERAL.—Unless the Commission makes a disapproval decision under paragraph (4), the written certification described in paragraph (1) shall become effective, pursuant to the certification by the eligible entity and notice of the certification to the public (in a manner determined by the Commission) on the date that is—
“(i) 20 business days after the date the Commission receives the certification (or such shorter period as determined by the Commission by rule or regulation), in the case of a digital commodity that has not been certified under this section or for which a certification is being modified under paragraph (3); or
“(B) EXTENSIONS.—The time for consideration under subparagraph (A) may be extended through notice to the eligible entity that there are novel or complex issues that require additional time to analyze, that the explanation by the submitting eligible entity is inadequate, or of a potential inconsistency with this Act—
“(i) once, for 30 business days, through written notice to the eligible entity by the Commission; and
“(6) PRIOR APPROVAL BEFORE REGISTRATION.—
“(A) IN GENERAL.—A person applying for registration with the Commission for the purposes of listing or offering a digital commodity for trading in a digital commodity cash or spot market may request that the Commission grant prior approval for the person to list or offer the digital commodity on being registered with the Commission.
“(B) REQUEST FOR PRIOR APPROVAL.—A person seeking prior approval under subparagraph (A) shall furnish the Commission with a written certification that the digital commodity meets the requirements of this Act (including the regulations prescribed under this Act) and the information described in paragraph (2).
“(C) DEADLINE.—The Commission shall take final action on a request for prior approval not later than 90 business days after submission of the request, unless the person submitting the request agrees to an extension of the time limitation established under this subparagraph.
“(D) DISAPPROVAL.—
“(i) IN GENERAL.—The Commission shall approve the listing of the digital commodity unless the Commission finds that the listing is inconsistent with this Act (including any regulation prescribed under this Act).
The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by inserting after section 5h the following:
“SEC. 5i. Registration of digital commodity exchanges.
“(a) In general.—
“(1) REGISTRATION.—
“(A) IN GENERAL.—A trading facility that offers or seeks to offer a cash or spot market in at least 1 digital commodity shall register with the Commission as a digital commodity exchange.
“(B) APPLICATION.—A person desiring to register as a digital commodity exchange shall submit to the Commission an application in such form and containing such information as the Commission may require for the purpose of making the determinations required for approval.
“(C) EXEMPTIONS.—A trading facility that offers or seeks to offer a cash or spot market in at least 1 digital commodity shall not be required to register under this section if the trading facility—
“(2) ADDITIONAL REGISTRATIONS.—
“(A) WITH THE COMMISSION.—In order to foster the development of fair and orderly markets, protect customers, and promote responsible innovation, the Commission—
“(B) WITH A REGISTERED FUTURES ASSOCIATION.—
“(b) Trading.—
“(1) PROHIBITION ON CERTAIN TRADING PRACTICES.—
“(A) Section 4b shall apply to any agreement, contract, or transaction in a digital commodity as if the agreement, contract, or transaction were a contract of sale of a commodity for future delivery.
“(2) PROHIBITION ON ACTING AS A COUNTERPARTY.—
“(A) IN GENERAL.—A digital commodity exchange or any affiliate of such an exchange shall not trade on or subject to the rules of the digital commodity exchange for its own account.
“(B) EXCEPTIONS.—Subject to any conditions, requirements, or limitations imposed by the Commission pursuant to subparagraph (C), a digital commodity exchange may engage in trading on the exchange so long as the trading is not solely for the purpose of the profit of the exchange, including the following:
“(i) CUSTOMER DIRECTION.—A transaction for, or entered into at the direction of, or for the benefit of, an unaffiliated customer.
“(ii) RISK MANAGEMENT.—A transaction to manage the credit, market, and liquidity risks associated with the digital commodity business of the exchange.
“(C) RULEMAKING.—The Commission may, by rule, establish conditions, requirements, or other limitations on the activities of a digital commodity exchange and its affiliate permitted pursuant to subparagraph (B) that are necessary for the protection of customers, the promotion of innovation, or the maintenance of fair, orderly, and efficient markets.
“(D) NOTICE REQUIREMENT.—In order for a digital commodity exchange or any affiliate of a digital commodity exchange to engage in trading on the affiliated exchange pursuant to subsection (B), notice must be given to the Commission that shall enumerate how any proposed activity is consistent with the exceptions in subsection (B) and the purposes of this Act.
“(c) Core principles for digital commodity exchanges.—
“(1) COMPLIANCE WITH CORE PRINCIPLES.—
“(A) IN GENERAL.—To be registered, and maintain registration, as a digital commodity exchange, a digital commodity exchange shall comply with—
“(B) REASONABLE DISCRETION OF A DIGITAL COMMODITY EXCHANGE.—Unless otherwise determined by the Commission by rule or regulation, a digital commodity exchange described in subparagraph (A) shall have reasonable discretion in establishing the manner in which the digital commodity exchange complies with the core principles described in this subsection.
“(2) COMPLIANCE WITH RULES.—A digital commodity exchange shall—
“(A) establish and enforce compliance with any rule of the digital commodity exchange, including—
“(3) LISTING STANDARDS FOR DIGITAL COMMODITIES.—
“(A) IN GENERAL.—A digital commodity exchange shall establish policies and procedures to permit trading in a digital commodity only if—
“(i) reports with respect to the digital commodity required under, as applicable, section 4B(b)(3) or 4B(b)(5)(C) of the Securities Act of 1933 (or, with respect to a digital commodity not issued in reliance on section 4(a)(8) of the Securities Act of 1933, a comparable set of reports, where required by the Securities and Exchange Commission) have been filed with the Securities and Exchange Commission;
“(B) PUBLIC INFORMATION REQUIREMENTS.—
“(i) IN GENERAL.—A digital commodity exchange shall—
“(ii) REQUIRED INFORMATION.—With respect to a digital commodity and each blockchain system to which the digital commodity relates for which the digital commodity exchange will make the digital commodity available to the customers of the digital commodity exchange, the following information:
“(II) TRANSACTION HISTORY.—A description of the steps necessary to independently access, search, and verify the transaction history of any blockchain system to which the digital commodity relates, to the extent any such independent access, search, and verification activities are technically feasible with respect to the blockchain system.
“(III) DIGITAL COMMODITY ECONOMICS.—A narrative description of the purpose of any blockchain system to which the digital commodity relates and the operation of any such blockchain system, including—
“(aa) information explaining the launch and supply process, including the number of digital assets to be issued in an initial allocation, the total number of digital commodities to be created, the release schedule for the digital commodities, and the total number of digital commodities then outstanding;
“(bb) information detailing any applicable consensus mechanism or process for validating transactions, method of generating or mining digital commodities, and any process for burning or destroying digital commodities on the blockchain system;
“(iii) FORMAT.—The Commission shall prescribe rules and regulations for the standardization and simplification of disclosures under clause (ii), including requiring that disclosures—
“(C) DIGITAL COMMODITIES HELD BY RELATED AND DIGITAL COMMODITY AFFILIATED PERSONS.—A digital commodity exchange shall establish policies and procedures designed to permit the trading of a unit of a digital commodity acquired from the issuer and held by a digital commodity affiliated person or a digital commodity related person, only in accordance with the requirements of section 4C of the Securities Act of 1933.
“(4) TREATMENT OF CUSTOMER ASSETS.—A digital commodity exchange shall establish policies and procedures that are designed to protect and ensure the safety of customer money, assets, and property.
“(5) MONITORING OF TRADING AND TRADE PROCESSING.—
“(A) IN GENERAL.—A digital commodity exchange shall provide a competitive, open, and efficient market and mechanism for executing transactions that protects the price discovery process of trading on the exchange.
“(B) PROTECTION OF MARKETS AND MARKET PARTICIPANTS.—A digital commodity exchange shall establish and enforce rules—
“(C) TRADING PROCEDURES.—A digital commodity exchange shall—
“(i) establish and enforce rules or terms and conditions defining, or specifications detailing—
“(ii) monitor trading in digital commodities to prevent manipulation, price distortion, and disruptions, through surveillance, compliance, and disciplinary practices and procedures, including methods for conducting real-time monitoring of trading and comprehensive and accurate trade reconstructions.
“(6) ABILITY TO OBTAIN INFORMATION.—A digital commodity exchange shall—
“(7) EMERGENCY AUTHORITY.—A digital commodity exchange shall adopt rules to provide for the exercise of emergency authority, in consultation or cooperation with the Commission or a registered entity, as is necessary and appropriate, including the authority to facilitate the liquidation or transfer of open positions in any digital commodity or to suspend or curtail trading in a digital commodity.
“(8) TIMELY PUBLICATION OF TRADING INFORMATION.—
“(9) RECORDKEEPING AND REPORTING.—
“(A) IN GENERAL.—A digital commodity exchange shall—
“(i) maintain records relating to the business of the exchange, including a complete audit trail, in a form and manner acceptable to the Commission for a period of 5 years;
“(B) INFORMATION-SHARING.—Subject to section 8, and on request, the Commission shall share information collected under subparagraph (A) with—
“(C) CONFIDENTIALITY AGREEMENT.—Before the Commission may share information with any entity described in subparagraph (B), the Commission shall receive a written agreement from the entity stating that the entity shall abide by the confidentiality requirements described in section 8 relating to the information on digital commodities that is provided.
“(10) ANTITRUST CONSIDERATIONS.—Unless necessary or appropriate to achieve the purposes of this Act, a digital commodity exchange shall not—
“(12) FINANCIAL RESOURCES.—
“(A) IN GENERAL.—A digital commodity exchange shall have adequate financial, operational, and managerial resources, as determined by the Commission, to discharge each responsibility of the digital commodity exchange.
“(B) MINIMUM AMOUNT OF FINANCIAL RESOURCES.—A digital commodity exchange shall possess financial resources that, at a minimum, exceed the sum of—
“(13) DISCIPLINARY PROCEDURES.—A digital commodity exchange shall establish and enforce disciplinary procedures that authorize the digital commodity exchange to discipline, suspend, or expel members or market participants that violate the rules of the digital commodity exchange, or similar methods for performing the same functions, including delegation of the functions to third parties.
“(14) GOVERNANCE FITNESS STANDARDS.—
“(15) SYSTEM SAFEGUARDS.—A digital commodity exchange shall—
“(A) establish and maintain a program of risk analysis and oversight to identify and minimize sources of operational and security risks, through the development of appropriate controls and procedures, and automated systems in accordance with industry standards, that—
“(d) Holding of customer assets.—
“(1) IN GENERAL.—A digital commodity exchange shall hold customer money, assets, and property in a manner to minimize the risk of loss to the customer or unreasonable delay in customer access to the money, assets, and property of the customer.
“(2) SEGREGATION OF FUNDS.—
“(A) IN GENERAL.—A digital commodity exchange shall treat and deal with all money, assets, and property that is received by the digital commodity exchange, or accrues to a customer as the result of trading in digital commodities, as belonging to the customer.
“(B) COMMINGLING PROHIBITED.—Money, assets, and property described in subparagraph (A) shall be separately accounted for and shall not be commingled with the funds of the digital commodity exchange or be used to margin, secure, or guarantee any trades or accounts of any customer or person other than the person for whom the same are held.
“(C) EXCEPTIONS.—
“(i) USE OF FUNDS.—
“(I) IN GENERAL.—Notwithstanding subparagraph (A), money, assets, and property described in subparagraph (A) may, for convenience, be commingled and deposited in the same account or accounts with any bank, trust company, derivatives clearing organization, or qualified digital asset custodian.
“(II) WITHDRAWAL.—Notwithstanding subparagraph (A), such share of the money, assets, and property described in subparagraph (A) as in the normal course of business shall be necessary to margin, guarantee, secure, transfer, adjust, or settle a contract of sale of a digital commodity with a registered entity may be withdrawn and applied to such purposes, including the payment of commissions, brokerage, interest, taxes, storage, and other charges, lawfully accruing in connection with the contract.
“(ii) COMMISSION ACTION.—Notwithstanding subparagraph (A), in accordance with such terms and conditions as the Commission may prescribe by rule, regulation, or order, any money, assets, or property of the customers of a digital commodity exchange may be commingled and deposited in customer accounts with any other money, assets, or property received by the digital commodity exchange and required by the Commission to be separately accounted for and treated and dealt with as belonging to the customer of the digital commodity exchange.
“(3) PERMITTED INVESTMENTS.—Money described in paragraph (2) may be invested in obligations of the United States, in general obligations of any State or of any political subdivision of a State, and in obligations fully guaranteed as to principal and interest by the United States, or in any other investment that the Commission may by rule or regulation prescribe, and such investments shall be made in accordance with such rules and regulations and subject to such conditions as the Commission may prescribe.
“(4) CUSTOMER PROTECTION DURING BANKRUPTCY.—
“(A) CUSTOMER PROPERTY.—All assets held on behalf of a customer by a digital commodity exchange, and all money, assets, and property of any customer received by a digital commodity exchange for trading or custody, or to facilitate, margin, guarantee, or secure contracts of sale of a digital commodity (including money, assets, or property accruing to the customer as the result of the transactions), shall be considered customer property for purposes of section 761 of title 11, United States Code.
“(B) TRANSACTIONS.—A transaction involving the sale of a unit of a digital commodity occurring on or subject to the rules of a digital commodity exchange shall be considered a contract for the purchase or sale of a commodity for future delivery, on or subject to the rules of, a contract market or board of trade for purposes of the definition of ‘commodity contract’ in section 761 of title 11, United States Code.
“(5) MISUSE OF CUSTOMER PROPERTY.—
“(A) IN GENERAL.—It shall be unlawful—
“(i) for any digital commodity exchange that has received any customer money, assets, or property for custody to dispose of, or use any such money, assets, or property as belonging to the digital commodity exchange or any person other than a customer of the digital commodity exchange; or
“(ii) for any other person, including any depository, other digital commodity exchange, or digital asset custodian that has received any customer money, assets, or property for deposit, to hold, dispose of, or use any such money, assets, or property, or property, as belonging to the depositing digital commodity exchange or any person other than the customers of the digital commodity exchange.
“(B) USE FURTHER DEFINED.—For purposes of this section, ‘use’ of a digital commodity includes utilizing any unit of a digital asset to participate in a blockchain service defined in paragraph (6) or a decentralized governance system associated with the digital commodity or the blockchain system to which the digital commodity relates in any manner other than that expressly directed by the customer from whom the unit of a digital commodity was received.
“(6) PARTICIPATION IN BLOCKCHAIN SERVICES.—
“(A) IN GENERAL.—A customer shall have the right to waive the restrictions in paragraph (2) for any unit of a digital commodity to be used under subparagraph (B) of this paragraph, by affirmatively electing, in writing to the digital commodity exchange, to waive the restrictions.
“(B) USE OF FUNDS.—Customer digital commodities removed from segregation under subparagraph (A) may be pooled and used by the digital commodity exchange or its designee to provide a blockchain service for a blockchain system to which the unit of the digital asset removed from segregation in subparagraph (A) relates.
“(C) LIMITATIONS.—
“(i) IN GENERAL.—The Commission shall, by rule, establish notice and disclosure requirements, and may, by rule, establish any other limitations and rules related to the waiving of any restrictions under this paragraph that are reasonably necessary to protect customers, including eligible contract participants, non-eligible contract participants, or any other class of customers.
“(e) Market access requirements.—The Commission may, by rule, impose any additional requirements related to the operations and activities of the digital commodity exchange and an affiliated digital commodity broker necessary to protect market participants, promote fair and equitable trading on the digital commodity exchange, and promote responsible innovation.
“(f) Designation of chief compliance officer.—
“(1) IN GENERAL.—A digital commodity exchange shall designate an individual to serve as a chief compliance officer.
“(2) DUTIES.—The chief compliance officer shall—
“(C) in consultation with the board of the exchange, a body performing a function similar to that of a board, or the senior officer of the exchange, resolve any conflicts of interest that may arise;
“(D) establish and administer the policies and procedures required to be established pursuant to this section;
“(3) REQUIREMENTS FOR PROCEDURES.—In establishing procedures under paragraph (2)(F), the chief compliance officer shall design the procedures to establish the handling, management response, remediation, retesting, and closing of noncompliance issues.
“(4) ANNUAL REPORTS.—
“(A) IN GENERAL.—In accordance with rules prescribed by the Commission, the chief compliance officer shall annually prepare and sign a report that contains a description of—
“(g) Appointment of trustee.—
“(1) IN GENERAL.—If a proceeding under section 5e results in the suspension or revocation of the registration of a digital commodity exchange, or if a digital commodity exchange withdraws from registration, the Commission, on notice to the digital commodity exchange, may apply to the appropriate United States district court where the digital commodity exchange is located for the appointment of a trustee.
“(2) ASSUMPTION OF JURISDICTION.—If the Commission applies for appointment of a trustee under paragraph (1)—
“(A) the court may take exclusive jurisdiction over the digital commodity exchange and the records and assets of the digital commodity exchange, wherever located; and
“(B) if the court takes jurisdiction under subparagraph (A), the court shall appoint the Commission, or a person designated by the Commission, as trustee with power to take possession and continue to operate or terminate the operations of the digital commodity exchange in an orderly manner for the protection of customers subject to such terms and conditions as the court may prescribe.
“(h) Qualified digital asset custodian.—A digital commodity exchange shall hold in a qualified digital asset custodian each unit of a digital asset that is—
“(i) Exemptions.—
“(1) IN GENERAL.—In order to promote responsible innovation and fair competition, or protect customers, the Commission may (on its own initiative or on application of the registered digital commodity exchange) exempt, either unconditionally or on stated terms or conditions or for stated periods and either retroactively or prospectively, or both, a registered digital commodity exchange from the requirements of this section, if the Commission determines that—
“(2) FOREIGN EXCHANGES.—The Commission may exempt, conditionally or unconditionally, a digital commodity exchange from registration under this section if the Commission finds that the digital commodity exchange is subject to comparable, comprehensive supervision and regulation on a consolidated basis by the appropriate governmental authorities in the home country of the facility.
“(j) Customer defined.—In this section, the term ‘customer’ means any person that maintains an account for the trading of digital commodities directly with a digital commodity exchange (other than a person that is owned or controlled, directly or indirectly, by the digital commodity exchange) for its own behalf or on behalf of any other person.
The Commodity Exchange Act (7 U.S.C. 1 et seq.), as amended by the preceding provisions of this Act, is amended by inserting after section 5i the following:
“SEC. 5j. Qualified digital asset custodians.
“(a) In general.—A person is a qualified digital asset custodian for purposes of this Act if the person—
“(b) Supervision requirement.—A person is in compliance with this subsection if the person is subject to—
“(1) supervision and examination for custody and safekeeping of digital assets by an appropriate Federal banking agency, the National Credit Union Administration, the Commission, or the Securities and Exchange Commission; or
“(2) adequate supervision and appropriate regulation for custody and safekeeping of digital assets by—
“(A) a State bank supervisor (within the meaning of section 3 of the Federal Deposit Insurance Act);
“(c) Other requirements.—A person shall be in compliance with this subsection if:
“(1) NOT OTHERWISE PROHIBITED.—The person has not been prohibited by its supervisor from engaging in an activity with respect to the custody and safekeeping of digital assets.
“(2) INFORMATION SHARING.—
“(A) IN GENERAL.—The person shares information with the Commission on request and complies with such requirements for periodic sharing of information regarding customer accounts that the person holds on behalf of an entity registered with the Commission as the Commission determines by rule are reasonably necessary to effectuate any of the provisions, or to accomplish any of the purposes, of this Act.
“(B) PROVISION OF INFORMATION.—If the person is subject to regulation and examination by an appropriate Federal banking agency, the person may satisfy any information request described in subparagraph (A) by providing the Commission with a detailed listing, in writing, of the digital assets of a customer in the custody of, or use by, the person.
“(C) RULEMAKING FOR CFTC ENTITIES.—
“(i) IN GENERAL.—The Commission shall prescribe rules to permit a person registered with the Commission to be a qualified digital asset custodian in compliance with this section.
“(d) Adequate supervision and appropriate regulation.—
“(1) IN GENERAL.—For purposes of subsection (b), the terms ‘adequate supervision’ and ‘appropriate regulation’ mean such minimum standards for supervision and regulation as are reasonably necessary to protect the digital assets held by a person registered under this Act, including standards relating to the licensing, examination, and supervisory processes that require the person to, at a minimum—
“(A) receive a review and evaluation of ownership, character and fitness, conflicts of interest, business model, financial statements, funding resources, and policies and procedures of the person;
“(E) submit financial statements and audited financial statements to the applicable supervisor described in subsection (b);
“(F) provide disclosures to the applicable supervisor described in subsection (b) regarding actions, proceedings, and other items as determined by the supervisor;
“(2) RULEMAKING WITH RESPECT TO DEFINITIONS.—
“(A) IN GENERAL.—For purposes of this section, the Commission may, by rule, further define the terms ‘adequate supervision’ and ‘appropriate regulation’ as necessary and appropriate for the protection of customers, and consistent with the purposes of this Act.
“(B) CONDITIONAL TREATMENT OF CERTAIN CUSTODIANS BEFORE RULEMAKING.—Before the effective date of a rulemaking under subparagraph (A), a trust company is deemed subject to adequate supervision and appropriate regulation if—
“(i) the trust company is expressly permitted by a State bank supervisor to engage in the custody and safekeeping of digital assets;
“(C) TRANSITION PERIOD FOR CERTAIN CUSTODIANS.—In implementing the rulemaking under subparagraph (A), the Commission shall provide a transition period of not less than 2 years for any trust company that is deemed subject to adequate supervision and appropriate regulation under subparagraph (B) on the effective date of the rulemaking.
“(e) Authority To temporarily suspend standards.—The Commission may, by rule or order, temporarily suspend, in whole or in part, any requirement imposed under, or any standard referred to in, this section, or any requirement to utilize a qualified digital asset custodian, if the Commission determines that the suspension would be consistent with the public interest and the purposes of this Act.”.
The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by inserting after section 4t the following:
“SEC. 4u. Registration and regulation of digital commodity brokers and dealers.
“(a) Registration.—
“(1) REQUIREMENT.—It shall be unlawful for any person to act as a digital commodity broker or digital commodity dealer unless the person is registered as such with the Commission.
“(2) ADDITIONAL REGISTRATION.—
“(A) RULES.—In order to foster the development of fair and orderly markets, protect customers, and promote responsible innovation, the Commission—
“(b) Requirements.—
“(1) IN GENERAL.—A person shall register as a digital commodity broker or digital commodity dealer by filing a registration application with the Commission.
“(2) CONTENTS.—
“(3) STATUTORY DISQUALIFICATION.—Except to the extent otherwise specifically provided by rule, regulation, or order, it shall be unlawful for a digital commodity broker or digital commodity dealer to permit any person who is associated with a digital commodity broker or a digital commodity dealer and who is subject to a statutory disqualification to effect or be involved in effecting a contract of sale of a digital commodity on behalf of the digital commodity broker or the digital commodity dealer, respectively, if the digital commodity broker or digital commodity dealer, respectively, knew, or in the exercise of reasonable care should have known, of the statutory disqualification.
“(c) Rulemaking.—
“(1) IN GENERAL.—The Commission shall prescribe such rules applicable to registered digital commodity brokers and registered digital commodity dealers as are appropriate to carry out this section, including rules in the public interest that limit the activities of digital commodity brokers and digital commodity dealers.
“(2) FINANCING AGREEMENTS.—
“(A) IN GENERAL.—The Commission shall prescribe rules and regulations applicable to digital commodity brokers or digital commodity dealers which shall set forth minimum requirements related to disclosure, recordkeeping, margin financing arrangements, rehypothecation, capital, reporting, business conduct, documentation, and supervision of employees and agents, in connection with—
“(B) SPECIFIC AUTHORITY.—Except as prohibited in section 2(c)(2)(G)(iii), the Commission may also make, promulgate, and enforce such rules and regulations as, in the judgment of the Commission, are reasonably necessary to effectuate any of the provisions of, or to accomplish any of the purposes of, this Act in connection with an agreement referred to in subparagraph (A) of this paragraph.
“(d) Capital requirements.—
“(1) IN GENERAL.—Each digital commodity broker and digital commodity dealer shall meet such minimum capital requirements as the Commission may prescribe to address the risks associated with digital commodity trading and to ensure that the digital commodity broker or digital commodity dealer, respectively, is able, at all times, to—
“(2) FUTURES COMMISSION MERCHANTS AND OTHER DEALERS.—Each futures commission merchant, introducing broker, digital commodity broker, digital commodity dealer, broker, and dealer shall maintain sufficient capital to comply with the stricter of any applicable capital requirements to which the futures commission merchant, introducing broker, digital commodity broker, digital commodity dealer, broker, or dealer, respectively, is subject under this Act or the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).
“(e) Reporting and recordkeeping.—Each digital commodity broker and digital commodity dealer—
“(1) shall make such reports as are required by the Commission by rule or regulation regarding the transactions, positions, and financial condition of the digital commodity broker or digital commodity dealer, respectively;
“(f) Daily trading records.—
“(1) IN GENERAL.—Each digital commodity broker and digital commodity dealer shall maintain daily trading records of the transactions of the digital commodity broker or digital commodity dealer, respectively, and all related records (including related forward or derivatives transactions) and recorded communications, including electronic mail, instant messages, and recordings of telephone calls, for such period as the Commission may require by rule or regulation.
“(2) INFORMATION REQUIREMENTS.—The daily trading records shall include such information as the Commission shall require by rule or regulation.
“(g) Business conduct standards.—
“(1) IN GENERAL.—Each digital commodity broker and digital commodity dealer shall conform with such business conduct standards as the Commission, by rule or regulation, prescribes related to—
“(A) fraud, manipulation, and other abusive practices involving spot or margined, leveraged, or financed digital commodity transactions (including transactions that are offered but not entered into);
“(2) BUSINESS CONDUCT REQUIREMENTS.—The Commission shall, by rule, prescribe business conduct requirements which—
“(A) require disclosure by a registered digital commodity broker and registered digital commodity dealer to any counterparty to the transaction (other than an eligible contract participant) of—
“(B) establish a duty for such a digital commodity broker and such a digital commodity dealer to communicate in a fair and balanced manner based on principles of fair dealing and good faith;
“(h) Duties.—
“(1) RISK MANAGEMENT PROCEDURES.—Each digital commodity broker and digital commodity dealer shall establish robust and professional risk management systems adequate for managing the day-to-day business of the digital commodity broker or digital commodity dealer, respectively.
“(2) DISCLOSURE OF GENERAL INFORMATION.—Each digital commodity broker and digital commodity dealer shall disclose to the Commission information concerning—
“(A) the terms and conditions of the transactions of the digital commodity broker or digital commodity dealer, respectively;
“(B) the trading operations, mechanisms, and practices of the digital commodity broker or digital commodity dealer, respectively;
“(3) ABILITY TO OBTAIN INFORMATION.—Each digital commodity broker and digital commodity dealer shall—
“(4) CONFLICTS OF INTEREST.—Each digital commodity broker and digital commodity dealer shall establish, maintain, and enforce written policies and procedures reasonably designed, taking into consideration the nature of the business of the person, to mitigate any conflicts of interest in transactions or arrangements with affiliates.
“(i) Designation of chief compliance officer.—
“(1) IN GENERAL.—Each digital commodity broker and digital commodity dealer shall designate an individual to serve as a chief compliance officer.
“(2) DUTIES.—The chief compliance officer shall—
“(A) report directly to the board or to the senior officer of the registered digital commodity broker or registered digital commodity dealer;
“(B) review the compliance of the registered digital commodity broker or registered digital commodity dealer with respect to the registered digital commodity broker and registered digital commodity dealer requirements described in this section;
“(C) in consultation with the board of directors, a body performing a function similar to the board, or the senior officer of the organization, resolve any conflicts of interest that may arise;
“(D) be responsible for administering each policy and procedure that is required to be established pursuant to this section;
“(E) ensure compliance with this Act (including regulations), including each rule prescribed by the Commission under this section;
“(3) ANNUAL REPORTS.—
“(A) IN GENERAL.—In accordance with rules prescribed by the Commission, the chief compliance officer shall annually prepare and sign a report that contains a description of—
“(B) REQUIREMENTS.—The chief compliance officer shall ensure that a compliance report under subparagraph (A)—
“(j) Segregation of digital commodities.—
“(1) HOLDING OF CUSTOMER ASSETS.—
“(A) IN GENERAL.—Each digital commodity broker and digital commodity dealer shall hold customer money, assets, and property in a manner to minimize the risk of loss to the customer or unreasonable delay in customer access to the money, assets, and property of the customer.
“(B) QUALIFIED DIGITAL ASSET CUSTODIAN.—Each digital commodity broker and digital commodity dealer shall hold in a qualified digital asset custodian each unit of a digital asset that is—
“(i) the property of a customer or counterparty of the digital commodity broker or digital commodity dealer, respectively;
“(2) SEGREGATION OF FUNDS.—
“(A) IN GENERAL.—Each digital commodity broker and digital commodity dealer shall treat and deal with all money, assets, and property that is received by the digital commodity broker or digital commodity dealer, or accrues to a customer as the result of trading in digital commodities, as belonging to the customer.
“(B) COMMINGLING PROHIBITED.—
“(i) IN GENERAL.—Except as provided in clause (ii), each digital commodity broker and digital commodity dealer shall separately account for money, assets, and property of a digital commodity customer, and shall not commingle any such money, assets, or property with the funds of the digital commodity broker or digital commodity dealer, respectively, or use any such money, assets, or property to margin, secure, or guarantee any trades or accounts of any customer or person other than the person for whom the money, assets, or property are held.
“(ii) EXCEPTIONS.—
“(I) USE OF FUNDS.—
“(aa) IN GENERAL.—A digital commodity broker or digital commodity dealer may, for convenience, commingle and deposit in the same account or accounts with any bank, trust company, derivatives clearing organization, or qualified digital asset custodian money, assets, and property of customers.
“(bb) WITHDRAWAL.—The share of the money, assets, and property described in item (aa) as in the normal course of business shall be necessary to margin, guarantee, secure, transfer, adjust, or settle a contract of sale of a digital commodity with a registered entity may be withdrawn and applied to such purposes, including the payment of commissions, brokerage, interest, taxes, storage, and other charges, lawfully accruing in connection with the contract.
“(II) COMMISSION ACTION.—In accordance with such terms and conditions as the Commission may prescribe by rule, regulation, or order, any money, assets, or property of the customers of a digital commodity broker or digital commodity dealer may be commingled and deposited in customer accounts with any other money, assets, or property received by the digital commodity broker or digital commodity dealer, respectively, and required by the Commission to be separately accounted for and treated and dealt with as belonging to the customer of the digital commodity broker or digital commodity dealer, respectively.
“(3) PERMITTED INVESTMENTS.—Money described in paragraph (2) may be invested in obligations of the United States, in general obligations of any State or of any political subdivision of a State, in obligations fully guaranteed as to principal and interest by the United States, or in any other investment that the Commission may by rule or regulation allow.
“(4) CUSTOMER PROTECTION DURING BANKRUPTCY.—
“(A) CUSTOMER PROPERTY.—All money, assets, or property described in paragraph (2) shall be considered customer property for purposes of section 761 of title 11, United States Code.
“(B) TRANSACTIONS.—A transaction involving a unit of a digital commodity occurring with a digital commodity broker or digital commodity dealer shall be considered a contract for the purchase or sale of a commodity for future delivery, on or subject to the rules of, a contract market or board of trade for purposes of the definition of a ‘commodity contract’ in section 761 of title 11, United States Code.
“(5) MISUSE OF CUSTOMER PROPERTY.—
“(A) IN GENERAL.—It shall be unlawful—
“(i) for any digital commodity broker or digital commodity dealer that has received any customer money, assets, or property for custody to dispose of, or use any such money, assets, or property as belonging to the digital commodity broker or digital commodity dealer, respectively, or any person other than a customer of the digital commodity broker or digital commodity dealer, respectively; or
“(ii) for any other person, including any depository, digital commodity exchange, other digital commodity broker, other digital commodity dealer, or digital commodity custodian that has received any customer money, assets, or property for deposit, to hold, dispose of, or use any such money, assets, or property, as belonging to the depositing digital commodity broker or digital commodity dealer or any person other than the customers of the digital commodity broker or digital commodity dealer, respectively.
“(B) USE FURTHER DEFINED.—For purposes of this section, ‘use’ of a digital commodity includes utilizing any unit of a digital asset to participate in a blockchain service defined in paragraph (6) or a decentralized governance system associated with the digital commodity or the blockchain system to which the digital commodity relates in any manner other than that expressly directed by the customer from whom the unit of a digital commodity was received.
“(6) PARTICIPATION IN BLOCKCHAIN SERVICES.—
“(A) IN GENERAL.—A customer shall have the right to waive the restrictions in paragraph (2) for any unit of a digital commodity to be used under subparagraph (B) of this paragraph, by affirmatively electing, in writing to the digital commodity broker or digital commodity dealer, to waive the restrictions.
“(B) USE OF FUNDS.—Customer digital commodities removed from segregation under subparagraph (A) may be pooled and used by the digital commodity broker or digital commodity dealer, or one of their designees, to provide a blockchain service for a blockchain system to which the unit of the digital asset removed from segregation in subparagraph (A) relates.
“(C) LIMITATIONS.—
“(i) IN GENERAL.—The Commission shall, by rule, establish notice and disclosure requirements, and may, by rule, establish any other limitations and rules related to the waiving of any restrictions under this paragraph that are reasonably necessary to protect customers, including eligible contract participants, non-eligible contract participants, or any other class of customers.
“(k) Federal preemption.—Notwithstanding any other provision of law, the Commission shall have exclusive jurisdiction over any digital commodity broker or digital commodity dealer registered under this section with respect to activities subject to this Act.
“(l) Exemptions.—In order to promote responsible innovation and fair competition, or protect customers, the Commission may (on its own initiative or on application of the registered digital commodity broker or registered digital commodity dealer) exempt, unconditionally or on stated terms or conditions, or for stated periods, and retroactively or prospectively, or both, a registered digital commodity broker or registered digital commodity dealer from the requirements of this section, if the Commission determines that—
“(1) (A) the exemption would be consistent with the public interest and the purposes of this Act; and
“(2) the registered digital commodity broker or registered digital commodity dealer is subject to comparable, comprehensive supervision and regulation by the appropriate government authorities in the home country of the registered digital commodity broker or registered digital commodity dealer, respectively.”.
(a) In general.—Section 4k of the Commodity Exchange Act (7 U.S.C. 6k) is amended—
(2) by inserting after subsection (3) the following:
“(4) It shall be unlawful for any person to act as an associated person of a digital commodity broker or an associated person of a digital commodity dealer unless the person is registered with the Commission under this Act and such registration shall not have expired, been suspended (and the period of suspension has not expired), or been revoked. It shall be unlawful for a digital commodity broker or a digital commodity dealer to permit such a person to become or remain associated with the digital commodity broker or digital commodity dealer if the digital commodity broker or digital commodity dealer knew or should have known that the person was not so registered or that the registration had expired, been suspended (and the period of suspension has not expired), or been revoked.”; and
(b) Conforming amendments.—The Commodity Exchange Act (7 U.S.C. 1a et seq.) is amended by striking “section 4k(6)” each place it appears and inserting “section 4k(7)”.
(a) In general.—Section 4m(3) of the Commodity Exchange Act (7 U.S.C. 6m(3)) is amended—
(b) Exemptive authority.—Section 4m of such Act (7 U.S.C. 6m) is amended by adding at the end the following:
“(4) Exemptive authority.—The Commission shall promulgate rules to provide appropriate exemptions for commodity pool operators and commodity trading advisors, to provide relief from duplicative, conflicting, or unduly burdensome requirements or to promote responsible innovation, to the extent the exemptions foster the development of fair and orderly cash or spot digital commodity markets, are necessary or appropriate in the public interest, and are consistent with the protection of customers.”.
The Commodity Exchange Act (7 U.S.C. 1 et seq.), as amended by the preceding provisions of this Act, is amended by inserting after section 4u the following:
“SEC. 4v. Decentralized finance activities not subject to this Act.
“(a) In general.—Notwithstanding any other provision of this Act, a person shall not be subject to this Act and the regulations promulgated under this Act based on the person directly or indirectly engaging in any of the following activities, whether singly or in combination, in relation to the operation of a blockchain system or in relation to decentralized finance trading protocol:
“(1) Compiling network transactions or relaying, searching, sequencing, validating, or acting in a similar capacity.
“(2) Providing computational work, operating a node or oracle service, or procuring, offering, or utilizing network bandwidth, or other similar incidental services.
“(3) Providing a user-interface that enables a user to read, and access data about a blockchain system.
“(4) Developing, publishing, constituting, administering, maintaining, or otherwise distributing a blockchain system other than a decentralized finance trading protocol.
“(5) Developing, publishing, constituting, administering, maintaining, or otherwise distributing a decentralized finance messaging system or decentralized finance trading protocol, or operating or participating in a liquidity pool with respect thereto, for the purpose of executing a spot contract for the purchase or sale of a digital commodity.
“(6) Developing, publishing, constituting, administering, maintaining, or otherwise distributing software or systems that create or deploy hardware or software, including wallets or other systems, facilitating an individual user’s own personal ability to keep, safeguard, or custody the user’s digital assets or related private keys.
(a) Collection of fees.—
(1) IN GENERAL.—The Commodity Futures Trading Commission (in this section referred to as the “Commission”) shall charge and collect a fee from each person in provisional status registered with the Commission pursuant to section 106, on—
(b) Fee schedule.—
(1) IN GENERAL.—The Commission shall publish in the Federal Register a schedule of the fees to be charged and collected under this section.
(2) CONTENT.—The fee schedule for a fiscal year shall include a written analysis of the estimate of the Commission of the total costs of carrying out the functions of the Commission under this Act during the fiscal year.
(3) SUBMISSION TO CONGRESS.—Before publishing the fee schedule for a fiscal year, the Commission shall submit a copy of the fee schedule to the Committees on Agriculture and on Appropriations of the House of Representatives and the Committees on Agriculture, Nutrition, and Forestry and on Appropriations of the Senate.
(c) Late payment penalty.—
(d) Reimbursement of excess fees.—To the extent that the total amount of fees collected under this section during a fiscal year that begins after the date of the enactment of this Act exceeds the amount provided under subsection (a)(2) with respect to the fiscal year, the Commission shall reimburse the excess amount to the persons who have timely paid their annual fees, on a pro-rata basis that excludes penalties, and shall do so within 60 days after the end of the fiscal year.
(e) Deposit of fees into the Treasury.—All amounts collected under this section shall be credited to the currently applicable appropriation, account, or fund of the Commission as discretionary offsetting collections, and shall be available for the purposes authorized in subsection (f) only to the extent and in the amounts provided in advance in appropriations Acts.
(f) Authorization of appropriations.—In addition to amounts otherwise authorized to be appropriated to the Commission, there is authorized to be appropriated to the Commission amounts collected under this section to cover the costs of carrying out the functions of the Commission under this Act.
(g) Expedited hiring authority.—
(1) APPOINTMENT AUTHORITY.—The Chairman, pursuant to section 6(a), may appoint individuals to a position described in paragraph (2) of this subsection—
The Commodity Exchange Act (7 U.S.C. 1 et seq.), as amended by the preceding provisions of this Act, is amended by inserting after section 5j the following:
“SEC. 5k. Exemption for certain registered entities engaged in digital commodity activities.
“(a) By alternative trading systems.—
“(1) IN GENERAL.—On receipt by the Commission from an alternative trading system of a written or electronic notice that contains such information as the Commission, by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors, the alternative trading system shall be exempt from registration as a digital commodity exchange pursuant to section 5i if—
“(A) the alternative trading system does not list any retail commodity transactions pursuant to section 2(c)(2)(D);
“(B) the provider, or an affiliated person of the provider, of the alternative trading system is not otherwise registered under this Act;
“(2) FURTHER REQUIREMENTS.—An alternative trading system that provides notice to the Commission pursuant to paragraph (1) of this subsection shall be exempt from the requirements of section 5i to the extent that the alternative trading system—
“(A) is in compliance with requirements consistent with the requirements of section 5i and imposed on the alternative trading system by the Securities and Exchange Commission;
“(B) annually files with the Commission, in a form and manner acceptable to the Commission, a notice that demonstrates compliance with this paragraph and contains any other information the Commission determines to be necessary or appropriate to perform the duties of the Commission under this Act; and
“(b) By registered intermediaries.—
“(1) IN GENERAL.—On receipt by the Commission, from a broker or dealer that is registered with the Securities and Exchange Commission, of a written or electronic notice that contains such information as the Commission, by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors, the broker or dealer shall be exempt from registration as a digital commodity broker or digital commodity dealer pursuant to section 4u of this Act if—
“(A) the broker or dealer does not offer or engage in any retail commodity transactions pursuant to section 2(c)(2)(D) of this Act;
“(B) the broker or dealer, or an affiliated person of the broker or dealer, is not otherwise registered under this Act;
“(C) the broker or dealer does not offer or engage in any other contracts of sale of commodities, except for digital commodities, currencies, and securities;
“(D) the broker or dealer is not subject to a statutory disqualification, as defined under section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)); and
“(2) FURTHER REQUIREMENTS.—A broker or dealer that provides notice to the Commission pursuant to paragraph (1) shall be exempt from the requirements of section 4u to the extent that the broker or dealer—
“(A) is in compliance with requirements consistent with the requirements of section 4u and imposed on the broker or dealer by the Securities and Exchange Commission;
“(B) annually files with the Commission, in a form and manner acceptable to the Commission, a notice that demonstrates compliance with this subsection and contains any other information the Commission determines to be necessary or appropriate to perform the duties of the Commission under this Act; and
The Commodity Exchange Act (7 U.S.C. 1 et seq.), as amended the preceding provisions of this Act, is amended by inserting after section 4v the following:
“SEC. 4w. Limitation on transactions by blockchain control persons.
“(a) Limitation.—It shall be unlawful for a blockchain control person with respect to a blockchain system certified as a mature blockchain system in accordance with section 42 of the Securities Exchange Act of 1934 to sell a unit of a digital commodity related to the blockchain system unless the person files notice with the Commission, in a form and manner determined by the Commission, that the person has or intends to obtain an authority described in subsection (b)(1) with respect to the blockchain system, and complies with rules adopted by the Commission that require—
“(1) disclosure of information to the Commission and the public about the material activities, as determined by the Commission, of the blockchain control person; and
“(b) Definitions.—In this section:
“(1) BLOCKCHAIN CONTROL PERSON.—The term ‘blockchain control person’ means, with respect to a blockchain system, any person or group of persons under common control, other than a decentralized governance system, who—
“(A) has the unilateral authority, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, to control or materially alter the functionality, operation, or rules of consensus or agreement of the blockchain system or its related digital commodity; or
“(B) has the unilateral authority to direct the voting, in the aggregate, of 20 percent or more of the outstanding voting power of the blockchain system by means of a related digital commodity, nodes or validators, a decentralized governance system, or otherwise, in a blockchain system which can be altered by a voting system.
“(2) AFFILIATED BLOCKCHAIN CONTROL PERSON.—The term ‘affiliated blockchain control person’ means any person directly or indirectly controlling, controlled by, or under common control with a blockchain control person, as the Commission by rule or regulation, may determine will effectuate the purposes of this section.”.
The Commodity Exchange Act (7 U.S.C. 1 et seq.), as amended by the preceding provisions of this Act, is amended by inserting after section 4w the following:
“SEC. 4x. Trading requirements for other tradable assets.
“(a) Limitation.—A tradable asset shall not be offered, solicited, traded, facilitated, executed, cleared, reported, or otherwise dealt in, on or subject to the rules of a registered entity, or by any other entity registered with the Commission, except in accordance with subsection (b).
“(b) Requirements.—
“(1) TREATMENT OF TRADABLE ASSETS.—A tradable asset that is offered, solicited, traded, facilitated, executed, cleared, reported, or otherwise dealt in on or subject to the rules of a registered entity, or by any other entity registered with the Commission, shall be treated as a digital commodity for purposes of this Act.
“(2) ADDITIONAL RULEMAKING AUTHORITY.—In addition to the other requirements of this Act, the Commission may, by rule or regulation, impose additional obligations on any person registered under this Act offering, soliciting, trading, facilitating, executing, clearing, reporting, or otherwise dealing in a tradable asset, or class thereof, pursuant to paragraph (1) as are necessary for the protection of customers, the promotion of innovation, and the maintenance of fair, orderly, and efficient markets, including additional obligations related to—
“(3) PROHIBITION ON TRADING.—A tradable asset, the primary purpose of which is to be used to commit fraud or market manipulation, or engage in any other conduct that would result in abusive practices or be disruptive to market integrity, shall not be offered, solicited, traded, facilitated, executed, cleared, reported, or otherwise dealt in on or subject to the rules of a registered entity, or by any other entity registered with the Commission.
“(c) Tradable asset defined.—In this section, the term ‘tradable asset’ means a digital asset other than—
“(d) Guidance on fraudulent, manipulative, or disruptive tradable assets.—The Commission may, after public notice and comment, issue guidance establishing criteria for determining if the primary purpose of a tradable asset is to be used to commit fraud or market manipulation, or engage in any other conduct that would result in abusive practices or be disruptive to market integrity.”.
Unless otherwise provided in this title, this title and the amendments made by this title shall take effect 270 days after the date of the enactment of this Act.
(a) Findings.—Congress finds the following:
(2) Digital commodity networks represent a new way for people to join together and cooperate with one another to undertake certain activities.
(3) Digital commodities have the potential to be the foundational building blocks of these systems, aligning the economic incentive for individuals to cooperate with one another to achieve a common purpose.
(4) The digital commodity ecosystem has the potential to grow our economy and improve everyday lives of Americans by facilitating collaboration through the use of technology to manage activities, allocate resources, and facilitate decision making.
(5) Blockchain systems and the digital commodities they empower provide control, enhance transparency, reduce transaction costs, and increase efficiency if proper protections are put in place for investors, consumers, our financial system, and our national security.
(6) Blockchain technology facilitates new types of network participation which businesses in the United States may utilize in innovative ways.
(7) Other digital commodity companies are setting up their operations outside of the United States, where countries are establishing frameworks to embrace the potential of blockchain technology and digital commodities and provide safeguards for consumers.
(b) Sense of Congress.—It is the sense of Congress that—
(1) the United States should seek to prioritize understanding the potential opportunities of the next generation of the internet;
(2) the United States should seek to foster advances in technology that have robust evidence indicating they can improve our financial system and create more fair and equitable access to financial services for everyday Americans while protecting our financial system, investors, and consumers;
(3) the United States must support the responsible development of digital commodities and the underlying technology in the United States or risk the shifting of the development of such assets and technology outside of the United States, to less regulated countries;
(4) Congress should consult with public and private sector stakeholders to understand how to enact a functional framework tailored to the specific risks and unique benefits of different digital commodity-related activities, distributed ledger technology, distributed networks, and mature blockchain systems;
(a) Securities Act of 1933.—Section 2(b) of the Securities Act of 1933 (15 U.S.C. 77(b)) is amended—
(b) Securities Exchange act of 1934.—Section 3(f) of the Securities Exchange Act of 1934 (15 U.S.C. 78(c)) is amended—
(c) Investment Advisers Act of 1940.—Section 202(c) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–2) is amended—
(d) Investment Company Act of 1940.—Section 2(c) of the Investment Company Act of 1940 (15 U.S.C. 80a–2) is amended—
Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d) is amended by adding at the end the following:
“(k) Strategic Hub for Innovation and Financial Technology.—
“(1) ESTABLISHMENT.—Not later than 180 days after the date of the enactment of this subsection, the Securities and Exchange Commission shall establish a committee to be known as the Strategic Hub for Innovation and Financial Technology (referred to in this subsection as the ‘FinHub’) to support engagement on emerging technologies in the financial sector.
“(2) MEMBERS.—The composition of FinHub shall be determined by the Commission, drawing from relevant divisions as appropriate, including the Division of Trading and Markets, Division of Corporate Finance, and Division of Investment Management.
(a) In general.—Section 18 of the Commodity Exchange Act (7 U.S.C. 22) is amended by adding at the end the following:
“(c) LabCFTC.—
“(2) PURPOSE.—The purposes of LabCFTC are to—
“(A) promote responsible financial technology innovation and fair competition for the benefit of the American public;
“(3) DIRECTOR.—LabCFTC shall have a Director, who shall be appointed by the Commission and serve at the pleasure of the Commission. Notwithstanding section 2(a)(6)(A), the Director shall report directly to the Commission and perform such functions and duties as the Commission may prescribe.
“(4) DUTIES.—LabCFTC shall—
“(A) advise the Commission with respect to rulemakings or other agency or staff action regarding financial technology;
“(C) advise the Commission regarding financial technology that would bolster the Commission’s oversight functions;
“(D) engage with academia, students, and professionals on financial technology issues, ideas, and technology relevant to activities under this Act;
“(5) REPORT TO CONGRESS.—
“(A) IN GENERAL.—Not later than October 31 of each year after 2025, LabCFTC shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report on its activities.
“(B) CONTENTS.—Each report required under paragraph (1) shall include—
“(iii) information on steps LabCFTC has taken to improve Commission services, including responsiveness to the concerns of persons;
(b) Conforming amendments.—Section 2(a)(6)(A) of such Act (7 U.S.C. 2(a)(6)(A)) is amended—
(a) In general.—The Commodity Futures Trading Commission, the Securities and Exchange Commission, and the Secretary of the Treasury shall jointly carry out a study on decentralized finance that analyzes—
(4) the interoperability of blockchain applications and software-based systems, including websites and wallets;
(5) the decentralized governance systems through which blockchain applications may be developed, published, constituted, administered, maintained, or otherwise distributed, including—
(8) the extent to which decentralized finance has integrated with the traditional financial markets and any potential risks or improvements to the stability of the markets;
(9) how the levels of illicit activity in decentralized finance compare with the levels of illicit activity in traditional financial markets;
(b) Consultation.—In carrying out the study required under subsection (a), the Commodity Futures Trading Commission and the Securities and Exchange Commission shall consult with the Secretary of the Treasury on the factors described under paragraphs (7) through (10) of subsection (a).
(c) Report.—Not later than 1 year after the date of enactment of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly submit to the relevant congressional committees a report that includes the results of the study required by subsection (a).
(d) GAO Study.—The Comptroller General of the United States shall—
(e) Definitions.—In this section:
(1) DECENTRALIZED FINANCE.—
(A) IN GENERAL.—The term “decentralized finance” means blockchain applications (including decentralized finance trading protocols and related decentralized finance messaging systems) that allow users to engage in financial transactions in a self-directed manner so that a third-party intermediary does not effectuate the transactions or take custody of digital commodities of a user during any part of the transactions.
(a) In general.—The Comptroller General of the United States shall carry out a study of non-fungible tokens that analyzes—
(2) the similarities and differences between non-fungible tokens and other digital commodities, including digital commodities and permitted payment stablecoins, and how the markets for those digital commodities intersect with each other;
(9) whether and how non-fungible tokens have integrated with traditional marketplaces, including those for music, real estate, gaming, events, and travel;
(a) In general.—The Commodity Futures Trading Commission with the Securities and Exchange Commission shall jointly conduct a study to identify—
(1) the existing level of financial literacy among retail digital commodity holders, including subgroups of investors identified by the Commodity Futures Trading Commission with the Securities and Exchange Commission;
(2) methods to improve the timing, content, and format of financial literacy materials regarding digital commodities provided by the Commodity Futures Trading Commission and the Securities and Exchange Commission;
(3) methods to improve coordination between the Securities and Exchange Commission and the Commodity Futures Trading Commission with other agencies, including the Financial Literacy and Education Commission as well as nonprofit organizations and State and local jurisdictions, to better disseminate financial literacy materials;
(4) the efficacy of current financial literacy efforts with a focus on rural communities and communities with majority minority populations;
(5) the most useful and understandable relevant information, including clear disclosures, that retail digital commodity holders need to make informed financial decisions before engaging with or purchasing a digital commodity or service that is typically sold to retail investors of digital commodities;
(6) the most effective public-private partnerships in providing financial literacy regarding digital commodities to consumers;
(b) Report.—Not later than 1 year after the date of the enactment of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly submit a written report on the study required by subsection (a) to the Committees on Financial Services and on Agriculture of the House of Representatives and the Committees on Banking, Housing, and Urban Affairs and on Agriculture, Nutrition, and Forestry of the Senate.
(a) In general.—The Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly conduct a study to assess whether additional guidance or rules are necessary to facilitate the development of tokenized securities and derivatives products, and to the extent such guidance or rules would foster the development of fair and orderly financial markets, be necessary or appropriate in the public interest, and be consistent with the protection of investors and customers.
(b) Report.—
(1) TIME LIMIT.—Not later than 1 year after the date of enactment of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly submit to the relevant congressional committees a report that includes the results of the study required by subsection (a).
(a) In general.—One year after the date of the enactment of this Act, the Securities and Exchange Commission and the Commodity Futures Trading Commission, in conjunction with the Secretary of the Treasury, shall conduct a comprehensive review of how Foreign Terrorist Organizations and Transnational Criminal Syndicates utilize digital assets in connection with illicit activities.
(b) Scope.—This review shall include an analysis of whether the Securities and Exchange Commission and the Commodity Futures Trading Commission have the necessary tools and resources to effectively detect, disrupt, and deter illicit financial activity.
(c) Report.—The two Commissions shall jointly issue a report to the Committees on Agriculture and on Financial Services of the House of Representatives and the Committees on Agriculture, Nutrition, and Forestry and on Banking, Housing, and Urban Affairs of the Senate on the findings of the Commissions.
No later than 360 days after the date of the enactment of this Act, the Commodity Futures Trading Commission shall issue rules establishing requirements for the identification, mitigation, and resolution of conflicts of interest among and across registered entities (within the meaning of the Commodity Exchange Act) and persons required to be registered with the Commission, including conflicts of interest related to vertically integrated market structures and their varying responsibilities.
(a) Short title.—This Act may be cited as the “Digital Asset Market Clarity Act of 2025” or the “CLARITY Act of 2025”.
(b) Table of contents.—The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 101. Definitions under the Securities Act of 1933.
Sec. 102. Definitions under the Securities Exchange Act of 1934.
Sec. 103. Definitions under the Commodity Exchange Act.
Sec. 104. Definitions under this Act.
Sec. 105. Rulemakings.
Sec. 106. Provisional registration for digital commodity exchanges, brokers, and dealers.
Sec. 107. Commodity Exchange Act and securities laws savings provisions.
Sec. 108. Administrative requirements.
Sec. 109. International cooperation.
Sec. 110. Treatment of certain non-controlling blockchain developers.
Sec. 111. Application of the Bank Secrecy Act.
Sec. 112. Implementation.
Sec. 201. Treatment of investment contract assets.
Sec. 202. Exempted primary transactions in digital commodities.
Sec. 203. Treatment of secondary transactions in digital commodities that originally involved investment contracts.
Sec. 204. Requirements for offers and sales of digital commodities by digital commodity related persons and digital commodity affiliated persons.
Sec. 205. Mature blockchain system requirements.
Sec. 206. Effective date.
Sec. 301. Treatment of digital commodities and permitted payment stablecoins.
Sec. 302. Anti-fraud authority over permitted payment stablecoins and certain digital commodity transactions.
Sec. 303. Eligibility of alternative trading systems.
Sec. 304. Operation of alternative trading systems.
Sec. 305. Modernization of recordkeeping requirements.
Sec. 306. Exemptive authority.
Sec. 307. Additional registrations with the Commodity Futures Trading Commission.
Sec. 308. Exempting digital commodities from State securities laws.
Sec. 309. Exclusion for decentralized finance activities.
Sec. 310. Treatment of custody activities by banking institutions.
Sec. 311. Broker and dealer disclosures regarding the treatment of assets.
Sec. 312. Digital commodity activities that are financial in nature.
Sec. 313. Effective date; administration.
Sec. 314. Studies on foreign adversary participation.
Sec. 401. Commission jurisdiction over digital commodity transactions.
Sec. 402. Requiring futures commission merchants to use qualified digital asset custodians.
Sec. 403. Trading certification and approval for digital commodities.
Sec. 404. Registration of digital commodity exchanges.
Sec. 405. Qualified digital asset custodians.
Sec. 406. Registration and regulation of digital commodity brokers and dealers.
Sec. 407. Registration of associated persons.
Sec. 408. Registration of commodity pool operators and commodity trading advisors.
Sec. 409. Exclusion for decentralized finance activities.
Sec. 410. Resources for implementation and enforcement.
Sec. 411. Digital commodity activities by SEC-registered entities.
Sec. 412. Requirements related to control persons.
Sec. 413. Effective date.
Sec. 414. Sense of Congress.
Sec. 501. Findings; sense of Congress.
Sec. 502. Modernization of the Securities and Exchange Commission mission.
Sec. 503. Strategic Hub for Innovation and Financial Technology.
Sec. 504. Codification of LabCFTC.
Sec. 505. Study on decentralized finance.
Sec. 506. Study on non-fungible tokens.
Sec. 507. Study on expanding financial literacy amongst digital commodity holders.
Sec. 508. Study on financial market infrastructure improvements.
Sec. 509. Study on blockchain in payments.
Section 2(a) of the Securities Act of 1933 (15 U.S.C. 77b(a)) is amended by adding at the end the following:
“(20) Blockchain.—The term ‘blockchain’ means—
“(A) any technology—
“(21) Blockchain application.—The term ‘blockchain application’ means any executable software that is deployed to a blockchain and composed of source code that is publicly available, including a smart contract or any network of smart contracts, or other similar technology.
“(22) Blockchain protocol.—The term ‘blockchain protocol’ means publicly available source code of a blockchain that is executed by the network participants of a blockchain to facilitate its functioning, or other similar technology.
“(23) Blockchain system.—The term ‘blockchain system’ means any blockchain, together with its blockchain protocol or any blockchain application or network of blockchain applications.
“(24) Decentralized governance system.—
“(A) IN GENERAL.—The term ‘decentralized governance system’ means, with respect to a blockchain system, any transparent, rules-based system permitting persons to form consensus or reach agreement in the development, provision, publication, maintenance, or administration of such blockchain system, where participation is not limited to, or under the effective control of, any person or group of persons under common control.
“(B) RELATIONSHIP OF PERSONS TO DECENTRALIZED GOVERNANCE SYSTEMS.—With respect to a decentralized governance system, the decentralized governance system and any persons participating in the decentralized governance system shall be treated as separate persons unless such persons are under common control or acting pursuant to an agreement to act in concert.
“(C) LEGAL ENTITIES FOR DECENTRALIZED GOVERNANCE SYSTEMS.—The term ‘decentralized governance system’ shall include a legal entity used to implement the rules-based system described in subparagraph (A), provided that the legal entity does not operate pursuant to centralized management. For the purposes of this subparagraph, the delegation of ministerial or administrative authority at the direction of the participants in a decentralized governance system shall not be construed to be centralized management.
“(25) Digital asset.—The term ‘digital asset’ means any digital representation of value which is recorded on a cryptographically-secured distributed ledger or other similar technology.
“(26) Digital commodity.—The term ‘digital commodity’ has the meaning given that term under section 1a of the Commodity Exchange Act (7 U.S.C. 1a).
“(27) Digital commodity affiliated person.—The term ‘digital commodity affiliated person’ means a person (including a digital commodity related person) that, with respect to any digital commodity—
“(28) Digital commodity issuer.—
“(A) IN GENERAL.—With respect to a digital commodity, the term ‘digital commodity issuer’ means any person that—
“(B) PROHIBITION ON EVASION.—It shall be unlawful for any person to knowingly evade classification as a ‘digital commodity issuer’ and facilitate an arrangement for the primary purpose of effecting an offer, sale, distribution, or other issuance of a digital commodity, including via any arrangement involving the transfer of intellectual property associated with the blockchain system to which the digital commodity relates.
“(29) Digital commodity related person.—
“(A) IN GENERAL.—With respect to a digital commodity issuer, the term ‘digital commodity related person’ means a person—
“(B) SENIOR EMPLOYEE DEFINED.—In this paragraph and with respect to a digital commodity issuer, the term ‘senior employee’ means any employee materially involved in the management of the digital commodity issuer, including management of the development of the blockchain system to which the digital commodity relates.
“(30) End user distribution.—The term ‘end user distribution’ means a distribution of a unit of a digital commodity that—
“(A) does not involve an exchange of more than a nominal value of cash, property, or other assets; and
“(B) is distributed in a broad and equitable manner based on conditions capable of being satisfied by any participant in the blockchain system, including, as incentive-based rewards—
“(i) to users of the digital commodity or any blockchain system to which the digital commodity relates;
“(31) Mature blockchain system.—The term ‘mature blockchain system’ means a blockchain system, together with its related digital commodity, that is not controlled by any person or group of persons under common control.
“(32) Permitted payment stablecoin.—
“(A) IN GENERAL.—The term ‘permitted payment stablecoin’ means a digital asset—
“(iii) the issuer of which is subject to the regulatory and supervisory authority of a State or Federal agency;
“(v) that is not—
“(II) a security issued by—
“(aa) an investment company registered under section 8(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–8(a)); or
“(bb) a person that would be an investment company under the Investment Company Act of 1940 but for paragraphs (1) and (7) of section 3(c) of that Act (15 U.S.C. 80a–3(c));
“(III) a deposit (as defined under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)), regardless of the technology used to record such deposit; or
“(IV) an account (as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752)), regardless of the technology used to record such account.
“(B) MONETARY VALUE DEFINED.—The term ‘monetary value’—
“(i) means—
“(II) a deposit (as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)) that is denominated in a national currency; or
“(III) an account (as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752)); and
“(ii) does not include any agricultural or other physical commodity (as defined in section 1a of the Commodity Exchange Act (7 U.S.C. 1a)).
“(33) Securities laws.—The term ‘securities laws’ has the meaning given that term under section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).”.
Section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) is amended—
(2) by adding at the end the following:
“(82) Bank Secrecy Act.—The term ‘Bank Secrecy Act’ means—
“(A) section 21 of the Federal Deposit Insurance Act (12 U.S.C. 1829b);
“(B) chapter 2 of title I of Public Law 91–508 (12 U.S.C. 1951 et seq.); and
“(C) subchapter II of chapter 53 of title 31, United States Code.
“(83) Additional digital commodity-related terms.—
“(A) SECURITIES ACT OF 1933.—The terms ‘blockchain system’, ‘decentralized governance system’, ‘digital asset’, ‘digital commodity affiliated person’, ‘digital commodity issuer’, ‘digital commodity related person’, ‘end user distribution’, ‘mature blockchain system’, 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)).
“(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).”.
(a) In general.—Section 1a of the Commodity Exchange Act (7 U.S.C. 1a) is amended—
(1) in paragraph (10)—
(B) by redesignating subparagraph (B) as subparagraph (C) and inserting after subparagraph (A) the following:
(2) in paragraph (11)—
(B) by redesignating subparagraph (B) as subparagraph (C) and inserting after subparagraph (A) the following:
(4) by redesignating paragraphs (16) through (51) as paragraphs (17) through (52), respectively, and inserting after paragraph (15) the following:
“(16) Terms related to digital commodities.—
“(A) ASSOCIATED PERSON OF A DIGITAL COMMODITY BROKER.—
“(i) IN GENERAL.—Except as provided in clause (ii), the term ‘associated person of a digital commodity broker’ means a person who is associated with a digital commodity broker as a partner, officer, employee, or agent (or any person occupying a similar status or performing similar functions) in any capacity that involves—
“(B) ASSOCIATED PERSON OF A DIGITAL COMMODITY DEALER.—
“(i) IN GENERAL.—Except as provided in clause (ii), the term ‘associated person of a digital commodity dealer’ means a person who is associated with a digital commodity dealer as a partner, officer, employee, or agent (or any person occupying a similar status or performing similar functions) in any capacity that involves—
“(C) BANK SECRECY ACT.—The term ‘Bank Secrecy Act’ means—
“(i) section 21 of the Federal Deposit Insurance Act (12 U.S.C. 1829b);
“(ii) chapter 2 of title I of Public Law 91–508 (12 U.S.C. 1951 et seq.); and
“(iii) subchapter II of chapter 53 of title 31, United States Code.
“(D) DECENTRALIZED FINANCE MESSAGING SYSTEM.—
“(E) DECENTRALIZED FINANCE TRADING PROTOCOL.—
“(i) IN GENERAL.—The term ‘decentralized finance trading protocol’ means a blockchain system through which multiple participants can execute a financial transaction—
“(ii) EXCLUSIONS.—
“(I) IN GENERAL.—The term ‘decentralized finance trading protocol’ does not include a blockchain system if—
“(aa) a person or group of persons under common control 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
“(F) DIGITAL COMMODITY.—
“(i) IN GENERAL.—The term ‘digital commodity’ means a digital asset that is intrinsically linked to a blockchain system, and the value of which is derived from or is reasonably expected to be derived from the use of the blockchain system.
“(ii) RELATIONSHIP TO A BLOCKCHAIN SYSTEM.—For purposes of this subparagraph, a digital asset is intrinsically linked to a blockchain system if the digital asset is directly related to the functionality or operation of the blockchain system or to the activities or services for which the blockchain system is created or utilized, including where the digital asset is—
“(V) used or removed from circulation in whole or in part to pay fees or otherwise verify or validate transactions on the blockchain system;
“(iii) EXCLUSION.—The term ‘digital commodity’ does not include any of the following:
“(I) SECURITY.—
“(aa) Any security, other than a note, an investment contract, or a certificate of interest or participation in any profit-sharing agreement.
“(bb) A note, an investment contract, or a certificate of interest or participation in any profit-sharing agreement that 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).
“(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—
“(IV) BANKING DEPOSIT.—
“(aa) A deposit (as defined under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)), regardless of the technology used to record the deposit.
“(bb) An account (as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752)), regardless of the technology used to record the account.
“(V) COMMODITY.—A digital asset that references, represents an interest in, or is functionally equivalent to—
“(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—
“(VII) POOLED INVESTMENT VEHICLE.—
“(aa) IN GENERAL.—A digital asset that, based on its terms and other characteristics, is, represents, or is functionally equivalent to—
“(AA) a commodity pool, as defined in this Act; or
“(BB) a pooled investment vehicle.
“(bb) POOLED INVESTMENT VEHICLE DEFINED.—In this subclause, the term ‘pooled investment vehicle’ means any investment company as defined in section 3(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–3(a)) or any company that would be an investment company under section 3(a) of such Act but for the exclusion provided from that definition by paragraph (1), (7), or (9) of section 3(c) of such Act (15 U.S.C. 80a–3(c)(1), (7), or (9)).
“(VIII) GOOD, COLLECTIBLE, AND OTHER NON-COMMODITY ASSET.—A digital asset that has inherent value, utility, or significance beyond its mere existence as a digital asset, including the digital equivalent of a tangible or intangible good, such as—
“(iv) RULE OF CONSTRUCTION.—No presumption shall exist that a digital asset is a security, nor shall a digital asset be excluded from being a digital commodity pursuant to clause (iii)(I), solely due to—
“(I) the digital asset providing voting or economic rights with respect to the blockchain system to which the digital asset relates or the decentralized governance system of the blockchain system;
“(G) DIGITAL COMMODITY BROKER.—
“(i) IN GENERAL.—The term ‘digital commodity broker’ means any person who, as a regular business—
“(I) is engaged in—
“(ii) EXCEPTIONS.—The term ‘digital commodity broker’ does not include a person solely because the person—
“(I) solicits or accepts an order described in clause (i)(I)(aa)(AA) from a customer who is an eligible contract participant;
“(II) enters into a digital commodity transaction the primary purpose of which is to make, send, receive, or facilitate payments, whether involving a payment service provider or on a peer-to-peer basis; or
“(III) is a bank (as defined under section 3(a) of the Securities Exchange Act of 1934) engaging in certain banking activities with respect to a digital commodity in the same or a similar manner as a bank is excluded from the definition of a broker under such section, as determined by the Commission.
“(H) DIGITAL COMMODITY DEALER.—
“(i) IN GENERAL.—The term ‘digital commodity dealer’ means any person who, as a regular business—
“(ii) EXCEPTION.—The term ‘digital commodity dealer’ does not include a person solely because the person—
“(III) enters into a digital commodity transaction on or through a registered digital commodity exchange, with a registered digital commodity broker, or through a decentralized finance trading protocol;
“(IV) enters into a digital commodity transaction for the person’s own account, either individually or in a fiduciary capacity, but not as a part of a regular business;
“(V) enters into a digital commodity transaction the primary purpose of which is to make, send, receive, or facilitate payments, whether involving a payment service provider or on a peer-to-peer basis; or
“(VI) is a bank (as defined under section 3(a) of the Securities Exchange Act of 1934) engaging in certain banking activities with respect to a digital commodity in the same or a similar manner as a bank is excluded from the definition of a dealer under section 3(a)(5) of such Act, as determined by the Commission.
“(I) DIGITAL COMMODITY EXCHANGE.—The term ‘digital commodity exchange’ means a trading facility that offers or seeks to offer a cash or spot market in at least 1 digital commodity.
“(J) MIXED DIGITAL ASSET TRANSACTION.—The term ‘mixed digital asset transaction’ means a transaction in which a digital commodity is traded for a security.
“(K) TERMS DEFINED UNDER THE SECURITIES ACT OF 1933.—The terms ‘blockchain system’, ‘decentralized governance system’, ‘digital asset’, ‘digital commodity issuer’, ‘digital commodity affiliated person’, ‘digital commodity related person’, ‘end user distribution’, ‘mature blockchain system’, 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)).”; and
(b) Conforming amendments.—
(1) Each of the following provisions of law is amended by striking “1a(18)” and inserting “1a(19)”:
(A) Section 4s(h)(5)(A)(i) of the Commodity Exchange Act (7 U.S.C. 6s(h)(5)(A)(i)).
(B) Section 5(e) of the Securities Act of 1933 (15 U.S.C. 77e(e)).
(C) Section 6(g)(5)(B) of the Securities Exchange Act of 1934 (15 U.S.C. 78f(g)(5)(B)).
(D) Section 15F(h)(5)(A)(i) of the Securities Exchange Act of 1934 (15 U.S.C. 78o–10(h)(5)(A)(i)).
(2) Section 752 of the Wall Street Transparency and Accountability Act of 2010 (15 U.S.C. 8325) is amended by striking “1a(39)” and inserting “1a(40)”.
(3) Section 4s(f)(1)(D) of the Commodity Exchange Act (7 U.S.C. 6s(f)(1)(D)) is amended by striking “1a(47)(A)” and inserting “1a(48)(A)”.
(4) Each of the following provisions of the Commodity Exchange Act is amended by striking “1a(47)(A)(v)” and inserting “1a(48)(A)(v)”:
(A) Section 4t(b)(1)(C) (7 U.S.C. 6t(b)(1)(C)).
(B) Section 5(d)(23) (7 U.S.C. 7(d)(23)).
(C) Section 5b(k)(3) (7 U.S.C. 7a–1(k)(3)).
(D) Section 5h(f)(10)(A)(iii) (7 U.S.C. 7b–3(f)(10)(A)(iii)).
(5) Section 21(f)(4)(C) of the Commodity Exchange Act (7 U.S.C. 24a(f)(4)(C)) is amended by striking “1a(48)” and inserting “1a(49)”.
(6) Section 403 of the Legal Certainty for Bank Products Act of 2000 (7 U.S.C. 27a) is amended—
(7) Section 712 of the Wall Street Transparency and Accountability Act of 2010 (15 U.S.C. 8302) is amended—
In this Act:
(1) Definitions under the Commodity Exchange Act.—The terms “decentralized finance messaging system”, “decentralized finance trading protocol”, “digital commodity”, “digital commodity broker”, “digital commodity dealer”, “digital commodity exchange”, and “mixed digital asset transaction” have the meaning given those terms, respectively, under section 1a of the Commodity Exchange Act (7 U.S.C. 1a).
(2) Definitions under the Securities Act of 1933.—The terms “blockchain”, “blockchain system”, “blockchain protocol”, “decentralized governance system”, “digital asset”, “digital commodity issuer”, “end user distribution”, “mature blockchain system”, “permitted payment stablecoin”, and “securities laws” have the meaning given those terms, respectively, under section 2(a) of the Securities Act of 1933 (15 U.S.C. 77b(a)).
(3) Definitions under the Securities Exchange Act of 1934.—The terms “Bank Secrecy Act”, “securities laws”, and “self-regulatory organization” have the meaning given those terms, respectively, under section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).
(a) Definitions.—The Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly issue rules to further define the following terms:
(1) The terms—
(A) “blockchain”, “blockchain application”, “blockchain system”, “blockchain protocol”, “decentralized governance system”, “digital commodity affiliated person”, “digital commodity issuer”, “digital commodity related person”, “end user distribution”, and “mature blockchain system”, as defined under section 2(a) of the Securities Act of 1933;
(b) Joint rulemaking for mixed digital asset transactions.—The Securities and Exchange Commission and the Commodity Futures Trading Commission shall jointly issue rules applicable to mixed digital asset transactions under this Act and the amendments made by this Act, including by further defining such term.
(c) Protection of self-Custody.—
(1) In general.—A United States individual shall retain the right to—
(A) maintain a hardware wallet or software wallet for the purpose of facilitating the individual’s own lawful custody of digital assets; and
(B) engage in direct, peer-to-peer transactions in digital assets with another individual or entity for the individual’s own lawful purposes using a hardware wallet or software wallet, if—
(3) Rule of construction.—Nothing in this subsection shall be construed to limit the authority of the Secretary of the Treasury, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, or the National Credit Union Administration to carry out any enforcement action or special measure authorized under applicable law, including—
(A) the Bank Secrecy Act, section 9714 of the Combating Russian Money Laundering Act (31 U.S.C. 5318A note), and section 7213A of the Fentanyl Sanctions Act (21 U.S.C. 2313a); or
(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 of this Act if the Commissions determine that the listing is inconsistent with the Commodity Exchange Act, the securities laws (including regulations under those laws), or this Act.
(e) Joint rules for portfolio margining determinations.—
(1) In general.—Not later than 360 days after the date of the enactment of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly issue rules describing the process for persons registered with either such Commission to seek a joint order or determination with respect to margin, customer protection, segregation, or other requirements as necessary to facilitate portfolio margining of securities (including related extensions of credit), security-based swaps, contracts for future delivery, options on a contract for future delivery, swaps, and digital commodities, or any subset thereof, in—
(2) Process.—With respect to a joint order or determination described in paragraph (1), the rules required to be issued pursuant to paragraph (1) shall require—
(A) the joint order or determination to be issued only if the order or determination is in the public interest and provides for the appropriate protection of customers;
(B) applicants to file a standard application, in a form and manner determined by the Securities and Exchange Commission and the Commodity Futures Trading Commission, which shall include the information necessary to make the joint order or determination;
(C) the Securities and Exchange Commission and the Commodity Futures Trading Commission to make a final determination not later than 270 days after the filing of a completed application;
(D) the Securities and Exchange Commission and the Commodity Futures Trading Commission to consider the public interest of the joint order or determination through the solicitation of public comments; and
(E) the Securities and Exchange Commission and the Commodity Futures Trading Commission to consult with other relevant foreign or domestic regulators, including the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, as appropriate.
(f) Capital requirements to address netting agreements.—No later than 360 days following the date of enactment of this Act, the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, and the Federal Deposit Insurance Corporation shall develop risk-based and leverage capital requirements for insured depository institutions, depository institution holding companies, and nonbank financial companies supervised by the Board of Governors that address netting agreements that provide for termination and close-out netting across multiple types of financial transactions, consistent with subsection (e), in the event of a counterparty’s default.
(a) In general.—
(1) Provisional registration.—Within 180 days after the date of the enactment of this Act, a person acting as a digital commodity exchange, digital commodity broker, or digital commodity dealer shall file a statement of provisional registration with the Commodity Futures Trading Commission (in this subsection referred to as the “Commission”), unless exempted from registration under section 5k of the Commodity Exchange Act, as a—
(2) Conditions.—
(A) NON-REGISTERED ENTITIES.—A person, other than a registered entity, who files a statement of provisional registration under paragraph (1) shall be considered to be in compliance with this section if the person—
(i) is a member of a futures association registered under section 17 of the Commodity Exchange Act, and complies with the rules of the association, including the rules of the association pertaining to customer disclosures and protection of customer assets;
(ii) submits to the Commission, in the form and manner determined by the Commission, and continues to materially update, as necessary or required by the Commission, a statement of the nature of the digital commodity-related activities the person is pursuing or intends to pursue;
(B) REGISTERED ENTITY.—
(i) IN GENERAL.—A registered entity who files a statement of provisional registration under paragraph (1) shall be considered to be in compliance with this section if the person—
(I) submits to the Commission and continues to materially update, a statement of the nature of the digital commodity-related activities the person is pursuing or intends to pursue;
(b) Disclosure of general information.—A person who files a statement of provisional registration under subsection (a) shall disclose to the Commission, unless already known to the Commission, the following:
(1) Management.—Information concerning the management of the person, including information describing—
(c) Requirements.—A person who files a statement of provisional registration under subsection (a) shall comply with the following requirements:
(1) Statutory disqualifications.—Except to the extent otherwise specifically provided by the Commission or any registered futures association rule, regulation, or order, the person shall not permit an individual who is subject to a statutory disqualification under paragraph (2) or (3) of section 8a of the Commodity Exchange Act or subject to a statutory disqualification as defined in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) to effect or be involved in effecting transactions on behalf of the person, if the person knew, or in the exercise of reasonable care should have known, of the statutory disqualification.
(2) Books and records.—The person shall keep their books and records open to inspection and examination by the Commission and by any registered futures association or national securities association of which the person is a member.
(3) Customer disclosures.—The person shall disclose to customers—
(A) information about the material risks and characteristics of the assets listed for trading on the person;
(B) information about the legal entity that custodies customer assets and the general manner in which the digital assets of the customer will be and are custodied;
(d) Authority.—
(1) In general.—
(A) DEEMED REGISTRATION.—A person who remains in compliance with the requirements of this section is deemed to be—
(e) Delisting.—This section shall not be construed to limit the authority of the Commission and the Securities and Exchange Commission to jointly require a person to delist an asset for trading if the Commission and the Securities and Exchange Commission determine, in accordance with rules, procedures or guidance jointly issued by the Commission and the Securities and Exchange Commission to delist an asset for trading, that the listing is inconsistent with the Commodity Exchange Act, the securities laws (including regulations under those laws), or this Act.
(f) Registration.—A person may not file a statement of provisional registration with the Commission after the Commission has finalized its rules for the registration of digital commodity exchanges, digital commodity brokers, or digital commodity dealers, as appropriate.
(g) Rulemaking.—
(1) In general.—Within 180 days after the date of the enactment of this Act, a registered futures association shall adopt and enforce rules applicable to persons required by subsection (a)(2) to be members of the association.
(h) Liability of the filer.—It shall be unlawful for any person to provide false information in support of a filing under this section if the person knew or reasonably should have known that the information was false.
(i) Whistleblower enforcement.—For purposes of section 23 of the Commodity Exchange Act, the term “this Act” includes this section.
(j) Federal preemption.—
(1) This section shall supersede any State or local law (other than antifraud provisions of general applicability) that regulates the offer or sale of digital assets in the case of a transaction conducted in compliance with this section and conducted on or through a person who files a statement of provisional registration under subsection (a) and complies with the requirements of this section.
(a) In general.—Nothing in this Act shall affect or apply to, or be interpreted to affect or apply to—
(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 or filing a statement of provisional registration as a digital commodity exchange, digital commodity broker, or digital commodity dealer.
Section 4c(a) of the Commodity Exchange Act (7 U.S.C. 6c(a)) is amended—
In order to promote greater consistency in effective and consistent global regulation of digital assets, the Commodity Futures Trading Commission and the Securities and Exchange Commission, as appropriate—
(a) In general.—Notwithstanding applicable law, a non-controlling blockchain developer or provider of a blockchain service shall not be treated as a money transmitter or as engaged in “money transmitting” or, following the date of enactment of this Act, be otherwise subject to any new registration requirement that is substantially similar to the requirement that currently applies to money transmitters, solely on the basis of—
(1) creating or publishing software to facilitate the creation of, or provision of maintenance services to, a blockchain or blockchain service;
(b) Rule of Construction.—Nothing in this section shall be construed to affect whether a blockchain developer or provider of a blockchain service is otherwise subject to classification or treatment as a money transmitter, or as engaged in “money transmitting”, under applicable State or Federal law, including laws relating to anti-money laundering or countering the financing of terrorism, based on conduct outside the scope of subsection (a). Nothing in this section shall be construed to affect whether a blockchain developer or provider of a blockchain service is otherwise subject to classification or treatment as a financial institution under the Bank Secrecy Act, this Act, or any Act enacted after the date of enactment of this Act.
(c) Effect on other laws.—
(d) Definitions.—In this section:
(1) Blockchain developer.—The term “blockchain developer” means any person or business that creates or publishes software to facilitate the creation of, or provide maintenance to, a blockchain or a blockchain service.
(2) Blockchain service.—The term “blockchain service” means any information, transaction, or computing service or system that provides or enables access to a blockchain network by multiple users, including specifically a service or system that enables users to send, receive, exchange, or store digital assets described by blockchain networks.
(3) Non-controlling blockchain developer or provider of a blockchain service.—The term “non-controlling blockchain developer or provider of a blockchain service” means a blockchain developer or provider of a blockchain service that in the regular course of operations, does not have the legal right or the unilateral and independent ability to control, initiate upon demand, or effectuate transactions involving digital assets that users are entitled to, without the approval, consent, or direction of any other third party.
(a) In general.—Section 5312(c)(1)(A) of title 31, United States Code, is amended—
(b) GAO study.—
(1) In general.—The Comptroller General of the United States, in consultation with the Secretary of the Treasury, shall conduct a study to—
(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.
(a) Securities Act of 1933.—Section 2(a) of the Securities Act of 1933 (15 U.S.C. 77b(a)), as amended by section 101, is further amended—
(1) in paragraph (1), by adding at the end the following: “The term ‘investment contract’ does not include an investment contract asset.”; and
(b) Investment Advisers Act of 1940.—Section 202(a)(18) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–2(a)(18)) is amended by adding at the end the following: “The term ‘investment contract’ does not include an investment contract asset (as such term is defined under section 2(a) of the Securities Act of 1933).”.
(c) Investment Company Act of 1940.—Section 2(a)(36) of the Investment Company Act of 1940 (15 U.S.C. 80a–2(a)(36)) is amended by adding at the end the following: “The term ‘investment contract’ does not include an investment contract asset (as such term is defined under section 2(a) of the Securities Act of 1933).”.
(d) Securities Exchange Act of 1934.—Section 3(a)(10) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(10)) is amended by adding at the end the following: “The term ‘investment contract’ does not include an investment contract asset (as such term is defined under section 2(a) of the Securities Act of 1933).”.
(e) Securities Investor Protection Act of 1970.—Section 16(14) of the Securities Investor Protection Act of 1970 (15 U.S.C. 78lll(14)) is amended by adding at the end the following: “The term ‘investment contract’ does not include an investment contract asset (as such term is defined under section 2(a) of the Securities Act of 1933).”.
(a) In general.—The Securities Act of 1933 (15 U.S.C. 77a et seq.) is amended—
(1) in section 4(a), by adding at the end the following:
“(8) the offer or sale of an investment contract involving units of a digital commodity by its digital commodity issuer (including all entities controlled by or under common control with the issuer), if—
“(A) the blockchain system to which the digital commodity relates, together with the digital commodity, is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934 or the issuer intends for the blockchain system to which the digital commodity relates to be a mature blockchain system by the later of—
“(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 $75,000,000 (as such amount is annually adjusted by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor);
“(C) after the completion of the transaction, a purchaser does not own more than 10 percent of the total amount of the outstanding units of the digital commodity;
“(D) the transaction does not involve the offer or sale of an investment contract involving units of a digital commodity by its digital commodity issuer that—
“(i) is not organized under the laws of a State, a territory of the United States, or the District of Columbia;
“(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(b) or section 3(c) of that Act (15 U.S.C. 80a–3(b) or 80a–3(c));
“(iv) is issuing fractional undivided interests in oil or gas rights, or a similar interest in other mineral rights;
(2) by inserting after section 4A the following:
“SEC. 4B. REQUIREMENTS WITH RESPECT TO CERTAIN DIGITAL COMMODITY TRANSACTIONS.
“(a) Commission jurisdiction.—For the purposes of this section:
“(b) Requirements for digital commodity issuers.—
“(1) Terms and conditions.—A digital commodity issuer offering or selling an investment contract involving units of a digital commodity in reliance on section 4(a)(8) shall file with the Commission an offering statement and any related documents, in such form and with such content as prescribed by the Commission, including financial information, a description of the issuer and the operations of the issuer, the financial condition of the issuer, a description of the plan of distribution of any unit of a digital commodity that is to be offered as well as the intended use of the offering proceeds, and a description of the development plan for the blockchain system, and the related digital commodity, to become a mature blockchain system, if such blockchain system is not already certified as a mature blockchain system pursuant to section 42 of the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).
“(2) Information required for purchasers.—A digital commodity issuer that has filed a statement under paragraph (1) to offer and sell an investment contract involving a unit of a digital commodity in reliance on section 4(a)(8) shall include in such statement the following information:
“(A) MATURITY STATUS.—Whether the blockchain system to which the digital commodity relates has been certified as a mature blockchain system pursuant to section 42 of the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) and, where such blockchain system is not so certified, a statement of the digital commodity issuer’s intent for the blockchain system to which the digital commodity relates to be a mature blockchain system within the time period described in section 4(a)(8)(A).
“(B) SOURCE CODE.—The source code, or a publicly accessible webpage displaying such source code, for any blockchain system to which the digital commodity relates, and whether the source code was sourced from an external third party, whether there are any existing external dependencies, and whether the code underwent a third-party security audit, along with material results of any such audit.
“(C) TRANSACTION HISTORY.—A description of the steps necessary to independently access, search, and verify the transaction history of any blockchain system to which the digital commodity relates, to the extent any such independent access, search, and verification activities are technically feasible with respect to such blockchain system.
“(D) DIGITAL COMMODITY ECONOMICS.—A description of the purpose of any blockchain system to which the digital commodity relates and the operation of any such blockchain system, including—
“(i) information explaining the launch and supply process, including the number of units of the digital commodity to be issued in an initial allocation, the total number of units of the digital commodity to be created, the release schedule for the units of the digital commodity, and the total number of units of the digital commodity outstanding;
“(ii) information explaining the technical requirements for holding, accessing, and transferring the digital commodity;
“(iii) information on any applicable consensus mechanism or process for validating transactions, method of generating or mining digital commodities, and any process for burning or destroying units of the digital commodity on the blockchain system;
“(E) PLAN OF DEVELOPMENT.—The current state and timeline for the development of any blockchain system to which the digital commodity relates, detailing how and when the blockchain system is intended to be a mature blockchain system, if the blockchain system is not yet certified as a mature blockchain system, and the various roles that exist or are intended to exist in connection with the blockchain system, such as users, service providers, developers, transaction validators, and governance participants, including a discussion of any mechanisms by which control or authority are exerted with respect to the blockchain system or its related digital commodity, and any critical operational dependencies of the blockchain system or its related digital commodity.
“(F) OWNERSHIP DISCLOSURES.—
“(3) Ongoing disclosure requirements for maturing blockchain systems.—Subject to paragraph (5), the issuer of a digital commodity related to a blockchain system that is not yet certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934 that has filed a statement under paragraph (1) to offer and sell an investment contract involving a unit of a digital commodity in reliance on section 4(a)(8) shall file the following with the Commission:
“(A) SEMIANNUAL REPORTS.—Every 6 months, a report containing—
“(i) an updated description of the current state and timeline for the development of the blockchain system to which the digital commodity relates, showing how and when the blockchain is intended to be a mature blockchain system;
“(ii) a description of the efforts of the issuer and digital commodity related persons in developing the blockchain system to which the digital commodity relates;
“(B) CURRENT REPORTS.—A current report reflecting any material changes relevant to the information previously reported to the Commission by the digital commodity issuer, which shall be filed as soon as practicable after the material change occurred, in accordance with such rules as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.
“(4) Rulemaking.—Not later than 360 days after the date of the enactment of this section, the Commission shall prescribe rules on requirements applicable to issuers of digital commodities in reliance on section 4(a)(8).
“(5) Termination of certain reporting requirements; post-maturity reporting requirements.—
“(A) IN GENERAL.—The ongoing reporting requirements under paragraph (3) shall not apply to a digital commodity issuer 180 days after the end of the covered fiscal year, if the information with respect to the digital commodity and the blockchain system to which it relates described in subparagraphs (A) through (C) of paragraph (2) is made publicly available and the disclosure requirements under subparagraph (C) of this paragraph are satisfied.
“(B) COVERED FISCAL YEAR DEFINED.—In this paragraph, the term ‘covered fiscal year’ means, with respect to a digital commodity, the first fiscal year of a digital commodity issuer in which the blockchain system to which such digital commodity relates is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934.
“(C) POST-MATURITY REPORTING REQUIREMENTS.—After the blockchain system to which a digital commodity relates is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934, any digital commodity issuer that has filed a statement under paragraph (1) to offer and sell an investment contract involving a unit of a digital commodity in reliance on section 4(a)(8) and is engaged in material ongoing efforts related to the mature blockchain system shall disclose, in a manner reasonably calculated to inform the public, and at such frequency as the Commission may prescribe, by rule, a description of such efforts, including—
“(ii) any participation in alterations or proposed alterations to the functionality or operation of such blockchain system;
“(iii) the use or planned use of any funds raised in reliance on section 4(a)(8) or any rulemaking pursuant to section 202(c) of the CLARITY Act of 2025 in such efforts;
“(D) TERMINATION OF AND EXEMPTION FROM POST-MATURITY REPORTING REQUIREMENTS.—Not later than 270 days after the date of the enactment of this section, the Commission shall issue rules—
“(i) for terminating the disclosure requirements described in subparagraph (C) during the first fiscal year in which the digital commodity issuer does not engage in material ongoing efforts related to the mature blockchain system; and
“(ii) to, as is necessary or appropriate in the public interest or for the protection of investors, exempt a digital commodity issuer from the requirements described in subparagraph (C) where only a de minimis amount of market activity involving the digital commodity of such digital commodity issuer is taking place.
“(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—
“(2) be a member of a national securities association registered under section 15A of the Securities Exchange Act of 1934 (15 U.S.C. 78o–3).
“(d) Disqualification provisions.—The Commission shall issue rules to apply the disqualification provisions under section 230.262 of title 17, Code of Federal Regulations, to the exemption provided under section 4(a)(8).
“(e) Failure To mature.—
“(1) In general.—Not later than 270 days after the date of the enactment of this section, the Commission shall issue rules applying such additional obligations and disclosures for the digital commodity issuers, digital commodity related persons, and digital commodity affiliated persons of a blockchain system described under subsection (b)(1) that does not become a mature blockchain system within the time period described in section 4(a)(8)(A) as are necessary or appropriate in the public interest or for the protection of investors. Such obligations and disclosures shall include the following:
“(A) DISCLOSURES.—Disclosures regarding the following:
“(i) FAILURE TO MATURE.—A detailed explanation of the reason that the blockchain system has not become a mature blockchain system within the time period described in section 4(a)(8)(A).
“(2) Qualification required.—The Commission may not permit any additional reliance on an exempt offering for the offer or sale of an investment contract involving a unit of a digital commodity by the issuer of the digital commodity related to a blockchain system described under subsection (a)(1) that has not become a mature blockchain system within the time period described in section 4(a)(8)(A) unless the Commission has qualified any offering statement related to such exempt offering.”.
(b) Additional exemptions.—
(1) Certain registration requirements.—Section 12(g)(6) of the Securities Exchange Act of 1934 (15 U.S.C. 78l(g)(6)) is amended by striking “under section 4(6)” and inserting “under section 4(a)(6) or 4(a)(8)”.
(2) Exemption from State regulation.—Section 18(b)(4) of the Securities Act of 1933 (15 U.S.C. 77r(b)(4)) is amended—
(c) Use of other exemptions.—
(1) Rule of construction.—Except as provided in this subsection, nothing in this section or the amendments made by this section may be construed as prohibiting the offer or sale of an investment contract involving units of a digital commodity in reliance on an exemption provided under section 3, 4(a), or 19 of the Securities Act of 1933 other than that provided under section 4(a)(8) of the Securities Act of 1933.
(2) Rulemakings.—
(A) The Securities and Exchange Commission may issue rules—
(i) to permit the issuer of a digital commodity related to a blockchain system described under section 4B(b)(1) of the Securities Act of 1933 that has not become a mature blockchain system within the time period described in section 4(a)(8)(A) of such Act, or the issuer of a digital commodity described in subparagraph (B)(iii), to utilize an exempt offering to offer or sell an investment contract involving the digital commodity, if the Commission qualifies any offering statement related to such exempt offering; and
(B) Not later than 270 days after the date of the enactment of this section, the Securities and Exchange Commission shall issue the following rules:
(i) A rule requiring a digital commodity issuer that last offered or sold an investment contract involving units of a digital commodity in reliance on an exemption 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—
(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 provided under section 3, 4(a), or 19 of the Securities Act of 1933, other than that provided under section 4(a)(8) of the Securities Act of 1933, on or after the date of enactment of this Act, to file a comparable set of disclosures to those described under section 4B of the Securities Act of 1933 as the Commission determines appropriate based on the exemption, the maturity of the blockchain system to which such digital commodity relates, and any material ongoing efforts of such digital commodity issuer, prior to the date of any secondary market sale of such digital commodity made in reliance on section 203.
(iii) With respect to a digital commodity where the digital commodity issuer is required to file disclosures under clause (i) or (ii) and where the blockchain system to which the digital commodity relates is not certified as a mature blockchain system pursuant to section 42 of the Securities Exchange Act of 1934 after the 4-year period beginning on the date that the first such disclosure is filed—
(a) Secondary market treatment.—Notwithstanding any other provision of law, the offer or sale of a digital commodity that originally involved an investment contract by a person other than the issuer of such digital commodity, or an agent or underwriter thereof, shall be deemed not to be an offer or sale of such investment contract between the issuer of the investment contract involving the digital commodity, or an agent or underwriter thereof, and the purchaser of such digital commodity under—
(1) the Securities Act of 1933 (15 U.S.C. 77a et seq.);
(2) the Investment Advisers Act of 1940 (15 U.S.C. 80b–1 et seq.);
(3) the Investment Company Act of 1940 (15 U.S.C. 80a–1 et seq.);
(4) the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.);
(5) the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.); and
The Securities Act of 1933 (15 U.S.C. 77a et seq.), as amended by section 202, is further amended by inserting after section 4B the following:
“SEC. 4C. REQUIREMENTS FOR OFFERS AND SALES OF DIGITAL COMMODITIES BY DIGITAL COMMODITY RELATED PERSONS AND DIGITAL COMMODITY AFFILIATED PERSONS.
“(a) In general.—It shall be a violation of this Act for a digital commodity affiliated person or a digital commodity related person to offer or sell a digital commodity acquired directly from its issuer, or an agent or underwriter thereof, pursuant to an investment contract in reliance on section 4(a)(8) or another exemption under this Act, other than as provided in this section.
“(b) Commission jurisdiction.—
“(1) Where a digital commodity affiliated person or a digital commodity related person offers or sells a digital commodity acquired directly from its issuer, or an agent or underwriter thereof, pursuant to an investment contract in reliance on section 4(a)(8), or another exemption under this Act, other than as provided in this section, such digital commodity affiliated person or digital commodity related person shall be considered an issuer of such investment contract.
“(c) Restrictions on digital commodity related persons and digital commodity affiliated persons.—
“(1) Prior to being a mature blockchain system.—Prior to the blockchain system to which a digital commodity relates being certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934, units of the digital commodity acquired by a digital commodity related person or digital commodity affiliated person directly from its issuer (or an agent or underwriter thereof) pursuant to an investment contract in reliance on section 4(a)(8), or another exemption under this Act, may be offered or sold by such digital commodity related person or digital commodity affiliated person if—
“(A) reports with respect to such digital commodity, where required under section 4B(b)(3) (or, with respect to a digital commodity not issued in reliance on section 4(a)(8), a comparable set of reports where required by the Commission) have been filed with the Commission;
“(B) the digital commodity related person or digital commodity affiliated person has held the units for not less than 12 months; and
“(C) the aggregate amount of the units of the digital commodity offered or sold by the digital commodity related person or digital commodity affiliated person is—
“(i) in any 12-month period, or shorter period as the Commission may prescribe, not less than 5 percent or greater than 20 percent of the total units of the digital commodity acquired directly from its issuer (or an agent or underwriter thereof) by the digital commodity related person or digital commodity affiliated person, as determined by the Commission pursuant to paragraph (3); and
“(ii) an amount, as determined by the Commission pursuant to paragraph (3), not less than 30 percent or greater than 50 percent of the total units of the digital commodity acquired directly from its issuer (or an agent or underwriter thereof) by the digital commodity related person or digital commodity affiliated person.
“(2) After becoming a mature blockchain system.—After the blockchain system to which a digital commodity relates is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934, units of the digital commodity acquired by a digital commodity related person or digital commodity affiliated person directly from its issuer (or an agent or underwriter thereof) pursuant to an investment contract in reliance on section 4(a)(8) or another exemption under this Act, may be—
“(B) offered or sold by a digital commodity affiliated person if—
“(i) information described in section 4B(b)(5)(C), where required (or, with respect to a digital commodity not issued in reliance on section 4(a)(8), a comparable set of information, where required) is publicly available;
“(iii) the aggregate amount of the units of the digital commodity offered or sold by the digital commodity affiliated person in any 12-month period is an amount, as determined by the Commission pursuant to paragraph (3), not less than 5 percent or greater than 10 percent of the total outstanding amount of the digital commodity.
“(3) Rulemakings required.—Not later than 270 days after the date of the enactment of this section, consistent with protecting investors, fostering the development of mature blockchain systems, facilitating capital formation, and maintaining fair and orderly markets the Commission, by rule, after notice and comment—
“(A) shall set the percentage amounts described in paragraphs (1)(C)(i), (1)(C)(ii), and (2)(B)(iii); and
“(B) may provide an exemption from the limitation described in paragraph (1)(C)(ii), if the Commission requires any offer or sale pursuant to such exemption of a digital commodity related to a blockchain system that has failed to become a mature blockchain system under this Act or any rule promulgated hereunder to be accompanied by the disclosures required under, as applicable, section 4B(e)(1)(A) or section 202(c)(2)(B)(iii)(II) of the CLARITY Act of 2025.
“(d) Use of a digital commodity in the programmatic functioning of the blockchain system.—For purposes of this section, the use of a digital commodity in the programmatic functioning of the blockchain system to which it relates is not an offer or sale of a digital commodity.
“(e) Manipulative and deceptive devices; reporting.—
“(1) In general.—It shall be unlawful for any digital commodity issuer, digital commodity related person, or digital commodity affiliated person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, to use or employ, in connection with the purchase or sale of any digital commodity, any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.
“(2) Affirmative defense.—Not later than 270 days after the date of the enactment of this section, the Commission shall issue rules to implement paragraph (1), including by providing any affirmative defenses to an enforcement action thereunder as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.
“(3) Reporting.—Not later than 270 days after the date of the enactment of this section, the Commission shall issue rules to prescribe such transaction reporting and beneficial ownership disclosure obligations applicable to digital commodity related persons and digital commodity affiliated persons, as necessary or appropriate in the public interest or for the protection of investors.
“(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 provided under section 3, 4(a), or 19, may be offered or sold by a digital commodity related person or digital commodity affiliated person, if—
“(1) the digital commodity issuer is no longer engaged in material ongoing efforts related to the blockchain system to which the digital commodity relates and the blockchain system to which the digital commodity relates is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934;
“(2) the digital commodity issuer is 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, and the appropriate disclosures required under section 202(c)(2)(B) of the CLARITY Act of 2025 have been made with the Commission; or
“(3) the digital commodity issuer is 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 not certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934, and the appropriate disclosures required under section 202(c)(2)(B) of the CLARITY Act of 2025 have been made with the Commission.
“(g) Rulemaking on further usage of digital commodities.—The Commission, consistent with protecting investors, fostering the development of mature blockchain systems, facilitating capital formation, and maintaining fair and orderly markets, 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.”.
Title I of the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by adding at the end the following:
“SEC. 42. MATURE BLOCKCHAIN SYSTEMS.
“(a) Certification of blockchain systems.—
“(1) Certification.—For purposes of sections 4(a)(8), 4B, and 4C of the Securities Act of 1933, any digital commodity issuer, digital commodity related person, digital commodity affiliated person, or decentralized governance system of the blockchain system may certify to the Securities and Exchange Commission that the blockchain system to which a digital commodity relates is a mature blockchain system.
“(2) Filing requirements.—A certification described under paragraph (1) shall be filed with the Commission, and include such information that is reasonably necessary to establish that the blockchain system is not controlled by any person or group of persons under common control, which may include information regarding—
“(3) Rebuttable presumption.—The Commission may rebut a certification described under paragraph (1) with respect to a blockchain system if the Commission, within 60 days of receiving such certification, determines that the blockchain system is not a mature blockchain system.
“(4) Certification review.—
“(A) IN GENERAL.—Any blockchain system that relates to a digital commodity for which a certification has been made under paragraph (1) shall be considered a mature blockchain system 60 days after the date on which the Commission receives a certification under paragraph (1), unless the Commission notifies the person who made the certification within such time that the Commission is staying the certification due to—
“(5) Stay of certification.—
“(6) Disposition of certification.—A certification made under paragraph (1) shall—
“(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.
“(b) Maturity criteria.—
“(1) Sense of Congress.—It is the sense of the Congress that protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation necessitates establishing clear criteria for blockchain systems to be deemed mature, as well as enabling the Commission to develop, without prejudice to any such criteria codified in statute, alternative criteria by which blockchain systems may be considered not to be controlled by any person or group of persons under common control in order to accommodate changes in markets and technology.
“(2) In general.—The Commission may issue rules identifying conditions by which a blockchain system, together with its related digital commodity, shall be considered a mature blockchain system, consistent with the protection of investors, maintenance of fair, orderly, and efficient markets, and the facilitation of capital formation.
“(c) Deemed mature.—
“(1) In general.—Notwithstanding subsection (b), for the purposes of subsection (a), a digital commodity issuer, digital commodity related person, digital commodity affiliated person, or decentralized governance system of the blockchain system may establish that a blockchain system, together with its related digital commodity, is not controlled by any person or group of persons under common control, if the blockchain system, together with its related digital asset, meets the requirements described in paragraph (2) or (3).
“(2) Criteria for any blockchain system.—The requirements described in this paragraph are the following:
“(A) SYSTEM VALUE.—
“(i) MARKET VALUE.—The digital commodity has a value that is substantially derived from the use and functioning of the blockchain system.
“(ii) DEVELOPMENT OF VALUE MECHANISM SUBSTANTIALLY COMPLETED.—Where the digital commodity issuer has made public a development plan describing how the digital commodity’s value is reasonably expected to be derived from the programmatic functioning of the blockchain system, the development of such mechanisms has been substantially completed.
“(B) FUNCTIONAL SYSTEM.—The blockchain system allows network participants to engage in the activities the blockchain system is intended to provide, including—
“(i) using, transmitting, or storing value, or otherwise executing transactions, on the blockchain system;
“(ii) deploying, executing, or accessing software or services, or otherwise offering or participating in services, deployed on or integrated with the blockchain system;
“(C) OPEN AND INTEROPERABLE SYSTEM.—The blockchain system—
“(ii) does not restrict or prohibit based on the exercise of unilateral authority any person, other than a digital commodity issuer, digital commodity related person, or digital commodity affiliated person from engaging in the activities the blockchain system is intended to provide, including the activities described in subparagraph (B).
“(D) PROGRAMMATIC SYSTEM.—The blockchain system operates, executes, and enforces its operations and transactions based solely on pre-established, transparent rules encoded directly within the source code of the blockchain system.
“(E) SYSTEM GOVERNANCE.—No person or group of persons under common control—
“(i) has the unilateral authority, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, to control or materially alter the functionality, operation, or rules of consensus or agreement of the blockchain system or its related digital commodity; or
“(ii) has the unilateral authority to direct the voting, in the aggregate, of 20 percent or more of the outstanding voting power of such blockchain system by means of a related digital commodity, nodes or validators, a decentralized governance system, or otherwise, in a blockchain system which can be altered by a voting system.
“(F) IMPARTIAL SYSTEM.—No person or group of persons under common control possesses a unique permission or privilege to alter the functionality, operation, or rules of consensus or agreement of the blockchain system or its related digital commodity, unless such alteration—
“(d) Decentralized governance system.—
“(1) For the purposes of this section, a decentralized governance system is not a ‘person’ or a ‘group of persons under common control’.
“(2) A blockchain system, together with its digital commodity, shall not be precluded from being considered a mature blockchain system solely based on a functional, administrative, clerical, or ministerial action of a decentralized governance system, including any such action taken by a person acting on behalf of and at the direction of the decentralized governance system, as determined by the Commission and consistent with the protection of investors, maintenance of fair, orderly, and efficient markets, and the facilitation of capital formation.
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—
(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 section 201(a)(1), is further amended by adding at the end the following: “The term does not include a digital commodity or permitted payment stablecoin.”.
(b) Securities Exchange Act of 1934.—Section 3(a)(10) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)), as amended by section 201(d) is further is amended by adding at the end the following: “The term does not include a digital commodity or permitted payment stablecoin.”.
(c) Investment Advisers Act of 1940.—Section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–2(a)) is amended—
(1) in paragraph (18)), as amended by section 201(b), by adding at the end the following: “The term does not include a digital commodity or permitted payment stablecoin.”;
(3) by adding at the end, the following:
“(32) Digital commodity-related terms.—The terms ‘digital commodity’ and ‘permitted payment stablecoin’ have the meaning given those terms, respectively, under section 2(a) of the Securities Act of 1933 (15 U.S.C. 77b(a)).”.
(d) Investment Company Act of 1940.—Section 2(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–2) is amended—
(1) in paragraph (36), as amended by section 201(c), by adding at the end the following: “The term does not include a digital commodity or permitted payment stablecoin.”; and
(2) by adding at the end, the following:
“(55) Digital commodity-related terms.—The terms ‘digital commodity’ and ‘permitted payment stablecoin’ have the meaning given those terms, respectively, under section 2(a) of the Securities Act of 1933 (15 U.S.C. 77b(a)).”.
(e) Securities Investor Protection Act of 1970.—Section 16 of the Securities Investor Protection Act of 1970 (15 U.S.C. 78lll) is amended—
(1) in paragraph (14), as amended by section 201(e), by adding at the end 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
(a) In general.—Section 10 of the Securities Exchange Act of 1934 (15 U.S.C. 78j) is amended—
(2) by inserting after subsection (c) the following:
“(d) To use or employ, in connection with the purchase or sale of any permitted payment stablecoin or digital commodity, including, as applicable, by or through a broker or dealer or an alternative trading system, any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.”; and
(3) by adding at the end the following: “Rules promulgated under subsection (b) that prohibit fraud, manipulation, or insider trading (but not rules imposing or specifying reporting or recordkeeping requirements, procedures, or standards as prophylactic measures against fraud, manipulation, or insider trading), and judicial precedents decided under subsection (b) and rules promulgated thereunder that prohibit fraud, manipulation, or insider trading, shall apply with respect to permitted payment stablecoin and digital commodity transactions engaged in by 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 brokered, traded, or custodied by 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.”.
(b) Treatment of permitted payment stablecoins.—Title I of the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by inserting after section 6 the following:
“SEC. 6A. TREATMENT OF TRANSACTIONS IN PERMITTED PAYMENT STABLECOINS.
“(a) Authority To broker, trade, and custody permitted payment stablecoins.—Permitted payment stablecoins may be brokered, traded, or custodied by a broker or dealer or through an alternative trading system or national securities exchange.
“(b) Commission jurisdiction.—The Commission shall only have jurisdiction over a transaction in a permitted payment stablecoin with respect to those circumstances in which a permitted payment stablecoin is brokered, traded, or custodied—
“(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—
(a) In general.—Section 5 of the Securities Exchange Act of 1934 (15 U.S.C. 78e) is amended—
(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: “An alternative trading system primarily facilitating the trading of digital commodities, permitted payment stablecoins, or both, is not a ‘facility’ of an exchange.”.
(a) Commission authority.—The Securities and Exchange Commission shall have jurisdiction over digital commodity activities and transactions engaged in by—
(b) Rulemaking authority.—The Securities and Exchange Commission shall have authority to issue rules governing any digital commodity activities and transactions engaged in by a registered broker or registered dealer, or an alternative trading system, including where such alternative trading system is operated by a national securities exchange or affiliate thereof, that is exempt from registration with the Commodity Futures Trading Commission pursuant to section 5k of the Commodity Exchange Act, consistent with this section and what is necessary or appropriate in the public interest or for the protection of investors.
(c) National securities exchanges.—Not later than 270 days after the date of the enactment of this Act, the Securities and Exchange Commission shall revise the covered regulations to permit a national securities exchange or affiliate thereof to operate an alternative trading system that permits the trading of digital commodities, permitted payment stablecoins, or both by registered brokers or registered dealers that are exempt from registration with the Commodity Futures Trading Commission pursuant section 5k of the Commodity Exchange Act, consistent with this section and what is necessary or appropriate in the public interest or for the protection of investors.
(d) Registered brokers and registered dealers.—Not later than 270 days after the date of the enactment of this Act, the Securities and Exchange Commission shall revise the covered regulations to permit a registered broker or registered dealer that is exempt from registration with the Commodity Futures Trading Commission pursuant to section 5k of the Commodity Exchange Act to operate an alternative trading system that permits the trading of digital commodities, permitted payment stablecoins, or both, consistent with this section and what is necessary or appropriate in the public interest or for the protection of investors.
(e) Permitted trading.—
(1) In general.—An alternative trading system operated pursuant to this section and the regulations promulgated hereunder shall be permitted to trade upon notice to the Securities and Exchange Commission in a manner prescribed by the Securities and Exchange Commission any digital commodity that has been listed by a digital commodity exchange in compliance with section 5i(c)(3) of the Commodity Exchange Act.
(2) Commission authority.—Digital commodity transactions offered on an alternative trading system operating pursuant to this section shall be subject to the jurisdiction of the Securities and Exchange Commission. The Securities and Exchange Commission shall have authority to promulgate rules governing such digital commodity transactions of alternative trading systems, consistent with this section and what is necessary or appropriate in the public interest or for the protection of investors.
(f) Order display and execution.—Not later than 270 days after the date of the enactment of this Act, the Securities and Exchange Commission shall issue and revise rules, as necessary or appropriate in the public interest or for the protection of investors, regarding whether alternative trading systems operating pursuant to subsections (c) and (d) have an obligation to provide the prices and sizes of orders displayed to more than one person in such alternative trading system of digital commodities to self-regulatory organizations with members who trade in digital commodities or permitted payment stablecoins.
(g) Principles of trade.—Not later than 270 days after the date of the enactment of this Act, the Securities and Exchange Commission shall issue and revise rules, as necessary or appropriate in the public interest or for the protection of investors, to—
(1) apply the rules and standards promulgated pursuant to paragraph (2) to the appropriate market participants, including—
(2) apply, as appropriate to the market participants described in paragraph (1) and customers thereof, rules and standards to—
(B) foster cooperation and coordination with persons engaged in regulating, settling, processing information with respect to, and facilitating transactions in digital commodities or permitted payment stablecoins traded, as applicable, on or by any alternative trading system operating pursuant to subsection (c) or (d), or any registered broker or registered dealer;
(h) 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 operates an alternative trading system pursuant to subsection (d) or otherwise transacts in digital commodities or permitted payment stablecoins to adopt such rules as may be necessary to further compliance with this section, including subsection (g)(2), protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.
(i) Rule of construction.—The enumeration of any category of rules or regulations in this section shall not be construed to limit the authority of the Securities and Exchange Commission to promulgate such rules as may be necessary or appropriate to implement this section and the purposes of this Act, including over—
(j) Memorandum of understanding.—Consistent with section 5k of the Commodity Exchange Act and to carry out this Act, the Securities and Exchange Commission shall enter into a memorandum of understanding with the Commodity Futures Trading Commission to ensure—
(1) requirements imposed on registered brokers or registered dealers operating an alternative trading system pursuant to subsection (c) or otherwise transacting in digital commodities or permitted payment stablecoins are consistent with the substantive requirements under section 4u of the Commodity Exchange Act;
(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 consider records from a blockchain system.
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”.
Section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o) is amended by adding at the end the following:
“(p) Additional registrations with the Commodity Futures Trading Commission.—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, to list or trade contracts of sale for digital commodities.”.
Section 18(b) of the Securities Act of 1933 (15 U.S.C. 77r(b)) is amended by adding at the end the following:
The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by inserting after section 15G the following:
“SEC. 15H. DECENTRALIZED FINANCE ACTIVITIES NOT SUBJECT TO THIS ACT.
“(a) In general.—Notwithstanding any other provision of this Act, a person shall not be subject to this Act and the regulations promulgated under this Act based on the person directly or indirectly engaging in any of the following activities, whether singly or in combination, in relation to the operation of a blockchain system or in relation to a decentralized finance trading protocol:
“(1) Compiling network transactions or relaying, searching, sequencing, validating, or acting in a similar capacity.
“(2) Providing computational work, operating a node or oracle service, or procuring, offering, or utilizing network bandwidth, or providing other similar incidental services.
“(3) Providing a user-interface that enables a user to read and access data about a blockchain system.
“(4) Developing, publishing, constituting, administering, maintaining, or otherwise distributing a blockchain system or a decentralized finance trading protocol.
“(5) Developing, publishing, constituting, administering, maintaining, or otherwise distributing a decentralized finance messaging system, or operating or participating in a liquidity pool, for the purpose of executing a spot contract for the purchase or sale of a digital commodity in relation to a decentralized finance trading protocol.
“(6) Developing, publishing, constituting, administering, maintaining, or otherwise distributing software or systems that create or deploy hardware or software, including wallets or other systems, facilitating an individual user’s own personal ability to keep, safeguard, or custody the user’s digital assets or related private keys.
(a) Treatment of custody activities.—The appropriate Federal banking agency, the National Credit Union Administration (in the case of a credit union), and the Securities and Exchange Commission may not require a depository institution, national bank, Federal credit union, State credit union, trust company, broker, or dealer, or any affiliate thereof (the “entity”)—
(1) to include assets held in custody that are not owned by the entity as a liability on the financial statement or balance sheet of the entity, including digital commodity or permitted payment stablecoin custody or safekeeping services;
(2) to hold regulatory capital against assets, including reserves backing such assets, in custody or safekeeping, except as necessary to mitigate against operational risks inherent with the custody or safekeeping services, as determined by—
(D) a State credit union supervisor (as defined in section 6003 of the Anti-Money Laundering Act of 2020 (31 U.S.C. 5311 note)); or
(b) Definitions.—In this section:
(1) Banking terms.—The terms “appropriate Federal banking agency”, “depository institution”, “national bank”, and “State bank supervisor” have the meaning given those terms, respectively, under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).
(2) Credit union terms.—The terms “Federal credit union” and “State credit union” have the meaning given those terms, respectively, under section 101 of the Federal Credit Union Act (12 U.S.C. 1752).
(a) In general.—Not later than 270 days after the date of the enactment of this Act, the Securities and Exchange Commission shall issue rules requiring written disclosures regarding the treatment of customer assets in the event of an insolvency, resolution, or liquidation proceeding to be provided by a registered broker or dealer to an investor before a digital commodity, a permitted payment stablecoin, or an investment contract involving a unit of a digital commodity is received, acquired, or held by the broker or dealer for the account of the investor, which shall include, as necessary or appropriate for the protection of investors—
(1) a description of the manner in which any digital commodity, permitted payment stablecoin, or investment contact involving a unit of a digital commodity received, acquired, or held by the broker or dealer for the account of such investor would be treated in an insolvency, resolution, or liquidation proceeding with respect to the broker or dealer under—
(A) title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5381 et seq.);
(B) the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.); or
(C) as applicable, chapter 7 or chapter 11 of title 11, United States Code; and
(2) how the treatment described in paragraph (1) differs from the treatment of securities and cash received, acquired, or held by the broker or dealer for the account of such investor in the event of an insolvency, resolution, or liquidation proceeding with respect to the broker or dealer under each law described under subparagraph (A) through (C) of paragraph (1).
(a) Digital commodity activities that are financial in nature.—Section 4(k)(4) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)(4)) is amended—
(b) National bank activity.—
(1) In general.—A national bank may use a digital asset or blockchain system to perform, provide, or deliver any activity, function, product, or service that the national bank is otherwise authorized by law to perform, provide, or deliver.
(2) Rule of construction.—Nothing in this subsection may be construed to exempt a national bank’s performance, provision, or delivery of an activity, function, product, or service from a requirement that would apply if the activity were not performed, provided, or delivered using a digital asset or blockchain system.
(c) Insured State banks and subsidiaries of insured State banks.—For purposes of sections 24(a) and 24(d) of the Federal Deposit Insurance Act (12 U.S.C. 1831a(a) and (d)), all of the activities authorized for a national bank under subsection (b) that are principal activities shall be permissible for an insured State bank and subsidiary of an insured State bank.
Except as otherwise provided under this title, this title and the amendments made by this title shall take effect 360 days after the date of enactment of this Act, except that, to the extent a provision of this title requires a rulemaking, the provision shall take effect on the later of—
(a) In general.—The Secretary of the Treasury, in consultation with the Commodity Futures Trading Commission and the Securities and Exchange Commission, shall, not later than 1 year after date of the enactment of this section, conduct a study and submit a report to the relevant congressional committees that—
(1) identifies any digital commodity registrants which are owned by governments of foreign adversaries;
(b) GAO study and report.—
(1) In general.—The Comptroller General shall, not later than 1 year after date of the enactment of this section, conduct a study and submit a report to the relevant congressional committees that—
(A) identifies any digital commodity registrants which are owned by governments of foreign adversaries;
(c) Definitions.—In this section:
(1) Digital commodity registrant.—The term “digital commodity registrant” means any person required to register as a digital commodity exchange, digital commodity broker, or digital commodity dealer under the Commodity Exchange Act.
(a) Savings clause.—Section 2(a)(1) of the Commodity Exchange Act (7 U.S.C. 2(a)(1)) is amended by adding at the end the following:
“(J) Except as expressly provided in this Act, nothing in the CLARITY Act of 2025 shall affect or apply to, or be interpreted to affect or apply to—
(b) Limitation on authority over permitted payment stablecoins.—Section 2(c)(1) of the Commodity Exchange Act (7 U.S.C. 2(c)(1)) is amended—
(c) Commission jurisdiction over financing agreements.—Section 2(c)(2) of the Commodity Exchange Act (7 U.S.C. 2(c)(2)) is amended—
(1) in subparagraph (D), by redesignating clause (iv) as clause (v) and inserting after clause (iii) the following:
(2) by adding at the end the following:
“(F) Commission jurisdiction with respect to digital commodity transactions.—
“(i) IN GENERAL.—Subject to sections 6d and 12(e), the Commission shall have exclusive jurisdiction with respect to any account, agreement, contract, or transaction involving a contract of sale of a digital commodity in interstate commerce, including in a digital commodity cash or spot market, that is offered, solicited, traded, facilitated, executed, cleared, reported, or otherwise dealt in—
“(ii) LIMITATIONS.—Clause (i) shall not apply with respect to—
“(iii) MIXED DIGITAL ASSET TRANSACTIONS.—
“(II) REPORTS ON MIXED DIGITAL ASSET TRANSACTIONS.—A digital commodity issuer, digital commodity related person, digital commodity affiliated person, or other person registered with the Securities and Exchange Commission that engages in a mixed digital asset transaction, shall, on request of the Commission, open to inspection and examination by the Commission all books and records relating to the mixed digital asset transaction, subject to the confidentiality and disclosure requirements of section 8.
“(G) Agreements, contracts, and transactions in stablecoins.—
“(i) TREATMENT OF PERMITTED PAYMENT STABLECOINS ON COMMISSION-REGISTERED ENTITIES.—Subject to clauses (ii) and (iii), the Commission shall have jurisdiction over a cash or spot agreement, contract, or transaction in a permitted payment stablecoin that is offered, offered to enter into, entered into, executed, confirmed the execution of, solicited, or accepted—
“(ii) PERMITTED PAYMENT STABLECOIN TRANSACTION RULES.—This Act shall apply to a transaction described in clause (i) only for the purpose of regulating the offer, execution, solicitation, or acceptance of a cash or spot permitted payment stablecoin transaction on a registered entity or by any other entity registered with the Commission, as if the permitted payment stablecoin were a digital commodity.
“(iii) NO AUTHORITY OVER PERMITTED PAYMENT STABLECOINS.—Notwithstanding clauses (i) and (ii), the Commission shall not make a rule or regulation, impose a requirement or obligation on a registered entity or other entity registered with the Commission, or impose a requirement or obligation on a permitted payment stablecoin issuer, regarding the operation of a permitted payment stablecoin issuer or a permitted payment stablecoin.”.
(d) Conforming amendment.—Section 2(a)(1)(A) of such Act (7 U.S.C. 2(a)(1)(A)) is amended in the 1st sentence by inserting “subparagraphs (F) and (G) of subsection (c)(2) of this section or” before “section 19”.
Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) is amended—
Section 5c of the Commodity Exchange Act (7 U.S.C. 7a–2) is amended—
(2) in subsection (b)—
(3) in subsection (c)—
(C) in paragraph (5), by adding at the end the following:
“(D) SPECIAL RULES FOR DIGITAL COMMODITY CONTRACTS.—In certifying any new rule or rule amendment, or listing any new contract or instrument, in connection with a contract of sale of a commodity for future delivery, option, swap, or other agreement, contract, or transaction, that is based on or references a digital commodity, a registered entity shall make or rely on a certification under subsection (d) for the digital commodity.”; and
(4) by inserting after subsection (c) the following:
“(d) Certifications for digital commodity trading.—
“(1) In general.—Notwithstanding subsection (c), for the purposes of listing or offering a digital commodity for trading in a digital commodity cash or spot market, an eligible entity shall submit a written certification to the Commission that the digital commodity meets the requirements of this Act (including the regulations prescribed under this Act).
“(2) Contents of the certification.—
“(3) Modifications.—
“(4) Disapproval.—
“(A) IN GENERAL.—The written certification described in paragraph (1) shall become effective unless the Commission finds that the listing of the digital commodity is inconsistent with the requirements of this Act or the rules and regulations prescribed under this Act.
“(5) Review.—
“(A) IN GENERAL.—Unless the Commission makes a disapproval decision under paragraph (4), the written certification described in paragraph (1) shall become effective, pursuant to the certification by the eligible entity and notice of the certification to the public (in a manner determined by the Commission) on the date that is—
“(i) 20 business days after the date the Commission receives the certification (or such shorter period as determined by the Commission by rule or regulation), in the case of a digital commodity that has not been certified under this section or for which a certification is being modified under paragraph (3); or
“(B) EXTENSIONS.—The time for consideration under subparagraph (A) may be extended through notice to the eligible entity that there are novel or complex issues that require additional time to analyze, that the explanation by the submitting eligible entity is inadequate, or of a potential inconsistency with this Act—
“(i) once, for 30 business days, through written notice to the eligible entity by the Commission; and
“(6) Prior approval before registration.—
“(A) IN GENERAL.—A person applying for registration with the Commission for the purposes of listing or offering a digital commodity for trading in a digital commodity cash or spot market may request that the Commission grant prior approval for the person to list or offer the digital commodity on being registered with the Commission.
“(B) REQUEST FOR PRIOR APPROVAL.—A person seeking prior approval under subparagraph (A) shall furnish the Commission with a written certification that the digital commodity meets the requirements of this Act (including the regulations prescribed under this Act) and the information described in paragraph (2).
“(C) DEADLINE.—The Commission shall take final action on a request for prior approval not later than 90 business days after submission of the request, unless the person submitting the request agrees to an extension of the time limitation established under this subparagraph.
“(D) DISAPPROVAL.—
“(i) IN GENERAL.—The Commission shall approve the listing of the digital commodity unless the Commission finds that the listing is inconsistent with this Act (including any regulation prescribed under this Act).
The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by inserting after section 5h the following:
“SEC. 5i. REGISTRATION OF DIGITAL COMMODITY EXCHANGES.
“(a) In general.—
“(1) Registration.—
“(A) IN GENERAL.—A trading facility that offers or seeks to offer a cash or spot market in at least 1 digital commodity shall register with the Commission as a digital commodity exchange.
“(B) APPLICATION.—A person desiring to register as a digital commodity exchange shall submit to the Commission an application in such form and containing such information as the Commission may require for the purpose of making the determinations required for approval.
“(C) EXEMPTIONS.—A trading facility that offers or seeks to offer a cash or spot market in at least 1 digital commodity shall not be required to register under this section if the trading facility—
“(2) Additional registrations.—
“(A) WITH THE COMMISSION.—In order to foster the development of fair and orderly markets, protect customers, and promote responsible innovation, the Commission—
“(B) WITH A REGISTERED FUTURES ASSOCIATION.—
“(b) Trading.—
“(1) Prohibition on certain trading practices.—
“(A) Section 4b shall apply to any agreement, contract, or transaction in a digital commodity as if the agreement, contract, or transaction were a contract of sale of a commodity for future delivery.
“(2) Prohibition on acting as a counterparty.—
“(A) IN GENERAL.—A digital commodity exchange or any affiliate of such an exchange shall not trade on or subject to the rules of the digital commodity exchange for its own account.
“(B) EXCEPTIONS.—The Commission shall, by rule, permit a digital commodity exchange or any affiliate of a digital commodity exchange to engage in trading on the exchange so long as the trading is not solely for the purpose of the profit of the exchange, including the following:
“(i) CUSTOMER DIRECTION.—A transaction for, or entered into at the direction of, or for the benefit of, an unaffiliated customer.
“(ii) RISK MANAGEMENT.—A transaction to manage the credit, market, and liquidity risks associated with the digital commodity business of the exchange.
“(C) NOTICE REQUIREMENT.—In order for a digital commodity exchange or any affiliate of a digital commodity exchange to engage in trading on the affiliated exchange pursuant to subsection (B), notice must be given to the Commission that shall enumerate how any proposed activity is consistent with the exceptions in subsection (B) and the purposes of this Act.
“(c) Core principles for digital commodity exchanges.—
“(1) Compliance with core principles.—
“(A) IN GENERAL.—To be registered, and maintain registration, as a digital commodity exchange, a digital commodity exchange shall comply with—
“(B) REASONABLE DISCRETION OF A DIGITAL COMMODITY EXCHANGE.—Unless otherwise determined by the Commission by rule or regulation, a digital commodity exchange described in subparagraph (A) shall have reasonable discretion in establishing the manner in which the digital commodity exchange complies with the core principles described in this subsection.
“(2) Compliance with rules.—A digital commodity exchange shall—
“(A) establish and enforce compliance with any rule of the digital commodity exchange, including—
“(3) Listing standards for digital commodities.—
“(A) IN GENERAL.—A digital commodity exchange shall not permit trading in a digital commodity unless—
“(i) reports with respect to the digital commodity required under section 4B(b)(3) of the Securities Act of 1933 (or, with respect to a digital commodity not issued in reliance on section 4(a)(8) of the Securities Act of 1933, a comparable set of reports, where required by the Securities and Exchange Commission) have been filed with the Securities and Exchange Commission; or
“(B) PUBLIC INFORMATION REQUIREMENTS.—
“(i) IN GENERAL.—A digital commodity exchange shall permit trading only in a digital commodity if the information required in clause (ii) is correct, current, and available to the public.
“(ii) REQUIRED INFORMATION.—With respect to a digital commodity and each blockchain system to which the digital commodity relates for which the digital commodity exchange will make the digital commodity available to the customers of the digital commodity exchange, the information required in this clause is as follows:
“(II) TRANSACTION HISTORY.—A description of the steps necessary to independently access, search, and verify the transaction history of any blockchain system to which the digital commodity relates, to the extent any such independent access, search, and verification activities are technically feasible with respect to the blockchain system.
“(III) DIGITAL COMMODITY ECONOMICS.—A narrative description of the purpose of any blockchain system to which the digital commodity relates and the operation of any such blockchain system, including—
“(aa) information explaining the launch and supply process, including the number of digital assets to be issued in an initial allocation, the total number of digital commodities to be created, the release schedule for the digital commodities, and the total number of digital commodities then outstanding;
“(bb) information detailing any applicable consensus mechanism or process for validating transactions, method of generating or mining digital commodities, and any process for burning or destroying digital commodities on the blockchain system;
“(C) DIGITAL COMMODITIES HELD BY RELATED AND DIGITAL COMMODITY AFFILIATED PERSONS.—A digital commodity exchange shall permit the trading of a unit of a digital commodity held by a digital commodity affiliated person or a digital commodity related person, only pursuant to section 4C of the Securities Act of 1933.
“(4) Treatment of customer assets.—A digital commodity exchange shall establish policies and procedures that are designed to protect and ensure the safety of customer money, assets, and property.
“(5) Monitoring of trading and trade processing.—
“(A) IN GENERAL.—A digital commodity exchange shall provide a competitive, open, and efficient market and mechanism for executing transactions that protects the price discovery process of trading on the exchange.
“(B) PROTECTION OF MARKETS AND MARKET PARTICIPANTS.—A digital commodity exchange shall establish and enforce rules—
“(C) TRADING PROCEDURES.—A digital commodity exchange shall—
“(i) establish and enforce rules or terms and conditions defining, or specifications detailing—
“(ii) monitor trading in digital commodities to prevent manipulation, price distortion, and disruptions, through surveillance, compliance, and disciplinary practices and procedures, including methods for conducting real-time monitoring of trading and comprehensive and accurate trade reconstructions.
“(6) Ability to obtain information.—A digital commodity exchange shall—
“(7) Emergency authority.—A digital commodity exchange shall adopt rules to provide for the exercise of emergency authority, in consultation or cooperation with the Commission or a registered entity, as is necessary and appropriate, including the authority to facilitate the liquidation or transfer of open positions in any digital commodity or to suspend or curtail trading in a digital commodity.
“(8) Timely publication of trading information.—
“(9) Recordkeeping and reporting.—
“(A) IN GENERAL.—A digital commodity exchange shall—
“(i) maintain records relating to the operation of the exchange, including a complete audit trail, in a form and manner acceptable to the Commission for a period of 5 years;
“(B) INFORMATION-SHARING.—Subject to section 8, and on request, the Commission shall share information collected under subparagraph (A) with—
“(C) CONFIDENTIALITY AGREEMENT.—Before the Commission may share information with any entity described in subparagraph (B), the Commission shall receive a written agreement from the entity stating that the entity shall abide by the confidentiality requirements described in section 8 relating to the information on digital commodities that is provided.
“(10) Antitrust considerations.—Unless necessary or appropriate to achieve the purposes of this Act, a digital commodity exchange shall not—
“(12) Financial resources.—
“(A) IN GENERAL.—A digital commodity exchange shall have adequate financial, operational, and managerial resources, as determined by the Commission, to discharge each responsibility of the digital commodity exchange.
“(B) MINIMUM AMOUNT OF FINANCIAL RESOURCES.—A digital commodity exchange shall possess financial resources that, at a minimum, exceed—
“(13) Disciplinary procedures.—A digital commodity exchange shall establish and enforce disciplinary procedures that authorize the digital commodity exchange to discipline, suspend, or expel members or market participants that violate the rules of the digital commodity exchange, or similar methods for performing the same functions, including delegation of the functions to third parties.
“(14) Governance fitness standards.—
“(15) System safeguards.—A digital commodity exchange shall—
“(A) establish and maintain a program of risk analysis and oversight to identify and minimize sources of operational and security risks, through the development of appropriate controls and procedures, and automated systems in accordance with industry standards, that—
“(d) Holding of customer assets.—
“(1) In general.—A digital commodity exchange shall hold customer money, assets, and property in a manner to minimize the risk of loss to the customer or unreasonable delay in customer access to the money, assets, and property of the customer.
“(A) SEGREGATION OF FUNDS.—
“(i) IN GENERAL.—A digital commodity exchange shall treat and deal with all money, assets, and property that is received by the digital commodity exchange, or accrues to a customer as the result of trading in digital commodities, as belonging to the customer.
“(ii) COMMINGLING PROHIBITED.—Money, assets, and property of a customer described in clause (i) shall be separately accounted for and shall not be commingled with the funds of the digital commodity exchange or be used to margin, secure, or guarantee any trades or accounts of any customer or person other than the person for whom the same are held.
“(B) EXCEPTIONS.—
“(i) USE OF FUNDS.—
“(I) IN GENERAL.—Notwithstanding subparagraph (A), money, assets, and property of customers of a digital commodity exchange described in subparagraph (A) may, for convenience, be commingled and deposited in the same account or accounts with any bank, trust company, derivatives clearing organization, or qualified digital asset custodian.
“(II) WITHDRAWAL.—Notwithstanding subparagraph (A), such share of the money, assets, and property described in subclause (I) of this clause as in the normal course of business shall be necessary to margin, guarantee, secure, transfer, adjust, or settle a contract of sale of a digital commodity with a registered entity may be withdrawn and applied to such purposes, including the payment of commissions, brokerage, interest, taxes, storage, and other charges, lawfully accruing in connection with the contract of sale of a digital commodity.
“(ii) COMMISSION ACTION.—Notwithstanding subparagraph (A), in accordance with such terms and conditions as the Commission may prescribe by rule, regulation, or order, any money, assets, or property of the customers of a digital commodity exchange described in subparagraph (A) may be commingled and deposited in customer accounts with any other money, assets, or property received by the digital commodity exchange and required by the Commission to be separately accounted for and treated and dealt with as belonging to the customer of the digital commodity exchange.
“(2) Permitted investments.—Money described in subparagraph (A) may be invested in obligations of the United States, in general obligations of any State or of any political subdivision of a State, and in obligations fully guaranteed as to principal and interest by the United States, or in any other investment that the Commission may by rule or regulation prescribe, and such investments shall be made in accordance with such rules and regulations and subject to such conditions as the Commission may prescribe.
“(3) Customer protection during bankruptcy.—
“(A) CUSTOMER PROPERTY.—All assets held on behalf of a customer by a digital commodity exchange, and all money, assets, and property of any customer received by a digital commodity exchange for trading or custody, or to facilitate, margin, guarantee, or secure contracts of sale of a digital commodity (including money, assets, or property accruing to the customer as the result of the transactions), shall be considered customer property for purposes of section 761 of title 11, United States Code.
“(B) TRANSACTIONS.—A transaction involving the sale of a unit of a digital commodity occurring on or subject to the rules of a digital commodity exchange shall be considered a contract for the purchase or sale of a commodity for future delivery, on or subject to the rules of, a contract market or board of trade for purposes of the definition of ‘commodity contract’ in section 761 of title 11, United States Code.
“(4) Misuse of customer property.—
“(A) IN GENERAL.—It shall be unlawful—
“(i) for any digital commodity exchange that has received any customer money, assets, or property for custody to dispose of, or use any such money, assets, or property as belonging to the digital commodity exchange or any person other than a customer of the digital commodity exchange; or
“(ii) for any other person, including any depository, other digital commodity exchange, or digital asset custodian that has received any customer money, assets, or property for deposit, to hold, dispose of, or use any such money, assets, or property, or property, as belonging to the depositing digital commodity exchange or any person other than the customers of the digital commodity exchange.
“(B) USE FURTHER DEFINED.—For purposes of this section, ‘use’ of a digital commodity includes utilizing any unit of a digital asset to participate in a blockchain service defined in paragraph (5) or a decentralized governance system associated with the digital commodity or the blockchain system to which the digital commodity relates in any manner other than that expressly directed by the customer from whom the unit of a digital commodity was received.
“(5) Participation in blockchain services.—
“(A) IN GENERAL.—A customer shall have the right to waive the restrictions in paragraph (1) for any unit of a digital commodity to be used under subparagraph (B), by affirmatively electing, in writing to the digital commodity exchange, to waive the restrictions.
“(B) USE OF FUNDS.—Customer digital commodities removed from segregation under subparagraph (A) may be pooled and used by the digital commodity exchange or its designee to provide a blockchain service for a blockchain system to which the unit of the digital asset removed from segregation in subparagraph (A) relates.
“(C) LIMITATIONS.—
“(i) IN GENERAL.—The Commission shall, by rule, establish notice and disclosure requirements, and may, by rule, establish any other limitations and rules related to the waiving of any restrictions under this paragraph that are reasonably necessary to protect customers, including eligible contract participants, non-eligible contract participants, or any other class of customers.
“(e) Market access requirements.—The Commission may, by rule, impose any additional requirements related to the operations and activities of the digital commodity exchange and an affiliated digital commodity broker necessary to protect market participants, promote fair and equitable trading on the digital commodity exchange, and promote responsible innovation.
“(f) Designation of chief compliance officer.—
“(1) In general.—A digital commodity exchange shall designate an individual to serve as a chief compliance officer.
“(2) Duties.—The chief compliance officer shall—
“(C) in consultation with the board of the exchange, a body performing a function similar to that of a board, or the senior officer of the exchange, resolve any conflicts of interest that may arise;
“(D) establish and administer the policies and procedures required to be established pursuant to this section;
“(3) Requirements for procedures.—In establishing procedures under paragraph (2)(F), the chief compliance officer shall design the procedures to establish the handling, management response, remediation, retesting, and closing of noncompliance issues.
“(4) Annual reports.—
“(A) IN GENERAL.—In accordance with rules prescribed by the Commission, the chief compliance officer shall annually prepare and sign a report that contains a description of—
“(g) Appointment of trustee.—
“(1) In general.—If a proceeding under section 5e results in the suspension or revocation of the registration of a digital commodity exchange, or if a digital commodity exchange withdraws from registration, the Commission, on notice to the digital commodity exchange, may apply to the appropriate United States district court where the digital commodity exchange is located for the appointment of a trustee.
“(2) Assumption of jurisdiction.—If the Commission applies for appointment of a trustee under paragraph (1)—
“(A) the court may take exclusive jurisdiction over the digital commodity exchange and the records and assets of the digital commodity exchange, wherever located; and
“(B) if the court takes jurisdiction under subparagraph (A), the court shall appoint the Commission, or a person designated by the Commission, as trustee with power to take possession and continue to operate or terminate the operations of the digital commodity exchange in an orderly manner for the protection of customers subject to such terms and conditions as the court may prescribe.
“(h) Qualified digital asset custodian.—A digital commodity exchange shall hold in a qualified digital asset custodian each unit of a digital asset that is—
“(i) Exemptions.—
“(1) In order to promote responsible innovation and fair competition, or protect customers, the Commission may (on its own initiative or on application of the registered digital commodity exchange) exempt, either unconditionally or on stated terms or conditions or for stated periods and either retroactively or prospectively, or both, a registered digital commodity exchange from the requirements of this section, if the Commission determines that—
“(2) The Commission may exempt, conditionally or unconditionally, a digital commodity exchange from registration under this section if the Commission finds that the digital commodity exchange is subject to comparable, comprehensive supervision and regulation on a consolidated basis by the appropriate governmental authorities in the home country of the facility.
“(j) Customer defined.—In this section, the term ‘customer’ means any person that maintains an account for the trading of digital commodities directly with a digital commodity exchange (other than a person that is owned or controlled, directly or indirectly, by the digital commodity exchange) for its own behalf or on behalf of any other person.
The Commodity Exchange Act (7 U.S.C. 1 et seq.), as amended by the preceding provisions of this Act, is amended by inserting after section 5i the following:
“SEC. 5j. QUALIFIED DIGITAL ASSET CUSTODIANS.
“(a) In general.—A person is a qualified digital asset custodian for purposes of this Act if the person—
“(b) Supervision requirement.—A person is in compliance with this subsection if the person is subject to—
“(1) supervision and examination for custody and safekeeping of digital assets by an appropriate Federal banking agency, the National Credit Union Administration, the Commission, or the Securities and Exchange Commission; or
“(2) adequate supervision and appropriate regulation for custody and safekeeping of digital assets by—
“(A) a State bank supervisor (within the meaning of section 3 of the Federal Deposit Insurance Act);
“(c) Other requirements.—A person shall be in compliance with this subsection if:
“(1) Not otherwise prohibited.—The person has not been prohibited by its supervisor from engaging in an activity with respect to the custody and safekeeping of digital assets.
“(2) Information sharing.—
“(A) IN GENERAL.—The person shares information with the Commission on request and complies with such requirements for periodic sharing of information regarding customer accounts that the person holds on behalf of an entity registered with the Commission as the Commission determines by rule are reasonably necessary to effectuate any of the provisions, or to accomplish any of the purposes, of this Act.
“(B) PROVISION OF INFORMATION.—If the person is subject to regulation and examination by an appropriate Federal banking agency, the person may satisfy any information request described in subparagraph (A) by providing the Commission with a detailed listing, in writing, of the digital assets of a customer in the custody of, or use by, the person.
“(C) RULEMAKING FOR CFTC ENTITIES.—
“(i) IN GENERAL.—The Commission shall prescribe rules to permit a person registered with the Commission to be a qualified digital asset custodian in compliance with this section.
“(d) Adequate supervision and appropriate regulation.—
“(1) In general.—For purposes of subsection (b), the terms ‘adequate supervision’ and ‘appropriate regulation’ mean such minimum standards for supervision and regulation as are reasonably necessary to protect the digital assets held by a person registered under this Act, including standards relating to the licensing, examination, and supervisory processes that require the person to, at a minimum—
“(A) receive a review and evaluation of ownership, character and fitness, conflicts of interest, business model, financial statements, funding resources, and policies and procedures of the person;
“(E) submit financial statements and audited financial statements to the applicable supervisor described in subsection (b);
“(F) provide disclosures to the applicable supervisor described in subsection (b) regarding actions, proceedings, and other items as determined by the supervisor;
“(2) Rulemaking with respect to definitions.—
“(A) IN GENERAL.—For purposes of this section, the Commission may, by rule, further define the terms ‘adequate supervision’ and ‘appropriate regulation’ as necessary and appropriate for the protection of customers, and consistent with the purposes of this Act.
“(B) CONDITIONAL TREATMENT OF CERTAIN CUSTODIANS BEFORE RULEMAKING.—Before the effective date of a rulemaking under subparagraph (A), a trust company is deemed subject to adequate supervision and appropriate regulation if—
“(i) the trust company is expressly permitted by a State bank supervisor to engage in the custody and safekeeping of digital assets;
“(C) TRANSITION PERIOD FOR CERTAIN CUSTODIANS.—In implementing the rulemaking under subparagraph (A), the Commission shall provide a transition period of not less than 2 years for any trust company that is deemed subject to adequate supervision and appropriate regulation under subparagraph (B) on the effective date of the rulemaking.
“(e) Authority To temporarily suspend standards.—The Commission may, by rule or order, temporarily suspend, in whole or in part, any requirement imposed under, or any standard referred to in, this section if the Commission determines that the suspension would be consistent with the public interest and the purposes of this Act.”.
The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by inserting after section 4t the following:
“SEC. 4u. REGISTRATION AND REGULATION OF DIGITAL COMMODITY BROKERS AND DEALERS.
“(a) Registration.—
“(1) Requirement.—It shall be unlawful for any person to act as a digital commodity broker or digital commodity dealer unless the person is registered as such with the Commission.
“(2) Additional registration.—
“(A) RULES.—In order to foster the development of fair and orderly markets, protect customers, and promote responsible innovation, the Commission—
“(b) Requirements.—
“(1) In general.—A person shall register as a digital commodity broker or digital commodity dealer by filing a registration application with the Commission.
“(2) Contents.—
“(3) Statutory disqualification.—Except to the extent otherwise specifically provided by rule, regulation, or order, it shall be unlawful for a digital commodity broker or digital commodity dealer to permit any person who is associated with a digital commodity broker or a digital commodity dealer and who is subject to a statutory disqualification to effect or be involved in effecting a contract of sale of a digital commodity on behalf of the digital commodity broker or the digital commodity dealer, respectively, if the digital commodity broker or digital commodity dealer, respectively, knew, or in the exercise of reasonable care should have known, of the statutory disqualification.
“(c) Rulemaking.—
“(1) In general.—The Commission shall prescribe such rules applicable to registered digital commodity brokers and registered digital commodity dealers as are appropriate to carry out this section, including rules in the public interest that limit the activities of digital commodity brokers and digital commodity dealers.
“(2) Financing agreements.—
“(A) IN GENERAL.—The Commission shall prescribe rules and regulations applicable to digital commodity brokers or digital commodity dealers which shall set forth minimum requirements related to disclosure, recordkeeping, margin and financing arrangements, rehypothecation, capital, reporting, business conduct, documentation, and supervision of employees and agents, in connection with—
“(B) SPECIFIC AUTHORITY.—Except as prohibited in section 2(c)(2)(G)(iii), the Commission may also make, promulgate, and enforce such rules and regulations as, in the judgment of the Commission, are reasonably necessary to effectuate any of the provisions of, or to accomplish any of the purposes of, this Act in connection with an agreement referred to in subparagraph (A) of this paragraph, which may include, without limitation, requirements regarding registration with the Commission and membership in a registered futures association.
“(d) Capital requirements.—
“(1) In general.—Each digital commodity broker and digital commodity dealer shall meet such minimum capital requirements as the Commission may prescribe to address the risks associated with digital commodity trading and to ensure that the digital commodity broker or digital commodity dealer, respectively, is able, at all times, to—
“(2) Futures commission merchants and other dealers.—Each futures commission merchant, introducing broker, digital commodity broker, digital commodity dealer, broker, and dealer shall maintain sufficient capital to comply with the stricter of any applicable capital requirements to which the futures commission merchant, introducing broker, digital commodity broker, digital commodity dealer, broker, or dealer, respectively, is subject under this Act or the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).
“(e) Reporting and recordkeeping.—Each digital commodity broker and digital commodity dealer—
“(1) shall make such reports as are required by the Commission by rule or regulation regarding the transactions, positions, and financial condition of the digital commodity broker or digital commodity dealer, respectively;
“(f) Daily trading records.—
“(1) In general.—Each digital commodity broker and digital commodity dealer shall maintain daily trading records of the transactions of the digital commodity broker or digital commodity dealer, respectively, and all related records (including related forward or derivatives transactions) and recorded communications, including electronic mail, instant messages, and recordings of telephone calls, for such period as the Commission may require by rule or regulation.
“(2) Information requirements.—The daily trading records shall include such information as the Commission shall require by rule or regulation.
“(g) Business conduct standards.—
“(1) In general.—Each digital commodity broker and digital commodity dealer shall conform with such business conduct standards as the Commission, by rule or regulation, prescribes related to—
“(A) fraud, manipulation, and other abusive practices involving spot or margined, leveraged, or financed digital commodity transactions (including transactions that are offered but not entered into);
“(2) Business conduct requirements.—The Commission shall, by rule, prescribe business conduct requirements which—
“(A) require disclosure by a registered digital commodity broker and registered digital commodity dealer to any counterparty to the transaction (other than an eligible contract participant) of—
“(B) establish a duty for such a digital commodity broker and such a digital commodity dealer to communicate in a fair and balanced manner based on principles of fair dealing and good faith;
“(h) Duties.—
“(1) Risk management procedures.—Each digital commodity broker and digital commodity dealer shall establish robust and professional risk management systems adequate for managing the day-to-day business of the digital commodity broker or digital commodity dealer, respectively.
“(2) Disclosure of general information.—Each digital commodity broker and digital commodity dealer shall disclose to the Commission information concerning—
“(A) the terms and conditions of the transactions of the digital commodity broker or digital commodity dealer, respectively;
“(B) the trading operations, mechanisms, and practices of the digital commodity broker or digital commodity dealer, respectively;
“(3) Ability to obtain information.—Each digital commodity broker and digital commodity dealer shall—
“(4) Conflicts of interest.—Each digital commodity broker and digital commodity dealer shall establish, maintain, and enforce written policies and procedures reasonably designed, taking into consideration the nature of the business of the person, to mitigate any conflicts of interest in transactions or arrangements with affiliates.
“(i) Designation of chief compliance officer.—
“(1) In general.—Each digital commodity broker and digital commodity dealer shall designate an individual to serve as a chief compliance officer.
“(2) Duties.—The chief compliance officer shall—
“(A) report directly to the board or to the senior officer of the registered digital commodity broker or registered digital commodity dealer;
“(B) review the compliance of the registered digital commodity broker or registered digital commodity dealer with respect to the registered digital commodity broker and registered digital commodity dealer requirements described in this section;
“(C) in consultation with the board of directors, a body performing a function similar to the board, or the senior officer of the organization, resolve any conflicts of interest that may arise;
“(D) be responsible for administering each policy and procedure that is required to be established pursuant to this section;
“(E) ensure compliance with this Act (including regulations), including each rule prescribed by the Commission under this section;
“(3) Annual reports.—
“(A) IN GENERAL.—In accordance with rules prescribed by the Commission, the chief compliance officer shall annually prepare and sign a report that contains a description of—
“(B) REQUIREMENTS.—The chief compliance officer shall ensure that a compliance report under subparagraph (A)—
“(j) Segregation of digital commodities.—
“(1) Holding of customer assets.—
“(A) IN GENERAL.—Each digital commodity broker and digital commodity dealer shall hold customer money, assets, and property in a manner to minimize the risk of loss to the customer or unreasonable delay in customer access to the money, assets, and property of the customer.
“(B) QUALIFIED DIGITAL ASSET CUSTODIAN.—Each digital commodity broker and digital commodity dealer shall hold in a qualified digital asset custodian each unit of a digital asset that is—
“(i) the property of a customer or counterparty of the digital commodity broker or digital commodity dealer, respectively;
“(2) Segregation of funds.—
“(A) IN GENERAL.—Each digital commodity broker and digital commodity dealer shall treat and deal with all money, assets, and property that is received by the digital commodity broker or digital commodity dealer, or accrues to a customer as the result of trading in digital commodities, as belonging to the customer.
“(B) COMMINGLING PROHIBITED.—
“(i) IN GENERAL.—Except as provided in clause (ii), each digital commodity broker and digital commodity dealer shall separately account for money, assets, and property of a digital commodity customer, and shall not commingle any such money, assets, or property with the funds of the digital commodity broker or digital commodity dealer, respectively, or use any such money, assets, or property to margin, secure, or guarantee any trades or accounts of any customer or person other than the person for whom the money, assets, or property are held.
“(ii) EXCEPTIONS.—
“(I) USE OF FUNDS.—
“(aa) IN GENERAL.—A digital commodity broker or digital commodity dealer may, for convenience, commingle and deposit in the same account or accounts with any bank, trust company, derivatives clearing organization, or qualified digital asset custodian money, assets, and property of customers.
“(bb) WITHDRAWAL.—The share of the money, assets, and property described in item (aa) as in the normal course of business shall be necessary to margin, guarantee, secure, transfer, adjust, or settle a contract of sale of a digital commodity with a registered entity may be withdrawn and applied to such purposes, including the payment of commissions, brokerage, interest, taxes, storage, and other charges, lawfully accruing in connection with the contract.
“(II) COMMISSION ACTION.—In accordance with such terms and conditions as the Commission may prescribe by rule, regulation, or order, any money, assets, or property of the customers of a digital commodity broker or digital commodity dealer may be commingled and deposited in customer accounts with any other money, assets, or property received by the digital commodity broker or digital commodity dealer, respectively, and required by the Commission to be separately accounted for and treated and dealt with as belonging to the customer of the digital commodity broker or digital commodity dealer, respectively.
“(3) Permitted investments.—Money described in paragraph (2) may be invested in obligations of the United States, in general obligations of any State or of any political subdivision of a State, in obligations fully guaranteed as to principal and interest by the United States, or in any other investment that the Commission may by rule or regulation allow.
“(4) Customer protection during bankruptcy.—
“(A) CUSTOMER PROPERTY.—All money, assets, or property described in paragraph (2) shall be considered customer property for purposes of section 761 of title 11, United States Code.
“(B) TRANSACTIONS.—A transaction involving a unit of a digital commodity occurring with a digital commodity broker or digital commodity dealer shall be considered a ‘contract for the purchase or sale of a commodity for future delivery, on or subject to the rules of, a contract market or board of trade’ for purposes of the definition of a ‘commodity contract’ in section 761 of title 11, United States Code.
“(5) Misuse of customer property.—
“(A) IN GENERAL.—It shall be unlawful—
“(i) for any digital commodity broker or digital commodity dealer that has received any customer money, assets, or property for custody to dispose of, or use any such money, assets, or property as belonging to the digital commodity broker or digital commodity dealer, respectively, or any person other than a customer of the digital commodity broker or digital commodity dealer, respectively; or
“(ii) for any other person, including any depository, digital commodity exchange, other digital commodity broker, other digital commodity dealer, or digital commodity custodian that has received any customer money, assets, or property for deposit, to hold, dispose of, or use any such money, assets, or property, as belonging to the depositing digital commodity broker or digital commodity dealer or any person other than the customers of the digital commodity broker or digital commodity dealer, respectively.
“(B) USE FURTHER DEFINED.—For purposes of this section, ‘use’ of a digital commodity includes utilizing any unit of a digital asset to participate in a blockchain service defined in paragraph (6) or a decentralized governance system associated with the digital commodity or the blockchain system to which the digital commodity relates in any manner other than that expressly directed by the customer from whom the unit of a digital commodity was received.
“(6) Participation in blockchain services.—
“(A) IN GENERAL.—A customer shall have the right to waive the restrictions in paragraph (2) for any unit of a digital commodity to be used under subparagraph (B) of this paragraph, by affirmatively electing, in writing to the digital commodity broker or digital commodity dealer, to waive the restrictions.
“(B) USE OF FUNDS.—Customer digital commodities removed from segregation under subparagraph (A) may be pooled and used by the digital commodity broker or digital commodity dealer, or one of their designees, to provide a blockchain service for a blockchain system to which the unit of the digital asset removed from segregation in subparagraph (A) relates.
“(C) LIMITATIONS.—
“(i) IN GENERAL.—The Commission shall, by rule, establish notice and disclosure requirements, and may, by rule, establish any other limitations and rules related to the waiving of any restrictions under this paragraph that are reasonably necessary to protect customers, including eligible contract participants, non-eligible contract participants, or any other class of customers.
“(k) Federal preemption.—Notwithstanding any other provision of law, the Commission shall have exclusive jurisdiction over any digital commodity broker or digital commodity dealer registered under this section with respect to activities subject to this Act, except as provided in section 5k.
“(l) Exemptions.—In order to promote responsible innovation and fair competition, or protect customers, the Commission may (on its own initiative or on application of the registered digital commodity broker or registered digital commodity dealer) exempt, unconditionally or on stated terms or conditions, or for stated periods, and retroactively or prospectively, or both, a registered digital commodity broker or registered digital commodity dealer from the requirements of this section, if the Commission determines that—
“(1) (A) the exemption would be consistent with the public interest and the purposes of this Act; and
“(2) the registered digital commodity broker or registered digital commodity dealer is subject to comparable, comprehensive supervision and regulation by the appropriate government authorities in the home country of the registered digital commodity broker or registered digital commodity dealer, respectively.”.
(a) In general.—Section 4k of the Commodity Exchange Act (7 U.S.C. 6k) is amended—
(2) by inserting after subsection (3) the following:
“(4) It shall be unlawful for any person to act as an associated person of a digital commodity broker or an associated person of a digital commodity dealer unless the person is registered with the Commission under this Act and such registration shall not have expired, been suspended (and the period of suspension has not expired), or been revoked. It shall be unlawful for a digital commodity broker or a digital commodity dealer to permit such a person to become or remain associated with the digital commodity broker or digital commodity dealer if the digital commodity broker or digital commodity dealer knew or should have known that the person was not so registered or that the registration had expired, been suspended (and the period of suspension has not expired), or been revoked.”; and
(b) Conforming amendments.—The Commodity Exchange Act (7 U.S.C. 1a et seq.) is amended by striking “section 4k(6)” each place it appears and inserting “section 4k(7)”.
(a) In general.—Section 4m(3) of the Commodity Exchange Act (7 U.S.C. 6m(3)) is amended—
(b) Exemptive authority.—Section 4m of such Act (7 U.S.C. 6m) is amended by adding at the end the following:
“(4) Exemptive authority.—The Commission shall promulgate rules to provide appropriate exemptions for commodity pool operators and commodity trading advisors, to provide relief from duplicative, conflicting, or unduly burdensome requirements or to promote responsible innovation, to the extent the exemptions foster the development of fair and orderly cash or spot digital commodity markets, are necessary or appropriate in the public interest, and are consistent with the protection of customers.”.
The Commodity Exchange Act (7 U.S.C. 1 et seq.), as amended by the preceding provisions of this Act, is amended by inserting after section 4u the following:
“SEC. 4v. DECENTRALIZED FINANCE ACTIVITIES NOT SUBJECT TO THIS ACT.
“(a) In general.—Notwithstanding any other provision of this Act, a person shall not be subject to this Act and the regulations promulgated under this Act based on the person directly or indirectly engaging in any of the following activities, whether singly or in combination, in relation to the operation of a blockchain system or in relation to decentralized finance trading protocol:
“(1) Compiling network transactions or relaying, searching, sequencing, validating, or acting in a similar capacity.
“(2) Providing computational work, operating a node or oracle service, or procuring, offering, or utilizing network bandwidth, or other similar incidental services.
“(3) Providing a user-interface that enables a user to read, and access data about a blockchain system.
“(4) Developing, publishing, constituting, administering, maintaining, or otherwise distributing a blockchain system or a decentralized finance trading protocol.
“(5) Developing, publishing, constituting, administering, maintaining, or otherwise distributing a decentralized finance messaging system or operating or participating in a liquidity pool for the purpose of executing a contract of sale of a digital commodity.
“(6) Developing, publishing, constituting, administering, maintaining, or otherwise distributing software or systems that create or deploy hardware or software, including wallets or other systems, facilitating an individual user’s own personal ability to keep, safeguard, or custody the user’s digital assets or related private keys.
(a) Collection of fees.—
(1) In general.—The Commodity Futures Trading Commission (in this section referred to as the “Commission”) shall charge and collect a filing fee from each person who files with the Commission a statement of provisional registration as a digital commodity exchange, digital commodity broker, or digital commodity dealer pursuant to section 106.
(b) Fee schedule.—
(1) In general.—The Commission shall publish in the Federal Register a schedule of the fees to be charged and collected under this section.
(2) Content.—The fee schedule for a fiscal year shall include a written analysis of the estimate of the Commission of the total costs of carrying out the functions of the Commission under this Act during the fiscal year.
(3) Submission to congress.—Before publishing the fee schedule for a fiscal year, the Commission shall submit a copy of the fee schedule to the Committees on Agriculture and on Appropriations of the House of Representatives and the Committees on Agriculture, Nutrition, and Forestry and on Appropriations of the Senate.
(c) Late payment penalty.—
(d) Reimbursement of excess fees.—To the extent that the total amount of fees collected under this section during a fiscal year that begins after the date of the enactment of this Act exceeds the amount provided under subsection (a)(2) with respect to the fiscal year, the Commission shall reimburse the excess amount to the persons who have timely paid their annual fees, on a pro-rata basis that excludes penalties, and shall do so within 60 days after the end of the fiscal year.
(e) Deposit of fees into the Treasury.—All amounts collected under this section shall be credited to the currently applicable appropriation, account, or fund of the Commission as discretionary offsetting collections, and shall be available for the purposes authorized in subsection (f) only to the extent and in the amounts provided in advance in appropriations Acts.
(f) Authorization of appropriations.—In addition to amounts otherwise authorized to be appropriated to the Commission, there is authorized to be appropriated to the Commission amounts collected under this section to cover the costs the costs of carrying out the functions of the Commission under this Act.
(g) Expedited hiring authority.—
(1) Appointment authority.—The Chairman, pursuant to section 6(a), may appoint individuals to a position described in paragraph (2) of this subsection—
The Commodity Exchange Act (7 U.S.C. 1 et seq.), as amended by the preceding provisions of this Act, is amended by inserting after section 5j the following:
“SEC. 5k. EXEMPTION FOR CERTAIN REGISTERED ENTITIES ENGAGED IN DIGITAL COMMODITY ACTIVITIES.
“(a) By alternative trading systems.—
“(1) In general.—On receipt by the Commission from an alternative trading system of a written or electronic notice that contains such information as the Commission, by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors, the alternative trading system shall be exempt from registration as a digital commodity exchange pursuant to section 5i if—
“(A) the alternative trading system does not list any retail commodity transactions pursuant to section 2(c)(2)(D);
“(B) the provider, or an affiliate person of the provider, of the alternative trading system is not otherwise registered under this Act;
“(2) Further requirements.—An alternative trading system that provides notice to the Commission pursuant to paragraph (1) of this subsection shall be exempt from the requirements of section 5i to the extent that the alternative trading system—
“(A) is in compliance with requirements consistent with the requirements of section 5i and imposed on the alternative trading system by the Securities and Exchange Commission;
“(B) annually files with the Commission, in a form and manner acceptable to the Commission, a notice that demonstrates compliance with this paragraph and contains any other information the Commission determines to be necessary or appropriate to perform the duties of the Commission under this Act; and
“(b) By registered intermediaries.—
“(1) In general.—On receipt by the Commission, from a broker or dealer that is registered with the Securities and Exchange Commission, of a written or electronic notice that contains such information as the Commission, by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors, the broker or dealer shall be exempt from registration as a digital commodity broker or digital commodity dealer pursuant to section 4u of this Act if—
“(A) the broker or dealer does not offer or engage in any retail commodity transactions pursuant to section 2(c)(2)(D) of this Act or other contracts of sale of commodities, except for digital commodities, currencies, and securities;
“(C) the broker or dealer is not subject to a statutory disqualification, as defined under section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)); and
“(2) Further requirements.—A broker or dealer that provides notice to the Commission pursuant to paragraph (1) shall be exempt from the requirements of section 4u to the extent that the broker or dealer—
“(A) is in compliance with requirements consistent with the requirements of section 4u and imposed on the broker or dealer by the Securities and Exchange Commission;
“(B) annually files with the Commission, in a form and manner acceptable to the Commission, a notice that demonstrates compliance with this subsection and contains any other information the Commission determines to be necessary or appropriate to perform the duties of the Commission under this Act; and
The Commodity Exchange Act (7 U.S.C. 1 et seq.), as amended the preceding provisions of this Act, is amended by inserting after section 4v the following:
“SEC. 4w. LIMITATION ON TRANSACTIONS BY BLOCKCHAIN CONTROL PERSONS.
“(a) Limitation.—It shall be unlawful for a blockchain control person with respect to a blockchain system certified as a mature blockchain system in accordance with section 42 of the Securities Exchange Act of 1934 to sell a unit of a digital commodity related to the blockchain system unless the person files notice with the Commission, in a form and manner determined by the Commission, that the person has or intends to obtain an authority described in subsection (b)(1) with respect to the blockchain system, and complies with rules adopted by the Commission that require—
“(1) disclosure of information to the Commission and the public about the material activities, as determined by the Commission, of the blockchain control person; and
“(b) Definitions.—In this section:
“(1) Blockchain control person.—The term ‘blockchain control person’ means, with respect to a blockchain system, any person or group of persons under common control who—
“(A) has the unilateral authority, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, to control or materially alter the functionality, operation, or rules of consensus or agreement of the blockchain system or its related digital commodity; or
“(B) has the unilateral authority to direct the voting, in the aggregate, of 20 percent or more of the outstanding voting power of the blockchain system by means of a related digital commodity, nodes or validators, a decentralized governance system, or otherwise, in a blockchain system which can be altered by a voting system.
“(2) Digital commodity affiliated person.—The term ‘digital commodity affiliated person’ means any person directly or indirectly controlling, controlled by, or under common control with a blockchain control person, as the Commission by rule or regulation, may determine will effectuate the purposes of this section.”.
Unless otherwise provided in this title, this title and the amendments made by this title shall take effect 360 days after the date of the 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—
(a) Findings.—Congress finds the following:
(2) Digital commodity networks represent a new way for people to join together and cooperate with one another to undertake certain activities.
(3) Digital commodities have the potential to be the foundational building blocks of these systems, aligning the economic incentive for individuals to cooperate with one another to achieve a common purpose.
(4) The digital commodity ecosystem has the potential to grow our economy and improve everyday lives of Americans by facilitating collaboration through the use of technology to manage activities, allocate resources, and facilitate decision making.
(5) Blockchain systems and the digital commodities they empower provide control, enhance transparency, reduce transaction costs, and increase efficiency if proper protections are put in place for investors, consumers, our financial system, and our national security.
(6) Blockchain technology facilitates new types of network participation which businesses in the United States may utilize in innovative ways.
(7) Other digital commodity companies are setting up their operations outside of the United States, where countries are establishing frameworks to embrace the potential of blockchain technology and digital commodities and provide safeguards for consumers.
(b) Sense of Congress.—It is the sense of Congress that—
(1) the United States should seek to prioritize understanding the potential opportunities of the next generation of the internet;
(2) the United States should seek to foster advances in technology that have robust evidence indicating they can improve our financial system and create more fair and equitable access to financial services for everyday Americans while protecting our financial system, investors, and consumers;
(3) the United States must support the responsible development of digital commodities and the underlying technology in the United States or risk the shifting of the development of such assets and technology outside of the United States, to less regulated countries;
(4) Congress should consult with public and private sector stakeholders to understand how to enact a functional framework tailored to the specific risks and unique benefits of different digital commodity-related activities, distributed ledger technology, distributed networks, and mature blockchain systems;
(a) Securities Act of 1933.—Section 2(b) of the Securities Act of 1933 (15 U.S.C. 77(b)) is amended—
(b) Securities Exchange act of 1934.—Section 3(f) of the Securities Exchange Act of 1934 (15 U.S.C. 78(c)) is amended—
(c) Investment Advisers Act of 1940.—Section 202(c) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–2) is amended—
(d) Investment Company Act of 1940.—Section 2(c) of the Investment Company Act of 1940 (15 U.S.C. 80a–2) is amended—
Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d) is amended by adding at the end the following:
“(l) Strategic Hub for Innovation and Financial Technology.—
“(1) Establishment.—Not later than 180 days after the date of the enactment of this subsection, the Securities and Exchange Commission shall establish a committee to be known as the Strategic Hub for Innovation and Financial Technology (referred to in this subsection as the ‘FinHub’) to support engagement on emerging technologies in the financial sector.
“(2) Members.—The composition of FinHub shall be determined by the Commission, drawing from relevant divisions as appropriate, including the Division of Trading and Markets, Division of Corporate Finance, and Division of Investment Management.
(a) In general.—Section 18 of the Commodity Exchange Act (7 U.S.C. 22) is amended by adding at the end the following:
“(c) LabCFTC.—
“(2) Purpose.—The purposes of LabCFTC are to—
“(A) promote responsible financial technology innovation and fair competition for the benefit of the American public;
“(3) Director.—LabCFTC shall have a Director, who shall be appointed by the Commission and serve at the pleasure of the Commission. Notwithstanding section 2(a)(6)(A), the Director shall report directly to the Commission and perform such functions and duties as the Commission may prescribe.
“(4) Duties.—LabCFTC shall—
“(A) advise the Commission with respect to rulemakings or other agency or staff action regarding financial technology;
“(C) advise the Commission regarding financial technology that would bolster the Commission’s oversight functions;
“(D) engage with academia, students, and professionals on financial technology issues, ideas, and technology relevant to activities under this Act;
“(5) Report to Congress.—
“(A) IN GENERAL.—Not later than October 31 of each year after 2025, LabCFTC shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report on its activities.
“(B) CONTENTS.—Each report required under paragraph (1) shall include—
“(iii) information on steps LabCFTC has taken to improve Commission services, including responsiveness to the concerns of persons;
(b) Conforming amendments.—Section 2(a)(6)(A) of such Act (7 U.S.C. 2(a)(6)(A)) is amended—
(a) In general.—The Commodity Futures Trading Commission, the Securities and Exchange Commission, and the Secretary of the Treasury shall jointly carry out a study on decentralized finance that analyzes—
(4) the interoperability of blockchain applications and software-based systems, including websites and wallets;
(5) the decentralized governance systems through which blockchain applications may be developed, published, constituted, administered, maintained, or otherwise distributed, including—
(8) the extent to which decentralized finance has integrated with the traditional financial markets and any potential risks or improvements to the stability of the markets;
(9) how the levels of illicit activity in decentralized finance compare with the levels of illicit activity in traditional financial markets;
(b) Consultation.—In carrying out the study required under subsection (a), the Commodity Futures Trading Commission and the Securities and Exchange Commission shall consult with the Secretary of the Treasury on the factors described under paragraphs (7) through (10) of subsection (a).
(c) Report.—Not later than 1 year after the date of enactment of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly submit to the relevant congressional committees a report that includes the results of the study required by subsection (a).
(d) GAO Study.—The Comptroller General of the United States shall—
(e) Definitions.—In this section:
(1) Decentralized finance.—
(A) IN GENERAL.—The term “decentralized finance” means blockchain applications (including decentralized finance trading protocols and related decentralized finance messaging systems) that allow users to engage in financial transactions in a self-directed manner so that a third-party intermediary does not effectuate the transactions or take custody of digital commodities of a user during any part of the transactions.
(a) In general.—The Comptroller General of the United States shall carry out a study of non-fungible tokens that analyzes—
(2) the similarities and differences between non-fungible tokens and other digital commodities, including digital commodities and permitted payment stablecoins, and how the markets for those digital commodities intersect with each other;
(9) whether and how non-fungible tokens have integrated with traditional marketplaces, including those for music, real estate, gaming, events, and travel;
(a) In general.—The Commodity Futures Trading Commission with the Securities and Exchange Commission shall jointly conduct a study to identify—
(1) the existing level of financial literacy among retail digital commodity holders, including subgroups of investors identified by the Commodity Futures Trading Commission with the Securities and Exchange Commission;
(2) methods to improve the timing, content, and format of financial literacy materials regarding digital commodities provided by the Commodity Futures Trading Commission and the Securities and Exchange Commission;
(3) methods to improve coordination between the Securities and Exchange Commission and the Commodity Futures Trading Commission with other agencies, including the Financial Literacy and Education Commission as well as nonprofit organizations and State and local jurisdictions, to better disseminate financial literacy materials;
(4) the efficacy of current financial literacy efforts with a focus on rural communities and communities with majority minority populations;
(5) the most useful and understandable relevant information, including clear disclosures, that retail digital commodity holders need to make informed financial decisions before engaging with or purchasing a digital commodity or service that is typically sold to retail investors of digital commodities;
(6) the most effective public-private partnerships in providing financial literacy regarding digital commodities to consumers;
(b) Report.—Not later than 1 year after the date of the enactment of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly submit a written report on the study required by subsection (a) to the Committees on Financial Services and on Agriculture of the House of Representatives and the Committees on Banking, Housing, and Urban Affairs and on Agriculture, Nutrition, and Forestry of the Senate.
(a) In general.—The Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly conduct a study to assess whether additional guidance or rules are necessary to facilitate the development of tokenized securities and derivatives products, and to the extent such guidance or rules would foster the development of fair and orderly financial markets, be necessary or appropriate in the public interest, and be consistent with the protection of investors and customers.
(b) Report.—
(1) Time limit.—Not later than 1 year after the date of enactment of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly submit to the relevant congressional committees a report that includes the results of the study required by subsection (a).
(a) Study required.—The Secretary of the Treasury shall conduct a study on the potential use of blockchain technology by the domestic private sector to address—
(b) Report to Congress.—Not later than one year after the date of enactment of this Act, the Secretary shall submit a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate that summarizes the findings of the study required under subsection (a).
Union Calendar No. 134 | |||||
| |||||
[Report No. 119–168, Parts I and II] | |||||
A BILL | |||||
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, and for other purposes. | |||||
June 23, 2025 | |||||
Reported from the Committee on Agriculture with an amendment | |||||
June 23, 2025 | |||||
Reported from the Committee on Financial Services with an amendment; committed to the Committee of the Whole House on the State of the Union and ordered to be printed |