HR 3633 — Digital Asset Market Clarity Act

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TITLE<DELETED>TITLE IV--REGISTRATION FOR DIGITAL COMMODITY INTERMEDIARIES AT THE COMMODITY FUTURES TRADING COMMISSION Sec.<DELETED>Sec.

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TITLE<DELETED>TITLE V--INNOVATION AND TECHNOLOGY IMPROVEMENTS Sec.<DELETED>Sec.

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TITLE<DELETED>TITLE VI--ANTI-CBDC SURVEILLANCE STATE ACT Sec.<DELETED>Sec.

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TITLE<DELETED>TITLE I--DEFINITIONS;

EXPEDITED REGISTRATIONREGISTRATION</DELETED> SEC.<DELETED>SEC.

DEFINITIONS UNDER THE SECURITIES ACT OF 1933.1933.</DELETED> <DELETED> Section 2(a) of the Securities Act of 1933 (15 U.S.C.

Section77b(a)) 2(a)is ofamended by adding at the Securitiesend Actthe following:</DELETED> <DELETED> ``(20) Blockchain.--The term `blockchain' means-- </DELETED> <DELETED> ``(A) any technology--</DELETED> <DELETED> ``(i) where data is--</DELETED> <DELETED> ``(I) shared across a network to create a distributed ledger of 1933independently (15verifiable U.S.C.transactions or information among network participants;</DELETED> <DELETED> ``(II) linked using cryptography to maintain the integrity of the distributed ledger and to execute other functions;

77b(a))and</DELETED> is<DELETED> amended``(III) bypropagated addingamong atnetwork participants to reach consensus on the endstate of the following:distributed ledger and any other functions;

``(20)and</DELETED> Blockchain.--The<DELETED> term``(ii) `blockchain'composed means-- ``(A) any technology-- ``(i) where data is-- ``(I) shared across a network to create a distributed ledger of independentlysource verifiablecode transactionsthat oris informationpublicly amongavailable; network participants;

``(II)and</DELETED> linked<DELETED> using``(B) cryptographyany similar technology to maintainthe technology described in subparagraph (A).</DELETED> <DELETED> ``(21) Blockchain application.--The term `blockchain application' means any executable software that is deployed to a blockchain and composed of source code that is publicly available, including a smart contract or any network of smart contracts, or other similar technology.</DELETED> <DELETED> ``(22) Blockchain protocol.--The term `blockchain protocol' means publicly available source code of a blockchain that is executed by the integritynetwork participants of a blockchain to facilitate its functioning, or other similar technology.</DELETED> <DELETED> ``(23) Blockchain system.--The term `blockchain system' means any blockchain, together with its blockchain protocol or any blockchain application or network of blockchain applications.</DELETED> <DELETED> ``(24) Decentralized governance system.-- </DELETED> <DELETED> ``(A) In general.--The term `decentralized governance system' means, with respect to a blockchain system, any transparent, rules-based system permitting persons to form consensus or reach agreement in the distributeddevelopment, ledgerprovision, publication, maintenance, or administration of such blockchain system, where participation is not limited to, or under the effective control of, any person or group of persons under common control.</DELETED> <DELETED> ``(B) Relationship of persons to decentralized governance systems.--With respect to a decentralized governance system, the decentralized governance system and any persons participating in the decentralized governance system shall be treated as separate persons unless such persons are under common control or acting pursuant to executean otheragreement functions;to act in concert.</DELETED> <DELETED> ``(C) Legal entities for decentralized governance systems.--The term `decentralized governance system' shall include a legal entity used to implement the rules-based system described in subparagraph (A), provided that the legal entity does not operate pursuant to centralized management.

andFor ``(III)the propagatedpurposes amongof networkthis participantssubparagraph, tothe reachdelegation consensusof onministerial or administrative authority at the statedirection of the distributedparticipants ledgerin anda decentralized governance system shall not be construed to be centralized management.</DELETED> <DELETED> ``(25) Digital asset.--The term `digital asset' means any digital representation of value which is recorded on a cryptographically-secured distributed ledger or other functions;similar technology.</DELETED> <DELETED> ``(26) Digital commodity.--The term `digital commodity' has the meaning given that term under section 1a of the Commodity Exchange Act (7 U.S.C.

and1a).</DELETED> ``(ii)<DELETED> composed``(27) Digital commodity affiliated person.--The term `digital commodity affiliated person'--</DELETED> <DELETED> ``(A) means a person (including a digital commodity related person) that, with respect to any digital commodity--</DELETED> <DELETED> ``(i) acquires or has any right to acquire 5 percent or more of sourcethe codetotal thatoutstanding units of such digital commodity from a digital commodity issuer or an agent or underwriter thereof;</DELETED> <DELETED> ``(ii) is publiclya available;founder of the digital commodity issuer;

andor</DELETED> ``(B)<DELETED> any``(iii) is an executive officer, director, trustee, general partner, or person serving in a similar technologycapacity toof the technologydigital describedcommodity issuer or held such role at any point in subparagraphthe (A).previous 12-month period;

``(21)and</DELETED> Blockchain<DELETED> application.--The``(B) termdoes `blockchainnot application'include meansa anydecentralized executablegovernance softwaresystem.</DELETED> that<DELETED> is``(28) deployedDigital commodity issuer.--</DELETED> <DELETED> ``(A) In general.--With respect to a blockchaindigital andcommodity, composedthe ofterm source`digital codecommodity thatissuer' ismeans publiclyany available,person includingthat--</DELETED> a<DELETED> smart``(i) contractissues or anycauses networkto ofbe smartissued, contracts,or proposes to issue or othercause similarto technology.be issued, a unit of such digital commodity to a person;

``(22)or</DELETED> Blockchain<DELETED> protocol.--The``(ii) termoffers `blockchainor protocol'sells meansa publiclyright availableto sourcea codefuture issuance of a blockchainunit thatof issuch executeddigital bycommodity to a person.</DELETED> <DELETED> ``(B) Prohibition on evasion.--It shall be unlawful for any person to knowingly evade classification as a `digital commodity issuer' and facilitate an arrangement for the networkprimary participantspurpose 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 facilitatewhich itsthe functioning,digital commodity relates.</DELETED> <DELETED> ``(29) Digital commodity related person.-- </DELETED> <DELETED> ``(A) In general.--With respect to a digital commodity issuer, the term `digital commodity related person'--</DELETED> <DELETED> ``(i) means a person--</DELETED> <DELETED> ``(I) that is or otherwas in the previous 6-month period a promoter, senior employee, advisory board member, consultant, advisor, or person serving in a similar technology.capacity;

``(23)or</DELETED> Blockchain<DELETED> system.--The``(II) termthat `blockchainacquires system'or meanshas any blockchain,right togetherto withacquire its1 blockchainpercent protocol or anymore blockchainof applicationthe ortotal networkoutstanding units of blockchainsuch applications.digital commodity from a digital commodity issuer or an agent or underwriter thereof;

``(24)and</DELETED> Decentralized<DELETED> ``(ii) does not include a decentralized governance system.--system.</DELETED> ``(A)<DELETED> In``(B) general.--TheSenior termemployee `decentralizeddefined.--In governancethis system'paragraph means,and with respect to a blockchaindigital system,commodity anyissuer, transparent,the rules-basedterm system`senior permittingemployee' personsmeans toany formemployee consensusmaterially orinvolved reachin agreementthe inmanagement of the development,digital provision,commodity publication,issuer, maintenance,including ormanagement administrationof the development of suchthe blockchain system,system whereto participationwhich isthe notdigital limitedcommodity to,relates.</DELETED> or<DELETED> under``(30) theEnd effectiveuser controldistribution.--</DELETED> of,<DELETED> any``(A) personIn orgeneral.--The groupterm `end user distribution' means a distribution of personsa underunit commonof control.a digital commodity that--</DELETED> <DELETED> ``(i) does not involve an exchange of more than a nominal value of cash, property, or other assets;

``(B)and</DELETED> Relationship<DELETED> of``(ii) personsis todistributed decentralizedin governancea systems.--Withbroad respectand toequitable amanner decentralizedbased governanceon system,conditions thecapable decentralizedof governancebeing systemsatisfied andby any personsparticipant participating in the decentralizedblockchain governancesystem, including, as incentive-based rewards--</DELETED> <DELETED> ``(I) to users of the digital commodity or any blockchain system shallto bewhich treatedthe asdigital separatecommodity personsrelates;</DELETED> unless<DELETED> such``(II) personsfor areactivities underdirectly commonrelated controlto the operation of the blockchain system, such as mining, validating, staking, or actingother pursuantactivity directly tied to anthe agreementoperation toof actthe inblockchain concert.system;

``(C)or</DELETED> Legal<DELETED> entities``(III) forto decentralizedthe governanceexisting systems.--Theholders of another digital commodity, in proportion to the total units of such other digital commodity as are held by each person.</DELETED> <DELETED> ``(B) Protocol consensus participation.-- The term `decentralized`end governanceuser system'distribution' shallincludes includethe following:</DELETED> <DELETED> ``(i) Self staking.--The distribution of a legalunit entityof useda todigital implementcommodity as a programmatic result of validating or staking activity for a blockchain system's consensus mechanism, including the rules-basedstaking systemof describeda indigital subparagraphcommodity (A),and providedthe thatoperation of a node or validator for such activity where the legalowner entityof doesthe notstaked operatedigital pursuantcommodity toand centralizedoperator management.of the node or validator are the same person or entity.</DELETED> <DELETED> ``(ii) Self-custodial staking with a third party.--The distribution of a unit of a digital commodity as a programmatic result of validating or staking activity for a blockchain system's consensus mechanism, including the staking of a digital commodity and the operation of a node or validator for such activity where--</DELETED> <DELETED> ``(I) the owner of the staked digital commodity and operator of the node or validator for such activity are different persons or entities;

Forand</DELETED> <DELETED> ``(II) the purposesoperator of thisthe subparagraph,node or validator does not maintain custody or control of the delegationstaked digital commodity.</DELETED> <DELETED> ``(iii) Custodial and ancillary staking services.--Subject to the rules issued pursuant to subparagraph (C), the provision of ministerialcustodial or ancillary staking services enabling the owner of a digital commodity to participate in validating or staking activity for a blockchain system's consensus mechanism that results in the programmatic distribution of a unit of a digital commodity, provided that such custodial or ancillary services are exclusively administrative authorityor atministerial in nature.</DELETED> <DELETED> ``(C) Rulemaking to define the directioncustodial and ancillary staking services.--Not later than 270 days after the date of the participantsenactment of this paragraph, the Commission shall issue rules defining the custodial and ancillary staking services described in subparagraph (B)(iii) that are exclusively administrative or ministerial in nature, consistent with what is necessary or appropriate for the public interest or for the protection of investors.</DELETED> <DELETED> ``(31) Mature blockchain system.--The term `mature blockchain system' means a decentralizedblockchain governancesystem, systemtogether shallwith its related digital commodity, that is not becontrolled construedby toany beperson centralizedor management.group of persons under common control.</DELETED> <DELETED> ``(32) Permitted payment stablecoin.--The term `permitted payment stablecoin' means a payment stablecoin (as defined in section 2 of the GENIUS Act) issued by a permitted payment stablecoin issuer.</DELETED> <DELETED> ``(33) Permitted payment stablecoin issuer.--The term `permitted payment stablecoin issuer' has the meaning given that term in section 2 of the GENIUS Act.''.</DELETED> <DELETED>SEC.

``(25) Digital asset.--The term `digital asset' means any digital representation of value which is recorded on a cryptographically-secured distributed ledger or other similar technology.

``(26) Digital commodity.--The term `digital commodity' has the meaning given that term under section 1a of the Commodity Exchange Act (7 U.S.C.

1a).

``(27) Digital commodity affiliated person.--The term `digital commodity affiliated person'-- ``(A) means a person (including a digital commodity related person) that, with respect to any digital commodity-- ``(i) acquires or has any right to acquire percent or more of the total outstanding units of such digital commodity from a digital commodity issuer or an agent or underwriter thereof;

``(ii) is a founder of the digital commodity issuer;

or ``(iii) is an executive officer, director, trustee, general partner, or person serving in a similar capacity of the digital commodity issuer or held such role at any point in the previous 12-month period;

and ``(B) does not include a decentralized governance system.

``(28) Digital commodity issuer.-- ``(A) In general.--With respect to a digital commodity, the term `digital commodity issuer' means any person that-- ``(i) issues or causes to be issued, or proposes to issue or cause to be issued, a unit of such digital commodity to a person;

or ``(ii) offers or sells a right to a future issuance of a unit of such digital commodity to a person.

``(B) Prohibition on evasion.--It shall be unlawful for any person to knowingly evade classification as a `digital commodity issuer' and facilitate an arrangement for the primary purpose of effecting an offer, sale, distribution, or other issuance of a digital commodity, including via any arrangement involving the transfer of intellectual property associated with the blockchain system to which the digital commodity relates.

``(29) Digital commodity related person.-- ``(A) In general.--With respect to a digital commodity issuer, the term `digital commodity related person'-- ``(i) means a person-- ``(I) that is or was in the previous 6-month period a promoter, senior employee, advisory board member, consultant, advisor, or person serving in a similar capacity;

or ``(II) that acquires or has any right to acquire 1 percent or more of the total outstanding units of such digital commodity from a digital commodity issuer or an agent or underwriter thereof;

and ``(ii) does not include a decentralized governance system.

``(B) Senior employee defined.--In this paragraph and with respect to a digital commodity issuer, the term `senior employee' means any employee materially involved in the management of the digital commodity issuer, including management of the development of the blockchain system to which the digital commodity relates.

``(30) End user distribution.-- ``(A) In general.--The term `end user distribution' means a distribution of a unit of a digital commodity that-- ``(i) does not involve an exchange of more than a nominal value of cash, property, or other assets;

and ``(ii) is distributed in a broad and equitable manner based on conditions capable of being satisfied by any participant in the blockchain system, including, as incentive- based rewards-- ``(I) to users of the digital commodity or any blockchain system to which the digital commodity relates;

``(II) for activities directly related to the operation of the blockchain system, such as mining, validating, staking, or other activity directly tied to the operation of the blockchain system;

or ``(III) to the existing holders of another digital commodity, in proportion to the total units of such other digital commodity as are held by each person.

``(B) Protocol consensus participation.--The term `end user distribution' includes the following:

``(i) Self staking.--The distribution of a unit of a digital commodity as a programmatic result of validating or staking activity for a blockchain system's consensus mechanism, including the staking of a digital commodity and the operation of a node or validator for such activity where the owner of the staked digital commodity and operator of the node or validator are the same person or entity.

``(ii) Self-custodial staking with a third party.--The distribution of a unit of a digital commodity as a programmatic result of validating or staking activity for a blockchain system's consensus mechanism, including the staking of a digital commodity and the operation of a node or validator for such activity where-- ``(I) the owner of the staked digital commodity and operator of the node or validator for such activity are different persons or entities;

and ``(II) the operator of the node or validator does not maintain custody or control of the staked digital commodity.

``(iii) Custodial and ancillary staking services.--Subject to the rules issued pursuant to subparagraph (C), the provision of custodial or ancillary staking services enabling the owner of a digital commodity to participate in validating or staking activity for a blockchain system's consensus mechanism that results in the programmatic distribution of a unit of a digital commodity, provided that such custodial or ancillary services are exclusively administrative or ministerial in nature.

``(C) Rulemaking to define the custodial and ancillary staking services.--Not later than 270 days after the date of the enactment of this paragraph, the Commission shall issue rules defining the custodial and ancillary staking services described in subparagraph (B)(iii) that are exclusively administrative or ministerial in nature, consistent with what is necessary or appropriate for the public interest or for the protection of investors.

``(31) Mature blockchain system.--The term `mature blockchain system' means a blockchain system, together with its related digital commodity, that is not controlled by any person or group of persons under common control.

``(32) Permitted payment stablecoin.--The term `permitted payment stablecoin' means a payment stablecoin (as defined in section 2 of the GENIUS Act) issued by a permitted payment stablecoin issuer.

``(33) Permitted payment stablecoin issuer.--The term `permitted payment stablecoin issuer' has the meaning given that term in section 2 of the GENIUS Act.''.

SEC.

DEFINITIONS UNDER THE SECURITIES EXCHANGE ACT OF 1934.1934.</DELETED> <DELETED> Section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C.

Section78c(a)) 3(a)is ofamended--</DELETED> <DELETED> (1) by redesignating the Securitiessecond Exchangeparagraph Act(80) of(relating 1934to (15funding U.S.C.portals) as paragraph (81);

78c(a))and</DELETED> is<DELETED> amended--(2) (1) by redesignatingadding at the secondend paragraphthe (80)following:</DELETED> (relating<DELETED> to``(82) fundingBank portals)secrecy asact.--The paragraphterm (81);`Bank Secrecy Act' means--</DELETED> <DELETED> ``(A) section 21 of the Federal Deposit Insurance Act (12 U.S.C.

and1829b);</DELETED> (2)<DELETED> by``(B) addingchapter at2 theof endtitle theI following:of Public Law 91-508 (12 U.S.C.

``(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.

andand</DELETED> <DELETED> ``(C) subchapter II of chapter 53 of title 31, United States Code.Code.</DELETED> <DELETED> ``(83) Additional digital commodity-related terms.--</DELETED> <DELETED> ``(A) Securities act of 1933.--The terms `blockchain system', `decentralized governance system', `digital asset', `digital commodity affiliated person', `digital commodity issuer', `digital commodity related person', `end user distribution', `mature blockchain system', `permitted payment stablecoin', and `permitted payment stablecoin issuer' have the meaning given those terms, respectively, under section 2(a) of the Securities Act of 1933 (15 U.S.C.

``(83)77b(a)).</DELETED> Additional<DELETED> digital``(B) commodity-relatedCommodity terms.--exchange ``(A)act.--The Securities act of 1933.--The terms `blockchain system', `decentralized governance system', `digital asset',commodity', `digital commodity affiliatedbroker', person', `digital commodity issuer',dealer', `digital commodity relatedexchange', person',`decentralized `endfinance usermessaging distribution', `mature blockchain system', `permitted payment stablecoin', and `permitted`decentralized paymentfinance stablecointrading issuer'protocol' have the meaning given those terms, respectively, under section 2(a)1a of the SecuritiesCommodity Exchange Act of(7 1933 (15 U.S.C.

77b(a)).1a).''.</DELETED> SEC.

``(B) Commodity exchange act.--The terms `digital commodity', `digital commodity broker', `digital commodity dealer', `digital commodity exchange', `decentralized finance messaging system', and `decentralized finance trading protocol' have the meaning given those terms, respectively, under section 1a of the Commodity Exchange Act (7 U.S.C.

1a).''.

SEC.

<DELETED> (a) In General.--Section 1a of the Commodity Exchange Act (7 U.S.C.

1a) is amended--amended--</DELETED> <DELETED> (1) in paragraph (10)--(10)--</DELETED> <DELETED> (A) in subparagraph (A)--(A)--</DELETED> <DELETED> (i) by redesignating clauses (iii) and (iv) as clauses (iv) and (v), respectively;

andand</DELETED> <DELETED> (ii) by inserting after clause (ii) the following:following:</DELETED> <DELETED> ``(iii) digital commodity;'';

``(iii)and</DELETED> <DELETED> (B) by redesignating subparagraph (B) as subparagraph (C) and inserting after subparagraph (A) the following:</DELETED> <DELETED> ``(B) Exclusion.--For purposes of this paragraph, the term `trading in commodity interests' shall not include transacting in digital commodity;'';commodities for the purpose of--</DELETED> <DELETED> ``(i) acting as a digital commodity custodian;</DELETED> <DELETED> ``(ii) establishing, maintaining, or managing inventory or payment instruments for commercial purposes;

andor</DELETED> (B)<DELETED> by``(iii) redesignatingmaintaining subparagraphor (B)supporting asthe operation of, or validating transactions on, a blockchain system.'';</DELETED> <DELETED> (2) in paragraph (11)--</DELETED> <DELETED> (A) in subparagraph (C)(A)(i)--</DELETED> <DELETED> (i) by redesignating subclauses (III) and inserting(IV) afteras subparagraphsubclauses (A)(IV) theand following:(V), respectively;

``(B)and</DELETED> Exclusion.--For<DELETED> purposes(ii) ofby thisinserting paragraph,after thesubclause term(II) `trading in commodity interests' shall not include transacting in digital commodities for the purposefollowing:</DELETED> of--<DELETED> ``(i)``(III) acting as a digital commoditycommodity;''; custodian;

and</DELETED> <DELETED> (B) by redesignating subparagraph (B) as subparagraph (C) and inserting after subparagraph (A) the following:</DELETED> <DELETED> ``(B) Exclusion.--For purposes of this paragraph, the term `trading in commodity interests' shall not include transacting in digital commodities for the purpose of--</DELETED> <DELETED> ``(i) acting as a digital commodity custodian;</DELETED> <DELETED> ``(ii) establishing, maintaining, or managing inventory or payment instruments for commercial purposes;

oror</DELETED> <DELETED> ``(iii) maintaining or supporting the operation of, or validating transactions on, a blockchain system.'';system.'';</DELETED> <DELETED> (3) in paragraph (12)(A)(i)--</DELETED> <DELETED> (A) in subclause (II), by adding at the end a semicolon;</DELETED> <DELETED> (B) by redesignating subclauses (III) and (IV) as subclauses (IV) and (V), respectively;

(2)and</DELETED> in<DELETED> paragraph(C) (11)--by (A)inserting inafter subparagraphsubclause (A)(i)--(II) (i)the following:</DELETED> <DELETED> ``(III) a digital commodity;'';</DELETED> <DELETED> (4) by redesignating subclausesparagraphs (III)(16) andthrough (IV)(51) as subclausesparagraphs (IV)(17) through (52), respectively, and (V),inserting respectively;after paragraph (15) the following:</DELETED> <DELETED> ``(16) Terms related to digital commodities.-- </DELETED> <DELETED> ``(A) Associated person of a digital commodity broker.--</DELETED> <DELETED> ``(i) In general.--Except as provided in clause (ii), the term `associated person of a digital commodity broker' means a person who is associated with a digital commodity broker as a partner, officer, employee, or agent (or any person occupying a similar status or performing similar functions) in any capacity that involves--</DELETED> <DELETED> ``(I) the solicitation or acceptance of an order for the purchase or sale of a digital commodity;

andor</DELETED> (ii)<DELETED> by``(II) insertingthe aftersupervision subclauseof (II)any person engaged in the following:solicitation or acceptance of an order for the purchase or sale of a digital commodity.</DELETED> <DELETED> ``(ii) Exclusion.--The term `associated person of a digital commodity broker' does not include any person associated with a digital commodity broker the functions of which are solely clerical or ministerial.</DELETED> <DELETED> ``(B) Associated person of a digital commodity dealer.--</DELETED> <DELETED> ``(i) In general.--Except as provided in clause (ii), the term `associated person of a digital commodity dealer' means a person who is associated with a digital commodity dealer as a partner, officer, employee, or agent (or any person occupying a similar status or performing similar functions) in any capacity that involves--</DELETED> <DELETED> ``(I) the solicitation or acceptance of a contract for the purchase or sale of a digital commodity;

``(III)or</DELETED> <DELETED> ``(II) the supervision of any person engaged in the solicitation or acceptance of a contract for the purchase or sale of a digital commodity;'';commodity.</DELETED> <DELETED> ``(ii) Exclusion.--The term `associated person of a digital commodity dealer' does not include any person associated with a digital commodity dealer the functions of which are solely clerical or ministerial.</DELETED> <DELETED> ``(C) Bank secrecy act.--The term `Bank Secrecy Act' means--</DELETED> <DELETED> ``(i) section 21 of the Federal Deposit Insurance Act (12 U.S.C.

and1829b);</DELETED> (B)<DELETED> by``(ii) redesignatingchapter subparagraph2 (B)of astitle subparagraphI (C)of andPublic insertingLaw after91-508 subparagraph(12 (A)U.S.C. the following:

``(B) Exclusion.--For purposes of this paragraph, the term `trading in commodity interests' shall not include transacting in digital commodities for the purpose of-- ``(i) acting as a digital commodity custodian;

``(ii) establishing, maintaining, or managing inventory or payment instruments for commercial purposes;

or ``(iii) maintaining or supporting the operation of, or validating transactions on, a blockchain system.'';

(3) in paragraph (12)(A)(i)-- (A) in subclause (II), by adding at the end a semicolon;

(B) by redesignating subclauses (III) and (IV) as subclauses (IV) and (V), respectively;

and (C) by inserting after subclause (II) the following:

``(III) a digital commodity;'';

(4) by redesignating paragraphs (16) through (51) as paragraphs (17) through (52), respectively, and inserting after paragraph (15) the following:

``(16) Terms related to digital commodities.-- ``(A) Associated person of a digital commodity broker.-- ``(i) In general.--Except as provided in clause (ii), the term `associated person of a digital commodity broker' means a person who is associated with a digital commodity broker as a partner, officer, employee, or agent (or any person occupying a similar status or performing similar functions) in any capacity that involves-- ``(I) the solicitation or acceptance of an order for the purchase or sale of a digital commodity;

or ``(II) the supervision of any person engaged in the solicitation or acceptance of an order for the purchase or sale of a digital commodity.

``(ii) Exclusion.--The term `associated person of a digital commodity broker' does not include any person associated with a digital commodity broker the functions of which are solely clerical or ministerial.

``(B) Associated person of a digital commodity dealer.-- ``(i) In general.--Except as provided in clause (ii), the term `associated person of a digital commodity dealer' means a person who is associated with a digital commodity dealer as a partner, officer, employee, or agent (or any person occupying a similar status or performing similar functions) in any capacity that involves-- ``(I) the solicitation or acceptance of a contract for the purchase or sale of a digital commodity;

or ``(II) the supervision of any person engaged in the solicitation or acceptance of a contract for the purchase or sale of a digital commodity.

``(ii) Exclusion.--The term `associated person of a digital commodity dealer' does not include any person associated with a digital commodity dealer the functions of which are solely clerical or ministerial.

``(C) Bank secrecy act.--The term `Bank Secrecy Act' means-- ``(i) section 21 of the Federal Deposit Insurance Act (12 U.S.C.

1829b);

``(ii) chapter 2 of title I of Public Law 91-508 (12 U.S.C.

andand</DELETED> <DELETED> ``(iii) subchapter II of chapter 53 of title 31, United States Code.Code.</DELETED> <DELETED> ``(D) Decentralized finance messaging system.--</DELETED> <DELETED> ``(i) In general.--The term `decentralized finance messaging system' means a software application that provides a user with the ability to create or submit an instruction, communication, or message to a decentralized finance trading protocol for the purpose of executing a transaction by the user.</DELETED> <DELETED> ``(ii) Additional requirements.-- The term `decentralized finance messaging system' does not include any system that provides any person other than the user with control over--</DELETED> <DELETED> ``(I) the funds of the user;

``(D)or</DELETED> <DELETED> ``(II) the execution of the transaction of the user.</DELETED> <DELETED> ``(E) Decentralized finance messagingtrading system.--protocol.--</DELETED> <DELETED> ``(i) In general.--The term `decentralized finance messagingtrading system'protocol' means a softwareblockchain applicationsystem thatthrough provideswhich amultiple userparticipants withcan theexecute abilitya tofinancial createtransaction--</DELETED> or<DELETED> submit``(I) anin instruction,accordance communication,with oran messageautomated torule aor decentralizedalgorithm financethat tradingis protocolpredetermined forand thenon-discretionary; purpose of executing a transaction by the user.

and</DELETED> <DELETED> ``(II) without reliance on any other person to maintain control of the digital assets of the user during any part of the financial transaction.</DELETED> <DELETED> ``(ii) AdditionalExclusions.--</DELETED> requirements.--The<DELETED> ``(I) In general.--The term `decentralized finance messagingtrading system'protocol' does not include anya blockchain system thatif--</DELETED> provides<DELETED> any``(aa) a person otheror thangroup of persons under common control or acting pursuant to an agreement to act in concert has the userauthority, withdirectly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, to control over--or ``(I)materially alter the fundsfunctionality, operation, or rules of consensus or agreement of the user;blockchain system;

or</DELETED> <DELETED> ``(bb) the blockchain system does not operate, execute, and enforce its operations and transactions based solely on pre- established, transparent rules encoded directly within the source code of the blockchain system.</DELETED> <DELETED> ``(II) Special rule.--For purposes of subclause (I), a decentralized governance system shall not be considered to be a person or a group of persons under common control or acting pursuant to an agreement to act in concert.</DELETED> <DELETED> ``(F) Digital commodity.--</DELETED> <DELETED> ``(i) In general.--The term `digital commodity' means a digital asset that is intrinsically linked to a blockchain system, and the value of which is derived from or is reasonably expected to be derived from the use of the blockchain system.</DELETED> <DELETED> ``(ii) Relationship to a blockchain system.--For purposes of this subparagraph, a digital asset is intrinsically linked to a blockchain system if the digital asset is directly related to the functionality or operation of the blockchain system or to the activities or services for which the blockchain system is created or utilized, including where the digital asset is--</DELETED> <DELETED> ``(I) issued or generated by the programmatic functioning of the blockchain system;</DELETED> <DELETED> ``(II) used to transfer value between participants in the executionblockchain system;</DELETED> <DELETED> ``(III) used to access the activities or services of the transactionblockchain system;</DELETED> <DELETED> ``(IV) used to participate in the decentralized governance system of the user.blockchain system;</DELETED> <DELETED> ``(V) used or removed from circulation in whole or in part to pay fees or otherwise verify or validate transactions on the blockchain system;</DELETED> <DELETED> ``(VI) used as payment or incentive to participants in the blockchain system to engage in the activities of the blockchain system, provide services to other participants in the blockchain system, or otherwise participate in the functionality of the blockchain system;

``(E)or</DELETED> Decentralized<DELETED> finance``(VII) tradingused protocol.--as ``(i)payment Inor general.--Theincentive to participants in the blockchain system to validate transactions, secure the blockchain system, provide computational services, maintain or distribute information, or otherwise participate in the operations of the blockchain system.</DELETED> <DELETED> ``(iii) Exclusion.--The term `decentralized`digital financecommodity' tradingdoes protocol'not meansinclude any of the following:</DELETED> <DELETED> ``(I) Security.-- </DELETED> <DELETED> ``(aa) Any security, other than a blockchainnote, systeman throughinvestment whichcontract, multipleor participantsa cancertificate executeof interest or participation in any profit- sharing agreement.</DELETED> <DELETED> ``(bb) A note, an investment contract, or a financialcertificate transaction--of ``(I)interest or participation in accordanceany withprofit- sharing agreement that-- </DELETED> <DELETED> ``(AA) represents or gives the holder an automatedownership ruleinterest or algorithmother thatinterest isin predeterminedthe andrevenues, non-discretionary;profits, obligations, debts, assets, or assets or debts to be acquired of the issuer of the digital asset or another person (other than a decentralized governance system);</DELETED> <DELETED> ``(BB) makes the holder a creditor of the issuer of the digital asset or another person;

andor</DELETED> <DELETED> ``(CC) represents or gives the holder the right to receive interest or the return of principal from the issuer of the digital asset or another person.</DELETED> <DELETED> ``(II) withoutSecurity reliancederivative.--A digital asset that, based on anyits terms and other personcharacteristics, is, represents, or is functionally equivalent to maintainan controlagreement, contract, or transaction that is--</DELETED> <DELETED> ``(aa) a security future, as defined in section 2a of the digitalSecurities assetsAct of 1933;</DELETED> <DELETED> ``(bb) a security- based swap, as defined in section 2a of the userSecurities duringAct of 1933;</DELETED> <DELETED> ``(cc) a put, call, straddle, option, or privilege on any partsecurity, certificate of deposit, or group or index of securities (including any interest therein or based on the financialvalue transaction.thereof), as defined in section 2a of the Securities Act of 1933;

``(ii)or</DELETED> Exclusions.--<DELETED> ``(I)``(dd) Ina general.--Theput, termcall, `decentralizedstraddle, financeoption, tradingor protocol'privilege doeson notany includesecurity, aas blockchaindefined systemin if--section ``(aa)2a aof personthe orSecurities groupAct of persons1933.</DELETED> under<DELETED> common``(III) controlPermitted orpayment actingstablecoin.--A pursuantdigital toasset anthat agreementis toa actpermitted inpayment concertstablecoin.</DELETED> has<DELETED> the``(IV) authority,Banking directlydeposit.-- or</DELETED> indirectly,<DELETED> through``(aa) anyA contract,deposit arrangement,(as understanding,defined relationship,under orsection otherwise,3 toof control or materially alter the functionality,Federal operation,Deposit orInsurance rulesAct of(12 consensusU.S.C. or agreement of the blockchain system;

or1813)), ``(bb)regardless of the blockchaintechnology systemused doesto notrecord operate,the execute,deposit.</DELETED> and<DELETED> enforce``(bb) itsAn operationsaccount and(as transactionsdefined basedin solelysection on101 pre-of established, transparent rules encoded directly within the sourceFederal codeCredit ofUnion theAct blockchain(12 system.U.S.C.

``(II)1752)), Specialregardless rule.--Forof purposesthe oftechnology subclauseused (I),to arecord decentralizedthe governanceaccount.</DELETED> system<DELETED> shall``(V) notCommodity.--A bedigital consideredasset tothat bereferences, arepresents personan interest in, or ais groupfunctionally ofequivalent personsto--</DELETED> under<DELETED> common``(aa) controlan oragricultural actingcommodity;</DELETED> pursuant<DELETED> to``(bb) an agreementexcluded tocommodity, actother inthan concert.a security;

``(F)or</DELETED> Digital<DELETED> commodity.--``(cc) ``(i)an Inexempt general.--Thecommodity, termother `digitalthan commodity'the meansdigital acommodity itself, as shall be further defined by the Commission.</DELETED> <DELETED> ``(VI) Commodity derivative.--A digital asset thatthat, based on its terms and other characteristics, is, represents, or is intrinsicallyfunctionally linkedequivalent to aan blockchainagreement, system,contract, andor thetransaction valuethat is--</DELETED> <DELETED> ``(aa) a contract of whichsale isof deriveda fromcommodity for future delivery or isan reasonablyoption expectedthereon;</DELETED> to<DELETED> be``(bb) deriveda fromsecurity thefutures useproduct;</DELETED> of<DELETED> the``(cc) blockchaina system.swap;</DELETED> <DELETED> ``(dd) an agreement, contract, or transaction described in section 2(c)(2)(C)(i) or section 2(c)(2)(D)(i);</DELETED> <DELETED> ``(ee) a commodity option authorized under section 4c;

``(ii)or</DELETED> Relationship<DELETED> to``(ff) a blockchainleverage system.--Fortransaction purposesauthorized ofunder thissection subparagraph,19.</DELETED> a<DELETED> digital``(VII) assetPooled isinvestment intrinsicallyvehicle.--</DELETED> linked<DELETED> to``(aa) aIn blockchaingeneral.--A system if the digital asset isnot directlydescribed relatedby tosubclause the(I) functionalitythat, orbased operationon ofits theterms blockchainand systemother orcharacteristics, tois, therepresents, activities or services for which the blockchain system is createdfunctionally orequivalent utilized,to includingan whereinterest thein-- digital</DELETED> asset<DELETED> is--``(AA) ``(I)a issuedcommodity orpool, generatedas bydefined thein programmaticthis functioningAct; of the blockchain system;

``(II)or</DELETED> used<DELETED> to``(BB) transfera valuepooled betweeninvestment participantsvehicle.</DELETED> <DELETED> ``(bb) Pooled investment vehicle defined.--In this subclause, the term `pooled investment vehicle' means--</DELETED> <DELETED> ``(AA) any investment company as defined in section 3(a) of the blockchainInvestment system;Company Act of 1940 (15 U.S.C.

``(III)80a- used3(a));</DELETED> to<DELETED> access``(BB) theany activitiescompany or(as servicesdefined in section 2 of thesuch blockchainAct system;(15 U.S.C.

``(IV) used to participate in the decentralized governance system of the blockchain system;

``(V) used or removed from circulation in whole or in part to pay fees or otherwise verify or validate transactions on the blockchain system;

``(VI) used as payment or incentive to participants in the blockchain system to engage in the activities of the blockchain system, provide services to other participants in the blockchain system, or otherwise participate in the functionality of the blockchain system;

or ``(VII) used as payment or incentive to participants in the blockchain system to validate transactions, secure the blockchain system, provide computational services, maintain or distribute information, or otherwise participate in the operations of the blockchain system.

``(iii) Exclusion.--The term `digital commodity' does not include any of the following:

``(I) Security.-- ``(aa) Any security, other than a note, an investment contract, or a certificate of interest or participation in any profit-sharing agreement.

``(bb) A note, an investment contract, or a certificate of interest or participation in any profit- sharing agreement that-- ``(AA) represents or gives the holder an ownership interest or other interest in the revenues, profits, obligations, debts, assets, or assets or debts to be acquired of the issuer of the digital asset or another person (other than a decentralized governance system);

``(BB) makes the holder a creditor of the issuer of the digital asset or another person;

or ``(CC) represents or gives the holder the right to receive interest or the return of principal from the issuer of the digital asset or another person.

``(II) Security derivative.--A digital asset that, based on its terms and other characteristics, is, represents, or is functionally equivalent to an agreement, contract, or transaction that is-- ``(aa) a security future, as defined in section 2a of the Securities Act of 1933;

``(bb) a security-based swap, as defined in section 2a of the Securities Act of 1933;

``(cc) a put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), as defined in section 2a of the Securities Act of 1933;

or ``(dd) a put, call, straddle, option, or privilege on any security, as defined in section 2a of the Securities Act of 1933.

``(III) Permitted payment stablecoin.--A digital asset that is a permitted payment stablecoin.

``(IV) Banking deposit.-- ``(aa) A deposit (as defined under section 3 of the Federal Deposit Insurance Act (12 U.S.C.

1813)), regardless of the technology used to record the deposit.

``(bb) An account (as defined in section 101 of the Federal Credit Union Act (12 U.S.C.

1752)), regardless of the technology used to record the account.

``(V) Commodity.--A digital asset that references, represents an interest in, or is functionally equivalent to-- ``(aa) an agricultural commodity;

``(bb) an excluded commodity, other than a security;

or ``(cc) an exempt commodity, other than the digital commodity itself, as shall be further defined by the Commission.

``(VI) Commodity derivative.--A digital asset that, based on its terms and other characteristics, is, represents, or is functionally equivalent to an agreement, contract, or transaction that is-- ``(aa) a contract of sale of a commodity for future delivery or an option thereon;

``(bb) a security futures product;

``(cc) a swap;

``(dd) an agreement, contract, or transaction described in section 2(c)(2)(C)(i) or section 2(c)(2)(D)(i);

``(ee) a commodity option authorized under section 4c;

or ``(ff) a leverage transaction authorized under section 19.

``(VII) Pooled investment vehicle.-- ``(aa) In general.--A digital asset not described by subclause (I) that, based on its terms and other characteristics, is, represents, or is functionally equivalent to an interest in-- ``(AA) a commodity pool, as defined in this Act;

or ``(BB) a pooled investment vehicle.

``(bb) Pooled investment vehicle defined.--In this subclause, the term `pooled investment vehicle' means-- ``(AA) any investment company as defined in section 3(a) of the Investment Company Act of 1940 (15 U.S.C.

80a-3(a));

``(BB) any company (as defined in section of such Act (15 U.S.C.

oror</DELETED> <DELETED> ``(CC) any entity or person that is not an investment company but holds or will hold assets other than securities.securities.</DELETED> <DELETED> ``(VIII) Good, collectible, and other non-commodity asset.--A digital asset that has value, utility, or significance beyond its mere existence as a digital asset, including the digital equivalent of a tangible or intangible good, such as-- </DELETED> <DELETED> ``(aa) a work of art, a musical composition, a literary work, or other intellectual property;</DELETED> <DELETED> ``(bb) collectibles, merchandise, virtual land, and video game assets;</DELETED> <DELETED> ``(cc) affinity, rewards, or loyalty points, including airline miles or credit card points, that are not primarily speculative in nature;

``(VIII)or</DELETED> Good,<DELETED> collectible,``(dd) rights, licenses, and othertickets.</DELETED> non-commodity<DELETED> asset.--A``(iv) Rule of construction.--No presumption shall exist that a digital asset thatis hasa value,security, utility,nor orshall significancea beyonddigital itsasset merebe existenceexcluded asfrom being a digital asset,commodity includingpursuant to clause (iii)(I), solely due to-- </DELETED> <DELETED> ``(I) the digital equivalentasset providing voting or economic rights with respect to the blockchain system to which the digital asset relates or the decentralized governance system of athe tangibleblockchain system to which the digital asset relates;</DELETED> <DELETED> ``(II) the value of the digital asset having the potential to appreciate or intangibledepreciate good,in suchresponse as--to ``(aa)the aefforts, workoperations, or financial performance of art,the ablockchain musicalsystem composition,to awhich literarythe work,digital asset relates or otherthe intellectualdecentralized property;governance system of the blockchain system to which the digital asset relates;

``(bb)or</DELETED> collectibles,<DELETED> merchandise,``(III) virtualthe land,value andof videothe gamedigital assets;asset appreciating or depreciating due to the use of the blockchain system to which the digital asset relates or the decentralized governance system of the blockchain system to which the digital asset relates.</DELETED> <DELETED> ``(G) Digital commodity broker.-- </DELETED> <DELETED> ``(i) In general.--The term `digital commodity broker' means any person who, as a regular business--</DELETED> <DELETED> ``(I) is engaged in-- </DELETED> <DELETED> ``(aa) soliciting or accepting an order from a customer for--</DELETED> <DELETED> ``(AA) the purchase or sale of a digital commodity;

``(cc)or</DELETED> affinity,<DELETED> rewards,``(BB) oran loyaltyagreement, points,contract, including airline miles or credittransaction carddescribed points, that are not primarily speculative in nature;section 2(c)(2)(D)(iv);

and</DELETED> <DELETED> ``(bb) in conjunction with the activities in item (aa), accepts or ``(dd)maintains rights,control licenses,over-- and</DELETED> tickets.<DELETED> ``(AA) the funds of any customer;

``(iv)or</DELETED> Rule<DELETED> of``(BB) construction.--Nothe presumptionexecution shallof existany thattransaction of a digitalcustomer;</DELETED> asset<DELETED> ``(II) is aengaged security,in norsoliciting shallor aaccepting digitalorders asset be excluded from being a digitalcustomer commodityfor pursuantthe topurchase clauseor (iii)(I),sale solelyof duea to--unit ``(I)of thea digital assetcommodity providingon voting or economicsubject rights with respect to the blockchainrules system to which the digital asset relates or the decentralized governance system of thea blockchainregistered systementity; to which the digital asset relates;

``(II)or</DELETED> the<DELETED> value``(III) ofis registered with the Commission as a digital assetcommodity havingbroker.</DELETED> <DELETED> ``(ii) Exceptions.--The term `digital commodity broker' does not include a person solely because the potentialperson--</DELETED> to<DELETED> appreciate``(I) solicits or depreciateaccepts an order described in responseclause to(i)(I)(aa)(AA) thefrom efforts,a operations,customer orwho financialis performancean ofeligible thecontract blockchainparticipant;</DELETED> system<DELETED> to``(II) whichenters theinto 1 or more digital assetcommodity relatestransactions that are attributable or thesolely decentralizedincidental governanceto systemmaking, ofsending, thereceiving, blockchainor systemfacilitating topayments, whichwhether theinvolving digitala assetpayment relates;service provider or on a peer-to-peer basis;

oror</DELETED> <DELETED> ``(III) theis valuea bank (as defined under section 3(a) of the Securities Exchange Act of 1934) engaging in certain banking activities with respect to a digital assetcommodity appreciatingin the same or depreciatinga duesimilar tomanner as a bank is excluded from the usedefinition of thea blockchainbroker systemunder tosuch whichsection, as determined by the digitalCommission.</DELETED> asset<DELETED> relates``(iii) Further definition.--The Commission, by rule or regulation, may exclude from the decentralizedterm governance`digital systemcommodity broker' any person or class of persons if the blockchainCommission systemdetermines that the rule or regulation will effectuate the purposes of this Act.</DELETED> <DELETED> ``(H) Digital commodity dealer.-- </DELETED> <DELETED> ``(i) In general.--The term `digital commodity dealer' means any person who, as a regular business--</DELETED> <DELETED> ``(I) is, or offers to whichbe a counterparty to a person for the purchase or sale of a digital assetcommodity relates.as a regular business, and in conjunction with the activities, accepts or maintains control over the funds of any counterparty;

``(G)or</DELETED> Digital<DELETED> ``(II) is registered with the Commission as a digital commodity broker.--dealer.</DELETED> ``(i)<DELETED> In``(ii) general.--TheException.--The term `digital commodity broker'dealer' meansdoes anynot include a person who,solely asbecause athe regularperson--</DELETED> business--<DELETED> ``(I) is engagedor in--offers ``(aa)to solicitingbe ora acceptingcounterparty to a person who is an ordereligible fromcontract participant;</DELETED> <DELETED> ``(II) enters into a customerdigital for--commodity ``(AA)transaction with an eligible contract participant;</DELETED> <DELETED> ``(III) enters into a digital commodity transaction on or through a registered digital commodity exchange, with a registered digital commodity broker, or through a decentralized finance trading protocol;</DELETED> <DELETED> ``(IV) enters into a digital commodity transaction for the purchaseperson's own account, either individually or salein a fiduciary capacity, but not as a part of a regular business;</DELETED> <DELETED> ``(V) enters into 1 or more digital commodity;commodity transactions that are attributable or solely incidental to making, sending, receiving, or facilitating payments, whether involving a payment service provider or on a peer-to-peer basis;

or</DELETED> <DELETED> ``(VI) is a bank (as defined under section 3(a) of the Securities Exchange Act of 1934) engaging in certain banking activities with respect to a digital commodity in the same or ``(BB)a ansimilar agreement,manner contract,as a bank is excluded from the definition of a dealer under section 3(a)(5) of such Act, as determined by the Commission.</DELETED> <DELETED> ``(iii) Further definition.--The Commission, by rule or transactionregulation, describedmay exclude from the term `digital commodity dealer' any person or class of persons if the Commission determines that the rule or regulation will effectuate the purposes of this Act.</DELETED> <DELETED> ``(I) Digital commodity exchange.--The term `digital commodity exchange' means a trading facility that offers or seeks to offer a cash or spot market in at least 1 digital commodity.</DELETED> <DELETED> ``(J) Mixed digital asset transaction.-- The term `mixed digital asset transaction' means a transaction in which a digital commodity is traded for a security.</DELETED> <DELETED> ``(K) Terms defined under the securities act of 1933.--The terms `blockchain system', `decentralized governance system', `digital asset', `digital commodity issuer', `digital commodity affiliated person', `digital commodity related person', `end user distribution', `mature blockchain system', `permitted payment stablecoin', and `permitted payment stablecoin issuer' have the meaning given those terms, respectively, under section 2(c)(2)(D)(iv);2(a) of the Securities Act of 1933 (15 U.S.C.

and ``(bb) in conjunction with the activities in item (aa), accepts or maintains control over-- ``(AA) the funds of any customer;

or ``(BB) the execution of any transaction of a customer;

``(II) is engaged in soliciting or accepting orders from a customer for the purchase or sale of a unit of a digital commodity on or subject to the rules of a registered entity;

or ``(III) is registered with the Commission as a digital commodity broker.

``(ii) Exceptions.--The term `digital commodity broker' does not include a person solely because the person-- ``(I) solicits or accepts an order described in clause (i)(I)(aa)(AA) from a customer who is an eligible contract participant;

``(II) enters into 1 or more digital commodity transactions that are attributable or solely incidental to making, sending, receiving, or facilitating payments, whether involving a payment service provider or on a peer-to-peer basis;

or ``(III) is a bank (as defined under section 3(a) of the Securities Exchange Act of 1934) engaging in certain banking activities with respect to a digital commodity in the same or a similar manner as a bank is excluded from the definition of a broker under such section, as determined by the Commission.

``(iii) Further definition.--The Commission, by rule or regulation, may exclude from the term `digital commodity broker' any person or class of persons if the Commission determines that the rule or regulation will effectuate the purposes of this Act.

``(H) Digital commodity dealer.-- ``(i) In general.--The term `digital commodity dealer' means any person who, as a regular business-- ``(I) is, or offers to be a counterparty to a person for the purchase or sale of a digital commodity as a regular business, and in conjunction with the activities, accepts or maintains control over the funds of any counterparty;

or ``(II) is registered with the Commission as a digital commodity dealer.

``(ii) Exception.--The term `digital commodity dealer' does not include a person solely because the person-- ``(I) is or offers to be a counterparty to a person who is an eligible contract participant;

``(II) enters into a digital commodity transaction with an eligible contract participant;

``(III) enters into a digital commodity transaction on or through a registered digital commodity exchange, with a registered digital commodity broker, or through a decentralized finance trading protocol;

``(IV) enters into a digital commodity transaction for the person's own account, either individually or in a fiduciary capacity, but not as a part of a regular business;

``(V) enters into 1 or more digital commodity transactions that are attributable or solely incidental to making, sending, receiving, or facilitating payments, whether involving a payment service provider or on a peer-to-peer basis;

or ``(VI) is a bank (as defined under section 3(a) of the Securities Exchange Act of 1934) engaging in certain banking activities with respect to a digital commodity in the same or a similar manner as a bank is excluded from the definition of a dealer under section 3(a)(5) of such Act, as determined by the Commission.

``(iii) Further definition.--The Commission, by rule or regulation, may exclude from the term `digital commodity dealer' any person or class of persons if the Commission determines that the rule or regulation will effectuate the purposes of this Act.

``(I) Digital commodity exchange.--The term `digital commodity exchange' means a trading facility that offers or seeks to offer a cash or spot market in at least 1 digital commodity.

``(J) Mixed digital asset transaction.--The term `mixed digital asset transaction' means a transaction in which a digital commodity is traded for a security.

``(K) Terms defined under the securities act of 1933.--The terms `blockchain system', `decentralized governance system', `digital asset', `digital commodity issuer', `digital commodity affiliated person', `digital commodity related person', `end user distribution', `mature blockchain system', `permitted payment stablecoin', and `permitted payment stablecoin issuer' have the meaning given those terms, respectively, under section 2(a) of the Securities Act of 1933 (15 U.S.C.

andand</DELETED> <DELETED> (5) in paragraph (41) (as so redesignated by paragraph (4) of this subsection)--subsection)--</DELETED> <DELETED> (A) by striking ``and'' at the end of subparagraph (E);(E);</DELETED> <DELETED> (B) by striking the period at the end of subparagraph (F) and inserting ``;

(B) by striking the period at the end of subparagraph (F) and inserting ``;

andand</DELETED> <DELETED> (C) by adding at the end the following:following:</DELETED> <DELETED> ``(G) a digital commodity exchange registered under section 5i.''.</DELETED> <DELETED> (b) Conforming Amendments.--</DELETED> <DELETED> (1) Each of the following provisions of law is amended by striking ``1a(18)'' and inserting ``1a(19)'':</DELETED> <DELETED> (A) Section 4s(h)(5)(A)(i) of the Commodity Exchange Act (7 U.S.C.

``(G)6s(h)(5)(A)(i)).</DELETED> a<DELETED> digital(B) commoditySection exchange5(e) registeredof underthe sectionSecurities 5i.''.Act of (15 U.S.C.

(b)77e(e)).</DELETED> Conforming<DELETED> Amendments.--(C) (1)Section Each6(g)(5)(B) of the followingSecurities provisionsExchange Act of law1934 is(15 amendedU.S.C. by striking ``1a(18)'' and inserting ``1a(19)'':

(A)78f(g)(5)(B)).</DELETED> <DELETED> (D) Section 4s(h)(5)(A)(i)15F(h)(5)(A)(i) of the CommoditySecurities Exchange Act (7of 1934 (15 U.S.C.

6s(h)(5)(A)(i)).78o- 10(h)(5)(A)(i)).</DELETED> <DELETED> (2) Section 752 of the Wall Street Transparency and Accountability Act of 2010 (15 U.S.C.

(B)8325) is amended by striking ``1a(39)'' and inserting ``1a(40)''.</DELETED> <DELETED> (3) Section 5(e)4s(f)(1)(D) of the SecuritiesCommodity Exchange Act of(7 1933 (15 U.S.C.

77e(e)).6s(f)(1)(D)) is amended by striking ``1a(47)(A)'' and inserting ``1a(48)(A)''.</DELETED> <DELETED> (4) Each of the following provisions of the Commodity Exchange Act is amended by striking ``1a(47)(A)(v)'' and inserting ``1a(48)(A)(v)'':</DELETED> <DELETED> (A) Section 4t(b)(1)(C) (7 U.S.C.

(C)6t(b)(1)(C)).</DELETED> Section<DELETED> 6(g)(5)(B)(B) ofSection the5(d)(23) Securities(7 Exchange Act of 1934 (15 U.S.C.

78f(g)(5)(B)).7(d)(23)).</DELETED> <DELETED> (C) Section 5b(k)(3) (7 U.S.C.

(D)7a- Section1(k)(3)).</DELETED> 15F(h)(5)(A)(i)<DELETED> of(D) theSection Securities5h(f)(10)(A)(iii) Exchange(7 Act of 1934 (15 U.S.C.

78o-10(h)(5)(A)(i)).7b-3(f)(10)(A)(iii)).</DELETED> <DELETED> (5) Section 21(f)(4)(C) of the Commodity Exchange Act (7 U.S.C.

(2)24a(f)(4)(C)) is amended by striking ``1a(48)'' and inserting ``1a(49)''.</DELETED> <DELETED> (6) Section 752403 of the WallLegal StreetCertainty Transparencyfor andBank AccountabilityProducts Act of 20102000 (15(7 U.S.C.

8325)27a) is amendedamended--</DELETED> <DELETED> (A) in subsection (a)(2), by striking ``1a(39)''``1a(47)(A)(v)'' and inserting ``1a(40)''.``1a(48)(A)(v)'';

(3)and</DELETED> <DELETED> (B) in each of subsections (b)(1) and (c)(2), by striking ``1a(47)'' and inserting ``1a(48)''.</DELETED> <DELETED> (7) Section 4s(f)(1)(D)712 of the CommodityWall ExchangeStreet Transparency and Accountability Act (7of 2010 (15 U.S.C.

6s(f)(1)(D))8302) is amendedamended-- </DELETED> <DELETED> (A) in subsection (a)(8), by striking ``1a(47)(A)''``1a(47)(D)'' each place it appears and inserting ``1a(48)(A)''.``1a(48)(D)'';

(4)and</DELETED> Each<DELETED> of(B) thein followingsubsection provisions(d)(1), ofby thestriking Commodity``1a(47)(A)(v)'' Exchangeeach Actplace isit amendedappears by striking ``1a(47)(A)(v)'' and inserting ``1a(48)(A)(v)'':``1a(48)(A)(v)''.</DELETED> <DELETED>SEC.

(A) Section 4t(b)(1)(C) (7 U.S.C.

6t(b)(1)(C)).

(B) Section 5(d)(23) (7 U.S.C.

7(d)(23)).

(C) Section 5b(k)(3) (7 U.S.C.

7a-1(k)(3)).

(D) Section 5h(f)(10)(A)(iii) (7 U.S.C.

7b- 3(f)(10)(A)(iii)).

(5) Section 21(f)(4)(C) of the Commodity Exchange Act (7 U.S.C.

24a(f)(4)(C)) is amended by striking ``1a(48)'' and inserting ``1a(49)''.

(6) Section 403 of the Legal Certainty for Bank Products Act of 2000 (7 U.S.C.

27a) is amended-- (A) in subsection (a)(2), by striking ``1a(47)(A)(v)'' and inserting ``1a(48)(A)(v)'';

and (B) in each of subsections (b)(1) and (c)(2), by striking ``1a(47)'' and inserting ``1a(48)''.

(7) Section 712 of the Wall Street Transparency and Accountability Act of 2010 (15 U.S.C.

8302) is amended-- (A) in subsection (a)(8), by striking ``1a(47)(D)'' each place it appears and inserting ``1a(48)(D)'';

and (B) in subsection (d)(1), by striking ``1a(47)(A)(v)'' each place it appears and inserting ``1a(48)(A)(v)''.

SEC.

DEFINITIONS UNDER THIS ACT.ACT.</DELETED> <DELETED> In this Act:</DELETED> <DELETED> (1) Definitions under the commodity exchange act.--The terms ``decentralized finance messaging system'', ``decentralized finance trading protocol'', ``digital commodity'', ``digital commodity broker'', ``digital commodity dealer'', ``digital commodity exchange'', and ``mixed digital asset transaction'' have the meaning given those terms, respectively, under section 1a of the Commodity Exchange Act (7 U.S.C.

In1a).</DELETED> this<DELETED> Act:(2) Definitions under the securities act of 1933.--The terms ``blockchain'', ``blockchain system'', ``blockchain protocol'', ``decentralized governance system'', ``digital asset'', ``digital commodity issuer'', ``end user distribution'', ``mature blockchain system'', ``permitted payment stablecoin'', and ``permitted payment stablecoin issuer'' have the meaning given those terms, respectively, under section 2(a) of the Securities Act of 1933 (15 U.S.C.

(1)77b(a)).</DELETED> <DELETED> (3) Definitions under the commoditysecurities exchange act.--Theact termsof ``decentralized1934.--The financeterms messaging``Bank system'',Secrecy ``decentralizedAct'', finance``securities tradinglaws'', protocol'', ``digital commodity'', ``digital commodity broker'', ``digital commodity dealer'', ``digital commodity exchange'', and ``mixed``self-regulatory digitalorganization'' asset transaction'' have the meaning given those terms, respectively, under section 1a3(a) of the CommoditySecurities Exchange Act (7of 1934 (15 U.S.C.

1a).78c(a)).</DELETED> <DELETED>SEC.

(2) Definitions under the securities act of 1933.--The terms ``blockchain'', ``blockchain system'', ``blockchain protocol'', ``decentralized governance system'', ``digital asset'', ``digital commodity issuer'', ``end user distribution'', ``mature blockchain system'', ``permitted payment stablecoin'', and ``permitted payment stablecoin issuer'' have the meaning given those terms, respectively, under section 2(a) of the Securities Act of 1933 (15 U.S.C.

77b(a)).

(3) Definitions under the securities exchange act of 1934.--The terms ``Bank Secrecy Act'', ``securities laws'', and ``self-regulatory organization'' have the meaning given those terms, respectively, under section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C.

78c(a)).

SEC.

RULEMAKINGS.RULEMAKINGS.</DELETED> <DELETED> (a) Definitions.--The Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly issue rules to further define the following terms:</DELETED> <DELETED> (1) The terms--</DELETED> <DELETED> (A) ``blockchain'', ``blockchain application'', ``blockchain system'', ``blockchain protocol'', ``decentralized governance system'', ``digital commodity affiliated person'', ``digital commodity issuer'', ``digital commodity related person'', ``end user distribution'', and ``mature blockchain system'', as defined under section 2(a) of the Securities Act of 1933;</DELETED> <DELETED> (B) ``unilateral authority'', as such term is used in section 42 of the Securities Exchange Act of and section 1a of the Commodity Exchange Act;

(a)and</DELETED> Definitions.--The<DELETED> (C) ``programmatic functioning'', as such term is used in sections 4C of the Securities Act of 1933, section 42 of the Securities Exchange Act of 1934, and section 1a of the Commodity FuturesExchange TradingAct.</DELETED> Commission<DELETED> (2) The terms ``digital commodity'', ``decentralized finance messaging system'', and ``decentralized finance trading protocol'', as defined under section 1a of the Commodity Exchange Act.</DELETED> <DELETED> (b) Joint Rulemaking for Mixed Digital Asset Transactions.--The Securities and Exchange Commission and the Commodity Futures Trading Commission shall jointly issue rules applicable to mixed digital asset transactions under this Act and the amendments made by this Act, including by further definedefining such term.</DELETED> <DELETED> (c) Protection of Self-Custody.--</DELETED> <DELETED> (1) In general.--A United States individual shall retain the followingright terms:to--</DELETED> <DELETED> (A) maintain a hardware wallet or software wallet for the purpose of facilitating the individual's own lawful custody of digital assets;

(1)and</DELETED> The<DELETED> terms--(B) (A)engage ``blockchain'',in ``blockchaindirect, application'',peer-to-peer ``blockchaintransactions system'',in ``blockchaindigital protocol'',assets ``decentralizedwith governanceanother system'',individual ``digitalor commodityentity affiliatedfor person'',the ``digitalindividual's commodityown issuer'',lawful ``digitalpurposes commodityusing relateda person'',hardware ``endwallet useror distribution'',software andwallet, ``matureif-- blockchain</DELETED> system'',<DELETED> as(i) such other individual or entity is not a financial institution (as defined underin section 2(a)5312 of thetitle Securities31, ActUnited ofStates 1933;Code);

(B)and</DELETED> ``unilateral<DELETED> authority'',(ii) asthe suchtransactions termdo isnot usedinvolve any property or interests in sectionproperty 42that ofare theblocked Securitiespursuant Exchangeto, Actor ofare 1934otherwise andprohibited sectionby, 1aUnited ofStates thesanctions.</DELETED> Commodity<DELETED> Exchange(2) Act;Application.--This subsection--</DELETED> <DELETED> (A) applies solely to personal use by individuals;

andand</DELETED> (C)<DELETED> ``programmatic(B) functioning'',does asnot suchapply termto isindividuals usedacting in sectionsa 4Ccustodial ofor thefiduciary Securitiescapacity Actfor others.</DELETED> <DELETED> (3) Rule of 1933,construction.--Nothing sectionin 42this subsection shall be construed to limit the authority of the Secretary of the Treasury, the Securities and Exchange ActCommission, the Commodity Futures Trading Commission, the Board of 1934,Governors andof the Federal Reserve System, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, or the National Credit Union Administration to carry out any enforcement action or special measure authorized under applicable law, including--</DELETED> <DELETED> (A) the Bank Secrecy Act, section 1a9714 of the CommodityCombating ExchangeRussian Act.Money Laundering Act (31 U.S.C.

(2) The terms ``digital commodity'', ``decentralized finance messaging system'', and ``decentralized finance trading protocol'', as defined under section 1a of the Commodity Exchange Act.

(b) Joint Rulemaking for Mixed Digital Asset Transactions.--The Securities and Exchange Commission and the Commodity Futures Trading Commission shall jointly issue rules applicable to mixed digital asset transactions under this Act and the amendments made by this Act, including by further defining such term.

(c) Protection of Self-Custody.-- (1) In general.--A United States individual shall retain the right to-- (A) maintain a hardware wallet or software wallet for the purpose of facilitating the individual's own lawful custody of digital assets;

and (B) engage in direct, peer-to-peer transactions in digital assets with another individual or entity for the individual's own lawful purposes using a hardware wallet or software wallet, if-- (i) such other individual or entity is not a financial institution (as defined in section of title 31, United States Code);

and (ii) the transactions do not involve any property or interests in property that are blocked pursuant to, or are otherwise prohibited by, United States sanctions.

(2) Application.--This subsection-- (A) applies solely to personal use by individuals;

and (B) does not apply to individuals acting in a custodial or fiduciary capacity for others.

(3) Rule of construction.--Nothing in this subsection shall be construed to limit the authority of the Secretary of the Treasury, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, or the National Credit Union Administration to carry out any enforcement action or special measure authorized under applicable law, including-- (A) the Bank Secrecy Act, section 9714 of the Combating Russian Money Laundering Act (31 U.S.C.

oror</DELETED> <DELETED> (B) any other law relating to illicit finance, money laundering, terrorism financing, or United States sanctions.sanctions.</DELETED> <DELETED> (d) Joint Rulemaking, Procedures, or Guidance for Delisting.--Not later than 180 days after the date of the enactment of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly issue rules, procedures, or guidance (as determined appropriate by the Commissions) regarding the process to delist an asset for trading under section 106 if the Commissions determine that the listing is inconsistent with the Commodity Exchange Act, the securities laws (including regulations under those laws), or this Act.</DELETED> <DELETED> (e) Joint Rules for Portfolio Margining Determinations.-- </DELETED> <DELETED> (1) In general.--Not later than 360 days after the date of the enactment of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly issue rules describing the process for persons registered with either such Commission to seek a joint order or determination with respect to margin, customer protection, segregation, or other requirements as necessary to facilitate portfolio margining of securities (including related extensions of credit), security-based swaps, contracts for future delivery, options on a contract for future delivery, swaps, and digital commodities, or any subset thereof, in--</DELETED> <DELETED> (A) a securities account carried by a registered broker or dealer or a security-based swap account carried by a registered security-based swap dealer;</DELETED> <DELETED> (B) a futures or cleared swap account carried by a registered futures commission merchant;</DELETED> <DELETED> (C) a swap account carried by a swap dealer;

(d)or</DELETED> Joint<DELETED> Rulemaking,(D) Procedures,a digital commodity account carried by a registered digital commodity broker or Guidancedigital forcommodity Delisting.--Notdealer laterthat thanis 180also daysregistered afterin such other capacity as is necessary to also carry the dateother ofcustomer or counterparty positions being held in the enactmentaccount.</DELETED> of<DELETED> this(2) Act,Process.--With respect to a joint order or determination described in paragraph (1), the Commodityrules Futuresrequired Tradingto Commissionbe issued pursuant to paragraph (1) shall require--</DELETED> <DELETED> (A) the joint order or determination to be issued only if the order or determination is in the public interest and provides for the appropriate protection of customers;</DELETED> <DELETED> (B) applicants to file a standard application, in a form and manner determined by the Securities and Exchange Commission and the Commodity Futures Trading Commission, which shall jointlyinclude issuethe rules,information procedures,necessary orto guidancemake (asthe determinedjoint appropriateorder byor determination;</DELETED> <DELETED> (C) the Commissions)Securities regardingand Exchange Commission and the processCommodity Futures Trading Commission to delistmake ana assetfinal fordetermination tradingnot underlater sectionthan 106270 ifdays after the Commissionsfiling determineof thata completed application;</DELETED> <DELETED> (D) the listingSecurities isand inconsistentExchange withCommission and the Commodity ExchangeFutures Act,Trading theCommission securitiesto lawsconsider (includingthe regulationspublic underinterest thoseof laws),the joint order or thisdetermination Act.through the solicitation of public comments;

(e)and</DELETED> Joint<DELETED> Rules(E) forthe PortfolioSecurities Marginingand Determinations.--Exchange (1)Commission Inand general.--Notthe laterCommodity thanFutures 360Trading daysCommission afterto theconsult datewith ofother relevant foreign or domestic regulators, including the enactmentBoard of thisGovernors Act,of the CommodityFederal FuturesReserve TradingSystem, Commissionthe andFederal theDeposit SecuritiesInsurance Corporation, and Exchangethe CommissionOffice shallof jointlythe issueComptroller rulesof describing the processCurrency, foras personsappropriate.</DELETED> registered<DELETED> with(f) eitherCapital suchRequirements Commission to seekAddress aNetting jointAgreements.-- orderNo orlater determinationthan with360 respectdays tofollowing margin,the customerdate protection,of segregation,enactment orof otherthis requirementsAct, asthe necessaryBoard toof facilitateGovernors portfolioof marginingthe ofFederal securitiesReserve (includingSystem, relatedthe extensionsComptroller of credit),the security-basedCurrency, swaps,and contractsthe forFederal futureDeposit delivery,Insurance optionsCorporation onshall adevelop contractrisk-based and leverage capital requirements for futureinsured delivery,depository swaps,institutions, depository institution holding companies, and digitalnonbank commodities,financial orcompanies anysupervised subsetby thereof,the in--Board (A)of aGovernors securitiesthat accountaddress carriednetting byagreements athat registeredprovide brokerfor ortermination dealerand orclose-out anetting security-basedacross swapmultiple accounttypes carriedof byfinancial atransactions, registeredconsistent security-basedwith swapsubsection dealer;(e), in the event of a counterparty's default.</DELETED> <DELETED>SEC.

(B) a futures or cleared swap account carried by a registered futures commission merchant;

(C) a swap account carried by a swap dealer;

or (D) a digital commodity account carried by a registered digital commodity broker or digital commodity dealer that is also registered in such other capacity as is necessary to also carry the other customer or counterparty positions being held in the account.

(2) Process.--With respect to a joint order or determination described in paragraph (1), the rules required to be issued pursuant to paragraph (1) shall require-- (A) the joint order or determination to be issued only if the order or determination is in the public interest and provides for the appropriate protection of customers;

(B) applicants to file a standard application, in a form and manner determined by the Securities and Exchange Commission and the Commodity Futures Trading Commission, which shall include the information necessary to make the joint order or determination;

(C) the Securities and Exchange Commission and the Commodity Futures Trading Commission to make a final determination not later than 270 days after the filing of a completed application;

(D) the Securities and Exchange Commission and the Commodity Futures Trading Commission to consider the public interest of the joint order or determination through the solicitation of public comments;

and (E) the Securities and Exchange Commission and the Commodity Futures Trading Commission to consult with other relevant foreign or domestic regulators, including the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, as appropriate.

(f) Capital Requirements to Address Netting Agreements.--No later than 360 days following the date of enactment of this Act, the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, and the Federal Deposit Insurance Corporation shall develop risk-based and leverage capital requirements for insured depository institutions, depository institution holding companies, and nonbank financial companies supervised by the Board of Governors that address netting agreements that provide for termination and close-out netting across multiple types of financial transactions, consistent with subsection (e), in the event of a counterparty's default.

SEC.

PROVISIONAL STATUS.STATUS.</DELETED> <DELETED> (a) Registration.--</DELETED> <DELETED> (1) In general.--Unless exempted from registration, a person shall not act as a digital commodity broker, digital commodity dealer, or digital commodity exchange after the end of the 90-day period beginning on the date the process described in paragraph (2) is adopted by the Commodity Futures Trading Commission, unless, as the case may be, the person is registered as a--</DELETED> <DELETED> (A) digital commodity broker pursuant to section 4u of the Commodity Exchange Act;</DELETED> <DELETED> (B) digital commodity dealer pursuant to section 4u of the Commodity Exchange Act;

(a)or</DELETED> Registration.--<DELETED> (1)(C) Indigital general.--Unlesscommodity exemptedexchange frompursuant registration,to asection person5i shallof notthe actCommodity asExchange aAct.</DELETED> digital<DELETED> commodity(2) broker,Expedited digitalprocess.--Within commodity180 dealer,days orafter digitalthe commoditydate exchangeof after the endenactment of this Act, the 90-dayCommodity periodFutures beginningTrading onCommission theshall dateadopt, theby rule, regulation, or order, a process describedfor inexpedited paragraphregistration (2)of ispersons adoptedrequired byto thebe Commodityregistered Futurespursuant Tradingto Commission,paragraph unless,(1).</DELETED> as<DELETED> the(b) caseProvisional mayStatus.--</DELETED> be,<DELETED> the(1) In general.--A person who is registered asin a--accordance with subsection (a) of this section shall be in provisional status until--</DELETED> <DELETED> (A) in the case of a digital commodity broker pursuantor todealer, 270 days after the final effective date of the rulemakings required under section 4u of the Commodity Exchange Act;

or</DELETED> <DELETED> (B) in the case of a digital commodity dealerexchange, 270 days after the final effective date of the rulemakings required under section 5i of such Act.</DELETED> <DELETED> (2) Payment of fees.--A person in provisional status shall pay all fees and penalties required under section 410.</DELETED> <DELETED> (c) Operations Prior to Regulations.--</DELETED> <DELETED> (1) Requirements.--A person in provisional status shall be subject to the requirements of this section and the Commodity Exchange Act and any rules or regulations promulgated under this section or the Commodity Exchange Act, as applicable.</DELETED> <DELETED> (2) Listings.--</DELETED> <DELETED> (A) In general.--Except as provided in subparagraph (B), a person in provisional status may continue to offer, solicit, trade, facilitate, execute, clear, report, or otherwise deal in any digital asset offered on or through the facilities of the person before the date of registration under this section, until such time as the joint rulemaking on definitions required under section 105(a) is effective.</DELETED> <DELETED> (B) Delisting.--Before the effective date of the joint rulemaking on definitions under section 105(a), a person in provisional status shall cease offering, soliciting, trading, facilitating, executing, clearing, reporting, or otherwise dealing in any digital asset required to be delisted pursuant to a joint delisting process established under section 4u105(d).</DELETED> <DELETED> (3) Exemptive authority.--In order to promote responsible innovation and fair competition, or protect customers, the Commodity Futures Trading Commission may exempt any persons or class of persons registered pursuant to subsection (a) and in provisional status pursuant to subsection (b) from any requirements of this section or the Commodity Exchange Act;Act or any rules or regulations promulgated under this section or the Commodity Exchange Act, as applicable.</DELETED> <DELETED> (d) Customer Disclosure Before Registration.--</DELETED> <DELETED> (1) In general.--Beginning 30 days after the date of the enactment of this Act, any person acting as a digital commodity exchange, digital commodity broker, or digital commodity dealer shall disclose to the customers of the person so acting, in the disclosure documents, offering documents, and promotional material of the person so acting, in a prominent manner, that the person is not registered with or regulated by the Commodity Futures Trading Commission.</DELETED> <DELETED> (2) Expiration.--Paragraph (1) of this subsection shall not apply to any person who registers pursuant to subsection (a).</DELETED> <DELETED>SEC.

or (C) digital commodity exchange pursuant to section 5i of the Commodity Exchange Act.

(2) Expedited process.--Within 180 days after the date of the enactment of this Act, the Commodity Futures Trading Commission shall adopt, by rule, regulation, or order, a process for expedited registration of persons required to be registered pursuant to paragraph (1).

(b) Provisional Status.-- (1) In general.--A person who is registered in accordance with subsection (a) of this section shall be in provisional status until-- (A) in the case of a digital commodity broker or dealer, 270 days after the final effective date of the rulemakings required under section 4u of the Commodity Exchange Act;

or (B) in the case of a digital commodity exchange, days after the final effective date of the rulemakings required under section 5i of such Act.

(2) Payment of fees.--A person in provisional status shall pay all fees and penalties required under section 410.

(c) Operations Prior to Regulations.-- (1) Requirements.--A person in provisional status shall be subject to the requirements of this section and the Commodity Exchange Act and any rules or regulations promulgated under this section or the Commodity Exchange Act, as applicable.

(2) Listings.-- (A) In general.--Except as provided in subparagraph (B), a person in provisional status may continue to offer, solicit, trade, facilitate, execute, clear, report, or otherwise deal in any digital asset offered on or through the facilities of the person before the date of registration under this section, until such time as the joint rulemaking on definitions required under section 105(a) is effective.

(B) Delisting.--Before the effective date of the joint rulemaking on definitions under section 105(a), a person in provisional status shall cease offering, soliciting, trading, facilitating, executing, clearing, reporting, or otherwise dealing in any digital asset required to be delisted pursuant to a joint delisting process established under section 105(d).

(3) Exemptive authority.--In order to promote responsible innovation and fair competition, or protect customers, the Commodity Futures Trading Commission may exempt any persons or class of persons registered pursuant to subsection (a) and in provisional status pursuant to subsection (b) from any requirements of this section or the Commodity Exchange Act or any rules or regulations promulgated under this section or the Commodity Exchange Act, as applicable.

(d) Customer Disclosure Before Registration.-- (1) In general.--Beginning 30 days after the date of the enactment of this Act, any person acting as a digital commodity exchange, digital commodity broker, or digital commodity dealer shall disclose to the customers of the person so acting, in the disclosure documents, offering documents, and promotional material of the person so acting, in a prominent manner, that the person is not registered with or regulated by the Commodity Futures Trading Commission.

(2) Expiration.--Paragraph (1) of this subsection shall not apply to any person who registers pursuant to subsection (a).

SEC.

COMMODITY EXCHANGE ACT AND SECURITIES LAWS SAVINGS PROVISIONS.PROVISIONS.</DELETED> <DELETED> (a) In General.--Nothing in this Act shall affect or apply to, or be interpreted to affect or apply to--</DELETED> <DELETED> (1) any agreement, contract, or transaction that is subject to the Commodity Exchange Act as--</DELETED> <DELETED> (A) a contract of sale of a commodity for future delivery or an option on such a contract;</DELETED> <DELETED> (B) a swap;</DELETED> <DELETED> (C) a security futures product;</DELETED> <DELETED> (D) an option authorized under section 4c of such Act;</DELETED> <DELETED> (E) an agreement, contract, or transaction described in section 2(c)(2)(C)(i) of such Act;

(a)or</DELETED> In<DELETED> General.--Nothing(F) ina thisleverage Acttransaction shallauthorized affectunder orsection apply19 to,of orsuch beAct;</DELETED> interpreted<DELETED> to(2) affect or apply to-- (1) any agreement, contract, or transaction that is subject to the Commoditysecurities Exchangelaws Actas--</DELETED> as--<DELETED> (A) a contractsecurity-based ofswap;</DELETED> sale<DELETED> of(B) a commoditysecurity forfutures futureproduct; delivery or an option on such a contract;

(B)or</DELETED> <DELETED> (C) an option on or based on the value of a swap;security;

(C)or</DELETED> <DELETED> (3) the activities of any person with respect to any such agreement, contract, or transaction.</DELETED> <DELETED> (b) Prohibitions on Spot Digital Commodity Entities.-- Nothing in this Act authorizes, or shall be interpreted to authorize, a securitydigital futurescommodity product;exchange, digital commodity broker, or digital commodity dealer to engage in any activities involving any transaction, contract, or agreement described in subsection (a)(1), solely by virtue of being registered as a digital commodity exchange, digital commodity broker, or digital commodity dealer.</DELETED> <DELETED> (c) Definitions.--In this section, each term shall have the meaning provided in the Commodity Exchange Act or the regulations prescribed under such Act.</DELETED> <DELETED>SEC.

(D) an option authorized under section 4c of such Act;

(E) an agreement, contract, or transaction described in section 2(c)(2)(C)(i) of such Act;

or (F) a leverage transaction authorized under section of such Act;

(2) any agreement, contract, or transaction that is subject to the securities laws as-- (A) a security-based swap;

(B) a security futures product;

or (C) an option on or based on the value of a security;

or (3) the activities of any person with respect to any such agreement, contract, or transaction.

(b) Prohibitions on Spot Digital Commodity Entities.--Nothing in this Act authorizes, or shall be interpreted to authorize, a digital commodity exchange, digital commodity broker, or digital commodity dealer to engage in any activities involving any transaction, contract, or agreement described in subsection (a)(1), solely by virtue of being registered as a digital commodity exchange, digital commodity broker, or digital commodity dealer.

(c) Definitions.--In this section, each term shall have the meaning provided in the Commodity Exchange Act or the regulations prescribed under such Act.

SEC.

ADMINISTRATIVE REQUIREMENTS.REQUIREMENTS.</DELETED> <DELETED> Section 4c(a) of the Commodity Exchange Act (7 U.S.C.

Section6c(a)) 4c(a)is ofamended--</DELETED> <DELETED> (1) in paragraph (3)--</DELETED> <DELETED> (A) in subparagraph (B), by striking ``or'' at the Commodityend;</DELETED> Exchange<DELETED> Act(B) (7in U.S.C.subparagraph (C), by striking the period and inserting ``;

6c(a)) is amended-- (1) in paragraph (3)-- (A) in subparagraph (B), by striking ``or'' at the end;

(B) in subparagraph (C), by striking the period and inserting ``;

andand</DELETED> <DELETED> (C) by adding at the end the following:following:</DELETED> <DELETED> ``(D) a contract of sale of a digital commodity.'';</DELETED> <DELETED> (2) in paragraph (4)--</DELETED> <DELETED> (A) in subparagraph (A)--</DELETED> <DELETED> (i) in clause (ii), by striking ``or'' at the end;</DELETED> <DELETED> (ii) in clause (iii), by striking the period and inserting ``;

``(D) a contract of sale of a digital commodity.'';

(2) in paragraph (4)-- (A) in subparagraph (A)-- (i) in clause (ii), by striking ``or'' at the end;

(ii) in clause (iii), by striking the period and inserting ``;

andand</DELETED> <DELETED> (iii) by adding at the end the following:following:</DELETED> <DELETED> ``(iv) a contract of sale of a digital commodity.'';</DELETED> <DELETED> (B) in subparagraph (B)--</DELETED> <DELETED> (i) in clause (ii), by striking ``or'' at the end;</DELETED> <DELETED> (ii) in clause (iii), by striking the period and inserting ``;

``(iv) a contract of sale of a digital commodity.'';

(B) in subparagraph (B)-- (i) in clause (ii), by striking ``or'' at the end;

(ii) in clause (iii), by striking the period and inserting ``;

andand</DELETED> <DELETED> (iii) by adding at the end the following:following:</DELETED> <DELETED> ``(iv) a contract of sale of a digital commodity.'';

``(iv)and</DELETED> a<DELETED> contract(C) ofin salesubparagraph of(C)--</DELETED> <DELETED> (i) in clause (ii), by striking ``or'' at the end;</DELETED> <DELETED> (ii) by striking ``(iii) a digitalswap, commodity.'';provided however,'' and inserting the following:</DELETED> <DELETED> ``(iii) a swap;

andor</DELETED> (C)<DELETED> in``(iv) subparagrapha (C)--contract (i)of insale clauseof (ii),a bydigital strikingcommodity,</DELETED> ``or''<DELETED>provided, athowever,''; the end;

(ii)and</DELETED> <DELETED> (iii) by striking ``(iii)``clauses a(i), swap,(ii), providedor however,''(iii)'' and insertinginsert the``any following:of clauses (i) through (iv)''.</DELETED> <DELETED>SEC.

``(iii) a swap;

or ``(iv) a contract of sale of a digital commodity, provided, however,'';

and (iii) by striking ``clauses (i), (ii), or (iii)'' and insert ``any of clauses (i) through (iv)''.

SEC.

TREATMENT OF CERTAIN NON-CONTROLLING BLOCKCHAIN DEVELOPERS.DEVELOPERS.</DELETED> <DELETED> (a) In General.--Notwithstanding applicable law, a non- controlling blockchain developer or provider of a blockchain service shall not be treated as a money transmitter or as engaged in ``money transmitting'' or, following the date of enactment of this Act, be otherwise subject to any new registration requirement that is substantially similar to the requirement that currently applies to money transmitters, solely on the basis of--</DELETED> <DELETED> (1) creating or publishing software to facilitate the creation of, or provision of maintenance services to, a blockchain or blockchain service;</DELETED> <DELETED> (2) providing hardware or software to facilitate a customer's own custody or safekeeping of the customer's digital assets;

(a)or</DELETED> In<DELETED> General.--Notwithstanding(3) applicableproviding law,infrastructure asupport non-controllingto blockchainmaintain developer or provider of a blockchain serviceservice.</DELETED> shall<DELETED> not(b) beRule treatedof asConstruction.--Nothing ain moneythis transmittersection orshall asbe engagedconstrued into ``moneyaffect transmitting''whether or,a followingblockchain thedeveloper dateor ofprovider enactment of thisa Act,blockchain beservice is otherwise subject to anyclassification newor registrationtreatment requirementas thata ismoney substantiallytransmitter, similaror toas theengaged requirementin that``money currentlytransmitting'', appliesunder toapplicable moneyState transmitters,or solelyFederal onlaw, theincluding basislaws of--relating (1)to creatinganti-money laundering or publishingcountering software to facilitate the creationfinancing of,of orterrorism, provisionbased ofon maintenanceconduct servicesoutside to,the ascope blockchainof orsubsection blockchain(a). service;

(2)Nothing providingin hardwarethis section shall be construed to affect whether a blockchain developer or softwareprovider of a blockchain service is otherwise subject to facilitateclassification or treatment as a customer'sfinancial owninstitution custodyunder the Bank Secrecy Act, this Act, or safekeepingany ofAct enacted after the customer'sdate digitalof assets;enactment of this Act.</DELETED> <DELETED> (c) Effect on Other Laws.--</DELETED> <DELETED> (1) Intellectual property law.--Nothing in this section shall be construed to limit or expand any law pertaining to intellectual property.</DELETED> <DELETED> (2) State law.--Nothing in this section shall be construed to prevent any State from enforcing any State law that is consistent with this section.

No cause of action may be brought and no liability may be imposed under any State or (3)local providinglaw infrastructurethat supportis inconsistent with this section.</DELETED> <DELETED> (d) Definitions.--In this section:</DELETED> <DELETED> (1) Blockchain developer.--The term ``blockchain developer'' means any person or business that creates or publishes software to maintainfacilitate the creation of, or provide maintenance to, a blockchain service.or a blockchain service.</DELETED> <DELETED> (2) Blockchain service.--The term ``blockchain service'' means any information, transaction, or computing service or system that provides or enables access to a blockchain network by multiple users, including specifically a service or system that enables users to send, receive, exchange, or store digital assets described by blockchain networks.</DELETED> <DELETED> (3) Non-controlling blockchain developer or provider of a blockchain service.--The term ``non-controlling blockchain developer or provider of a blockchain service'' means a blockchain developer or provider of a blockchain service that in the regular course of operations, does not have the legal right or the unilateral and independent ability to control, initiate upon demand, or effectuate transactions involving digital assets that users are entitled to, without the approval, consent, or direction of any other third party.</DELETED> <DELETED>SEC.

(b) Rule of Construction.--Nothing in this section shall be construed to affect whether a blockchain developer or provider of a blockchain service is otherwise subject to classification or treatment as a money transmitter, or as engaged in ``money transmitting'', under applicable State or Federal law, including laws relating to anti-money laundering or countering the financing of terrorism, based on conduct outside the scope of subsection (a).

Nothing in this section shall be construed to affect whether a blockchain developer or provider of a blockchain service is otherwise subject to classification or treatment as a financial institution under the Bank Secrecy Act, this Act, or any Act enacted after the date of enactment of this Act.

(c) Effect on Other Laws.-- (1) Intellectual property law.--Nothing in this section shall be construed to limit or expand any law pertaining to intellectual property.

(2) State law.--Nothing in this section shall be construed to prevent any State from enforcing any State law that is consistent with this section.

No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section.

(d) Definitions.--In this section:

(1) Blockchain developer.--The term ``blockchain developer'' means any person or business that creates or publishes software to facilitate the creation of, or provide maintenance to, a blockchain or a blockchain service.

(2) Blockchain service.--The term ``blockchain service'' means any information, transaction, or computing service or system that provides or enables access to a blockchain network by multiple users, including specifically a service or system that enables users to send, receive, exchange, or store digital assets described by blockchain networks.

(3) Non-controlling blockchain developer or provider of a blockchain service.--The term ``non-controlling blockchain developer or provider of a blockchain service'' means a blockchain developer or provider of a blockchain service that in the regular course of operations, does not have the legal right or the unilateral and independent ability to control, initiate upon demand, or effectuate transactions involving digital assets that users are entitled to, without the approval, consent, or direction of any other third party.

SEC.

APPLICATION OF THE BANK SECRECY ACT.ACT.</DELETED> <DELETED> (a) In General.--Section 5312(c)(1)(A) of title 31, United States Code, is amended--</DELETED> <DELETED> (1) by inserting ``digital commodity broker, digital commodity dealer,'' after ``futures commission merchant,'';

(a)and</DELETED> In<DELETED> General.--Section(2) 5312(c)(1)(A) of title 31, United States Code, is amended-- (1) by inserting ``digitalbefore commoditythe broker,period digitalthe commodityfollowing: dealer,'' after ``futures commission merchant,'';

``and any digital commodity exchange registered, or required to register, under the Commodity Exchange Act which permits direct customer access''.</DELETED> <DELETED> (b) Bank Secrecy Act Requirements.--</DELETED> <DELETED> (1) Regulations.--The Secretary of the Treasury, acting through the Director of the Financial Crimes Enforcement Network, and (2)in consultation with Commodity Futures Trading Commission, shall issue requirements consistent with the requirements of futures commission merchants to apply the Bank Secrecy Act to digital commodity brokers, digital commodity dealers, and digital commodity exchanges that are tailored to the size and complexity of such entities, including by insertingrequiring beforeeach such entity to--</DELETED> <DELETED> (A) establish and maintain an anti-money laundering and countering the periodfinancing of terrorism program, which shall include--</DELETED> <DELETED> (i) an appropriate risk assessment;</DELETED> <DELETED> (ii) the following:development of internal policies, procedures, and controls;</DELETED> <DELETED> (iii) the designation of a compliance officer;</DELETED> <DELETED> (iv) an ongoing employee training program;

``andand</DELETED> any<DELETED> digital(v) commodityan exchangeindependent registered,audit orfunction required to register,test undersuch theprogram;</DELETED> Commodity<DELETED> Exchange(B) Actretain appropriate records of transactions;</DELETED> <DELETED> (C) monitor and report suspicious activity, which permitsmay directinclude customeruse access''.of appropriate distributed ledger analytics;

(b)and</DELETED> Bank<DELETED> Secrecy(D) Actmaintain Requirements.--an (1)effective Regulations.--Thecustomer Secretaryidentification ofprogram theto Treasury,identify actingand throughverify theaccount Directorholders of the Financial Crimes Enforcement Network, and incarry consultationout withappropriate Commoditycustomer Futuresdue Tradingdiligence.</DELETED> Commission,<DELETED> shall(2) issueCompliance requirements consistent with thesanctions.--A requirements of futures commission merchants to apply the Bank Secrecy Act to digital commodity brokers,broker, digital commodity dealers,dealer, andor digital commodity exchangesexchange thatshall arecomply tailoredwith toall thelaws size and complexityregulations ofrelated suchto entities,United includingStates bysanctions requiringadministered eachby such entity to-- (A) establish and maintain an anti-money laundering and countering the financingOffice of terrorismForeign program,Assets whichControl.</DELETED> shall<DELETED>SEC. include-- (i) an appropriate risk assessment;

(ii) the development of internal policies, procedures, and controls;

(iii) the designation of a compliance officer;

(iv) an ongoing employee training program;

and (v) an independent audit function to test such program;

(B) retain appropriate records of transactions;

(C) monitor and report suspicious activity, which may include use of appropriate distributed ledger analytics;

and (D) maintain an effective customer identification program to identify and verify account holders and carry out appropriate customer due diligence.

(2) Compliance with sanctions.--A digital commodity broker, digital commodity dealer, or digital commodity exchange shall comply with all laws and regulations related to United States sanctions administered by the Office of Foreign Assets Control.

SEC.

RULE OF CONSTRUCTION.CONSTRUCTION.</DELETED> <DELETED> Nothing in this Act, or the amendments made by this Act, shall be construed to limit or prevent the continued application of applicable ethics statutes and regulations administered by the Office of Government Ethics, or the ethics rules of the Senate and the House of Representatives, including section 208 of title 18, United States Code, and sections 2635.702 and 2635.802 of title 5, Code of Federal Regulations.

Nothing in this Act, or the amendments made by this Act, shall be construed to limit or prevent the continued application of applicable ethics statutes and regulations administered by the Office of Government Ethics, or the ethics rules of the Senate and the House of Representatives, including section 208 of title 18, United States Code, and sections 2635.702 and 2635.802 of title 5, Code of Federal Regulations.

For the purposes of this section, an employee described in section 202 of title 18, United States Code, shall be deemed an executive branch employee for purposes of complying with section 208 of that title.title.</DELETED> <DELETED>SEC.

SEC.

IMPLEMENTATION.IMPLEMENTATION.</DELETED> <DELETED> (a) Global Rulemaking Timeframe.--Unless otherwise provided in this Act or an amendment made by this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission, or both, shall individually, and jointly where required, promulgate rules and regulations required of each Commission under this Act or an amendment made by this Act not later than 360 days after the date of enactment of this Act.</DELETED> <DELETED> (b) Rules and Registration Before Final Effective Dates.-- </DELETED> <DELETED> (1) In general.--In order to prepare for the implementation of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission may, before any effective date provided in this Act--</DELETED> <DELETED> (A) promulgate rules, regulations, or orders permitted or required by this Act;</DELETED> <DELETED> (B) conduct studies and prepare reports and recommendations required by this Act;</DELETED> <DELETED> (C) register persons under this Act;

(a)and</DELETED> Global<DELETED> Rulemaking(D) Timeframe.--Unlessexempt otherwisepersons, providedagreements, incontracts, this Act or antransactions amendmentfrom madeprovisions byof this Act, under the Commodityterms Futurescontained Tradingin Commissionthis andAct.</DELETED> the<DELETED> Securities(2) andLimitation Exchangeon Commission,effectiveness.--An oraction both,by shallthe individually,Commodity andFutures jointlyTrading whereCommission required,or promulgatethe rulesSecurities and regulationsExchange requiredCommission ofunder eachparagraph Commission(1) undershall thisnot Actbecome oreffective anbefore amendmentthe madeeffective bydate thisotherwise Actapplicable notto laterthe thanaction 360under daysthis afterAct.</DELETED> the<DELETED>TITLE dateII--OFFERS ofAND enactmentSALES ofOF thisDIGITAL Act.COMMODITIES</DELETED> <DELETED>SEC.

(b) Rules and Registration Before Final Effective Dates.-- (1) In general.--In order to prepare for the implementation of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission may, before any effective date provided in this Act-- (A) promulgate rules, regulations, or orders permitted or required by this Act;

(B) conduct studies and prepare reports and recommendations required by this Act;

(C) register persons under this Act;

and (D) exempt persons, agreements, contracts, or transactions from provisions of this Act, under the terms contained in this Act.

(2) Limitation on effectiveness.--An action by the Commodity Futures Trading Commission or the Securities and Exchange Commission under paragraph (1) shall not become effective before the effective date otherwise applicable to the action under this Act.

TITLE II--OFFERS AND SALES OF DIGITAL COMMODITIES SEC.

TREATMENT OF INVESTMENT CONTRACT ASSETS.ASSETS.</DELETED> <DELETED> (a) Securities Act of 1933.--Section 2(a) of the Securities Act of 1933 (15 U.S.C.

(a)77b(a)), Securitiesas Actamended ofby 1933.--Sectionsection 2(a)101, ofis thefurther Securitiesamended--</DELETED> Act<DELETED> of(1) (15in U.S.C.paragraph (1), by adding at the end the following:

77b(a)), as amended by section 101, is further amended-- (1) in paragraph (1), by adding at the end the following:

andand</DELETED> <DELETED> (2) by adding at the end the following:following:</DELETED> <DELETED> ``(36) The term `investment contract asset' means a digital commodity--</DELETED> <DELETED> ``(A) that can be exclusively possessed and transferred, person to person, without necessary reliance on an intermediary, and is recorded on a blockchain;

``(36)and</DELETED> The<DELETED> term``(B) `investmentsold contractor asset'otherwise meanstransferred, aor digitalintended commodity--to ``(A) that can be exclusivelysold possessedor andotherwise transferred, personpursuant to person,an withoutinvestment necessarycontract.''.</DELETED> reliance<DELETED> on(b) anInvestment intermediary,Advisers andAct isof recorded1940.--Section on202(a)(18) aof blockchain;the Investment Advisers Act of 1940 (15 U.S.C.

and ``(B) sold or otherwise transferred, or intended to be sold or otherwise transferred, pursuant to an investment contract.''.

(b) Investment Advisers Act of 1940.--Section 202(a)(18) of the Investment Advisers Act of 1940 (15 U.S.C.

``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).''.1933).''.</DELETED> <DELETED> (c) Investment Company Act of 1940.--Section 2(a)(36) of the Investment Company Act of 1940 (15 U.S.C.

(c) Investment Company Act of 1940.--Section 2(a)(36) of the Investment Company Act of 1940 (15 U.S.C.

``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).''.1933).''.</DELETED> <DELETED> (d) Securities Exchange Act of 1934.--Section 3(a)(10) of the Securities Exchange Act of 1934 (15 U.S.C.

(d) Securities Exchange Act of 1934.--Section 3(a)(10) of the Securities Exchange Act of 1934 (15 U.S.C.

``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).''.1933).''.</DELETED> <DELETED> (e) Securities Investor Protection Act of 1970.--Section 16(14) of the Securities Investor Protection Act of 1970 (15 U.S.C.

(e) Securities Investor Protection Act of 1970.--Section 16(14) of the Securities Investor Protection Act of 1970 (15 U.S.C.

``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).''.1933).''.</DELETED> <DELETED>SEC.

SEC.

EXEMPTED PRIMARY TRANSACTIONS IN DIGITAL COMMODITIES.COMMODITIES.</DELETED> <DELETED> (a) In General.--The Securities Act of 1933 (15 U.S.C.

(a)77a Inet General.--Theseq.) is amended--</DELETED> <DELETED> (1) in section 4(a), by adding at the end the following:</DELETED> <DELETED> ``(8) the offer or sale of an investment contract involving units of a digital commodity by its digital commodity issuer (including all entities controlled by or under common control with the issuer), if--</DELETED> <DELETED> ``(A) the blockchain system to which the digital commodity relates, together with the digital commodity, is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 19331934 (15or U.S.C.the issuer intends for the blockchain system to which the digital commodity relates to be a mature blockchain system by the later of--</DELETED> <DELETED> ``(i) the date that is four years after the first sale of the investment contract involving a unit of such digital commodity in reliance on the exemption provided under this paragraph, subject to any extensions as may be granted by the Commission;

77aor</DELETED> et<DELETED> seq.)``(ii) the date that is amended--four (1)years after the effective date of this paragraph;</DELETED> <DELETED> ``(B) the sum of all cash and other consideration to be received by the digital commodity issuer in sectionreliance 4(a),on the exemption provided under this paragraph, during the 12-month period preceding the date of such offering, including the amount received in such offering, is not more than $50,000,000 (as such amount is annually adjusted by addingthe atCommission to reflect the endchange in the following:Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor);</DELETED> <DELETED> ``(C) after the completion of the transaction, a purchaser does not own more than 10 percent of the total amount of the outstanding units of the digital commodity;</DELETED> <DELETED> ``(D) the transaction does not involve the offer or sale of an investment contract involving units of a digital commodity by its digital commodity issuer that--</DELETED> <DELETED> ``(i) is not organized under the laws of a State, a territory of the United States, or the District of Columbia;</DELETED> <DELETED> ``(ii) is a development stage company that either--</DELETED> <DELETED> ``(I) has no specific business plan or purpose;

``(8)or</DELETED> the<DELETED> offer``(II) orhas saleindicated ofthat anthe investmentbusiness contractplan involving units of a digital commodity by its digital commodity issuer (including all entities controlled by or under common control with the issuer),company if--is ``(A) the blockchain system to whichmerge thewith digitalor commodityacquire relates,an togetherunidentified withcompany;</DELETED> the<DELETED> digital``(iii) commodity, is certifiedan asinvestment acompany, matureas blockchaindefined systemin under section 423 of the SecuritiesInvestment ExchangeCompany Act of 19341940 or(15 theU.S.C. issuer intends for the blockchain system to which the digital commodity relates to be a mature blockchain system by the later of-- ``(i) the date that is four years after the first sale of the investment contract involving a unit of such digital commodity in reliance on the exemption provided under this paragraph, subject to any extensions as may be granted by the Commission;

or ``(ii) the date that is four years after the effective date of this paragraph;

``(B) the sum of all cash and other consideration to be received by the digital commodity issuer in reliance on the exemption provided under this paragraph, during the 12-month period preceding the date of such offering, including the amount received in such offering, is not more than $50,000,000 (as such amount is annually adjusted by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor);

``(C) after the completion of the transaction, a purchaser does not own more than 10 percent of the total amount of the outstanding units of the digital commodity;

``(D) the transaction does not involve the offer or sale of an investment contract involving units of a digital commodity by its digital commodity issuer that-- ``(i) is not organized under the laws of a State, a territory of the United States, or the District of Columbia;

``(ii) is a development stage company that either-- ``(I) has no specific business plan or purpose;

or ``(II) has indicated that the business plan of the company is to merge with or acquire an unidentified company;

``(iii) is an investment company, as defined in section 3 of the Investment Company Act of 1940 (15 U.S.C.

80a-3(b) or 80a-3(c));80a-3(c));</DELETED> <DELETED> ``(iv) is issuing fractional undivided interests in oil or gas rights, or a similar interest in other mineral rights;</DELETED> <DELETED> ``(v) is, or has been, subject to any order of the Commission entered pursuant to section 12(j) of the Securities Exchange Act of during the 5-year period before the filing of the offering statement;

``(iv)or</DELETED> is<DELETED> issuing``(vi) fractionalis undivideddisqualified interestspursuant into oilsection or230.262 gasof rights,title or17, aCode similarof interestFederal inRegulations; other mineral rights;

``(v)and</DELETED> is,<DELETED> or``(E) has been, subject to any order of the Commissionissuer enteredmeets pursuant to section 12(j) of the Securitiesrequirements Exchange Act of 1934section during4B(b).''; the 5-year period before the filing of the offering statement;

orand</DELETED> ``(vi)<DELETED> is(2) disqualifiedby pursuantinserting toafter section 230.2624A ofthe titlefollowing:</DELETED> 17,<DELETED>``SEC. Code of Federal Regulations;

and ``(E) the issuer meets the requirements of section 4B(b).'';

and (2) by inserting after section 4A the following:

``SEC.

REQUIREMENTS WITH RESPECT TO CERTAIN DIGITAL COMMODITY TRANSACTIONS.TRANSACTIONS.</DELETED> <DELETED> ``(a) Commission Jurisdiction.--For the purposes of this section:</DELETED> <DELETED> ``(1) The Commission shall have jurisdiction and enforcement authority with respect to disclosures described in this section.</DELETED> <DELETED> ``(2) Section 17 shall apply to a statement made in an offering statement, disclosure, or report filed under this section to the same extent as such section 17 applies to a statement made in any other offering statement, disclosure, or report filed under this Act.</DELETED> <DELETED> ``(b) Requirements for Digital Commodity Issuers.-- </DELETED> <DELETED> ``(1) Terms and conditions.--A digital commodity issuer offering or selling an investment contract involving units of a digital commodity in reliance on section 4(a)(8) shall file with the Commission an offering statement and any related documents, in such form and with such content as prescribed by the Commission, including financial information, a description of the issuer and the operations of the issuer, the financial condition of the issuer, a description of the plan of distribution of any unit of a digital commodity that is to be offered as well as the intended use of the offering proceeds, and a description of the development plan for the blockchain system, and the related digital commodity, to become a mature blockchain system, if such blockchain system is not already certified as a mature blockchain system pursuant to section 42 of the Securities Exchange Act of 1934 (15 U.S.C.

``(a)78a Commissionet Jurisdiction.--Forseq.).</DELETED> <DELETED> ``(2) Information required for purchasers.--A digital commodity issuer that has filed a statement under paragraph (1) to offer and sell an investment contract involving a unit of a digital commodity in reliance on section 4(a)(8) shall include in such statement the purposesfollowing information:</DELETED> <DELETED> ``(A) Maturity status.--Whether the blockchain system to which the digital commodity relates has been certified as a mature blockchain system pursuant to section 42 of thisthe section:Securities Exchange Act of 1934 (15 U.S.C.

``(1)78a Theet Commissionseq.) shalland, havewhere jurisdictionsuch blockchain system is not so certified, a statement of the digital commodity issuer's intent for the blockchain system to which the digital commodity relates to be a mature blockchain system within the time period described in section 4(a)(8)(A).</DELETED> <DELETED> ``(B) Source code.--The source code, or a publicly accessible webpage displaying such source code, for any blockchain system to which the digital commodity relates, and enforcementwhether authoritythe source code was sourced from an external third party, whether there are any existing external dependencies, and whether the code underwent a third-party security audit, along with material results of any such audit.</DELETED> <DELETED> ``(C) Transaction history.--A description of the steps necessary to independently access, search, and verify the transaction history of any blockchain system to which the digital commodity relates, to the extent any such independent access, search, and verification activities are technically feasible with respect to disclosuressuch describedblockchain system.</DELETED> <DELETED> ``(D) Digital commodity economics.--A description of the purpose of any blockchain system to which the digital commodity relates and the operation of any such blockchain system, including--</DELETED> <DELETED> ``(i) information explaining the launch and supply process, including the number of units of the digital commodity to be issued in thisan section.initial allocation, the total number of units of the digital commodity to be created, the release schedule for the units of the digital commodity, and the total number of units of the digital commodity outstanding;</DELETED> <DELETED> ``(ii) information explaining the technical requirements for holding, accessing, and transferring the digital commodity;</DELETED> <DELETED> ``(iii) information on any applicable consensus mechanism or process for validating transactions, method of generating or mining digital commodities, and any process for burning or destroying units of the digital commodity on the blockchain system;</DELETED> <DELETED> ``(iv) an explanation of any mechanism for driving value to the digital commodity of such blockchain system;

``(2)and</DELETED> Section<DELETED> 17``(v) shallan applyexplanation of governance mechanisms for implementing changes to the blockchain system or forming consensus among holders of units of such digital commodity.</DELETED> <DELETED> ``(E) Plan of development.--The current state and timeline for the development of any blockchain system to which the digital commodity relates, detailing how and when the blockchain system is intended to be a statementmature madeblockchain 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 anconnection offeringwith statement,the disclosure,blockchain system, such as users, service providers, developers, transaction validators, and governance participants, including a discussion of any mechanisms by which control or reportauthority filedare exerted with respect to the blockchain system or its related digital commodity, and any critical operational dependencies of the blockchain system or its related digital commodity.</DELETED> <DELETED> ``(F) Ownership disclosures.--</DELETED> <DELETED> ``(i) In general.--A list of all persons who are digital commodity related persons or digital commodity affiliated persons who have been issued a unit of the digital commodity by the digital commodity issuer or have a right to a unit of the digital commodity from the digital commodity issuer.</DELETED> <DELETED> ``(ii) Confidentiality.--The Commission shall keep each list described under thisclause section(i) confidential, consistent with what is necessary or appropriate in the public interest or for the protection of investors.</DELETED> <DELETED> ``(G) Risk factor disclosures.--A description of the material risks surrounding ownership of a unit of a digital commodity.</DELETED> <DELETED> ``(3) Ongoing disclosure requirements for maturing blockchain systems.--Subject to paragraph (5), the sameissuer extentof a digital commodity related to a blockchain system that is not yet certified as sucha mature blockchain system under section 1742 appliesof tothe Securities Exchange Act of 1934 that has filed a statement madeunder paragraph (1) to offer and sell an investment contract involving a unit of a digital commodity in anyreliance otheron offeringsection statement,4(a)(8) disclosure,shall orfile the following with the Commission:</DELETED> <DELETED> ``(A) Semiannual reports.--Every 6 months, a report filedcontaining--</DELETED> under<DELETED> this``(i) Act.an updated description of the current state and timeline for the development of the blockchain system to which the digital commodity relates, showing how and when the blockchain is intended to be a mature blockchain system;</DELETED> <DELETED> ``(ii) a description of the efforts of the issuer and digital commodity related persons in developing the blockchain system to which the digital commodity relates;</DELETED> <DELETED> ``(iii) the amount of money raised by the digital commodity issuer in reliance on section 4(a)(8), how much of that money has been spent, and the general categories of activities for which that money has been spent and amounts spent per category;

``(b)and</DELETED> Requirements<DELETED> for``(iv) Digitalfinancial Commoditystatements, Issuers.--where ``(1)applicable.</DELETED> Terms<DELETED> and``(B) conditions.--ACurrent digitalreports.--A commoditycurrent issuerreport offeringreflecting orany sellingmaterial anchanges investmentrelevant contractto involvingthe unitsinformation ofpreviously areported digitalto commodity in reliance on section 4(a)(8) shall file with the Commission anby offeringthe statementdigital andcommodity anyissuer, relatedwhich documents,shall inbe suchfiled formas andsoon with such content as prescribedpracticable byafter the Commission,material includingchange financialoccurred, information,in aaccordance descriptionwith ofsuch therules issueras and the operationsCommission ofmay theprescribe issuer,as thenecessary financialor conditionappropriate ofin the issuer,public ainterest descriptionor offor the planprotection of distributioninvestors.</DELETED> of<DELETED> any``(4) unitRulemaking.--Not oflater athan digital360 commoditydays thatafter is to be offered as well as the intendeddate use of the offeringenactment proceeds, and a description of thethis developmentsection, plan for the blockchainCommission system,shall andprescribe therules relatedon digitalrequirements commodity,applicable to becomeissuers aof maturedigital blockchaincommodities system,in ifreliance suchon blockchain system is not already certified as a mature blockchain system pursuant to section 424(a)(8).</DELETED> of<DELETED> the``(5) SecuritiesTermination Exchange Act of 1934certain (15reporting U.S.C.requirements;

78apost-maturity etreporting seq.).requirements.--</DELETED> <DELETED> ``(A) In general.--The ongoing reporting requirements under paragraph (3) shall not apply to a digital commodity issuer 180 days after the end of the covered fiscal year, if the information with respect to the digital commodity and the blockchain system to which it relates described in subparagraphs (A) through (C) of paragraph (2) is made publicly available and the disclosure requirements under subparagraph (C) of this paragraph are satisfied.</DELETED> <DELETED> ``(B) Covered fiscal year defined.--In this paragraph, the term `covered fiscal year' means, with respect to a digital commodity, the first fiscal year of a digital commodity issuer in which the blockchain system to which such digital commodity relates is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934.</DELETED> <DELETED> ``(C) Post-maturity reporting requirements.--After the blockchain system to which a digital commodity relates is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934, any digital commodity issuer that has filed a statement under paragraph (1) to offer and sell an investment contract involving a unit of a digital commodity in reliance on section 4(a)(8) and is engaged in material ongoing efforts related to the mature blockchain system shall disclose, in a manner reasonably calculated to inform the public, and at such frequency as the Commission may prescribe, by rule, a description of such efforts, including--</DELETED> <DELETED> ``(i) any participation in a decentralized governance system of such blockchain system;</DELETED> <DELETED> ``(ii) any participation in alterations or proposed alterations to the functionality or operation of such blockchain system;</DELETED> <DELETED> ``(iii) the use or planned use of any funds raised in reliance on section 4(a)(8) or any rulemaking pursuant to section 202(c) of the CLARITY Act of 2025 in such efforts;</DELETED> <DELETED> ``(iv) the amount of units of the digital commodity, or rights thereto, owned and controlled by such issuer and any use, sale, trading, or other disposition thereof;

``(2)and</DELETED> Information<DELETED> required``(v) forany purchasers.--Aaffiliations digitalof commoditysuch issuer thatmaterial hasto filedthe aefforts statementof undersuch paragraphissuer.</DELETED> (1)<DELETED> to``(D) offerTermination of and sellexemption anfrom investmentpost-maturity contractreporting involvingrequirements.--Not alater unitthan days after the date of athe digitalenactment commodityof this section, the Commission shall issue rules--</DELETED> <DELETED> ``(i) for terminating the disclosure requirements described in reliancesubparagraph on(C) sectionduring 4(a)(8)the shallfirst includefiscal year in suchwhich statementthe digital commodity issuer does not engage in material ongoing efforts related to the followingmature information:blockchain system;

``(A)and</DELETED> Maturity<DELETED> status.--Whether``(ii) to, as is necessary or appropriate in the blockchainpublic systeminterest toor whichfor the protection of investors, exempt a digital commodity relatesissuer hasfrom beenthe certifiedrequirements asdescribed in subparagraph (C) where only a maturede blockchainminimis systemamount pursuantof tomarket sectionactivity 42involving the digital commodity of such digital commodity issuer is taking place.</DELETED> <DELETED> ``(E) Rule of construction.--Nothing in subparagraph (C) may be construed to make any digital commodity described in such subparagraph a security.</DELETED> <DELETED> ``(c) Requirements for Intermediaries.--A person acting as an intermediary in connection with the Securitiesoffer Exchangeor Actsale of 1934an (15investment U.S.C.contract involving units of a digital commodity in reliance on section 4(a)(8) shall--</DELETED> <DELETED> ``(1) register with the Commission as a broker or dealer;

78aand</DELETED> et<DELETED> seq.)``(2) and,be where such blockchain system is not so certified, a statementmember of thea digitalnational commoditysecurities issuer'sassociation intentregistered forunder thesection blockchain15A systemof to which the digitalSecurities commodityExchange relatesAct toof be1934 a(15 matureU.S.C. blockchain system within the time period described in section 4(a)(8)(A).

``(B)78o-3).</DELETED> Source<DELETED> code.--The``(d) sourceDisqualification code,Provisions.--The orCommission ashall publiclyissue accessiblerules webpageto displayingapply suchthe sourcedisqualification code,provisions forunder anysection blockchain230.262 systemof title 17, Code of Federal Regulations, to whichthe exemption provided under section 4(a)(8).</DELETED> <DELETED> ``(e) Failure To Mature.--</DELETED> <DELETED> ``(1) In general.--Not later than 270 days after the date of the enactment of this section, the Commission shall issue rules applying such additional obligations and disclosures for the digital commodity relates,issuers, digital commodity related persons, and whetherdigital thecommodity sourceaffiliated codepersons wasof sourceda fromblockchain ansystem externaldescribed thirdunder party,subsection whether(b)(1) therethat aredoes anynot existingbecome externala dependencies,mature andblockchain whethersystem within the codetime underwentperiod adescribed third-partyin securitysection audit,4(a)(8)(A) alongas withare materialnecessary resultsor ofappropriate anyin suchthe audit.public interest or for the protection of investors.

``(C)Such Transactionobligations history.--Aand descriptiondisclosures ofshall include the stepsfollowing:</DELETED> necessary<DELETED> ``(A) Disclosures.--Disclosures regarding the following:</DELETED> <DELETED> ``(i) Failure to independentlymature.--A access,detailed search,explanation andof verifythe reason that the transactionblockchain historysystem has not become a mature blockchain system within the time period described in section 4(a)(8)(A).</DELETED> <DELETED> ``(ii) Development plans.--The future plans of anydevelopment of the blockchain system, including information required under subsection (b)(3).</DELETED> <DELETED> ``(iii) Risk factor disclosures.-- The material risks surrounding ownership of a unit of a digital commodity that relates to a blockchain system described under subsection (b)(1) that has not become a mature blockchain system within the time period described in section 4(a)(8)(A).</DELETED> <DELETED> ``(B) Obligations.--Transaction reporting and beneficial ownership disclosure obligations applicable to whichdigital commodity related persons and digital commodity affiliated persons of such blockchain system.</DELETED> <DELETED> ``(2) Qualification required.--The Commission may not permit any additional reliance on an exempt offering for the offer or sale of an investment contract involving a unit of a digital commodity relates,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 extenttime anyperiod suchdescribed independentin access,section search,4(a)(8)(A) andunless verificationthe activitiesCommission arehas technicallyqualified feasibleany withoffering respectstatement related to such blockchainexempt system.offering.''.</DELETED> <DELETED> (b) Additional Exemptions.--</DELETED> <DELETED> (1) Certain registration requirements.--Section 12(g)(6) of the Securities Exchange Act of 1934 (15 U.S.C.

``(D)78l(g)(6)) Digitalis commodityamended economics.--Aby descriptionstriking of``under thesection purpose4(6)'' of any blockchain system to which the digital commodity relates and theinserting operation``under ofsection any4(a)(6) suchor blockchain4(a)(8)''.</DELETED> system,<DELETED> including--(2) ``(i)Exemption informationfrom explainingstate theregulation.--Section launch18(b)(4) and supply process, including the number of units of the digitalSecurities commodityAct to be issued in an initial allocation, the total number of units1933 of(15 theU.S.C. 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)77r(b)(4)) informationis explainingamended--</DELETED> the<DELETED> technical(A) requirementsin forsubparagraph holding,(B), accessing,by striking ``section 4(4)'' and transferringinserting the``section digital4(a)(4)'';</DELETED> commodity;<DELETED> (B) in subparagraph (C), by striking ``section 4(6)'' and inserting ``section 4(a)(6)'';</DELETED> <DELETED> (C) in subparagraph (F)--</DELETED> <DELETED> (i) by striking ``section 4(2)'' each place such term appears and inserting ``section 4(a)(2)'';

``(iii)and</DELETED> information<DELETED> on(ii) anyby applicablestriking consensus``or'' mechanismat orthe processend;</DELETED> for<DELETED> validating(D) transactions,in methodsubparagraph of(G), generatingby orstriking miningthe digitalperiod commodities, and anyinserting process``; for burning or destroying units of the digital commodity on the blockchain system;

``(iv) an explanation of any mechanism for driving value to the digital commodity of such blockchain system;

and ``(v) an explanation of governance mechanisms for implementing changes to the blockchain system or forming consensus among holders of units of such digital commodity.

``(E) Plan of development.--The current state and timeline for the development of any blockchain system to which the digital commodity relates, detailing how and when the blockchain system is intended to be a mature blockchain system, if the blockchain system is not yet certified as a mature blockchain system, and the various roles that exist or are intended to exist in connection with the blockchain system, such as users, service providers, developers, transaction validators, and governance participants, including a discussion of any mechanisms by which control or authority are exerted with respect to the blockchain system or its related digital commodity, and any critical operational dependencies of the blockchain system or its related digital commodity.

``(F) Ownership disclosures.-- ``(i) In general.--A list of all persons who are digital commodity related persons or digital commodity affiliated persons who have been issued a unit of the digital commodity by the digital commodity issuer or have a right to a unit of the digital commodity from the digital commodity issuer.

``(ii) Confidentiality.--The Commission shall keep each list described under clause (i) confidential, consistent with what is necessary or appropriate in the public interest or for the protection of investors.

``(G) Risk factor disclosures.--A description of the material risks surrounding ownership of a unit of a digital commodity.

``(3) Ongoing disclosure requirements for maturing blockchain systems.--Subject to paragraph (5), the issuer of a digital commodity related to a blockchain system that is not yet certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934 that has filed a statement under paragraph (1) to offer and sell an investment contract involving a unit of a digital commodity in reliance on section 4(a)(8) shall file the following with the Commission:

``(A) Semiannual reports.--Every 6 months, a report containing-- ``(i) an updated description of the current state and timeline for the development of the blockchain system to which the digital commodity relates, showing how and when the blockchain is intended to be a mature blockchain system;

``(ii) a description of the efforts of the issuer and digital commodity related persons in developing the blockchain system to which the digital commodity relates;

``(iii) the amount of money raised by the digital commodity issuer in reliance on section 4(a)(8), how much of that money has been spent, and the general categories of activities for which that money has been spent and amounts spent per category;

and ``(iv) financial statements, where applicable.

``(B) Current reports.--A current report reflecting any material changes relevant to the information previously reported to the Commission by the digital commodity issuer, which shall be filed as soon as practicable after the material change occurred, in accordance with such rules as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.

``(4) Rulemaking.--Not later than 360 days after the date of the enactment of this section, the Commission shall prescribe rules on requirements applicable to issuers of digital commodities in reliance on section 4(a)(8).

``(5) Termination of certain reporting requirements;

post- maturity reporting requirements.-- ``(A) In general.--The ongoing reporting requirements under paragraph (3) shall not apply to a digital commodity issuer 180 days after the end of the covered fiscal year, if the information with respect to the digital commodity and the blockchain system to which it relates described in subparagraphs (A) through (C) of paragraph (2) is made publicly available and the disclosure requirements under subparagraph (C) of this paragraph are satisfied.

``(B) Covered fiscal year defined.--In this paragraph, the term `covered fiscal year' means, with respect to a digital commodity, the first fiscal year of a digital commodity issuer in which the blockchain system to which such digital commodity relates is certified as a mature blockchain system under section of the Securities Exchange Act of 1934.

``(C) Post-maturity reporting requirements.--After the blockchain system to which a digital commodity relates is certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934, any digital commodity issuer that has filed a statement under paragraph (1) to offer and sell an investment contract involving a unit of a digital commodity in reliance on section 4(a)(8) and is engaged in material ongoing efforts related to the mature blockchain system shall disclose, in a manner reasonably calculated to inform the public, and at such frequency as the Commission may prescribe, by rule, a description of such efforts, including-- ``(i) any participation in a decentralized governance system of such blockchain system;

``(ii) any participation in alterations or proposed alterations to the functionality or operation of such blockchain system;

``(iii) the use or planned use of any funds raised in reliance on section 4(a)(8) or any rulemaking pursuant to section 202(c) of the CLARITY Act of 2025 in such efforts;

``(iv) the amount of units of the digital commodity, or rights thereto, owned and controlled by such issuer and any use, sale, trading, or other disposition thereof;

and ``(v) any affiliations of such issuer material to the efforts of such issuer.

``(D) Termination of and exemption from post- maturity reporting requirements.--Not later than 270 days after the date of the enactment of this section, the Commission shall issue rules-- ``(i) for terminating the disclosure requirements described in subparagraph (C) during the first fiscal year in which the digital commodity issuer does not engage in material ongoing efforts related to the mature blockchain system;

and ``(ii) to, as is necessary or appropriate in the public interest or for the protection of investors, exempt a digital commodity issuer from the requirements described in subparagraph (C) where only a de minimis amount of market activity involving the digital commodity of such digital commodity issuer is taking place.

``(E) Rule of construction.--Nothing in subparagraph (C) may be construed to make any digital commodity described in such subparagraph a security.

``(c) Requirements for Intermediaries.--A person acting as an intermediary in connection with the offer or sale of an investment contract involving units of a digital commodity in reliance on section 4(a)(8) shall-- ``(1) register with the Commission as a broker or dealer;

and ``(2) be a member of a national securities association registered under section 15A of the Securities Exchange Act of (15 U.S.C.

78o-3).

``(d) Disqualification Provisions.--The Commission shall issue rules to apply the disqualification provisions under section 230.262 of title 17, Code of Federal Regulations, to the exemption provided under section 4(a)(8).

``(e) Failure To Mature.-- ``(1) In general.--Not later than 270 days after the date of the enactment of this section, the Commission shall issue rules applying such additional obligations and disclosures for the digital commodity issuers, digital commodity related persons, and digital commodity affiliated persons of a blockchain system described under subsection (b)(1) that does not become a mature blockchain system within the time period described in section 4(a)(8)(A) as are necessary or appropriate in the public interest or for the protection of investors.

Such obligations and disclosures shall include the following:

``(A) Disclosures.--Disclosures regarding the following:

``(i) Failure to mature.--A detailed explanation of the reason that the blockchain system has not become a mature blockchain system within the time period described in section 4(a)(8)(A).

``(ii) Development plans.--The future plans of development of the blockchain system, including information required under subsection (b)(3).

``(iii) Risk factor disclosures.--The material risks surrounding ownership of a unit of a digital commodity that relates to a blockchain system described under subsection (b)(1) that has not become a mature blockchain system within the time period described in section 4(a)(8)(A).

``(B) Obligations.--Transaction reporting and beneficial ownership disclosure obligations applicable to digital commodity related persons and digital commodity affiliated persons of such blockchain system.

``(2) Qualification required.--The Commission may not permit any additional reliance on an exempt offering for the offer or sale of an investment contract involving a unit of a digital commodity by the issuer of the digital commodity related to a blockchain system described under subsection (a)(1) that has not become a mature blockchain system within the time period described in section 4(a)(8)(A) unless the Commission has qualified any offering statement related to such exempt offering.''.

(b) Additional Exemptions.-- (1) Certain registration requirements.--Section 12(g)(6) of the Securities Exchange Act of 1934 (15 U.S.C.

78l(g)(6)) is amended by striking ``under section 4(6)'' and inserting ``under section 4(a)(6) or 4(a)(8)''.

(2) Exemption from state regulation.--Section 18(b)(4) of the Securities Act of 1933 (15 U.S.C.

77r(b)(4)) is amended-- (A) in subparagraph (B), by striking ``section 4(4)'' and inserting ``section 4(a)(4)'';

(B) in subparagraph (C), by striking ``section 4(6)'' and inserting ``section 4(a)(6)'';

(C) in subparagraph (F)-- (i) by striking ``section 4(2)'' each place such term appears and inserting ``section 4(a)(2)'';

and (ii) by striking ``or'' at the end;

(D) in subparagraph (G), by striking the period and inserting ``;

andand</DELETED> <DELETED> (E) by adding at the end the following:following:</DELETED> <DELETED> ``(H) section 4(a)(8).''.</DELETED> <DELETED> (c) Use of Other Exemptions.--</DELETED> <DELETED> (1) Rule of construction.--Except as provided in this subsection, nothing in this section or the amendments made by this section may be construed as prohibiting the offer or sale of an investment contract involving units of a digital commodity in reliance on an exemption from registration under the Securities Act of 1933, including as provided under section 3, 4(a), or 19 of the Securities Act of 1933, other than that provided under section 4(a)(8) of the Securities Act of 1933.</DELETED> <DELETED> (2) Rulemakings.--</DELETED> <DELETED> (A) The Securities and Exchange Commission may issue rules--</DELETED> <DELETED> (i) to permit the issuer of a digital commodity related to a blockchain system described under section 4B(b)(1) of the Securities Act of 1933 that has not become a mature blockchain system within the time period described in section 4(a)(8)(A) of such Act, or the issuer of a digital commodity described in subparagraph (B)(iii), to utilize an exempt offering to offer or sell an investment contract involving the digital commodity, if the Commission qualifies any offering statement related to such exempt offering;

``(H)and</DELETED> <DELETED> (ii) for the offer and sale of investment contracts involving units of a digital commodity by issuers that are not organized under the laws of a State, a territory of the United States, or the District of Columbia.</DELETED> <DELETED> (B) Not later than 270 days after the date of the enactment of this section, the Securities and Exchange Commission shall issue the following rules:</DELETED> <DELETED> (i) A rule requiring a digital commodity issuer that last offered or sold an investment contract involving units of a digital commodity in reliance on an exemption from registration under the Securities Act of 1933, including as provided under section 4(a)(8).''.3, 4(a), or 19 of the Securities Act of 1933, prior to the date of enactment of this Act, to file a comparable set of disclosures to those described under section 4B of the Securities Act of 1933 as the Commission determines appropriate based on the exemption, the maturity of the blockchain system to which such digital commodity relates, and any material ongoing efforts of such digital commodity issuer (provided that for blockchains certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934, such disclosures shall be comparable to those under section 4B(b)(5)(C)), not later than the later of--</DELETED> <DELETED> (I) one year after the effective date of this section;

(c)or</DELETED> Use<DELETED> of(II) Otherthe Exemptions.--date (1)of Ruleany ofsecondary construction.--Exceptmarket assale providedof insuch thisdigital subsection,commodity nothingmade in thisreliance on section or203.</DELETED> the<DELETED> amendments(ii) madeA byrule thisrequiring sectiona maydigital becommodity construedissuer asthat prohibitingoffers the offer or salesells of an investment contract involving units of a digital commodity in reliance on an exemption from registration under the Securities Act of 1933, including as provided under section 3, 4(a), or 19 of the Securities Act of 1933, other than that provided under section 4(a)(8) of the Securities Act of 1933.1933, on or after the date of enactment of this Act, to file a comparable set of disclosures to those described under section 4B of the Securities Act of 1933 as the Commission determines appropriate based on the exemption, the maturity of the blockchain system to which such digital commodity relates, and any material ongoing efforts of such digital commodity issuer, prior to the date of any secondary market sale of such digital commodity made in reliance on section 203.</DELETED> <DELETED> (iii) With respect to a digital commodity where the digital commodity issuer is required to file disclosures under clause (i) or (ii) and where the blockchain system to which the digital commodity relates is not certified as a mature blockchain system pursuant to section 42 of the Securities Exchange Act of 1934 after the 4-year period beginning on the date that the first such disclosure is filed--</DELETED> <DELETED> (I) a rule prohibiting the offer or sale of an investment contract involving units of the digital commodity unless the Commission has qualified any offering statement related to such offer or sale, where such offer or sale is permitted pursuant to subparagraph (A)(i);

(2)and</DELETED> Rulemakings.--<DELETED> (A)(II) Thea Securitiesrule andrequiring Exchange Commission may issue rules-- (i) to permit the issuer of a digital commodity relatedissuer to amake blockchaindisclosures systemcomparable describedto underthose sectiondescribed 4B(b)(1)in 4B(e)(1)(A) of the Securities Act of 19331933.</DELETED> that<DELETED> has(iv) notA becomerule permitting a maturesuccessor blockchainto system within the time period described in section 4(a)(8)(A) of such Act, or the issuer of a digital commodity describedissuer, inor subparagraphsuch (B)(iii),other toappropriate utilizeperson anas exemptdesignated offeringby tothe offerCommission, orto sellmake an investment contract involving the digitaldisclosures commodity,required ifunder theclause Commission(i), qualifieswhere anysuch offeringissuer statementdoes relatednot tomake suchthe exemptrequired offering;disclosures.</DELETED> <DELETED>SEC.

and (ii) for the offer and sale of investment contracts involving units of a digital commodity by issuers that are not organized under the laws of a State, a territory of the United States, or the District of Columbia.

(B) Not later than 270 days after the date of the enactment of this section, the Securities and Exchange Commission shall issue the following rules:

(i) A rule requiring a digital commodity issuer that last offered or sold an investment contract involving units of a digital commodity in reliance on an exemption from registration under the Securities Act of 1933, including as provided under section 3, 4(a), or 19 of the Securities Act of 1933, prior to the date of enactment of this Act, to file a comparable set of disclosures to those described under section 4B of the Securities Act of 1933 as the Commission determines appropriate based on the exemption, the maturity of the blockchain system to which such digital commodity relates, and any material ongoing efforts of such digital commodity issuer (provided that for blockchains certified as a mature blockchain system under section 42 of the Securities Exchange Act of 1934, such disclosures shall be comparable to those under section 4B(b)(5)(C)), not later than the later of-- (I) one year after the effective date of this section;

or (II) the date of any secondary market sale of such digital commodity made in reliance on section 203.

(ii) A rule requiring a digital commodity issuer that offers or sells an investment contract involving units of a digital commodity in reliance on an exemption from registration under the Securities Act of 1933, including as provided under section 3, 4(a), or 19 of the Securities Act of 1933, other than that provided under section 4(a)(8) of the Securities Act of 1933, on or after the date of enactment of this Act, to file a comparable set of disclosures to those described under section 4B of the Securities Act of 1933 as the Commission determines appropriate based on the exemption, the maturity of the blockchain system to which such digital commodity relates, and any material ongoing efforts of such digital commodity issuer, prior to the date of any secondary market sale of such digital commodity made in reliance on section 203.

(iii) With respect to a digital commodity where the digital commodity issuer is required to file disclosures under clause (i) or (ii) and where the blockchain system to which the digital commodity relates is not certified as a mature blockchain system pursuant to section 42 of the Securities Exchange Act of 1934 after the 4-year period beginning on the date that the first such disclosure is filed-- (I) a rule prohibiting the offer or sale of an investment contract involving units of the digital commodity unless the Commission has qualified any offering statement related to such offer or sale, where such offer or sale is permitted pursuant to subparagraph (A)(i);

and (II) a rule requiring the digital commodity issuer to make disclosures comparable to those described in 4B(e)(1)(A) of the Securities Act of 1933.

(iv) A rule permitting a successor to a digital commodity issuer, or such other appropriate person as designated by the Commission, to make the disclosures required under clause (i), where such issuer does not make the required disclosures.

SEC.