[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7614 Introduced in House (IH)]
<DOC>
117th CONGRESS
2d Session
H. R. 7614
To provide for orderly and secure digital commodity exchange markets,
and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 28, 2022
Mr. Thompson of Pennsylvania (for himself, Mr. Khanna, Mr. Soto, and
Mr. Emmer) introduced the following bill; which was referred to the
Committee on Agriculture
_______________________________________________________________________
A BILL
To provide for orderly and secure digital commodity exchange markets,
and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Digital Commodity Exchange Act of
2022''.
SEC. 2. AMENDMENTS TO THE COMMODITY EXCHANGE ACT.
(a) Definitions.--Section 1a of the Commodity Exchange Act (7
U.S.C. 1a) is amended--
(1) in paragraph (28)(A)(i)--
(A) in subclause (I)--
(i) in item (aa)--
(I) by striking ``or'' at the end
of subitem (EE); and
(II) by adding at the end the
following:
``(GG) the purchase
or sale of a unit of a
digital commodity that
is traded on or subject
to the rules of a
registered entity;'';
(ii) in item (bb), by striking ``and'' and
inserting ``or''; and
(iii) by adding at the end the following:
``(cc) acting as a
counterparty to any cash or
spot agreement, contract, or
transaction involving a digital
commodity with a person who is
not an eligible contract
participant, unless the
activity is--
``(AA) conducted in
compliance with the
laws of the State in
which the activity
occurs;
``(BB) subject to
regulation by another
Federal authority; or
``(CC) separately
regulated under this
Act; and''; and
(B) in subclause (II), by striking ``(aa) or (bb)''
and inserting ``(aa), (bb), or (cc)'';
(2) in paragraph (40)--
(A) in subparagraph (E), by striking ``and'' at the
end; and
(B) by redesignating subparagraph (F) as
subparagraph (G) and inserting after subparagraph (E)
the following:
``(F) a digital commodity exchange registered under
section 5i; and''; and
(3) by adding at the end the following:
``(52) Digital commodity.--
``(A) In general.--The term `digital commodity'
means any form of fungible intangible personal property
that can be exclusively possessed and transferred
person to person without necessary reliance on an
intermediary.
``(B) Exclusions.--The term `digital commodity'
does not include any asset that conveys--
``(i) an equity or debt interest in a
company, partnership, or fund;
``(ii) a profit or revenue share derived
solely from the managerial efforts of others;
or
``(iii) an entitlement to any interest or
dividend payment.
``(C) Further exclusions.--The Commission, by rule
or regulation, may exclude from the term `digital
commodity' any intangible personal property that can be
exclusively possessed and transferred person to person
without necessary reliance on an intermediary that is
not of the nature of a digital asset, if the Commission
determines that the rule or regulation will effectuate
the purposes of this Act.
``(53) Digital commodity custodian.--The term `digital
commodity custodian' means an entity that holds, maintains, or
safeguards digital commodities and other assets on behalf of
digital commodity market participants.
``(54) Digital commodity exchange.--The term `digital
commodity exchange' means a trading facility that lists for
trading at least one digital commodity.
``(55) Digital commodity presale.--The term `digital
commodity presale' means the delivery of a unit of a digital
commodity, or any promise or right to a future unit of a
digital commodity, before the listing of the digital commodity
for trading on a registered digital commodity exchange, to--
``(A) a participant in a securities offering that
is--
``(i) intended to finance the development
of the digital commodity; and
``(ii) conducted in compliance with the
Securities Act of 1933;
``(B) a founder, promoter, developer, manager,
affiliated organization, or other person directly
associated with the development of the digital
commodity; or
``(C) any other person the Commission determines
has personal knowledge of the activities of individuals
directly associated with the development of the digital
commodity.''.
(b) Commission Jurisdiction Over Retail Digital Commodity
Transactions.--
(1) In general.--Section 2(c)(2) of such Act (7 U.S.C.
2(c)(2)) is amended--
(A) in subparagraph (D)(ii)--
(i) in subclause (III), in the matter that
precedes item (aa), by inserting ``of a
commodity, other than a digital commodity,''
before ``that''; and
(ii) by redesignating subclauses (IV) and
(V) as subclauses (V) and (VI) and inserting
after subclause (III) the following:
``(IV) a contract of sale of a
digital commodity that--
``(aa) results in actual
delivery within 2 days or such
other period as the Commission
may determine by rule or
regulation based upon the
typical commercial practice in
cash or spot markets for the
digital commodity involved; or
``(bb) is executed on or
subject to the rules of a
registered digital commodity
exchange or with a registered
futures commission merchant;'';
and
(B) by adding at the end the following:
``(F) Commission Jurisdiction Over Digital Commodity
Transactions.--
``(i) In general.--Subject to sections 6d and 12(e), the
Commission shall have exclusive jurisdiction over any
agreement, contract, or transaction involving a contract of
sale of a digital commodity in interstate commerce.
``(ii) Withholding of rulemaking authority over certain
transactions.--Notwithstanding clause (i), this subparagraph
shall not be interpreted to permit the Commission to issue any
rule or regulation regarding any agreement, contract, or
transaction that is not offered, solicited, traded,
facilitated, executed, cleared, reported, or otherwise dealt
in--
``(I) on or subject to the rules of a registered
entity;
``(II) by any other entity registered by the
Commission; or
``(III) for the purpose of transferring a digital
commodity, or any promise or right to a future unit of
a digital commodity, obtained through a digital
commodity presale and subject to section 4c(h).
``(iii) Limitations.--Clause (i) shall not apply with
respect to--
``(I) custodial or depository activities for a
digital commodity, or custodial or depository
activities for any promise or right to a future digital
commodity, of an entity regulated by a State or other
Federal regulatory agency; or
``(II) a securities offering or transaction
associated with--
``(aa) a digital commodity presale; or
``(bb) a sale described in section
4c(h)(3)(A).''.
(2) Conforming amendment.--Section 2(a)(1)(A) of such Act
(7 U.S.C. 2(a)(1)(A)) is amended in the 1st sentence by
inserting ``subsection (c)(2)(F) of this section or'' before
``section 19''.
(c) Prohibited Transactions.--Section 4c of such Act (7 U.S.C. 6c)
is amended by adding at the end the following:
``(h) Prohibited Digital Commodity Transactions.--
``(1) In general.--It shall be a violation of this Act for
any person who owns or controls a unit of a digital commodity,
or any promise or right to a future unit of a digital
commodity, obtained through a digital commodity presale and
subject to the restrictions in this subsection, to offer to
enter into, to enter into, or to execute a contract for the
purchase or sale of the unit, promise, or right, except as
provided in paragraph (3).
``(2) Unlawful facilitation of prohibited transactions.--It
shall be a violation of this Act for any person willfully to
execute, confirm the execution of, or conduct any office or
business for the purpose of soliciting, accepting any order
for, or otherwise dealing in, any transaction in, or in
connection with, a contract for the purchase or sale of a unit
of a digital commodity, or any promise or right to a future
unit of a digital commodity, which such person has reason to
believe is obtained through a digital commodity presale and
subject to the restrictions in this subsection, except as
provided in paragraph (3).
``(3) Exceptions.--
``(A) Off-exchange transactions.--
``(i) Sale of a promise or right.--A
promise or right to a future unit of a digital
commodity obtained through a digital commodity
presale may be sold pursuant to a securities
transaction conducted in compliance with the
Securities Act of 1933.
``(ii) Sale of a digital commodity.--A unit
of a digital commodity obtained through a
digital commodity presale may be sold--
``(I) pursuant to a securities
transaction conducted in compliance
with the Securities Act of 1933; or
``(II) to an accredited investor
(as defined in section 2(a)(15) of such
Act).
``(iii) Treatment.--For purposes of this
subsection, a unit of a digital commodity or
any promise or right to a future unit of a
digital commodity obtained through a
transaction utilizing this exception shall
continue to be considered to be obtained
through a digital commodity presale.
``(B) On-exchange transactions.--
``(i) In general.--A unit of a digital
commodity that is obtained through a digital
commodity presale or a transaction described in
subparagraph (A) may be offered for sale or
exchange on a registered digital commodity
exchange, subject to any limitations imposed by
the exchange.
``(ii) Treatment.--For purposes of this
subsection, a unit of a digital commodity
obtained through a transaction utilizing this
exception shall not be considered to be
obtained though a digital commodity presale.
``(C) Utilization of presold digital commodities.--
``(i) In general.--A unit of a digital
commodity that is obtained through a digital
commodity presale may be--
``(I) utilized for the purposes of
receiving the non-financial rights or
services associated with the digital
commodity; or
``(II) exchanged or sold in such
limited quantities as the Commission
determines support the public use and
functioning of services and rights
associated with the digital commodity.
``(ii) Treatment.--For purposes of this
subsection, a unit of a digital commodity
obtained through a transaction utilizing this
exception shall not be considered to be
obtained though a digital commodity presale.
``(D) Prior digital commodities.--A unit of a
digital commodity shall not be subject to this
subsection if, before the date of the enactment of this
subsection, the digital commodity was publicly
available for trading on a trading facility licensed as
a money services business with the Department of the
Treasury.
``(4) Transition rules.--
``(A) In general.--For the purpose of a transaction
described in paragraph (3)(B), the Commission shall
consider a trading facility to be a registered digital
commodity exchange if--
``(i) the trading facility--
``(I) has been continuously
licensed as a money services business
with the Department of the Treasury
since August 1, 2019;
``(II) is a registered designated
contract market; or
``(III) is a registered swap
execution facility;
``(ii) the trading facility submits a
notice to the Commission containing--
``(I) documentation demonstrating
its licensing referred to in clause
(i)(I); and
``(II) an assessment of the digital
commodity and all units of the digital
commodity to be permitted to trade, in
accordance with section 5i(c)(3); and
``(iii) the Commission has not issued a
notice of disapproval.
``(B) Disapproval process.--In making a disapproval
under subparagraph (A), the Commission shall--
``(i) issue any disapproval within 20
business days after receipt of a completed
notice; and
``(ii) identify the specific deficiencies
with the notice that necessitated the
disapproval.
``(C) Extensions.--The Commission may extend the
time for consideration under subparagraph (B)--
``(i) once, for 20 business days, through
written notice to the digital commodity
exchange; and
``(ii) once, for an additional 90 business
days, through notice to the digital commodity
exchange which includes a description of any
deficiencies with the listing notice, including
any--
``(I) novel or complex issues which
require additional time to analyze;
``(II) missing information or
inadequate explanations; or
``(III) potential inconsistencies
with this Act.
``(D) Expiration.--The authority provided by this
subparagraph shall expire 1 year after the date of the
final promulgation of the digital commodity exchange
registration requirements, or on the first registration
of a digital commodity exchange, whichever occurs
earlier.''.
(d) Segregation of Digital Commodities.--Section 4d of such Act (7
U.S.C. 6d) is amended by adding at the end the following:
``(i) Segregation of Digital Commodities.--
``(1) Holding of customer assets.--
``(A) In general.--Each futures commission merchant
shall hold customer money, assets, and property in a
manner to minimize the customer's risk of loss or
unreasonable delay in the access to the money, assets,
and property of the customer.
``(B) Qualified digital commodity custodian.--A
futures commission merchant shall hold in a qualified
digital commodity custodian each unit of a digital
commodity that is--
``(i) the property of a customer of the
futures commission merchant; or
``(ii) otherwise so required by the
Commission to reasonably protect customers or
promote the public interest.
``(2) Segregation of funds.--
``(A) In general.--A futures commission merchant
shall treat and deal with all money, assets, and
property of any digital commodity customer received as
belonging to the customer.
``(B) Commingling prohibited.--Money, assets, and
property of a customer described in subparagraph (A)
shall be separately accounted for, and shall not be
commingled with the funds of the futures commission
merchant or be used to margin, secure, or guarantee any
trades or accounts of any customer or person other than
the person for whom the same are held.
``(C) Digital commodity customer defined.--For the
purposes of this paragraph, the term `digital commodity
customer' means a customer involved in a cash or spot,
leveraged, margined, or financed digital commodity
transaction in which the futures commission merchant is
acting as the counterparty.
``(3) Exceptions.--
``(A) Use of funds.--
``(i) In general.--Notwithstanding
paragraph (2), money, assets, and property of
customers of a futures commission merchant
described in paragraph (2) may, for
convenience, be commingled and deposited in the
same account or accounts with any bank, trust
company, derivatives clearing organization, or
qualified digital commodity custodian.
``(ii) Withdrawal.--Notwithstanding
paragraph (2), the share of the money, assets,
and property described in clause (i) as in the
normal course of business shall be necessary to
margin, guarantee, secure, transfer, adjust, or
settle a digital commodity transaction with a
registered entity may be withdrawn and applied
to such purposes, including the payment of
commissions, brokerage, interest, taxes,
storage, and other charges, lawfully accruing
in connection with the digital commodity
transaction.
``(B) Commission action.--Notwithstanding paragraph
(2), in accordance with such terms and conditions as
the Commission may prescribe by rule, regulation, or
order, any money, assets, or property of the customers
of a futures commission merchant described in paragraph
(2) may be commingled and deposited in customer
accounts with any other money, assets, or property
received by the futures commission merchant and
required by the Commission to be separately accounted
for and treated and dealt with as belonging to the
customer of the futures commission merchant.
``(4) Permitted investments.--Money described in paragraph
(2) may be invested in obligations of the United States, in
general obligations of any State or of any political
subdivision of a State, and in obligations fully guaranteed as
to principal and interest by the United States, or in any other
investment that the Commission may by rule or regulation
prescribe, and the investments shall be made in accordance with
such rules and regulations and subject to such conditions as
the Commission may prescribe.
``(5) Prohibition.--It shall be unlawful for any person,
including any derivatives clearing organization or depository
institution that has received any money, securities, or
property for deposit in a separate account or accounts as
provided in paragraph (2) to hold, dispose of, or use any of
the money, assets, or property that belongs to the depositing
futures commission merchant or any person other than the
digital commodity customer of the futures commission merchant.
``(6) Customer right to opt out.--
``(A) In general.--A customer shall have the right
to waive the restrictions in this subsection, by
affirmatively electing, in writing to the futures
commission merchant, to waive the restrictions.
``(B) Limitations.--The Commission may, by rule,
establish notice and disclosure requirements,
segregation requirements, investment limitations, and
other rules related to the waiving of any restrictions
under this subsection that are reasonably necessary to
protect customers, including eligible contract
participants, non-eligible contract participants, or
any other class of customers.
``(7) Customer protection during bankruptcy.--
``(A) Customer property.--All money, assets, or
property described in paragraph (2) shall be considered
customer property for purposes of section 761 of title
11, United States Code.
``(B) Transactions.--A cash or spot, leveraged,
margined, or financed digital commodity transaction in
which the futures commission merchant is acting as the
counterparty shall be considered a `contract for the
purchase or sale of a commodity for future delivery on,
or subject to the rules of, a contract market or board
of trade' for purposes of the definition of `commodity
contract' in section 761 of title 11, United States
Code.
``(C) Assets removed from segregation.--Assets
removed from segregation due to a customer election
under paragraph (6) shall not be considered customer
property for purposes of section 761 of title 11,
United States Code.''.
(e) Limitation on Futures Commission Merchant Acting as a
Counterparty in Digital Commodity Transactions.--Section 4d of such Act
(7 U.S.C. 6d) is further amended by adding at the end the following:
``(j) Limitation on Futures Commission Merchant Acting as a
Counterparty in Digital Commodity Transactions.--A registered futures
commission merchant shall not act as a counterparty in any agreement,
contract, or transaction involving a digital commodity that has not
been listed for trading on a registered digital commodity exchange.''.
(f) Common Provisions Applicable to Registered Entities.--Section
5c of such Act (7 U.S.C. 7a-2) is amended--
(1) in subsection (a), by striking ``5(d) and 5b(c)(2)''
and inserting ``5(d), 5b(c)(2), and 5i(c)'';
(2) in subsection (b)--
(A) in each of paragraphs (1) and (2), by inserting
``digital commodity exchange,'' before ``derivatives'';
and
(B) in paragraph (3), by inserting ``digital
commodity exchange,'' before ``derivatives'' each place
it appears; and
(3) in subsection (c)--
(A) in paragraph (2), by inserting ``or
participants'' before ``(in'';
(B) in paragraph (4)(B), by striking ``1a(10)'' and
inserting ``1a(9)''; and
(C) in paragraph (5), by adding at the end the
following:
``(D) Special rules for the listing of certain
digital commodities.--
``(i) In general.--In the case of listing a
digital commodity for trading which has not yet
been listed for trading on another registered
entity, paragraphs (2) and (3) shall apply as
if the listing were a rule, and paragraph (2)
shall be applied by substituting `20 business
days' for `10 business days'.
``(ii) Transitional extension.--For 1 year
after the registration of the first digital
commodity exchange, the Commission shall have
an additional 20 business days to review any
certification under clause (i).
``(iii) Digital commodity presales.--
``(I) In general.--In conjunction
with listing a digital commodity in
which any unit of the digital commodity
was obtained through a digital
commodity presale, a registered entity
shall prohibit any transaction with any
unit of the digital commodity obtained
in violation of section 4c(h).
``(II) Reliance on disclosure by
registered developer.--In complying
with subclause (I), a registered entity
may rely on the records and disclosures
of a registered digital commodity
developer submitted to the Commission
or its designee under section 4v in
determining whether a unit of a digital
commodity was obtained in violation of
section 4c(h).
``(iv) Consideration of comments.--In
conducting a review under clause (i), the
Commission shall consider any comments provided
by the Securities and Exchange Commission
regarding any inconsistencies with this Act
posed by the potential listing of an asset that
is not a digital commodity.''.
(g) Registration of Digital Commodity Exchanges; Qualified Digital
Commodity Custodians.--
(1) In general.--The Commodity Exchange Act (7 U.S.C. 1 et
seq.) is amended by inserting after section 5h the following:
``SEC. 5I. REGISTRATION OF DIGITAL COMMODITY EXCHANGES.
``(a) In General.--
``(1) Registration.--
``(A) In general.--Any trading facility that offers
or seeks to offer a market in digital commodities may
register with the Commission as a digital commodity
exchange.
``(B) Application.--A person desiring to register
as a digital commodity exchange shall submit to the
Commission an application in such form and containing
such information as the Commission may require for the
purpose of making the determinations required for
approval under subsections (c) and (e).
``(2) Deemed registration.--A registered designated
contract market or registered swap execution facility which
fulfills the requirements of this section may elect to be
considered a registered digital commodity exchange, in such
form and manner as the Commission shall prescribe.
``(3) Additional registrations.--A registered digital
commodity exchange shall be--
``(A) a member of a registered futures association;
and
``(B) registered with the Secretary of the Treasury
as a Money Services Business.
``(b) Trading.--
``(1) In general.--A digital commodity exchange that is
registered under subsection (a) may make available for trading
any digital commodity that is not readily susceptible to
manipulation, subject to this subsection.
``(2) Rules governing margined or leveraged trading.--The
Commission may make, promulgate, and enforce such additional
rules governing margined, leveraged, or financed transactions
as are reasonably necessary to protect market participants and
promote the orderly settlement of transactions with respect
to--
``(A) disclosure;
``(B) recordkeeping;
``(C) capital, margin, and other financial
resources;
``(D) reporting;
``(E) business conduct;
``(F) documentation; and
``(G) such other matters as the Commission
demonstrates to be necessary.
``(3) Prohibition on certain trading practices.--Sections
4b, 4c, and 6(c) shall apply to any agreement, contract, or
transaction in a digital commodity as if the agreement,
contract, or transaction were a contract of sale of a commodity
for future delivery.
``(4) Prohibition on trading derivatives products.--
Registration as a digital commodity exchange shall not permit a
trading facility to offer any contract of sale of a commodity
for future delivery, option, or swap for trading without also
being registered as a designated contract market or swap
execution facility.
``(5) Rules for digital commodity presales.--The digital
commodity exchange shall have in place such rules as may be
necessary to reasonably ensure the orderly sale of any unit of
a digital commodity obtained through a digital commodity
presale.
``(c) Core Principles for Digital Commodity Exchanges.--
``(1) Compliance with core principles.--
``(A) In general.--To be registered, and maintain
registration, as a digital commodity exchange, the
digital commodity exchange shall comply with--
``(i) the core principles described in this
subsection; and
``(ii) any requirement that the Commission
may impose by rule or regulation pursuant to
section 8a(5).
``(B) Reasonable discretion of a digital commodity
exchange.--Unless otherwise determined by the
Commission by rule or regulation, a digital commodity
exchange described in subparagraph (A) shall have
reasonable discretion in establishing the manner in
which the digital commodity exchange complies with the
core principles described in this subsection.
``(2) Compliance with rules.--A digital commodity exchange
shall--
``(A) establish and enforce compliance with any
rule of the digital commodity exchange, including--
``(i) the terms and conditions of the
trades traded or processed on or through the
digital commodity exchange; and
``(ii) any limitation on access to the
digital commodity exchange;
``(B) establish and enforce trading, trade
processing, and participation rules that will deter
abuses and have the capacity to detect, investigate,
and enforce those rules, including means--
``(i) to provide market participants with
impartial access to the market; and
``(ii) to capture information that may be
used in establishing whether rule violations
have occurred; and
``(C) establish rules governing the operation of
the exchange, including rules specifying trading
procedures to be used in entering and executing orders
traded or posted on the facility.
``(3) Digital commodities not readily susceptible to
manipulation.--
``(A) In general.--The digital commodity exchange
shall permit trading in only digital commodities that
are not readily susceptible to manipulation.
``(B) Listing restrictions.--A digital commodity
exchange shall not permit trading in--
``(i) a unit of a digital commodity, if it
is reasonably likely that the transaction
history of the digital commodity can be
fraudulently altered by any person or group of
persons acting collectively; or
``(ii) a unit of a digital commodity
subject to the restrictions in section 4c(h),
if it is reasonably likely that the
functionality or operation of the digital
commodity can be materially altered by any
person or group of persons under common
control.
``(C) Considerations.--In assessing a digital
commodity under this paragraph, the exchange shall
consider, with respect to the digital commodity--
``(i) its purpose and use;
``(ii) its unit creation or release
process;
``(iii) its consensus mechanism;
``(iv) its governance structure;
``(v) its participation and distribution;
``(vi) its current and proposed
functionality; and
``(vii) any other factor required by the
Commission.
``(D) Rules for fixed-value digital commodities.--A
fixed-value digital commodity shall be determined to be
not readily susceptible to manipulation under this
section if the issuer of the fixed-value digital
commodity is registered as a fixed-value digital
commodity operator or subject to comparable,
comprehensive supervision and regulation by another
Federal regulator or an appropriate government
authority in the home country of the fixed-value
digital commodity operator.
``(4) Treatment of customer assets.--
``(A) Required standards and procedures.--Each
digital commodity exchange shall establish standards
and procedures that are designed to protect and ensure
the safety of customer money, assets, and property.
``(B) Holding of customer assets.--
``(i) In general.--Each digital commodity
exchange shall hold customer money, assets, and
property in a manner to minimize the customer's
risk of loss or unreasonable delay in the
access to the money, assets, and property of
the customer.
``(ii) Segregation of funds.--
``(I) In general.--A digital
commodity exchange shall treat and deal
with all money, assets, and property of
any customer received as belonging to
the customer.
``(II) Commingling prohibited.--
Money, assets, and property of a
customer described in subclause (I)
shall be separately accounted for and
shall not be commingled with the funds
of the digital commodity exchange or be
used to margin, secure, or guarantee
any trades or accounts of any customer
or person other than the person for
whom the same are held.
``(iii) Exceptions.--
``(I) Use of funds.--
``(aa) In general.--
Notwithstanding clause (ii),
money, assets, and property of
customers of a digital
commodity exchange described in
clause (ii) may, for
convenience, be commingled and
deposited in the same account
or accounts with any bank,
trust company, or qualified
digital commodity custodian.
``(bb) Withdrawal.--
Notwithstanding clause (ii),
such share of the money,
assets, and property described
in item (aa) as in the normal
course of business shall be
necessary to margin, guarantee,
secure, transfer, adjust, or
settle a digital commodity
transaction with a registered
entity may be withdrawn and
applied to such purposes,
including the payment of
commissions, brokerage,
interest, taxes, storage, and
other charges, lawfully
accruing in connection with the
digital commodity transaction.
``(II) Commission action.--
Notwithstanding clause (ii), in
accordance with such terms and
conditions as the Commission may
prescribe by rule, regulation, or
order, any money, assets, or property
of the customers of a digital commodity
exchange described in clause (ii) may
be commingled and deposited in customer
accounts with any other money, assets,
or property received by the digital
commodity exchange and required by the
Commission to be separately accounted
for and treated and dealt with as
belonging to the customer of the
digital commodity exchange.
``(C) Permitted investments.--Money described in
clause (ii) may be invested in obligations of the
United States, in general obligations of any State or
of any political subdivision of a State, and in
obligations fully guaranteed as to principal and
interest by the United States, or in any other
investment that the Commission may by rule or
regulation prescribe, and such investments shall be
made in accordance with such rules and regulations and
subject to such conditions as the Commission may
prescribe.
``(D) Customer protection during bankruptcy.--
``(i) Customer property.--All assets held
on behalf of a customer by a digital commodity
exchange registered under section 5i of this
Act, and all money, assets, and property of any
customer received by a digital commodity
exchange registered under section 5i of this
Act for trading or custody, or to facilitate,
margin, guarantee, or secure digital commodity
transactions (including money, assets, or
property accruing to the customer as the result
of the transactions), shall be considered
customer property for purposes of section 761
of title 11, United States Code.
``(ii) Transactions.--A transaction
involving a unit of a digital commodity
occurring on or subject to the rules of a
digital commodity exchange registered under
section 5i of this Act shall be considered a
`contract for the purchase or sale of a
commodity for future delivery, on or subject to
the rules of, a contract market or board of
trade' for the purposes of the definition of a
`commodity contract' in section 761 of title
11, United States Code.
``(iii) Exchanges.--A digital commodity
exchange registered under section 5i of this
Act shall be considered a futures commission
merchant for purposes of section 761 of title
11, United States Code.
``(iv) Assets removed from segregation.--
Notwithstanding clause (i), assets that have
been removed from segregation due to a customer
election under subparagraph (F) shall not be
considered customer property for purposes of
section 761 of title 11, United States Code.
``(E) Misuse of customer property.--It shall be
unlawful--
``(i) for any digital commodity exchange
that has received any customer money, assets,
or property for custody to dispose of, or use
any such money, assets, or property as
belonging to the digital commodity exchange; or
``(ii) for any other person, including any
depository, other digital commodity exchange,
or digital commodity custodian that has
received any customer money, assets, or
property for deposit, to hold, dispose of, or
use any such money, assets, or property as
belonging to the depositing digital commodity
exchange or any person other than the customers
of the digital commodity exchange.
``(F) Customer right to opt out.--
``(i) In general.--A customer shall have
the right to waive the restrictions in
subparagraph (B), by affirmatively electing, in
writing to the digital commodity exchange, to
waive the restrictions.
``(ii) Limitations.--The Commission may, by
rule, establish notice and disclosure
requirements, segregation requirements,
investment limitations, and other rules related
to the waiving of any restrictions under this
paragraph that are reasonably necessary to
protect customers, including eligible contract
participants, non-eligible contract
participants, or any other class of customers.
``(5) Monitoring of trading and trade processing.--
``(A) In general.--The digital commodity exchange
shall provide a competitive, open, and efficient market
and mechanism for executing transactions that protects
the price discovery process of trading on the exchange.
``(B) Protection of markets and market
participants.--The digital commodity exchange shall
establish and enforce rules--
``(i) to protect markets and market
participants from abusive practices committed
by any party, including abusive practices
committed by a party acting as an agent for a
participant; and
``(ii) to promote fair and equitable
trading on the exchange.
``(C) The digital commodity exchange shall--
``(i) establish and enforce rules or terms
and conditions defining, or specifications
detailing--
``(I) trading procedures to be used
in entering and executing orders traded
on or through the facilities of the
digital commodity exchange; and
``(II) procedures for trade
processing of digital commodities on or
through the facilities of the digital
commodity exchange; and
``(ii) monitor trading in digital
commodities to prevent manipulation, price
distortion, and disruptions of the delivery or
cash settlement process through surveillance,
compliance, and disciplinary practices and
procedures, including methods for conducting
real-time monitoring of trading and
comprehensive and accurate trade
reconstructions.
``(6) Ability to obtain information.--The digital commodity
exchange shall--
``(A) establish and enforce rules that will allow
the facility to obtain any necessary information to
perform any of the functions described in this section;
``(B) provide the information to the Commission on
request; and
``(C) have the capacity to carry out such
international information-sharing agreements as the
Commission may require.
``(7) Emergency authority.--The digital commodity exchange
shall adopt rules to provide for the exercise of emergency
authority, in consultation or cooperation with the Commission
or a registered entity, as is necessary and appropriate,
including the authority to facilitate the liquidation or
transfer of open positions in any digital commodity or to
suspend or curtail trading in a digital commodity.
``(8) Reporting requirements.--
``(A) Duty of digital commodity exchange.--Each
digital commodity exchange shall provide to the
Commission all information that is determined by the
Commission to be necessary to perform each
responsibility of the Commission under this Act.
``(B) Timely publication of trading information.--
``(i) In general.--The digital commodity
exchange shall make public timely information
on price, trading volume, and other trading
data on digital commodities to the extent
prescribed by the Commission.
``(ii) Capacity of digital commodity
exchange.--The digital commodity exchange shall
be required to have the capacity to
electronically capture and transmit trade
information with respect to transactions
executed on the exchange.
``(9) Recordkeeping and reporting.--
``(A) In general.--A digital commodity exchange
shall--
``(i) maintain records of all activities
relating to the business of the facility,
including a complete audit trail, in a form and
manner acceptable to the Commission for a
period of 5 years;
``(ii) report to the Commission, in a form
and manner acceptable to the Commission, such
information as the Commission determines to be
necessary or appropriate for the Commission to
perform the duties of the Commission under this
Act; and
``(iii) keep any such records of digital
commodities which relate to a security open to
inspection and examination by the Securities
and Exchange Commission.
``(B) Information-sharing.--Subject to section 8,
and on request, the Commission shall share information
collected under subparagraph (A) with--
``(i) the Board;
``(ii) the Securities and Exchange
Commission;
``(iii) each appropriate Federal banking
agency;
``(iv) each appropriate State bank
supervisor (within the meaning of section 3 of
the Federal Deposit Insurance Act);
``(v) the Financial Stability Oversight
Council;
``(vi) the Department of Justice; and
``(vii) any other person that the
Commission determines to be appropriate,
including--
``(I) foreign financial supervisors
(including foreign futures
authorities);
``(II) foreign central banks; and
``(III) foreign ministries.
``(C) Confidentiality agreement.--Before the
Commission may share information with any entity
described in subparagraph (B), the Commission shall
receive a written agreement from each entity stating
that the entity shall abide by the confidentiality
requirements described in section 8 relating to the
information on digital commodity transactions that is
provided.
``(D) Providing information.--Each digital
commodity exchange shall provide to the Commission
(including any designee of the Commission) information
under subparagraph (A) in such form and at such
frequency as is required by the Commission.
``(10) Antitrust considerations.--Unless necessary or
appropriate to achieve the purposes of this Act, the digital
commodity exchange shall not--
``(A) adopt any rules or take any actions that
result in any unreasonable restraint of trade; or
``(B) impose any material anticompetitive burden on
trading.
``(11) Conflicts of interest.--The digital commodity
exchange shall--
``(A) establish and enforce rules to minimize
conflicts of interest in its decision-making process;
and
``(B) establish a process for resolving the
conflicts of interest.
``(12) Financial resources.--
``(A) In general.--Each digital commodity exchange
shall have adequate financial, operational, and
managerial resources, as determined by the Commission,
to discharge each responsibility of the digital
commodity exchange.
``(B) Minimum amount of financial resources.--Each
digital commodity exchange shall possess financial
resources that, at a minimum, exceed the total amount
that would enable the digital commodity exchange to
conduct an orderly wind-down of its activities.
``(C) Additional financial resources for leverage
trading.--The Commission may require such additional
financial resources as are necessary to enable a
digital commodity exchange which offers margined,
leveraged, or financed transactions to fulfill its
customer obligations.
``(13) Governance fitness standards.--
``(A) Governance arrangements.--Each digital
commodity exchange shall establish governance
arrangements that are transparent to fulfill public
interest requirements.
``(B) Fitness standards.--Each digital commodity
exchange shall establish and enforce appropriate
fitness standards for--
``(i) directors;
``(ii) any individual or entity with direct
access to the settlement activities of the
digital commodity exchange;
``(iii) any individual or entity with
direct access to any affiliated digital
commodity custodian;
``(iv) any entity offering affiliated
services for the digital commodity exchange;
and
``(v) any party affiliated with any
individual or entity described in this clause.
``(14) System safeguards.--The digital commodity exchange
shall--
``(A) establish and maintain a program of risk
analysis and oversight to identify and minimize sources
of operational and security risks, through the
development of appropriate controls and procedures, and
automated systems, that--
``(i) are reliable and secure; and
``(ii) have adequate scalable capacity;
``(B) establish and maintain emergency procedures,
backup facilities, and a plan for disaster recovery
that allow for--
``(i) the timely recovery and resumption of
operations; and
``(ii) the fulfillment of the
responsibilities and obligations of the digital
commodity exchange; and
``(C) periodically conduct tests to verify that the
backup resources of the digital commodity exchange are
sufficient to ensure continued--
``(i) order processing and trade matching;
``(ii) price reporting;
``(iii) market surveillance; and
``(iv) maintenance of a comprehensive and
accurate audit trail.
``(d) Appointment of Trustee.--
``(1) In general.--If a proceeding under section 5e results
in the suspension or revocation of the registration of a
digital commodity exchange, or if a digital commodity exchange
withdraws from registration, the Commission, on notice to the
digital commodity exchange, may apply to the appropriate United
States district court where the digital commodity exchange is
located for the appointment of a trustee.
``(2) Assumption of jurisdiction.--If the Commission
applies for appointment of a trustee under paragraph (1)--
``(A) the court may take exclusive jurisdiction
over the digital commodity exchange and the records and
assets of the digital commodity exchange, wherever
located; and
``(B) if the court takes jurisdiction under
subparagraph (A), the court shall appoint the
Commission, or a person designated by the Commission,
as trustee with power to take possession and continue
to operate or terminate the operations of the digital
commodity exchange in an orderly manner for the
protection of customers subject to such terms and
conditions as the court may prescribe.
``(e) Qualified Digital Commodity Custodian.--A digital commodity
exchange shall hold in a qualified digital commodity custodian each
unit of a digital commodity that is--
``(1) the property of a customer of the digital commodity
exchange;
``(2) required to be held by the digital commodity exchange
under subsection (b)(2) or (c)(12) of this section; or
``(3) otherwise so required by the Commission to reasonably
protect customers or promote the public interest.
``(f) Exemptions.--In order to promote responsible economic or
financial innovation and fair competition, or protect customers, the
Commission may (on its own initiative or on application of the
registered digital commodity exchange) exempt, either unconditionally
or on stated terms or conditions or for stated periods and either
retroactively or prospectively, or both, a registered digital commodity
exchange from the requirements of this section, if the Commission
determines that--
``(1)(A) the exemption would be consistent with the public
interest and the purposes of this Act; and
``(B) the exemption will not have a material adverse effect
on the ability of the Commission or the digital commodity
exchange to discharge regulatory or self-regulatory duties
under this Act; or
``(2) the digital commodity exchange is subject to
comparable, comprehensive supervision and regulation by the
appropriate government authorities in the home country of the
organization.
``(g) Customer Defined.--In this section, the term `customer' means
any person that maintains an account for the trading of digital
commodities directly with a digital commodity exchange (other than a
person that is owned or controlled, directly or indirectly, by the
digital commodity exchange) for its own behalf or on behalf of other
any person.
``(h) Federal Preemption.--Notwithstanding any other provision of
law, the Commission shall have exclusive jurisdiction over any digital
commodity exchange registered under this section.
``SEC. 5J. QUALIFIED DIGITAL COMMODITY CUSTODIANS.
``(a) In General.--The Commission shall designate a digital
commodity custodian as a qualified digital commodity custodian, if--
``(1) the Commission finds the digital commodity custodian
is subject to adequate supervision and appropriate regulation
by the Commission, the Securities and Exchange Commission, an
appropriate Federal banking agency, a State bank supervisor
(within the meaning of section 3 of the Federal Deposit
Insurance Act), or an appropriate foreign governmental
authority in the home country of the digital commodity
custodian; and
``(2) the digital commodity custodian agrees to such
regular and periodic sharing of information as the Commission
determines by rule shall be reasonably necessary to effectuate
any of the provisions, or to accomplish any of the purposes, of
this Act.
``(b) Rulemaking Authority.--For purposes of subsection (a), the
Commission, by rule or order, shall define `adequate supervision' and
`appropriate regulation' as any regulatory regime which meets such
minimum standards for supervision and regulation as the Commission
determines are reasonably necessary to protect the property of
customers of a registered digital commodity exchange, including minimum
standards relating to--
``(1) accessibility of customer assets;
``(2) financial resources;
``(3) risk management requirements;
``(4) governance arrangements;
``(5) fitness standards;
``(6) recordkeeping;
``(7) information-sharing; and
``(8) conflicts of interest.
``(c) Authority To Temporarily Suspend Standards.--The Commission
may, by rule or order, temporarily suspend, in whole or in part, any
requirement imposed under, or any standard referred to in, this section
if the Commission determines that the suspension would be consistent
with the public interest and the purposes of this Act.''.
(2) Certain digital commodity exchange functions not
sufficient to trigger requirement to register as futures
commission merchant.--Section 4f(c) of the Commodity Exchange
Act (7 U.S.C. 6f(c)) is amended by adding at the end the
following:
``(12) Clarification of scope of registration
requirement.--A registered digital commodity exchange shall not
be required to register as a futures commission merchant for
any activity for which the exchange is regulated under section
5i.''.
(h) Registration and Regulation of Fixed-Value Digital Commodity
Operators.--
(1) Definitions.--Section 1a of the Commodity Exchange Act
(7 U.S.C. 1a) is further amended by adding at the end the
following:
``(56) Fixed-value digital commodity.--
``(A) In general.--The term `fixed-value digital
commodity' means a digital commodity which is
redeemable for a fixed amount of fiat currency or
another commodity, or the value thereof.
``(B) Further definition.--The Commission, by rule
or regulation, may include within, or exclude from, the
term `fixed-value digital commodity' any digital
commodity if the Commission determines that the rule or
regulation will effectuate the purposes of this Act.
``(57) Fixed-value digital commodity operator.--
``(A) In general.--The term `fixed-value digital
commodity operator' means any person--
``(i) engaged in a business that solicits,
accepts, or receives funds, property, or other
assets from others for the purpose of issuing
units of a fixed-value digital commodity; or
``(ii) who is registered with the
Commission as a fixed-value digital commodity
operator.
``(B) Further definition.--The Commission, by rule
or regulation, may include within, or exclude from, the
term `fixed-value digital commodity operator' any
person engaged in a business of issuing fixed-value
digital commodities, if the Commission determines that
the rule or regulation will effectuate the purposes of
this Act.''.
(2) Registration and regulation.--The Commodity Exchange
Act (7 U.S.C. 1 et seq.) is amended by inserting after section
4t the following:
``SEC. 4U. REGISTRATION AND REGULATION OF FIXED-VALUE DIGITAL COMMODITY
OPERATORS.
``(a) Registration.--
``(1) In general.--A person may register with the
Commission as a fixed-value digital commodity operator.
``(2) Filing requirement.--A person desiring to register
with the Commission as a fixed-value digital commodity operator
shall file with the Commission a registration application, in
such form and manner as is prescribed by the Commission.
``(3) Application contents.--The application shall
include--
``(A) a description of the operation of the fixed-
value digital commodity, including the process for
issuing, redeeming, and calculating the value of the
outstanding redeemable units of the fixed-value digital
commodity;
``(B) the process by which the fixed-value digital
commodity operator would wind-down its business,
including--
``(i) transferring the funds and property
available for the redemption of units of the
fixed-value digital commodity to another fixed-
value digital commodity operator; or
``(ii) redeeming outstanding units of the
fixed-value digital commodity in an orderly
manner; and
``(C) such other information as the Commission
considers necessary concerning the business in which
the applicant is or will be engaged.
``(b) Prohibitions; Enforcement.--
``(1) Statutory disqualification.--Except to the extent
otherwise specifically provided by rule, regulation, or order,
it shall be unlawful for a registered fixed-value digital
commodity operator to permit any person who is associated with
the operator and is subject to a statutory disqualification, to
take any action in relation to the fixed-value digital
commodity on behalf of the operator, if the operator knew, or
in the exercise of reasonable care should have known, of the
statutory disqualification.
``(2) Revocation.--
``(A) In general.--The failure of a registered
fixed-value digital commodity operator to comply with
any provision of this Act or any regulation or order of
the Commission under this Act shall be cause for the
suspension for a period not to exceed 180 days, or
revocation, of the registration of the operator as a
fixed-value digital commodity operator, in accordance
with the procedures and subject to the judicial review
provided in section 6(b).
``(B) Trustee.--If a proceeding under subparagraph
(A) results in the suspension or revocation of the
registration of a fixed-value digital commodity
operator, or if such an operator withdraws from
registration, the Commission, on notice to the
operator, may apply to the appropriate United States
district court for the judicial district in which the
operator is located for the appointment of a trustee.
``(C) Assumption of jurisdiction.--If the
Commission applies for appointment of a trustee under
subparagraph (B)--
``(i) the court may take exclusive
jurisdiction over the fixed-value digital
commodity operator and the records and assets
of the operator, wherever located; and
``(ii) if the court takes jurisdiction
under clause (i), the court shall appoint the
Commission, or a person designated by the
Commission, as trustee with power to take
possession and continue to operate or terminate
the operations of the fixed-value digital
commodity operator in an orderly manner for the
protection of participants, subject to such
terms and conditions as the court may
prescribe.
``(c) Duties of a Registered Fixed-Value Digital Commodity
Operator.--A registered fixed-value digital commodity operator shall
comply, in such manner as the Commission shall by rule or order
determine, with the following requirements:
``(1) Disclosure of general information.--For each fixed-
value digital commodity it operates, such an operator shall--
``(A) disclose to the Commission information
concerning--
``(i) the terms and conditions of the
fixed-value digital commodity transactions;
``(ii) the fixed-value digital commodity
operations, mechanisms, and practices;
``(iii) the process for the issuance and
redemption of units of the fixed-value digital
commodity;
``(iv) the financial integrity protections
relating to the fixed-value digital commodity;
and
``(v) other information relevant to
transacting in the fixed-value digital
commodity; and
``(B) continue to submit to the Commission reports
that contain such information pertaining to the
business of the operator as the Commission may require.
``(2) Publicly available information.--For each fixed-value
digital commodity it operates, such an operator shall make
available to the public, information concerning--
``(A) the fixed-value digital commodity operations,
mechanisms, and practices;
``(B) the process for the issuance and redemption
of the units of the fixed-value digital commodity;
``(C) information about the material risks and
characteristics of the fixed-value digital commodity;
``(D) the total value of the outstanding units of
the fixed-value digital commodity;
``(E) the total value of funds and other property
held by the operator for redemption;
``(F) any material incentives or conflicts of
interest that the operator may have in connection with
the fixed-value digital commodity; and
``(G) any other information the Commission
determines is relevant to the public's understanding of
the operation of the fixed-value digital commodity.
``(3) Record of assets and liabilities.--For each fixed-
value digital commodity it operates, such an operator shall
maintain daily redemption fund records reflecting the total
amount of funds or property held by the operator for redemption
and the total value of outstanding redeemable units of the
fixed-value digital commodity.
``(4) Ability to obtain information.--Such an operator
shall--
``(A) establish and enforce internal systems and
procedures to obtain any necessary information to
perform any of the functions described in this section;
and
``(B) provide the information to the Commission, as
applicable, on request.
``(5) Conflicts of interest.--Such an operator shall
implement conflict-of-interest systems and procedures that
address such issues as the Commission determines to be
appropriate.
``(6) Risk management procedures.--Such an operator shall
establish robust and professional risk management systems
adequate for managing the day-to-day business of the operator.
``(7) Reporting and recordkeeping.--Such an operator
shall--
``(A) make such reports as are required by the
Commission by rule or regulation regarding the issuance
and redemption transactions, and positions and
financial condition of the registered fixed-value
digital commodity operator;
``(B) keep books and records in such form and
manner and for such period as may be prescribed by the
Commission by rule or regulation; and
``(C) keep the books and records referred to in
subparagraph (B) open to inspection and examination by
any representative of the Commission.
``(8) Business conduct standards.--Such an operator shall
conform with such business conduct standards as the Commission
may prescribe, related to--
``(A) fraud, manipulation, and other abusive
practices involving the issuance and redemption of any
unit of the fixed-value digital commodity;
``(B) diligent supervision of the business of the
operator;
``(C) communicating with the public in a fair and
balanced manner based on principles of fair dealing and
good faith; and
``(D) such other standards and requirements as the
Commission may determine are appropriate in the public
interest, for the protection of participants in the
fixed-value digital commodity, or otherwise in
furtherance of the purposes of this section.
``(9) Requirements for issuance and redemption transaction
records.--
``(A) In general.--For each fixed-value digital
commodity it operates, such an operator shall maintain
daily transaction records of the units of the fixed-
value digital commodity issued or redeemed by the
operator for such period as may be required by the
Commission by rule or regulation.
``(B) Counterparty records.--For each fixed-value
digital commodity it operates, such an operator shall
maintain daily transaction records for each
counterparty to an issuance or redemption transaction
in a manner and form that is identifiable with each
fixed-value digital commodity transaction.
``(C) Audit trail.--For each fixed-value digital
commodity it operates, such an operator shall maintain
a complete audit trail for conducting comprehensive and
accurate issuance and redemption transaction
reconstructions.
``(D) Information requirements.--Such a daily
transaction record shall include such information as
the Commission shall require by rule or regulation.
``(d) Funds Held for Redemption.--
``(1) Amount of funds.--For each fixed-value digital
commodity it operates, a registered fixed-value digital
commodity operator shall maintain funds or other property equal
to the total value of any outstanding redeemable fixed-value
digital commodities issued by the operator, as determined in
accordance with such requirements and limitations on valuation
as the Commission shall, by rule, prescribe.
``(2) Segregation requirements.--
``(A) Funds held for redemption.--For each fixed-
value digital commodity it operates, a registered
fixed-value digital commodity operator shall--
``(i) segregate the funds or other property
held for redemption; and
``(ii) in accordance with such rules and
regulations as the Commission may promulgate,
maintain the funds or other property in a
segregated account separate from the assets and
other interests of the operator.
``(B) Applicability.--Subparagraph (A) shall not
preclude any commercial arrangement regarding the
investment of segregated funds or other property that
may only be invested in such investments as the
Commission may permit by rule or regulation.
``(C) Custodians.--The segregated account referred
to in subparagraph (A) shall be carried by a qualified
digital commodity custodian for any digital commodity
held for redemption.
``(e) Financial Resources.--
``(1) In general.--A registered fixed-value digital
commodity operator shall meet such minimum capital requirements
as the Commission shall by rule or regulation prescribe,
pursuant to the standards in paragraph (2).
``(2) Standards for capital requirements.--
``(A) The requirements imposed under paragraph (1)
shall--
``(i) help ensure the safety and soundness
of the fixed-value digital commodity operator;
``(ii) be appropriate for the risk
associated with the funds for redemption held
by such an operator; and
``(iii) be sufficient for the operator to
comply with its plan for an orderly wind-down
of its activities.
``(B) Adjustments.--In setting capital requirements
for a registered fixed-value digital commodity
operator, the Commission shall take into account--
``(i) the risks associated with other
activities conducted by the operator or
affiliated entity for activities not subject to
regulations providing for a minimum capital
standard; and
``(ii) any other capital requirement
imposed on the operator or affiliated entity
for activities subject to regulations providing
for a minimum capital standard.
``(f) Exemptions.--In order to promote responsible economic or
financial innovation and fair competition, or protect customers, the
Commission may (on its own initiative or on application of the
registered fixed-value digital commodity operator) exempt, either
unconditionally or on stated terms or conditions or for stated periods
and either retroactively or prospectively, or both, a registered fixed-
value digital commodity operator from the requirements of this section,
if the Commission determines that--
``(1) the exemption would be consistent with the public
interest and the purposes of this Act; and
``(2) the exemption will not have a material adverse effect
on the ability of the Commission or the operator to discharge
any duty of the Commission or the operator, respectively, under
this Act.
``(g) Rulemaking.--
``(1) In general.--The Commission shall adopt rules for
registered fixed-value digital commodity operators and to
effectuate the requirements of this section.
``(2) Prohibition on the collection of certain
information.--This section shall not be construed to--
``(A) require a registered fixed-value digital
commodity operator to solicit, collect, maintain,
report, or otherwise make available to the Commission,
any other State or Federal agency, or any foreign
authority, any record or information relating to any
person, counterparty, amount, or account utilizing a
unit of the fixed-value digital commodity in a
transaction which does not involve the issuance or
redemption of a unit of the fixed-value digital
commodity, or to cause any other person to do the same;
or
``(B) permit the Commission to require such an
operator to solicit, collect, maintain, report, or
otherwise make available to the Commission, any other
State or Federal agency, or any foreign authority, any
record or information relating to any person,
counterparty, amount, or account utilizing a unit of
the fixed-value digital commodity in a transaction
which does not involve the issuance or redemption of a
unit of the fixed-value digital commodity, or to cause
any other person to do the same.''.
(i) Voluntary Registration and Disclosures by Digital Commodity
Developers.--
(1) Definition.--Section 1a of the Commodity Exchange Act
(7 U.S.C. 1a) is further amended by adding at the end the
following:
``(58) Digital commodity developer.--The term `digital
commodity developer' means a person who creates or develops a
digital commodity.''.
(2) Registration and disclosures.--The Commodity Exchange
Act (7 U.S.C. 1 et seq.), as amended by subsection (f)(2) of
this section, is further amended by inserting after section 4t
the following:
``SEC. 4V. REGISTRATION AND DISCLOSURES BY DIGITAL COMMODITY
DEVELOPERS.
``(a) Registration.--Any person may register with the Commission as
a digital commodity developer by filing a registration application with
the Commission.
``(b) Requirements.--
``(1) In general.--The application shall be made in such
form and manner as prescribed by the Commission, and shall
contain such information, as the Commission determines by rule
is necessary to effectuate the purposes of this Act.
``(2) Membership.--Any person registered as a digital
commodity developer shall be a member of a registered futures
association for the duration of the registration.
``(3) Expiration.--Each registration under this section
shall expire--
``(A) when the applicant withdraws from
registration;
``(B) when the applicant fails to comply with the
requirements of this section; or
``(C) at such other time as the Commission may
prescribe by rule or regulation.
``(c) Disclosures.--For each digital commodity, a registered
digital commodity developer shall submit to the Commission or its
designee, and maintain on a publicly available website, in such form
and manner as prescribed by the Commission, the following:
``(1) Initial disclosures.--
``(A) Project disclosures.--A general description
of the digital commodity, including--
``(i) its purpose and use;
``(ii) its unit creation or release
process;
``(iii) its consensus mechanism;
``(iv) its governance structure;
``(v) its participation and distribution;
``(vi) its current and proposed
functionality; and
``(vii) any other such information the
Commission determines will effectuate the
purposes of this Act.
``(B) Development disclosures.--A list of all
individuals who are--
``(i) participants in a related digital
commodity presale;
``(ii) holders of units of the digital
commodity subject to the limitations in section
4c(h);
``(iii) holders of rights or promises to
future units of the digital commodity; or
``(iv) compensated in any fashion for
providing material support for the development
of the digital commodity.
``(C) Technical disclosures.--Technical
documentation related to the digital commodity,
including any--
``(i) whitepaper;
``(ii) source code;
``(iii) development guide; or
``(iv) other similar material.
``(2) Periodic disclosures.--The digital commodity
developer shall periodically update the disclosures made
pursuant to subsection (c)(1), at such frequency as prescribed
by the Commission.
``(3) Post-filing digital commodity sale disclosures.--
``(A) In general.--The digital commodity developer
shall publicly disclose the sale or transfer of any
unit, or any promise or right to any future unit, of
the digital commodity, that is subject to the
restrictions in section 4c(h).
``(B) Contents.--Each disclosure required under
subparagraph (A) shall include the date of sale, number
of digital commodities sold, number of purchasers if
identifiable, any limitations or restrictions on the
transferability of the digital commodities sold, price
per digital commodity, and the type and amount of
consideration received.
``(4) Substitute disclosures.--The Commission may exempt,
conditionally or unconditionally, a digital commodity developer
from the disclosure requirements under this section if the
Commission determines that the digital commodity developer
complies with the comparable disclosure requirements of another
federal regulator.
``(d) No Requirement to Register.--The creator or developer of a
digital commodity shall not be required to be registered under this
section in order for a digital commodity created or developed by the
creator or developer to be listed for trading on a registered digital
commodity exchange.''.
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