Digital Asset Market Structure and Investor Protection Act
This bill generally addresses the regulatory treatment of digital assets and digital asset securities.
The bill grants the Commodities Futures Trading Commission authority over digital assets, which (1) are created electronically or digitally through software code; (2) are programmed with rules that govern the creation, supply, ownership, use, and transfer of the asset; (3) have a secure transaction history; and (4) are capable of being transferred through a decentralized method without an intermediate custodian.
Additionally, the bill grants the Securities and Exchange Commission authority over the regulation of digital asset securities, digital assets that provide the holder with (1) equity or debt interest in the issuer, (2) rights to certain payments from the issuer, (3) voting rights in the major corporate actions of the issuer, or (4) liquidation rights in the event of the issuer's liquidation.
Digital assets and digital asset securities are subject to the Bank Secrecy Act for anti-money laundering, reporting, and recordkeeping purposes.
The Board of Governors of the Federal Reserve System may issue digital currency. However, digital assets, digital asset securities, and fiat-based stablecoins (a digital asset pegged to the U.S. dollar or other fiat currency) are not U.S. legal tender. Digital asset fiat-based stablecoins must be registered with and approved by the Department of the Treasury.
Digital assets shall not be covered by the Federal Deposit Insurance Corporation and the National Credit Union Administration depository insurance.
The Financial Crimes Enforcement Network must issue rules regarding the use of anonymizing services and other anonymity-enhanced convertible virtual currency services.
[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5745 Introduced in House (IH)]
<DOC>
118th CONGRESS
1st Session
H. R. 5745
To provide for the regulation of digital assets, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 27, 2023
Mr. Beyer introduced the following bill; which was referred to the
Committee on Financial Services, and in addition to the Committees on
Agriculture, and Ways and Means, for a period to be subsequently
determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To provide for the regulation of digital assets, 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 Asset Market Structure and
Investor Protection Act''.
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I--DIGITAL ASSET SECURITIES UNDER THE FEDERAL SECURITIES LAWS
Subtitle A--Securities Exchange Act of 1934
Sec. 101. Definition of digital asset security.
Sec. 102. Delayed registration for digital asset securities.
Sec. 103. Desecuritization of digital asset securities.
Sec. 104. Joint SEC and CFTC rulemaking on major digital asset
classification.
Sec. 105. Conforming amendments.
Subtitle B--Other Securities Laws
Sec. 111. Securities Act of 1933.
Sec. 112. Investment Advisers Act of 1940.
Sec. 113. Investment Company Act of 1940.
Sec. 114. Securities Investor Protection Act of 1970.
TITLE II--TREATMENT OF DIGITAL ASSETS UNDER THE COMMODITY EXCHANGE ACT
Sec. 201. Definitions.
Sec. 202. Actual delivery of digital assets.
Sec. 203. Optional Federal charter for digital asset trading and
clearing.
Sec. 204. Reporting requirements.
Sec. 205. CTA and CPOs: Commodity Interests.
Sec. 206. Swap data repositories and digital asset trade repositories.
TITLE III--DIGITAL FEDERAL RESERVE NOTES, LEGAL TENDER STATUS, THE
REGULATION OF DIGITAL ASSET FIAT-BASED STABLECOINS, AND FEDERAL DEPOSIT
AND SHARE INSURANCE FOR DIGITAL ASSETS
Subtitle A--Digital Federal Reserve Notes
Sec. 301. In general.
Sec. 302. Digital asset legal tender status.
Subtitle B--Regulation of Digital Asset Fiat-Based Stablecoins
Sec. 311. Department of Treasury regulation of digital asset fiat-based
stablecoins.
Sec. 312. Conforming amendment.
Subtitle C--Federal Deposit and Share Insurance for Digital Assets
Sec. 321. Digital asset not deposits for Federal deposit and share
insurance.
Sec. 322. Directed rulemaking FDIC and NCUA website disclosure on
digital assets and insurance noncoverage.
TITLE IV--BANK SECRECY ACT
Sec. 401. Bank Secrecy Act.
Sec. 402. Anonymizing services, money mule, and anonymity-enhanced
convertible virtual currencies.
Sec. 403. Digital asset transaction actual delivery reporting.
Sec. 404. Virtual digital asset service providers.
TITLE V--VARIOUS DIGITAL ASSET REPORTS
Sec. 501. IRS report on digital asset ownership/taxes.
Sec. 502. Report on ransomware and digital assets.
Sec. 503. Report on decentralized finance.
Sec. 504. Report on custody of digital assets and digital asset
securities.
Sec. 505. Report on digital asset trading platforms.
Sec. 506. Report on false trade reporting, wash trading, and off-chain
transaction on digital asset trading
platforms.
Sec. 507. Relevant committees defined.
TITLE I--DIGITAL ASSET SECURITIES UNDER THE FEDERAL SECURITIES LAWS
Subtitle A--Securities Exchange Act of 1934
SEC. 101. DEFINITION OF DIGITAL ASSET SECURITY.
(a) Definition of Security.--Section 3(a)(10) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a)(10)) is amended--
(1) by inserting ``digital asset security,'' after
``investment contract,''; and
(2) by striking ``; but shall not include currency'' and
inserting ``; but shall not include any fiat currency,
commodity, digital asset,''.
(b) Other Definitions.--Section 3(a) of the Securities Exchange Act
of 1934 (15 U.S.C. 78c(a)) is amended--
(1) by transferring paragraph (79) so as to appear after
paragraph (78);
(2) by redesignating the second paragraph (80) as paragraph
(81); and
(3) by adding at the end the following:
``(82) Digital asset security.--
``(A) In general.--The term `digital asset
security' means a digital asset that:
``(i) Provides the holder of the digital
asset with any of the following rights:
``(I) Equity or debt interest in
the issuer.
``(II) Right to profits, interest,
or dividend payments from the issuer.
``(III) Voting rights in the major
corporate actions (which shall not
include new block creations, hardforks,
or protocol changes related to the
digital asset) of the issuer.
``(IV) Liquidation rights in the
event of the issuer's liquidation.
``(ii) In the case of an issuer with a
service, goods, or platform that is not wholly
operational at the time of issuing such digital
asset, with respect to any fundraising or
capital formation activity (including initial
coin offerings) which is accomplished through
the issuance of such a digital asset, issues
such digital asset to a holder in return for
money (including other digital assets) to fund
the development of the proposed service, goods,
or platform of the issuer.
``(B) Rule relating to digital assets.--The term
`digital asset security' does not include any digital
asset other than the digital assets described in
subparagraph (A). Any digital asset not described in
subparagraph (A) shall be considered to be, and
regulated as, a commodity under the Commodity Exchange
Act (7 U.S.C. 1a et seq.).''.
SEC. 102. DELAYED REGISTRATION FOR DIGITAL ASSET SECURITIES.
Section 12(g)(1) of the Securities Exchange Act of 1934 (15 U.S.C.
78l(g)(1)) is amended--
(1) in subparagraph (A)(ii), by striking ``and'' at the
end;
(2) in subparagraph (B), by inserting ``and'' after
``persons,''; and
(3) by inserting after subparagraph (B) the following:
``(C) in the case of an issuer of a digital asset security,
not later than 120 days after the last day of the third fiscal
year on which the issuer first has total assets exceeding
$10,000,000 and a class of equity security (other than an
exempted security) held of record by 2,000 or more persons,''.
SEC. 103. DESECURITIZATION OF DIGITAL ASSET SECURITIES.
Section 12(g) of the Securities Exchange Act of 1934 (15 U.S.C.
78l(g)) is amended by adding at the end the following:
``(7) Desecuritization of digital asset
securities.--Registration of any class of digital asset
security pursuant to this subsection or status as a
security (or both) shall be terminated ninety days, or
such shorter period as the Commission may determine,
after the issuer files a desecuritization certification
with the Commission. The desecuritization certification
shall demonstrate that the issuer's service, goods, or
platform are fully operational and that the digital
asset does not provide holders of such digital assets
with any of the rights specified in subclauses (I)
through (IV) of section 3(a)(82)(A). The Commission
shall after notice and opportunity for hearing deny
termination of registration or change in status as a
security (or both) if it finds that the
desecuritization certification is untrue. Termination
of registration or change in status (or both) shall be
deferred pending final determination on the question of
denial. A digital asset security so desecuritized shall
be considered to be, and regulated as, a commodity
under the Commodity Exchange Act (7 U.S.C. 1a et
seq.).''.
SEC. 104. JOINT SEC AND CFTC RULEMAKING ON MAJOR DIGITAL ASSET
CLASSIFICATION.
The Securities Exchange Act of 1934 is amended by adding at the end
the following:
``SEC. 105. JOINT SEC AND CFTC RULEMAKING ON MAJOR DIGITAL ASSET
CLASSIFICATION.
``(a) In General.--Not later than 150 days after the date of the
enactment of this section, the Commission and the Commodity Futures
Trading Commission shall jointly publish, for purposes of a 60-day
public comment period, a proposed rulemaking that classifies each of
the major digital assets by (i) highest market capitalization and (ii)
highest daily trading volume as either--
``(1) a digital asset; or
``(2) a digital asset security.
``(b) Final Rule.--Not later than 270 days after the date of the
enactment of this Act, the Commission and the Commodity Futures Trading
Commission shall jointly publish a final rule that classifies each of
the major digital assets by (i) highest market capitalization and (ii)
highest daily average trading volume as--
``(1) a digital asset; or
``(2) a digital asset security.
``(c) Major Digital Assets Defined.--In this subsection, the term
`major digital assets' means the top 25 digital assets (including
digital asset securities) by (i) the highest market capitalization and
(ii) the highest daily trading volume as of the date of the enactment
of the Digital Asset Market Structure and Investor Protection Act as
reported on an appropriate publicly available website (as jointly
determined by the Commission and the Commodity Futures Trading
Commission) that publishes such information, such as CoinMarketCap.''.
SEC. 105. CONFORMING AMENDMENTS.
(a) Definition of Broker.--Section 3(a)(4)(A) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a) is amended by inserting
``including a digital asset security, but not digital assets,'' after
``security''.
(b) Securities Exchange Act Definitions.--Section 3(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)), as amended by
section 101, is further amended by adding at the end the following:
``(83) Commodity exchange act terms.--The terms,
`commodity', `digital asset', `digital asset repository of
transactions', and `virtual currency' have the meanings given
such terms, respectively, in section 1a of the Commodity
Exchange Act (7 U.S.C. 1a).''.
Subtitle B--Other Securities Laws
SEC. 111. SECURITIES ACT OF 1933.
(a) Definition of Security.--Section 2(a)(1) of the Securities Act
of 1933 (15 U.S.C. 77b(a)(1)) is amended--
(1) by inserting ``digital asset security,'' after
``investment contract,''; and
(2) by striking the period at the end and inserting ``; but
does not include any fiat currency, commodity, digital asset,
or any note, draft, bill of exchange, or banker's acceptance
which has a maturity at the time of issuance of not exceeding
nine months exclusive of days of grace or any renewal thereof
the maturity of which is likewise limited.''.
(b) Other Definitions.--Section 2(a) of the Securities Act of 1933
(15 U.S.C. 77b(a)) is amended by adding the following:
``(20) The terms `commodity', `digital asset', `digital
asset repository of transactions', and `virtual currency' have
the meanings given such terms, respectively, in section 1a of
the Commodity Exchange Act (7 U.S.C. 1a).
``(21) The term `digital asset security' has the meaning
given such term in section 3(a) of the Securities Exchange Act
of 1934 (15 U.S.C. 78c(a)).''.
SEC. 112. INVESTMENT ADVISERS ACT OF 1940.
(a) Definition of Security.--Section 202(a)(18) of the Investment
Advisers Act of 1940 (15 U.S.C. 80b-2(a)(18)) is amended--
(1) by inserting ``digital asset security,'' after
``investment contract,''; and
(2) by striking the period at the end and inserting ``; but
does not include any fiat currency, commodity, digital asset,
or any note, draft, bill of exchange, or banker's acceptance
which has a maturity at the time of issuance of not exceeding
nine months exclusive of days of grace or any renewal thereof
the maturity of which is likewise limited.''.
(b) Definition of Digital Asset Security.--Section 202(a) of the
Investment Advisers Act of (15 U.S.C. 80b-2(a)) is amended by adding at
the end the following:
``(31) The term `digital asset security' has the meaning
given such term section 3(a) of the Securities Exchange Act of
1934 (15 U.S.C. 78c(a)).''.
(c) Other Definitions.--The second paragraph (29) of section 202(a)
of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(29)) is
amended by inserting ```commodity', `digital asset', `digital asset
repository of transactions', `virtual currency''', after ```commodity
trading advisor',''.
SEC. 113. INVESTMENT COMPANY ACT OF 1940.
(a) Definition of Security.--Section 2(a)(36) of the Investment
Company Act of 1940 (15 U.S.C. 80b-2(a)(36) is amended--
(1) by inserting ``digital asset security,'' after
``investment contract,''; and
(2) by striking the period at the end and inserting ``; but
does not include any fiat currency, commodity, digital asset,
or any note, draft, bill of exchange, or banker's acceptance
which has a maturity at the time of issuance of not exceeding
nine months exclusive of days of grace or any renewal thereof
the maturity of which is likewise limited.''.
(b) Commodity Exchange Act Terms.--Section 2(a)(54) of the
Investment Company Act of 1940 (15 U.S.C. 80a-2(a)) is amended by
striking ``and `swap execution facility''' and inserting ```swap
execution facility', `commodity', `digital asset', `digital asset
repository of transactions', and `virtual currency'''.
(c) Definition of Digital Asset Security.--Section 2(a) of the
Investment Company Act of 1940 (15 U.S.C. 80a-2(a)) is amended by
adding at the end the following:
``(55) The term `digital asset security' has the meaning
given such term in section 3(a) of the Securities Exchange Act
of 1934 (15 U.S.C. 78c(a)).''.
SEC. 114. SECURITIES INVESTOR PROTECTION ACT OF 1970.
(a) In General.--
(1) Definition of security.--Section 16(14) of the
Securities Investor Protection Act of 1970 (15 U.S.C.
78lll(14)) is amended--
(A) by inserting ``, digital asset security,''
after ``investment contract'';
(B) by inserting ``, digital asset security,''
after ``if such investment contract''; and
(C) in the last sentence, by inserting ``digital
asset,'' after ``commodity,''.
(2) Other definitions.--Section 16 of the Securities
Investor Protection Act of 1970 (15 U.S.C. 78lll) is amended by
adding the following:
``(15) Commodity exchange act terms.--The terms
`commodity', `digital asset', `digital asset repository of
transactions', and `virtual currency' have the meanings given
such terms, respectively, in section 1a of the Commodity
Exchange Act (7 U.S.C. 1a).
``(16) Digital asset security.--The term `digital asset
security' has the meaning given such term in section 3(a) of
the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).''.
(b) SIPC Notice.--Not later than 90 days after the date of the
enactment of this Act, the Securities Investor Protection Corporation
shall make publicly available on the website of the Corporation a
notice--
(1) regarding the status of digital assets and digital
asset securities and how such status impacts Securities
Investor Protection Corporation insurance coverage; and
(2) that digital assets are not deposits and digital asset
securities are in almost all cases not securities and neither
would be covered by Securities Investor Protection Corporation
insurance, regardless of whether--
(A) an insured bank, savings association, or credit
union holds the digital assets or digital asset
securities; or
(B) a broker or dealer (as defined in section 3(a)
of the Securities Exchange Act of 1934 (15 U.S.C.
78c(a))) holds the digital assets or digital asset
securities.
TITLE II--TREATMENT OF DIGITAL ASSETS UNDER THE COMMODITY EXCHANGE ACT
SEC. 201. DEFINITIONS.
(a) Definition of Commodity.--Section 1a(9) of the Commodity
Exchange Act (7 U.S.C. 1a(9)) is amended by adding ``digital asset
(including Bitcoin, Ether, and their hardforks),'' after ``livestock
products,''.
(b) Other Definitions Relating to Digital Assets.--Section 1a of
the Commodity Exchange Act (7 U.S.C. 1a) is amended by adding at the
end the following:
``(52) Digital asset.--The term `digital asset'--
``(A) means an asset--
``(i) that is created electronically or
digitally through software code;
``(ii) that is programmed with rules that--
``(I) govern the creation, supply,
ownership, use, and transfer of such
digital asset; and
``(II) are designed to resist
modification or tampering by any single
person or persons under common control;
``(iii) that has a transaction history
that--
``(I) is recorded on a--
``(aa) distributed digital
ledger; or
``(bb) digital data
structure in which consensus is
achieved through a
mathematically verifiable
process;
``(II) is updated as soon as
possible in accordance with the digital
asset programming rules related to
transactions and ownership; and
``(III) after consensus is reached,
is designed to prevent modification or
tampering with the ownership or
transaction history by any single
person or persons under common control;
``(iv) that is capable of being transferred
between persons through a decentralized method
without an intermediate custodian; and
``(B) is a broad term which includes several other
terms used to describe digital assets by market
participants and regulators such as `virtual asset',
`virtual currency', and `convertible virtual currency'
among others.
``(53) Digital asset security.--The term `digital asset
security' has the meaning given the term in section 3(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).
``(54) Digital asset repository of transactions.--The term
`digital asset repository of transactions' or `DART' means any
person that collects and maintains information or records with
respect to transactions or positions in, or the terms and
conditions of, contracts of sale of digital assets in
interstate commerce entered into by third parties (both on
chain public distributed ledger transactions as well as off-
chain transactions) for the purpose of providing a centralized
recordkeeping facility for any digital asset, but does not
include a private or public distributed ledger or the operator
of either such ledger unless such private or public distributed
ledger or operator seeks to aggregate or include `off-chain'
transactions as well.
``(55) Distributed ledger technology.--The term
`distributed ledger technology,' means a decentralized peer-to-
peer network of computers that operate on open-source software
which validate and irrevocably log digital asset ownership and
transactions on a permanent public distributed ledger which is
visible to the entire network.
``(56) Virtual currency.--The term `virtual currency' means
a digital asset which is a digital representation of value that
does not have legal tender status and that functions as a
medium of exchange, a unit of account, or a store of value.''.
(c) Definition of Commodity Trading Advisor.--Section
1(a)(12)(A)(i) of the Commodity Exchange Act (7 U.S.C. 1(a)(12)(A)(i)
is amended by adding ``commodity interests, including any--'' after
``advisability of trading in''.
(d) Definition of Futures Commission Merchant.--Section
1a(28)(A)(i)(I)(aa) Commodity Exchange Act (7 U.S.C. 1a(9)) is
amended--
(1) in subitem (EE), by striking ``or'' at the end; and
(2) by adding at the end the following:
``(GG) any contract
of sale of a digital
asset in interstate
commerce, but not a
digital asset security;
or''.
(e) Definition of Introducing Broker.--Section 1a(31)(A)(i)(I) of
the Commodity Exchange Act (7 U.S.C. 1a(31)) is amended--
(1) in item (cc) by striking ``or'' at the end;
(2) in item (dd), by striking ``and'' at the end and
inserting ``or''; and
(3) by adding at the end the following:
``(ee) any contract of sale
of a digital asset in
interstate commerce, but not a
digital asset security; and''.
SEC. 202. ACTUAL DELIVERY OF DIGITAL ASSETS.
Section 2(c)(2)(D)(ii)(III) of the Commodity Exchange Act (7 U.S.C.
2(c)(2)(D)(ii)(III)) is amended--
(1) in item (aa)--
(A) by striking ``other longer'' and inserting
``shorter''; and
(B) by striking ``; or'' and inserting a semicolon;
and
(2) by adding at the end the following:
``(cc) with respect to
digital assets, results in
actual delivery (including
transfer of control over
private keys) not later than 24
hours after the transaction is
entered into and such delivery
is accomplished by either--
``(AA) recording
the transaction on the
public distributed
ledger for the digital
asset; or
``(BB) with respect
to digital asset
transactions which are
not recorded on a
public distributed
ledger for the digital
asset, reporting the
transaction to a CFTC
registered digital
asset repository of
transactions; or''.
SEC. 203. OPTIONAL FEDERAL CHARTER FOR DIGITAL ASSET TRADING AND
CLEARING.
Section 2(a)(1) of the Commodity Exchange Act (7 U.S.C. 2(a)(1)) is
amended by adding at the end the following:
``(J) Optional federal charter for digital asset
trading and clearing.--Notwithstanding any other
provision of law, a registered entity may list, trade,
or clear a contract of sale of a commodity in
interstate commerce (including digital assets). The
registered entity shall apply all the core principles
and related regulations, including Bank Secrecy Act,
anti-money laundering and know your customer
requirements, to such contracts. The Commission shall
have exclusive jurisdiction under this paragraph over
any agreement, contract, or transaction involving a
contract of sale of a commodity in interstate commerce
(including any digital asset) which is listed, traded,
or cleared on or through a registered entity and,
provided further, such contracts shall be treated for
regulatory and enforcement purposes as if they were
contracts of sale of a commodity for future
delivery.''.
SEC. 204. REPORTING OF DIGITAL ASSET TRANSACTIONS TO DART.
A digital asset trading platform shall report to the digital asset
repository of transactions each contract of sale of a digital asset in
interstate commerce transaction executed on such digital asset trading
platform, not later than 24 hours after such trade has executed.
SEC. 205. CTA AND CPOS: COMMODITY INTERESTS.
Section 4m (3)(C) of the Commodity Exchange Act (7 U.S.C. 6m(3)(C))
is amended by replacing the word ``paragraph'' with ``Act'' and
striking the word ``physical''.
SEC. 206. SWAP DATA REPOSITORIES AND DIGITAL ASSET TRADE REPOSITORIES.
Section 21 of the Commodity Exchange Act (7 U.S.C. 24a) is amended
to read as follows:
``SEC. 21. SWAP DATA REPOSITORIES AND DIGITAL ASSET TRADE REPOSITORIES.
``(a) Registration Requirement.--
``(1) Requirement; authority of derivatives clearing
organization.--
``(A) In general.--It shall be unlawful for any
person, unless registered with the Commission, directly
or indirectly to make use of the mails or any means or
instrumentality of interstate commerce to perform the
functions of a swap data repository or a digital asset
repository of transactions.
``(B) Registration of derivatives clearing
organizations.--A derivatives clearing organization may
register as a swap data repository.
``(2) Inspection and examination.--Each registered swap
data repository and digital asset repository of transactions
shall be subject to inspection and examination by any
representative of the Commission.
``(3) Compliance with core principles.--
``(A) In general.--To be registered, and maintain
registration, as a swap data repository or a digital
asset repository of transactions, the swap data
repository or digital asset repository of transactions
shall comply with--
``(i) the requirements and core principles
described in this section; and
``(ii) any requirement that the Commission
may impose by rule or regulation pursuant to
section 8a(5).
``(B) Reasonable discretion of repository.--Unless
otherwise determined by the Commission by rule or
regulation, a swap data repository or a digital asset
repository of transactions described in subparagraph
(A) shall have reasonable discretion in establishing
the manner in which the swap data repository or the
digital asset repository of transactions complies with
the core principles described in this section.
``(b) Standard Setting.--
``(1) Data identification.--
``(A) In general.--In accordance with subparagraph
(B), the Commission shall prescribe standards that
specify the data elements for each swap or digital
asset that shall be collected and maintained by each
registered swap data repository or digital asset
repository of transactions, respectively.
``(B) Requirement.--In carrying out subparagraph
(A), the Commission shall prescribe consistent data
element standards applicable to registered entities and
reporting counterparties.
``(2) Data collection and maintenance.--The Commission
shall prescribe data collection and data maintenance standards
for swap data repositories and digital asset trade
repositories.
``(3) Comparability.--The standards prescribed by the
Commission under this subsection shall be comparable to the
data standards imposed by the Commission on derivatives
clearing organizations in connection with the clearing of swaps
or digital assets, as appropriate.
``(c) Duties.--A swap data repository or a digital asset repository
of transactions shall--
``(1) accept data prescribed by the Commission for each
swap or digital asset transaction under subsection (b),
respectively;
``(2) confirm with both counterparties to the swap or the
digital asset transaction the accuracy of the data that was
submitted;
``(3) maintain the data described in paragraph (1) in such
form, in such manner, and for such period as may be required by
the Commission;
``(4)(A) provide direct electronic access to the Commission
(or any designee of the Commission, including another
registered entity); and
``(B) provide the information described in paragraph (1) in
such form and at such frequency as the Commission may require
to comply with the public reporting requirements contained in
section 2(a)(13);
``(5) at the direction of the Commission, establish
automated systems for monitoring, screening, and analyzing swap
or digital asset data, including compliance and frequency of
end user clearing exemption claims by individual and affiliated
entities;
``(6) maintain the privacy of any and all swap or digital
asset transaction information that the swap data repository or
digital asset repository of transactions, respectively,
receives from a swap dealer, counterparty, or any other
registered entity;
``(7) on a confidential basis pursuant to section 8, upon
request, and after notifying the Commission of the request,
make available swap or digital asset data obtained by the swap
data repository or digital asset repository of transactions,
respectively, including individual counterparty trade and
position data, to--
``(A) each appropriate prudential regulator;
``(B) the Financial Stability Oversight Council;
``(C) the Securities and Exchange Commission;
``(D) the Department of Justice; and
``(E) any other person that the Commission
determines to be appropriate, including--
``(i) foreign financial supervisors
(including foreign futures authorities);
``(ii) foreign central banks;
``(iii) foreign ministries; and
``(iv) other foreign authorities; and
``(8) establish and maintain emergency procedures, backup
facilities, and a plan for disaster recovery that allows timely
recovery and resumption of operations and the fulfillment of
the responsibilities and obligations of the organization.
``(d) Confidentiality Agreement.--Before the swap data repository
or digital asset repository of transactions may share information with
any entity described in subsection (c)(7), the swap data repository or
digital asset repository of transactions shall receive a written
agreement from each entity stating that the entity shall abide by the
confidentiality requirements described in section 12 of this title
relating to information on swap or digital asset transactions,
respectively, that is provided.
``(e) Designation of Chief Compliance Officer.--
``(1) In general.--Each swap data repository or digital
asset repository of transactions shall designate an individual
to serve as a chief compliance officer.
``(2) Duties.--The chief compliance officer shall--
``(A) report directly to the board or to the senior
officer of the swap data repository or digital asset
repository of transactions;
``(B) review the compliance of the swap data
repository or digital asset repository of transactions
with respect to requirements and core principles
described in this section;
``(C) in consultation with the board of the swap
data repository or digital asset repository of
transactions, a body performing a function similar to
the board of the swap data repository or digital asset
repository of transactions, or senior officer of the
swap data repository or digital asset repository of
transactions resolve any conflicts of interest that may
arise;
``(D) be responsible for administering each policy
and procedure that is required to be established
pursuant to this section;
``(E) ensure compliance with this Act (including
regulations) relating to agreements, contracts, or
transactions, including each rule prescribed by the
Commission under this section;
``(F) establish procedures for the remediation of
noncompliance issues identified by the chief compliance
officer through any--
``(i) compliance office review;
``(ii) look-back;
``(iii) internal or external audit finding;
``(iv) self-reported error; or
``(v) validated complaint; and
``(G) establish and follow appropriate procedures
for handling, management response, remediation,
retesting, and closing of noncompliance issues.
``(3) Annual reports.--
``(A) In general.--In accordance with rules
prescribed by the Commission, the chief compliance
officer shall annually prepare and sign a report that
contains a description of--
``(i) the compliance of the swap data
repository or the digital asset repository of
transactions, as appropriate, of the chief
compliance office with respect to this Act
(including regulations); and
``(ii) each policy and procedure of the
swap data repository or the digital asset
repository of transactions, as appropriate, of
the chief compliance officer (including the
code of ethics and conflict of interest
policies of the swap data repository or the
digital asset repository of transactions, as
appropriate).
``(B) Requirements.--A compliance report under
subparagraph (A) shall--
``(i) accompany each appropriate financial
report of the swap data repository or digital
asset repository of transactions that is
required to be furnished to the Commission
pursuant to this section; and
``(ii) include a certification that, under
penalty of law, the compliance report is
accurate and complete.
``(f) Core Principles Applicable to Swap Data Repositories and
Digital Asset Trade Repositories.--
``(1) Antitrust considerations.--Unless necessary or
appropriate to achieve the purposes of this Act, a swap data
repository or digital asset repository of transactions shall
not--
``(A) adopt any rule or take any actions that
result in any unreasonable restraint of trade; or
``(B) impose any material anticompetitive burden on
the trading, clearing, or reporting of transactions.
``(2) Governance arrangements.--Each swap data repository
or digital asset repository of transactions shall establish
governance arrangements that are transparent--
``(A) to fulfill public interest requirements; and
``(B) to support the objectives of the Federal
Government, owners, and participants.
``(3) Conflicts of interest.--Each swap data repository or
digital asset repository of transactions shall--
``(A) establish and enforce rules to minimize
conflicts of interest in the decision making process of
the swap data repository or the digital asset
repository of transactions; and
``(B) establish a process for resolving conflicts
of interest described in subparagraph (A).
``(4) Additional duties developed by the commission.--
``(A) In general.--The Commission may develop 1 or
more additional duties applicable to swap data
repositories or digital asset trade repositories.
``(B) Consideration of evolving standards.--In
developing additional duties under subparagraph (A),
the Commission may take into consideration any evolving
standard of the United States or the international
community.
``(C) Additional duties for commission designees.--
The Commission shall establish additional duties for
any registered swap data repository or digital asset
repository of transactions in order to minimize
conflicts of interest, protect data, ensure compliance,
and guarantee safety and security of the swap data
repository or digital asset repository of transactions.
``(g) Required Registration of Swap Data Repositories and Digital
Asset Trade Repositories.--Any person that is required to be registered
as a swap data repository or a digital asset repository of transactions
under this section shall register with the Commission regardless of
whether that person is also licensed as a bank, trust company, money
services business, or registered with the Securities and Exchange
Commission as a security-based swap data repository, broker-dealer,
qualified custodian, or transfer agent.
``(h) Rules.--The Commission shall adopt rules governing persons
that are registered under this section.''.
TITLE III--DIGITAL FEDERAL RESERVE NOTES, LEGAL TENDER STATUS, THE
REGULATION OF DIGITAL ASSET FIAT-BASED STABLECOINS, AND FEDERAL DEPOSIT
AND SHARE INSURANCE FOR DIGITAL ASSETS
Subtitle A--Digital Federal Reserve Notes
SEC. 301. IN GENERAL.
(a) Supervising and Regulating Issue and Retirement of Federal
Reserve Notes.--Section 11(d) of the Federal Reserve Act (12 U.S.C.
248(d)) is amended to read as follows:
``(d) To supervise and regulate through the Secretary of the
Treasury the issue and retirement of Federal Reserve notes (both
physical and digital), except for the cancellation and destruction, and
accounting with respect to such cancellation and destruction, of notes
unfit for circulation, and to prescribe rules and regulations
(including appropriate technology) under which such notes may be
delivered by the Secretary of the Treasury to the Federal Reserve
agents applying therefor.''.
(b) Issuance to Reserve Banks; Nature of Obligation; Redemption.--
Section 16 of the Federal Reserve Act (12 U.S.C. 411) is amended by
striking the first two sentences and inserting: ``Federal reserve
notes, to be issued at the discretion of the Board of Governors of the
Federal Reserve System for the purpose of making advances to Federal
reserve banks through the Federal reserve agents as hereinafter set
forth and for no other purpose, are authorized. Notwithstanding any
other provision of law, the Board of Governors of the Federal Reserve
System is authorized to issue digital versions of Federal reserve notes
in addition to current physical Federal reserve notes. Further, the
Board of Governors of the Federal Reserve System, after consultation
with the Secretary of the Treasury, is authorized to use distributed
ledger technology for the creation, distribution and recordation of all
transactions involving digital Federal reserve notes. The said notes
shall be obligations of the United States and shall be considered legal
tender and shall be receivable by all national and member banks and
Federal reserve banks and for all taxes, customs, and other public
dues. They shall be redeemed in lawful money on demand at the Treasury
Department of the United States, in the city of Washington, District of
Columbia, or at any Federal Reserve bank.''.
SEC. 302. DIGITAL ASSET LEGAL TENDER STATUS.
Section 5103 of title 31, United States Code, is amended to read as
follows:
``Sec. 5103. Legal tender
``United States coins and currency (including Federal reserve notes
and circulating notes of Federal reserve banks and national banks) are
legal tender for all debts, public charges, taxes, and dues. Foreign
fiat currencies, digital assets, digital asset securities and foreign
gold and silver coins are not legal tender.''.
Subtitle B--Regulation of Digital Asset Fiat-Based Stablecoins
SEC. 311. DEPARTMENT OF TREASURY REGULATION OF DIGITAL ASSET FIAT-BASED
STABLECOINS.
Subchapter I of chapter 51 of subtitle IV of title 31, United
States Code is amended by adding at the end the following:
``Sec. 5104. Department of Treasury regulation of digital asset fiat-
based stablecoins
``(a) In General.--Beginning on the date of the enactment of this
section, no person may issue, use, or permit to be used a digital asset
fiat-based stablecoin that is not approved by the Secretary of the
Treasury under subsection (b).
``(b) Applications.--
``(1) In general.--Not later than 90 days after the date of
the enactment of this section, the Secretary of the Treasury
shall establish an application process under which the
Secretary may approve or disapprove a person wishing to issue a
digital asset fiat-based stablecoin, under such terms and
conditions as the Secretary determines necessary and
appropriate.
``(2) Consultation.--In carrying out paragraph (1), the
Secretary of the Treasury shall, in considering applications
for digital asset fiat-based stablecoins, consult with--
``(A) the Board of Governors of the Federal Reserve
System;
``(B) the Securities and Exchange Commission;
``(C) the Commodity Futures Trading Commission; and
``(D) such other foreign central banks or foreign
treasury departments or agencies as the Secretary of
the Treasury determines appropriate.
``(3) Approval or disapproval; terms and conditions
changes; termination.--
``(A) In general.--Subject to subparagraph (B), the
Secretary of the Treasury may approve or disapprove an
application by an issuer of a digital asset fiat-based
stablecoin or may withdraw an approval or modify the
terms and conditions of an approval previously issued
under paragraph (1).
``(B) Timing.--With respect to a withdrawal or
modification of an approval under subparagraph (A), the
Secretary of the Treasury shall notify the issuer at
least 60 days before such approval is so withdrawn or
modified.
``(4) No grandfathering of existing digital asset fiat-
based stablecoins.--The Secretary of the Treasury shall not
grandfather the use of any digital asset fiat-based stablecoin.
All digital asset fiat-based stablecoins, including digital
asset fiat-based stablecoins existing on the date of the
enactment of this section, shall apply to the Secretary of the
Treasury under this section.
``(c) Digital Asset Fiat-Based Stablecoin Defined.--In this
section, the term `digital asset fiat-based stablecoin' means a digital
asset (as defined in section 1a of the Commodity Exchange Act (7 U.S.C.
1a)) that is, as determined by the Secretary of the Treasury, tied,
pegged to, or collateralized substantially by--
``(1) the United States dollar or;
``(2) one or more fiat currencies.''.
SEC. 312. CONFORMING AMENDMENT.
The table of contents for subchapter I of chapter 51 of subtitle IV
of title 31, United States Code is amended by adding at the end the
following:
``5104. Department of Treasury regulation of digital asset fiat-based
stablecoins.''.
Subtitle C--Federal Deposit and Share Insurance for Digital Assets
SEC. 321. DIGITAL ASSET NOT DEPOSITS FOR FEDERAL DEPOSIT AND SHARE
INSURANCE.
(a) Federal Deposit Insurance Act.--Section 3(l)(5) of the Federal
Deposit Insurance Act (12 U.S.C. 1813(l)(5)) is amended--
(1) in subparagraph (B), by striking ``; and'' and
inserting a semicolon;
(2) in subparagraph (C), by striking the period at the end
and inserting ``; and''; and
(3) by adding at the end the following:
``(D) any--
``(i) digital asset (as defined in section
1a of the Commodity Exchange Act (7 U.S.C.
1a)); or
``(ii) digital asset security (as defined
in section 3(a) of the Securities Exchange Act
of 1934 (15 U.S.C. 78c(a)).''.
(b) Federal Credit Union Act.--Section 101(5) of the Federal Credit
Union Act (12 U.S.C. 1752(5)) is amended by striking ``State law'' and
inserting ``State law: Provided further: That in no case may such terms
include a digital asset (as defined in section 1a of the Commodity
Exchange Act (7 U.S.C. 1a)) or digital asset security (as defined in
section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C.
78c(a))''.
SEC. 322. DIRECTED RULEMAKING FDIC AND NCUA WEBSITE DISCLOSURE ON
DIGITAL ASSETS AND INSURANCE NONCOVERAGE.
(a) FDIC and NCUA Notices.--Not later than 90 days after the date
of the enactment of this Act, the Federal Deposit Insurance Corporation
and the National Credit Union Administration shall each make publicly
available on the website of such entity a notice--
(1) regarding the treatment of digital assets and digital
asset securities;
(2) that digital assets and digital asset securities are
not ``deposits'' or ``shares'' and are not covered by Federal
deposit insurance (FDIC or NCUA), regardless of whether an
insured bank, savings association, or credit union holds the
digital assets or digital assets securities; and
(3) such notice shall specifically address whether the FDIC
Nondeposit Investment Product (NDIP) Policy Statement and
related disclosure obligations or similar NCUA requirements
apply to digital assets and digital asset securities.
(b) Digital Asset.--In this section, the term ``digital asset'' has
the meaning given the term in section 1a of the Commodity Exchange Act
(7 U.S.C. 1a).
(c) Digital Asset Security.--In this section, the term ``digital
asset security'' has the meaning given the term in section 3(a) of the
Securities Exchange Act of 1934 (15 U.S.C. Sec. 78c(a)).
TITLE IV--BANK SECRECY ACT
SEC. 401. BANK SECRECY ACT.
(a) Definition of Monetary Instruments.--Section 5312(a)(3)(B) of
title 31, United States Code, is amended--
(1) by inserting ``digital assets,'' after ``coins and
currency of a foreign country,''; and
(2) by inserting after ``passed on delivery'', the
following: ``, digital asset security as such term is defined
in section 3(a) of the Securities Exchange Act of 1934''.
(b) Definition of Digital Asset and Virtual Asset.--Section 5312(a)
of title 31, United States Code, is amended by adding after paragraph
(6) the following:
``(7) Digital asset.--The term `digital asset' has the
meaning given the term in section 1a of the Commodity Exchange
Act (7 U.S.C. 1a).
``(8) Virtual asset.--The term `virtual asset' means--
``(A) a digital representation of value that can be
digitally traded, or transferred, and can be used for
payment or investment purposes; and
``(B) a digital asset.''.
(c) Definition of Virtual Asset Service Provider.--Section 5312(a)
of title 31, United States Code, is further amended by adding at the
end the following:
``(9) Virtual asset service provider.--The term `virtual
asset service provider'--
``(A) means a person who--
``(i) exchanges between digital asset and
fiat currencies;
``(ii) exchanges between digital assets;
``(iii) transfers of digital assets;
``(iv) is responsible for the custody,
safekeeping of a digital asset or an instrument
that enables control over a digital asset;
``(v) issues or has the authority to redeem
a digital asset; and
``(vi) provides financial services related
to the offer or sale of a digital asset by a
person who issues such digital asset; and
``(B) does not include any person who--
``(i) obtains a digital asset to purchase
goods or services for themself;
``(ii) provides communication service or
network access services used by a money
transmitter; or
``(iii) develops, creates, or disseminates
software designed to be used to issue a digital
asset or facilitate financial activities
associated with a digital asset.''.
(d) Additional Definitions.--Section 5312(c)(1) of title 31, United
States Code, is amended--
(1) in subparagraph (A), by striking the period at the end
and inserting a semicolon; and
(2) by adding after subparagraph (A), the following:
``(B) any virtual asset service provider that--
``(i) exchanges between digital assets and
fiat currencies;
``(ii) exchanges between digital assets;
``(iii) transfers digital assets;
``(iv) is responsible for the custody,
safekeeping or administration of digital assets
or instruments enabling control over digital
assets; or
``(v) provides financial services related
to the offer or sale of a digital asset by an
issuer.''.
SEC. 402. ANONYMIZING SERVICES, MONEY MULE, AND ANONYMITY-ENHANCED
CONVERTIBLE VIRTUAL CURRENCIES.
Subchapter II of chapter 53 of subtitle IV of title 31, United
States Code is amended by adding at the end the following:
``SEC. 5333. ANONYMIZING SERVICES, MONEY MULE, AND ANONYMITY-ENHANCED
CONVERTIBLE VIRTUAL CURRENCIES.
``(a) In General.--Not later than 180 days of the date of the
enactment of the Digital Asset Market Structure and Investor Protection
Act, the Secretary of the Treasury, acting through the Financial Crimes
Enforcement Network, shall issue a rule that governs--
``(1) anonymizing services;
``(2) money mules; and
``(3) anonymity-enhanced convertible virtual currency
transactions.
``(b) Purpose.--The purpose of the rule described in subsection (a)
shall be to ensure that anonymizing services, money mule, and
anonymity-enhanced convertible virtual currencies are not used to
prevent association of an individual customer with the movement of a
digital asset, digital asset security, or virtual currency of which the
customer is the direct or beneficial owner.
``(c) Requirements.--The rule described in subsection (a) shall--
``(1) require any financial institution to prohibit any
person from engaging in any transactions that involves digital
assets or digital asset securities and--
``(A) anonymizing services;
``(B) money mules; or
``(C) anonymity-enhanced convertible virtual
currencies;
``(2) prohibit any financial institution from informing
persons about--
``(A) the existence of anonymizing services, money
mules and anonymity-enhanced convertible virtual
currencies;
``(B) the availability of anonymizing services,
money mules and anonymity-enhanced convertible virtual
currencies; or
``(C) means for identifying anonymizing services,
money mules and anonymity-enhanced convertible virtual
currencies; and
``(3) require any financial institution to establish
written procedures governing the documentation of the persons
and amounts associated with any transaction involving--
``(A) an anonymizing service;
``(B) a money mule; or
``(C) anonymity-enhanced convertible virtual
currencies.
``(d) Definitions.--In this section, the term `virtual currency',
`anonymizing service', `money mule', and `anonymity-enhanced
convertible virtual currency' have the meanings given such terms by the
Secretary of the Treasury, acting through the Financial Crimes
Enforcement Network.''.
SEC. 403. DIGITAL ASSET TRANSACTION ACTUAL DELIVERY REPORTING.
Not later than 180 days after the date of the enactment of this
Act, the Secretary of the Treasury, in consultation with the Commodity
Futures Trading Commission, shall issue a rule that requires, for any
transaction involving a contract of sale of a digital asset (as defined
in section 1a of the Commodity Exchange Act (7 U.S.C. 1a)) in
interstate commerce--
(1) the transfer of possession and control (including
transfer of control over any private keys) by the seller to the
purchaser not later than 24 hours after the digital asset
transaction is entered into and such delivery is accomplished
by either--
(A) the recording of the transaction on the public
distributed ledger for the digital asset; or
(B) with respect to digital asset transactions
which are not recorded on the public distributed ledger
for the digital asset, reporting the transaction to a
CFTC registered digital asset repository of
transactions.
SEC. 404. VIRTUAL DIGITAL ASSET SERVICE PROVIDERS.
(a) In General.--The Secretary of the Treasury shall, not later
than 270 days after the date of the enactment of this Act, issue a rule
requiring virtual asset service providers (as defined in section
5312(a) of title 31, United States Code), which are engaged in services
which are available in the United States and to United States persons,
even if the provider is located outside the United States, related to
digital asset securities and digital assets, that such persons shall be
required to--
(1) register with the Securities and Exchange Commission or
with the Commodity Futures Trading Commission, as appropriate
and in such capacities as are appropriate;
(2) with respect to digital asset securities, meet the
customer protection and account custody rules which are
applicable to Securities Exchange Commission registered broker-
dealers for customer funds and securities; and
(3) with respect to digital assets, meet the customer
account custody and segregated funds rules which are applicable
to Commodity Futures Trading Commission registered futures
commission merchants.
(b) Customer Accounts.--The customer accounts custody requirements
referenced in subsection (a) shall include, but are not limited to,
using registered and qualified custodians, proper customer account
labeling and identification, minimum of quarterly account statements
being issued to customers by the registered and qualified custodian,
annual surprise audit requirements and annual audits by accounting
firms which are registered with the Public Company Accounting Oversight
Board.
TITLE V--VARIOUS DIGITAL ASSET REPORTS
SEC. 501. IRS REPORT ON DIGITAL ASSET OWNERSHIP/TAXES.
(a) In General.--Not later than 270 days after the date of the
enactment of this Act, the Secretary of the Treasury, acting through
the Internal Revenue Service, after consulting with other Federal and
State regulators and market participants as appropriate, shall submit a
report to the specified committees on the utilization of digital assets
by United States citizens that--
(1) estimates the number and percentage of United States
citizens who own digital assets as of the date of the enactment
of this Act and who have paid tax on digital assets each year
between 2016 and 2020;
(2) compares the number and percentage of Americans who own
stocks and bonds and who have paid taxes on such assets over
the same time period referenced above;
(3) estimates the number and percentage of Americans who
fail to report digital asset holdings and income versus stock
and bond holdings;
(4) identifies the major digital asset trading platforms in
the United States, the number of customer accounts with each
platform, and the annual trading volume of each platform;
(5) estimates the number of United States citizens who use
United States registered digital asset trading platforms
compared to foreign digital asset trading platforms;
(6) estimates the amount of tax revenue which was not
received by the United States Treasury due to under reporting
by United States taxpayers each year between 2016 and 2020; and
(7) makes legislative and regulatory recommendations
regarding changes which would improve reporting and collection
of taxes on digital assets so it would be closer to reporting
and collection of taxes on securities holdings.
(b) Specified Committees.--In this section, the term ``specified
committees'' means--
(1) the Ways and Means Committee of the House of
Representatives;
(2) the Finance Committee of the Senate;
(3) the Committee on Financial Services of the House of
Representatives;
(4) the Committee on Banking, Housing, and Urban Affairs of
the Senate;
(5) the Committee on Agriculture of the House of
Representatives; and
(6) the Committee on Agriculture, Nutrition, and Forestry
of the Senate.
SEC. 502. REPORT ON RANSOMWARE AND DIGITAL ASSETS.
(a) Report.--Not later than 270 days after the date of enactment of
this Act, the Department of Justice, Department of Homeland Security,
Department of the Treasury, and Board of Governors of the Federal
Reserve System shall jointly submit a report to the appropriate
committees that--
(1) summarizes the number and size of recent ransomware
attacks in the United States and the world;
(2) discusses the frequency of ransomware hackers
requesting payment in digital assets and identifies the most
common digital assets which are demanded;
(3) discusses the use of mixing and tumbling services and
money mules to help obscure audit trail for the digital assets
involved;
(4) identifies the digital asset trading platforms most
frequently used for transactions involving digital asset
ransoms; and
(5) makes legislative and regulatory recommendations for
addressing the problem of ransomware and digital assets.
(b) Appropriate Committees.--Appropriate committees include the
Committee on the Judiciary, Committee on Homeland Security, Committee
on Financial Services, and the Committee on Agriculture of the House of
Representatives, and the Committee on the Judiciary, Committee on
Homeland Security and Governmental Affairs, Committee on Banking,
Housing, and Urban Affairs, Committee on Agriculture, Nutrition, and
Forestry of the Senate.
SEC. 503. REPORT ON DECENTRALIZED FINANCE.
Not later than 270 days after the date of the enactment of this
Act, the Board of Governors of the Federal Reserve System, the Office
of the Comptroller of the Currency, the Secretary of the Treasury, the
Securities and Exchange Commission, and the Commodity Futures Trading
Commission, shall jointly submit a report to the appropriate committees
that--
(1) summarizes the use of decentralized finance in the
United States;
(2) estimates the number and percentage of Americans using
decentralized finance products and services versus the global
usage and identifies the major decentralized finance products
and services by estimated dollar volume usage;
(3) provides recommendations with respect to the definition
of the term ``decentralized finance'' to be adopted and
codified in United States law;
(4) discusses the primary differences between digital asset
fiat-based stablecoins and central bank digital currencies;
(5) discusses whether there are financial stability risks
or concerns posed by decentralized finance;
(6) provides recommendations regarding appropriate
regulation and investor protection for decentralized finance in
United States banking, securities, and commodities, including
with respect to United States jurisdiction and application of
United States law; and
(7) discusses the legal obligations of creators, owners, or
operators of decentralized finance applications, distributed
ledgers, smart contracts, and other applications which are
hacked or are used for fraud and manipulation.
SEC. 504. REPORT ON CUSTODY OF DIGITAL ASSETS AND DIGITAL ASSET
SECURITIES.
Not later than 270 days after the date of the enactment of this
Act, the Securities and Exchange Commission, the Office of the
Comptroller of the Currency, the Secretary of the Treasury, and the
Commodity Futures Trading Commission, shall jointly submit a report to
the appropriate committees that--
(1) provides recommendations on the regulation, licensing,
and auditing of digital asset custodians and digital asset
security custodians; and
(2) considers each of the following issues:
(A) The custody of digital assets and digital asset
securities.
(B) Estimates on digital assets and digital asset
securities custody at trading platforms, licensed
custodians, self custody in wallets.
(C) FINRA Guidance to Broker Dealers on Digital
Asset and Digital Asset Security Custody.
(D) AICPA position on custody of digital assets and
digital asset securities.
(E) Custodian markets, banks, trust companies,
brokers, dealers, and futures commissions merchants.
(F) The background on major United States and
foreign digital asset and digital asset security
custodians by size (assets held) and licensing.
SEC. 505. REPORT ON DIGITAL ASSET TRADING PLATFORMS.
Not later than 270 days after the date of the enactment of this
section, the Securities and Exchange Commission, the Commodity Futures
Trading Commission, the Secretary of the Treasury, and the Financial
Crimes Enforcement Network, in consultation with such Federal and State
regulators and market participants as the Commission determines
appropriate, shall jointly submit to the relevant committees a report
that--
(1) identifies the 10 largest digital asset trading
platforms in the United States, their registration status, the
number of client accounts each platform has, and the annual
trading volume on each trading platform over the last 5 years;
(2) summarizes and compares--
(A) the statutory and regulatory requirements
applicable to United States digital asset trading
platforms (MSBs) which are currently available to
United States investors; and
(B) the statutory and regulatory requirements
applicable to national securities exchanges,
alternative trading systems, designated contract
market, and swap execution facility;
(3) identifies and quantifies investor losses related to
all known major foreign and domestic unauthorized electronic
access or hacks of digital asset trading platforms in the 5-
year period preceding the date of the enactment of this Act;
and
(4) provides legislative and regulatory recommendations to
promote and increase United States investor protection with
respect to sale or trading of digital assets and digital asset
securities.
The report shall discuss the major differences between money services
businesses and securities/commodities exchanges and provide concrete
legislative and regulatory recommendations which would help clarify on
what entities and under what rules and requirements the trading of
digital assets and digital asset securities should take place as
distinguished from the entities and the rules which should apply to the
transmission of monetary instruments.
SEC. 506. REPORT ON FALSE TRADE REPORTING, WASH TRADING, AND OFF-CHAIN
TRANSACTION ON DIGITAL ASSET TRADING PLATFORMS.
Not later than 270 days after the date of the enactment of this
section, the Commodity Futures Trading Commission, the Secretary of the
Treasury, and the Financial Crimes Enforcement Network, in consultation
with such Federal and State regulators and market participants as the
Commission determines appropriate, shall jointly submit to the relevant
committees a report on false trade reporting, wash trading, and off-
chain transactions with respect to contracts of sale of digital assets
in interstate commerce that--
(1) with respect to the 5-year period preceding the date of
the enactment of this section, examines each public report
regarding false trade reporting and wash trading of digital
assets on digital asset trading platforms;
(2) identifies the US and foreign digital asset trading
platforms which have engaged in significant false trade
reporting and wash trading;
(3) quantifies and estimates the amount of false trade
reporting and wash trading for each year of the last five
years;
(4) discusses the use of omnibus accounts by digital asset
trading platforms to hold customer assets and whether
internalization of digital asset transactions by digital asset
trading platforms creates transparency issues related to the
public distributed ledger having an up-to-date record of all
transactions and current ownership of digital assets;
(5) quantifies the amount and average daily trading volume
of off-chain digital asset transactions occurring on United
States digital asset trading platforms which are not reported
to the public distributed ledger for the digital asset for each
of the last five years;
(6) identifies the entities which have facilitated false
trade reporting; and
(7) provides legislative and regulatory recommendations to
promote and increase United States investor protection with
respect to digital assets.
SEC. 507. RELEVANT COMMITTEES DEFINED.
The term ``relevant committees'' means--
(1) the Committee on Financial Services of the House of
Representatives;
(2) the Committee on Banking, Housing, and Urban Affairs of
the Senate;
(3) the Committee on Agriculture of the House of
Representatives; and
(4) the Committee on Agriculture, Nutrition, and Forestry
of the Senate.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Financial Services, and in addition to the Committees on Agriculture, and Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Financial Services, and in addition to the Committees on Agriculture, and Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Financial Services, and in addition to the Committees on Agriculture, and Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Commodity Markets, Digital Assets, and Rural Development.
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