Off-Chain Digital Commodity Transaction Reporting Act of 2023
This bill requires all digital asset commodity transactions to be reported to a trade repository registered with the Commodity Futures Trading Commission. This includes transactions executed on or off a trading platform. The bill also requires sellers to deliver a digital commodity not less than 24 hours after the transaction.
Digital asset repositories of transactions are subject to similar requirements established for swap data repositories.
[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5966 Introduced in House (IH)]
<DOC>
118th CONGRESS
1st Session
H. R. 5966
To amend the Commodity Exchange Act with respect to reporting digital
commodity transactions.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 17, 2023
Mr. Beyer introduced the following bill
October 25, 2023
Referred to the Committee on Agriculture
_______________________________________________________________________
A BILL
To amend the Commodity Exchange Act with respect to reporting digital
commodity transactions.
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 ``Off-Chain Digital Commodity
Transaction Reporting Act of 2023''.
SEC. 2. REPORTING OF SWAPS AND DIGITAL COMMODITY TRANSACTIONS.
Section 2(a)(13) of the Commodity Exchange Act is amended--
(1) by amending the paragraph heading to read as follows:
``Reporting and public availability of swap and digital
commodity transaction data'';
(2) in subparagraph (A), by inserting ``or digital
commodity'' after ``swap'' both places it appears;
(3) in subparagraph (B)--
(A) by inserting ``or digital commodity'' after
``swap''; and
(B) by inserting ``and investor protection'' before
the period at the end;
(4) by amending subparagraph (G) to read as follows:
``(G) Reporting of swaps and digital commodity
transactions to registered repositories.--
``(i) Swaps.--Each swap (whether cleared or
uncleared) shall be reported to a registered
swap data repository.
``(ii) Digital commodities.--Each contract
of sale of a digital commodity in interstate
commerce (whether on-chain or off-chain) shall
be reported to a registered digital asset
repository for transactions.'';
(5) by adding at the end the following:
``(H) Reporting of digital commodity
transactions.--
``(i) In general.--With respect to
contracts of sale of digital commodities in
interstate commerce that are not executed on or
through a trading platform, such transactions
shall be reported by the purchaser in real-time
to a registered digital asset repository for
transactions as soon as technologically
practicable after execution of the transaction.
``(ii) Rule for trading platforms.--Trading
platforms which facilitate contracts of sale of
digital commodities in interstate commerce
transactions shall be responsible for reporting
all such transactions to a registered digital
asset repository of transactions as soon as
technically practicable after the execution of
each such transaction.
``(I) Actual delivery of digital commodity
transactions.--
``(i) In general.--In the case of a
contract of sale of a digital commodity in
interstate commerce, the seller of such digital
commodity shall actually deliver the digital
commodity into the exclusive control of the
purchaser not less than 24 hours after the
transaction is executed.
``(ii) Actual delivery.--For purposes of
clause (i), actual delivery shall have occurred
only if--
``(I) the transfer of the digital
commodity from the seller to the
purchaser's address is recorded on the
public distributed ledger for the
digital commodity; or
``(II) with respect to off-chain
digital commodity transactions on a
trading platform, the trading platform
reports the off-chain digital commodity
transaction, which must be held in a
customer segregated account, to a
registered digital asset repository of
transactions.''.
SEC. 3. SWAP DATA REPOSITORIES AND DIGITAL ASSET REPOSITORIES OF
TRANSACTIONS.
(a) Commodity Exchange Act.--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 REPOSITORIES OF
TRANSACTIONS.
``(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
commodity, digital asset, or digital collectible (as
determined a collectible under section 408(m) of the
Internal Revenue Code) 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 repositories of
transactions.
``(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 commodities, digital assets, or digital
collectibles, as appropriate.
``(4) Consistent standards.--If a digital asset repository
of transactions is jointly registered with the Commission and
Securities and Exchange Commission and receives digital
commodity, digital asset, and digital collectible transaction
data, the Commission shall coordinate with the Securities and
Exchange Commission and the Commissioner of the Internal
Revenue Service to ensure that the data standards and elements
are appropriate and consistent for use by both Commissions and
the Internal Revenue Service.
``(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 commodity, digital asset, or digital
collectible transaction under subsection (b), respectively;
``(2) confirm with both counterparties to the swap or
digital commodity, digital asset, or digital collectible
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 commodity, digital asset, or digital collectible
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
commodity, digital asset, or digital collectible 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 each swap or digital commodity, digital asset,
or digital collectible 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 commodity, digital asset, or
digital collectible (as determined a collectible under section 408(m)
of the Internal Revenue Code), 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 Repositories of Transactions.--
``(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 repositories of
transactions.
``(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 Repositories of Transactions.--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) Dual SEC and CFTC Registration of Digital Asset Repository of
Transactions.--Any person that seeks to act as a digital asset
repository for transactions for digital commodities, digital assets,
digital collectibles (as determined a collectible under section 408(m)
of the Internal Revenue Code) shall register with the Commission and
Securities and Exchange Commission subject to joint regulation by such
Commissions, but only with respect to the digital commodities and
digital assets subject to their respective jurisdictions.
``(i) Rules.--The Commission shall adopt rules governing persons
that are registered under this section.''.
SEC. 4. DEFINITIONS.
(a) In General.--Section 1a of the Commodity Exchange Act (7 U.S.C
1a) is amended by adding at the end the following:
``(52) 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 digital commodities, digital assets, or digital
collectibles (as determined a collectibles under section 408(m)
of the Internal Revenue Code) entered into by third parties for
the purpose of providing a centralized recordkeeping facility
for digital commodities, digital assets, or digital
collectibles.
``(53) Off-chain digital commodity transaction.--The term
`off-chain digital commodity transaction' means any contract of
sale of a digital commodity in interstate commerce which is not
mined or validated and recorded on the appropriate public
distributed ledger for such digital commodity within 24 hours
of the transaction being entered into.''.
(b) Definition of Registered Entity.--Section 1a(40)(E) of the
Commodity Exchange Act (7 U.S.C. 1a(40)(E)) is amended by inserting
``or a digital asset repository of transactions'' after ``section 21''.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Agriculture.
Referred to the Subcommittee on Commodity Markets, Digital Assets, and Rural Development.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line