Sec. 101. Definitions under the Securities Act of 1933
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Section 2(a) of the Securities Act of 1933 ( 15 U.S.C. 77b(a) ) is amended by adding at the end the following: The term affiliated person means a person (including a related person) that— with respect to a digital asset issuer— directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such digital asset issuer; or was described under clause
(i)at any point in the previous 3-month period; or with respect to any digital asset— beneficially owns 5 percent or more of the units of such digital asset that are then outstanding; or was described under clause
(i)at any point in the previous 3-month period. The Commission shall issue rules to require a person that beneficially owns 5 percent or more of the units of a digital asset that are then outstanding to file with the Commission a report at such time as the Commission determines appropriate. The term blockchain means any technology— where data is— shared across a network to create a public ledger of verified transactions or information among network participants; linked using cryptography to maintain the integrity of the public ledger and to execute other functions; and distributed among network participants in an automated fashion to concurrently update network participants on the state of the public ledger and any other functions; and composed of source code that is publicly available. The term blockchain protocol means any executable software deployed to a blockchain composed of source code that is publicly available and accessible, including a smart contract or any network of smart contracts. The term blockchain system means any blockchain or blockchain protocol. The term decentralized governance system means, with respect to a blockchain system, any rules-based system permitting persons using the blockchain system or the digital assets related to such blockchain system to form consensus or reach agreement in the development, provision, publication, management, or administration of such blockchain system. Persons acting through a decentralized governance system shall be treated as separate persons unless such persons are under common control. The term decentralized governance system does not include a system in which— a person or group of persons under common control have the ability to— unilaterally alter the rules of consensus or agreement for the blockchain system; or determine the final outcome of decisions related to the development, provision, publication, management, or administration of such blockchain system; a person or group of persons is directly engaging in an activity that requires registration with the Commission or the Commodity Futures Trading Commission other than— developing, providing, publishing, managing, or administering a blockchain system; or an activity with respect to which the organization is exempt from such registration; or a person or group of persons seeking to knowingly evade the requirements imposed on a digital asset issuer, a related person, an affiliated person, or any other person registered (or required to be registered) under the securities laws, the Financial Innovation and Technology for the 21st Century Act, or the Commodity Exchange Act. With respect to a blockchain system to which a digital asset relates, the term decentralized system means the following conditions are met: During the previous 12-month period, no person— had the unilateral authority, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, to control or materially alter the functionality or operation of the blockchain system; or had the unilateral authority to restrict or prohibit any person who is not a digital asset issuer, related person, or an affiliated person from— using, earning, or transmitting the digital asset; deploying software that uses or integrates with the blockchain system; participating in a decentralized governance system with respect to the blockchain system; or operating a node, validator, or other form of computational infrastructure with respect to the blockchain system. During the previous 12-month period— no digital asset issuer or affiliated person beneficially owned, in the aggregate, 20 percent or more of the total amount of units of such digital asset that— can be created, issued, or distributed in such blockchain system; and were freely transferrable or otherwise used or available to be used for the purposes of such blockchain system; no digital asset issuer or affiliated person had the unilateral authority to direct the voting, in the aggregate, of 20 percent or more of the outstanding voting power of such digital asset or related decentralized governance system; or the digital asset did not include voting power with respect to any decentralized governance system of the blockchain system. During the previous 3-month period, the digital asset issuer, any affiliated person, or any related person has not implemented or contributed any intellectual property to the source code of the blockchain system that materially alters the functionality or operation of the blockchain system, unless such implementation or contribution to the source code— addressed vulnerabilities, errors, regular maintenance, cybersecurity risks, or other technical changes to the blockchain system; or were adopted through the consensus or agreement of a decentralized governance system. During the previous 3-month period, neither any digital asset issuer nor any affiliated person described under paragraph (20)(A) has marketed to the public the digital assets as an investment. During the previous 12-month period, all issuances of units of such digital asset through the programmatic functioning of the blockchain system were end user distributions. For purposes of the previous sentence, any units of such digital asset that are made available over time and were created in the initial block of the blockchain system shall be considered issued at the point in time of creation. The term digital asset means any fungible digital representation of value that can be exclusively possessed and transferred, person to person, without necessary reliance on an intermediary, and is recorded on a cryptographically secured public distributed ledger. The term digital asset does not include— any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof); or any asset which, based on its terms and other characteristics, is, represents, or is functionally equivalent to an agreement, contract, or transaction that is— a contract of sale of a commodity (as defined under section 1a of the Commodity Exchange Act) for future delivery or an option thereon; a security futures product; a swap; an agreement, contract, or transaction described in section 2(c)(2)(C)(i) or 2(c)(2)(D)(i) of the Commodity Exchange Act; a commodity option authorized under section 4c of the Commodity Exchange Act; or a leverage transaction authorized under section 19 of the Commodity Exchange Act. Nothing in this paragraph shall be construed to create a presumption that a digital asset is a representation of any type of security not excluded from the definition of digital asset. A digital asset is considered to relate to a blockchain system if the digital asset is intrinsically linked to the blockchain system, including— where the digital asset’s value is reasonably expected to be generated by the programmatic functioning of the blockchain system; where the digital asset has voting rights with respect to the decentralized governance system of the blockchain system; or where the digital asset is issued through the programmatic functioning of the blockchain system. A digital asset offered or sold or intended to be offered or sold pursuant to an investment contract is not and does not become a security as a result of being sold or otherwise transferred pursuant to that investment contract. With respect to a digital asset, the term digital asset issuer means any person that, in exchange for any consideration— issues or causes to be issued a unit of such digital asset to a person; or offers or sells a right to a future issuance of a unit of such digital asset to a person. The term digital asset issuer does not include any person solely because such person deploys source code that creates or issues units of a digital asset that are only distributed in end user distributions. It shall be unlawful for any person to knowingly evade classification as a digital asset issuer and facilitate an arrangement for the primary purpose of effecting a sale, distribution, or other issuance of a digital asset. The term digital asset maturity date means, with respect to any digital asset, the first date on which 20 percent or more of the total units of such digital asset that are then outstanding as of such date are— digital commodities; or digital assets that have been registered with the Commission. The term digital commodity has the meaning given that term under section 1a of the Commodity Exchange Act ( 7 U.S.C. 1a ). The term end user distribution means an issuance of a unit of a digital asset that— does not involve an exchange of more than a nominal value of cash, property, or other assets; and is distributed in a broad, equitable, and non-discretionary manner based on conditions capable of being satisfied by any participant in the blockchain system, including, as incentive-based rewards— to users of the digital asset or any blockchain system to which the digital asset relates; for activities directly related to the operation of the blockchain system, such as mining, validating, staking, or other activity directly tied to the operation of the blockchain system; or to the existing holders of another digital asset, in proportion to the total units of such other digital asset as are held by each person. It shall be unlawful for any person to facilitate an end user distribution to knowingly evade classification as a digital asset issuer, related person, or an affiliated person, or the requirements related to a digital asset issuance. With respect to a blockchain system to which a digital asset relates, the term functional system means the network allows network participants to use such digital asset for— the transmission and storage of value on the blockchain system; the participation in services provided by or an application running on the blockchain system; or the participation in the decentralized governance system of the blockchain system. The term permitted payment stablecoin means a digital asset— that is or is designed to be used as a means of payment or settlement; the issuer of which— is obligated to convert, redeem, or repurchase for a fixed amount of monetary value; or represents will maintain or creates the reasonable expectation that it will maintain a stable value relative to the value of a fixed amount of monetary value; the issuer of which is subject to regulation by a Federal or State regulator with authority over entities that issue payment stablecoins; and that is not— a national currency; or a security issued by an investment company registered under section 8(a) of the Investment Company Act of 1940 ( 15 U.S.C. 80a–8(a) ). For purposes of subparagraph (A), the term monetary value means a national currency, deposit (as defined under section 3 of the Federal Deposit Insurance Act), or an equivalent instrument that is denominated in a national currency. With respect to a digital asset issuer, the term related person means— a founder, promoter, employee, consultant, advisor, or person serving in a similar capacity; any person that is or was in the previous 6-month period an executive officer, director, trustee, general partner, advisory board member, or person serving in a similar capacity; any equity holder or other security holder; or any other person that received a unit of digital asset from such digital asset issuer through— an exempt offering, other than an offering made in reliance on section 4(a)(8); or a distribution that is not an end user distribution described under section 42(d)(1) of the Securities Exchange Act of 1934. The term restricted digital asset means— prior to the first date on which each blockchain system to which a digital asset relates is a functional system and certified to be a decentralized system under section 44 of the Securities Exchange Act of 1934, any unit of the digital asset held by a person, other than the digital asset issuer, a related person, or an affiliated person, that was— issued to such person through a distribution, other than an end user distribution described under section 42(d)(1) of the Securities Exchange Act of 1934; or acquired by such person in a transaction that was not executed on a digital commodity exchange; during any period when any blockchain system to which a digital asset relates is not a functional system or not certified to be a decentralized system under section 44 of the Securities Exchange Act of 1934, any digital asset held by a related person or an affiliated person; and any unit of a digital asset held by the digital asset issuer. The term restricted digital asset does not include a permitted payment stablecoin. The term securities laws has the meaning given that term under section 3(a) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78c(a) ). With respect to a blockchain system, the term source code means a listing of commands to be compiled or assembled into an executable computer program. .
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- 15 USC 80a–8(a)
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Sec. 101
Definitions under the Securities Act of 1933
Cite15 USC 80a–8(a)
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