Sec. 505. Qualified digital commodity custodians
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/bill/118/hr/4763/rfs/section-505·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
The Commodity Exchange Act ( 7 U.S.C. 1 et seq. ), as amended by the preceding provisions of this Act, is amended by inserting after section 5i the following: A digital commodity custodian is a qualified digital commodity custodian if the digital commodity custodian complies with the requirements of this section. A digital commodity custodian that is not subject to supervision and examination by an appropriate Federal banking agency, the National Credit Union Administration, the Commission, or the Securities and Exchange Commission shall be subject to adequate supervision and appropriate regulation by— a State bank supervisor (within the meaning of section 3 of the Federal Deposit Insurance Act); a State credit union supervisor, as defined under section 6003 of the Anti-Money Laundering Act of 2020; or an appropriate foreign governmental authority in the home country of the digital commodity custodian.
The digital commodity custodian has not been prohibited by a supervisor of the digital commodity custodian from engaging in an activity with respect to the custody and safekeeping of digital commodities. A digital commodity custodian shall share information with the Commission on request and comply with such requirements for periodic sharing of information regarding customer accounts that the digital commodity custodian holds on behalf of an entity registered with the Commission as the Commission determines by rule are reasonably necessary to effectuate any of the provisions, or to accomplish any of the purposes, of this Act.
Any entity that is subject to regulation and examination by an appropriate Federal banking agency may satisfy any information request described in subparagraph
(A)by providing the Commission with a detailed listing, in writing, of the digital commodities of a customer within the custody or use of the entity. For purposes of subsection (b), the terms adequate supervision and appropriate regulation mean such minimum standards for supervision and regulation as are reasonably necessary to protect the digital commodities of customers of an entity registered with the Commission, including standards relating to the licensing, examination, and supervisory processes that require the digital commodity custodian to, at a minimum— receive a review and evaluation of ownership, character and fitness, conflicts of interest, business model, financial statements, funding resources, and policies and procedures of the digital commodity custodian; hold capital sufficient for the financial integrity of the digital commodity custodian; protect customer assets; establish and maintain books and records regarding the business of the digital commodity custodian; submit financial statements and audited financial statements to the applicable supervisor described in subsection (b); provide disclosures to the applicable supervisor described in subsection
(b)regarding actions, proceedings, and other items as determined by the supervisor; maintain and enforce policies and procedures for compliance with applicable State and Federal laws, including those related to anti-money laundering and cybersecurity; establish a business continuity plan to ensure functionality in cases of disruption; and establish policies and procedures to resolve complaints. For purposes of this section, the Commission may, by rule, further define the terms adequate supervision and appropriate regulation as necessary in the public interest, as appropriate for the protection of investors, and consistent with the purposes of this Act. Before the effective date of a rulemaking under subparagraph (A), a trust company is deemed subject to adequate supervision and appropriate regulation if— the trust company is expressly permitted by a State bank supervisor to engage in the custody and safekeeping of digital commodities; the State bank supervisor has established licensing, examination, and supervisory processes that require the trust company to, at a minimum, meet the conditions described in subparagraphs
(A)through
(I)of paragraph (1); and the trust company is in good standing with its State bank supervisor. In implementing the rulemaking under subparagraph (A), the Commission shall provide a transition period of not less than 2 years for any trust company that is deemed subject to adequate supervision and appropriate regulation under subparagraph
(B)on the effective date of the rulemaking. The Commission may, by rule or order, temporarily suspend, in whole or in part, any requirement imposed under, or any standard referred to in, this section if the Commission determines that the suspension would be consistent with the public interest and the purposes of this Act. .
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Sec. 505
Qualified digital commodity custodians
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