Sec. 103. Definitions under the Commodity Exchange Act

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Section 1a of the Commodity Exchange Act ( 7 U.S.C. 1a ) is amended— in paragraph (10)— in subparagraph (A)— by redesignating clauses

(iii)and

(iv)as clauses

(iv)and (v), respectively; and by inserting after clause

(ii)the following: digital commodity; ; and by redesignating subparagraph

(B)as subparagraph

(C)and inserting after subparagraph

(A)the following: For purposes of this paragraph, the term trading in commodity interests shall not include transacting in digital commodities for the purpose of— acting as a digital commodity custodian; establishing, maintaining, or managing inventory or payment instruments for commercial purposes; or maintaining or supporting the operation of, or validating transactions on, a blockchain system. ; in paragraph (11)— in subparagraph (A)(i)— by redesignating subclauses

(III)and

(IV)as subclauses

(IV)and (V), respectively; and by inserting after subclause

(II)the following: digital commodity; ; and by redesignating subparagraph

(B)as subparagraph

(C)and inserting after subparagraph

(A)the following: For purposes of this paragraph, the term trading in commodity interests shall not include transacting in digital commodities for the purpose of— acting as a digital commodity custodian; establishing, maintaining, or managing inventory or payment instruments for commercial purposes; or maintaining or supporting the operation of, or validating transactions on, a blockchain system. ; in paragraph (12)(A)(i)— in subclause (II), by adding at the end a semicolon; by redesignating subclauses

(III)and

(IV)as subclauses

(IV)and (V), respectively; and by inserting after subclause

(II)the following: a digital commodity; ; by redesignating paragraphs

(16)through

(51)as paragraphs

(17)through (52), respectively, and inserting after paragraph

(15)the following: Except as provided in clause (ii), the term associated person of a digital commodity broker means a person who is associated with a digital commodity broker as a partner, officer, employee, or agent (or any person occupying a similar status or performing similar functions) in any capacity that involves— the solicitation or acceptance of an order for the purchase or sale of a digital commodity; or the supervision of any person engaged in the solicitation or acceptance of an order for the purchase or sale of a digital commodity. The term associated person of a digital commodity broker does not include any person associated with a digital commodity broker the functions of which are solely clerical or ministerial. Except as provided in clause (ii), the term associated person of a digital commodity dealer means a person who is associated with a digital commodity dealer as a partner, officer, employee, or agent (or any person occupying a similar status or performing similar functions) in any capacity that involves— the solicitation or acceptance of a contract for the purchase or sale of a digital commodity; or the supervision of any person engaged in the solicitation or acceptance of a contract for the purchase or sale of a digital commodity. The term associated person of a digital commodity dealer does not include any person associated with a digital commodity dealer the functions of which are solely clerical or ministerial. The term Bank Secrecy Act means— section 21 of the Federal Deposit Insurance Act ( 12 U.S.C. 1829b ); chapter 2 of title I of Public Law 91–508 ( 12 U.S.C. 1951 et seq. ); and subchapter II of chapter 53 of title 31, United States Code. The term decentralized finance messaging system means a software application that provides a user with the ability to create or submit an instruction, communication, or message to a decentralized finance trading protocol for the purpose of executing a transaction by the user. The term decentralized finance messaging system does not include any system that provides any person other than the user with control over— the funds of the user; or the execution of the transaction of the user. The term decentralized finance trading protocol means a blockchain system through which multiple participants can execute a financial transaction— in accordance with an automated rule or algorithm that is predetermined and non-discretionary; and without reliance on any other person to maintain control of the digital assets of the user during any part of the financial transaction. The term decentralized finance trading protocol does not include a blockchain system if— a person or group of persons under common control has the unilateral authority, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, to control or materially alter the functionality, operation, or rules of consensus or agreement of the blockchain system; or the blockchain system does not operate, execute and enforce its operations and transactions based solely on pre-established, transparent rules encoded directly within the source code of the blockchain system. For purposes of subclause (I), a decentralized governance system shall not be considered to be a person or a group of persons under common control. The term digital commodity means a digital asset that is intrinsically linked to a blockchain system, and the value of which is derived from or is reasonably expected to be derived from the use of the blockchain system. For purposes of this subparagraph, a digital asset is intrinsically linked to a blockchain system if the digital asset is directly related to the functionality or operation of the blockchain system or to the activities or services for which the blockchain system is created or utilized, including where the digital asset is— issued or generated by the programmatic functioning of the blockchain system; used to transfer value between participants in the blockchain system; used to access the activities or services of the blockchain system; used to participate in the decentralized governance system of the blockchain system; used or removed from circulation in whole or in part to pay fees or otherwise verify or validate transactions on the blockchain system; used as payment or incentive to participants in the blockchain system to engage in the activities of the blockchain system, provide services to other participants in the blockchain system, or otherwise participate in the functionality of the blockchain system; or used as payment or incentive to participants in the blockchain system to validate transactions, secure the blockchain system, provide computational services, maintain or distribute information, or otherwise participate in the operations of the blockchain system. The term digital commodity does not include any of the following: Any security, other than a note, an investment contract, or a certificate of interest or participation in any profit-sharing agreement. A note, an investment contract, or a certificate of interest or participation in any profit-sharing agreement that represents or gives the holder an ownership interest or other interest in the revenues, profits, obligations, debts, assets, or assets or debts to be acquired of the issuer of the digital asset or another person (other than a decentralized governance system). A digital asset that, based on its terms and other characteristics, is, represents, or is functionally equivalent to an agreement, contract, or transaction that is— a security future, as defined in section 2a of the Securities Act of 1933; a security-based swap, as defined in section 2a of the Securities Act of 1933; a put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), as defined in section 2a of the Securities Act of 1933; or a put, call, straddle, option, or privilege on any security, as defined in section 2a of the Securities Act of 1933. A digital asset that is a permitted payment stablecoin. A deposit (as defined under section 3 of the Federal Deposit Insurance Act ( 12 U.S.C. 1813 )), regardless of the technology used to record the deposit. An account (as defined in section 101 of the Federal Credit Union Act ( 12 U.S.C. 1752 )), regardless of the technology used to record the account. A digital asset that references, represents an interest in, or is functionally equivalent to— an agricultural commodity; an excluded commodity, other than a security; or an exempt commodity, other than the digital commodity itself, as shall be further defined by the Commission. A digital asset that, 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 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); a commodity option authorized under section 4c; or a leverage transaction authorized under section 19. A digital asset that, based on its terms and other characteristics, is, represents, or is functionally equivalent to— a commodity pool, as defined in this Act; or a pooled investment vehicle. In this subclause, the term pooled investment vehicle means any investment company as defined in section 3(a) of the Investment Company Act of 1940 ( 15 U.S.C. 80a–3(a) ) or any company that would be an investment company under section 3(a) of such Act but for the exclusion provided from that definition by paragraph (1), (7), or

(9)of section 3(c) of such Act ( 15 U.S.C. 80a–3(c)(1) , (7), or (9)). A digital asset that has inherent value, utility, or significance beyond its mere existence as a digital asset, including the digital equivalent of a tangible or intangible good, such as— a work of art, a musical composition, a literary work, or other intellectual property; collectibles, merchandise, virtual land, and video game assets; affinity, rewards, or loyalty points, including airline miles or credit card points, that are not primarily speculative in nature; or rights, licenses, and tickets. No presumption shall exist that a digital asset is a security, nor shall a digital asset be excluded from being a digital commodity pursuant to clause (iii)(I), solely due to— the digital asset providing voting or economic rights with respect to the blockchain system to which the digital asset relates or the decentralized governance system of the blockchain system; the value of the digital asset having the potential to appreciate or depreciate in response to the efforts, operations, or financial performance of the decentralized governance system of the blockchain system to which the digital asset relates; or the value of the digital asset appreciating or depreciating due to the adoption and use of the blockchain system to which the digital asset relates or the decentralized governance system of the blockchain system. The term digital commodity broker means any person who, as a regular business— is engaged in— soliciting or accepting an order from a customer for— the purchase or sale of a digital commodity; or an agreement, contract, or transaction described in section 2(c)(2)(D)(iv); and in conjunction with the activities in item (aa), accepts or maintains control over— the funds of any customer; or the execution of any transaction of a customer; is engaged in soliciting or accepting orders from a customer for the purchase or sale of a unit of a digital commodity on or subject to the rules of a registered entity; or is registered with the Commission as a digital commodity broker. The term ‘digital commodity broker’ does not include a person solely because the person— solicits or accepts an order described in clause (i)(I)(aa)(AA) from a customer who is an eligible contract participant; enters into a digital commodity transaction the primary purpose of which is to make, send, receive, or facilitate payments, whether involving a payment service provider or on a peer-to-peer basis; or is a bank (as defined under section 3(a) of the Securities Exchange Act of 1934) engaging in certain banking activities with respect to a digital commodity in the same or a similar manner as a bank is excluded from the definition of a broker under such section, as determined by the Commission. The Commission, by rule or regulation, may exclude from the term digital commodity broker any person or class of persons if the Commission determines that the rule or regulation will effectuate the purposes of this Act. The term digital commodity dealer means any person who, as a regular business— is, or offers to be a counterparty to a person for the purchase or sale of a digital commodity as a regular business, and in conjunction with the activities, accepts or maintains control over the funds of any counterparty; or is registered with the Commission as a digital commodity dealer. The term digital commodity dealer does not include a person solely because the person— is or offers to be a counterparty to a person who is an eligible contract participant; enters into a digital commodity transaction with an eligible contract participant; enters into a digital commodity transaction on or through a registered digital commodity exchange, with a registered digital commodity broker, or through a decentralized finance trading protocol; enters into a digital commodity transaction for the person’s own account, either individually or in a fiduciary capacity, but not as a part of a regular business; enters into a digital commodity transaction the primary purpose of which is to make, send, receive, or facilitate payments, whether involving a payment service provider or on a peer-to-peer basis; or is a bank (as defined under section 3(a) of the Securities Exchange Act of 1934) engaging in certain banking activities with respect to a digital commodity in the same or a similar manner as a bank is excluded from the definition of a dealer under section 3(a)(5) of such Act, as determined by the Commission. The Commission, by rule or regulation, may exclude from the term digital commodity dealer any person or class of persons if the Commission determines that the rule or regulation will effectuate the purposes of this Act. The term digital commodity exchange means a trading facility that offers or seeks to offer a cash or spot market in at least 1 digital commodity. The term mixed digital asset transaction means a transaction in which a digital commodity is traded for a security. 1933 The terms blockchain system , decentralized governance system , digital asset , digital commodity issuer , digital commodity affiliated person , digital commodity related person , end user distribution , mature blockchain system , and permitted payment stablecoin have the meaning given those terms, respectively, under section 2(a) of the Securities Act of 1933 ( 15 U.S.C. 77b(a) ). ; and in paragraph

(41)(as so redesignated by paragraph

(4)of this subsection)— by striking and at the end of subparagraph (E); by striking the period at the end of subparagraph

(F)and inserting ; and ; and by adding at the end the following: a digital commodity exchange registered under section 5i. . Each of the following provisions of law is amended by striking 1a(18) and inserting 1a(19) : Section 4s(h)(5)(A)(i) of the Commodity Exchange Act ( 7 U.S.C. 6s(h)(5)(A)(i) ). Section 5(e) of the Securities Act of 1933 ( 15 U.S.C. 77e(e) ). Section 6(g)(5)(B) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78f(g)(5)(B) ). Section 15F(h)(5)(A)(i) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78o–10(h)(5)(A)(i) ). Section 752 of the Wall Street Transparency and Accountability Act of 2010 ( 15 U.S.C. 8325 ) is amended by striking 1a(39) and inserting 1a(40) . Section 4s(f)(1)(D) of the Commodity Exchange Act ( 7 U.S.C. 6s(f)(1)(D) ) is amended by striking 1a(47)(A) and inserting 1a(48)(A) . Each of the following provisions of the Commodity Exchange Act is amended by striking 1a(47)(A)(v) and inserting 1a(48)(A)(v) : Section 4t(b)(1)(C) ( 7 U.S.C. 6t(b)(1)(C) ). Section 5(d)(23) ( 7 U.S.C. 7(d)(23) ). Section 5b(k)(3) ( 7 U.S.C. 7a–1(k)(3) ). Section 5h(f)(10)(A)(iii) ( 7 U.S.C. 7b–3(f)(10)(A)(iii) ). Section 21(f)(4)(C) of the Commodity Exchange Act ( 7 U.S.C. 24a(f)(4)(C) ) is amended by striking 1a(48) and inserting 1a(49) . Section 403 of the Legal Certainty for Bank Products Act of 2000 ( 7 U.S.C. 27a ) is amended— in subsection (a)(2), by striking 1a(47)(A)(v) and inserting 1a(48)(A)(v) ; and in each of subsections (b)(1) and (c)(2), by striking 1a(47) and inserting 1a(48) . Section 712 of the Wall Street Transparency and Accountability Act of 2010 ( 15 U.S.C. 8302 ) is amended— in subsection (a)(8), by striking 1a(47)(D) and inserting 1a(48)(D) ; and in subsection (d)(1), by striking 1a(47)(A)(v) each place it appears and inserting 1a(48)(A)(v) .

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