,i  #aac? ,,congress  #b;d ,session  ,h4
 ,r4 #ehib  ,,9 ,,! ,,h\se ,,(          
,,repres5tatives  ,janu>y #b1 #bjae ,mr4
 ,/ockman introduc$ ! foll[+ bill2 :i* 0
 ref]r$ to ! ,committee on ,f9ancial    
,s]vices1 & 9 addition to ! ,committees 
on ,ways & ,means & ,agriculture1 = a   
p]iod to be subsequ5tly det]m9$ by !    
,speak]1 9 ea* case = consid]ation ( su*
 provisions z fall )9 ! jurisdiction ( !
 committee conc]n$  ,a ,,bill  ,to      
protect cryptocurr5cies4  #a4 ,%ort     
title  ,?is ,act may be cit$ z ! ,onl9e 
,m>ket ,protection ,act ( #bjad4  #b4   
,moratorium  7a7 ,nei!r ! ,f$]al        
,gov]nm5t nor any ,/ate or political    
subdivision !re( %all impose any        
/atutory re/rictions or regulations     
specifically id5tify+ & gov]n+ !        
creation1 use1 exploitation1 possession 
or transf] ( any algori?mic protocols   
gov]n+ ! op]ation ( any virtual1        
non-physical1 algori?m or comput] s\rce 
code-bas$ m$ium = ex*ange 7collectively1
 cryptocurr5cy z def9$ h]e97 = a p]iod  

beg9n+ ,june #a1 #bjae1 & ext5d+ five   
ye>s aft] ! enactm5t ( ?is ,act 7su*    
p]iod1 ! moratorium p]iod71 except =    
/atutes already enact$ & effective prior
 to ! date ( enactm5t ( ?is ,act1 &     
fur!r susp5d+ ! enactm5t & effectiv5ess 
( any & all p5d+ /atutes & regulations  
until ! end ( ! a=em5tion$ moratorium   
p]iod1 except z o!rwise provid$ 9 ?is   
section4  7b7 ,dur+ ! moratorium p]iod1 
! ,f$]al ,gov]nm5t & all ,/ate gov]nm5ts
 & political subdivisions !re( %all n   
impose any fur!r /atutory re/rictions or
 regulations affect+ ,sm>t ,contract    
plat=ms su* z cryptographic escr[       
s]vices1 multi-signature transactions1 &
 oracles1 s z to all[ = ! gr[? &        
facilitation ( ^! important facets (    
cryptological te*nology4  7c7 ,f$]al &  
,/ate ,ag5cies %all consid]             
cryptocurr5cies exempt commodities ak9  
to gold & silv]1 r ?an exclud$          
commodities su* z national fiat         
curr5cies4 ,! ,bitco9 cryptological     
protocol is n /rictly a curr5cy1 b is a 

broad multifacet$ protocol :i* all[s =  
myriad novel applications4  7d7 ,f$]al &
 ,/ate ,ag5cies %all h no jurisdiction  
ov] ,cryptocurr5cy ,economy             
,transactions or ,bitco9 ,economy       
,transactions4 ,! f9ancial regulations  
au?oriz+ ^! ag5cies are design$ to      
protect us]s ( f9ancial in/rum5ts f     
fraud1 manipulation1 & o!r types (      
misconduct t result 9 real economic     
losses2 n virtual losses solely )9 a    
cryptographic network4  7e7 ,no?+ 9 ?is 
,act %all prev5t1 impair or imp$e !     
op]ation ( any gov]nm5t ag5cy1 au?ority 
or in/rum5tality1 :e!r ( ! ,f$]al       
,gov]nm5t or ( any ,/ate or political   
subdivision !re(1 to en=ce curr5tly     
exi/+ crim9al1 civil or taxation /atutes
 & regulations4  #c4 ,def9itions  7a7   
,algori?m is def9$ z a proc$ure = solv+ 
a ma!matical problem 9 a f9ite numb] (  
/eps p]=m$ by a comput]4  7b7           
,algori?mic *a9 is a s]ies or *a9 ( bits
 ( data compris+ a unique /r+ ( data :i*
 is ! basis = ! cryptographic pro( ( a  

valid transf] or transaction (          
cryptocurr5cies4 ,! algori?mic *a9 = a  
cryptocurr5cy is commonly ref]r$ to z a 
block*a94  7c7 ,! cryptographic pro( =  
ea* transaction or transf] is bas$ on "o
 unique algori?mic *a91 di/9ct f all    
previ\sly exi/+ algori?ms & nei!r       
replicable nor reusable yet %>+ ) all   
o!r units at lea/ "o common s\rce code  
elem5t 9 ! algori?mic *a9 7or block*a97 
9 ! transf]or's exi/+ ,bitco9 or        
bitco9s4  7d7 ,protocol ref]s to        
proc$ures or guidel9es gov]n+ !         
creation1 developm5t & op]ation ( a     
cryptocurr5cy4  7e7 ,s]vice is def9$ z !
 ,int]nal ,rev5ue ,s]vice4  7f7 ,!      
phrase us+ ! ,int]net or o!r electronic1
 non-physical m$ium means by placem5t ( 
mat]ial 9 a comput] s]v]-bas$ file      
ar*ive s t x is publicly accessible on1 
?r\gh1 or ov] ! ,int]net1 us+ hyp]text  
transf] protocol1 file transf] protocol1
 or o!r simil> protocols4  7g7          
,cryptocurr5cy is a popul> t]m          
encompass+ code-bas$ protocols support+ 

an electronic1 non-physical m$ia = !    
ex*ange ( value1 & = ! sake ( bo? cl>ity
 & ! avoidance ( confusion 9 ! m9d ( !  
public1 bas$ on ! prior use ( ?is t]m by
 ! ,int]nal ,rev5ue ,s]vice 9 its       
initial guidance 7see ,notice #bjad-ba1 
releas$ ,m>* #bf1 #bjad7 ?is t]m is us$ 
h]e94 ,h[ev]1 x is believ$ cryptocurr5cy
 encompasses ! same protocols z ^? cov]$
 by t]ms su* z digital curr5cy1 virtual 
curr5cy or electronic curr5cy4  7h7     
,ag5cies is def9$ z ! regulatory bodies 
( ! ,f$]al ,gov]nm5t & ! ,/ate gov]nm5ts
 or political subdivision !re(1 includ+ 
b n limit$ to ! ,commodity & ,futures   
,trad+ ,committee 7,,cftc71 !           
,securities & ,ex*ange ,commission      
7,,sec71 ! ,bo>d ( ,gov]nors ( ! ,f$]al 
,res]ve1 ! ,f9ancial ,crimes ,en=cem5t  
,network 7,fin,c,e,n71 & ! ,new ,york   
,/ate ,dep>tm5t ( ,f9ancial ,s]vices    
7,,nysdfs74  7i7 ,sm>t ,contracts are   
cryptographically encod$ agreem5ts1 (t5 
utiliz+ multi-signature te*nology1 :i*  
all[ = automatic or multi-p>ty execution

 & public record+ ( transactions or     
prop]ty transf]s :5 c]ta9 pr$et]m9$     
p>amet]s are met4  7j7 ,multi-,signature
 ,transactions are cryptographic        
contracts encod$ 9 ! block*a91 (t5      
involv+ ?ird-p>ty arbitrators or        
oracles1 :i* are f9aliz$ :5 a pre-set   
numb] ( involv$ p>ties sign (f4 ,9 a    
?ree-p>ty multi-signature transaction   
involv+ an arbitrator1 ! transaction may
 be f9aliz$ only :5 two 7#b7 out ( !    
?ree 7#c7 p>ties--a buy]1 a sell]1 &_/or
 ! arbitrator--sign (f on ! transaction4
  7k7 ,cryptographic ,escr[ ,s]vices are
 s]vices t all[ = fund transf]s subject 
to ! au?orization ( an arbitrator or o!r
 int]m$i>y4 ,^! transactions c utilize  
multi-signature te*nology1 all[+ = !    
possibility ( arbitration )\t requir+   
any actual transf] ( funds ?r\gh !      
int]m$i>y4  7l7 ,oracles are automat$   
programs or algori?ms act+ z signatories
 to multi-signature transactions4       
,utiliz+ databases & in=mation          
amalgamators1 an oracle automatically   

executes its signature :5 pr$et]m9$     
?re%old is met4  7m7 ,cryptocurr5cy     
,economy ,transactions or ,bitco9       
,economy ,transactions are transactions 
involv+ f9ancial in/rum5ts d5om9at$ 9   
,bitco9 or ano!r cryptocurr5cy und]ly+ a
 transaction :i* is also d5om9at$ 9     
,bitco9 or ano!r cryptocurr5cy4 ,a      
,bitco9-d5om9at$ cr$it default swap t   
ref]5ces a ,bitco9-d5om9at$ loan w\ld be
 a ,bitco9 ,economy ,transaction4  #d4  
,decl>ation ( moratorium  7a7 ,9 g5]al  
,x is ! public policy ( ! ,unit$ ,/ates 
t no new /atutes1 regulations or        
advisory op9ions be pass$1 implem5t$1   
en=c$ or issu$ gov]n+ ! creation1 use1  
possession or taxation (                
cryptocurr5cies1 ! protocols gov]n+ ea* 
& ! data1 codes1 algori?ms or o!r       
calculations compris+ ea*1 until !      
expiration ( ! moratorium z provid$ 9   
?is ,act4  7b7 ,public int]e/ ,x is     
fur!r ! public policy ( ! ,unit$ ,/ates 
t ! developm5t & use ( any m$ium (      
ex*ange :i* utilizes cryptographic pro( 

( & = a transaction ( cryptocurr5cy )\t 
! ne$ = or reliance ^u ?ird-p>ty        
int]m$i>ies or v]ification w enhance !  
economic well-be+ ( ! ,am]ican p &      
result 9 significant economic gr[?4     
,giv5 ! block*a9's capacity to s]ve z a 
public l$g]1 s(tw>e develop]s are creat+
 me*anisms = sm>t te*nologies t w       
elim9ate ! ne$ = _m =ms ( co/ly         
int]m$iation rang+ f ?ird-p>ty          
arbitration 9 legal disputes to         
key-ex*anges 9 c> & hotel r5tals4 ,!    
capacity = publicly record$             
multi-signature transactions w all[ = ! 
seamless prop]ty transf]s t are         
c]tifiable1 public & secure )\t ! use ( 
an int]m$i>y4 ,^! & o!r uses increase   
m>ket effici5cy & facilitate economic   
activity & gr[?4 ,moreov]1 ^! advances  
promote ! autonomy & lib]ty (           
individuals & small bus9esses at !      
exp5se ( ne$less bureaucracy4  #e4      
,decl>ation ( neutral tax treatm5t  7a7 
,9 g5]al ,x is ! public policy ( !      
,unit$ ,/ates t ! production1 possession

 or use ( cryptocurr5cy1 :e!r 9 trade1  
comm]ce or p]sonal non-comm]cial        
transf]s1 %\ld n be disfavor$ or        
disc\rag$ by ! ,f$]al tax code or o!r   
,f$]al or ,/ate /atute or regulation4   
7b7 ,tax treatm5t ,x is ! public policy 
( ! ,unit$ ,/ates t ! curr5t guidance j 
promulgat$ & releas$ by ! ,s]vice 9 its 
,notice #bjad-ba is advisory1 subject to
 public comm5t & n 9 f9al =m p5d+ !     
expiration ( ! comm5t p]iod4 ,z su*1    
,congress believes t ! curr5t guidance  
is less ?an optimal = ! ,am]ican p &    
economy1 & directs ! ,s]vice to issue or
 revise int]im regulations consi/5t ) ! 
foll[+4  7c7 ,treatm5t z curr5cy ,x is !
 public policy ( ! ,unit$ ,/ates t      
virtual curr5cies %\ld be treat$ z      
curr5cy in/ead ( prop]ty 9 ord] to fo/] 
an equitable tax treatm5t & prev5t a tax
 treatm5t t w\ld disc\rage ! use ( any  
cryptocurr5cy4 ,tax treatm5t (          
cryptocurr5cy z prop]ty does n acc\nt = 
! sub/antial illiquidity & highly limit$
 acceptance & use ( cryptocurr5cy1 &    

sub/antially & unfairly disc\rages      
taxpay]s engag+ 9 a trade or bus9ess f  
us+ cryptocurr5cy 9 comm]ce4 ,?is       
circum/ance is likely to disc\rage      
economic activity & /ifle innovation &  
gr[?4 ,at pres5t1 a taxpay] accept+     
cryptocurr5cy = goods or s]vices w be   
tax$ on ! fair m>ket value ( !          
cryptocurr5cy despite ! fact t ex*ange  
rates 7f cryptocurr5cy to conv5tional   
curr5cy7 are bo? highly volatile &      
publi%$ or available only on a small    
numb] ( proto-ex*anges 9 ! e>ly /ages ( 
developm5t1 acceptance & aw>5ess by     
cryptocurr5cy us]s4 ,z a result1 curr5t 
tax treatm5t w measure income on ! basis
 ( an illiquid & likely inaccurate fair 
m>ket value t exce$s ! taxpay]'s true   
fair m>ket value & h5ce income1 result+ 
9 ! risk ( a consi/5t ov]taxation or    
ov]paym5t t w act z a /rong det]r5t to  
or p5alty = accept+ cryptocurr5cy 9     
paym5t4 ,su* tax treatm5t is inconsi/5t 
) ! tax treatm5t ( secur$ notes = paym5t
 9 trade or comm]ce1 :i* recognizes a   

disc\nt f ! face value ( ! note due to !
 illiquid nature ( ! paym5t4 7,note3    
,see ,,irs ,pub4 #ebe at #d47  7d7      
,rev5ue 9 trade or bus9ess2 taxation ^u 
monetiz+ ev5t ,x is ! public policy ( ! 
,unit$ ,/ates t taxpay]s accept+        
cryptocurr5cy 9 trade or comm]ce %\ld be
 deem$ to realize actual income only :5 
cryptocurr5cy is monetiz$ ?r\gh         
conv]sion or ex*ange into doll>s or any 
(ficial gov]nm5t curr5cy1 & t fair m>ket
 value %\ld be calculat$ z net proce$s f
 ! conv]sion4 7,note3 ,?is treatm5t     
seeks to a*ieve ! mo/ accurate & fair   
measure ( actual income receiv$1 z      
di/+ui%$ f !oretical income 9 ! =m (    
cryptocurr5cy :i*1 until its conv]sion  
to doll>s1 rema9s "u sub/antial risk (  
dim9ution f illiquidity or o!r conv]sion
 risks or ineffici5cies4 ,?is treatm5t  
is consi/5t ) tax treatm5t ( /atutory   
/ock options :]e ! taxable ev5t is n !  
receipt or ex]cise ( ! option1 b ! sale 
( ! und]ly+ /ock = proce$s 9 ca%4 ,!    
goal "h is to h income tax$ :5 ! income 

is actual in/ead ( !oretical & subject  
to sub/antial if n total risk ( loss    
?r\gh liquidity problems1 ex*ange       
problems or o!r b>ri]s to monetization47
 ,accord+ly1 z x is ! fur!r public      
policy ( ! ,unit$ ,/ates t income on    
cryptocurr5cy receiv$ 9 trade or bus9ess
 %\ld be def9$ z ! net proce$s f        
conv]sion ( ! receiv$ cryptocurr5cy into
 doll>s1 ! ,s]vice is h]eby direct$ to  
revise or issue int]im regulations      
consi/5t h]e)4  7e7 ,rev5ue f m9+ or    
creation ( cryptocurr5cy ,x is ! public 
policy ( ! ,unit$ ,/ates t ! ,s]vice's  
guidance t taxpay]s %\ld h ! fair m>ket 
value ( ! cryptocurr5cy !y successfully 
m9e or produce includ$ 9 gross income is
 inequitable1 ov]/ates actual income by 
ov]/at+ fair m>ket value by n acc\nt+ = 
! liquidity risk or ! risk t sub/antial 
ef=t may yield no production1 & /rongly 
& unfairly p5alizes or disc\rages su*   
income produc+ ef=ts & det]s economic   
gr[?1 activity & innovation4 ,accord+ly1
 z x is ! fur!r public policy ( ! ,unit$

 ,/ates t m9$ produc$ cryptocurr5cy %\ld
 be tax$ z income only :5 actual a      
transf] & conv]sion ( proce$s into      
doll>s realize income1 ! ,s]vice is     
h]eby direct$ to revise or issue int]im 
regulations consi/5t h]e)4  #f4         
,sev]ability ,if any provision ( ?is    
title1 or any am5dm5t made by ?is title1
 or ! application ( t provision to any  
p]son or circum/ance1 is held by a c\rt 
( compet5t jurisdiction to violate any  
provision ( ! ,con/itution ( ! ,unit$   
,/ates1 !n ! o!r provisions ( t title1 &
 ! application ( t provision to o!r     
p]sons & circum/ances1 %all n be        
affect$4