,i #aafth ,,congress #b;d ,session ,h4 ,r4 #hcgc ,,in ,,the ,,house ,,of ,,representatives ,september #bd1 #bjbj,mr4 ,conaway 7for himself1 ,mr4 ,austin ,scott of ,georgia1 ,mr4 ,johnson of ,south ,dakota1 ,mr4 ,emmer1 ,mr4 ,soto1 and ,mr4 ,schweikert7 introduced the following bill2 which was referred to the ,committee on ,agriculture ,a ,,bill ,to provide for orderly and secure digital commodity exchange markets1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,digital ,commodity ,exchange ,act of #bjbj4 #b4 ,amendments to the ,commodity ,exchange ,act 7a7 ,definitions ,section #a;a of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #a;a7 is amended-- 7#a7 in paragraph 7#dj7-- 7,a7 in subparagraph 7,e71 by striking and at the end2 and 7,b7 by redesignating subparagraph 7,f7 as subparagraph 7,g7 and inserting after subparagraph 7,e7 the following3 7,f7 a digital commodity exchange registered under section #e;i2 and 2 and 7#b7 by adding at the end the following3 7#eb7 ,digital commodity ,the term digital commodity means any form of fungible intangible personal property that can be exclusively possessed and transferred person to person without necessary reliance on an intermediary1 and which does not represent a financial interest in a company1 partnership1 or investment vehicle4 7#ec7 ,digital commodity custodian ,the term digital commodity custodian means an entity that holds1 maintains1 or safeguards digital commodities and other assets on behalf of digital commodity market participants4 7#ed7 ,digital commodity exchange ,the term digital commodity exchange means a trading facility that lists for trading at least one digital commodity4 7#ee7 ,digital commodity presale ,the term digital commodity presale means the delivery of a unit of a digital commodity1 or any promise or right to a future unit of a digital commodity1 to a participant in a securities offering conducted in compliance with the ,securities ,act of #aicc before the listing of the digital commodity for trading on a registered digital commodity exchange4 4 7b7 ,commission jurisdiction over retail digital commodity transactions ,section #b7;c77#b7 of such ,act 7#g ,u4,s4,c4 #b7;c77#b77 is amended-- 7#a7 in subparagraph 7,d77ii7-- 7,a7 in subclause 7,,iii71 in the matter that precedes item 7aa71 by inserting of a commodity1 other than a digital commodity1 before that2 and 7,b7 by redesignating subclauses 7,,iv7 and 7,v7 as subclauses 7,v7 and 7,,vi7 and inserting after subclause 7,,iii7 the following3 7,,iv7 a contract of sale of a digital commodity that-- 7aa7 results in actual delivery within #b days or such other period as the ,commission may determine by rule or regulation based upon the typical commercial practice in cash or spot markets for the digital commodity involved2 or 7bb7 is executed on or subject to the rules of a registered digital commodity exchange2 2 and 7#b7 by adding at the end the following3 7,f7 ,commission jurisdiction over digital commodity transactions 7i7 ,notwithstanding any other provision of law1 the ,commission shall have exclusive jurisdiction over any agreement1 contract1 or transaction involving a contract of sale of any digital commodity in interstate commerce which is offered1 solicited1 traded1 executed1 or otherwise dealt in on or subject to the rules of a registered entity1 including the conduct of any such office or business4 7ii7 ,notwithstanding any other provision of law1 the ,commission shall have exclusive jurisdiction over any agreement1 contract1 or transaction involving a unit of a digital commodity1 or any promise or right to a future unit of a digital commodity1 obtained through a digital commodity presale and subject to the restrictions in section #d;c7h74 7iii7 ,nothing in this subparagraph shall be construed to limit the power of any ,state or other ,federal regulatory agency1 or to provide the ,commission with jurisdiction1 with respect to-- 7,i7 custodial or depository activities for a digital asset1 or custodial or depository activities for any promise or right to a future digital asset1 of an entity regulated by a ,state or another ,federal regulatory agency2 or 7,,ii7 a securities offering or transaction associated with-- 7aa7 a digital commodity presale2 or 7bb7 a sale described in section #d;c7h77#c77;,a77i74 4 7c7 ,prohibited transactions ,section #d;c of such ,act 7#g ,u4,s4,c4 #f;c7 is amended by adding at the end the following3 7h7 ,prohibited digital commodity transactions 7#a7 ,in general ,it shall be a violation of this ,act for any person who owns or controls a unit of a digital commodity1 or any promise or right to a future unit of a digital commodity1 obtained through a digital commodity presale and subject to the restrictions in this subsection1 to offer to enter into1 to enter into1 or to execute a contract for the purchase or sale of the unit1 promise1 or right1 except as provided in paragraph 7#c74 7#b7 ,unlawful facilitation of prohibited transaction ,it shall be a violation of this ,act for any person willfully to execute1 confirm the execution of1 or conduct any office or business for the purpose of soliciting1 accepting any order for1 or otherwise dealing in1 any transaction in1 or in connection with1 a contract for the purchase or sale of a unit of a digital commodity1 or any promise or right to a future unit of a digital commodity1 which such person has reason to believe is obtained through a digital commodity presale and subject to the restrictions in this subsection1 except as provided in paragraph 7#c74 7#c7 ,exceptions 7,a7 ,off-exchange transactions 7i7 ,sale of a promise or right ,a promise or right to a future unit of a digital commodity obtained through a digital commodity presale may be sold pursuant to a securities transaction conducted in compliance with the ,securities ,act of #aicc4 7ii7 ,sale of a digital commodity ,a unit of a digital commodity obtained through a digital commodity presale may be sold to an accredited imvestor 7as defined in section #b7;a77#ae7 of the ,securities ,act of #aicc74 7iii7 ,treatment ,for purposes of this subsection1 a unit of a digital commodity or any promise or right to a future unit of a digital commodity obtained through a transaction utilizing this exception shall continue to be considered to be obtained through a digital commodity presale4 7,b7 ,on-exchange transactions 7i7 ,in general ,a unit of a digital commodity that is obtained through a digital commodity presale or a transaction described in subparagraph 7,a7 may be offered for sale or exchange on a registered digital commodity exchange1 subject to any limitations imposed by the exchange4 7ii7 ,treatment ,for purposes of this subsection1 a unit of a digital commodity obtained through a transaction utilizing this exception shall not be considered to be obtained though a digital commodity presale4 7,c7 ,utilization of presold digital commodities 7i7 ,in general ,a unit of a digital commodity that is obtained through a digital commodity presale may be-- 7,i7 utilized for the purposes of receiving the non-financial rights or services associated with the digital commodity2 or 7,,ii7 exchanged or sold in such limited quantities as the ,commission determines support the public use and functioning of services and rights associated with the digital commodity4 7ii7 ,treatment ,for purposes of this subsection1 a unit of a digital commodity obtained through a transaction utilizing this exception shall not be considered to be obtained though a digital commodity presale4 7,d7 ,prior digital commodities ,a unit of a digital commodity shall not be subject to this subsection if1 before the date of the enactment of this subsection1 the digital commodity was publicly available for trading on a trading facility licensed as a money transmitter in a ,state or territory of the ,united ,states4 7#d7 ,transition rules 7,a7 ,in general ,for the purpose of a transaction described in paragraph 7#c77;,b71 the ,commission shall consider a trading facility to be a registered digital commodity exchange if-- 7i7 the trading facility-- 7,i7 has been continuously licensed as a money transmitter in at least #bj ,states or territories of the ,united ,states since ,august #a1 #bjai2 7,,ii7 is a designated contract market2 or 7,,iii7 is a swap execution facility2 7ii7 the trading facility submits a listing notice to the ,commission containing-- 7,i7 documentation demonstrating its licensing referred to in clause 7i77,i72 and 7,,ii7 the determination made by the trading facility under section #e;i7c77#c7 that the digital commodity that is the subject of the transaction is not readily susceptible to manipulation2 and 7iii7 the ,commission has not issued a notice of disapproval of the listing notice4 7,b7 ,disapproval process ,in making a disapproval under subparagraph 7,a71 the ,commission shall-- 7i7 issue any disapproval within #bj business days after receipt of a completed listing notice2 and 7ii7 identify the specific deficiencies with the listing notice that necessitated the disapproval4 7,c7 ,extensions ,the ,commission may extend the time for disapproval under subparagraph 7,b7-- 7i7 once1 for #bj days1 through written notice to the digital commodity exchange given by a division director2 and 7ii7 once1 for an additional #ij business days1 through notice given by the ,commission which includes a description of any deficiencies with the listing notice1 including any-- 7,i7 novel or complex issues which require additional time to analyze2 7,,ii7 missing information or inadequate explanations2 or 7,,iii7 potential inconsistencies with this ,act4 7,d7 ,expiration ,the authority provided by this subparagraph shall expire #a year after the date of the final promulgation of the digital commodity exchange registration requirements1 or on the first registration of a digital commodity exchange1 whichever occurs earlier4 4 7d7 ,common provisions applicable to registered entities ,section #e;c of such ,act 7#g ,u4,s4,c4 #g;a-#b7 is amended-- 7#a7 in subsection 7a71 by striking #e7;d7 and #e;b7c77#b7 and inserting #e7;d71 #e;b7c77#b71 and #e;i7c72 7#b7 in subsection 7b7-- 7,a7 in each of paragraphs 7#a7 and 7#b71 by inserting digital commodity exchange1 before derivatives2 and 7,b7 in paragraph 7#c71 by inserting digital commodity exchange1 before derivatives each place it appears2 and 7#c7 in subsection 7c7-- 7,a7 in paragraph 7#b71 by inserting or participants before 7in2 7,b7 in paragraph 7#d77;,b71 by striking #a;a7#aj7 and inserting #a;a7#i72 and 7,c7 in paragraph 7#e71 by adding at the end the following3 7,d7 ,special rules for the listing of certain digital commodities 7i7 ,in general ,in the case of listing a digital commodity for trading which has not yet been listed for trading on another registered entity1 paragraphs 7#b7 and 7#c7 shall apply as if the listing were a rule1 and paragraph 7#b7 shall be applied by substituting #bj business days for #aj business days4 7ii7 ,transitional extension ,for #a year after the registration of the first digital commodity exchange1 the ,commission shall have an additional #bj business days review any certification under clause 7i74 7iii7 ,digital commodity presales ,in conjunction with listing a digital commodity in which any unit of the digital commodity was obtained through a digital commodity presale1 the ,commission shall require the registered entity to prohibit the sale of any unit of the digital commodity that was obtained in violation of section #d;c7h74 4 7e7 ,registration of digital commodity exchanges2 qualified digital commodity custodians ,the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #a et seq47 is amended by inserting after section #e;h the following3 #e;i4 ,registration of digital commodity exchanges 7a7 ,in general 7#a7 ,voluntary registration 7,a7 ,in general ,any trading facility that offers or seeks to offer a market in digital commodities may register with the ,commission as a digital commodity exchange4 7,b7 ,application ,a person desiring to register as a digital commodity exchange shall submit to the ,commission an application in such form and containing such information as the ,commission may require for the purpose of making the determinations required for approval under subsections 7c7 and 7e74 7#b7 ,deemed registration ,a registered designated contract market or registered swap execution facility which fulfills the requirements of this section shall be considered a registered digital commodity exchange4 7b7 ,trading 7#a7 ,in general ,a digital commodity exchange that is registered under subsection 7a7 may make available for trading any digital commodity that is not readily subject to manipulation1 subject to this subsection4 7#b7 ,rules governing margined or leveraged trading ,the ,commission may make1 promulgate1 and enforce such rules governing margined1 leveraged1 or financed transactions as are reasonably necessary to protect market participants and promote the orderly settlement of transactions with respect to-- 7,a7 disclosure2 7,b7 recordkeeping2 7,c7 capital1 margin1 and other financial resources2 7,d7 reporting2 7,e7 business conduct2 7,f7 documentation2 and 7,g7 such other matters as the ,commission demonstrates to be necessary4 7#c7 ,prohibition on certain trading practices ,sections #d;b1 #d;c1 and #f7;c7 shall apply to any agreement1 contract1 or transaction in a digital commodity as if the agreement1 contract1 or transaction were a contract of sale of a commodity for future delivery4 7#d7 ,prohibition on trading derivatives products ,registration as a digital commodity exchange shall not permit a trading facility to offer any contract of sale of a commodity for future delivery1 option1 or swap for trading without also being registered as a designated contract market or swap execution facility4 7c7 ,core principles for digital commodity exchanges 7#a7 ,compliance with core principles 7,a7 ,in general ,to be registered1 and maintain registration1 as a digital commodity exchange1 the digital commodity exchange shall comply with-- 7i7 the core principles described in this subsection2 and 7ii7 any requirement that the ,commission may impose by rule or regulation pursuant to section #h;a7#e74 7,b7 ,reasonable discretion of a digital commodity exchange ,unless otherwise determined by the ,commission by rule or regulation1 a digital commodity exchange described in subparagraph 7,a7 shall have reasonable discretion in establishing the manner in which the digital commodity exchange complies with the core principles described in this subsection4 7#b7 ,compliance with rules ,a digital commodity exchange shall-- 7,a7 establish and enforce compliance with any rule of the digital commodity exchange1 including-- 7i7 the terms and conditions of the trades traded or processed on or through the digital commodity exchange2 and 7ii7 any limitation on access to the digital commodity exchange2 7,b7 establish and enforce trading1 trade processing1 and participation rules that will deter abuses and have the capacity to detect1 investigate1 and enforce those rules1 including means-- 7i7 to provide market participants with impartial access to the market2 and 7ii7 to capture information that may be used in establishing whether rule violations have occurred2 and 7,c7 establish rules governing the operation of the exchange1 including rules specifying trading procedures to be used in entering and executing orders traded or posted on the facility4 7#c7 ,digital commodities not readily susceptible to manipulation 7,a7 ,in general ,the digital commodity exchange shall permit trading only in digital commodities that are not readily susceptible to manipulation4 7,b7 ,determinations ,prior to offering trading in any digital commodity1 the digital commodity exchange shall make a determination under this paragraph as to whether the digital commodity is readily susceptible to manipulation4 7,c7 ,considerations ,in making a determination under this paragraph1 the exchange shall consider the digital commodity's-- 7i7 purpose and use2 7ii7 governance structure2 7iii7 participation2 7iv7 distribution2 7v7 intended1 current1 and proposed functionality2 7vi7 other relevant factors determined by the exchange2 and 7vii7 any other factor required by the ,commission4 7,d7 ,rules for digital commodity presales ,the digital commodity exchange shall have in place such rules as may be necessary to reasonably ensure the orderly sale of any unit of a digital commodity obtained through a digital commodity presale4 7#d7 ,treatment of customer assets 7,a7 ,required standards and procedures ,each digital commodity exchange shall establish standards and procedures that are designed to protect and ensure the safety of customer money1 assets1 and property4 7,b7 ,holding of customer assets 7i7 ,in general ,each digital commodity exchange shall hold customer money1 assets1 and property in a manner to minimize the customer's risk of loss or unreasonable delay in the access to the money1 assets1 and property of the customer4 7ii7 ,segregation of funds 7,i7 ,in general ,a digital commodity exchange shall treat and deal with all money1 assets1 and property of any customer received as belonging to the customer4 7,,ii7 ,commingling prohibited ,money1 assets1 and property of a customer described in subclause 7,i7 shall be separately accounted for and shall not be commingled with the funds of the digital commodity exchange or be used to margin1 secure1 or guarantee any trades or accounts of any customer or person other than the person for whom the same are held4 7iii7 ,exceptions 7,i7 ,use of funds 7aa7 ,in general ,notwithstanding clause 7ii71 money1 assets1 and property of customers of a described in clause 7ii7 may1 for convenience1 be commingled and deposited in the same account or accounts with any bank1 trust company1 or qualified digital commodity custodian4 7bb7 ,withdrawal ,notwithstanding clause 7ii71 such share of the money1 assets1 and property described in item 7aa7 as in the normal course of business shall be necessary to margin1 guarantee1 secure1 transfer1 adjust1 or settle a digital commodity transaction with a registered entity may be withdrawn and applied to such purposes1 including the payment of commissions1 brokerage1 interest1 taxes1 storage1 and other charges1 lawfully accruing in connection with the digital commodity transaction4 7,,ii7 ,commission action ,notwithstanding clause 7ii71 in accordance with such terms and conditions as the ,commission may prescribe by rule1 regulation1 or order1 any money1 assets1 or property of the customers of a digital commodity exchange described in clause 7ii7 may be commingled and deposited in customer accounts with any other money1 assets1 or property received by the digital commodity exchange and required by the ,commission to be separately accounted for and treated and dealt with as belonging to the customer of the digital commodity exchange4 7,c7 ,permitted investments ,money described in clause 7ii7 may be invested in obligations of the ,united ,states1 in general obligations of any ,state or of any political subdivision of a ,state1 and in obligations fully guaranteed as to principal and interest by the ,united ,states1 or in any other investment that the ,commission may by rule or regulation prescribe1 and such investments shall be made in accordance with such rules and regulations and subject to such conditions as the ,commission may prescribe4 7,d7 ,customer property ,assets held on behalf of a customer by a digital commodity exchange shall be considered to be customer property as such term is defined in section #gfa of title #aa1 ,united ,states ,code1 with regard to all money1 assets1 and property of any customer received by a digital commodity exchange for trading or custody1 or to margin1 guarantee1 or secure digital commodity transactions 7including money1 assets1 or property accruing to the customer as the result of such transactions74 7,e7 ,misuse of customer property ,it shall be unlawful-- 7i7 for any digital commodity exchange that has received any customer money1 assets1 or property for custody to dispose of1 or use any such money1 assets1 or property as belonging to the digital commodity exchange2 or 7ii7 for any other person1 including any depository1 other digital commodity exchange1 or digital commodity custodian that has received any customer money1 assets1 or property for deposit1 to hold1 dispose of1 or use any such money1 assets1 or property as belonging to the depositing digital commodity exchange or any person other than the customers of the digital commodity exchange4 7,f7 ,customer right to opt out 7i7 ,in general ,a customer shall have the right to waive the restrictions in subparagraph 7,b71 by affirmatively electing1 in writing to the digital commodity exchange1 to waive the restrictions4 7ii7 ,limitations ,the ,commission may1 by rule1 establish notice and disclosure requirements1 segregation requirements1 investment limitations1 and other rules related to the waiving of any restrictions under this paragraph that are reasonably necessary to protect customers1 including eligible contract participants1 non-eligible contract participants1 or any other class of customers4 7#e7 ,monitoring of trading and trade processing 7,a7 ,in general ,the digital commodity exchange shall provide a competitive1 open1 and efficient market and mechanism for executing transactions that protects the price discovery process of trading on the exchange4 7,b7 ,protection of markets and market participants ,the digital commodity exchange shall establish and enforce rules-- 7i7 to protect markets and market participants from abusive practices committed by any party1 including abusive practices committed by a party acting as an agent for a participant2 and 7ii7 to promote fair and equitable trading on the exchange4 7,c7 ,the digital commodity exchange shall-- 7i7 establish and enforce rules or terms and conditions defining1 or specifications detailing-- 7,i7 trading procedures to be used in entering and executing orders traded on or through the facilities of the digital commodity exchange2 and 7,,ii7 procedures for trade processing of digital commodities on or through the facilities of the digital commodity exchange2 and 7ii7 monitor trading in digital commodities to prevent manipulation1 price distortion1 and disruptions of the delivery or cash settlement process through surveillance1 compliance1 and disciplinary practices and procedures1 including methods for conducting real-time monitoring of trading and comprehensive and accurate trade reconstructions4 7#f7 ,ability to obtain information ,the digital commodity exchange shall-- 7,a7 establish and enforce rules that will allow the facility to obtain any necessary information to perform any of the functions described in this section2 7,b7 provide the information to the ,commission on request2 and 7,c7 have the capacity to carry out such international information-sharing agreements as the ,commission may require4 7#g7 ,emergency authority ,the digital commodity exchange shall adopt rules to provide for the exercise of emergency authority1 in consultation or cooperation with the ,commission or a registered entity1 as is necessary and appropriate1 including the authority to facilitate the liquidation or transfer of open positions in any digital commodity or to suspend or curtail trading in a digital commodity4 7#h7 ,reporting requirements 7,a7 ,duty of digital commodity exchange ,each digital commodity exchange shall provide to the ,commission all information that is determined by the ,commission to be necessary to perform each responsibility of the ,commission under this ,act4 7,b7 ,timely publication of trading information 7i7 ,in general ,the digital commodity exchange shall make public timely information on price1 trading volume1 and other trading data on digital commodities to the extent prescribed by the ,commission4 7ii7 ,capacity of digital commodity exchange ,the digital commodity exchange shall be required to have the capacity to electronically capture and transmit trade information with respect to transactions executed on the exchange4 7#i7 ,recordkeeping and reporting 7,a7 ,in general ,a digital commodity exchange shall-- 7i7 maintain records of all activities relating to the business of the facility1 including a complete audit trail1 in a form and manner acceptable to the ,commission for a period of #e years2 7ii7 report to the ,commission1 in a form and manner acceptable to the ,commission1 such information as the ,commission determines to be necessary or appropriate for the ,commission to perform the duties of the ,commission under this ,act2 and 7iii7 keep any such records of digital commodities which relate to a security open to inspection and examination by the ,securities and ,exchange ,commission4 7,b7 ,information-sharing ,subject to section #h1 and on request1 the ,commission shall share information collected under subparagraph 7,a7 with-- 7i7 the ,board2 7ii7 the ,securities and ,exchange ,commission2 7iii7 each appropriate ,federal banking agency2 7iv7 each appropriate ,state bank supervisor 7within the meaning of section #c of the ,federal ,deposit ,insurance ,act72 7v7 the ,financial ,stability ,oversight ,council2 7vi7 the ,department of ,justice2 and 7vii7 any other person that the ,commission determines to be appropriate1 including-- 7,i7 foreign financial supervisors 7including foreign futures authorities72 7,,ii7 foreign central banks2 and 7,,iii7 foreign ministries4 7,c7 ,confidentiality agreement ,before the ,commission may share information with any entity described in subparagraph 7,b71 the ,commission shall receive a written agreement from each entity stating that the entity shall abide by the confidentiality requirements described in section #h relating to the information on digital commodity transactions that is provided4 7,d7 ,providing information ,each digital commodity exchange shall provide to the ,commission 7including any designee of the ,commission7 information under subparagraph 7,a7 in such form and at such frequency as is required by the ,commission4 7#aj7 ,antitrust considerations ,unless necessary or appropriate to achieve the purposes of this ,act1 the digital commodity exchange shall not-- 7,a7 adopt any rules or take any actions that result in any unreasonable restraint of trade2 or 7,b7 impose any material anticompetitive burden on trading4 7#aa7 ,conflicts of interest ,the digital commodity exchange shall-- 7,a7 establish and enforce rules to minimize conflicts of interest in its decision-making process2 and 7,b7 establish a process for resolving the conflicts of interest4 7#ab7 ,financial resources 7,a7 ,in general ,each digital commodity exchange shall have adequate financial1 operational1 and managerial resources1 as determined by the ,commission1 to discharge each responsibility of the digital commodity exchange4 7,b7 ,minimum amount of financial resources ,each digital commodity exchange shall possess financial resources that1 at a minimum1 exceed the total amount that would enable the digital commodity exchange to conduct an orderly wind down of its activities4 7,c7 ,additional financial resources for leverage trading ,the ,commission may require such additional financial resources as are necessary to enable a digital commodity exchange which offers margined1 leveraged1 or financed transactions to fulfill its customer obligations4 7#ac7 ,governance fitness standards 7,a7 ,governance arrangements ,each digital commodity exchange shall establish governance arrangements that are transparent to fulfill public interest requirements4 7,b7 ,fitness standards ,each digital commodity exchange shall establish and enforce appropriate fitness standards for-- 7i7 directors2 7ii7 any individual or entity with direct access to the settlement activities of the digital commodity exchange2 7iii7 any individual or entity with direct access to any affiliated digital commodity custodian2 7iv7 any entity offering affiliated services for the digital commodity exchange2 and 7v7 any party affiliated with any individual or entity described in this clause4 7#ad7 ,system safeguards ,the digital commodity exchange shall-- 7,a7 establish and maintain a program of risk analysis and oversight to identify and minimize sources of operational and security risks1 through the development of appropriate controls and procedures1 and automated systems1 that-- 7i7 are reliable and secure2 and 7ii7 have adequate scalable capacity2 7,b7 establish and maintain emergency procedures1 backup facilities1 and a plan for disaster recovery that allow for-- 7i7 the timely recovery and resumption of operations2 and 7ii7 the fulfillment of the responsibilities and obligations of the digital commodity exchange2 and 7,c7 periodically conduct tests to verify that the backup resources of the digital commodity exchange are sufficient to ensure continued-- 7i7 order processing and trade matching2 7ii7 price reporting2 7iii7 market surveillance2 and 7iv7 maintenance of a comprehensive and accurate audit trail4 7d7 ,appointment of trustee 7#a7 ,in general ,if a proceeding under section #e;e results in the suspension or revocation of the registration of a digital commodity exchange1 or if a digital commodity exchange withdraws from registration1 the ,commission1 on notice to the digital commodity exchange1 may apply to the appropriate ,united ,states district court where the digital commodity exchange is located for the appointment of a trustee4 7#b7 ,assumption of jurisdiction ,if the ,commission applies for appointment of a trustee under paragraph 7#a7-- 7,a7 the court may take exclusive jurisdiction over the digital commodity exchange and the records and assets of the digital commodity exchange1 wherever located2 and 7,b7 if the court takes jurisdiction under subparagraph 7,a71 the court shall appoint the ,commission1 or a person designated by the ,commission1 as trustee with power to take possession and continue to operate or terminate the operations of the digital commodity exchange in an orderly manner for the protection of customers subject to such terms and conditions as the court may prescribe4 7e7 ,qualified digital commodity custodian ,a digital commodity exchange shall hold in a qualified digital commodity custodian each unit of a digital commodity that is-- 7#a7 the property of a customer of the digital commodity exchange2 7#b7 required to be held by the digital commodity exchange under subsection 7b77#b7 or 7c77#ab7 of this section2 or 7#c7 otherwise so required by the ,commission to reasonably protect customers or promote the public interest4 7f7 ,exemptions ,in order to promote responsible economic or financial innovation and fair competition1 or protect customers1 the ,commission may 7on its own initiative or on application of the registered digital commodity exchange7 exempt1 either unconditionally or on stated terms or conditions or for stated periods and either retroactively or prospectively1 or both1 a registered digital commodity exchange from the requirements of this section1 if the ,commission determines that-- 7#a7 the exemption would be consistent with the public interest and the purposes of this ,act2 and 7#b7 the exemption will not have a material adverse effect on the ability of the ,commission or the digital commodity exchange to discharge regulatory or self-regulatory duties under this ,act4 7g7 ,customer defined ,in this section1 the term customer means any person that maintains an account for the trading of digital commodities directly with a digital commodity exchange 7other than a person that is owned or controlled1 directly or indirectly1 by the digital commodity exchange7 for its own behalf or on behalf of other any person4 7h7 ,fees 7#a7 ,in general ,the ,commission may1 by rule1 establish-- 7,a7 an initial application fee to offset the cost to review an application under this section and the initial registration of a digital commodity exchange under this section2 and 7,b7 an annual supervisory fee to offset the cost to provide ongoing supervision and oversight of a digital commodity exchange under this section4 7#b7 ,imposition2 collection ,the ,commission may impose on1 and collect from applicants and entities registered under this section fees established under paragraph 7#a71 in reasonable amounts to offset the costs described in paragraph 7#a74 7#c7 ,retention of fees ,any fees collected under this section shall remain available for expenditure1 without further appropriation1 until expended for the purpose of-- 7,a7 implementing this section2 and 7,b7 providing ongoing registration1 supervision1 and oversight under this section4 7i7 ,federal preemption ,notwithstanding any other provision of law1 the ,commission shall have exclusive jurisdiction over any digital commodity exchange registered under this section4 #e;j4 ,qualified digital commodity custodians 7a7 ,in general ,the ,commission shall designate a digital commodity custodian as a qualified digital commodity custodian1 if-- 7#a7 the ,commission finds the digital commodity custodian is subject to adequate supervision and appropriate regulation by an appropriate ,federal banking agency1 a ,state bank supervisor 7within the meaning of section #c of the ,federal ,deposit ,insurance ,act71 or an appropriate government authority in the home country of the organization2 and 7#b7 the digital commodity custodian agrees to such regular and periodic sharing of information as the ,commission determines by rule shall be reasonably necessary to effectuate any of the provisions1 or to accomplish any of the purposes1 of this ,act4 7b7 ,rulemaking authority ,for purposes of subsection 7a71 the ,commission1 by rule or order1 shall define adequate supervision and appropriate regulation as any regulatory regime which meets such minimum standards for supervision and regulation as the ,commission determines are reasonably necessary to protect the property of customers of a registered digital commodity exchange1 including minimum standards relating to-- 7#a7 financial resources2 7#b7 risk management requirements2 7#c7 governance arrangements2 7#d7 fitness standards2 7#e7 recordkeeping2 7#f7 information-sharing2 and 7#g7 conflicts of interest4 7c7 ,authority ,to temporarily suspend standards ,the ,commission may1 by rule or order1 temporarily suspend1 in whole or in part1 any requirement imposed under1 or any standard referred to in1 this section if the ,commission determines that the suspension would be consistent with the public interest and the purposes of this ,act4 4