,i  #aah? ,,congress  #b;d ,session  ,h4
 ,r4 #ajefa  ,,9 ,,! ,,h\se ,,(         
,,repres5tatives  ,decemb] #bg1         
#bjbd,mr4 ,davidson introduc$ ! foll[+  
bill2 :i* 0 ref]r$ to ! ,committee on   
,f9ancial ,s]vices  ,a ,,bill  ,to      
codify ! special purpose brok] deal]1 & 
= o!r purposes4  #a4 ,%ort title ,?is   
,act may be cit$ z ! ,brok]-,deal]      
,tok5ization ,act4  #b4 ,regi/ration &  
regulation ( approv$ brok]s & deal]s =  
qualifi$ tok5iz$ securities  7a7 ,9     
g5]al ,! ,securities ,ex*ange ,act (    
#aicd 7#ae ,u4,s4,c4 #gh;a et seq47 is  
am5d$ by ins]t+ aft] section #ae;,g !   
foll[+3  #ae;,h4 ,regi/ration &         
regulation ( approv$ brok]s & deal]s =  
qualifi$ tok5iz$ securities  7a7        
,regi/ration  7#a7 ,9 g5]al ,a regi/]$  
brok] or deal] may regi/] ) a national  
securities association z an approv$     
brok] or deal] = qualifi$ tok5iz$       
securities1 if ! regi/]$ brok] or deal] 
complies ) ! requirem5ts specifi$ 9     
subsection 7b74  7#b7 ,rule (           

con/ruction ,a regi/]$ brok] or deal]   
p]=m+ activities unrelat$ to qualifi$   
tok5iz$ securities or p]mitt$ paym5t    
/ableco9s may regi/] ) a national       
securities association z an approv$     
brok] or deal] = qualifi$ tok5iz$       
securities to ! same ext5t z a regi/]$  
brok] or deal] only p]=m+ activities    
relat$ to qualifi$ tok5iz$ securities or
 p]mitt$ paym5t /ableco9s4  7b7         
,requirem5ts ,) respect to a regi/]$    
brok] or deal]1 ! requirem5ts specifi$ 9
 ?is subsection are ! foll[+3 7#a7 ,!   
brok] or deal] complies ) ,rule         
#ae;c#c-c 7#ag ,,cfr #bdj4ae;c#c-c7 7&  
any successor rule71 except t1 =        
purposes ( comply+ ) su* ,rule3 7,a7    
,p]mitt$ paym5t /ableco9s %all be treat$
 z funds4  7,b7 ,! brok] or deal] %all  
be deem$ to h control ( a qualifi$      
tok5iz$ security or p]mitt$ paym5t      
/ableco9 if-- 7i7 ! brok] or deal] has  
access to ! qualifi$ tok5iz$ security or
 p]mitt$ paym5t /ableco9 & ! capability 
to transf] x us+ ! associat$ di/ribut$  

l$g] te*nology2  7ii7 ! brok] or deal]  
e/abli%es1 ma9ta9s1 & en=ces reasonably 
design$ writt5 policies & proc$ures to  
assess ! *>act]i/ics ( a qualifi$       
tok5iz$ security's di/ribut$ l$g]       
te*nology & associat$ network prior to  
und]tak+ to ma9ta9 cu/ody ( ! qualifi$  
tok5iz$ security & at reasonable        
int]vals !reaft]2  7iii7 ! brok] or     
deal]-- 7,i7 is n aw>e (1 or is aw>e ( &
 is able to promptly mitigate or        
elim9ate1 any mat]ial security or       
op]ational problems or weaknesses ) !   
di/ribut$ l$g] te*nology & associat$    
network us$ to access & transf] !       
qualifi$ tok5iz$ security or p]mitt$    
paym5t /ableco92 &  7,,ii7 is n aw>e (  
o!r mat]ial risks pos$ to ! bus9ess ( ! 
brok] or deal] by ! qualifi$ tok5iz$    
security or p]mitt$ paym5t /ableco92    
7iv7 ! brok] or deal] e/abli%es1        
ma9ta9s1 & en=ces reasonably design$    
writt5 policies1 proc$ures1 & controls t
 are consi/5t ) indu/ry be/ practices   
to-- 7,i7 demon/rate ! brok] or deal]   

has exclusive control ov] any qualifi$  
tok5iz$ securities & p]mitt$ paym5t     
/ableco9s ! brok] or deal] holds 9      
cu/ody2 &  7,,ii7 protect aga9/ ! !ft1  
loss1 & unau?oriz$ & accid5tal use ( !  
private keys necess>y to access &       
transf] ! qualifi$ tok5iz$ securities & 
! p]mitt$ paym5t /ableco9s ! brok] or   
deal] holds 9 cu/ody2 &  7v7 ! brok] or 
deal] e/abli%es1 ma9ta9s1 & en=ces      
reasonably design$ writt5 policies1     
proc$ures1 & arrangem5ts to-- 7,i7      
id5tify1 9 advance1 ! /eps ! brok] or   
deal] w take 9 response to ev5ts t c\ld 
affect cu/ody ( qualifi$ tok5iz$        
securities or p]mitt$ paym5t /ableco9s1 
includ+-- 7aa7 block*a9 malfunctions2   
7bb7 #ea p]c5t attacks2  7cc7 h>d =ks2  
or  7dd7 airdrops2  7,,ii7 all[ = !     
brok] or deal] to comply ) a c\rt-ord]$ 
freeze or seizure ( a qualifi$ tok5iz$  
security or p]mitt$ paym5t /ableco92 &  
7,,iii7 all[ = ! transf] ( ! qualifi$   
tok5iz$ securities or p]mitt$ paym5t    
/ableco9s held by ! brok] or deal] to   

ano!r approv$ brok] or deal] = qualifi$ 
tok5iz$ securities1 a tru/ee1 receiv]1  
liquidator1 or p]son p]=m+ a simil>     
function1 or to ano!r appropriate p]son1
 9 ! ev5t ! brok] or deal] c no long]   
cont9ue z a go+ conc]n & self-liquidates
 or is subject to a =mal bankruptcy1    
receiv]%ip1 liquidation1 or simil>      
proce$+4  7#b7 ,! brok] or deal]        
e/abli%es1 ma9ta9s1 & en=ces reasonably 
design$ writt5 policies & proc$ures t   
protect aga9/ risks t ! cu/ody (        
qualifi$ tok5iz$ securities or p]mitt$  
paym5t /ableco9s may h on o!r aspects ( 
! bus9ess ( ! brok] or deal] t are n    
directly relat$ to ! cu/ody ( qualifi$  
tok5iz$ securities & p]mitt$ paym5t     
/ableco9s4  7#c7 ,! brok] or deal]      
e/abli%es1 ma9ta9s1 & en=ces reasonably 
design$ writt5 policies & proc$ures to  
conduct & docum5t an analysis t confirms
 t a qualifi$ tok5iz$ security is (f]$ &
 sold pursuant to an effective          
regi/ration /atem5t or an available     
exemption f regi/ration4  7#d7 ,! brok] 

or deal] provides writt5 disclosures to 
prospective cu/om]s on behalf ( :om !   
brok] or deal] w\ld be transact+ 9      
qualifi$ tok5iz$ securities or p]mitt$  
paym5t /ableco9s1 cl>ify+ ! foll[+3 7,a7
 ,! brok] or deal] is deem$ to be 9     
control ( qualifi$ tok5iz$ securities or
 p]mitt$ paym5t /ableco9s = ! purposes (
 p>agraph 7b77#a7 ( ,rule #ae;c#c-c4    
7,b7 ,! risks ( inve/+ 9 or hold+       
qualifi$ tok5iz$ securities or p]mitt$  
paym5t /ableco9s1 includ+ by-- 7i7      
describ+ ! risks ( fraud1 manipulation1 
!ft1 & loss associat$ ) qualifi$ tok5iz$
 securities or p]mitt$ paym5t /ableco9s2
  7ii7 describ+ ! risks relat+ to       
valuation1 price volatility1 & liquidity
 associat$ ) qualifi$ tok5iz$           
securities2 &  7iii7 describ+1 at a high
 level t w\ld n compromise any security 
protocols1 ! processes1 s(tw>e & h>dw>e 
sy/ems1 & any o!r =mats or sy/ems       
utiliz$ by ! brok] or deal] to-- 7,i7   
create1 /ore1 or use ! brok] or deal]'s 
private keys2 &  7,,ii7 protect ^?      

private keys f loss1 !ft1 or unau?oriz$ 
or accid5tal use4  7#e7 ,! brok] or     
deal] ent]s into a writt5 agreem5t ) ea*
 cu/om] on behalf ( :om ! brok] or deal]
 w be transact+ 9 qualifi$ tok5iz$      
securities or p]mitt$ paym5t /ableco9s t
 sets =? ! t]ms & conditions ) respect  
to receiv+1 pur*as+1 hold+1 safekeep+1  
sell+1 transf]r+1 ex*ang+1 cu/ody+1     
liquidat+1 & o!rwise transact+ 9        
qualifi$ tok5iz$ securities or p]mitt$  
paym5t /ableco9s on behalf ( ! cu/om]4  
7#f7 ,! brok] or deal] obta9s any       
approval requir$ "u ! rules ( any       
national securities association ( :i* ! 
brok] ( deal] is a memb] prior to op]at+
 z an approv$ brok] or deal] = qualifi$ 
tok5iz$ securities4  7c7 ,consid]ation (
 applications ,) respect to a memb]%ip  
application to op]ate z an approv$ brok]
 or deal] = qualifi$ tok5iz$ securities1
 a regi/]$ national securities          
association %all-- 7#a7 make a f9al     
decision on ! application n m ?an #abj  
days aft] ! lat] (-- 7,a7 ! date x      

receives ! application2  7,b7 if !      
application is am5d$ or supplem5t$ aft] 
x is receiv$1 ! date ( ! f9al am5dm5t or
 supplem5t to su* application2 or  7,c7 
su* lat] date z ! applicant may specify 
9 a writ+ to su* regi/]$ national       
securities association2  7#b7 ) respect 
to an application t is d5i$ by ! regi/]$
 national securities association-- 7,a7 
include ) ! d5ial an explanation 9      
detail ( ! reason = d5ial2 &  7,b7 p]mit
 ! brok] or deal] to reapply2 &  7#c7   
prioritize applications submitt$ by a   
memb] :i* has be5 approv$ to op]ate "u !
 conditions set out 9 ! /atem5t ( !     
,securities & ,ex*ange ,commission titl$
 ,cu/ody ( ,digital ,asset ,securities  
by ,special purpose brok]s or deal]s    
7#hf ,f$4 ,reg4 #aafbg2 publi%$ ,febru>y
 #bf1 #bjba74  7d7 ,rulemak+  7#a7      
,possession or control ( qualifi$       
tok5iz$ securities & p]mitt$ paym5t     
/ableco9s ,n lat] ?an #ab mon?s aft] !  
date ( enactm5t ( ?is section1 !        
,commission %all issue a rule to am5d   

section #bdj4ae;c#c-c ( title #ag1 ,code
 ( ,f$]al ,regulations to-- 7,a7 apply  
appropriate cu/om] protection           
requirem5ts = p]mitt$ paym5t /ableco9s =
 purposes ( cu/ody+ su* p]mitt$ paym5t  
/ableco9s by brok]s or deal]s2 &  7,b7  
provide t a qualifi$ tok5iz$ security or
 p]mitt$ paym5t /ableco9 %all be deem$  
to be "u ! control ( a brok] or deal] "u
 conditions sub/antially simil> to ^?   
specifi$ 9 subsection 7b77#a77;,b71 )   
su* modifications z ! ,commission may   
consid] necess>y or appropriate 9 !     
public int]e/ or = ! protection (       
inve/ors4  7#b7 ,cl>ification (         
recordkeep+ & report+ rules ,foll[+ !   
date on :i* f9al rules are issu$ "u     
p>agraph 7#a77;,b71 ! ,commission may   
am5d sections #bdj4ag;a-#c1             
#bdj4ag;a-#d1 & #bdj4ag;a-#e ( title    
#ag1 ,code ( ,f$]al ,regulations1 z well
 z any o!r sections ! ,commission       
det]m9es necess>y1 to cl>ify !          
application ( ^! recordkeep+ & report+  
requirem5ts ) respect to qualifi$       

tok5iz$ securities & p]mitt$ paym5t     
/ableco9s1 includ+ by cl>ify+ ! mann] 9 
:i* block*a9-bas$ records are treat$ z  
meet+ recordkeep+ & report+ requirem5ts4
  7e7 ,def9itions ,9 ?is section3 7#a7  
,approv$ brok] or deal] = qualifi$      
tok5iz$ securities ,! t]m approv$ brok] 
or deal] = qualifi$ tok5iz$ securities  
means a regi/]$ brok] or deal] t c>ries 
p]mitt$ paym5t /ableco9s or qualifi$    
tok5iz$ securities = ! acc\nt ( any     
cu/om]s or o!r brok]s or deal]s4  7#b7  
,p]mitt$ paym5t /ableco9  7,a7 ,9 g5]al 
,! t]m p]mitt$ paym5t /ableco9 means a  
digital asset issu$ us+ di/ribut$ l$g]  
te*nology-- 7i7 t is or is design$ to be
 us$ z a means ( paym5t or settlem5t2   
7ii7 ! issu] ( :i*-- 7,i7 is obligat$ to
 conv]t1 r$eem1 or repur*ase = a fix$   
am\nt ( monet>y value2  7,,ii7 repres5ts
 w ma9ta9 or creates ! reasonable       
expectation t x w ma9ta9 a /able value  
relative to ! value ( a fix$ am\nt (    
monet>y value2 &  7,,iii7 is subject to 
regulation by a ,f$]al or ,/ate         

regulator ) au?ority ov] entities t     
issue paym5t /ableco9s2 &  7iii7 t is   
n-- 7,i7 a national curr5cy2 or  7,,ii7 
a security issu$ by an inve/m5t company 
regi/]$ "u section #h7;a7 ( ! ,inve/m5t 
,company ,act ( #aidj 7#ae ,u4,s4,c4    
#hj;a-#h7;a774  7,b7 ,monet>y value     
def9$ ,= purposes ( subp>agraph 7,a71 ! 
t]m monet>y value means a national      
curr5cy1 deposit 7z def9$ "u section #c 
( ! ,f$]al ,deposit ,insurance ,act71 or
 an equival5t in/rum5t t is d5om9at$ 9 a
 national curr5cy4  7#c7 ,qualifi$      
tok5iz$ security ,! t]m qualifi$ tok5iz$
 security means a security t is issu$ & 
transf]r$ us+ di/ribut$ l$g] te*nology z
 ! prim>y record ( own]%ip2  4  7b7     
,exi/+ special purpose brok]s or deal]s 
,no regi/]$ national securities         
association %all require a memb] :i* has
 be5 approv$ to op]ate "u ! conditions  
set out 9 ! /atem5t ( ! ,securities &   
,ex*ange ,commission titl$ ,cu/ody (    
,digital ,asset ,securities by ,special 
purpose brok]s or deal]s 7#hf ,f$4 ,reg4

 #aafbg2 publi%$ ,febru>y #bf1 #bjba7 to
 complete a memb]%ip application to     
cont9ue its approv$ scope ( bus9ess4    
7c7 ,sunset ,section #ae;,h ( !         
,securities ,ex*ange ,act ( #aicd is    
repeal$ effective on ! effective date ( 
! f9al rule requir$ "u section          
#ae;,h7d77#a7 ( ! ,securities ,ex*ange  
,act ( #aicd is issu$4  #c4 ,/udy on    
f9ancial m>ket infra/ructure improvem5ts
  7a7 ,9 g5]al ,! ,securities & ,ex*ange
 ,commission %all conduct a /udy to     
assess :e!r additional guidance or rules
 are necess>y to facilitate ! developm5t
 ( tok5iz$ securities1 to ! ext5t su*   
guidance or rules w\ld fo/] ! developm5t
 ( fair & ord]ly f9ancial m>kets1 be    
necess>y or appropriate 9 ! public      
int]e/1 & be consi/5t ) ! protection (  
inve/ors & cu/om]s4  7b7 ,report  7#a7  
,"t limit ,n lat] ?an #a ye> aft] ! date
 ( enactm5t ( ?is ,act1 ! ,securities & 
,ex*ange ,commission %all submit to !   
relevant congressional committees a     
report t includes ! results ( ! /udy    

requir$ by subsection 7a74  7#b7        
,relevant congressional committees def9$
 ,9 ?is section1 ! t]m relevant         
congressional committees means-- 7,a7 ! 
,committee on ,f9ancial ,s]vices ( !    
,h\se ( ,repres5tatives2 &  7,b7 !      
,committee on ,bank+1 ,h\s+1 & ,urban   
,affairs ( ! ,s5ate4