,,ii  #aah? ,,congress  #a/ ,session    
,s4 #cjhg  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,octob] #ai1 #bjbc,mr4 
,tillis 7= himself & ,mr4 ,hick5loop]7  
introduc$ ! foll[+ bill2 :i* 0 read     
twice & ref]r$ to ! ,committee on       
,bank+1 ,h\s+1 & ,urban ,affairs  ,a    
,,bill  ,to impose requirem5ts on       
digital ex*anges1 & = o!r purposes4  #a4
 ,%ort title ,?is ,act may be cit$ z !  
,prov+ ,res]ves ,( ,o!rs' ,funds ,act or
 ! ,,pro( ,act4  #b4 ,def9itions ,9 ?is 
,act3 7#a7 ,cov]$ asset  7,a7 ,9 g5]al  
,! t]m cov]$ asset means1 ) respect to a
 cu/om] ( a digital ex*ange1 money1 an  
asset1 or prop]ty ( ! cu/om]4  7,b7     
,exceptions  7i7 ,propriet>y funds ,!   
t]m cov]$ asset does n include          
propriet>y funds ( a digital ex*ange4   
7ii7 ,m>g9 acc\nts ,if a cu/om] ( a     
digital ex*ange has op5$ a m>g9 acc\nt =
 ! purposes ( borr[+ ca% or digital     
assets1 or o!r relat$ activity1 ! assets
 9 t m>g9 acc\nt are n cov]$ assets4    
7#b7 ,digital asset ,! t]m digital asset

 means any digital repres5tation ( value
 t is record$ on a cryptographically    
secur$ digital l$g]4  7#c7 ,digital     
commodity ,! t]m digital commodity means
 any =m ( fungible & intangible p]sonal 
prop]ty t-- 7,a7 c be-- 7i7 exclusively 
possess$2 &  7ii7 transf]r$ f a p]son to
 ano!r p]son )\t necess>y reliance on an
 int]m$i>y2 &  7,b7 is n an inve/m5t    
contract4  7#d7 ,digital cu/odian  7,a7 
,9 g5]al ,! t]m digital cu/odian means  
an entity t holds1 ma9ta9s1 or safegu>ds
 digital commodities1 digital assets1 & 
o!r assets on behalf ( a cu/om]4  7,b7  
,exception ,any entity facilitat+ cle>+ 
or settl+ s]vices ( a cov]$ asset on    
behalf ( a cu/om] %all n be consid]$ to 
be a digital cu/odian ( t cov]$ asset = 
! duration ( ! cle>+ or settl+ process4 
7#e7 ,digital ex*ange ,! t]m digital    
ex*ange means a trad+ facility t li/s = 
trad+ n less ?an #a digital commodity or
 digital asset4  7#f7 ,digital wallet ,!
 t]m digital wallet means any device1   
physical m$ium1 program1 or s]vice t    

/ores a digital asset or digital        
commodity4  7#g7 ,inve/m5t contract     
7,a7 ,9 g5]al ,! t]m inve/m5t contract  
means a contract-- 7i7 t provides = an  
inve/m5t ( money 9 an ent]prise ) a     
sponsor2 &  7ii7 ! objective ( !        
p]=mance ( :i* is prim>ily pr(it 7r ?an 
consumption71 :i* is d]iv$ prim>ily f ! 
manag]ial or entrepr5eurial ef=ts ( !   
sponsor describ$ 9 clause 7i74  7,b7    
,use ( c]ta9 t]ms ,= ! purposes (       
subp>agraph 7,a7-- 7i7 ! t]m money      
means-- 7,i7 any m$ium ( ex*ange        
recogniz$ z legal t5d] any:]e 9 ! _w2 or
  7,,ii7 any conv]tible virtual curr5cy1
 z def9$ by ! ,f9ancial ,crimes         
,en=cem5t ,network ( ! ,dep>tm5t ( !    
,treasury2 &  7ii7 ! t]m sponsor means a
 manag] or entrepr5eur t has solicit$   
inve/m5t 9 a contract describ$ 9 t      
subp>agraph4  7,c7 ,effect ( memb]%ip 9 
c]ta9 organizations ,a memb] ( a =mal or
 in=mal dec5traliz$ autonom\s           
organization is n1 solely by reason ( t 
memb]%ip1 or ?r\gh p>ticipation 9 su* an

 organization1 ! hold] ( an inve/m5t    
contract4  7,d7 ,exclusions ,a contract 
t w\ld o!rwise be an inve/m5t contract  
"u ?is p>agraph is n an inve/m5t        
contract if ! obligee ( t contract-- 7i7
 z ( ! date on :i* ! contract became    
effective1 prim>ily expect$ pr(it f     
p]=mance ( ! contract2 &  7ii7 7,i7 at a
 date aft] ! date describ$ 9 clause     
7i7-- 7aa7 prim>ily expects to consume  
goods or s]vices associat$ ) ! contract2
 or  7bb7 no long] expects pr(it        
prim>ily f ! manag]ial or entrepr5eurial
 ef=ts ( ! sponsor describ$ 9           
subp>agraph 7,a77i7 ) respect to !      
contract4  7#h7 ,(fice ,! t]m ,(fice    
means ! ,(fice ( ,dome/ic ,f9ance ( !   
,dep>tm5t ( ! ,treasury4  7#i7 ,"u      
,secret>y ,! t]m ,"u ,secret>y means !  
,"u ,secret>y ( ! ,treasury = ,dome/ic  
,f9ance4  #c4 ,requirem5ts = digital    
ex*anges reg>d+ treatm5t ( cu/om] assets
  7a7 ,requir$ /&>ds & proc$ures ,ea*   
digital ex*ange %all e/abli% basel9e    
acc\nt+ /&>ds & proc$ures t are design$ 

to protect & ensure ! safety ( cov]$    
assets ( cu/om]s ( ! ex*ange4  7b7      
,hold+ ( cu/om] assets  7#a7 ,9 g5]al   
,ea* digital ex*ange %all hold ! cov]$  
assets ( ea* cu/om] ( ! ex*ange 9 a     
mann] t m9imizes-- 7,a7 ! risk ( loss by
 ! cu/om] ( any su* cov]$ asset2 &  7,b7
 any delay 9 ! cu/om] access+ any su*   
cov]$ asset4  7#b7 ,segregation ( funds 
7,a7 ,9 g5]al ,ea* digital ex*ange %all 
treat & deal ) all cov]$ assets ( a     
cu/om] ( ! ex*ange t are receiv$ by !   
ex*ange z belong+ to ! cu/om]4  7,b7    
,co-m+l+ prohibit$ ,except z provid$ 9  
subp>agraph 7,c71 ) respect to any cov]$
 asset ( a cu/om] ( a digital ex*ange1 !
 ex*ange may n-- 7i7 co-m+le t cov]$    
asset ) assets t are n cov]$ assets2 or 
7ii7 use t cov]$ asset to m>g91 secure1 
or gu>antee any trade or acc\nt ( any   
p]son o!r ?an ! cu/om] = :i* t item is  
held4  7,c7 ,exceptions  7i7 ,9 g5]al ,a
 digital ex*ange may1 = conv5i5ce1      
co-m+le & deposit a cov]$ asset ( a     
cu/om] ( ! ex*ange 9 ! same acc\nt z    

funds ( ! ex*ange ) any bank1 tru/      
company1 or qualifi$ digital cu/odian4  
7ii7 ,)drawal ,a digital ex*ange may    
)draw f a bank1 tru/1 or digital wallet 
acc\nt su* %>e ( a cov]$ asset ( a      
cu/om] ( ! ex*ange z may be necess>y 9 !
 ord9>y c\rse ( bus9ess to m>g91        
gu>antee1 secure1 transf]1 adju/1 or    
settle a transaction reg>d+ a digital   
asset or digital commodity ) ano!r      
digital ex*ange1 includ+ = ! paym5t ( a 
commission1 a brok]age fee1 int]e/1     
taxes1 /orage co/s1 or any o!r *>ge t   
lawfully accrues 9 connection ) a       
digital commodity transaction4  7iii7   
,sub/itution ,a cu/om] may explicitly   
cons5t to a digital ex*ange sub/itut+   
cov]$ assets ( ! cu/om] ) c]ta9 o!r     
assets4  7c7 ,en=cem5t  7#a7 ,9 g5]al   
,if1 9 ! process ( review+ a report     
submitt$ to ! ,"u ,secret>y "u section  
#d7;b7 ) respect to a digital ex*ange1 !
 ,"u ,secret>y discov]s t ! digital     
ex*ange has violat$ a provision ( ?is   
section1 ! ,"u ,secret>y1 ?r\gh !       

,(fice1 %all impose a civil p5alty on ! 
digital ex*ange 9 ! mann] describ$ 9    
clauses 7i71 7ii71 & 7iii7 ( section    
#d7;c77#a77;,a7 7subject to p>agraph    
7#b7 ( ?is subsection74  7#b7 ,rule (   
con/ruction ,= ! purposes ( a civil     
p5alty impos$ "u p>agraph 7#a7-- 7,a7 an
 entity t is subject to ! requirem5ts ( 
section #d7;a71 z describ$ 9 section    
#d7;c77#a77;,a71 %all be deem$ to be an 
entity t is subject to ! requirem5ts (  
?is section2 &  7,b7 ! failure ( an     
entity to satisfy ! requirem5ts (       
section #d7;a71 z describ$ 9 section    
#d7;c77#a77;,a71 %all be deem$ to be a  
failure to satisfy ! requirem5ts ( ?is  
section4  #d4 ,atte/ation requirem5ts   
7a7 ,atte/ation  7#a7 ,9 g5]al ,n lat]  
?an #cj days aft] ! effective date ( ?is
 section1 & mon?ly !reaft]1 ea* digital 
ex*ange & ea* digital cu/odian %all     
obta9 f an indep5d5t audit+ firm an     
atte/ation t ! applicable entity has    
pro( ( res]ves1 :i* %all be accompani$  
by appropriate evid5ce demon/rat+ pro( (

 ^? res]ves1 z describ$ fur!r 9         
subsection 7b74  7#b7 ,inability to     
obta9 s]vices ( audit+ firm  7,a7 ,9    
g5]al ,a digital ex*ange or digital     
cu/odian may contract )1 or o!rwise     
obta9 ! s]vices (1 a dis9t]e/$ ?ird p>ty
 to c>ry out ! responsibilities ( an    
indep5d5t audit+ firm "u p>agraph 7#a7  
only if ! digital ex*ange or digital    
cu/odian is unable to contract )1 or    
o!rwise obta9 ! s]vices (1 an indep5d5t 
audit+ firm to c>ry out ^?              
responsibilities4  7,b7 ,applicability  
,if a digital ex*ange or digital        
cu/odian contracts )1 or o!rwise obta9s 
! s]vices (1 a dis9t]e/$ ?ird p>ty z    
describ$ 9 subp>agraph 7,a71 t ?ird p>ty
 %all be subject to ! requirem5ts ( ?is 
section to ! same ext5t z an indep5d5t  
audit+ firm c>ry+ out ! responsibilities
 describ$ 9 p>agraph 7#a74  7#c7        
,indu/ry /&>d  7,a7 ,solicitation ( /&>d
 ,n lat] ?an #ij days aft] ! date (     
enactm5t ( ?is ,act1 ! ,public ,company 
,acc\nt+ ,ov]sight ,bo>d & ! ,am]ican   

,in/itute ( ,c]tifi$ ,public ,acc\ntants
 %all jo9tly issue a reque/ = public    
comm5t solicit+ proposals f ! digital   
asset indu/ry reg>d+ a /&>d = !         
atte/ations requir$ "u ?is section4     
7,b7 ,e/abli%m5t ( advisory committee   
,aft] ! expiration ( ! #ij-;day p]iod   
describ$ 9 subp>agraph 7,a71 ! ,public  
,company ,acc\nt+ ,ov]sight ,bo>d & !   
,am]ican ,in/itute ( ,c]tifi$ ,public   
,acc\ntants %all e/abli% an advisory    
committee t %all be compris$ ( !        
entities t submit proposals "u t        
subp>agraph4  7,c7 ,creation ( /&>d ,!  
advisory committee e/abli%$ "u          
subp>agraph 7,b7 %all-- 7i7 create a    
propos$ /&>d = ! purposes describ$ 9    
subp>agraph 7,a72 &  7ii7 submit to !   
,public ,company ,acc\nt+ ,ov]sight     
,bo>d & ! ,am]ican ,in/itute ( ,c]tifi$ 
,public ,acc\ntants ! propos$ /&>d      
describ$ 9 clause 7i7 = approval ( !    
propos$ /&>d by ^? entities4  7,d7      
,approval ( /&>d  7i7 ,9 g5]al ,n lat]  
?an #ah mon?s aft] ! date ( enactm5t (  

?is ,act1 ! ,public ,company ,acc\nt+   
,ov]sight ,bo>d & ! ,am]ican ,in/itute (
 ,c]tifi$ ,public ,acc\ntants %all      
jo9tly approve a propos$ /&>d submitt$  
to ^? entities "u subp>agraph 7,c74     
7ii7 ,ext5sion ( deadl9e ,if1 z ( ! date
 t is #ah mon?s aft] ! date ( enactm5t (
 ?is ,act1 ! ,public ,company ,acc\nt+  
,ov]sight ,bo>d & ! ,am]ican ,in/itute (
 ,c]tifi$ ,public ,acc\ntants h n issu$ 
a jo9t approval describ$ 9 clause 7i71 !
 #ah-mon? deadl9e describ$ 9 t clause ) 
respect to t approval %all be ext5d$ by 
consecutive #ahj-;day p]iods until !    
date on :i* ^? entities issue su* an    
approval4  7b7 ,reports  7#a7 ,9 g5]al  
,an audit+ firm t prep>es an atte/ation 
"u subsection 7a7 ) respect to an entity
 %all1 aft] mak+ ! atte/ation1 submit to
 ! ,"u ,secret>y a report t addresses ! 
foll[+ ) respect to ! entity3 7,a7      
,cryptographic pro( ( possession or     
control ov] keys t are capable (        
effectuat+ ! transf]1 *ange ( control1  
or movem5t ( a *a9 ( assets t are own$  

by a p]son o!r ?an t entity1 su* z a    
cu/om] ( ! entity4  7,b7 ,v]ification ( 
cryptographic pro( ( res]ves ( ! entity4
  7,c7 7i7 ,v]ification ( cryptographic 
pro( ( ! liabilities ( ! entity4  7ii7  
,= ! purposes ( clause 7i71             
cryptographic pro( means a              
cryptographically v]ifiable atte/ation  
us+ a ,m]kle tree /ructure1 a z]o-k     
pro(1 or ano!r simil> me*anism t c      
prove-- 7,i7 ! exi/5ce ( ! applicable   
liabilities2 &  7,,ii7 t ! applicable   
liabilities are ! legal responsibility (
 ! entity t is ! subject ( ! report4    
7#b7 ,public availability ,! ,"u        
,secret>y1 ?r\gh ! ,(fice1 %all make ea*
 report receiv$ "u p>agraph 7#a7        
available to ! public1 :i* %all include1
 9 addition to ! mat]ial describ$ 9     
subp>agraphs 7,a71 7,b71 & 7,c7 ( t     
p>agraph-- 7,a7 ! "n ( ! entity = :i* ! 
atte/ation t is ! subject ( ! report 0  
p]=m$2 &  7,b7 ! "n ( ! audit+ firm t   
made ! atte/ation describ$ 9 subp>agraph
 7,a7 ( ?is p>agraph4  7c7 ,en=cem5t    

7#a7 ,civil p5alties  7,a7 ,9 g5]al ,)  
respect to an entity t is subject to !  
requirem5ts "u subsection 7a7 & fails to
 satisfy ^? requirem5ts1 ! ,"u          
,secret>y1 ?r\gh ! ,(fice1 %all1 subject
 to subp>agraph 7,b71 impose a civil    
p5alty on ! entity z foll[s3 7i7 ,if t  
failure is ! only su* failure by !      
entity dur+ ! mo/ rec5t #bd-mon? p]iod1 
! am\nt ( ! p5alty %all be ! great] ( ! 
foll[+3 7,i7 #be c5ts p] us] or cu/om] (
 ! entity 7z applicable71 z ( ! date on 
:i* ! p5alty is impos$4  7,,ii7 #b4e    
basis po9ts ( ! total assets "u         
managem5t by ! entity1 z ( ! date on :i*
 ! p5alty is impos$4  7ii7 ,if ! entity 
has #a additional su* failure dur+ ! mo/
 rec5t #bd-mon? p]iod1 ! am\nt ( !      
p5alty %all be ! great] ( ! foll[+3 7,i7
 #ee c5ts p] us] or cu/om] ( ! entity 7z
 applicable71 z ( ! date on :i* ! p5alty
 is impos$4  7,,ii7 #e4e basis po9ts ( !
 total assets "u managem5t by ! entity1 
z ( ! date on :i* ! p5alty is impos$4   
7iii7 ,if ! entity has m ?an #a         

additional su* failure dur+ ! mo/ rec5t 
#bd-mon? p]iod1 ! am\nt ( ! p5alty %all 
be ! great] ( ! foll[+3 7,i7 #ij c5ts p]
 us] or cu/om] ( ! entity 7z            
applicable71 z ( ! date on :i* ! p5alty 
is impos$4  7,,ii7 #i basis po9ts ( !   
total assets "u managem5t by ! entity1 z
 ( ! date on :i* ! p5alty is impos$4    
7,b7 ,limitation ,! ,"u ,secret>y1 ?r\gh
 ! ,(fice1 may n impose a p5alty on an  
entity "u subp>agraph 7,a7 if !         
imposition ( t p5alty w\ld cause ! total
 am\nt ( p5alties impos$ on t entity "u 
t subp>agraph = ! ye> 9 :i* ! p5alty    
w\ld be impos$ to exce$ ! less] ( !     
foll[+3 7i7 #a p] us] or cu/om] ( !     
entity 7z applicable71 z ( ! date on :i*
 ! p5alty w\ld be impos$4  7ii7 #aj     
basis po9ts ( ! total assets "u         
managem5t by ! entity1 z ( ! date on :i*
 ! p5alty w\ld be impos$4  7#b7         
,publication ,! ,"u ,secret>y1 ?r\gh !  
,(fice1 %all make publicly available1 ) 
respect to ! mo/ rec5t #bd-mon? p]iod1 !
 "n ( ea* entity t is subject to !      

requirem5ts "u subsection 7a7 & has     
fail$ to satisfy ^? requirem5ts4  7#c7  
,appeals  7,a7 ,9 g5]al ,! ,"u ,secret>y
 %all e/abli% a process ?r\gh :i* an    
entity on :i* a p5alty is impos$ "u     
p>agraph 7#a7 may appeal t p5alty4  7,b7
 ,waiv] ( p5alty ,! ,"u ,secret>y %all  
waive a p5alty impos$ "u p>agraph 7#a7  
if ! ,"u ,secret>y det]m9es 9 an appeal 
br\ght "u subp>agraph 7,a7 ( ?is        
p>agraph t ! reason t ! ,"u ,secret>y   
did n receive a report "u subsection    
7b77#a7 is because ( an action or       
omission by an audit+ firm & n ! entity 
on :i* ! ,"u ,secret>y impos$ ! p5alty4 
7,c7 ,pause 9 paym5t ,an entity on :i* !
 ,"u ,secret>y imposes a p5alty "u      
p>agraph 7#a7 %all n be requir$ to pay t
 p5alty dur+ ! p]iod 9 :i* an appeal    
br\ght by ! entity "u ?is p>agraph is   
p5d+4  7d7 ,effective date ,?is section 
%all take effect on ! date on :i* !     
,public ,company ,acc\nt+ ,ov]sight     
,bo>d & ! ,am]ican ,in/itute ( ,c]tifi$ 
,public ,acc\ntants jo9tly approve1 "u  

subsection 7a77#c71 an indu/ry /&>d = ! 
atte/ations requir$ "u ?is section4