“To establish certain digital asset prohibitions with respect to elected Government officials, and for other purposes.”
No CRS summary available for this bill.
This section prohibits a covered individual from (1) owning a proportion of a digital asset that would allow the individual to unilaterally make changes to the digital asset, (2) serving as an officer, director, or owner of a digital asset issuer, (3) issuing, sponsoring, promoting, or receiving direct or indirect compensation—including fees—for the sale, marketing, or mining of any digital asset in the United States or to a U.S. person, or (4) trading digital assets while in office if the individual has material nonpublic information about digital assets. The section further prohibits an issuer required to file reports with the SEC under section 13 of the Securities Exchange Act of 1934 from issuing, selling, or otherwise transacting with respect to a digital asset on behalf of a covered individual. It applies the penalties under 18 U.S.C. 216—imprisonment for not more than one year (five years if willful), civil penalties of not more than $50,000 per violation or the compensation amount (whichever greater), and injunctive relief—to violations of these prohibitions.
This section prohibits covered individuals from taking any action barred by the Act through intermediaries (e.g., trusts, corporations, partnerships, digital wallets, or protocols) if they (1) directly or indirectly exercise control over the intermediary, (2) act as its beneficial owner, or (3) receive or expect compensation, financial benefit, or influence from its digital asset activities. It defines "beneficial owner," with respect to an entity, as any individual who (1) has a financial interest in or receives material benefit from a digital asset issuer, (2) can influence, direct, or control the entity's decisions or digital asset activities, (3) holds 5% or more ownership interest (including through trusts or nominees), or (4) serves as grantor, trustee, or beneficiary of a relevant trust. It requires prohibitions and disclosure requirements in the Act to apply on a look-through basis to digital assets held indirectly or through concealment arrangements.
This section defines four terms for purposes of the Act: (1) covered individual, meaning the President, Vice President, a Member of Congress, or the spouse, child, son-in-law, or daughter-in-law of such an individual (as determined under applicable common law); (2) digital asset, meaning any digital representation of value recorded on a cryptographically-secured distributed ledger (including stablecoins, memecoins, derivatives such as futures, options, or swaps; securities or trusts benchmarked to digital assets; yield-bearing products such as staking, lending, or decentralized finance protocols; non-fungible tokens; and decentralized autonomous organization tokens); (3) distributed ledger, meaning technology that shares data across a network to create a digital ledger of verified transactions or information among participants, with data typically linked using cryptography; and (4) Member of Congress, meaning a Senator, Representative, Delegate, or Resident Commissioner.