S. 3755 — Digital Commodity Intermediaries Act

This section amends the definitions in §1a of the Commodity Exchange Act (7 U.S.C. 1a) by redesignating certain paragraphs and inserting the following new terms: (1) associated person of a digital commodity broker and associated person of a digital commodity dealer, generally meaning a partner, officer, employee, agent, or similar person involved in soliciting or accepting orders or contracts for digital commodities (excluding those whose functions are solely clerical or ministerial); (2) blockchain, blockchain application, blockchain protocol, and blockchain system, describing technology for sharing verified data across networks using cryptography; and (3) decentralized finance messaging system, decentralized finance trading protocol, and decentralized governance system, defining software and protocols for automated, noncustodial financial transactions on blockchain systems (with exclusions for systems subject to centralized control or censorship).

This section defines 10 terms for purposes of this Act—blockchain, decentralized finance messaging system, decentralized finance trading protocol, decentralized governance system, digital asset, digital commodity, digital commodity broker, digital commodity dealer, digital commodity exchange, and mixed digital asset transaction—by incorporating the meanings given those terms in section 1a of the Commodity Exchange Act (7 U.S.C. 1a).

This section directs the Commodity Futures Trading Commission (CFTC) to issue rules further defining specified terms related to digital commodities and blockchain (subsection (a)); requires the CFTC and Securities and Exchange Commission (SEC) to jointly issue rules exempting dually registered persons from duplicative, conflicting, or unduly burdensome provisions of specified laws to foster fair and orderly digital asset markets, protect customers, and protect investors (subsection (b)); requires joint CFTC/SEC rules applicable to mixed digital asset transactions, including further defining that term (subsection (c)); requires joint CFTC/SEC rules, procedures, or guidance—within 180 days of enactment—on delisting assets for trading under section 104 if inconsistent with the Commodity Exchange Act, securities laws, or this Act (subsection (d)); requires joint CFTC/SEC rules—within 360 days of enactment—to facilitate portfolio margining across specified securities, swaps, futures, and digital commodities in various accounts, subject to public interest and customer protection requirements (subsection (e)); and directs the CFTC to issue rules—within 18 months of enactment—establishing minimum standards for identifying, mitigating, and resolving conflicts of interest among registered entities and persons, including governance separations, prohibitions on self-dealing, customer asset safeguards, disclosures, and independent oversight (subsection (f)).

This section requires the Commodity Futures Trading Commission (CFTC) to adopt, within 180 days of enactment, an expedited registration process for digital commodity exchanges (under CEA §5i), brokers (under CEA §4u), and dealers (under CEA §4u), and prohibits such entities from operating after 90 days from process adoption unless registered or exempted. Registered entities operate in provisional status—and must pay CFTC fees under CEA §8e—until 270 days after the final effective date of required rulemakings under CEA §§4u or 5i, as applicable. During provisional status, such entities (1) remain subject to this section and the CEA; (2) may continue pre-registration digital asset activities until the §103(a) definitions rulemaking is effective, except they must delist assets per the §103(e) process; and (3) may receive CFTC exemptions to promote innovation, competition, or customer protection. Beginning 30 days after enactment, unregistered digital commodity exchanges, brokers, and dealers must prominently disclose their unregistered status to customers in documents and materials.

This section provides that nothing in this Act affects or applies to any agreement, contract, or transaction subject to the Commodity Exchange Act (CEA; 7 U.S.C. 1 et seq.) as (1) a contract of sale of a commodity for future delivery or option thereon, (2) a swap, (3) a security futures product, (4) an option authorized under CEA section 4c, (5) a transaction described in CEA section 2(c)(2)(C)(i), or (6) a leverage transaction authorized under CEA section 19—or to activities of persons with respect to such instruments. The section further prohibits a digital commodity exchange, broker, or dealer from engaging in CEA-regulated activities solely by virtue of registration under this Act and specifies that a CEA-regulated instrument is not regulated as a digital commodity solely because it is issued, recorded, represented, or transferred on a blockchain or similar technology. (Thus, the Commodity Futures Trading Commission retains exclusive jurisdiction, as provided in CEA section 2(a)(1)(A) (7 U.S.C. 2(a)(1)(A)), over such instruments regardless of this Act's digital commodity provisions.)

This section adds contracts of sale of a digital commodity to the list of transactions—including contracts of sale of commodities for future delivery (or options on such contracts), certain options, and swaps—that federal government employees and agents, Members of Congress, congressional employees, judicial officers, and judicial employees are prohibited from entering into for personal gain using nonpublic information that may affect commodity prices and is not generally available to the trading public. The section makes parallel additions to the prohibitions in CEA Section 4c(a)(4) on imparting such information to others or causing them to enter into those transactions.

This section directs the Commodity Futures Trading Commission (CFTC), as appropriate, to (1) consult and coordinate with foreign regulatory authorities on the application of consistent international standards for regulating digital commodities, and (2) enter into information-sharing arrangements necessary or appropriate for protecting investors, customers, and users of digital commodities.

This section establishes implementation procedures for the Act. Specifically, it (1) directs the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) to promulgate required rules and regulations individually or jointly within 18 months of enactment (unless otherwise provided); (2) authorizes those agencies to conduct preparatory actions—including promulgating rules, conducting studies, registering persons, and granting exemptions—prior to applicable effective dates, with such actions effective only on those dates; and (3) expresses the sense of Congress that, prior to implementation, the CFTC be fully constituted with five commissioners (per CEA §2(a)(2))—including at least two nominated after consultation with the Senate Agriculture Committee's ranking minority member—and appropriately staffed for regulatory and enforcement responsibilities.

This section establishes an effective date for this Act and its amendments of 18 months after the date of enactment, except as otherwise provided in the Act. For any provision requiring rulemaking, the effective date is the later of 18 months after enactment or 120 days after publication of the final implementing rule in the Federal Register.

This section expresses the sense of Congress that nothing in this Act or any amendment made by this Act should be interpreted to authorize any entity to regulate any commodity, other than a digital commodity, on any spot market.

This section amends the Commodity Exchange Act (CEA) to clarify the Commodity Futures Trading Commission's (CFTC) jurisdiction over digital commodity transactions as follows: (1) Adds a savings clause preserving existing CEA jurisdiction over futures, swaps, security futures products, and related activities and persons, unaffected by the Digital Commodity Intermediaries Act, including where such instruments use blockchain technology (which does not recharacterize them as digital commodities). (2) Excludes permitted payment stablecoins (as defined in the GENIUS Act)—issued by permitted issuers—from CEA provisions on commodity options, certain retail forex transactions, and similar activities. (3) Modifies CEA exclusions from CFTC jurisdiction for forward contracts, including by (A) excepting permitted payment stablecoins from certain exclusions; (B) providing that the forward exclusion does not apply to cash or spot sales of digital commodities or permitted payment stablecoins with actual delivery within 2 days (or such other period as the CFTC determines reflects cash market practices); and (C) requiring CFTC rulemaking on leverage, margin, or financing conditions for retail cash or spot digital commodity transactions and authorizing further exemptions for digital commodity exchanges or brokers to promote innovation, competition, or customer protection. (4) Grants the CFTC exclusive jurisdiction over accounts, agreements, contracts, or transactions involving cash or spot digital commodities in interstate commerce that are offered, traded, or dealt in on or subject to rules of a registered entity (or required to be registered) or by other CFTC registrants, subject to exceptions for (A) custodial or depository services by federally or state-regulated banking entities (i.e., excluding State bank supervisors as defined in the Federal Deposit Insurance Act); (B) investment contracts or securities offerings involving digital commodities; and (C) mixed digital asset transactions. (5) Provides CFTC jurisdiction over cash or spot permitted payment stablecoin transactions on registered entities or by CFTC registrants solely to regulate their offer, execution, solicitation, or acceptance (treating such stablecoins as digital commodities), notwithstanding limitations on authority over permitted payment stablecoins.

This section modifies futures commission merchant (FCM) customer fund segregation requirements under the Commodity Exchange Act to authorize deposit and commingling of such funds with qualified digital asset custodians (in addition to banks and trust companies), as applicable, and to require that any customer property that is a digital asset be held in a qualified digital asset custodian. (FCMs must segregate customer margin funds from their own and may commingle them only in specified accounts to facilitate clearing and settlement.)

This section amends Section 5c of the Commodity Exchange Act (governing registered entity rule certifications and new product listings, including by designated contract markets and swap execution facilities) to (1) expand applicability of certain certification requirements to include Section 5i(c) (presumably digital commodity exchange registration); (2) include "digital commodity exchange" alongside derivatives clearing organizations in enforcement and emergency powers provisions; (3) make technical changes to review procedures for rule certifications, including adding participants to customer protection considerations, updating a cross-reference from "1a(10)" to "1a(16)," and authorizing certifications under new subsection (d) for digital commodity-based contracts; and (4) establish a new certification process in subsection (d) for eligible entities to list or offer digital commodities for trading in cash or spot markets. Subsection (d) requires a written certification with analysis of compliance with Section 5i(c)(3), effective after 20 business days of Commission review for new or modified certifications (1 business day for recertified digital commodities) unless disapproved as inconsistent with the act, with possible extensions of 30 business days (once) or 60 business days total; it also authorizes 90-business-day prior approval requests for registration applicants. (Thus, this enables faster listing of digital commodities on spot markets than typical futures or swaps review.)

This section amends the Commodity Exchange Act (CEA) by inserting a new section 5i to require a trading facility offering or seeking to offer a cash or spot market in at least one digital commodity to register with the Commodity Futures Trading Commission (CFTC) as a digital commodity exchange, including via an application with CFTC-prescribed information on governance, resources, systems safeguards, surveillance, and conflict management. The section provides exemptions from registration for (1) facilities serving only customers in a single U.S. state, territory, or possession; (2) facilities with no more than a de minimis amount of digital commodity trading activity, as determined by CFTC rule; or (3) designated contract markets that provide CFTC notice and comply with applicable CEA requirements. It directs the CFTC to issue rules (1) exempting multi-registered entities from duplicative or burdensome CEA provisions; (2) requiring identification, mitigation, and resolution of conflicts of interest, including in vertically integrated structures; and (3) authorizing portfolio margining after risk-benefit analysis; and it requires registration regardless of other state or federal oversight. The section applies CEA prohibitions on fraud and manipulation (ss. 4b, 4c, and 4b-1) to digital commodity agreements, contracts, or transactions as if they were commodity futures; and it prohibits a digital commodity exchange or affiliate from trading for its own account on the exchange, except for (1) customer-directed transactions, (2) liquidity provision limited to expected customer demand, or (3) risk-mitigating hedging related to exchange activities—subject to CFTC rules on conditions, customer protections, conflict disclosures or barriers, and prior CFTC notice.

This section requires persons acting as digital commodity brokers or digital commodity dealers to register with the Commodity Futures Trading Commission (CFTC), subject to exemptions for de minimis activity (as determined by CFTC rule), activity limited to customers in a single state or territory, or persons already registered as futures commission merchants (FCMs) that provide notice and comply with applicable rules. It directs the CFTC to prescribe rules (1) exempting multi-registered entities from duplicative or burdensome requirements, (2) addressing conflicts of interest among affiliated or multi-registered entities (including vertically integrated structures), (3) providing for portfolio margining after risk-benefit analysis, and (4) harmonizing rules to minimize inconsistencies for multi-registered persons; requires such registrants to join a registered futures association; and prohibits permitting statutorily disqualified associated persons to effect digital commodity sales. The section further imposes (1) registration via application with required business information and ongoing reporting; (2) minimum capital requirements tailored to digital commodity risks (with FCMs, introducing brokers, and certain dealers subject to the stricter of CEA or Securities Exchange Act standards); (3) a limitation to offering only trades in digital commodities not readily susceptible to manipulation; (4) CFTC rules on transaction execution addressing fair pricing, recordkeeping and disclosure, price discovery protection, and safeguards for non-eligible contract participants; and (5) reporting and recordkeeping on transactions, positions, and financial condition.

This section amends Section 4k of the Commodity Exchange Act (1) by adding a new paragraph (7) requiring Commodity Futures Trading Commission (CFTC) registration for any person acting as an associated person of a digital commodity broker or digital commodity dealer and prohibiting such brokers and dealers from permitting unregistered persons (or persons with expired, suspended, or revoked registration) to become or remain associated persons; and (2) by expanding an existing provision concerning associated persons to explicitly include those of digital commodity brokers and digital commodity dealers.

This section establishes an exemption from the Commodity Exchange Act (CEA) and Commodity Futures Trading Commission (CFTC) regulations for persons engaging, directly or indirectly, in specified activities related to blockchain systems or decentralized finance (DeFi) trading protocols, including (1) compiling, relaying, searching, sequencing, or validating network transactions; (2) providing computational work, node or oracle services, or network bandwidth; (3) offering user interfaces to read or access blockchain data; (4) developing, publishing, or distributing blockchain or DeFi messaging systems; (5) constituting, administering, or maintaining DeFi messaging systems, trading protocols, or liquidity pools for spot transactions in digital commodities; and (6) developing or distributing software, including wallets, enabling users to self-custody digital assets or private keys. The exemption does not limit CFTC enforcement authorities for anti-fraud, anti-manipulation, or false reporting violations.

This section amends the Commodity Exchange Act (CEA) to authorize portfolio margining for cleared swaps accounts (by inserting references to CEA §4d(f)(2) and "or a cleared swap" in CEA §4d(h)) and to require the CFTC to treat securities and digital commodities (previously, securities only) held in portfolio margining accounts carried as a futures account or cleared swaps account (previously, futures account only) as customer property, with owners treated as customers, for purposes of subchapter IV of chapter 7 of title 11 (CEA §20(c)). (Portfolio margining permits margin calculations based on net portfolio risk rather than individual positions; subchapter IV prioritizes commodity customers' claims in broker bankruptcies.)

This section authorizes the Commodity Futures Trading Commission (CFTC), by rule or regulation, to include cash, securities, other property, trading or operating accounts, and commodities held in inventory from a commodity broker's bankruptcy estate as customer property under subchapter IV of chapter 7 of title 11, subject to unavoidable security interests or contractual offset and netting rights of creditors (including those in rules or bylaws of derivatives clearing organizations or clearing agencies), but only to the extent necessary to satisfy net equity claims of public customers (as defined by CFTC rule) when other customer property is insufficient. (As background, subchapter IV of chapter 7 provides special bankruptcy protections prioritizing segregated customer property of commodity brokers—firms that clear or trade commodity futures, options, or swaps—over general creditor claims.)

This section requires the Commodity Futures Trading Commission (CFTC) to assess and collect registration and annual fees from registered digital commodity brokers, dealers, exchanges, and qualified digital asset custodians to recover costs of registration, oversight of those entities and digital commodity transactions, customer education and outreach, and other activities required by the Digital Commodity Intermediaries Act. Fee rates are determined based on business volume and registration category, adjusted annually to match the relevant congressional appropriation (deposited as offsetting collections), published in advance without judicial review or APA notice-and-comment requirements, prohibited from including customer transaction fees, and limited to funding only the specified activities; if no regular appropriation is enacted, prior-year rates continue during a lapse. This section further directs the CFTC to conduct customer education and outreach for digital commodity markets; authorizes $150 million (to remain available until expended) for implementing the Digital Commodity Intermediaries Act until registration fees are collected; and provides the CFTC Chairman expedited hiring authority to appoint individuals to competitive service positions (as defined in 5 U.S.C. §2102) requiring specialized knowledge of digital commodities markets—treating such positions as excepted service (per 5 U.S.C. §2103) and bypassing competitive service appointment rules. (Thus, the CFTC—a primary regulator of derivatives and futures markets—may hire digital asset experts more rapidly to oversee the new regulatory regime.)

This section establishes within the Commodity Futures Trading Commission (CFTC) the Office of the Digital Commodity Retail Advocate to represent and assist retail participants (i.e., non-eligible contract participants engaging in spot or cash digital commodity transactions with CFTC registrants). The Digital Commodity Retail Advocate, appointed by the CFTC Chairman from individuals with relevant advocacy experience and paid at the highest senior executive rate, must (1) assist retail participants in resolving issues with the CFTC or registered futures associations; (2) identify regulatory gaps, problems with registrants, and impacts of proposed rules; (3) propose regulatory, legislative, or personnel changes; (4) conduct research; and (5) support customer education initiatives. The Advocate has access to CFTC and futures association documents at the Chairman's discretion, subject to confidentiality safeguards. The Office must submit annual reports directly to the Senate and House Agriculture Committees—by June 30 on upcoming objectives and by December 31 on prior-year activities, including statistics, problem inventories, and recommendations—without prior CFTC review. Service restrictions prohibit Commission employment for two years prior to and five years following the Advocate's tenure.

This section directs the Commodity Futures Trading Commission (CFTC) to examine, not later than 180 days after enactment, the racial, ethnic, and gender demographics of customers participating in digital commodity markets and to submit a report to the Senate Committee on Agriculture, Nutrition, and Forestry and the House Committee on Agriculture describing (1) how those demographics will inform the CFTC's customer protection rules and regulations, (2) proposed outreach to historically underserved customers in those markets, and (3) policy recommendations for other necessary protection and outreach activities. In preparing the report, the CFTC must seek input from stakeholders including market participants, customers, and consumer advocates.