Digital Asset Market Clarity Act

4B. Requirements with respect to certain transactions involving ancillary assets

(a) Definitions. In this section:

(1) Ancillary asset. The term ancillary asset means a network token, the value of which is dependent upon the entrepreneurial or managerial efforts of an ancillary asset originator or a related person, as those concepts are further specified by the Commission by regulation.

(2) Ancillary asset originator

(A) In general. The term ancillary asset originator means, with respect to a particular ancillary asset, a person that (whether directly or through 1 or more subsidiary or controlled entities)—

(i) initially offers, sells, or distributes the ancillary asset; or

(ii) during the 12-month period beginning on the date on which the ancillary asset is initially offered, sold, or distributed, controls or causes the initial offer, sale, or distribution of that ancillary asset.

(B) Joint and several liability. For the purposes of this paragraph, if the person that initially offered, sold, or distributed an ancillary asset (or otherwise sold, distributed, controlled, or caused the initial offer, sale, or distribution of the ancillary asset) did not receive the largest amount of those ancillary assets distributed in the 12-month period following the commencement of that offer, sale, or distribution, then that person, solely for purposes of subsection (c), shall be jointly and severally considered to be an ancillary asset originator with respect to that ancillary asset (with the person that controlled such offer, sale, or distribution) along with the person (including a person under direct or indirect control of that person) that received the largest amount of those ancillary assets in that period, other than ancillary assets received—

(i) in an intermediary capacity;

(ii) solely through a gratuitous distribution;

(iii) through an offer, sale, or distribution of a security to the public registered under section 5; or

(iv) otherwise in a broad and public manner that the Commission determines, pursuant to regulation, should not subject the person to disclosure requirements under subsection (d).

(C) Rulemaking. Not later than 360 days after the date of enactment of this section, the Commission shall, after providing notice and the opportunity for comment, issue rules regarding the circumstances under which persons that are jointly and severally considered an ancillary asset originator pursuant to subparagraph (B) are responsible for furnishing the disclosures required under subsection (d) on behalf of the ancillary asset originator.

(3) Certification covered party. The term certification covered party means—

(A) an ancillary asset originator;

(B) a subsidiary of the ancillary asset originator;

(C) a related person of the ancillary asset originator; or

(D) any entity that directly or indirectly controls or is controlled by a common entity with the ancillary asset originator.

(4) Decentralized governance system; digital asset; digital asset intermediary; related person; securities laws. The terms decentralized governance system, digital asset, digital asset intermediary, related person, and securities laws have the meanings given those terms in section 2 of the Digital Asset Market Clarity Act.

(5) Gratuitous distribution

(A) In general. The term gratuitous distribution—

(i) means a distribution of a network token, including a distribution effected by an agent or other service provider engaged solely in an administrative or ministerial capacity, in exchange for not more than a nominal value of cash, property, services, or other assets in a broad, equitable, and non-discretionary manner; and

(ii) includes, without limitation, the mechanisms and methods of distribution described in subparagraph (B).

(B) Mechanisms and methods of distribution. The mechanisms and methods of distribution described in this subparagraph are the following:

(i) Self staking. The distribution of a unit of a network token, as a programmatic result of validating or staking activity for a distributed ledger system’s consensus mechanism, including the staking of a network token, and the operation of a node, validator, or substantially similar software for such activity where the owner of the staked network token and the operator of the node, validator, or substantially similar software are the same person or entity.

(ii) Self-custodial staking with a third party. The distribution of a unit of a network token, as a programmatic result of validating or staking activity for a distributed ledger system’s consensus mechanism, including the staking of a network token, and the operation of a node, validator, or substantially similar software for such activity in which—

(I) the owner of the staked network token, and operator of the node, validator, or substantially similar software for such activity are different persons or entities; and

(II) the operator of the node, validator, or substantially similar software does not maintain custody or control of the staked network token.

(iii) Liquid staking. The distribution of network tokens, as the issuance, transfer, or redemption of liquid staking tokens representing a pro rata interest in staked network tokens, and their associated rewards, provided that such tokens are issued as administrative or ministerial receipts and are not providing discretionary management authority.

(iv) Custodial and ancillary staking services

(I) In general. Subject to the rules issued pursuant to subclause (II), the provision of custodial or ancillary staking services enabling the owner of a network token to participate in validating or staking activity for a distributed ledger system’s consensus mechanism that results in the programmatic distribution of a unit of a network token, provided that such custodial or ancillary services are exclusively administrative or ministerial in nature.

(II) Rulemaking to define the custodial and ancillary staking services. The Commission shall issue rules defining the custodial and ancillary staking services described in subclause (I) that are exclusively administrative or ministerial in nature, consistent with what is necessary or appropriate for the public interest or for the protection of investors.

(v) Programmatic and automated distributions. The automated, programmatic, protocol-defined, or rules-based distribution of network tokens achieved through the transparent functioning of a distributed ledger system, a distributed ledger, or distributed ledger applications, in which—

(I) distributions occur pursuant to public, transparent, rules-based parameters that are publicly available and are accessible on a permissionless basis, without individualized or real-time negotiation with recipients;

(II) recipients receive network tokens as a direct, programmatic result of objective, verifiable network participation, consumption, or contribution, including consensus participation, data availability, bandwidth, governance, or use and interaction with the protocol or application;

(III) the number of network tokens received is proportionate to the verifiable service, usage, or contribution;

(IV) any expected utility or value of the network tokens arises primarily from decentralized network participation and market forces, rather than the discretionary actions of any single person or affiliated group; and

(V) no person or group has unilateral authority to alter, restrict, or direct the issuance parameters or distribution mechanisms of the distributed ledger system, and any modification occurs only through a decentralized governance system.

(vi) Technology-neutral clause. The distribution employing a mechanism, protocol, or technology not specifically described in clauses (i) through (v), without regard to whether such mechanism, protocol, or technology is in existence at the time of enactment of this section, and without regard to terminology or underlying technical framework, provided such distribution meets the requirements described in subparagraph (A)(i).

(6) Investment company. The term investment company has the meaning given the term in section 3(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–3(a)).

(7) Network token

(A) In general. The term network token means a digital commodity that is intrinsically linked to a distributed ledger system and that derives, or is reasonably expected to derive, its value from the use of such distributed ledger system, and, pursuant to the Digital Asset Market Clarity Act and the amendments made by the Digital Asset Market Clarity Act, is treated as a non-security solely for purposes of the securities laws.

(B) Disqualifying financial rights. The term network token does not include any of the following:

(i) Any security, consistent with the categories of disqualifying financial rights described in clause (ii).

(ii) An investment contract or a certificate of interest or participation in any profit-sharing agreement that represents, gives the holder, or is substantially economically or functionally equivalent to, any of the following, as the Commission shall establish by rule:

(I) A debt or equity interest, or an option on a debt or equity interest, in a person.

(II) Liquidation rights with respect to a person.

(III) An entitlement to, or a reasonable expectation of, an interest, dividend, or other payment, or direct or indirect transfer of value, from a person (other than a decentralized governance system).

(IV) An express or implied financial interest in (including a limited partnership interest or interest in intellectual property of), or provided by, a person (other than a decentralized governance system).

(iii) Any interest that is, represents, or is functionally equivalent to an interest in an investment company or a company (as defined in section 2 of the Investment Company Act of 1940 (15 U.S.C. 80a–2)) that would be an investment company under section 3(a) of that Act (15 U.S.C. 80a–3(a)) but for the exclusions provided from that definition by section 3(c) of that Act (15 U.S.C. 80a–3(c)).

(iv) Any interest that is, represents, or is functionally equivalent to an interest in any entity or person that is not an investment company but holds or will hold assets other than securities.

(C) Rule of construction. A digital commodity—

(i) shall be deemed to be intrinsically linked to a distributed ledger system if the digital commodity is directly related to the functionality or operation of the distributed ledger system or to the activities or services for which the distributed ledger system is created or utilized; and

(ii) shall not be disqualified from being deemed a network token due to the granting of economic interests or voting capabilities with respect to a distributed ledger system or its decentralized governance system, as further clarified by the Commission through the final rules adopted under section 105 of the Lummis-Gillibrand Responsible Financial Innovation Act of 2026.

(b) Treatment of network tokens and transactions

(1) In general. The offer, sale, or distribution of an ancillary asset by, or caused by, an ancillary asset originator, including through an underwriter, shall be considered to be an offer, sale, or distribution of an investment contract involving an ancillary asset, except with respect to a gratuitous distribution.

(2) Treatment as non-security. Except as provided in this section, and subject to paragraph (3), a network token shall be treated as a non-security, to the extent materially consistent with the requirements and conditions of this section, for purposes of —

(A) section 2(a)(1);

(B) section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a));

(C) section 2(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–2(a));

(D) section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–2(a));

(E) section 16 of the Securities Investor Protection Act of 1970 (15 U.S.C. 78lll); or

(F) any applicable requirement of State law that is functionally equivalent to the provisions described in subparagraphs (A) through (E), including any provision of State law that directly or indirectly prohibits, limits, or imposes any conditions on the use, offer, sale, transfer, or disposition of a network token in a manner that is—

(i) not substantially similar to prohibitions, limitations, or conditions imposed by that State relating to assets that are commodities under the laws of that State; and

(ii) inconsistent with this section.

(3) Secondary market treatment

(A) In general. Except as provided in this section (including the limitation under subparagraph (B)), and to the extent materially consistent with the requirements and conditions of this section, the offer, sale, or distribution of a network token by a person shall be treated as not involving the offer, sale, or distribution of a security under—

(i) section 2(a)(1);

(ii) the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.);

(iii) the Investment Company Act of 1940 (15 U.S.C. 80a–1 et seq.);

(iv) the Investment Advisers Act of 1940 (15 U.S.C. 80b–1 et seq.);

(v) the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.); and

(vi) any applicable requirement of State law that is functionally equivalent to the provisions described in clauses (i) through (v), including any provision of State law that directly or indirectly prohibits, limits, or imposes any conditions on the use, offer, sale, transfer, or disposition of a network token in a manner that is—

(I) not substantially similar to prohibitions, limitations, or conditions imposed by that State relating to assets that are commodities under the laws of that State; and

(II) inconsistent with this section.

(B) Limitation. Subparagraph (A) shall not apply if the applicable network token is offered, sold, or distributed pursuant to the offer, sale, or distribution of a security by an ancillary asset originator or underwriter.

(4) Treatment of gratuitous distributions

(A) In general. A gratuitous distribution, by itself, shall be presumed to not constitute an offer, sale, or distribution of a security for the purposes of—

(i) section 2(a)(1);

(ii) section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a));

(iii) section 2(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–2(a));

(iv) section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–2(a));

(v) section 16 of the Securities Investor Protection Act of 1970 (15 U.S.C. 78lll); or

(vi) any applicable requirement of State law, or any provision of State law that is functionally equivalent to the provisions described in clauses (i) through (v), including any provision of State law that directly or indirectly prohibits, limits, or imposes any conditions on the use, offer, sale, transfer, or disposition of a network token in a manner that is—

(I) not substantially similar to prohibitions, limitations, or conditions imposed by that State relating to assets that are commodities under the laws of that State; and

(II) inconsistent with this section.

(B) Savings clause. Nothing in this paragraph may be construed to limit, impair, or otherwise affect the anti-fraud or anti-manipulation authorities of the Commission, the Commodity Futures Trading Commission, or a State regulator.

(5) Prior certification

(A) Submission and default treatment

(i) In general

(I) Presumption. For purposes of this section, there shall be a rebuttable presumption that a network token, including a network token distributed in the manner described in paragraph (4), is an ancillary asset unless the originator of that network token, or a digital asset intermediary (as provided under subsection (c)(4)), submits to the Commission a completed written certification, supported by reasonable evidence, as defined by the Commission, sufficient to demonstrate that the network token is not an ancillary asset.

(II) Contents. A certification submitted under subclause (I) shall include a statement in accordance with subsection (d)(3)(B)(i).

(ii) Notification. The Commission shall notify the Commodity Futures Trading Commission of each certification made pursuant to clause (i) and of any final agency action with respect to that certification.

(iii) Reciprocal notice. The Commission shall receive a copy of any certification and supporting materials submitted to the Commodity Futures Trading Commission under section 203(d) of the Digital Commodity Intermediaries Act.

(B) Automatic effectiveness. A certification submitted under subparagraph (A) by an originator or a digital asset intermediary shall become effective upon the earlier of—

(i) the date on which the Commission notifies the originator or digital asset intermediary in writing that the Commission does not object to the certification; or

(ii) if the Commission has not issued a rebuttal to the originator or digital asset intermediary in accordance with subparagraph (C), 60 days after the date on which the originator or digital asset intermediary submits the certification.

(C) Commission denial

(i) Authority to deny. Subject to clauses (ii) and (iii), the Commission may deny a certification submitted under subparagraph (A) by an originator or digital asset intermediary only during the 60-day period described in subparagraph (B)(ii) or upon determining, based on reasonable evidence, that a material change in circumstances has occurred after the submission of the certification, whether or not the certification has taken effect.

(ii) Notice of intent to deny. If the Commission intends to deny a certification submitted under subparagraph (A), the Commission shall—

(I) either not later than 20 business days after the date on which the certification is submitted, or promptly after determining that a material change in circumstances has occurred, provide to the applicable originator or digital asset intermediary notice of the intent of the Commission to deny that certification; and

(II) provide to the applicable originator or digital asset intermediary a 10-day period following the provision of notice under subclause (I) during which—

(aa) interested persons shall have an opportunity to submit written data, views, and arguments relating to that certification; and

(bb) the Commodity Futures Trading Commission may, at the discretion of the Commodity Futures Trading Commission, submit input regarding whether the applicable asset—

(AA) satisfies the requirements for being considered an ancillary asset; or

(BB) includes any disqualifying financial right described in subsection (a)(7)(B).

(iii) Requirements after notice of intent. After the 10-day period described in clause (ii)(II), the Commission shall—

(I) upon request of the applicable originator or digital asset intermediary, provide an opportunity for the oral presentation of data, views, and arguments by certification covered parties;

(II) have a vote of the Commission (which, notwithstanding section 4A of the Securities Exchange Act of 1934 (15 U.S.C. 78d–1), may not be delegated to an employee or employee board or to any individual Commissioner) to deny the certification after a finding that the applicable asset—

(aa) is an ancillary asset; or

(bb) includes any disqualifying financial right described in subsection (a)(7)(B); and

(III) notify the Commodity Futures Trading Commission of each denial made under subclause (II).

(iv) Interested person. For purposes of this subparagraph, the term interested person means, with respect to a network token—

(I) the ancillary asset originator with respect to that network token (referred to in this clause as the originator);

(II) a subsidiary of the originator;

(III) a related person of the originator;

(IV) any entity that directly or indirectly controls or is controlled by a common entity with the originator;

(V) any broker or dealer (as those terms are defined in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a))), or an exchange registered pursuant to section 6 of that Act (15 U.S.C. 78f), that operates in connection with digital assets; or

(VI) any person registered with the Commodity Futures Trading Commission that operates or proposes to operate in connection with digital assets.

(D) Certification filed by digital asset intermediary

(i) In general. A certification submitted by a digital asset intermediary under this paragraph shall only become effective if—

(I) the digital asset intermediary has—

(aa) conducted a reasonable inquiry of publicly available information, appropriate under the circumstances, regarding whether the applicable originator has engaged in entrepreneurial and managerial efforts with respect to the applicable network token during the most recent 180-day period, or is likely to engage in those efforts in the future; and

(bb) concluded that the efforts described in item (aa) have not occurred or are not reasonably likely to occur; and

(II) subject to clause (ii), the applicable originator has certified that there is not (and, during the most recent 180-day period, there has not been) material, non-public information regarding entrepreneurial or managerial efforts with respect to the applicable network token in the possession of the originator or a related party.

(ii) Limitation. Clause (i)(II) shall not be required if the applicable digital asset intermediary, after a reasonable inquiry, appropriate under the circumstances, determines that the applicable originator, or any person jointly and severally liable pursuant to subsection (a)(2)(B), is not capable of submitting the applicable certification.

(E) Final agency action. Denial under this paragraph constitutes final agency action reviewable under applicable law.

(F) Tolling. Any applicable period specified in this paragraph may be tolled, for periods of not longer than 60 days, during the 3-year period following the effective date of the Digital Asset Market Clarity Act, upon a showing in writing that the originator or digital asset intermediary has not substantially responded to a request for information from the Commission within a reasonable time.

(G) Withdrawal. An originator or digital asset intermediary may withdraw a certification submitted under subparagraph (A) at any time before approval.

(H) Designated commission office. The Commission shall designate an office that shall—

(i) acknowledge receipt of certifications submitted under subparagraph (A);

(ii) support those seeking certification under subparagraph (A) by providing guidance regarding the mechanics of preparing and submitting those certifications; and

(iii) route certifications submitted under subparagraph (A), together with any associated comments or recommendations, to the appropriate division or office of the Commission for review.

(I) Misstatements or omissions. Any material misstatement or omission to state a material fact, including with respect to continuing compliance, in a certification that has become effective under this paragraph shall constitute grounds for the Commission, consistent with the securities laws, to issue an order denying, suspending, or revoking the effectiveness of the certification and to pursue any appropriate enforcement action.

(c) Disclosure requirements for certain transactions involving ancillary assets

(1) Specified initial and periodic disclosure requirements

(A) In general. An ancillary asset originator shall be subject to the initial and periodic disclosure requirements under subsection (d) upon the occurrence of the earlier of the following:

(i) Any offer, sale, or distribution of an ancillary asset after the effective date of the Digital Asset Market Clarity Act by, or that is caused by, that ancillary asset originator pursuant to—

(I) Regulation Crypto, as adopted pursuant to section 103 of the Lummis-Gillibrand Responsible Financial Innovation Act of 2026;

(II) the filing of an effective registration statement under this Act;

(III) the filing of an offering statement described in section 3(b)(2); or

(IV) an offering conducted pursuant to section 4(a)(6).

(ii)

(I) The first secondary market offer, sale, or distribution of an ancillary asset in the United States after the effective date of the Digital Asset Market Clarity Act that constitutes a public offering, whether by the ancillary asset originator or any other person.

(II) For the purposes of subclause (I), the term public offering shall be interpreted consistent with the meaning of that term under section 4(a)(2).

(B) Exclusion. Subparagraph (A) shall not apply if—

(i) the aggregate gross proceeds from the offer, sale, or distribution of the applicable ancillary asset (together with any related assets sold in those offers, sales, or distributions) were $5,000,000 or less (adjusted for inflation) during the 12-month period immediately following the date of the first such offer, sale, or distribution; or

(ii) the average daily aggregate value of trading in the applicable ancillary asset in all spot markets open to the public in the United States for which trading volume is generally available is $5,000,000 or less (adjusted for inflation) during the 12-month period (or such shorter period as the Commission may determine) immediately following the commencement of compliance with the disclosure requirements under subsection (d) (as determined pursuant to paragraph (2) of this subsection), based on the knowledge of the ancillary asset originator after due inquiry (or, if the ancillary asset has not yet traded on spot markets open to the public in the United States, the trading volume is reasonably expected to be $5,000,000 or less (adjusted for inflation) during the 12-month period immediately following the reporting date specified by paragraph (2)).

(C) Calculation. For the purposes of this paragraph, the calculation of daily aggregate value shall be based on a reasonable calculation of public data.

(2) Commencement of compliance with specified initial and periodic disclosure requirements

(A) In general. An ancillary asset originator subject to the requirements of paragraph (1) shall comply with the disclosure requirements under subsection (d)—

(i) before—

(I) any initial offer, sale, or distribution described in paragraph (1)(A)(i); or

(II) a secondary market offer, sale, or distribution described in paragraph (1)(A)(ii); and

(ii) semiannually thereafter.

(B) Exclusion. The requirements of this paragraph shall not apply to an offer, sale, or distribution of an ancillary asset that occurs after the effective date of the Digital Asset Market Clarity Act if an ancillary asset originator has submitted a certification under subsection (d)(3)(B) and the Commission has not denied that certification within a 60-day period after the completion of the process under that subsection.

(3) Transition rule

(A) In general. An ancillary asset originator that initially offered, sold, or distributed (or otherwise controlled or caused the offer, sale, or distribution of) a security involving an ancillary asset before the effective date of the Digital Asset Market Clarity Act shall comply with the periodic disclosure requirements under subsection (d), if applicable, beginning on the date that is 1 year after that effective date.

(B) Effect on certification. An ancillary asset originator, or any other certification covered party, subject to this paragraph that meets the requirements of subsection (d)(3) may furnish a certification as provided in that subsection without complying with the periodic disclosure requirements under subsection (d), if the Commission has not denied that certification within a 60-day period after the completion of the process under that subsection.

(C) Period of disclosures. The disclosures required under subparagraph (A) shall apply with respect to the 3-year period preceding the effective date described in that subparagraph.

(4) Digital asset intermediaries

(A) In general. Other than as provided under subparagraph (B), with respect to an ancillary asset that is listed for trading on a digital asset intermediary, that digital asset intermediary may, in lieu of the applicable ancillary asset originator, satisfy the requirements of subsection (d) in accordance with such rules as the Commission shall jointly adopt with the Commodity Futures Trading Commission.

(B) Allocation of disclosure responsibility

(i) Originator filings. A digital asset intermediary may not satisfy the requirements of subsection (d) in lieu of the applicable ancillary asset originator, if—

(I) the ancillary asset originator is incorporated, organized, or otherwise registered under the laws of the United States or of any State; and

(II) the applicable ancillary asset is—

(aa) offered, sold, or distributed after the effective date of the Digital Asset Market Clarity Act pursuant to—

(AA) an investment contract that is offered, sold, or distributed pursuant to Regulation Crypto, as adopted pursuant to section 103 of the Lummis-Gillibrand Responsible Financial Innovation Act of 2026;

(BB) the filing of an effective registration statement under this Act (other than a registration statement on the form described in section 239.31 or 239.33 of title 17, Code of Federal Regulations, or the successor to either such form);

(CC) the filing of an offering statement described in section 3(b)(2); or

(DD) an offering conducted pursuant to section 4(a)(6); or

(bb) first offered or sold after the effective date of the Digital Asset Market Clarity Act in a transaction described in paragraph (1)(A)(ii).

(ii) Commission determination

(I) In general. If, after notice, comment, and the opportunity for a hearing, the Commission determines that it is in the public interest or necessary for the protection of investors, including with respect to an ancillary asset originator incorporated or organized in a foreign jurisdiction, the Commission may require an ancillary asset originator, after a transition period, to file the disclosures required under subsection (d).

(II) Extraterritorial effect. Subclause (I) shall apply extraterritorially.

(C) Standard of liability. Notwithstanding any other provision of this Act, it shall be unlawful for a digital asset intermediary to file disclosures under subsection (d) pursuant to this paragraph that contain any material misstatement or omission to state a material fact required to be stated therein, or necessary to make the statements therein not misleading, unless that digital asset intermediary did not know (and, in the exercise of reasonable care, could not have known) of that misstatement or omission.

(5) Failure to comply. Subject to the requirements of this section, an ancillary asset shall not be listed for trading on a digital asset intermediary if the Commission and the Commodity Futures Trading Commission jointly find that the ancillary asset originator that initially offered, sold, or distributed the ancillary asset after the effective date of the Digital Asset Market Clarity Act (or, if a digital asset intermediary is satisfying the requirements of this subsection in lieu of that ancillary asset originator in accordance with paragraph (4), such digital asset intermediary) has materially failed to furnish the required disclosures under this subsection after a reasonable opportunity to cure, as provided by joint rule of the Commission and the Commodity Futures Trading Commission in a manner that is consistent with the considerations under subsection (d)(5).

(d) Specified initial and periodic disclosure requirements

(1) In general

(A) Furnishing of information. An ancillary asset originator that is subject to the requirements of paragraph (1) or (3) of subsection (c), or a digital asset intermediary acting in accordance with subsection (c)(4), shall furnish to the Commission, in such form as the Commission may prescribe by rule after providing notice and the opportunity for comment, and until the requirement terminates under paragraph (3) of this subsection, the information described in paragraph (2) of this subsection, to the extent that the information is material and known, or reasonably knowable, to the ancillary asset originator or digital asset intermediary.

(B) Requirements for rules. A rule prescribed under subparagraph (A) shall be reasonably tailored, including by adjusting the scope, form, and content of required disclosures, based on—

(i) the size of the applicable ancillary asset originator in accordance with section 108(a) of the Lummis-Gillibrand Responsible Financial Innovation Act of 2026;

(ii) the aggregate amount of ancillary assets offered, sold, or distributed by the applicable ancillary asset originator to the public in the United States; and

(iii) whether the applicable ancillary asset and any related distributed ledger system is subject to coordinated control, as defined by the Commission pursuant to rules adopted under section 104(b) of the Lummis-Gillibrand Responsible Financial Innovation Act of 2026.

(2) Categories of information. The information required under paragraph (1) shall include the following with respect to the applicable ancillary asset originator and the related ancillary asset:

(A) Basic corporate information regarding the ancillary asset originator and the ancillary asset activities of the ancillary asset originator, which may include the following items, as the Commission shall determine by rule:

(i) The experience of the ancillary asset originator (or persons controlling the ancillary asset originator) in developing ancillary assets.

(ii) If the ancillary asset originator (or persons controlling the ancillary asset originator) has previously distributed ancillary assets, information on the subsequent distribution history of those ancillary assets, including price history, if the information is publicly available.

(iii) The activities that the ancillary asset originator has taken in the relevant disclosure period, and is projecting to take in the 1-year period following the submission of the disclosure, with respect to promoting the use, value, or resale of the ancillary asset (including any activity to facilitate the creation or maintenance of a trading market for the ancillary asset and any distributed ledger system, application, or system that uses the ancillary asset).

(iv) The anticipated cost of the activities of the ancillary asset originator described in clause (iii), whether the ancillary asset originator has unencumbered, liquid funds equal to that amount, and, if the ancillary asset originator does not have those funds, the anticipated plan of operations of the ancillary asset originator for the portion of time where those liquid funds are less than the anticipated cost of the activities of the ancillary asset originator.

(v) The experience of the ancillary asset originator with the use of a distributed ledger system or distributed ledger technology.

(vi) The identities and expertise of the board of directors (or equivalent body) and senior management of the ancillary asset originator, the experience or functions of whom are material to the development or value of the ancillary asset, as well as any personnel changes relating to the ancillary asset originator during the period covered by the disclosure.

(vii) Financial statements of the ancillary asset originator that are—

(I) if the aggregate amount of such ancillary assets offered, sold, or distributed to the public does not exceed $25,000,000 in gross proceeds, reviewed by a public accountant that is independent of the ancillary asset originator; or

(II) if the aggregate amount of such ancillary assets offered, sold, or distributed to the public exceeds $25,000,000 in gross proceeds, audited by a public accountant that is independent of the ancillary asset originator.

(viii) A description of any legal proceedings in which the ancillary asset originator is engaged.

(ix) Risk factors arising from the activities of the ancillary asset originator with respect to the ancillary asset, and not generally applicable to other kinds of ancillary assets, that may limit the utility or liquidity of the ancillary asset, investor demand with respect to the ancillary asset, or the market price or value of the ancillary asset.

(x) Information relating to ownership of the ancillary asset by—

(I) persons owning not less than 10 percent of any class of equity security or other ownership interest of the ancillary asset originator; and

(II) the board of directors (or equivalent body) and senior management of the ancillary asset originator, if those individuals, in the aggregate, own not less than 5 percent of the ancillary asset.

(xi) For any material transactions involving the ancillary asset between the ancillary asset originator and any related person, a description, in the aggregate, of the parties, the number of ancillary assets involved, and a summary of any material features of the transactions, including any material terms or ongoing obligations.

(xii) A summary, in the aggregate by year, of transactions in ancillary assets during the 4-year period preceding the furnishing of the disclosure, by the ancillary asset originator and persons that directly or indirectly control the ancillary asset originator.

(xiii) Purchases or similar acquisitions of ancillary assets by the ancillary asset originator and affiliates of the ancillary asset originator.

(xiv) A statement, made in good faith, from the chief financial officer of the ancillary asset originator or equivalent official, stating whether the ancillary asset originator reasonably expects to maintain or have the financial resources to continue business as a going concern for the 12-month period following the furnishing of the disclosure, absent a change in circumstances.

(xv) The current state and timeline for the development of the distributed ledger system to which the ancillary asset relates, detailing if, how, and when the distributed ledger system and the related ancillary asset are intended to no longer be subject to coordinated control, including by related persons, if the distributed ledger system has not yet received a certification under section 104(d) of the Lummis-Gillibrand Responsible Financial Innovation Act of 2026.

(B) Economic and technical information relating to the ancillary asset, which may include the following items, as the Commission shall determine by rule:

(i) A general description of the ancillary asset and the distributed ledger system to which that ancillary asset relates, including—

(I) a plain-English description of how the applicable distributed ledger, distributed ledger system, or distributed ledger application functions;

(II) the intended or known functionality and uses of the ancillary asset and any associated fees for use or disposition of the ancillary asset;

(III) the market for the ancillary asset;

(IV) other assets or services that may compete with the ancillary asset;

(V) the total supply of the ancillary asset or the manner and rate of the ongoing production or creation of the ancillary asset; and

(VI) the governance and consensus mechanism for the ancillary asset and that distributed ledger system, if applicable, including for validating transactions and implementing changes to the distributed ledger system, the method of generating or mining ancillary assets, and any process for burning or destroying units of the ancillary asset on a distributed ledger system.

(ii) If the ancillary asset originator has offered, sold, or otherwise provided ancillary assets to affiliates, investors, employees, intermediaries, or resellers, a description of the amount of assets offered, sold, or otherwise provided to such persons and a summary of any material resale restrictions or other material obligations arising from related contracts, agreements, or other arrangements.

(iii) If ancillary assets were distributed by the ancillary asset originator without charge or upon meeting certain conditions, a description of the distributions, in the aggregate, along with the identity of any recipient that received more than 5 percent of the total amount of ancillary assets (calculated as a percentage of the total supply of such asset at the time of distribution).

(iv) The amount of ancillary assets owned by the ancillary asset originator.

(v) For the 12-month period following the furnishing of the disclosure, a description of the current state and anticipated timeline for the development of the distributed ledger system to which that ancillary asset relates, including—

(I) plans of the ancillary asset originator to support (or to cease supporting) the use or development of the ancillary asset, including markets for the ancillary asset and that distributed ledger system;

(II) the various roles that exist or are intended to exist in connection with any applicable distributed ledger, distributed ledger system, or distributed ledger application, such as users, service providers, developers, transaction validators, and governance participants;

(III) a discussion of any mechanisms by which control or authority are exerted with respect to that distributed ledger system, if applicable, or the related ancillary asset; and

(IV) any critical operational dependencies of any applicable distributed ledger, distributed ledger system, or distributed ledger application or of the related ancillary asset.

(vi) Risk factors that may materially affect the liquidity of the ancillary asset, investor demand with respect to the ancillary asset, or the market price or value of the ancillary asset.

(vii) To the extent available to the ancillary asset originator, the average daily price for a constant unit of value of the ancillary asset during the relevant reporting period, as well as the 12-month high and low prices for the ancillary asset, as calculated based on the 3 exchanges with the largest trading volume in that ancillary asset.

(viii) If applicable, and subject to cybersecurity best practices, information relating to any external audit of the code and functionality of the ancillary asset, including the entity performing the audit and the experience of the entity in conducting similar audits.

(ix) Information relating to custodial services available for the ancillary asset.

(x) Information on intellectual property rights claimed or disputed relating to the ancillary asset.

(xi) A description of the technology underlying the initial distribution and trading of the ancillary asset, including the source code for the ancillary asset, if applicable, and technical requirements for holding, accessing, and transferring the ancillary asset.

(xii) If applicable, a description of the steps necessary to independently access, search, and verify the transaction history of the ancillary asset.

(C) In addition to the information expressly required to be included under subparagraphs (A) and (B), the ancillary asset originator or digital asset intermediary, as applicable, shall provide such further material information, if any, as may be necessary to ensure that the statements made in the disclosure are not, in light of the circumstances under which the statements are made, materially misleading.

(3) Termination of requirements

(A) Termination. The obligation of an ancillary asset originator to provide disclosures under paragraph (1) shall terminate on the date that a certification becomes effective under subparagraph (B), including through an approval or deemed approval.

(B) Certification

(i) In general. A certification covered party may submit to the Commission a certification, based on the knowledge of the certification covered party after due inquiry and supported by reasonable evidence, that states—

(I) that—

(aa) during the 180-day period preceding the date on which the certification covered party submits the certification, and as of the date of submission, no certification covered party has engaged in more than a nominal level of entrepreneurial or managerial efforts (as defined by the Commission by rule), which shall not, for the purposes of this clause, include providing administrative services alone;

(bb) any efforts described in item (aa) were not a primary factor in determining the value of the related ancillary asset (which may include that any essential promises made by the certification covered party have been fulfilled); and

(cc) a certification is effective under section 104(d) of the Lummis-Gillibrand Responsible Financial Innovation Act of 2026;

(II) in good faith that the certification covered party does not reasonably expect there to be any efforts that would render the certification covered party unable to provide a new certification following the date of the certification; and

(III) that substantially all material information that is reasonably expected to contribute to the value of the ancillary assets offered, sold, or distributed to the public by the ancillary asset originator is, and is reasonably expected to remain, available to the public.

(ii) Change in circumstances

(I) Effectiveness of the certification. A certification under clause (i) shall remain effective until the date on which any certification covered party engages in entrepreneurial or managerial efforts that would render the certification covered party unable to meet the standards of the certification.

(II) New disclosures required. On and after the date described in subclause (I), the certification covered party undertaking efforts described in that subclause shall be responsible for furnishing to the Commission the disclosures required under paragraph (1), including a description of the change in circumstances.

(III) Periodic disclosures. The furnishing of disclosures pursuant to subclause (II) shall restart the schedule for periodic disclosures under paragraph (1).

(IV) Prior certifications. A certification submitted under clause (i) before a change in circumstances shall not be deemed false or misleading solely by reason of subsequent reengagement under this clause.

(iii) Commission denial

(I) In general. The Commission may deny a certification submitted under clause (i) by a certification covered party by—

(aa) issuing a written notice of objection to the certification submitted under clause (i) or upon determining that more than a nominal level of entrepreneurial or managerial efforts has been undertaken by any certification covered party after the submission of the certification; and

(bb) providing to the certification covered party 10 days notice of the intent of the Commission to deny that certification, during which period interested persons shall have an opportunity to submit written data, views, and arguments relating to that certification.

(II) Requirements after notice of intent. After the 10-day period described in subclause (I)(bb), the Commission shall—

(aa) upon request of the certification covered party, provide an opportunity for the oral presentation of data, views, and arguments by any interested persons; and

(bb) have a vote of the Commission on whether to grant or deny the certification, based on a finding as to whether the applicable ancillary asset meets the standard for certification under clause (i).

(III) Final agency action. Denial under this clause constitutes final agency action reviewable under applicable law.

(iv) Deemed approval. If the Commission fails to issue a written notice of objection or non-objection within 90 days after submission of a certification under clause (i), the certification shall be deemed approved by the Commission.

(v) Withdrawal. A certification covered party may withdraw a certification submitted under clause (i) at any time before that certification is approved or denied.

(vi) Designated Commission office. The Commission shall designate an office that shall—

(I) acknowledge the receipt of certifications submitted under clause (i);

(II) support certification covered parties seeking certification under clause (i) by providing guidance regarding the mechanics of preparing and submitting those certifications; and

(III) route certifications submitted under clause (i), together with any associated comments or recommendations, to the appropriate division or office of the Commission for review.

(vii) Advance review

(I) In general. A certification covered party may submit a certification under clause (i) before the offer, sale, or distribution of a network token.

(II) Intended originator. In submitting for a certification for advance review under subclause (I), a certification covered party shall identify the person intending to offer, sell, or distribute the applicable network token, and that person shall be treated as the applicable ancillary asset originator for the purposes of this subparagraph.

(viii) Tolling. Any applicable period specified in this subparagraph may be tolled, for periods of not longer than 60 days, during the 3-year period following the effective date of the Digital Asset Market Clarity Act, upon a showing in writing that the submitting certification covered party has not substantially responded to a request for information from the Commission within a reasonable time.

(ix) Misstatements or omissions. Any material misstatement or omission to state a material fact, including with respect to continuing compliance, in a certification that has become effective under this subparagraph shall constitute grounds for the Commission, consistent with the securities laws, to—

(I) issue an order denying, suspending, or revoking the effectiveness of that certification; and

(II) pursue any appropriate enforcement action.

(4) Voluntary disclosure. An ancillary asset originator may voluntarily furnish to the Commission the information required under this subsection if the ancillary asset originator determines that it is reasonably likely that the ancillary asset originator will become subject to the requirements of paragraph (1) or (3) of subsection (c) in the future.

(5) Rulemaking considerations. In adopting rules under this subsection, the Commission shall—

(A) require only such information as the Commission finds to be necessary or appropriate to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation, innovation, and efficiency;

(B) include in any final versions of those rules a cost-benefit analysis evaluating the effects of any such rule on innovation, efficiency, competition, maintaining fair and orderly markets, and capital formation, including the competitiveness of United States market participants; and

(C) act jointly with the Commodity Futures Trading Commission to establish a process for implementing the requirements of this subsection, including with respect to listing and disclosures, that is consistent and coordinated with the listing process for digital asset intermediaries.

(6) Limitations. Rules adopted under this subsection shall not require the inclusion of financial statements of an ancillary asset originator, except with respect to the disclosure of financial information under paragraph (2).

(e) Exemptions. The Commission may, by order, exempt an ancillary asset originator or digital asset intermediary, or any class of ancillary asset originators or digital asset intermediaries, from specified requirements under subsection (d) if it is in the public interest or for the protection of investors, consistent with the purposes of this section and subject to such conditions as the Commission determines necessary to protect investors and in the public interest.

(f) Confidential treatment of certain information. Subject to Commission rules and procedures, an ancillary asset originator required to furnish to the Commission disclosures under subsection (d), or a digital asset intermediary furnishing those disclosures in lieu of such an ancillary asset originator, may submit a request for confidential treatment of information included in such disclosures pursuant to procedures the Commission shall establish and that are modeled on or identical to section 230.406 of title 17, Code of Federal Regulations, or any successor regulation.

(g) Effect of failure to comply. The failure of an ancillary asset originator or digital asset intermediary to comply with a provision of this section shall not, by itself, cause an ancillary asset offered, sold, or distributed by that ancillary asset originator (or that the ancillary asset originator caused to be offered, sold, or distributed) to be a security under any applicable law.

(h) Liability for false or misleading statements

(1) In general. It shall be unlawful for an ancillary asset originator, in any initial and periodic disclosure, certification, or other document furnished under this section, to make an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

(2) Rule of construction. Nothing in this subsection may be construed as limiting the application of section 240.10b–5 of title 17, Code of Federal Regulations, or any successor regulation, to false or misleading disclosure statements or preventing any private right of action otherwise available under the securities laws.

(i) Special disposition restrictions by related persons

(1) In general. The Commission shall adopt rules, consistent with section 104 of the Lummis-Gillibrand Responsible Financial Innovation Act of 2026, establishing limitations on the disposition of certain ancillary assets with specified characteristics by related persons.

(2) Considerations. In adopting rules under paragraph (1), the Commission shall consider what is necessary or appropriate to protect investors, promote capital formation, and maintain fair and orderly markets, which may include the prevention of insider self-dealing or other abuses of a privileged position.

(j) Safe harbor for forward-Looking statements. In any action against an ancillary asset originator or digital asset intermediary arising under this Act that is based on an untrue statement of a material fact or omission of a material fact necessary to make the statement not misleading, no liability shall arise with respect to any forward-looking statement (including any statement of plans, objectives, projections, expectations, or assumptions concerning future performance, financial position, development milestones, asset utility, system adoption, or market conditions) made in an ancillary asset disclosure, statement, or other document furnished pursuant to this section, if the statement is—

(1) identified as forward-looking; and

(2) accompanied by meaningful cautionary language that identifies important factors that could cause actual results to differ materially.

(k) Transactions before effective date

(1) Primary transactions. Notwithstanding any other provision of law, neither the Commission nor any private plaintiff may initiate, pursue, or maintain any action, or an appeal of an action, for a violation of section 5 or 12(a)(1) of this Act arising from any offer, sale, or distribution of ancillary assets occurring before the effective date of the Digital Asset Market Clarity Act, provided that the ancillary asset originator or a certification covered party complies with any applicable requirements under subsection (c)(3).

(2) Primary transactions related to fraud. Nothing in paragraph (1) shall limit the ability of the Commission to bring an action based on the anti-fraud or anti-manipulation authorities of the Commission.

(3) Secondary transactions. Notwithstanding any other provision of law, the offer, sale, or distribution of a network token by a person occurring before the effective date of the Digital Asset Market Clarity Act shall be treated as not involving the offer, sale, or distribution of a security under—

(A) section 2(a)(1);

(B) section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a));

(C) section 2(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–2(a));

(D) section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–2(a));

(E) section 16 of the Securities Investor Protection Act of 1970 (15 U.S.C. 78lll); or

(F) any applicable requirement of State law that is functionally equivalent to the provisions described in subparagraphs (A) through (E), including any provision of State law that directly or indirectly prohibits, limits, or imposes any conditions on the use, offer, sale, transfer, or disposition of a network token in a manner that is—

(i) not substantially similar to prohibitions, limitations, or conditions imposed by that State relating to assets that are commodities under the laws of that State; and

(ii) inconsistent with this section.

(4) No inference of liability. Nothing in paragraph (1), (2), or (3) may be construed as an admission, acknowledgment, or inference of liability for any act, transaction, or conduct occurring before the effective date of the Digital Asset Market Clarity Act.

(5) Rules of construction. Nothing in this subsection may be construed to—

(A) impair vested rights or contractual obligations lawfully established before the effective date of the Digital Asset Market Clarity Act; or

(B) limit the authority of the Commission to bring an action against an ancillary asset originator or a related person for securities fraud or manipulation in connection with a statement, a disclosure, or conduct by that ancillary asset originator or related person, except that the Commission may not exercise that authority to treat a network token as a security or regulate secondary market trading.

(l) Rules of construction. Nothing in this section may be construed to—

(1) preclude the Commission from bringing an appropriate action or entering into a settlement agreement relating to a violation or alleged violation of this section;

(2) permit compliance with this section to be used in any administrative or judicial proceeding as evidence that an ancillary asset is a security;

(3) prohibit the offer, sale, or distribution of a digital asset in reliance on an exemption from registration under this Act, other than Regulation Crypto (as adopted pursuant to section 103 of the Lummis-Gillibrand Responsible Financial Innovation Act of 2026); or

(4) require more than 1 person to furnish the disclosures required under subsection (d), unless otherwise provided by the Commission by rule.

(m) Anti-Evasion

(1) Anti-evasion. The Commission may issue such regulations as the Commission considers necessary or appropriate in the public interest or for the protection of investors to administer and prevent willful evasion of—

(A) this section;

(B) sections 103 and 104 of the Lummis-Gillibrand Responsible Financial Innovation Act of 2026; and

(C) with respect to an ancillary asset originator and related persons, the securities laws amended by the Lummis-Gillibrand Responsible Financial Innovation Act of 2026.

(2) Considerations. In adopting rules under this section—

(A) the form, label, and written documentation of an agreement, contract, or transaction, or an entity, shall not be dispositive in determining whether the agreement, contract, or transaction, or the entity, has been entered into or structured to willfully evade the requirements of this section;

(B) the Commission may consider whether, based on the totality of facts and circumstances, the principal purpose of any arrangement, allocation of rights, interposition of entities, or sequencing of steps is to willfully circumvent the requirements of this section or the restrictions set forth in section 104 of the Lummis-Gillibrand Responsible Financial Innovation Act of 2026, by satisfying the literal terms while defeating the purpose and policy of this section;

(C) for purposes of subparagraph (B), factors that may be considered, without being dispositive, in determining whether a principal purpose to willfully circumvent this section exists may include—

(i) removal of a disqualifying financial right described in subsection (a)(7)(B) from the instrument coupled with its re-introduction through a substantially equivalent right held by a related person or controlled vehicle, including, by way of example, any nominally independent foundation, decentralized autonomous organization, laboratory, or similar arrangement;

(ii) circular or non-commercial flows of value among related persons designed to simulate network utility; and

(iii) timing of steps designed to trigger, accelerate, or delay certification or termination of disclosure obligations without a material change in circumstances relating to the asset; and

(D) the Commission shall provide that evasion shall not have occurred if an agreement, contract, or transaction is entered into for a legitimate business purpose and is not structured with a principal purpose of willfully circumventing the requirements of this section.

(n) Fiduciary obligations

(1) Fiduciary duties under State law. Nothing in this section, or in any rule issued under this section, may be construed to limit, preempt, or otherwise affect any fiduciary duty of an ancillary asset originator, or of any director, officer, or controlling person of an ancillary asset originator, arising under the laws of any State.

(2) Preservation of fiduciary and other duties to customers, clients, and shareholders. Nothing in this section, or in any rule issued under this section, may be construed to limit, preempt, or otherwise affect any fiduciary duty that any person owes to a customer, client, or shareholder under any other provision of Federal or State law, including in connection with the offer, sale, transfer, distribution, or custody of an ancillary asset.

(o) Savings clause. Except as provided by the Digital Asset Market Clarity Act and the amendments made by that Act, nothing in this section may be construed to limit the authority of the Commission under the securities laws.