Digital Asset Market Clarity Act

(a) Adoption of Regulation Crypto. The Commission shall adopt rules under the Securities Act of 1933 (15 U.S.C. 77a et seq.) and the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), which shall be referred to collectively as Regulation Crypto, to implement subsections (b), (c), and (d) of this section.

(b) Exemption for certain transactions involving ancillary assets

(1) Exemption

(A) In general. Rules adopted by the Commission under this section shall provide that the registration requirements of the Securities Act of 1933 (15 U.S.C. 77a et seq.) shall not apply to an offer, sale, or distribution of an investment contract involving an ancillary asset, if the offer, sale, or distribution does not exceed the greater of—

(i) $50,000,000 in gross proceeds per calendar year for a period of not longer than 4 years; or

(ii) 10 percent of the total dollar value of those ancillary assets that are outstanding, as of the date of that offer, sale, or distribution.

(B) Continued application of certain provisions. Sections 12(a)(2) and 17 of the Securities Act of 1933 (15 U.S.C. 77l(a)(2), 77q) shall apply with respect to an offer, sale, or distribution of an investment contract involving an ancillary asset that is described in subparagraph (A).

(2) Limitation. An ancillary asset originator may not raise more than $200,000,000 in total gross proceeds in reliance on the rules adopted under subsection (a).

(3) Review and adjustment for inflation

(A) In general. Not later than 2 years after the date of enactment of this Act, and every 2 years thereafter, the Commission shall—

(i) review the amounts described in paragraphs (1)(A)(i) and (2);

(ii) adjust the amounts described in paragraphs (1)(A)(i) and (2) to account for inflation; and

(iii) increase the amounts described in paragraphs (1)(A)(i) and (2) as the Commission determines appropriate, if that action would be in the public interest and consistent with the protection of investors.

(B) Report. If the Commission, after conducting a review under subparagraph (A), determines not to increase the amount described in paragraph (1)(A)(i) or (2) (other than to adjust that amount for inflation, as required under subparagraph (A)(ii) of this paragraph), the Commission shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report detailing the reasons that the Commission did not increase that amount.

(c) Conditions for exemption. The following conditions shall apply to the exemption provided under subsection (b):

(1) Initial disclosures. Not later than 30 days before the date on which the applicable ancillary asset originator, any affiliate of the ancillary asset originator, or any underwriter of an investment contract, offers, sells, or distributes an ancillary asset in reliance on the rules adopted under subsection (a), the ancillary asset originator shall furnish to the Commission the disclosures required under section 4B(d) of the Securities Act of 1933, as added by this Act, subject to the periodic semiannual disclosure requirements of that section.

(2) Coordinated control. If the applicable ancillary asset is reliant on a distributed ledger system that, together with that ancillary asset, is subject to coordinated control, including by related persons, the restrictions on disposition under section 104 shall apply.

(3) Criteria. The applicable ancillary asset originator may not be—

(A) a company that is not organized under, and subject to, the laws of a State or territory of the United States or the District of Columbia;

(B) a development-stage company that either—

(i) has no specific business plan or purpose; or

(ii) has indicated that the business plan of the company is to merge with or acquire an unidentified company;

(C) an investment company (as defined in section 3(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–3(a))) or a company (as defined in section 2 of that Act (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)), provided that, solely for the purposes of evaluating eligibility to rely on the exemption provided under subsection (b), an ancillary asset originator shall not be deemed to be an investment company solely by virtue of investing, reinvesting, owning, holding, or trading ancillary assets, including ancillary assets offered for sale by the ancillary asset originator;

(D) a person issuing fractional undivided interests in other commodities;

(E) a person that is or has been subject to any order of the Commission entered pursuant to section 12(j) of the Securities Exchange Act of 1934 (15 U.S.C. 78l(j)) after the date of enactment of this Act and during the 5-year period preceding the offer and sale;

(F) a person that is or has been disqualified pursuant to section 230.506(d) of title 17, Code of Federal Regulations, or any successor regulation, unless waived by order of the Commission;

(G) a person that is or has been disqualified pursuant to section 230.251 through 230.263 of title 17, Code of Federal Regulations (commonly referred to as Regulation A), or any successor regulations, unless waived by order of the Commission; or

(H) a person convicted of a felony offense involving insider trading, embezzlement, cybercrime, money laundering, financing of terrorism, or financial fraud, within the last 10 years.

(4) Furnishing notice of reliance. The applicable ancillary asset originator shall electronically furnish to the Commission a notice of reliance on the rules adopted under subsection (a) not fewer than 30 days before the date on which the ancillary asset originator first offers, sells, or distributes an ancillary asset in reliance on those rules, which shall contain the following information:

(A) The name of the ancillary asset originator.

(B) A statement by a person duly authorized by the ancillary asset originator that the conditions of those rules are satisfied.

(C) The website where the summary documents of the ancillary asset originator, if any, may be found and made available for public consumption.

(D) An email address at which the ancillary asset originator may be contacted.

(5) Public availability. The Commission shall require that the disclosures furnished to the Commission under section 4B(d) of the Securities Act of 1933, as added by this Act, be made publicly available in a manner that provides timely and continuing access.

(6) Form and manner. The disclosures furnished to the Commission under section 4B(d) of the Securities Act of 1933, as added by this Act, shall be prepared, furnished, and made public in the form and manner prescribed by the Commission, including through the use of electronic furnishing, web posting, machine-readable formats, and plain-English legends, as the Commission determines necessary or appropriate in the public interest or for the protection of investors.

(d) Status under securities laws

(1) In general. A disclosure furnished under section 4B of the Securities Act of 1933, as added by this Act, including an initial or periodic disclosure furnished under subsection (d) of such section 4B, and any other document furnished under the rules adopted under subsection (a) of this section, shall be deemed to be—

(A) a prospectus solely—

(i) for purposes of section 12(a)(2) of the Securities Act of 1933 (15 U.S.C. 77l(a)(2)); and

(ii) with respect to the person that is the purchasing party in a transaction made in reliance on the rules adopted under subsection (a); and

(B) a statement solely for purposes of—

(i) section 17(a) of the Securities Act of 1933 (15 U.S.C. 77q(a));

(ii) section 10(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78j(b)); and

(iii) section 240.10b–5 of title 17, Code of Federal Regulations, or any successor regulation.

(2) Registration statement

(A) In general. A disclosure furnished under section 4B of the Securities Act of 1933, as added by this Act, including an initial or periodic disclosure furnished under subsection (d) of such section 4B, or any other document furnished pursuant to the rules adopted under subsection (a), shall not be deemed to be a registration statement for purposes of section 11 of the Securities Act of 1933 (15 U.S.C. 77k) or to have been filed under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).

(B) Civil liability. Liability under section 12(a)(2) of the Securities Act of 1933 (15 U.S.C. 77l(a)(2)) relating to a disclosure furnished under section 4B of the Securities Act of 1933, as added by this Act, including an initial or periodic disclosure furnished under subsection (d) of such section 4B, or any other document furnished pursuant to the rules adopted under subsection (a), shall only apply to the person making statements in that disclosure or other document, and only a person that purchased an ancillary asset in a transaction involving disclosures provided pursuant to the rules adopted under subsection (a) shall have a claim under such section 12(a)(2).

(3) Forward-looking statements. In any action against an ancillary asset originator under this title or the amendments made by this title 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 a statement of plans, objectives, projections, expectations, or assumptions concerning future performance, financial position, development milestones, digital asset utility, system adoption, or market conditions) made in a disclosure, statement, or other document furnished pursuant to section 4B of the Securities Act of 1933, as added by this Act, including an initial or periodic disclosure furnished under subsection (d) of such section 4B, or furnished under this section, if the statement is—

(A) identified as forward-looking; and

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