Digital Asset Market Clarity Act

(a) Definitions. In this section:

(1) Covered agency. The term covered agency means any State or Federal law enforcement agency, including the Department of the Treasury.

(2) Covered person. The term covered person means a person that is—

(A) a permitted payment stablecoin issuer;

(B) a foreign payment stablecoin issuer (as defined in section 2 of the GENIUS Act (12 U.S.C. 5901)) registered with the Office of the Comptroller of the Currency pursuant to section 18(c) of that Act (12 U.S.C. 5916(c)); or

(C) a digital asset service provider, as that term is defined in section 2 of the GENIUS Act (12 U.S.C. 5901).

(3) Payment stablecoin; permitted payment stablecoin issuer. The terms payment stablecoin and permitted payment stablecoin issuer have the meanings given those terms in section 2 of the GENIUS Act (12 U.S.C. 5901).

(4) Qualified written request. The term qualified written request means a written communication issued by an authorized official of a covered agency that—

(A) identifies a specific wallet, address, account, or transaction reasonably suspected of being linked to illicit activity;

(B) requests a covered person initiate an action with respect to the specified wallet, address, account, or transaction reasonably suspected of being linked to illicit activity, including delaying the execution of a transaction, conversion, or withdrawal involving digital assets; and

(C) includes a designated agency contact.

(5) Temporary hold. The term temporary hold means a restriction applied by a covered person that delays execution of a transaction, conversion, or withdrawal involving digital assets for a reasonable period of time, not to exceed 30 calendar days, which may be extended for an additional 150 calendar days pursuant to a qualified written request.

(b) Protection from private causes of action

(1) In general. Any covered person that, in good faith and in compliance with this section, or any person complying with a temporary lawful order under subsection (c) that, voluntarily implements a temporary hold shall not be held liable pursuant to any Federal or State private right of action for implementing the temporary hold, provided that—

(A) the covered person or other person, as applicable—

(i) implements the temporary hold based on a reasonable belief the transaction, conversion, or withdrawal relates to a violation or attempted violation of State or Federal law; or

(ii) implements the temporary hold after receiving a qualified written request from a covered agency;

(B) the covered person—

(i) makes reasonable efforts to notify the affected customer of the temporary hold;

(ii) reasonably determines that notification would impede actual or potential law enforcement efforts; or

(iii) receives a qualified written request from a covered agency that requests notification not be attempted; and

(C) the covered person notifies as soon as reasonably practicable an appropriate State or Federal law enforcement agency or the Federal Trade Commission, provided that such notification is not required when the covered person has received a qualified written request from a covered agency.

(2) Documentation. A covered person shall—

(A) maintain for the 3-year period following the implementation of a temporary hold documentation of the basis for applying a temporary hold; and

(B) make available the documentation described in subparagraph (A) upon the request of a covered agency or the Federal Trade Commission.

(c) Compliance with temporary lawful orders. A permitted payment stablecoin issuer shall comply with any valid writ, process, order, rule, decree, command, or other requirement issued or promulgated under Federal law by a court of competent jurisdiction that—

(1) requires a person to freeze or prevent the transfer of payment stablecoins;

(2) specifies the payment stablecoins or accounts subject to blocking with reasonable particularity; and

(3) is subject to judicial or administrative review or appeal, as provided by law.

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

(1) compel or require any covered person to take action to freeze, seize, or block digital assets that is not otherwise required under existing Federal or State law, as in effect on the day before the date of enactment of this Act;

(2) limit or alter the authority of any government agency, including with respect to authority to pursue enforcement actions;

(3) limit or affect the application of—

(A) section 5318(g)(3) of title 31, United States Code, and any regulation requiring any financial institution to report suspicious activity; or

(B) any lawful authority to seize or freeze assets pursuant to a lawful order or sanctions designation; or

(4) limit the ability of a covered person to apply a temporary hold to any wallet, address, account, or transaction located outside the United States.

(e) Reporting. The Attorney General and the Federal Trade Commission may issue regulations or guidance relating to any notification by covered persons pursuant to this section to the Department of Justice and the Federal Trade Commission, respectively.