Top Summary
This section amends the Commodity Exchange Act to exclude certain decentralized finance (DeFi) activities from its jurisdiction, exempting actions such as compiling network transactions, operating nodes, providing user interfaces for blockchain data access, developing blockchain systems, maintaining DeFi protocols, and creating tools for personal digital asset custody. However, it explicitly preserves the authority of the Commission to enforce anti-fraud, anti-manipulation, and false reporting provisions.
Original Bill Text:
SEC. 409.Exclusion for decentralized finance activities.
The Commodity Exchange Act (7 U.S.C. 1 et seq.), as amended by the preceding provisions of this Act, is amended by inserting after section 4u the following:
“SEC. 4v.Decentralized finance activities not subject to this Act.
“(a) In general.—Notwithstanding any other provision of this Act, a person shall not be subject to this Act and the regulations promulgated under this Act based on the person directly or indirectly engaging in any of the following activities, whether singly or in combination, in relation to the operation of a blockchain system or in relation to decentralized finance trading protocol:
“(1) Compiling network transactions or relaying, searching, sequencing, validating, or acting in a similar capacity.
“(2) Providing computational work, operating a node or oracle service, or procuring, offering, or utilizing network bandwidth, or other similar incidental services.
“(3) Providing a user-interface that enables a user to read, and access data about a blockchain system.
“(4) Developing, publishing, or otherwise distributing a blockchain system or a decentralized finance messaging system.
“(5) Constituting, administering, or maintaining a decentralized finance messaging system or decentralized finance trading protocol, or operating or participating in a liquidity pool with respect thereto, for the purpose of executing a spot transaction for the purchase or sale of a digital commodity.
“(6) Developing, publishing, constituting, administering, maintaining, or otherwise distributing software or systems that create or deploy hardware or software, including wallets or other systems, facilitating an individual user’s own personal ability to keep, safeguard, or custody the user’s digital assets or related private keys.
“(b) Exceptions.—Subsection (a) shall not be interpreted to apply to the anti-fraud, anti-manipulation, or false reporting enforcement authorities of the Commission.”.