Digital Taxonomy Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 2154 To authorize additional appropriations to the Federal Trade Commission to prevent unfair or deceptive acts or practices relating to digital tokens and transactions relating to digital tokens, and to require a report to Congress on the Commission’s actions related to digital tokens. IN THE HOUSE OF REPRESENTATIVES APRIL 9, 2019 Mr. SOTO (for himself and Mr. DAVIDSON of Ohio) introduced the following bill; which was referred to the Committee on Energy and Commerce A BILL To authorize additional appropriations to the Federal Trade Commission to prevent unfair or deceptive acts or prac- tices relating to digital tokens and transactions relating to digital tokens, and to require a report to Congress on the Commission’s actions related to digital tokens. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Digital Taxonomy Act 4 of 2019’’. 5 VerDate Sep 11 2014 02:48 Apr 17, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2154.IH H2154 kjohnson on DSK79L0C42 with BILLS 2 •HR 2154 IH SEC. 2. AUTHORIZATION OF APPROPRIATIONS TO PREVENT 1 UNFAIR OR DECEPTIVE ACTS OR PRACTICES 2 RELATING TO DIGITAL TOKENS. 3 There is authorized to be appropriated to the Federal 4 Trade Commission $25,000,000 for each of fiscal years 5 2020 through 2024 to prevent unfair or deceptive acts or 6 practices in transactions relating to digital tokens pursu- 7 ant to section 5 of the Federal Trade Commission Act (15 8 U.S.C. 45). 9 SEC. 3. DEFINITION OF DIGITAL TOKENS. 10 As used in this Act— 11 (1) the term ‘‘digital token’’ means a digital 12 unit— 13 (A) that is programmed with rules that 14 govern its creation, supply, ownership, use, and 15 transfer, where such rules are designed to resist 16 modification or tampering by any single person 17 or persons under common control; 18 (B) that has a transaction history that— 19 (i) is recorded in a distributed, digital 20 ledger or digital data structure in which 21 consensus is achieved through a mathe- 22 matically verifiable process; and 23 (ii) after consensus is reached, is de- 24 signed to resist modification or tampering 25 VerDate Sep 11 2014 02:48 Apr 17, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2154.IH H2154 kjohnson on DSK79L0C42 with BILLS 3 •HR 2154 IH by any single person or persons under 1 common control; 2 (C) that is capable of being transferred be- 3 tween persons in a decentralized fashion with- 4 out an intermediate custodian; and 5 (D) that is not a representation of a finan- 6 cial interest in a company or partnership, in- 7 cluding an ownership or debt interest or rev- 8 enue share; and 9 (2) the term ‘‘digital unit’’— 10 (A) means a representation of economic, 11 proprietary, or access rights that is stored in a 12 computer-readable format; and 13 (B) does not include a store of value. 14 SEC. 4. REPORT TO CONGRESS. 15 Beginning one year after the date of enactment of 16 this Act and each year thereafter, the Federal Trade Com- 17 mission shall transmit a report to the Committee on En- 18 ergy and Commerce of the House of Representatives and 19 the Committee on Commerce, Science, and Transportation 20 of the Senate of— 21 (1) any actions taken by the Commission relat- 22 ing to unfair or deceptive acts or practices in trans- 23 actions relating to digital tokens; 24 VerDate Sep 11 2014 02:48 Apr 17, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2154.IH H2154 kjohnson on DSK79L0C42 with BILLS 4 •HR 2154 IH (2) the Commission’s plan to prevent unfair or 1 deceptive acts or practices relating to digital tokens; 2 and 3 (3) any recommendations by the Commission 4 for legislation that would to improve the ability of 5 the Commission and other relevant Federal agen- 6 cies— 7 (A) to further protect consumers from un- 8 fair or deceptive acts or practices in the digital 9 token marketplace; and 10 (B) to promote the competitiveness of the 11 United States and promote innovation of busi- 12 nesses in the global digital token sector. 13 SEC. 5. PRESERVATION OF AUTHORITY. 14 Nothing in this Act shall supersede the authority of 15 the Commodity Futures Trading Commission nor prevent 16 the treatment of digital tokens as commodities subject to 17 the Commodity Exchange Act (7 U.S.C. 1a et seq.). 18 Æ VerDate Sep 11 2014 02:48 Apr 17, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\H2154.IH H2154 kjohnson on DSK79L0C42 with BILLS