1. Short title This Act may be cited as the Token Taxonomy Act . 2. Securities Act of 1933 (a) Definition of digital token Section 2(a) of the Securities Act of 1933 ( 15 U.S.C. 77b(a) ) is amended by adding at the end the following: (20) Digital token The term digital token means a digital unit that— (A) is created— (i) in response to the verification or collection of proposed transactions; (ii) pursuant to rules for the digital unit’s creation and supply that cannot be altered by a single person or group of persons under common control; or (iii) as an initial allocation of digital units that will otherwise be created in accordance with clause (i) or (ii); (B) has a transaction history that— (i) is recorded in a distributed, digital ledger or digital data structure in which consensus is achieved through a mathematically verifiable process; and (ii) after consensus is reached, cannot be materially altered by a single person or group of persons under common control; (C) is capable of being traded or transferred between persons without an intermediate custodian; and (D) is not a representation of a financial interest in a company, including an ownership or debt interest or revenue share. (21) Digital unit The term digital unit means a representation of economic, proprietary, or access rights that is stored in a computer-readable format. . (b) Definition of security Section 2(a)(1) of the Securities Act of 1933 ( 15 U.S.C. 77b(a)(1) ) is amended— (1) by inserting (A) after (1) ; and (2) by adding at the end the following: (B) Such term does not include a digital token. . (c) Exemption Section 4(a) of the Securities Act of 1933 ( 15 U.S.C. 77d(a) ) is amended by adding at the end the following: (8) Transactions involving the development, offer, or sale of a digital unit if— (A) the person developing, offering, or selling the digital unit has a reasonable and good faith belief that such digital unit is a digital token