1. Short title This Act may be cited as the Proving Reserves Of Others’ Funds Act or the PROOF Act . 2. Definitions In this Act: (1) Covered asset (A) In general The term covered asset means, with respect to a customer of a digital exchange, money, an asset, or property of the customer. (B) Exceptions (i) Proprietary funds The term covered asset does not include proprietary funds of a digital exchange. (ii) Margin accounts If a customer of a digital exchange has opened a margin account for the purposes of borrowing cash or digital assets, or other related activity, the assets in that margin account are not covered assets. (2) Digital asset The term digital asset means any digital representation of value that is recorded on a cryptographically secured digital ledger. (3) Digital commodity The term digital commodity means any form of fungible and intangible personal property that— (A) can be— (i) exclusively possessed; and (ii) transferred from a person to another person without necessary reliance on an intermediary; and (B) is not an investment contract. (4) Digital custodian (A) In general The term digital custodian means an entity that holds, maintains, or safeguards digital commodities, digital assets, and other assets on behalf of a customer. (B) Exception Any entity facilitating clearing or settling services of a covered asset on behalf of a customer shall not be considered to be a digital custodian of that covered asset for the duration of the clearing or settling process. (5) Digital exchange The term digital exchange means a trading facility that lists for trading not less than 1 digital commodity or digital asset. (6) Digital wallet The term digital wallet means any device, physical medium, program, or service that stores a digital asset or digital commodity. (7) Investment contract (A) In general The term investment contract means a contract— (i) that provides for an investment of money in an enterprise with a sponsor