A proof-of-reserve bill requiring exchanges to maintain reserves “sufficient to fulfil all obligations to customers” is one step closer to becoming law in Texas. The state Senate approved the bill on May 15, awaiting only the governor’s permission.
Earlier this year, the Texas House of Representatives approved House Bill 1666, which amends the Texas Finance Code. After three readings in the Senate, the bill’s text has remained the same as the original draft.
Under the amendments, digital asset providers with at least $10 million in customer funds and more than 500 customers in the state would be prohibited from commingling customer funds with other types of operational capital and using customer funds for transactions other than the original transaction requested by the customer.
In addition, exchanges must maintain sufficient reserves to facilitate all potential withdrawals. Within ninety days of the end of each fiscal year, companies must submit a report to the Texas Department of Banking detailing their extant customer liability.
The department can revoke the provider’s license if it fails to comply with the requirements.
Texas is a region with forward-thinking legislators regarding crypto. In addition to the proof-of-reserves measure, the Senate voted to limit cryptocurrency mining incentives in April.
Concurrently, Texan legislators voted to add a provision to the state’s Bill of Rights recognizing the right of individuals to possess, retain, and utilize digital currencies.
