Key Takeaways
- Both Texas’ House and Senate voted in favor to require digital asset service suppliers to have audited proof-of-reserves, defending clients’ belongings.
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Texas is ready to develop into the primary state within the United States to cross a invoice requiring digital asset service suppliers, comparable to crypto exchanges, to keep proof of reserves. The invoice, House Bill 1666, was accepted by the Texas Senate on May 15, handed within the Texas House on May 18 and can head to the governor’s desk for closing approval.
The invoice requires crypto exchanges that serve greater than 500 clients in Texas and have no less than $10 million in buyer funds to segregate buyer funds from their very own operational funds and to present proof of reserves to the Texas Department of Banking on an annual foundation. Along with that:
“A digital asset service provider may not maintain customer funds in such a manner that a digital asset customer may be unable to fully withdraw the customer’s funds.”
The invoice is designed to defend shoppers from fraud and be certain that they’ve entry to their funds after they want them. A yearly audit can be necessary, and operational funds shall not be paid for with the shopper’s cash. This comes proper after Texas’ House handed laws that will add the appropriate to use cryptocurrency within the Texas Bill of Rights.
The Texas Chamber of Digital Commerce supported the invoice upon Bill 1666’s first draft in February 2023, stating in a help letter:
“Chamber has advocated that this standard of transparency, which requires verification that a custodian holds that appropriate reserve backing the digital asset for the customer, must be implemented and enforced.”
Another trade supporter of Bill 1666, President of the Texas Blockchain Council Lee Bratcher, took to Twitter to express his pleasure concerning the invoice, saying that “with the passage of HB 1666, Texas is continuing to demonstrate that we are the leader in blockchain and digital asset innovation.”
While Texas Governor Greg Abbot nonetheless has to resolve on the invoice’s destiny, it could be a serious victory for the crypto trade in Texas. Pierre Rochard, vp of analysis at Riot Platforms and among the many few who testified in entrance of Texas State Congress in favor of this invoice, supported the passing of the invoice, tweeting:
“Texas is Bitcoin Country!”