‘Proof of Reserve’ bill passes in Texas House of Representatives

The Texas House of Representatives approved a measure that would necessitate crypto exchanges to support reserves “in an magnitude capable to fulfill each obligations to customers” connected April 20.

Should the bill walk the Senate and person the governor’s signature, it could go instrumentality by September 1, 2023. 

The measure introduces amendments to the Texan Finance Code, namely to its Section 160. According to these amendments, integer plus providers that service much than 500 customers successful the authorities and person astatine slightest $10 cardinal of lawsuit funds would beryllium restricted from comingling the lawsuit funds with immoderate different benignant of operational superior and utilizing lawsuit funds for immoderate different transactions too the archetypal transaction, demanded by the customer.

Related: Advocates knock measure removing crypto mining incentives

In addition, the supplier would person to clasp reserves successful an magnitude capable to instantly fto each the imaginable withdrawals. It should besides “create a plan” to let auditors to reappraisal the accusation made disposable to the customer.

By the 90th time aft the extremity of each fiscal year, an speech volition request to record a study astir its outstanding liability to customers with the State Banking Department. The study should besides see and attestation by the auditor.

If the supplier fails to comply with the requirements, the Banking Department would person a close to revoke its license.

In the aftermath of 2022’s marketplace failures, Texas took a cautious attack toward crypto. On April 12, the state’s Senate approved a measure aimed astatine mostly removing incentives for section crypto miners.