Texas proof-of-reserve bill passes Senate

Legislation that could mandate exchanges to maintain reserves “in an amount sufficient to meet all obligations to customers” brought it one step closer to reality in the state of Texas. The bill passed through a vote of the Senate and now only awaits the signature of the state’s governor.

On May 15, State Bill 1666, amending the Texan Finance Code, was voted on by the Senate after passing the state House of Representatives voting earlier this year. After three readings in the Senate, Basic lesson The bill has not made any significant changes from the previous draft.

Under the amendments, digital asset providers that serve more than 500 customers in the state and hold at least $10 million in customer funds will be prohibited from commingling customer funds with any other form of operating capital and in addition to Customer funds will also be used for other transactions. The original transaction requested by the customer.

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Also, exchanges must maintain sufficient reserves to accommodate all potential withdrawals at any given time. Within 90 days after the end of each financial year, companies are required to submit a report to the State Banking Department regarding their current liabilities towards customers.

If the provider fails to comply with the requirements, the state banking department will have the right to cancel its license.

Texas has become a region of active legislators when it comes to crypto. In addition to the “Proof of Reserves” bill, a legislative project to cut part of the cryptocurrency mining incentives was voted on by the Senate in April. At the same time, Texan lawmakers voted to amend the state’s Bill of Rights and add a provision recognizing the right of individuals to own, maintain and use digital currencies.

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