Texas proof-of-reserve bill passes through the Senate
The legislation that could oblige exchanges to maintain reserves “in an amount sufficient to fulfill all obligations to customers” made it one step closer to reality in the state of Texas. The bill passed through a Senate vote and now awaits only the state governor’s signature.
On May 15, state bill 1666, amending the Texan Finance Code, was voted in by Senate after passing the state House of Representatives voting earlier this year. After three readings in the Senate, the text of the bill hasn’t experienced any significant changes from the previous draft.
Under the amendments, digital asset providers that serve more than 500 customers in the state and have at least $10 million of customer funds would be restricted from comingling the customer funds with any other type of operational capital and using customer funds for any further transactions besides the original transaction demanded by the customer.
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Also, the exchanges must maintain reserves sufficient to accommodate all potential withdrawals at any given moment. Within 90 days following the conclusion of each fiscal year, the companies are required to submit a report to the State Banking Department regarding their existing liability to customers.
Should the provider fail to comply with the requirements, the state’s Banking Department would have a right to revoke its license.
Texas became an area of proactive legislators when it comes to crypto. Apart from the “Proof of Reserve” bill, the legislative project to cut part of the crypto mining incentives was voted in 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 possess, retain and utilize digital currencies.
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