Texas ‘Proof of Reserves’ Bill Advances to Senate

The bill focuses on digital asset providers who have $10 million in customer funds or over 500 customers

article-image

vladm/Shutterstock modified by Blockworks

share

Texas will advance its Proof of Reserves bill to the Senate following a majority vote in the House of Representatives.

The bill could become law by September 1 if it passes the Senate vote and is signed by Governor Greg Abbott.

The bill defines a digital asset company as a company that has over 500 customers and $10 million in customer funds. The customer assets, if the bill passes, would be required to be held in a reserve. 

Exchanges would be required to file a report to show evidence of customer assets–which can be attested to by an auditor–to the Texas Banking Department. 

The report would also include “outstanding liabilities” owed to the customers of the exchange.

Non-compliance would give the Banking Department the authority to revoke the license of the digital asset company.

The bill comes after the collapses of multiple crypto lenders–including Voyager, Celsius and BlockFi–in 2022, as well as the collapse of FTX.

In each collapse, customer assets were frozen for a period of time. The bill would ensure that reserves are maintained so that the exchanges can fulfill all customer obligations. 

Texas is also taking steps to cut incentives for bitcoin miners operating in the state. The bill must also pass a Senate vote before being signed by the governor. 

However, the bill is facing pushback from bitcoin miners and the larger crypto community in the Lone Star State. Pierre Rochard, VP of Research at Riot, tweeted that the bill is “bad for rural jobs and economic growth.”


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (1).jpg

Research

In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.

article-image

BUZZ holds shares of Coinbase, Robinhood and MicroStrategy

article-image

Opinion: Even though I didn’t pay for my “Diamond Hands” burger with BTC, don’t let that fool you into thinking that crypto’s development is futile

article-image

The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally

article-image

While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders

article-image

Trading volumes totalled $154 billion in Q4, including $125 billion in institutional volume

article-image

DeFi on Bitcoin is all the rage right now and Stacks is positioned to benefit