Texas is looking for ways to avoid the next FTX scenario, by requiring proof of reserves for every registered crypto exchange.
On April 21, the Texas House of Representatives approved a bill requiring cryptocurrency exchanges to maintain sufficient reserves to fulfill their clients’ payment obligations.
Texas Aims to Protect Citizens
Perianne Boring, Founder and CEO of the Chamber of Digital Commerce, congratulated Rep. Capriglione and the Texas House of Representatives for approving a law aimed at protecting citizens from financial issues caused by exchanges while addressing a critical problem like Proof of Reserves.
“Congratulations to Rep. Giovanni Capriglione (R-TX) and the Texas House of Representatives on the passage of HB 1666, which seeks to protect Texas consumers’ investments in digital assets and addresses the critical issue of Proof of Reserves for exchanges.
She also stated that the approval of the HB 166 bill “represents an essential step in ensuring the stability and security of the digital asset market.” Similarly, she emphasized the importance of requiring exchanges to provide Proof of Reserves, proving their ability to cover all user funds.
“The Proof of Reserves requirement in this bill is exactly what should be required by custodians to demonstrate that they hold sufficient assets to cover all customer deposits.”
Texas Becomes a Regulatory Role Model
Thanks to this new law, the state of Texas has become a regulatory role model for other US jurisdictions, possibly being replicated or used as a template to improve regulations that continue to be a problem for cryptocurrency exchanges.