The state of Texas continues to implement laws regarding the cryptocurrency sector.
In a move to protect crypto customers, the Texas House of Representatives passed a bill mandating crypto exchanges to hold adequate reserves to cover all customer-related commitments.
The bill was approved on April 20th. It is worth noting that if the proposal receives approval from Senate and gets the green light from the governor, it could become law by September 1st, 2023.
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The proposed changes bring adjustments to the Texan Finance Code Section 160. According to the possible legislation, crypto exchanges catering to over 500 clients within the state and holding a minimum of $10 million in customer assets would have to follow certain rules.
In particular, the new bill would bar crypto exchanges from mixing customer funds with other operational capital or using the funds for purposes other than customer-requested transactions.
Furthermore, exchanges would be obligated to maintain reserves sufficient to enable all potential withdrawals instantly. The companies would also need to "create a plan" allowing auditors to examine the information provided to customers.
At the end of each fiscal year, crypto exchanges would have to submit a report to the State Banking Department detailing their liabilities to customers, along with an auditor's attestation.
Based on the bill, failure to comply with all requirements could lead to the Banking Department revoking the crypto exchange's license.
In recent months, Texas has adopted a careful attitude toward cryptocurrencies. The state's Senate approved a bill on April 12th, primarily aimed at eliminating incentives for local crypto miners.
The Texas House of Representatives' approval of the "Proof of Reserve" bill signals a growing focus on consumer protection and regulatory oversight within the state's burgeoning crypto landscape.
