The legislation would oblige exchanges to maintain reserves “ in a quantum sufficient to fulfill all obligations to customers. ”
Legislation that could necessitate exchanges to maintain reserves “ in a quantum sufficient to fulfill all obligations to customers ” has framed it one move closer to becoming law in Texas. On May 15, the bill passed a vote in the state Senate and presently awaits simply the governor’s signature.
Texas House Bill 1666, amending the Texan finance code, was transferred through the state’s House of Representatives before this year. After three readings in the Senate, the text of the bill hasn’t experienced any meaningful changes from the previous draft.
Under the amendments, digital asset providers serving additional than 500 customers in the state, with at least $10 million of customer funds, would be restricted from comingling the customer funds with any different type of operational capital and utilizing customer funds for any further deals besides the original transaction demanded by the customer.
Related: Bitcoin advocates rally at Texas State Capitol to oppose bill cutting mining incentives
Similarly, the exchanges must maintain reserves sufficient to accommodate all potential withdrawals at any given moment. Within 90 days succeeding each fiscal year’s conclusion, companies must submit a report to the Texas Department of Banking regarding their existing liability to customers.
Should the provider fail to comply with the necessities, the department would have a right to revoke its license.
Texas is an area of proactive legislators when it comes to crypto. Apart from the proof- of- reserves bill, the Senate shifted to limit 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, adding a provision recognizing the right of individuals to possess, retain and utilize digital currencies.
(DAVID ATTLEE, Cointelegraph, 2023)