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.”
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Source: https://blockworks.co/news/texas-proof-of-reserves-bill-advances-to-senate