New Texas Bill Requires Crypto Exchanges Provide Proof Of Reserves
The state of Texas has taken a step towards greater transparency in the cryptocurrency industry by passing a new bill that requires digital asset service providers to provide their proof of reserves. The Texas House of Representatives passed the bill on Thursday, which is a significant move towards transparency between crypto exchanges and their users.
JUST IN: 🇺🇸 Texas passes bill requiring #crypto exchanges to provide proof of reserves.
— Watcher.Guru (@WatcherGuru) April 20, 2023
Mandatory Proof of Reserve
Under the new bill, digital asset service providers must file a report with the Texas Department of Banking within 90 days of the end of each fiscal year. The report must include an attestation by the provider of their outstanding liability to digital asset customers, evidence of customer assets held by the person, and an attestation by an auditor that the information in the report is true and accurate. Additionally, the report must include a copy of the provider’s plan to allow auditors and customers to view the accounting of digital assets quarterly and the customer’s digital assets at any time. The information must be documented using zero-knowledge encryption or a similar industry standard.
Gaining Investor Confidence
The bill has been well-received by multiple users who see it as a positive step towards greater transparency in the crypto industry, rather than heavily regulating or banning exchanges altogether. The move could also lead to more investors and traders feeling confident in using crypto exchanges that provide proof of their reserves, which could ultimately lead to greater adoption of cryptocurrencies.
The Texas House of Representatives’ decision to approve the new bill is a clear signal that the state is taking a proactive approach to regulating the crypto industry while also balancing the need for innovation and transparency. It remains to be seen how other states and countries will respond to the growing demand for greater transparency and regulation in the crypto space. However, Texas has taken a significant step forward in this regard, and it will be interesting to see how the crypto industry responds to this new bill.
