• On April 21, the Texas House of Representatives passed a bill requiring cryptocurrency exchanges to maintain sufficient reserves to fulfill their clients’ payment obligations.
• The bill was aimed at “rebuilding trust in the market by requiring Proof of Reserves for digital asset exchanges.”
• 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.
Texas Passes Bill Requiring Proof of Reserves for Crypto Exchanges
The Texas House of Representatives has approved a bill on April 21 that requires cryptocurrency exchanges to maintain sufficient reserves to fulfill their clients’ payment obligations. This bill was introduced by State Rep. Giovanni Capriglione with the intention to “rebuild trust in the market by requiring Proof of Reserves for digital asset exchanges.“
Aims To Protect Citizens
Perianne Boring, Founder and CEO of the Chamber of Digital Commerce, expressed her congratulations towards Rep. Capriglione and the Texas House of Representatives for approving this law which seeks to protect citizens from financial issues caused by exchanges while addressing a critical problem like Proof Of Reserves. She believes that this approval represents an essential step in ensuring the stability and security of the digital asset market.
What Is „Proof Of Reserve“?
Proof Of Reserve is an accounting practice used by cryptocurrency companies to prove they have enough funds available to cover all customer deposits or liabilities associated with said company’s activities. It involves publishing proof that there are more funds than liabilities within its system, effectively verifying liquidity levels and allowing customers to trust it is solvent enough to meet its obligations when requested.
Why Is This Important?
This type of legislation is necessary as many customers who invest in cryptocurrencies do so without any assurance that funds will be returned if something were to happen with said exchange or service provider – such as what happened with FTX recently when it had trouble fulfilling its obligations due to lack funds availability or mismanagement on its part.. By having these types of regulations in place, it helps protect customers from being taken advantage off or scammed out their money since it mandates transparency between companies and their customers about how much money is available in reserve should anything happen unexpectedly.
The passing HB 166 bill is an important step forward in providing investors more protection when dealing with cryptocurrencies while also instilling trust within crypto-exchanges so people feel safe investing in them knowing there are measures put into place should something go wrong down road .