The US state of Texas has imposed a new requirement on cryptocurrency service providers in the region.
Texas passes new cryptocurrency law
The US state has passed a law that requires crypto businesses to submit proof of reserve (PoR). This law requires crypto businesses operating in Texas to be transparent about their reserves. The goal is to protect customers’ assets and guard against potential fraud. The new law also aims to provide more transparency and trust in the cryptocurrency industry.
Proof of reserve became the standard under Binance’s leadership after FTX went bankrupt in November. The main goal here is for crypto service providers, such as exchanges, to transparently prove that customers are holding their funds at a one-to-one ratio.
Texas passes Proof of Reserves law
By law, crypto businesses operating in Texas are now required to reveal their reserves transparently. In this context, the law also made it mandatory for all businesses to be checked by an auditor. The Texas Senate, which approved the law, states that this regulation will increase transparency and trust in the cryptocurrency industry.
The law also requires service providers in Texas to separate and account for customer funds separately. It also brings an annual report to the Texas Banking Department, which includes a third-party-approved “proof of reserve” report, at least quarterly for greater transparency for customers.
Gavin Fearey, a member of the Texas Blockchain Council working group, said:
Segregation and separate accounting of client funds are fundamental to the custody and trade of many types of assets in the financial sector. Recent events like FTX remind us how important these principles are.
Texas is the first state to mandate PoR
Nic Carter, another contributor to the working group, spoke about the importance of the law to Taksas
This landmark bill is a resounding endorsement of industry best practices for PoR. Texas sets a strong legislative precedent as the first state to approve the use of PoR for currency surveillance.
cryptocoin.comWe have included the latest developments about the reserves of central crypto exchanges on this page.
Texas voted to add cryptocurrencies to the state’s Bill of Rights
Last week, Texas state legislators amended the state’s Bill of Rights. To that extent, they voted to add a provision that gives individuals the right to hold and use cryptocurrencies. The decision was made on Wednesday, May 10. If the law passes and becomes law, it will give Texans the privilege to use cryptocurrencies like Bitcoin.
