The Texas House of Representatives approved a bill on April 20 requiring cryptocurrency exchanges to maintain reserves “sufficient to meet all obligations to customers.”
If the bill passes the Senate and gets the governor's signature, it will become law on Sept. 1. The act introduced an amendment to the Texas Finance Code, known as Section 160. Under the amendment, digital asset providers that serve more than 500 clients in the state and have at least $10 million in client funds will be restricted from combining client funds with any other type of operating funds and using client funds for purposes other than those requested by the client Any other transaction other than the original transaction.
In addition, the provider must hold a sufficient amount of reserves to allow all possible withdrawals immediately. It should also "establish a program" to allow auditors to review information provided to clients. On the 90th day after the end of each financial year, the exchange is required to submit a report to the National Banking Department on its outstanding liabilities to clients. The report shall also include the auditor's certification.
If a supplier fails to comply with the requirements, the Banking Department will have the right to revoke its license. After market failure in 2022, Texas is taking a cautious approach to cryptocurrencies. On April 12, the state Senate approved a bill aimed at removal incentives for local cryptocurrency miners.
