In Texas, House Bill 1666 is on the governor’s desk, which regulates cryptocurrency digital asset providers. Many Texans have invested in cryptocurrency and use apps like Robinhood or Coinbase to trade or invest in digital currency. The issue is that the industry is unregulated, and this bill by State Rep. Giovanni Capriglione will guarantee that people’s money is safe from fraud and theft.
We have seen cases of digital asset providers taking money from customers, like what happened with FTX. The leaders are still facing litigation after being accused of taking billions of dollars.
HB 1666 will require digital asset service providers to verify in a yearly report to the Department of Banking that they are:
– Maintaining reserves sufficient to fulfill their obligations to consumers;
– Ensuring customers can withdraw their funds at any time;
– Allowing consumers to view any outstanding liabilities owed to the digital asset customer and any assets held in custody by the digital asset service provider;
– Storing reserves in either an omnibus account where customers’ digital assets are not strictly segregated from each other or in the digital asset corresponding to customers’ obligations;
– Not commingling customer funds with funds belonging to the digital asset service provider.
The bill passed unanimously in both chambers. Capriglione said that this regulation of crypto will make Texans more comfortable knowing that their investments are being watched and managed with an audit trail protecting assets. If the bill is signed by Gov. Greg Abbott, it will become law in 2024. Penalties for non-compliance include the loss of a transmission license or criminal charges. Capriglione hopes the federal government will also lightly regulate cryptocurrency.