Rep. Giovanni Capriglione (R-98) has filed HB 1666, a bill “relating to the commingling of funds by digital asset service providers.”
This bill is intended to protect Texas consumers’ investments in digital assets, according to an emailed news release.
“Over 8.5 million Texans have invested in cryptocurrencies and other digital assets, the vast majority of which are held by third-party custodial account holders which facilitate the trade,” said Capriglione.
“Recently, multiple companies have betrayed the trust of their consumers by commingling investor funds with corporate assets, leading consumers to lose billions in their investments. HB 1666 would make it clear that any company that wishes to hold digital assets of Texas residents must verify to the Texas Department of Banking that they do not, and will not, commingle consumer funds with corporate assets. Additionally, these companies must prove that they are maintaining adequate reserves so consumers can access their funds.”
Capriglione is a proponent of modernization with a background in technology and finance. He is the chair of the Innovation and Technology Caucus in the Texas Legislature and also the chair of the Joint Oversight Committee on Investment in Information Technology Improvement and Modernization Projects.
“This bill is a product of months of conversations with stakeholders, consumer advocates, and many of my colleagues. I am proud that we have the support of the Texas Blockchain Council and can work together to restore consumer confidence in the blockchain economy,” he said.
Lee Bratcher, president of the Texas Blockchain Council, said that “the poor risk management practices demonstrated by multiple digital asset exchanges have severely damaged our industry. We at the Texas Blockchain Council are committed to ensuring custodial account holders do not commingle consumer funds and maintain adequate proof of reserves. The Texas Blockchain Council will continue to advocate for safe and secure methods of custody, including our ongoing educational efforts to promote self-custody of digital assets.”
