US Congress introduces crypto consumer protection and proof-of-reserves bill


The bills were introduced by Ritchie Torres, a New York Democrat, to supplement more comprehensive legislation earlier in the month. There was little fanfare. News Own this piece of crypto-history. Collect this article as NFTUnited States Representative Ritchie Torres introduced bills in the House of Representatives that would prohibit the misuse of customer funds by cryptocurrency exchanges and require them to show proof of reserves to Securities and Exchange Commission. Torres stated that the bills are meant to complement other legislation regarding cryptocurrency. Torres introduced the bills with the titles “Crypto Consumer Investor Protection Act” and “Crypto Exchange Disclosure Act” on December 1. These bills are very brief. The first bill, H.R. H.R. 9241 reads: “A cryptocurrency exchange cannot lend, leverage, and co-mingle funds of a client without such customer’s consent.” H.R. 9242 is the second bill. It states that an exchange that holds assets on behalf of customers must periodically (as determined by the Securities and Exchange Commission) disclose to the Securities and Exchange Commission information relating to proof of reserves of the exchange, including the amount of assets held by the exchange compared with the liabilities of the exchange. H.R. 9242 is the second bill. It reads: “A cryptocurrency exchange that holds assets for customers shall periodically (as deemed by the Securities and Exchange Commission), disclose to the Securities and Exchange Commission information related to proof of reserves of exchange, including with respect to exchange at the time, the amount of assets by the exchange relative to the liabilities of exchange.” These bills were referred to House Financial Services Committee. U.S. Rep. Ritchie Torres of New York introduces two bills that would create new guardrails for cryptocurrency exchanges as response to collapse of FTX exchange– New York Daily News (@NYDailyNews) December 5, 2022
Torres stated that crypto has a place in America’s economy, but that it must be carefully controlled. He has a history of supporting crypto, including an editorial in New York on the “liberal case for crypto”. He wrote a Dec. 5 letter asking for a Government Accountability Office review on “the failure of the SEC to protect the investing public against the egregious malfeasance and mismanagement of FTX. “Related”: US lawmaker questions major crypto-exchanges about consumer protection in the wake of FTX collapse. There are several bills Torres’ legislation could be matched with, including one drafted and signed by Maxine Waters, House Financial Services Chair, and Patrick Henry. Torres is also a member. Chainalysis, a blockchain analytics company, compiled a list 20 bills that could impact cryptocurrency in November.


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