Bills Aimed at Protecting Crypto Consumers and Enforcing Proof-of-Reserves Brought to US Congress
Author:Earlier this month, Ritchie Torres, a New York Democrat, introduced two short bills, aiming to supplement more comprehensive legislation, with very little attention.
Ritchie Torres, United States Representative, has proposed two bills in the House of Representatives to prevent misconduct involving customer funds from cryptocurrency exchanges, as well as to mandate that the exchanges give evidence of their funds to the Securities and Exchange Commission. Torres noted that these short bills will work in tandem with existing cryptocurrency laws.
Torres introduced the bills, which have the titles of “Crypto Consumer Investor Protection Act’’ and “Crypto Exchange Disclosure Act,’’ on Dec. 1. The bills are very short. In copies obtained from Torres’ office, the body of the first bill, H.R. 9241, reads:
“A cryptocurrency exchange may not lend, leverage, or co-mingle the funds of a customer without the consent of such customer.”
The second bill, H.R. 9242, reads:
“A cryptocurrency exchange that holds assets on behalf of customers shall 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, with respect to the exchange at the time of the disclosure, the amount of assets held by the exchange compared to the liabilities of the exchange.”
The bills have been referred to the House Financial Services Committee.
At a press conference regarding the proposed bills, Torres stated that "Crypto has a place in the American economy, but it must be carefully regulated." He has an established record of being in favor of crypto and has written an editorial advocating the ''liberal case'' for crypto in a New York newspaper. On December 5th, he sent a letter requesting a study from the Government Accountability Office to examine “the SEC’s failure to protect the investing public from the egregious mismanagement and malfeasance of FTX."