Crypto consumer protection, proof of reserves bills introduced into US Congress

United States Congressman Ritchie Torres has introduced bills successful the House of Representatives to prohibit misuse of lawsuit funds by cryptocurrency exchanges and to necessitate exchanges disclose impervious of reserves to the Securities and Exchange Commission (SEC). The abbreviated bills are intended to supplement different authorities that is passed connected cryptocurrency, Torres said. 

Torres introduced the bills, which person the titles of “Crypto Consumer Investor Protection Act’’ and “Crypto Exchange Disclosure Act,’’ connected Dec. 1. The bills are precise short. In copies obtained from Torres’ office, the assemblage of the archetypal bill, introduced arsenic H.R. 9241, reads:

“A cryptocurrency speech whitethorn not lend, leverage, oregon co-mingle the funds of a lawsuit without the consent of specified customer.”

The 2nd bill, H.R. 9242, reads:

“A cryptocurrency speech that holds assets connected behalf of customers shall periodically (as determined by the Securities and Exchange Commission) disclose to the Securities and Exchange Commission accusation relating to impervious of reserves of the exchange, including, with respect to the speech astatine the clip of the disclosure, the magnitude of assets held by the speech compared to the liabilities of the exchange.”

The bills person been referred to the House Financial Services Committee.

U.S. Rep. Ritchie Torres of New York introduces 2 bills that would make caller guardrails for cryptocurrency exchanges arsenic effect to illness of FTX exchangehttps://t.co/uVevNgxMyV

— New York Daily News (@NYDailyNews) December 5, 2022

“Crypto has a spot successful the American economy, but it indispensable beryllium cautiously regulated,” Torres said astatine a property league dedicated to the bills. He has a grounds of enactment for crypto, which includes authoring an editorial connected the “liberal case” for crypto successful a New York newspaper. On Dec. 5, he wrote a missive requesting a Government Accountability Office reappraisal of “the SEC’s nonaccomplishment to support the investing nationalist from the egregious mismanagement and malfeasance of FTX."

Related: US lawmaker questions large crypto exchanges connected user extortion amid FTX collapse

There are respective bills that Torres’ authorities mightiness beryllium matched with, including 1 drafted by Maxine Waters and Patrick Henry, presently the seat and ranking member, respectively, of the House Financial Services. Torres is besides a subordinate of that committee. In November, blockchain analytics institution Chainalysis compiled a database of 20 bills earlier the U.S. Congress that could impact cryptocurrency.