The Texas House of Representatives has passed a bill requiring cryptocurrency exchanges to maintain sufficient reserves to fulfill their clients' payment obligations. The "HB 166" bill filed by State Rep. Giovanni Capriglione aims to rebuild trust in the market by requiring Proof of Reserves for digital asset exchanges. Proof of Reserves is a process by which a cryptocurrency exchange demonstrates that it holds sufficient funds to cover customer deposits, which can protect customers' assets and increase trust in the exchange.

Thanks to this new law, Texas aims to protect citizens from financial issues caused by exchanges while addressing a critical problem like Proof of Reserves. The Proof of Reserves requirement would prevent exchanges from being used to commit fraud or scams like FTX, categorized as one of the largest financial frauds in US history.