88(R) SB 770 - Introduced version - Bill Text

	88R10139 MLH-F
	By:  Parker	S.B.  No.  770

Statutes affected:
Introduced: ()

	A BILL TO BE ENTITLED
	AN ACT
	relating to the commingling of funds by digital asset service
	providers.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION  1.    Subtitle E, Title 3, Finance Code, is amended by
	adding Chapter 160 to read as follows:
	CHAPTER 160. DIGITAL ASSET SERVICE PROVIDERS
	Sec.  160.001.    DEFINITIONS. In this chapter:
	(1)    "Customer funds" means the digital assets, fiat
	currency, or other property of a digital asset customer.
	(2)    "Department" means the Texas Department of
	Banking.
	(3)    "Digital asset" means a natively electronic asset
	that confers economic, proprietary, or access rights and is
	recorded or stored in a blockchain, cryptographically secured
	distributed ledger, or similar technology, and includes:
	(A)    a digital asset that the laws of any country
	consider to be legal tender; or
	(B)    virtual currency as defined by Section
	12.001, Business & Commerce Code.
	(4)    "Digital asset customer" means a person who
	deposits fiat currency or a digital asset with a digital asset
	service provider.
	(5)    "Digital asset service provider" means an
	electronic platform that facilitates the trading of digital assets
	on behalf of a digital asset customer and maintains custody of the
	customer's digital assets.
	Sec.  160.002.    APPLICABILITY. (a) This chapter applies to a
	digital asset service provider in this state that:
	(1)    serves more than 500 digital asset customers in
	this state; or
	(2)    has at least $10 million in customer funds.
	(b)    This chapter does not apply to:
	(1)    a bank, as defined by Section 31.002;
	(2)    an institutional trading division or accredited
	investor division of a digital asset service provider; or
	(3)    an institution excluded by rule from this chapter
	by the banking commissioner of Texas.
	Sec.  160.003.    DUTIES OF DIGITAL ASSET SERVICE PROVIDERS.
	(a) A digital asset service provider may not:
	(1)    commingle customer funds with funds belonging to
	the digital asset service provider, including the digital asset
	service provider's:
	(A)    operating capital;
	(B)    proprietary accounts;
	(C)    digital assets;
	(D)    fiat currency; or
	(E)    other property that is not customer funds;
	(2)    use customer funds to secure or guarantee a
	transaction other than a transaction for the customer contributing
	the funds;
	(3)    maintain customer funds in such a manner that a
	digital asset customer may be unable to fully withdraw the
	customer's funds; or
	(4)    invest in an obligation not listed under
	Subsection (b)(2).
	(b)    In addition to any other requirements under state law, a
	digital asset service provider shall maintain reserves in an amount
	sufficient to fulfill all obligations to digital asset customers.
	These reserves may be held:
	(1)    in a commingled account in which digital assets of
	digital asset customers are not strictly segregated from each
	other; or