Crypto Funds at Risk? Senators Push PROOF Act to Stop Co-Mingling!

U.S. Senators Push for Crypto Transparency with PROOF Act

U.S. Senators Thom Tillis and John Hickenlooper have reintroduced the Proving Reserves of Others Funds Act. This bipartisan bill aims to stop crypto custodians from mixing customer assets with company funds.

The PROOF Act, first introduced in 2023, mandates monthly third-party audits to ensure crypto firms hold enough assets to cover customer liabilities. Audit results would be sent to the U.S. Treasury department and made public. Non-compliance would result in civil penalties. This measure aims to prevent another FTX-like disaster, where customer funds were misused and led to billions in losses.

Senator Tillis believes the bill will “build trust” in digital markets by banning fund co-mingling and enhancing reserve transparency. Hickenlooper calls it “commonsense,” holding crypto firms to the same standards as traditional financial institutions.The reintroduction of the PROOF Act is part of ongoing efforts to create a comprehensive regulatory framework for digital assets.