HB 1666 will become law in 2024 pending the governor's signature.
AUSTIN, Texas — House Bill 1666, which regulates cryptocurrency digital asset providers, is on the governor's desk.
If you are one of the millions of Texans who have invested in cryptocurrency, odds are you have an app like Robinhood or Coinbase on your phone to exchange or invest in digital currency.
Cryptocurrency is relatively new, and a big concern with the industry is it's unregulated. HB 1666, by State Rep. Giovanni Capriglione (R-Southlake), would make sure your money isn't caught up in fraud and stolen by these companies.
We've seen it happen before with many digital asset providers, but notably what used to be one of the largest cryptocurrency exchange platforms, FTX. The leaders of that company are still facing litigation after being accused of taking billions of dollars from customers.
HB 1666 will require digital asset service providers to verify in a yearly report to the Department of Banking that they are:
- Maintaining reserves sufficient to fulfill their obligations to consumers;
- Ensuring customers are able to withdraw their funds at any time;
- Allowing consumers to view any outstanding liabilities owed to the digital asset customer and any assets held in custody by the digital asset service provider;
- Storing reserves in either an omnibus account where customers’ digital assets are not strictly segregated from each other or in the digital asset corresponding to customers’ obligations.
- Not commingling customer funds with funds belonging to the digital asset service provider.
The bill passed unanimously in both chambers.
Texas could be one of the first U.S. states to regulate cryptocurrency pending Gov. Signature.
It would require digital asset providers like Coinbase to:
- maintain enough funds to ensure customers can withdraw their assets.
- eliminate co-mingling of funds
-A yearly audit
— Daranesha Herron (@Daraneshatv) May 29, 2023
"You will be comfortable knowing that when you invest online, when you're buying cryptos, when you're trading it, when you're selling, those assets are being watched, that they are being managed, and that there's an audit trail that protects those assets," Capriglione said.
Failure to comply would lead to punishments ranging from a loss of transmission license or criminal charges.
Capriglione said cryptocurrency is being regulated all over the world, but Texas would be the first state to regulate it in the U.S. He hopes the federal government will follow suit and lightly regulate cryptocurrency.
If Gov. Greg Abbott signs off on the bill, it will become law in 2024.
FAQs
The notice states that Texas state-chartered banks are authorized to provide cryptocurrency services as long as the bank follows “adequate” protocols. To be adequate, protocols must comply with applicable law and effectively manage the risks associated with cryptocurrency trading.
Do states regulate cryptocurrency? ›
Cryptocurrency sales are only regulated if the sale constitutes a sale of a security under state or federal law or if the sale is considered a money transmission under state law, making the person a money services business (MSB) under Federal law.
What is the best state in the US for crypto? ›
Arizona, Florida, Wyoming, and Texas are considered crypto tax friendly states due to their favorable tax policies, exemptions, and incentives for crypto businesses, while states like California, Hawaii, and New York have high state taxes and regulations that may be less favorable for individuals and the crypto ...
Why can't i buy crypto in Texas? ›
Due to the regulatory clarity and legality of bitcoin in Texas, it is extremely easy to purchase crypto assets in this state. Any of the major exchanges that operate in the United States will be happy to take customers from this state.
What is the Texas Constitution on crypto? ›
United States state legislators in Texas have voted to amend the state's Bill of Rights and add a provision recognizing the right of individuals to possess, retain and utilize digital currencies. The decision was made on Wednesday, May 10.
Is there no crypto tax in Texas? ›
Texas residents, however, have the advantage of no state tax rules, which removes the burden of income taxes for crypto holders. Other ways include reducing the capital gains taxes by holding crypto assets for over 12 months. This qualifies the holder for lower capital gains taxes based on the 2024 rate.
What does regulating crypto mean? ›
Cryptocurrency regulations across jurisdictions can range from detailed rules designed to support blockchain users to outright bans on the trading or use of cryptocurrencies. Digital asset regulations may address how digital money is created, bought, sold, and traded.
Will crypto become regulated? ›
The European Union introduced the world's first comprehensive cryptocurrency regulations in May 2023, known as the Markets in Crytpo-Assets Regulation (MiCA). The European Security and Markets Authority is currently in a consultation process with the public on a number of measures.
Which crypto is legal in the USA? ›
As of March 2024, bitcoin was legal in the U.S., Japan, the U.K., and most other developed countries. In general, it is necessary to look at laws in specific countries. In the U.S., the IRS considers bitcoin and other cryptocurrencies property, issuing appropriate tax treatment guidelines for taxpayers.
What state has no crypto tax? ›
However, there is no tax for simply owning cryptocurrency. What states have no crypto tax? Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming have no state income taxes (although New Hampshire and Tennessee tax interest and dividends while Washington taxes capital gains).
Coinbase is the largest U.S.-based cryptocurrency exchange, trading more than 200 cryptocurrencies. Its fees, however, can be confusing and higher than some competitors.
Which bank is crypto friendly in USA? ›
Best Crypto-friendly Banks in the USA
- Revolut Fintech Innovation for All-in-One Finance. Revolut, a UK-based fintech company, redefines traditional banking through its innovative mobile app, seamlessly integrating comprehensive cryptocurrency services. ...
- Wirex. ...
- Juno. ...
- Monzo. ...
- Ally Bank. ...
- BankProv. ...
- Cash App. ...
- Quontic.
In 2021, Texas became one of the first states to amend its version of the Uniform Commercial Code, or UCC, to define “virtual currency” and explicitly set forth how to perfect a security interest in cryptocurrency.
Can you buy a house in Texas with cryptocurrency? ›
A Texas startup is allowing people to buy real estate with cryptocurrency through its platform. MyEListing launched a website where people can use bitcoin or ether to buy Texas-based commercial and residential properties listed on the site.
Is Texas a good place to mine crypto? ›
Over the last few years, Texas has become a global leader in crypto mining because miners can access cheap energy and land there, as well as benefit from friendly tax laws and regulation.
How can I trade crypto in Texas? ›
Exchanges such as Coinbase, Binance, and Kraken allow users to buy Bitcoin using a credit or debit card, bank transfer, or wire transfer. These exchanges often have lower fees than Bitcoin ATMs and do not have transaction limits.
Is crypto com allowed in Texas? ›
Popular exchanges available in Texas include: Coinbase. Crypto.com App. Gemini.
Can you buy a house with crypto in Texas? ›
No, FHA doesn't allow a direct purchase with cryptocurrency. You can sell your crypto assets and use the cash proceeds from the sale toward your down payment on an FHA loan. But the crypto asset must have been in your digital wallet for at least 60 days prior to the sale. Do mortgage lenders look at cryptocurrency?
Is trading in crypto illegal? ›
Is Cryptocurrency In India Legal or Not? Cryptocurrencies as a payment medium in India are not regulated by any central authority. There are no rules and regulations or any guidelines laid down for settling disputes while dealing with cryptocurrency. So, trading in cryptocurrency is done at investors' risk.
