Ritchie Torres Proposes Consumer Protection Bills for Cryptocurrency Exchanges

Ritchie Torres Takes Action

In a bold move to safeguard consumers in the wild world of cryptocurrency, U.S. Representative Ritchie Torres has introduced two bills aimed at preventing the misuse of customer funds by cryptocurrency exchanges. Dubbed the “Crypto Consumer Investor Protection Act” and the “Crypto Exchange Disclosure Act,” these proposals focus on transparency and customer consent.

Key Features of the Bills

The bills, presented on December 1, are concise yet impactful. The first bill, H.R. 9241, straightforwardly states:

“A cryptocurrency exchange may not lend, leverage, or co-mingle the funds of a customer without the consent of such customer.”

This essentially prohibits exchanges from playing fast and loose with your hard-earned crypto without first getting your thumbs up.

Proof of Reserves Requirement

The second bill, H.R. 9242, aims to hold cryptocurrency exchanges accountable for the assets they claim to hold. It stipulates that they must:

• Regularly disclose information about their reserves and liabilities.
• Provide this information to the Securities and Exchange Commission (SEC) as determined.

Torres believes this will encourage trust in the industry while helping prevent another FTX debacle, which taught us all a thing or two about the risks of speculation without substance.

Why Now?

Following the dramatic collapse of FTX, Torres is advocating for stricter regulations in an industry that has been, shall we say, a little too loosey-goosey with financial practices. “Crypto has a place in the American economy, but it must be carefully regulated,” Torres emphasized during a recent press conference, clearly indicating that the days of unregulated crypto growth are numbered.

Collaborative Efforts

These bills are not alone in the legislative gym. They could complement other proposed regulations, particularly those drafted by House Financial Services Chair Maxine Waters and ranking member Patrick Henry. Torres, a member of that committee, looks to build a robust framework that can help protect investors in the often dizzying crypto landscape.

A Unified Approach to Regulation

In November, Chainalysis released a list of 20 bills before Congress that could impact the cryptocurrency scene. Torres’ initiatives could provide vital guardrails as part of a comprehensive approach to regulation. After all, with great power (and profit) comes great responsibility.

Conclusion

As the legislative landscape evolves, the introduction of these bills marks a significant step forward in prioritizing consumer protection in cryptocurrency. It’s an addition to the conversation that reflects the pressing need for accountability in this rapidly developing industry.