Sponsors (2)
The bill improves customer protections, transparency, and regulatory clarity for digital-asset custody through ownership rules, attestations, and enforcement, but does so at the cost of substantial compliance burdens (especially for smaller firms), remaining exceptions and narrow definitional gaps that can leave some assets unprotected, and technical and enforcement uncertainties for industry participants.
Retail and business customers of crypto exchanges and custodians gain clearer property rights and stronger legal protections because platforms must hold and account for crypto assets as belonging to customers, reducing the risk of loss or misuse.
Customers get significantly greater transparency into platform reserves and liabilities through required independent attestations and cryptographic proofs (e.g., proofs of possession/control and liability reports), helping detect misclassification or missing assets.
Standardized attestation rules (PCAOB/AICPA-approved) and authorization of civil penalties increase public confidence and market integrity by creating uniform audit expectations and enforcement mechanisms.
Smaller exchanges and custodians face significant compliance costs (monthly attestations, cryptographic proofs, auditing), which could raise user fees, squeeze margins, or push some firms out of business, reducing competition and choice.
Certain asset types (e.g., margin accounts and proprietary exchange funds) are excluded from the bill's 'covered assets' protections, leaving those customer assets with weaker legal safeguards.
A narrow definition of 'investment contract' tied to sponsor managerial efforts could allow some tokens to avoid securities regulation, weakening investor protections and creating regulatory arbitrage.
Based on analysis of 4 sections of legislative text.
Requires digital exchanges and custodians to produce monthly independent proof-of-reserves attestations, stop commingling customer assets, and publish cryptographic proof reports.
Official title: Impose requirements on digital exchanges, and for other purposes.
Introduced April 10, 2025 by Thomas Roland Tillis · Last progress April 10, 2025
Requires digital-asset trading platforms and custodians to prove and publish that they actually hold customers’ assets. The bill defines covered assets and digital-asset industry terms, bars commingling or using customer assets for margin or third-party obligations (with narrow exceptions), and creates a monthly independent attestation regime plus public reporting of cryptographic proof of reserves and liabilities. It directs standard-setting bodies and accounting authorities to produce an approved attestation standard and gives the Treasury Office of Domestic Finance authority to publish reports and impose civil penalties for violations.