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Congress·In Committee

Bipartisan Bill Requires Crypto Exchanges to Prove They Hold Customer Assets to Prevent Fraud

PROOF Act

11 months ago·View on Congress.gov

Legislative Progress

✓ Filed
Review
Senate
House
President

Key Points

  • This bill requires cryptocurrency exchanges and companies that hold digital assets to prove they actually have the money their customers deposited. Every month, these companies must get an independent audit to show they have "proof of reserves," meaning they aren't just pretending to have the funds on hand.
  • It protects everyday crypto investors by banning exchanges from mixing customer money with their own company funds. This practice has led to major market collapses in the past where companies spent customer money on their own business deals and then could not pay people back when they tried to withdraw.
  • The goal is to make the crypto market safer and more transparent. By requiring these audit reports to be made public by the Treasury Department, investors can check for themselves if an exchange is being honest about its finances before they trust them with their savings.
  • Companies that fail to provide these monthly reports will face fines. These penalties are based on how many customers the company has or how much total money they manage, ensuring that larger companies pay more if they break the rules.
  • Before the rules start, accounting experts and the crypto industry will work together to create a formal standard for these audits. The new requirements will officially kick in once those professional standards are finalized and approved.
Economy FinanceTechnology Digital

Impact Analysis

Scores: 1 = low, 5 = highSentiment: -5 to +5 (net benefit)

Milestones

2 milestones2 actions
Apr 10, 2025Senate

Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Apr 10, 2025

Introduced in Senate

Related News

4 articles
CryptoSlate·11 months ago

Senators reintroduce legislation to tighten rules on crypto custody

U.S. Senators Thom Tillis and John Hickenlooper reintroduced the PROOF Act to prevent digital asset custodians from co-mingling customer funds. The bill mandates monthly third-party inspections of reserves, with results submitted to the Treasury Department for public disclosure.

L=
CoinGeek·11 months ago

United States senators reintroduce PROOF Act

The Proving Reserves of Others Funds (PROOF) Act aims to strengthen reserve transparency by requiring crypto firms to undergo monthly audits. Senator Tillis stated the bill would explicitly prohibit the co-mingling of funds, a direct response to the $8 billion loss seen in the FTX collapse.

C=
Bloomberg Law·about 2 months ago

Crypto’s Rules Are Here. 2026 Will Be About Making Them Work

As federal legislation like the GENIUS Act takes hold, proof-of-reserves reporting is becoming the de facto benchmark for the industry. New criteria outline core elements of compliant reports, including reconciliations between tokens outstanding and available redemption assets.

CL=

Source Information

Document Type

Congressional Bill

Official Title

PROOF Act

Bill NumberS 1405
Congress119th Congress
ChamberSenate
Latest ActionRead twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Sponsor

Cosponsors

(1)
D: 1

Analysis generated by AI. While we strive for accuracy, this should not be considered legal or professional advice. Always verify information with official government sources.