Sponsors
11 Republican
Thom TillisSenator · NC
This bill, known as the PROOF Act, establishes requirements for digital exchanges and custodians regarding customer asset protection and transparency. It mandates that these entities implement accounting standards, segregate customer funds, and obtain monthly attestations of proof of reserves and liabilities from independent auditors. The bill also defines "digital commodity" and "investment contract," clarifying that certain digital assets, including those from decentralized autonomous organizations (DAOs), are not automatically considered investment contracts. Enforcement is handled by the Treasury's Office of Domestic Finance, with civil penalties for non-compliance.
This bill provides significant regulatory clarity for digital exchanges and custodians, addressing a major trust deficit in the crypto industry following past insolvencies. By mandating the segregation of customer assets and requiring auditable proof of reserves and liabilities using crypto-native methods like Merkle trees and zero-knowledge proofs, it establishes specific, actionable 'rules of the road.' This framework helps reduce ambiguity for builders and users, protecting ordinary access by fostering a more secure and transparent environment for custodial services. The explicit definition of "digital commodity" and clarification that DAO membership alone does not constitute an investment contract further contributes to legal certainty. While imposing compliance burdens and penalties, these measures are designed to enable lawful, trustworthy crypto activity rather than restrict it, directly supporting the long-term health and legitimacy of the industry. The involvement of industry in developing the attestation standards is also a positive indicator, suggesting a tailored and informed regulatory approach.
Every member who has sponsored, cosponsored or voted on this bill. Pick a vote to see how each member voted on it, or narrow by party, name or state.
1 Republican
1 Democrat
