PROOF Act

The PROOF Act (S 3087) requires digital exchanges and digital custodians to prove they hold customer assets (like cryptocurrency or digital funds) separately from their own money. It mandates monthly independent audits showing cryptographic proof of reserves (verifying assets exist and are owned by customers) and liabilities, with reports made public. Non-compliance triggers tiered civil penalties - up to $0.90 per user or 0.9% of assets under management - scaled by the number of violations in a 24-month period. The law applies to platforms handling digital assets (e.g., crypto exchanges) and takes effect after an industry-standard audit framework is approved.