Utah continues to make strides in its quest to create a strategic Bitcoin (BTC) reserve, as the state’s Blockchain and Digital Innovation Amendments bill – also known as H.B. 230 – cleared its first reading in the Senate yesterday, and has now moved to the Senate Revenue and Taxation Committee for further consideration.

Utah Bitcoin Reserve Bill Passes First Reading In Senate

In a major development that could strengthen Bitcoin’s position as a mainstream store of value, Utah’s H.B. 230 bill has successfully cleared its first reading in the state Senate. According to the official bill tracker, the proposal has now advanced to the Senate Revenue and Taxation Committee, where it will undergo further review before potentially moving to the next stage of the legislative process.

To recall, Utah Representative Jordan Teuscher introduced H.B. 230 on January 21. The bill passed the House in the same month with an 8-1 vote before proceeding to the Senate for its first reading on February 7. 

If enacted, the bill would authorize the state treasurer to allocate up to 5% of public funds for investment in “qualifying digital assets.” According to the bill’s criteria, these assets must have maintained a market capitalization of more than $500 billion over the past 12 months and must not be a stablecoin.

Under these strict requirements, Bitcoin is currently the only asset that qualifies. The leading cryptocurrency commands a total market cap of over $1.9 trillion, whereas Ethereum (ETH), the second-largest digital asset by market capitalization, stands at approximately $327 billion, falling short of the proposed $500 billion threshold. 

If the bill is enacted, it is expected to go into effect on May 7. Commenting on the legislation’s development, Teuscher wrote in a recent X post:

Thrilled to join with @Dennis_Porter_ to announce HB230 which will allow the state to invest in digital assets. While Utah is the 11th state to introduce similar legislation, we will be the first to pass it. Utah continues to lead the nation in blockchain and digital innovation!

Various States Working Toward BTC Adoption

Teuscher’s statement reflects the broader movement among several US states to incorporate Bitcoin into their financial strategies. Utah is not alone in considering Bitcoin reserves, as more than 25 different states have introduced similar legislative measures aimed at creating a strategic Bitcoin reserve.

In May 2024, New Hampshire State Representative Keith Ammon proposed diversifying the state’s financial reserves by investing in Bitcoin exchange-traded funds (ETFs). Later in October, Florida’s Chief Financial Officer, Jimmy Patronis, urged the state’s pension fund managers to explore Bitcoin investments as part of a broader strategy to strengthen financial resilience.

Similar bills have been introduced in other states, including Alabama, Massachusetts, South Dakota, Ohio, and Oklahoma. At press time, BTC trades at $96,075, up 0.6% in the past 24 hours.

Featured Image from Unsplash.com, Charts from Bitcoinlaws and TradingView.com

John Reed Stark has pointed out that one of the causes of a rising risk in crypto security is the US SEC cutting back on enforcement activities. This includes a latest attack on crypto trading platform Bybit which compromised and stole $1.5 billion belonging to customers.

The attack, which analysts describe as the largest crypto heist in history, has raised concerns about the lack of regulatory safeguards protecting investors.

US SEC Criticized as Bybit Hack Highlights Security Gaps

According to a recent post on X, Stark criticized the US SEC’s decision to roll back enforcement actions against cryptocurrency platforms. He pointed out that Bybit’s security breach is a direct consequence of weak regulatory oversight, leaving investors unprotected against sophisticated cyberattacks.

The attack on Bybit has been linked to North Korea’s Lazarus Group, a state-sponsored hacking collective known for targeting cryptocurrency exchanges. Analysts at blockchain forensics firm Elliptic reported that the group has stolen billions in crypto over the years, using complex laundering methods to fund North Korea’s missile programs. Without strict cybersecurity requirements enforced by the US SEC, exchanges remain vulnerable to such threats.

EX SEC John Reed Stark added,

“For crypto-exchanges, there’s no regulatory oversight; no consumer protections; no net capital requirements; no licensure of individuals; no US audits, inspections or examinations; no segregation of customer funds; no insurance, no cybersecurity requirements; no transparency; no accountability; no SEC/FDIC/OCC/etc. engagement and the list goes on”

Bybit’s $1.5 Billion Hack Exposes Risks

The Bybit hack has sparked concerns about the broader security risks in the crypto industry. Crypto exchanges lack oversight, unlike traditional financial institutions. They have no mandatory audits, capital reserves, or customer asset protection.

Bybit has responded by securing bridge loans to cover losses and working to recover the stolen assets. However, experts remain skeptical about the likelihood of successful recovery. This incident underscores how the absence of SEC enforcement leaves crypto investors exposed to large-scale losses with no regulatory safeguards.

With the US SEC pulling back from crypto-related investigations and enforcement, investors are left without key protections. The lack of insurance, consumer safeguards, and oversight mechanisms means that customers impacted by breaches like the Bybit hack have limited options for recovering their funds.

As the US SEC changes its regulatory stance, critics raise concerns. They argue that offshore crypto exchanges may still operate with weak security. This regulatory gap increases the risk of further large-scale hacks, placing investors at continued financial risk.

The US SEC decision to halt enforcement actions has sparked debates on crypto regulation. Ongoing cases against major exchanges are now on hold. Some industry participants see reduced oversight as a way to promote innovation. Others warn it increases risks of fraud, security breaches, and financial instability.

Following the recent crypto hack, Bybit has launched a $140 million recovery bounty to track and reclaim stolen funds. The exchange is offering rewards to individuals or organizations that provide information leading to the identification of hackers.

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Ronny Mugendi

Ronny Mugendi is a seasoned crypto journalist with four years of professional experience, having contributed significantly to various media outlets on cryptocurrency trends and technologies. With over 4000 published articles across various media outlets, he aims to inform, educate and introduce more people to the Blockchain and DeFi world. Outside of his journalism career, Ronny enjoys the thrill of bike riding, exploring new trails and landscapes.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.