U.S. government employees are now barred from writing crypto policies if they are invested

Stock image of Bitcoin and US Dollars

The value of cryptocurrencies fluctuates arguably more than fiat currency based on global events. We have seen mere tweets tank and inflate the value of even the most valuable of cryptocurrencies. As such, the U.S. government has now decided that employees who have invested in cryptocurrencies cannot participate in the formulation of laws in this area.

As CoinDesk notes, this information comes via a legal advisory published by the U.S. Office of Government Ethics (OGE). OGE had previously stated that cryptocurrencies do not fall under the "publicly traded securities" umbrella, which includes common stock, preferred stock, corporate bond, municipal security, long-term Federal Government security, and limited partnership interest. As such, the de minimis exemption does not apply on them.

Moving forward, a U.S. government employee who owns any amount of cryptocurrency or stablecoin cannot participate in the lawmaking process for cryptocurrencies. This is because any action they take would have a direct impact on their holdings, and would thus be a conflict of interest.

The advisory also mentions that:

[...] Stock interests in companies engaged in the development of cryptocurrency or stablecoins or related services are covered by these regulatory exemptions, so long as they are "publicly traded securities". However, these regulatory exemptions do not apply to equity ownership in private companies engaged in the cryptocurrency and stablecoin field.

[...] Employees may participate in certain particular matters in which they have a disqualifying financial interest arising from holdings in a mutual fund under regulatory exemptions. An employee may participate in any particular matter affecting one or more holdings of a diversified mutual fund when the disqualifying financial interest arises from ownership of the fund. In addition, an employee may participate in a particular matter affecting one or more holdings of a sector mutual fund when the disqualifying financial interest arises from ownership of the fund so long as the aggregate value of all sector funds held by the employee in the same sector is less than $50,000.

[...] Finally, OGE wants to emphasize that, although it is sometimes possible to identify whether a fund is a diversified or sector fund based on the fund name, a number of similarly named blockchain and digital asset funds have adopted widely divergent investment strategies, resulting in some qualifying as sector funds and some as diversified funds. As a result, agencies will "need to look beyond the fund name to the prospectus" to determine the actual investment strategy of the fund.

The new advisory applies to all White House officials and employees engaged in the federal sector, with those who require further clarifications being asked to contact the OGE Desk Officer.

Source: OGE via CoinDesk

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