The U.S. House of Representatives Committee on Ethics released a memorandum this week that provides new guidance for how House members should handle disclosures about their cryptocurrency holdings. The new rules will require representatives who own more than $1,000 in cryptocurrency to publicly disclose those assets.
Financial disclosure has been required for decades. The Ethics in Government Act of 1978 (EIGA) required legislators to provide details about investments, real estate, and other holdings. Within the last decade, those ethical rules were expanded to cover assets like stocks and bonds. Now, those representatives will need to report crypt assets as well.
In addition to disclosing those assets, the lawmakers will also be required to report cryptocurrency transactions that exceed $1,000. To comply with the rules, those disclosures must be made within 45 days of the transaction in accord with the STOCK Act. The Committee concluded that cryptocurrencies are subject to that Act’s transaction reporting requirements after determining that digital currencies should be considered as “other forms of security” for these purposes:
“After careful review of this issue, the Committee recently determined that it is appropriate to consider cryptocurrencies "other forms of securities" for purposes of the EIGA and financial disclosure with respect to individuals who are subject to financial disclosure requirements and who file their reports with the Clerk of the House.”
Meanwhile, the Committee chose not to issue strict guidance for House members who might want to participate in initial coin offerings (ICOs), citing a lack of clarity on the issue. Instead, they encouraged those members to contact the Ethics Committee for individual guidance before they take part in any coin offering.
The new guidelines also directed members to avoid cryptocurrency insider trading and noted that income earned from cryptocurrency mining is subject to rules limiting members’ outside income to no more than $28,050 per year.