Lawmakers Must Disclose Cryptocurrency Holdings Exceeding $1K, Says US House Ethics Committee

ICO News, News | June 21, 2018 By:

US House of Representative members will now be required to disclose holdings of cryptocurrencies that exceed $1,000.

In a memo published on June 18, the House Ethics Committee advised lawmakers that they must inlcude crypto holdings worth more than $1,000 in their annual financial disclosure report and reveal any transactions that exceed $1,000 within 45 days of the purchase or sale of the virtual asset.

Under the Ethics in Government Act of 1978 (EIGA), house members, officers and certain employees are required to file a Financial Disclosure Statement (FD Statement) at least once a year. They are also to required report certain transactions twice – once on the filer’s annual FD Statement, as before, and once closer in time to the transaction. The types of transactions subject to the Stop Trading on Congressional Knowledge Act of 2012 (STOCK Act) requirement are any purchase, sale, or exchange by a filer, their spouse, or dependent child of “stocks, bonds, commodities futures, and other forms of securities” if the amount of the transaction exceeds a certain threshold.

The Ethics Committee said 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.

“The Committee has determined that with respect to financial disclosure, cryptocurrencies will be treated as an “other forms of securities” and are therefore subject to reporting both on a financial disclosure filer’s ammal Financial Disclosure Statement and on Periodic Transaction Rep011s (PTRs) throughout the year,” the committee said.

The Ethics Committee also encouraged lawmakers to contact the committee for guidance before they participate in initial coin offerings. According to the committee, the STOCK Act prohibited House members from participating in initial public offerings (IPO) in a manner “other than is available to members of the public generally.”

“At this time, the SEC indicated that it is continuing to review ICOs and to assess how existing securities laws and regulations apply to them,” the committee said. “The SEC has halted an ICO that it concluded failed to comply with those laws and regulations. Also, a company recently filed a securities registration for an upcoming ICO. At this time, it is unclear which ICOs, if any, may be considered to be “the subject of an initial public offering” for purposes of the IPO prohibition.”

The memo was issued on the same day that the US Office of Government Ethics (OGE), the ethical watchdog of the federal government, said in its own guidance that federal executive branch employees must report their virtual currency holdings.