Ethics Watchdog Bans Employees From Writing Crypto Policy If They Own Crypto

July 6, 2022 7:04 pm Comments

Government officials and lawmakers are now banned from writing any crypto policy if they themselves are invested in crypto.

This legal advisory notice was issued by the U.S. Office of Government Ethics (OGE) and the intended purpose of it was to prevent people from creating regulation and policy that would directly affect the value of assets that they own.

The ban will apply to employees of all federal agencies which includes the Federal Reserve and the Treasury department.

It is quite interesting that this new legal advisory has only come out now given that digital assets have been around already for many years.

CoinDesk reports:

U.S. officials who are personally invested in cryptocurrencies are now disqualified from working on crypto-related policy and regulation that could affect the value of their assets.

A legal advisory notice issued by the U.S. Office of Government Ethics (OGE) on Tuesday declared that the de minimis exemption – which, when applied to a security, would allow the owner of an amount below a certain threshold to work on policy related to that security – doesn’t apply to any cryptocurrency or stablecoin, even if the cryptocurrencies in question “constitute securities for purposes of the federal or state securities laws.”

The directive applies to all White House staff and the employees of all federal agencies, including the Federal Reserve and Treasury Department.

It is already known that there are quite a few employees who have been holding digital assets within the federal agencies, but it is not clear if any of them were involved in writing crypto policy directly.

The ban does not have any limit and prevents policy writers from owning any digital assets no matter how small the amount may be which is different from securities which do have an acceptable limit.

The crypto community is paying attention on whether or not this new legal advisory will have a positive effect on future regulation of crypto as it is quite likely that there may have been possible conflicts of interests in the past.

With that being, it is still possible for employees to have exposure to the crypto markets via the use of a mutual fund given that the amount is under $50,000.

Yahoo concludes:

The directive will likely have a significant impact on some White House staffers who have been open about their crypto investments, like Tim Wu, a technology adviser to the Biden administration who holds millions of dollars in bitcoin.

Wu has already voluntarily recused himself from working on crypto policy.

Federal employees who have invested less than $50,000 in a mutual fund with exposure to the crypto sector will still be allowed to work on crypto-related policies.

This new legal advisory may have come quite late in the game, but at least it finally took effect this year.

The question is where is the ethics watchdog on the Bill Hinman free pass speech.

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