U.S. Office of Government Ethics Bans Cryptocurrency Employees from Participating in Government Crypto Policymaking
U.S. government officials who privately own cryptocurrencies are now barred from working on regulations and policies that could affect the value of digital assets.
A new advisory issued by the U.S. Office of Government Ethics (OGE) on Tuesday says de minimis exemptions — which allow owners of securities with holdings below a certain threshold to engage in policy work related to that security — are important for cryptocurrencies and stablecoins. Generally not applicable.
“Consequently, an employee who holds any amount of a cryptocurrency or stablecoin may not engage in a particular matter that the employee knows may have a direct and predictable effect on the value of his or her cryptocurrency or stablecoin.”
The notice provides an example where an employee who possesses only $100 worth of a certain stablecoin is required to work on stablecoin regulation — the employee in question cannot participate in work on regulation “until and unless they relinquish their position in [the ] Interest in Stablecoins”.
The notice makes clear that the ruling applies even if the underlying cryptocurrency or stablecoin “constitutes [a security] for purposes of federal or state securities laws.”
The new rules apply to all federal government employees, including the White House, Federal Reserve and Treasury Departments.
The word "de minimis" (minimum immunity) comes from a longer Latin phrase that means: "The law pays no attention to small things."
The only exemption from the OGE crackdown on cryptocurrency ownership is that policymakers can hold up to $50,000 in mutual funds that invest broadly in companies that will benefit from cryptocurrencies and blockchain technology. The rationale for this exemption is that they are "considered diversification funds".
Despite seemingly draconian rules on employee investments in the cryptocurrency space, the U.S. has continued to push ahead with consolidation of the cryptocurrency industry, with U.S. President Joe Biden announcing a "whole-of-government" approach to regulation of digital assets.
Raymond Shu, co-founder and CEO of Cabital, said recent legislative proposals could make the U.S. the only Western country to fully regulate and accept stablecoins and other digital assets as an official part of the financial system.