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Today, Bloomberg reported that US House of Representative members have received “guidance” which stated that they should begin to report their cryptocurrency holdings. This guidance came in the form of a memorandum from the House Ethics Committee two days ago. It applies if more then $1000 worth of currency is owned. But due to the price volatility of cryptocurrencies, these members would be wise to start reporting with their very first purchase of currency, no matter how small.
The Ethics Committee stated that
“….cryptocurrencies will be treated as an *other forms of securities*”
Their currency holdings should be reported on each member’s annual financial disclosure report. This report also includes disclosure of other financial holdings, such as investments, real estate. This applies not only to the congressional members but also to their aides and families.
The advisory letter also including warnings about having a “side-business” related to cryptocurrency. In particular, this would apply to congressmen mining for more coins. The total of all side businesses together should not exceed an annual limit of $28,050.
The annual report is called a congressman’s Financial Disclosure Statement. There is also a Periodic Transaction Report which should be updated throughout the year as an individual’s financial situation changes.
In this memorandum, it was interesting to note the ways in which various US government agencies classify cryptocurrencies. For example:
“The U.S. Commodity Futures Trading Commission (CFTC) has determined that it can regulate cryptocurrencies as commodities. The Securities and Exchange Commission (SEC) has indicated that for certain purposes, cryptocurrencies may be regulated as securities and that it is continuing to review how existing securities laws and regulations apply to them. The Internal Revenue Service (IRS) has advised that for federal tax purposes, it will treat cryptocurrencies as property.”
This applies to bitcoin, ether, litecoin, and all other altcoins. Extensive holdings of cryptocurrency by any member could influence how they vote on future regulations of the various currencies. These votes could also trigger accusations of insider trading.
In 2019 we will start to find out if these congressmen and women have been caught up in the cryptocurrency frenzy which has taken hold worldwide.
Read the full Bloomberg article here
UPDATE: August 7th, 2018. Today Forbes followed up on this story to report that Bob Goodlatte, congressional chair of the House Judiciary Committee, reported his cryptocurrency holdings. Goodlatte holdings were valued at $80,000 at one point and he seems to be the first member of Congress to have filed a cryptocurrency holding report. Even though this filing was done in May, it is just now coming to light.
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