25 January 2022

House Members Must Disclose Crypto Holdings

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The US House Ethics Committee on Monday issued a memo advising members of the House of Representatives to publicly disclose any holdings in cryptocurrency that exceed $1,000. They should reveal investments in digital currencies and report on any crypto sale or purchase beyond $1,000 within 45 days of the deal. As a result, we may soon find out if at least some Representatives are showing interest in cryptocurrencies such as Bitcoin or Ether.

According to the Ethics in Government Act of 1978, lawmakers are required to reveal their assets such as real estate or investment returns. The rules were updated in 2012, also requiring lawmakers and their family members to also disclose holdings in stocks, bonds, and derivatives. However, in a sign that Bitcoin and other cryptocurrencies are going mainstream, the House Ethics Committee has decided to add them as well. 

The committee’s memo also touched upon whether Congress members could earn money from jobs related to cryptocurrencies. The current rules prohibit lawmakers from making more than $28,050 per year from extra jobs that are not connected with their congressional activity. Even if it’s not a job, the House Ethics notes that the ban also applies to cryptocurrency mining, a process in which people use computing power to generate new coins or tokens. 

Interestingly, the committee views cryptocurrencies as “other forms of securities,” making them subject to disclosure in the annual Financial Disclosure Statement (FD Statements or Statements) and Periodic Transaction Reports (PTRs) during the year. The US Securities and Exchange Commission doesn’t tend to regulate Bitcoin and Ethereum as securities. 

The memo ends with an FAQ section for the House members. For example, the first question is:

“I am a Congresswoman and I purchased cryptocurrency years ago for $1. It is now worth $10,000. Do I have to report it on my FD Statement now? Did I have to file a PTR at the time of purchase?”

To which the answer is:

“Yes, you do have to report your ownership interest in the cryptocurrency on Schedule A ("Assets & Unearned Income") on every FD Statement where the balance of your interest exceeds $1,000 at the end of the reporting period. You were not required to file a PTR at the time of the transaction because your purchase amount was less than $1,000.”

Click here for the original article from Cryptovest.  

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