Ethics Office: Federal Employees With Crypto Shouldn’t Work on Rules
WASHINGTON — Federal employees with crypto-assets shouldn’t be working on new rules and regulations that could influence the value of those assets, according to a new legal advisory from the Office of Government Ethics.
This comes as multiple agencies across the federal government were instructed by an executive order from President Joe Biden to look into regulating crypto-assets.
Typically, federal employees are allowed to own some “publicly traded securities” and work on regulations surrounding those as long as they have a “de minimis” or trivial ownership of those. However, cryptocurrencies and stablecoins that are traded with blockchain technology are not considered publicly traded by the office.
“As a result, an employee who holds any amount of a cryptocurrency or stablecoin may not participate in a particular matter if the employee knows that particular matter could have a direct and predictable effect on the value of their cryptocurrency or stablecoins,” according to the advisory released Tuesday by Director Emory Rounds III.
He gave the example that if an employee owns $100 worth of a stablecoin backed by U.S. currency, that employee would have to divest from that asset to work on regulating it because the regulation would likely have a financial impact.
More than 130 federal agencies are overseen by the Office of Government Ethics to minimize employees’ conflicts of interest.
The heads of about 20 different federal agencies including the secretary of Commerce, the attorney general and the director of National Intelligence were addressed in Biden’s executive order to be part of the group advising on crypto-asset regulations.
The banking regulators have also been working on crypto-assets and had previously implemented some of their own rules for the top officials of those agencies. The Federal Reserve, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency all previously limited senior officials’ crypto-asset trades in February when the agencies enacted new rules prohibiting officials from owning individual stocks.
According to the advisory, federal employees are still allowed to buy stocks and other “publicly traded securities” that deal with cryptocurrencies. They may also own mutual funds that involve cryptocurrencies worth less than $50,000.
And the office warns each agency should look closely at employees’ ownership of these assets to ensure no conflict of interest.
Madeline can be reached at [email protected] or on Twitter @ByMaddieHughes