Congresspeople Now Required To Disclose Crypto Holdings
Secret HODLING by politicians is about to have its moment under the microscope.
According to a June 18 memo issued by the House Ethics Committee, U.S. House members were advised this week that they must now publicly reveal any digital token holdings worth more than $1,000.
Lawmakers are also now required to reveal any cryptocurrency sales or purchases that exceed $1,000 within 45 days of the transaction date.
The memo further stipulated that congresspeople should include such investments in their annual financial disclosure reports.
The timing of the memo is intriguing. For decades, congresspeople and their employees have been legally required to disclose assets like real estate and investment proceeds.
The enforcement of these rules got even stricter after the passage of a 2012 law requiring disclosure of stocks, bonds and derivatives trades by members of Congress or their family members.
The rise of cryptocurrencies, alongside questions over how and if they should be regulated, has generated a lot of uncertainty over how existing rules should apply to lawmakers’ purchases of Bitcoin and other crypto tokens.
In theory, it could expose hypocrisy by lawmakers that condemn cryptocurrency as a fraud or national security risk but profit off them in the shadows.
The release of the house memo means that the public will soon learn exactly which lawmakers are invested in crypto assets. This mandated reporting forces lawmakers who take strong stances either way on the regulation of crypto assets to literally put their money where their mouth is.
The memo also addressed whether members of Congress are allowed to make money through side gigs tied to cryptocurrencies.
The memo clarified that House rules going forward prohibit lawmakers from earnings of more than $28,050 a year from jobs unrelated to congressional duties will also apply to cryptocurrency mining.
This should, therefore, eliminate the temptation for lawmakers to use cryptocurrency to skirt the rules.
These rules coming out of the memos are likely a good thing for the blockchain industry as a whole going forward. This is due to to the fact that implementing universal standards for lawmakers will eliminate potential areas of corruption.
Since a huge focus of governments worldwide around crypto assets has been their potential for use in illicit or criminal activities, it would be tremendously embarrassing if politicians themselves were using cryptocurrency for these purposes.
That being said, for savvy lawmakers, it is probably relatively straightforward to hide the assets that they do have/had.
For instance, all one needs to avoid suspicion is a non-verified account on a decentralized exchange with a hardware wallet. In the view of this analyst, the odds of a lawmaker personally owning crypto assets while not being remotely technically inclined is near zero.
As a result, while the new standards are absolutely necessary going forward, I don’t know how much of an impact they will really have.
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