The New Requirements: An Overview

In a bold move, the Ethics Committee of the U.S. House of Representatives has put a spotlight on cryptocurrency with new disclosure requirements. If you’re a House member and you’ve got cryptocurrencies worth more than $1,000, it’s time for a little financial spring cleaning. Following a memo dated June 18, all lawmakers must now disclose their crypto holdings as part of their annual Financial Disclosure Statement.

What Exactly Needs to be Disclosed?

The memo doesn’t just end at the holdings; it encompasses a range of activities. Lawmakers must declare:

• Holdings of cryptocurrencies valued over $1,000 (including those of spouses!), under “Assets and Unearned Income.”
• Any purchases, sales, or exchanges involving cryptocurrencies that total over $1,000, labeled under “Transactions.”
• Participation in Initial Coin Offerings (ICOs) and income from mining must also be reviewed and disclosed.

Why the Focus on Bitcoin and Friends?

The Ethics Committee’s decision draws its rationale from the U.S. Commodity Futures Trading Commission (CFTC), which has classified certain cryptocurrencies, notably Bitcoin, as commodities. However, for the purposes of full disclosure, these digital currencies will be treated as “other forms of securities.” That means they come with a new set of rules and regulations that congress members must follow.

Timing is Everything: Keeping the Committee in the Loop

In addition to annual disclosures, there are strict timelines for reporting transactions involving cryptocurrencies. If a House member executes a transaction exceeding $1,000, they must file a Periodic Transaction Report within 45 days. Talk about a squeeze on your schedule!

The Ripple Effect: Broader Implications for Congress

This memo extends beyond just a simple checklist; it also emphasizes that the standards of conduct regarding insider trading apply equally to cryptocurrencies as they do to traditional financial assets. And because lawmakers are expected to follow rules that limit additional income from non-congressional activities to $28,050 a year, any crypto payments or gains from mining fall right into that mix—while trading remains free from that cap. It’s a brave new world out there!

Final Thoughts: Are You Ready to Disclose?

As lawmakers navigate their own financial landscapes in a rapidly evolving digital economy, they’re encouraged to reach out to the Ethics Committee directly for guidance if they’re considering participating in an ICO. It’s a fascinating (albeit complex) time to be in Congress, and no one wants to trip over their digital assets!