A new legal notice from the U.S. Office of Government Ethics prohibits government employees who own cryptocurrencies from working on federal regulation of cryptocurrencies.
• Recently, U.S. government officials who privately own cryptocurrencies have been banned from dealing with regulations and policies that could affect the value of digital assets.
A new advisory notice released Tuesday by the U.S. Office of Government Ethics (OGE) says the de minimis exemption — which allows securities owners who hold an amount below a certain threshold to work on policies related to that particular security — is universally applicable when it comes to cryptocurrencies and stablecoins.
"As a result, an employee who holds any amount of cryptocurrency or stablecoin cannot participate in a particular matter if he knows that that particular issue could have a direct and predictable effect on the value of the cryptocurrencies or stablecoins held."
The notice also provided an example scenario, in which an employee who owns only $100 of a certain stablecoin is asked to work on stablecoin regulation: the employee in question cannot participate in regulation "until and unless he gives up his interests in [that] stablecoin."
The notice specifies that this ruling applies even if the cryptocurrency or stablecoin in question were ever to "constitute [a security] for the purposes of federal or state securities laws."
The new ruling applies universally to all employees of the federal government, including the White House, the Federal Reserve and the Treasury Department.
The term "de minimis" comes from a more extensive Latin phrase, which means: "the law does not deal with trifles".
The only exemption from the OGE's crackdown on cryptocurrency ownership is that policymakers are allowed to hold up to $50,000 in mutual funds that invest extensively in companies that could benefit from crypto and blockchain technology. The reason for this exemption is that "they are considered diversified funds".
Despite seemingly strict rules regarding employee investments in the cryptocurrency industry, the United States is continuing its integration of the cryptocurrency industry, with US President Joe Biden announcing a broad cooperation approach to regulating the digital asset sector.
According to Raymond Shu, co-founder and CEO of Cabital, the recent legislative proposals could make the United States one of the first Western countries to regulate and accept stablecoins and other digital assets as integral parts of the financial system.