The Ethics Committee of the US House has issued a memo which advises the members of the House of Representatives to disclose any of their cryptocurrency holdings that exceed $1000. The members are supposed to report any sale or purchase of the digital assets within 45 days of the deal.
Ethics in the Government Act of 1978 stated that the lawmakers are required to reveal their holdings in real estate or the returns made by their investments. Amendments to the rule were made in 2012 also requiring the lawmakers and their family members to disclose all holdings in stocks, bonds, and derivatives. Now, the House Ethics Committee has decided to add Bitcoin and other cryptocurrencies to the list, seeing the rise of investments made in them.
The current rule also prohibits the committee members from making more than $28,050 per year from extra jobs that are not connected with their congressional activity. The House Ethics has stated that the ban also implies to mining of cryptocurrencies.
The committee, however, views cryptocurrencies as “other forms of securities”, making it obvious to disclose the earnings from them 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 a FAQ section. The first question being:
“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?”
The answer to it was:
“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.”