U.S. Ethics Department Mandates Federal Employees to Disclose Digital Holdings Info

United States federal employees are now required to disclose pertinent information if they’re in possession of virtual currency. The mandate comes from the U.S. Office of Government Ethics (OGE) and is projected to encompass some 2 million employees under the U.S. executive branch – basically those working in the White House, Army, Veterans Affairs, Department of Homeland Security, and other such agencies under the said branch.

The disclosure requirement is due to OGE classifying crypto holdings as an investment or a property that can produce income rather than be used exclusively as a legal tender. As such, owning such holdings "may create a conflict of interest for employees," Cointelegraph reported.

Moreover, the ruling will apply to other digital assets such as coins or tokens obtained through initial coin offerings (ICO) or issued via blockchain technology.

“Filers report their holdings in a virtual currency if the value of the virtual currency holding exceeded $1,000 at the end of the reporting period or if the income produced by the virtual currency holding exceeded $200 during the reporting period,” the notice dictates. “Filers are required to identify the name of the virtual currency and if held through an exchange or platform, the exchange or platform on which it is held.”

Jay Clayton, chairman of the US Securities and Exchange Commission, recently spoke with CNBC clarifying what constitutes a security and what doesn’t. The agency will likely consider a digital asset to be a security if the investor expects to make a profit out of it, and therefore it should be subject to regulation.

However, the OGE will still conduct an assessment to know whether a particular asset will be considered a security. If there is uncertainty regarding a coin or token categorization, the department advises that an employee report any transaction using such holdings in “periodic transaction reports” if the value of the said transaction goes over the reporting limit.

This notice was given importance as employees who own cryptocurrencies are seeking clarification from their ethics officials about their obligation in disclosing information on virtual cash. The OGE said that because there still isn’t a defined line as to what classification virtual currencies and other digital holdings fall into, further guidance will be disseminated to better clarify this new innovation.