If you have invested in Bitcoin, Dogecoin, or any number of other alternative cryptocurrencies, you may be obligated to reveal those holdings.
A new US Office of Government Ethics (OGE) order requires all federal employees to disclose any crypto assets they own. The guideline issued on June 18, 2018, affects 2 million federal executives and departments. This guideline includes the Departments of the Army, Homeland Security, Justice, and Veteran Affairs.
In its foresight, the OGE does not recognize cryptocurrencies as legal tender or real currencies. All crypto assets, regardless of the acquisition means or distribution channel, are subject to the OGE’s published guidelines. For this reason, employees should report all digital currencies where an asset’s value exceeds $1,000 or an income of over $200. Plus, employees must provide names of the digital currency and the exchange or platform holding it.
In its rationale, the OGE argues that due to the popularity and increased adoption of cryptocurrencies, federal employees holding virtual assets are ethically concerned about disclosure obligations.
Hence, the OGE ruled that federal employees must file all transactions involving crypto asset investments. Even so, reporting depends on whether a digital asset qualifies as security. Where doubts exist, employees should periodically report all digital transactions exceeding the reporting threshold.
As digital currencies are an “investment asset,” they can create a conflict of interest for the owner. What’s more, no conflict of interest exemption applies to employees holding digital assets. Nonetheless, the OGE will provide further guidance in tandem with the evolution of digital currencies.
In March this year, South Korea banned public officials from transacting or owning cryptocurrency assets. Interestingly, it’s the first recorded instance of the state prohibiting its public officials from holding digital assets. As a result, any public official transacting in virtual currencies violates civil servant’s code of ethics and practice and is liable for disciplinary action.