Officials in the executive branch of the federal government must report their holdings in virtual currency as part of the public financial disclosure process, according to an internal government ethics watchdog.
In a legal advisory released Monday, the U.S. Office of Government Ethics clarified that virtual currency qualifies as “property held … for investment or the production of income” under the Ethics in Government Act, and therefore is subject to the public or confidential disclosures required under the law. Going forward, the OGE is requiring executive branch officials and nominees to identify the name of the virtual currency they hold and any exchange or platform used to hold it in their annual disclosures.
OGE clarified that it “does not consider virtual currency a ‘real’ currency or legal tender,” joining a growing list of federal agencies who treat digital tokens and cryptocurrencies more as property. The Internal Revenue Service has treated virtual currency as property since 2014 rather than as currency for tax purposes. The Commodity Futures Trading Commission regards certain digital currencies as commodities that come under its regulatory purview and the Securities and Exchange Commission recently has taken a closer look at digital currencies as they have been promoted as investment assets.
“OGE recognizes that virtual currencies are experiencing a surge in use and access, and as a result, employees who hold virtual currencies are increasingly seeking guidance from their ethics officials concerning their financial disclosure reporting obligations,” the advisory says. The advisory goes on to say that virtual currency is a “relatively new and still evolving financial instrument whose final form and function may yet change” and that OGE may have to issue further guidance as virtual currencies and their uses evolve.
Monday’s legal advisory from the OGE, however, notes that commodities transactions are exempt from disclosure under the Ethics in Government Act, and the CFTC has determined that bitcoin is a commodity, which would appear to exempt the largest cryptocurrency. Still, some nominees for federal positions have already been disclosing their bitcoin holdings out of an abundance of caution in the run-up to Monday’s announcement.
Brent McIntosh, the Sullivan & Cromwell partner that President Donald Trump nominated as general counsel to the U.S. Treasury Department, disclosed that he held bitcoin valued at between $1,001 and $15,000. Jessie Liu, a former Morrison & Foerster partner who is now the U.S. attorney for the District of Columbia, likewise disclosed bitcoin valued at between $1,001 and $15,000.
Read the OGE letter below: