Members of the US House of Representatives and Senate as well as Supreme Court justices who currently trade cryptocurrencies may have to stop HODLing while in office should a bill receive enough votes.
According to an outline released on Thursday, House Administration Committee Chair Zoe Lofgren – responsible for the day-to-day running of the House – said she had a “meaningful and effective plan to combat financial conflicts of interest” in the US Congress by limiting the financial the activities of legislators and SCOTUS judges, as well as of their spouses and children. The bill, if passed under the framework, would propose a change in policy following the passage in 2012 of the Stop Trading on Congressional Knowledge Act, or STOCK Act, which allows members of Congress to buy, sell and trade stocks and other investments while in office. , but also requires them to publish such transactions.
“Congress can act to restore the public’s faith and confidence in its public officials and ensure that those officials act in the public interest, not their private financial interests, by restricting senior government officials — including members of Congress and the Supreme Court — and their spouses and dependent children from trading stocks or holding investments in securities, commodities, futures, cryptocurrency and other similar investments and from shorting stocks,” Lofgren said.
“I will soon introduce legislation for a bill built on this framework for reform. Many members have already concluded that reforms are necessary.”
The framework suggested that lawmakers and SCOTUS judges could still hold and disclose a portfolio of diversified mutual funds, exchange-traded funds, Treasury bills and other investments that “did not present the same potential for conflicts of interest.” The bill’s framework also suggested. disclosure amounts be more precise rather than the “extremely broad” range currently used — for example, from $5 million to $25 million — and be available to the public.
Under the Corporations Act, lawmakers are required to report the purchase, sale or exchange of any investment over $1,000 within 30 to 45 days, but the law provides minimal financial and legal consequences for not filing on time — sometimes as little as a $200 late fee . The proposed framework proposed enforcing fines of $1,000 for each 30-day period a person was in violation of the disclosure rules, increasing the late fee to $500, and authorizing the Justice Department to file civil lawsuits if necessary. The House Press Gallery’s Twitter account reported on Thursday that the House could consider the bill as early as next week.
Senators Jon Ossoff and Mark Kelly proposed similar reforms to the Corporations Act in the Senate in January, but there has been no movement on the bill for more than 8 months. According to Lofgren, Speaker of the House of Representatives Nancy Pelosi tasked the committee with reviewing potential financial conflicts of interest in Congress. However, the speaker has previously pushed back against efforts to ban lawmakers from owning or trading stocks, saying “they should be able to participate in that.”
Related: Powers On… Why US Officials Ignore Ethics and Corporation Law When Trading Stocks?
A number of House members and senators have disclosed their exposure to crypto investments, including Illinois Representative Marie Newman, Florida Representative Michael Waltz, Wyoming Senator Cynthia Lummis, Texas Representative Michael McCaul, Pennsylvania Representative Pat Toomey, Alabama Representative Barry Moore and New Jersey Representative Jefferson Van Drew. In December 2021, New York Representative Alexandria Ocasio-Cortez said it was inappropriate for her to hold Bitcoin (BTC) or other digital assets because US lawmakers have access to “sensitive information and upcoming policies.”