Sometimes I read a headline and immediately go and check my email to make sure I did not miss an important announcement and yesterday was one of those days. During my lunch break, I was scrolling a few different crypto article websites when one stuck out to me above all else. An article on Cointelegraph had the title, "Crypto owners banned from working on US Government crypto policies" and I sure hadn't been told anything about this and there had not been a notice sent out to inform us of this decision.
As someone who holds a variety of different crypto assets and shares in crypto companies and with the job that I have I stopped eating to read through this article and try and figure out what was going on. It did not take me long to see how misleading the title was and quickly become pretty annoyed at it because it had interrupted my lunch. While the article contains pretty important information for those of us in government as well as in the crypto agency the author was extremely off base in what he said and how he said it.
So What Happened?
On July 5th, 2022 the United States Office of Government Ethics released a legal advisory to Ethics Officials across the government. This advisory was to clarify the application of regulatory exemptions for publicly traded securities (stocks) and mutual funds regarding cryptocurrencies, stablecoins, and companies involved in blockchain technology and related service. In the advisory, it is stated that cryptocurrency and stablecoins are not publicly traded securities according to the Office of Government Ethics regulations and therefore do not qualify for securities exemptions. An exception was given for stock, mutual funds, and ETFs as long as you hold less than $50,000 USD in value.
What is Wrong with the Cointelegraph Article?
The way that the article is written is misleading in a few ways. By far the biggest issue with it is that it claims that this prohibits any employee who owns crypto from working on Federal crypto regulation. While the author later tries to clarify who it affects by saying it affects employees at The White House, The Federal Reserve, and The Department of Treasury but falls short. In the US government, the part of the government that is charged with regulation and is the branch that is working on this is Congress. Congress crafts the rules and regulations and then has Departments and Agencies oversee the rules however the rules themselves come from Congress.
The U.S. Office of Government Ethics even though it sounds like they are in control of all of the government ethics wise are only in charge of 1/3 of it, the Executive Branch. Both the Legislative Branch (Congress) and the Judicial Branch have their own ethics offices that address issues key to their specific branch. That is not to say that the different offices do not work together because they do it is just that the separation of powers keeps these things separate.
Why is this Important?
This issue of misidentifying where this office is and who it affects really impacts the whole article. While this article would make it sound like a bunch of people are creating legislation and rules for the industry that is far from the case. Now to entirely rag on the article it does highlight an important development for the industry and that is this rule does seek to remove any bias from the SEC or any other department/agency involved. Someone won't be able to buy up a bunch of Solana and then try to issue restrictions against Ethereum to boost the value of their investment.
While legislation has not come as quickly as I would have hoped it is moving along and will most likely be addressed next year. The proposals have been bright so far and will help this industry really solidify itself and shake off the current Wild West perceptions.
Please know I am not a financial advisor and make sure you do your own research! If you enjoyed this article and would like to further support me below are a few referral links that if you used when signing up I would appreciate it! Also, follow me on Twitter @Cje95_
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