Members of the United States House of Representatives, Senate, and Supreme Court justices who currently trade cryptocurrencies may have to stop HODLing during their term if a bill receives enough votes.
According to a Framework released Thursday, House Management Committee Chair Zoe Lofgren, who oversees the day-to-day operations of the House, said she had a “reasonable and effective plan to address financial conflicts of interest” in the US Congress by monitoring the financial activities of Restrict legislators and SCOTUS judges and their spouses and children. If passed under the Framework, the bill would propose a policy change following passage of the Stop Trading on Congressional Knowledge Act, or STOCK Act, in 2012, allowing members of Congress to buy stocks and other investments during their term in office, to sell and trade, but also the obligation to disclose such transactions.
“Congress can act to restore public confidence in its officials and ensure those officials are acting in the public interest, not their private financial interests, by targeting senior government officials — including members of Congress and the Supreme Court — and their spouses restrict and prevent dependent children from trading in or holding investments in securities, commodities, futures, cryptocurrency and other similar investments and from short selling stocks,” Lofgren said.
“I will soon be introducing legislative text for a bill that builds on this reform framework. Many MEPs have already concluded that reforms are needed.”
The framework suggested lawmakers and SCOTUS judges could continue to hold and disclose a portfolio of diversified mutual funds, exchange-traded funds, treasury bills and other investments that “do not present the same potential for conflicts of interest.” Disclosure amounts should be more precise than the “extremely broad” range currently used – for example, between $5 million and $25 million – and be available to the public.
Under the STOCK Act, lawmakers are required to report the purchase, sale, or exchange of investments over $1,000 within 30 to 45 days, but the law provides for minimal financial and legal ramifications for failure to file on time — sometimes as little as a late fee of $200. The proposed framework would enforce fines of $1,000 for each 30-day period in which an individual violated disclosure rules, increase the late fee to $500, and authorize the Department of Justice to file civil suits if necessary to initiate The House Press Gallery Twitter account reported on Thursday that the House could consider the proposed legislation as early as next week.
Senators Jon Ossoff and Mark Kelly proposed similar reforms to the STOCK Act in the Senate in January, but there has been no motion on the bill for more than 8 months. According to Lofgren, House Speaker Nancy Pelosi assigned the committee to review potential financial conflicts of interest in Congress. But the spokesman has previously resisted efforts to ban lawmakers from owning or trading stocks, saying “they should be able to take part”.
Related: Powers On… Why are US officials ignoring ethics and the STOCK Act when trading stocks?
A number of members of the House of Representatives and Senators have disclosed their involvement in crypto investing, 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 any other digital asset because US lawmakers had access to “sensitive information and upcoming regulations.”