US ethics bureau issues new rules for government employees holding NFTs
The US Office of Government Ethics (OGE), which oversees ethics laws and guidelines for the executive branch, has issued new legal advice for public financial disclosure filers who own non-fungible tokens (NFTs).
The guidance, titled “Financial Disclosure Reporting Assessments for Collectable Nonfungible Tokens and Fractionalized Nonfungible Tokens,” has been published by the Office of OGE Director Emory A. Rounds III, and specifies which categories NFTs qualify for and how to file financially. mediation.
It states that public officials must file financial disclosures if they hold NFTs or fractional NFTs (F-NFTs) worth more than $1,000 for investment or production of income; or if the asset produces over $200 in income during the reporting period.
“…public financial disclosure filers must disclose ownership of NFTs and F-NFTs that can be collected when these assets are held for investment or the production of income and are worth more than $1,000 at the end of the reporting period, or if they produce over $200 in income during the reporting period,” the guidance said.
A seven-part test in the guidance can be used to distinguish between NFTs that are held for personal, family or household use and are exempt from disclosure. The test includes questions such as whether the NFT was purchased for personal or aesthetic reasons, or whether it was purchased primarily for its potential value, among others.
It added that financial disclosure must also be filed for purchases, sales and exchanges of NFTs or F-NFTs worth more than $1,000 and qualify as securities defined by US securities laws such as the ’33 and ’34 Securities Acts.
The $1,000 benchmark is the same one available for disclosure of transactions involving stocks, bonds, commodity futures and other forms of securities. Filers must disclose within 30 days of receiving confirmation of the transaction through OGE’s Form 278e.
The US is pushing for regulatory clarity in the digital asset market
In a similar publication earlier this month, OGE clarified the application of securities and mutual fund laws to digital currencies, stablecoins and related investments. The guidance announced that OGE does not consider digital assets to be listed securities.
Based on this, government employees will not be allowed to take part in federal regulations and policies that affect the industry if they have a lot of digital assets. However, the rule does not apply to federal legislators who are elected by the people.
Meanwhile, OGE has not been the only US agency to create new guidance for the digital asset market. The Treasury Department recently launched a new framework for international engagement on digital asset regulations.
See: The presentation of the BSV Global Blockchain Convention, NFTs: What Can We Do Better?
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