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Crypto Holders Banned from Writing Rules on US Digital Assets

July 6, 2022, 7:52 PM

US officials holding cryptocurrencies and stablecoins directly as personal investments will generally be barred from advising President Joe Biden on how to oversee the digital currency, the government’s ethics chief said.

The directive, issued Tuesday by the US Office of Government Ethics, disqualifies federal employees from working on any regulation that could influence the value of their digital currencies. Mutual-fund holders with less than $50,000 invested in the sector will be allowed to help write the rules, so long as the fund’s primary goal isn’t to invest in cryptocurrency, the advisory said.

The statement comes as lawmakers and federal agencies grapple with how to oversee a fast-growing and risky $1.2 trillion market.

Biden signed an executive order in March that calls on federal agencies to work out policies on crypto, including by researching the possibility of a US digital dollar and combating illicit finance. The order stopped short of providing clear direction on regulation, and Congress has yet to pass a regulatory framework.

The industry is looking to expand its influence in Washington. Political donations from the sector surged to more than $26 million during 2021 and the first three months of 2022, eclipsing the defense and big pharma sectors.

To contact the reporter on this story: Courtney Rozen in Washington at crozen@bgov.com

To contact the editors responsible for this story: Bernie Kohn at bkohn@bloomberglaw.com; David Jolly at djolly@bloombergindustry.com