Depending on which U.S. government  agency one looks to, cryptocurrencies can be a security (per the SEC), a commodity (per the CFTC), property (per the IRS), or a form of money (per FinCEN).  In a Legal Advisory issued on June 18, the U.S. Office of Government Ethics took the position that virtual currency qualifies as “property held … for investment or the production of income” under the Ethics in Government Act.  As a result, Executive branch employees are required to report their holdings of virtual currency on their public or confidential financial disclosure report, subject to applicable reporting thresholds for property held for investment or the production of income. The Advisory further provides that the reporting and conflict of interest principles apply equally to other digital assets, such as “coins” or “tokens” received in connection with ICOs or issued or distributed using distributed ledger or blockchain technology.

Interestingly, the Advisory noted that the CFTC has determined Bitcoin to be a commodity.   Since the Ethics in Government Act does not require the reporting of transactions of commodities, it would appear that the requirement to report holdings in virtual currencies does not apply to the most popular of them.

Author

Email
David Zaslowsky has a degree in computer science and, before going to Yale Law School, was a computer programmer. His practice focuses on international litigation and arbitration. He has been involved in cases in trial and appellate courts across the United States and before arbitral institutions around the world. Many of David’s cases, including some patent cases, have related to technology. David has been included in Chambers for his expertise in international arbitration. He is the editor of the firm's blockchain blog.