If a law receives enough support, members of the US House of Representatives and Senate as well as justices of the Supreme Court who already trade cryptocurrencies may be forced to give up their holdings while serving in office.
Zoe Lofgren, chair of the Committee on House Administration, which oversees the day-to-day operations of the House, claimed to have a “meaningful and effective plan to combat financial conflicts of interest” in the US Congress by limiting the financial activities of representatives and SCOTUS justices, as well as their spouses and children.
The Stop Trading on Congressional Knowledge Act, or STOCK Act, which was passed in 2012 and allows members of Congress to buy, sell, and trade stocks and other investments while in the office while also requiring them to disclose such transactions, would be repealed if the bill were to be passed as written.
Senator Cynthia Lummis of Wyoming, Representative Michael McCaul of Texas, Representative Marie Newman of Illinois, Representative Pat Toomey of Pennsylvania, Representative Barry Moore of Alabama, and Representatives Michael Waltz and Jefferson Van Drew of New Jersey have all disclosed their involvement in cryptocurrency investments. Since U.S. lawmakers have access to “critical information and forthcoming policies,” Alexandria Ocasio-Cortez, a representative from New York, stated in December 2021 that it would be unacceptable for her to own Bitcoin (BTC) or other digital assets.
Lofgren claims that Congress can take re-establish the public’s faith and trust in their state authorities and ensure that these representatives serve the public interest, not their financial interest, by prohibiting senior government officials, including Members of Congress and the Supreme Court, and their spouses and dependent children, from trading stock or holding investments in equities, commodities, futures, crypto, and other similar investments and from shorting opportunities.
Legislators are required by the STOCK Act to record any investment above $1,000 that they buy, sell, or exchange within 30 to 45 days of the transaction, however, the law imposes very mild financial and legal penalties for late registration, often as little as a $200 late fee. In addition to raising the late charge to $500 and giving the Department of Justice permission to file civil lawsuits as needed, the proposed framework called for implementing a $1,000 penalty for any 30-day period that someone violated the disclosure regulations.
The House could take up the proposed legislation as early as next week, according to a tweet from the House Press Gallery on Thursday.
Using a portfolio of diversified mutual funds, exchange-traded funds, Treasury bills, and other investments that “did not present the same potential for conflicts of interest,” the framework indicated that legislators and Supreme Court justices might still hold and disclose their holdings. The structure of the legislation also called for more specific and open disclosure amounts, such as $5 million to $25 million, as opposed to the present “extremely broad” range.
Similar STOCK Act amendments were put out by Senators Jon Ossoff and Mark Kelly in January, but the legislation hasn’t moved for more than eight months.
Nancy Pelosi, the speaker of the House, assigned the committee to look into apparent financial conflicts of interest in Congress, according to Lofgren. The speaker, however, previously resisted attempts to forbid politicians from holding or trading stocks, arguing that “they should be able to participate in that.”