Dear Chairwoman Brooks and Ranking Member Deutch:
It is my understanding that the House Committee on Ethics dispenses informal guidance that Bitcoin and other cryptocurrency assets and transactions should be reported on annual financial disclosures and periodic transaction reports. Our reporting rules are designed to give the public confidence that members are not using their elected position for financial gain. To that end, the committee's guidance on cryptocurrencies should be formalized as soon as possible to expressly require the reporting of cryptocurrency assets and transactions.
I first wrote the Stop Trading on Congressional Knowledge (STOCK) Act in 2006 in response to reports that individuals in congressional offices had abused the public trust. For six years I made the case that federal officials should be explicitly covered by insider trading rules before the STOCK Act was finally signed into law. In order to maintain the public trust and confidence, each member of Congress and certain employees have a duty to disclose their financial transactions.
This standard should not be any different for Bitcoin and other cryptocurrencies. Although a relatively new innovation, cryptocurrencies have been gaining popularity and in recent months, Bitcoin has enjoyed a meteoric rise in valuation. Under the current informal guidance, members and staff could buy and sell Bitcoin, make a tremendous profit, and not know they should be reporting these assets and transactions. Formal guidance that affirmatively requires disclosure would resolve this omission.
Additionally, the federal agencies are beginning to review how cryptocurrencies fit into government rules and regulations. As these decisions are made, Congress may undoubtedly become aware of these determinations before the general public. Members and staff should not be allowed to profit from knowledge of these decisions and at the same time evade the financial transparency that would bring these actions to light.
The American people should have confidence that our rules and laws prohibit our officials from financially profiting from their position and the knowledge they may gain while in that position. Such confidence requires a formal standard that buying, selling, and profiting from cryptocurrencies should be, at the very least, reported. I would appreciate hearing from the committee about any actions it is taking regarding cryptocurrencies and the expected timeline for future actions or decisions.
Thank you for your work and attention to this request.