Two weeks after banning crypto-owning government employees from working on policy, the U.S. government is now insisting that staff declare their non-fungible token (NFT) holdings.
The Office of Government Ethics (OGE) issued a legal advisory over the weekend to regulate financial disclosure reporting requirements applicable to NFTs.
The general rule of thumb to follow is that NFTs held for investments or “production of income” exceeding a valuation of $1,000 must be reported within the prescribed window.
The document adds that the reporting requirements will extend to NFTs that generate over $200 in income within the reporting window. All transactions involving sales, and purchases of NFTs and fractionalized NFTs (F-NFTs) that take the form of security must be disclosed without exception.
New rules insist on a “full and complete” description of NFT
The OGE filing requirements compel all disclosures to include a “full and complete” description of the NFT, including the type of collectible and the name of the platform it is being stored.
In an attempt to promote transparency, the legal advisory mandates individuals to indicate how the NFT was purchased, whether through cryptocurrencies or stablecoins.
If the NFT is rare and expensive, it may be construed as being held for investment purposes, while the purchasing history of the owner can help officials decide if a particular NFT purchase is being held as an investment.
The rule notes that “F-NFTs are almost always held for investment or the production of income and therefore must generally be reported.”
A spree of regulations
Early in the month, the OGE banned government employees that own cryptocurrencies from working on policies that could affect the values of such assets.
The rule applies to all government agencies including the White House, Federal Reserve, and the United States Treasury.
The only exceptions are for government employees holding less than $50,000 in mutual funds in companies that operate in the cryptocurrency industry.
These moves have been considered a primer for an incoming wave of cryptocurrency regulations.
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