Two weeks after banning crypto-owning government employees from working on the policy, the US government is now insisting that employees declare their non-fungible token (NFT) holdings.
The Office of Government Ethics (OGE) issued a legal advisory over the weekend to regulate the financial disclosure reporting requirements applicable to NFTs.
The general rule of thumb to follow is that NFTs held for investments or “income produced” valuations in excess of $1,000 must be reported within the prescribed window.
The document states that reporting requirements will extend to NFTs that generate more than $200 in income within the reporting window. All transactions involving the sale, and purchase of NFTs and Partial NFTs (F-NFTs) as security must be disclosed without exception.
New rules emphasize “complete and complete” description of NFTs
The OGE filing requirements compel all disclosures to include a “complete and complete” description of the NFT, including the type of collectible and the name of the platform where it is stored.
In an effort to promote transparency, legal advice mandates individuals to indicate how NFTs were purchased, whether via cryptocurrency or stablecoins.
If NFTs are scarce and expensive, it may be held for investment purposes, while the owner’s purchasing history can help authorities decide whether a particular NFT purchase is being held as an investment.
The rule notes that “F-NFTs are almost always conducted for investment or income generation and therefore generally must be reported.”
a flurry of rules
Earlier in the month, OGE banned government employees who own cryptocurrencies from acting on policies that could affect the values of such assets.
This rule applies to all government agencies, including the White House, the Federal Reserve, and the United States Treasury.
The only exceptions are for government employees holding less than $50,000 in mutual funds in companies operating in the cryptocurrency industry.
These moves are supposed to be a primer for the coming wave of cryptocurrency regulations.