The US Office of Government Ethics (OGE) issued a legal advisory that recommended various cases when senior government officials are required to disclose their investments in non-changeable tokens (NFTs).
In legal advice to the designated agency’s ethics officers, Director Emory Rounds III said that all NFT investments — Fragments (F-NFTs) and holdings — of $1,000 should be reported if they are “held for investment or income production” at the end of the reporting period .
The guidelines provided by the federal agency also require that NFT investments be reported if the officials generated profits of more than $200 during the reporting period, adding that:
“Public Financial Disclosure Service Providers must also disclose purchases, sales, and exchanges of collectible NFTs and F-NFTs that qualify as securities.”
The advisor is primarily intended to report on investments of NFTs that are “property”, such as real estate. However, OGE has previously ruled that personal assets, including clothing, electronics or family photos – or NFTs that represent the same thing – cannot be reported.
Depending on the circumstances disclosed by each presenter, the holdings may or may not be required to disclose them as financial investments. The rounds put together seven questions to help bloggers determine their reporting requirements for themselves, as described below.
Factors to consider for financial disclosure. Source: oge.gov
Guides were advised to use OGE Form 278e to report NFT investments, whereby investors must include details such as value, type of income and amount of income for all eligible NFTs. OGE disclosed that it will continue to monitor developments in cryptography and modify the above guidelines as necessary in the future.
Related: US lawmaker slams SEC enforcement director for not prosecuting cryptocurrency exchanges
Congressman Brad Sherman has advised the Securities and Exchange Commission (SEC) to pursue securities cases against cryptocurrency exchanges “with firmness and courage.”
Highlighting the SEC’s attempt to investigate cryptocurrency exchanges, Enforcement Director Gurbir Grewal referred to a case filed against Poloniex in August 2021. However, Sherman noted the need to pursue investigations against larger exchanges such as Binance and Coinbase:
“The big fish that operates major exchanges has done many tens of thousands of transactions with XRP. You know it’s a security – that means they were running a stock exchange illegally. They know it’s illegal because they stopped doing it, though That it was profitable. […] I hope you focus on that.”
In line with Sherman’s request for stricter oversight of cryptocurrency exchanges, Securities and Exchange Commission Chairman Gary Gensler and Grewal noted concerns about crypto enforcement in the government’s fiscal year 2023 budget request.
