Following a change in the leadership of the United States Congress, the 118th Congress may decide to pursue an initiative to prohibit members of Congress from investing in stocks or cryptocurrencies. This is an idea that has garnered support from a significant number of lawmakers on both sides of the political aisle in the United States.
Based on the results of the Midterm Elections in 2022, the Republicans will achieve a narrow majority in the House of Representatives and assume control of the chamber. On the other hand, Democrats will continue to have a majority in the Senate when the new session of Congress begins on January 3.
According to a report from January 2022, Kevin McCarthy, a Republican representative who is in contention to be the next speaker of the House, said that he would consider an outright ban on lawmakers holding and trading stocks in the event that his party won control of the chamber. This is a measure that could presumably be extended to cryptocurrency.
It is unknown whether or not McCarthy has the necessary votes to seize leadership of the House of Representatives, a process that will most likely get underway on January 3.
On the other hand, many people have referred to the fact that elected officials are permitted to trade and keep certain assets while they are in office as a potential conflict of interest.
According to reports, 77 members of Congress breached the disclosure requirements of the Stop Trading on Congressional Knowledge Act, or STOCK Act, which was initially enacted in 2012 and is currently in its 117th session.
Despite the fact that these infractions included the delayed reporting of permissible trades, members were nonetheless authorized to address legislation on subjects that may have been impacted by their personal interests.
The ranking member of the Senate Banking Committee, Senator Pat Toomey, has also previously revealed purchases of Ether and Bitcoin, but he will be leaving office in 2023.
The close financial relationships that existed between several U.S. legislators and prominent business figures were at the center of the most significant issues that surrounded the cryptocurrency sector in the year 2022.
The executives at the cryptocurrency exchange FTX, including the company’s former CEO Sam Bankman-Fried, contributed to politicians and campaigns for both Republicans and Democrats. As a result of this action, many individuals within the industry questioned the objectivity of lawmakers during hearings that were intended to investigate the collapse of the firm.
In September, Zoe Lofgren, the chair of the Committee on House Administration, presented a framework to lawmakers with the intention of changing the STOCK Act to prohibit members of Congress and the Supreme Court, as well as their spouses and dependent children, “from trading stock or holding investments in securities, commodities, futures, cryptocurrency, and other similar investments.” This would also apply to members of the Supreme Court. Lofgren’s proposal was made by the chair of the Committee on House Administration.
There was no action made in the planned modification to the policy in 2022; nonetheless, the Federal Open Market Committee established identical restrictions that prohibit senior officials at the Federal Reserve from acquiring and keeping cryptocurrency.