It’s now a must for staff of the US government to declare their non-fungible token (NFT) holdings. This follows the ban on crypto-owning government employees from working on policy.
The Office of Government Ethics (OGE) issued a legal advisory to regulate financial disclosure reporting requirements applicable to NFTs. It says NFTs held for investments or production of income exceeding a valuation of $1,000 must be reported. The advisory highlighted that reporting requirements extend to NFTs that generate over $200 in income within the reporting window. And transactions involving the sales and purchases of NFTs, and fractionalized NFTs that take the form of security must be disclosed without exception.
All disclosures must include a full and complete description of the NFT, including the type of collectible and the name of the platform it is being stored on. The legal advisory, in an attempt to promote transparency, requires individuals to indicate how the NFT was purchased – through cryptocurrencies or stablecoins, etc. And if the token is rare and expensive, the asset can be construed as being held for investment purposes. It should be noted that the purchasing history of the owner can help officials decide if a particular NFT purchase is being held as an investment.
The government understands that F-NFTs are always held for investment or production of income, and as such, must be reported. In regards to the ban on government employees owning cryptocurrencies from working on policies, the US administration believes it could affect the values of such assets. This rule is applicable to government agencies in the Federal Reserve, White House, and US Treasury.