A new legal advisory from the US Office of Government Ethics bars federal workers who own crypto from working on cryptocurrency-related policy and regulation
A new legal advisory from the Office of Government Ethics bars federal workers who own crypto from working on policies that could influence the value of their digital assets.
CoinDeskCheyenne Ligon
Context & Ripple Effects
In July 2022, at the height of Washington's enforcement-first posture toward digital assets, the [[a:980632|Office of Government Ethics ruled that personal crypto holdings disqualify federal workers from crypto policy work]] — treating tokens like any other financial interest that could be swayed by the policies an employee drafts.
That restrictive frame has since been dismantled piece by piece: the OCC told banks they can engage in crypto activities without prior sign-off, the Fed withdrew its approval requirement for bank crypto activity, and the DOJ disbanded its National Cryptocurrency Enforcement Unit. The advisory now reads less like a standing rule than a marker of the era it came from.
First-order effects
Federal employees who hold digital assets are barred from touching cryptocurrency policy or regulation at their agencies, forcing a choice between divesting their holdings and staying off the file.
Agencies drafting crypto rules must staff that work exclusively with non-holders, narrowing the pool of officials who can legally shape the rulemaking.
Second-order effects
The exclusion pushes officials with direct market knowledge either to liquidate into disclosure-friendly vehicles or to cede crypto portfolios entirely, reshaping who inside government carries institutional expertise on the asset class.
The advisory fit a broader 2022–2023 hard line alongside the SEC's proposal to bar advisers from storing assets at unregistered crypto platforms, signaling to the industry that conflict-of-interest and custody rules would tighten together.
Third-order effects
The subsequent reversals — the OCC's rescinded guidance, the Fed's withdrawn approval requirement, and the DOJ standing down its crypto enforcement unit — show the advisory's restrictive logic did not become the durable baseline, leaving ethics rules and regulatory posture moving in opposite directions.
If enforcement bodies keep exiting while ethics restrictions persist, oversight of the sector consolidates in whichever agencies remain engaged, raising the structural question of who actually regulates digital assets as dedicated units dissolve.
The trend: US crypto policy is oscillating between ethics-driven restriction and wholesale deregulation, with each agency's retreat redrawing who governs the asset class.
Announcement from the US Office of Government Ethics: Government employees who hold cryptocurrencies are disqualified from working on any crypto-related policy or regulation that could impact the value of their holdings. https://www.oge.gov/... https://twitter.com/...
🤦 this is the equivalent of “those that are working on internet policy are not allowed to use the internet.” I wrote the White House memo on Bitcoin in 2014. This is shortsighted. https://twitter.com/...
“Cryptocurrencies and stablecoins do not meet the definition of ‘publicly traded securities’ for purposes of these exemptions. This is true even if individual cryptocurrencies or stablecoins constitute securities for purposes of the Federal or state securities laws.” https://twit…
Of note: This does not affect Congress, as lawmaker and Capitol Hill staffers are — for now — allowed to hold and trade cryptocurrencies regardless of the work they do. About that: https://www.businessinsider.com/ ... https://twitter.com/...
In order to maintain my objectivity as a scholar of banking crises and regulation, I have decided that I need to close my bank account. https://twitter.com/...
This is good, and a step toward preventing regulatory capture on the issue. NB: those offering banal tu quoque rejoinders in the comments will be muted — regulatory capture is bad, even if it's concurrently happening elsewhere. https://twitter.com/...
This is a tough one IMO. I know regulators who are struggling to attract crypto experts due to similar rules. Parity to TradFi rules is important though. I purposely didn't hold crypto when I was writing crypto legislation and that made learning difficult https://www.oge.gov/...
as this thread notes, this does not apply to congress. there are members of congress who have crypto and work on crypto policy. https://twitter.com/...
U.S. officials who own cryptocurrency have been disqualified from working on regulation that could have a “direct and predictable effect” on the value of their personal holdings by a government watchdog. @cheyenneligon reports https://www.coindesk.com/...