Federal Reserve officials have been banned from investing in crypto currency. “Officials covered by the new rules will have 12 months from the effective date of the rules to dispose of all impermissible holdings,” said the Federal Open Market Committee.
Cryptocurrency Investments are Prohibited from Senior Federal Reserve Officials
The Federal Open Market Committee (FOMC) announced Friday that it has “unanimously formally adopted comprehensive new rules for the investment and trading activity of senior officials.”
The FOMC is a committee within the U.S. Federal Reserve System charged with overseeing the nation’s open market operations.
The rules were first announced in October last year to strengthen “the impartiality and integrity of the Committee’s work by guarding against even the appearance of any conflict of interest,” the announcement details, elaborating:
Under the new rules, senior Federal Reserve officials are prohibited from … holding investments in individual bonds, agency securities, cryptocurrencies, commodities, or foreign currencies.
In addition, they are also banned from “purchasing individual stocks or sector funds,” “entering into derivatives contracts,” and “engaging in short sales or purchasing securities on margin.” Cryptocurrency was not included in the October announcement.
These new rules will apply to Reserve Bank presidents, board member, first vice-presidents, research directors and FOMC staff officers. The manager and deputy managers of System Open Market Account are also eligible. Board division directors regularly attend Committee meetings. Any other person designated by the chairman as well as their spouses or minor children.
After further analysis and review, the Federal Reserve anticipates that these rules will apply to any additional personnel.
Following a scandal last year, in which Fed officials traded stocks as well as other investments, the central bank took drastic measures to aid the economy after the Covid-19 crises. Following the scandal, Eric Rosengren (president of the Federal Reserve Bank of Boston) and Robert Kaplan (president of the Federal Reserve Bank of Dallas), resigned.
FOMC explanation:
The new rules give officials covered 12 months to dispose off all impermissible holdings.
“Going forward, newly covered officials will have 6 months to dispose of all impermissible holdings,” the FOMC noted, adding that the rules will take effect on May 1.
Are you against the ban on investment by senior Fed officials? Please comment below.
Images CreditsShutterstock. Pixabay. Wiki Commons
DisclaimerThis article serves informational purposes. This article is not intended to be a solicitation or offer to sell or buy any product, service, or company. Bitcoin.com is not a provider of investment, tax, legal or accounting advice. This article does not contain any information, products, or advice that can be used to cause or alleged result in any kind of damage.