On Monday, Rep. Alexandria Ocasio-Cortez clarified on Instagram that she does not hold any digital assets or tokens, including Bitcoin, and said she doesn’t believe policymakers should be able to hold financial products like stocks.
In June 2018, rules passed by the House Ethics Committee required members of Congress to disclose ownership of crypto-asset holdings worth at least $1,000 in their annual disclosures. It should not come as a surprise, then, that the democratic socialist doesn’t believe policymakers should be able to hold financial assets in order to remain impartial.
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“Because we have access to sensitive information and upcoming policy, I do not believe members of Congress should hold/trade individual stock and I choose not to hold any so I can remain impartial about policy marking,” Ocasio-Cortez wrote on Instagram, answering a question about if she held any crypto. “I also extend that to digital assets/currencies (especially because I sit on the Financial Services Committee). So the answer is no because I want to do my job as ethically and impartially as I can,” she added.
This point about ethics and impartiality is an important one, because lawmakers trading on nonpublic information has been an open secret for years. AOC herself has said it is “absolutely wild” that members of Congress are allowed to trade stock while in office.
To take one recent example, Unusual Whales—which features financial tools that track “large stock and unusual options flow movements”—published a brief history last year looking at semiconductor bills that were proposed, but never passed, in Congress. Many of the bills not only feature co-sponsors that stood to financially benefit from the legislation, but also stock sales and purchases around their anticipated passage.
It’s because of a long history of situations like this that the Stop Trading on Congressional Knowledge Act of 2012 (STOCK Act) was passed, which finally made insider trading illegal, aimed to stop conflicts of interest, and tried to force members of Congress to quickly and transparently report personal finances. Within a year, Congress and then-President Obama passed and signed a bill that reversed huge parts of the STOCK Act but preserved the trail-blazing decision to make insider trading illegal as well as require disclosure of large trades within 45 days.
However, the STOCK Act seems to have largely failed. In March 2020, Senators Diane Feinstein (D-CA), Kelly Loefler (R-GA), Richard Burr (R-NC), and James Inhoe (R-OK) were accused of using nonpublic information about the coronavirus pandemic to dump stocks ahead of an anticipated panic selloff. In May 2020, the Department of Justice halted its investigation into all but Burr and it was recently reported the SEC was still investigating the Senator. At least 47 members of Congress have either failed to properly report financial dealings or traded on insider information.
Remaining impartial around the issue of cryptocurrencies will be an increasingly important priority going forward, as lawmakers continue to explore regulations for the industry. A provision around taxation for some industry participants even became a bonafide dust-up that held up the Biden administration’s infrastructure bill.
There are only a handful of representatives and senators who have disclosed holdings in crypto. According to Bitcoin Politicians, a crowdsourced data project tracking financial disclosures to see which members of Congress are holding crypto, the lawmakers that have disclosed holdings are: Rep. Jefferson Van Drew (R-NJ), Sen. Patrick Toomey (R-PA), Barry Moore (R-AL), Michael McCaul (R-TX), Michael Waltz (R-FL), and Sen. Cynthia Lummis (R-WY).
Senators Toomey and Lummis in particular were intimately involved in the fight over cryptocurrency taxation in the infrastructure bill. The pair, along with Senator Ron Wyden, proposed an amendment that would have narrowed the definition of a “broker” to exclude industry participants like miners from tax reporting requirements. Lummis, who disclosed she owns between $100,000 and $250,000 in Bitcoin, has been buying since 2013 when the price was $330 and has praised God for Bitcoin. In June, Toomey made two purchases between $1,000 and $15,000 into two crypto-linked mutual funds–Grayscale Ethereum Trust and Grayscale Bitcoin Trust.
Van Drew disclosed between $100,000 and $250,000 held in Grayscale Investment Trust, which offers exposure to crypto-assets, but seems to have little legislative interest here. Waltz and Moore seem equally mum on crypto legislation. Moore bought Dogecoin, Ethereum, and Cardano in May and seems to have logged losses on all but Ethereum as he bought in at dips or price slumps that have not since reversed. Waltz, a member of the Congressional Blockchain Caucus, has bought anywhere from $30,000 to $100,000 in Bitcoin but has not been a particularly loud advocate. McCaul—who is worth well over $100 million—has between $1,000 and $15,000 in Grayscale Bitcoin Trust that is tied to his children’s trust.
Meanwhile, the crypto industry is seeking to boost its lobbying efforts in D.C. in order to bend future legislation in a beneficial direction.
