Lawmakers from both parties in the US House of Representatives have backed a bill that would prohibit members of Congress, their spouses and dependents from trading or owning certain financial instruments — which could expand to investments in digital assets.
In a May 2 announcement, Democratic Representatives Alexandria Ocasio-Cortez (AOC) and Raja Krishnamoorthi and Republican Representatives Brian Fitzpatrick and Matt Gaetz introduced the bipartisan Restoration of Faith in Government Act. The April 28 draft bill propose s changing US law applicable to members of Congress to prohibit owning securities, securities futures and commodities, and restrict owning or trading certain assets. Under the bill, members of Congress investing in such assets would largely be required to sell them or place them in confidential trusts within 90 days of p assage. Failure to Comply with the law may result in civil charges brought by the US Attorney General and may result in a fine of up to $50,000.
"The ability to trade stocks individually erodes public trust in government," AOC said. "We shouldn't be trading in the stock market when members have access to confidential information. It really is that simple." While four members of Congress pointed to stock trading as one of the reasons for the bill, the text of the bill suggests that ownership of certain cryptocurrencies could also be included in the ban. Members of the US Securities and Exchange Commission and the Commodity Futures Trading Commission have said Bitcoin Qualifies as a commodity, while some are still unclear about the asset status of ether. In 2021, AOC said she personally avoided investments that might represent a conflict of interest a policy she applied to stocks and cryptocurrencies. USLawmakers are largely required to report investments under the Stop Trading on Congressional Knowledge Act (STOCK Act), but are still allowed to monitor or discuss transactions that may be related to companies in which they hold stock. Issue legal proposals.
Many experts believe that under current rules, penalties for lawmakers who fail to disclose investments are not enough to deter potential conflicts of interest. Rep. Lois Frankel reportedly sold her shares in troubled First Republic Bank and bought some stock for JPMorgan before the sale, suggesting insider information was used for profit. Policymakers have previously proposed, without success, ways to expand the scope of the Stock Act to ban certain investments outright. Much of the American public said it was morally dubious to allow members to own stock or receive finan cial contributions on behalf of companies. For example, some top executives at defunct cryptocurrency exchange FTX, including former CEO Sam Bankman-Fried, have donated to the campaigns of both Republican and Democratic lawmakers.
It is unclear whether the bipartisan bill will have enough votes to pass the House and Senate before it reaches President Joe Biden's desk to be signed into law.
