Federal Reserve officials will be prohibited from trading cryptocurrencies.
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According to a press release, the U.S. Federal Reserve’s senior officials will be unable to trade crypto, purchase individual stocks, hold an investment in individual bonds, commodities, and even foreign currencies. The FED’s Federal Open Market Committee made the announcement today and claimed the rules had been adopted with a unanimous vote. Earlier, many high-ranking officials were accused of purchasing securities before big announcements.
The rule would prevent FED Senior Officials from entering into a conflict of interest.
The FED is attempting to regain public confidence, the release said, and send a message of “impartiality and integrity.” The rules have the objective of preventing FED Senior Officials from entering into a conflict of interest. In addition to crypto trading, the rules forbid FED officials from derivatives and margin trading and require them to provide a 45 days’ notice when purchasing or selling a security. Furthermore, they will need to obtain permission to conduct these transactions or to “hold investments for at least one year.”
Purchases and sales will also be prohibited during heightened financial market stress periods.
The financial institution also restricted its high-ranking staff from purchasing and selling during periods of heightened financial market stress. These new rules supplement existing rules that prohibit Federal Reserve officials from holding bank stocks and Treasury securities and from engaging in financial transactions during a blackout period around FOMC meetings. Once the rules come into effect, the release reveals, the presidents of the U.S. Reserve Banks will need to disclose any securities transactions within a month. This information will be made available to the public on the correspondent Reserve Bank website.
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