March 2, 2018
SEC also allows employees to trade in cryptocurrencies. However, unlike the CFTC, SEC requires them to pre-clear all the digital currency.
Employees of Commodity Futures Trading Commission employees can invest in cryptocurrencies but under specific guidelines. For instance, they are not allowed to take advantage of insider information sourced from their jobs. Additionally, they are not to buy on margin.
The direction is on CFTC’s standard Ethics’ which allows people to trade in physical commodities. The direction comes from CTFC’s categorization of digital currencies as a commodity. Therefore, employees can similarly trade digital currencies that they can trade oil and corn.
The CTFC decision is critical given that CFTC‘s announcements mostly do affect crypto prices, even instantly.
Under normal circumstances, it is consider as a conflict of interest if the same people making crypto regulations trade the same. It would skew the direction of rules according to Angela Walch, an associate professor who specializes in digital money and financial stability at St. Mary’s University School of Law.
The circumstances which can lead to an employee gaining inside information that would influence trade are many. They include when they are working on a regulation involving cryptocurrencies, when handling an enforcement case and when conducting surveillance.
The government does not have a blanket policy on the investment, and each agency requires to set its own.
Securities and Exchange Commission also allows employees to trade cryptocurrencies
The Securities and Exchange Commission also allows its workers to invest in digital currencies, with some exceptions similar to the CFTC. However, the SEC has less responsibility for overseeing the crypto markets.
In comparison, employees of the Securities and Exchange Commission can also trade in cryptocurrencies under similar conditions. However, SEC has limited jurisdiction in cryptocurrencies with a special focus on ICOs at the moment. SEC‘s ethics allow employees to indulge in an ICO seven days after the ICO.
Additionally, the employees should pre-clear all their digital currency. CFTC hasn’t adopted this requirement yet.
Moreover, attorneys who specialize in government ethics are split on the issue. Richard Painter who specializes in securities law does not agree with the decision to allow the commission’s workers to trade cryptocurrencies. He says it looks terrible.
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