The Federal Reserve has banned its top officials from investing in cryptocurrency. “Officials covered by the new rules will have 12 months from the effective date of the rules to get rid of all prohibited holdings,” the Federal Open Market Committee said.
Senior Federal Reserve officials banned from investing in cryptocurrency
The Federal Open Market Committee (FOMC) announced on Friday that it had “unanimously formally adopted comprehensive new rules for investment and business activity of senior officials.”
The FOMC is a committee within the US Federal Reserve System responsible for overseeing the country’s open market operations.
The rules were first announced in October last year to reinforce “the impartiality and integrity of the Committee’s work by preventing even the appearance of any conflict of interest”, details the announcement, in specifying:
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 prohibited from “purchasing individual stocks or sector funds”, “entering into derivative contracts” and “engaging in short selling or buying securities on margin”. . The cryptocurrency was not included in the October announcement.
The new rules apply to reserve bank presidents, board members, first vice president, directors of research, FOMC staffers, director and deputy market account manager open to the system, to directors of council divisions who regularly attend committee meetings, to any other person designated by the president, as well as the spouses and minor children of these persons.
The Federal Reserve expects the rules to apply to additional staff after further review and analysis.
The rules follow a controversy last year in which several senior Fed officials swapped stocks and other investments just before the central bank passed sweeping measures to help the economy weather the storm. Covid-19 crisis. Eric Rosengren, president of the Federal Reserve Bank of Boston, and Robert Kaplan, president of the Federal Reserve Bank of Dallas, left their posts following the controversy.
The FOMC explained:
Officials covered by the new rules will have 12 months from the date the rules come into force to dispose of any unauthorized assets.
“Going forward, newly covered officials will have 6 months to get rid of any unauthorized assets,” the FOMC noted, adding that the rules will go into effect May 1.
Do you think senior Fed officials should be banned from the investments listed above? Let us know in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons
Warning: This article is for informational purposes only. This is not a direct offer or the solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service or company. bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.