US Federal Reserve Staff Banned From Trading Bitcoin
Federal Reserve Officials will no longer be able to trade Bitcoin along with other assets and bonds. The ban comes as a part of new rules that were formalized on Friday. The latest regulations follow up on the October rules that banned policymakers from owning individual stocks and restricted trading. Most of these restrictions will come into effect from May 1.
Ban Will Cover Spouses and Children of Officials Too
The rules cover FOMC members, presidents of regional banks, and a range of other officials that includes bond desk managers, staff officers, and Fed employees. The ban even brings under its ambit the spouses and minor children of the officials. Central bank officials sprung into action last year following disclosures that several Federal Reserve officials had been indulging in the trade of individual stocks and stock funds just before the central bank was gearing towards boosting the economy during the early days of the pandemic. The controversy had led regional presidents Eric Rosengren of Boston and Robert Kaplan to leave their positions.
Cryptocurrencies Become the Latest Casualty to New Regulations
It is worth mentioning that the October announcement didn't include cryptocurrencies. The new regulations grant 12 months to officials still holding market positions to shed prohibited positions. On the other hand, new Fed officials will have 6 months to do so. The rules also mandate officials to give a notice of 45 days before they purchase any permissible asset. This restriction will come into effect from July 1. They will then have to hold these positions for at least 112 months. Also, they will be forbidden from any trading during periods of heightened financial stress. Other than stocks, crypto, and bonds, the ban also extends to derivatives, foreign currencies, commodities, and sector index funds. Congress has also been discussing ways to restrict its members from owning individual stocks. However, this has not yet been adopted.
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