STABLE GENIUS Act
The STABLE GENIUS Act is a proposed federal bill that would bar certain elected officials and candidates from engaging in certain financial activities related to digital assets (cryptocurrency) during specific periods. Specifically, it would prohibit covered individuals (including the President, Vice President, Senators, Representatives, Delegates to Congress, Resident Commissioner of Puerto Rico, and candidates in covered elections) from issuing, sponsoring, or purchasing/selling/holding digital assets in ways that would create a conflict of interest. The prohibition applies from the date a person files to run in a covered federal election through the end of their term and for one year after leaving office. During these periods, individuals would be required to place all covered investments in a qualified blind trust approved by the appropriate ethics office, with divestment deadlines and ongoing compliance obligations. The bill also creates reporting requirements, expands officials’ oversight by ethics offices and the Federal Election Commission (FEC) for certain roles, and establishes civil and criminal penalties for violations, including potential fines, disgorgement of profits, and substantial prison time in cases with large losses or benefits. In short, it aims to prevent lawmakers and candidates from trading or otherwise benefiting from digital assets while in office or running for office, by mandating blind trusts, strengthening disclosures, and enforcing penalties.
Key Points
- 1Scope of who is covered: includes the President, Vice President, U.S. Senators, U.S. Representatives, Delegates to Congress, Resident Commissioner of Puerto Rico, and candidates in a covered election.
- 2What counts as a “covered investment” in a “digital asset”: any digital representation of value recorded on a cryptographically secured distributed ledger or similar technology (i.e., broad crypto assets).
- 3Prohibited transactions: during the campaign filing to election period, during the term of office, and for one year after leaving office, a covered individual may not engage in:
- 4- Issuance, sponsorship, or endorsement of a digital asset.
- 5- Purchase, sale, holding, or other conduct that results in obtaining a digital asset.
- 6- Acquisition of a financial interest in a digital asset via derivatives (options, warrants, etc.).
- 7- Acquisition of a similar financial interest through mutual funds, ETFs, or other aggregation that yields exposure to such assets.
- 8Qualified blind trust requirement: during the restricted periods, each covered investment must be placed in a qualified blind trust (approved in writing by the applicable supervising ethics office). The trustee must divest within 6 months, certify annually that no information about the trust’s assets/transactions has been provided to the covered individual, and avoid close personal/business relationships with the individual.
- 9Reporting and oversight: supervising ethics offices must publicly post copies of qualified blind trust agreements. The bill also expands reporting authority to include the Federal Election Commission for candidates in presidential, senatorial, representative, delegate, or Resident Commissioner elections.
- 10Enforcement and penalties:
- 11- Civil: Attorney General may sue a violator; civil penalties up to $250,000; potential disgorgement of profits to the U.S. Treasury.
- 12- Criminal: knowingly violating the prohibition and causing large losses (at least $1,000,000) or benefiting financially from the prohibited transaction can lead to fines and imprisonment (up to 18 years, or both).