STABLE GENIUS Act
The STABLE GENIUS Act would prohibit certain high-level federal elected officials and candidates from trading or otherwise acquiring digital assets (cryptocurrencies and similar digital representations) during specific periods—starting from when a candidate files to run for a covered federal election, throughout their time in office, and for one year after leaving office. The bill requires that any such covered investments be placed into a qualified blind trust approved by the relevant ethics office, with strict divestment and monitoring requirements. It also creates enforcement mechanisms, penalties, and reporting obligations to ensure compliance. In essence, the bill aims to remove financial incentives tied to digital asset investments from the political sphere by mandating blind-trust holding and barring certain crypto-related transactions for covered individuals, while providing civil and criminal penalties for violations.
Key Points
- 1Definitions of scope:
- 2- Covered elections include races for President, Vice President, U.S. Senator, U.S. Representative, Delegate to Congress, and Resident Commissioner of Puerto Rico.
- 3- Covered individuals include the officeholders listed above and candidates in those elections.
- 4- Covered investments and digital assets expressly include any digital representation of value recorded on a cryptographically secured ledger (i.e., digital assets/cryptocurrencies).
- 5Prohibited financial transactions:
- 6- Prohibits issuance, sponsorship, or endorsement of a covered investment.
- 7- Prohibits purchases, sales, holdings, or other actions that cause a covered investment to be acquired.
- 8- Prohibits acquisitions via derivatives or other synthetic means, and acquisitions through mutual funds or ETFs that aggregate such investments.
- 9Timing of restrictions:
- 10- Applies from the date a candidate files to run for a covered election through the end of the term and for one year after service ends.
- 11Qualified blind trust:
- 12- Covered individuals must place each covered investment into a qualified blind trust (approved by the relevant supervising ethics office).
- 13- Trustees must divest within six months, certify annually they have no information about the trust’s assets/transactions, and avoid close personal/business ties to the individual.
- 14Reporting and transparency:
- 15- Supervising ethics offices must publish copies of qualified blind trust agreements on their public websites.
- 16- Amendments to conflict-of-interest statute bring in the Federal Election Commission for candidates in the specified elections.
- 17Penalties and enforcement:
- 18- Civil: The Attorney General can sue, with civil penalties up to $250,000 and disgorgement of profits from the unlawful activity.
- 19- Criminal: Knowing violations can lead to fines, up to 18 years’ imprisonment, or both, particularly if a large aggregate loss results or the violator benefits financially through any means.