The MEME Act (Modern Emoluments and Malfeasance Enforcement Act) would add a new Subchapter IV to Title 5, United States Code, aimed at curbing financial exploitation by federal public office holders and certain closely connected individuals. It defines a set of "prohibited financial transactions" involving the issuance, sponsorship, or promotion of certain financial assets (including digital assets like cryptocurrencies, meme coins, tokens, and NFTs) for pecuniary gain. The law would apply to the President, Vice President, other high-ranking public officials, and “adjacent individuals” (which includes Senior Executive Service members, high-ranking military officers, certain other positions designated by the Special Counsel, and the spouses or dependent children of these individuals). The bill imposes prohibitions during service, and for a 180-day window before and after service, with civil and criminal penalties, a private right of action, and disgorgement of profits for violations. It also sets a broad enforcement framework, including a sense-of-Congress statement prioritizing honest services and avoidance of personal financial gain through public office.
Key Points
- 1Creation of Subchapter IV: Establishes a new set of prohibitions against financial activity by “covered individuals” and their “adjacent” associates, including definitions of key terms (adjacent individual, covered asset, prohibited financial transaction, and covered individual).
- 2Scope of prohibited assets: Covered assets include securities, security futures, commodities, digital assets (such as cryptocurrencies, meme coins, tokens, and NFTs), and derivatives/ETFs/mutual funds tied to those assets.
- 3Prohibited time frames: A covered or adjacent individual may not engage in or benefit from a prohibited financial transaction during their term of service, within 180 days before service begins, or within 180 days after service ends. Adjacent individuals remain subject to existing conflict-of-interest laws (Section 208) as well.
- 4Penalties and remedies (civil): The Attorney General may sue violators in federal court. Civil penalties may be up to $250,000 per violation, and violators must disgorge profits derived from the prohibited transaction. A continuing conduct violation (e.g., promoting the asset) is itself a violation.
- 5Private right of action: Investors, competitors, or other private parties harmed by a violation may sue in federal court for equitable or monetary relief, notwithstanding contract terms.
- 6Criminal penalties: The bill adds a new criminal penalty provision (Title 18, Sec. 228) for knowing violations of 13152, including (a) large public losses or personal financial gain from the asset, with potential fines and up to five years of imprisonment; (b) bribery; (c) insider trading tied to these assets. Intent to create the asset is not required for liability.
- 7Sense of Congress: The bill states it is the sense of Congress that federal officials should not use their office for private financial gain, and that promotion or sponsorship of financial instruments by public office holders undermines honest services and public trust.