Sen. Lummis, sell your bitcoin

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There is a cryptocurrency angle for Wyoming, but it must follow an economic development strategy that cannot be tainted or influenced by personal interests and currently Senator Cynthia Lummis has an undeniable financial conflict of interest.

I don’t think she has a sneaky motive for promoting bitcoin. But it is not for each senator or representative to decide whether the conflict of interest regulations apply to them. Lummis is to sell his five bitcoins, which are collectively worth around $ 200,000.

Digital currency laws have a big impact on Lummis’ personal financial situation. Since taking the oath, bitcoin prices have impacted her net worth by $ 160,000, by my calculations. It’s hard for anyone not to have an unwitting bias when the stakes are so high.

This is not a fussy household. Members of the US Congress are drafting tax laws, and the tax treatment of cryptocurrency is the subject of active debate.

Today, a tax loophole classifies digital currencies as property, which means that unlike stocks and mutual funds, individuals can circumvent blank-selling rules. This means that if a person bought bitcoin in May for $ 50,000, they could sell it today for $ 40,000, redeem it immediately, but still take the $ 10,000 loss on their tax return. It’s a good deal and needs to be fixed. This will, however, have an impact on the attractiveness of Lummiss’ own investments.

There is also the question of whether a bitcoin is classified as a currency, property, or investment. This is important because, for example, if a person buys bitcoin for $ 30,000, its price increases to $ 40,000, and the person then uses it to buy a new truck for $ 40,000, it raises the question of find out how the $ 10,000 gain should be treated as a tax matter. Is this gain taxed as short or long term gain, and can it be deferred?

This is all more embarrassing as Lummis mainly talks about one of the more than 10,000 cryptocurrency brands. Last month, she was one of six keynote speakers at the bitcoin2021 conference and, in a recent interview, said she was an advocate for bitcoin.

To my knowledge, this is the first time in our modern Congress that a member has actively and openly used his elected mandate to defend an investment he personally owns.

This is no different than if Lummis owned Disney stock and continued to broadcast information via cable encouraging Americans to buy Disney stock.

Bitcoin may be the most popular form of cryptocurrency, but it still accounts for less than half of all cryptocurrency volume. Yet in a recent interview with CNBC, Lummis mentioned bitcoin 37 times, but never any of the digital currency competitors. This ultimately prompted the reporter to ask him about Ethereum, the second most popular cryptocurrency. To this, the senator replied: The only one that I really understand is bitcoin.

Finally, Lummis provides financial advice regardless of the laws, regulations and standards we have for financial advisers. The Securities and Exchange Commission and the Investment Advisors Act of 1940 exist to protect people from investment advice that does not follow protective guidelines, such as not understanding individual financial circumstances and appetite for money. risk.

In the same CNBC interview. Lummis offered cheeky investment advice to everyone, as I see bitcoin as a great store of value; I encourage [Americans] save bitcoin for retirement; and I think one of the strongest long-term stores of value is bitcoin.

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If your grandma had taken her advice last April, when she said in a nationwide interview: Save money in bitcoin I’m a big supporter of bitcoin, your grandma would have lost a third of her investment in a few weeks.

There is no doubt that Lummis is a genuine and honest fan of cryptocurrency. She owned bitcoin long before she became a senator and I think her enthusiasm is driven by a genuine passion for cryptocurrency, not self-operation. But none of that matters when it comes to a senator separating her personal interests from those of her official duties.

If Senator Lummis is to use her power in Congress to increase demand for cryptocurrency in general, she must first eliminate her own personal financial interest. We need to know that those who use their power and influence to shape and defend laws and regulations have neither the appearance nor the real existence of conflict.

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