Pennsylvania State Representative Ben Waxman, a member of the Democratic party, has proposed a new law that would restrict government employees from holding or dealing in digital currencies during their time in office.
This legislative effort, formally known as House Bill 1812 (HB1812), seeks to revise the existing state regulations concerning ethics and financial transparency. It would also extend these restrictions to the immediate relatives of these public officials.
The proposed legislation broadly covers a range of digital assets. This includes cryptocurrencies, meme-based digital coins, non-fungible tokens (NFTs), and stablecoins. The restrictions would be in place throughout an official’s term and continue for one year after they leave their position.
According to the proposed law, public servants would be required to sell off any digital asset investments within a 90-day window after entering office or from the date the bill takes effect. This ban extends beyond direct holdings to include digital assets controlled through businesses, trusts, investment funds, or financial instruments like derivatives and exchange-traded funds (ETFs).
Furthermore, lawmakers would be mandated to declare any digital asset holdings exceeding $1,000 in value on their yearly financial disclosure reports.
Non-compliance with this proposed law could result in significant penalties.
In Pennsylvania, violations of ethics rules can be classified as felonies. This means public officials who fail to follow the new regulations could face financial penalties reaching up to $50,000, or even imprisonment.
According to Bitcoin Laws, a platform monitoring crypto legislation, HB1812 has only passed the initial committee review. This is the second of six steps necessary before it can be enacted into law.
Democrats raise efforts to curb digital asset conflicts
Waxman’s proposal reflects a growing trend among Democratic legislators to address potential conflicts of interest related to digital currencies.
Earlier this year, U.S. Representative Sam Liccardo introduced a bill designed to prevent government officials and their families from profiting from cryptocurrencies, specifically including meme coins.
Liccardo’s proposed legislation sought to prohibit elected officials, their spouses, and dependent children from creating, promoting, or benefiting financially from digital securities and commodities. He described the initiative as “a way to make corruption criminal again.”
The Democratic Party has generally maintained a cautious perspective on the crypto industry.
Prominent lawmakers, including Senator Elizabeth Warren and Representative Maxine Waters, have argued that public officials’ involvement in digital asset markets, such as recent examples like President Donald Trump, raises both ethical and legal questions.
These lawmakers have also consistently emphasized the potential risks associated with the sector, spanning from market instability to possible misuse in illegal financial activities.