As federal agencies prepare for new executive leadership, unclear ethics rules threaten to hamper the incoming Trump administration’s ability to develop sound digital asset policies. Legal Advisory 22-04, issued by the Office of Government Ethics in 2022, received little attention as part of the Biden administration’s restrictive approach to cryptocurrencies. But the impact could be severe, effectively barring anyone who holds cryptocurrencies, tokens, or stablecoins from federal government services.
This will be an immediate challenge for the incoming administration, which has pledged to restore America’s competitiveness in financial innovation. Key agencies such as the Treasury Department, SEC, CFTC, and Federal Reserve require officials who understand both traditional finance and digital assets. However, current ethical guidelines force potential appointees and civil servants to make an impossible choice: withdraw from the field altogether or stay away from public service.
The irony is striking. Treasury officials can hold investments in JPMorgan while working on banking policy, but they can’t hold any amount of Bitcoin while working on digital asset regulation. SEC lawyers can own mutual funds while reviewing securities cases, but they can’t hold $100 in stablecoins. This creates artificial barriers to hiring experts when their expertise is most needed.
As the Blockchain Association’s Senior Director of Industry, I work with over 100 member companies at the forefront of financial innovation. Many of our members include professionals with deep government experience who can provide valuable insight to federal services. But under current rules, their expertise remains off-limits unless they are willing to completely exit the industry they know best.
There is a simple solution. The Office of Government Ethics should change its guidance to allow minimal holdings of digital assets, similar to existing rules for traditional financial products. This opens the door to much-needed expertise while maintaining ethical standards. Alternatively, the next administration could simply rescind the recommendation through an executive order, which would be a quick win and signal a more balanced approach to crypto policy.
The stakes are high. As countries such as Singapore, Switzerland, and the UAE race to establish clear regulatory frameworks for digital assets, the U.S. government needs officials who understand both the opportunities and the risks. Maintaining ethics rules that are too broad not only puts government agencies at a disadvantage, it also undermines America’s ability to lead in financial innovation.
Addressing this barrier should be an early and low-hanging priority for the next administration, which is focused on effective governance and U.S. leadership in technology. The other option is to see key positions go unfilled, or worse, filled by people who have little understanding of one of the most innovative technologies of our time.
