US executive branch employees who own NFTs must disclose assets they hold for investment or production income that are worth more than $1,000, according to a new legal advisory from the Office of Government Ethics.
The office oversees executive branch employees in the White House and across more than 130 government agencies. The advisory for employees who file public financial disclosures comes after the NFT market reached a peak at the beginning of the year.
The new advisory focuses on NFTs and fractional NFTs that come in the form of “virtual artwork, music, video files, trading cards, digital real estate or items in a virtual world.”
Public financial disclosure filers must report NFTs that are worth more than $1,000 or produce over $200 in investment income, according to the advisory, which was released by OGE Director Emory A. Rounds III on Monday.
Public financial disclosure filers must disclose the purchase, sale and exchange of collectible NFTs and F-NFTs that qualify as securities, the advisory says.
Filers do not need to report assets that are not held for investment or production income, and instead are held for personal, family or household use. The office has previously said other household items like furniture, clothing and perishable items purchased for family use are not reportable.
The office laid out a seven-part test in the advisory for determining whether an NFT is held for personal or investment use. The test asks whether the NFT was purchased for personal or aesthetic reasons, and if it was bought primarily for its potential value, among other questions.
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