US federal agency issues legal advisory on NFT investments
The United States Office of Government Ethics (OGE) issued a legal advisory recommending various instances when senior government officials are required to disclose their investments in nonfungible tokens (NFT).
In the legal advisory presented to the designated agency ethics officials, Director Emory Rounds III said that all NFT investments — both fractionalized (F-NFTs) and collectibles — worth $1,000 must be reported if “held for investment or production of income” at the end of the reporting period.
The guidance provided by the federal agency also requires reporting of NFT investments if officials made profits over $200 during the reporting period, adding that:
The advisory primarily targets reporting of NFTs investments that represent “property,” such as real estate. However, the OGE previously ruled that personal assets, including clothing, electronics or family photos — or NFTs representing the same — are not reportable.
Based on the circumstances disclosed by each filer, collectibles may or not be required to disclose as financial investments. Director Rounds laid down seven questions to help filers self-determine their reporting requirement, as shown below.
Filers have been advised to use the OGE Form 278e for reporting NFT investments, wherein investors must include details such as the value, income type and income amount of all eligible NFTs. The OGE revealed to continue monitoring advancements in crypto and modify the above guidance as deemed necessary in the future.
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