The US Office of Government Ethics (OGE) has ordered federal employees to report their holdings of virtual currency, according to new guidance issued June 18. The guidance will affect around 2 million federal executive branch employees, including the Departments of Homeland Security, the Army, Justice, Veterans Affairs, and others.

According to the notice, the OGE “does not consider virtual currency a ‘real’ currency or legal tender.” The reporting and conflict principles set out in the guidance will apply equally to digital assets like “coins” and “tokens,” which were received within initial coin offerings (ICOs) or issued or distributed employing blockchain technology. It states:

“Filers report their holdings in a virtual currency if the value of the virtual currency holding exceeded $1,000 at the end of the reporting period or if the income produced by the virtual currency holding exceeded $200 during the reporting period. Filers are required to identify the name of the virtual currency and, if held through an exchange or platform, the exchange or platform on which it is held.”

The development of guidance was deemed essential because, “virtual currencies are experiencing a surge in use and access, and as a result, employees who hold virtual currencies are increasingly seeking guidance from their ethics officials concerning their financial disclosure reporting obligations.”

Public filers are required to report transactions of certain investment assets, i.e. different forms of securities, although the notice says that the requirements will depend on whether a particular digital asset is recognized a security. If there is any uncertainty, the agency recommends “ethics officials advise the employee to report transactions of that asset on periodic transaction reports if the value of the transaction exceeds the reporting threshold.”

Furthermore, the guidance states that digital currency is an “investment asset” and “it may create a conflict of interest for employees who own it,” and it is not subject to any conflict of interest exemptions. According to the document, the OGE may need to issue further guidance as “the nature of virtual currency becomes better defined.”

In March, the South Korean government banned its own officials from holding and trading cryptocurrency, which is considered to be “the first time the government has formulated a virtual currency ban for all public officials.” According to the Ministry of Personnel Management, officials who are found to be involved in cryptocurrency trading are “in violation of the prohibition of forbearance obligations under the civil servants’ law” and are subject to disciplinary actions.