- Sen. Cynthia Lummis is getting ready to introduce the Responsible Financial Innovation Act, which would impact how crypto is taxed.
- She told “Meet the Press Reports” that, from a policymaking perspective, owning Bitcoin is no different than owning cattle.
Senator Cynthia Lummis (R-WY) is the most vocal Bitcoin proponent in the U.S. government. And the junior senator from Wyoming is also crafting policy that would affect BTC and other crypto assets—which don’t yet fall under a solid regulatory framework within the U.S.
Which has some asking, “Is that a conflict of interest?”
Not at all, she says. “Well, I own cows too, and cows are commodities. Bitcoin is a commodity,” she told “Meet the Press Reports” host Chuck Todd in an interview airing today. “Should I have to sell my cows because they’re a commodity and now I’m on the Banking Committee that may have a relationship to the [Commodity Futures Trading Commission], or there may be laws in Congress that affect the marketing or ownership of cattle?”
The answer, per the U.S. Senate Select Committee on Ethics is: no. Senators must “disclose any purchase, sale, or exchange of any stock, bond, commodity future, or other security when the transaction exceeds $1,000,” according to 2021 guidelines. And, to be clear, commodities and commodity futures are different—the former are the actual thing while the latter are financial agreements to buy that thing at a later date for a predetermined price.
As for cryptocurrency, members must report the coin or token they hold and, if applicable, the exchange or platform that has custody of it. As an incoming senator in 2020, Lummis reported holding between $50,000 and $100,000 worth of BTC; in August 2021, she reported an additional purchase of BTC worth between $50,000 and $100,000. She has not claimed any income from selling the assets.
The same isn’t true of her cows. According to filings, as of January 2021, she owned between $1 million and $5 million worth of cattle and declared an income from them of $110,000.
But Lummis—who, with support from New York Senator Kristen Gillibrand is drafting the Responsible Financial Innovation Act to provide tax guidance on capital gains from Bitcoin mining, staking, and other crypto activities—implied in the interview that even if she sold everything today, it wouldn’t matter.
“I bought my first three Bitcoin for $330 each,” she said. “So I had $1,000 worth of skin in the game. It’s now a $1.8 trillion market. There are 17,000 to 18,000 cryptocurrencies. So this is a very big marketplace. And I am a speck of sand.”
Still, the crux of the issue is that many people see Bitcoin as an investment. Which it may be, but regulators haven’t necessarily treated it as such.
In 2019, the then-chair of the U.S. Securities and Exchange Commission, Jay Clayton, said that Bitcoin is not a security. Securities are investment contracts such as stocks and bonds; people put money into them because they have a “reasonable expectation of profits to be derived from the efforts of others.”
That doesn’t quite apply to Bitcoin, which is a decentralized network maintained by disparate people running software on their computers. Moreover, it’s also designed to be used for transactions—whether or not people choose to do so.
Said Lummis, “At some point, though, it will become a means of payment, which it is not right now, but it’s going to happen really fast.”
If so, that could put any questions of a conflict of interest to rest.
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