Federal Reserve Officials Banned From Owning Cryptocurrencies, Stocks After Public Outcry

The move, which follows controversy over personal trades from members, is said by the Fed to guard against “even the appearance of any conflict of interest”

article-image

Source: Shutterstock

share

key takeaways

  • The new restrictions take effect May 1
  • The Fed is mulling the creation of a central bank digital currency

As US regulators hone in on digital assets, senior Federal Reserve officials will no longer be allowed to trade individual cryptocurrencies.

On the heels of public pressure to reign in trading practices, the new Fed rules — first broached in October —  ban senior officials from purchasing individual stocks or sector funds, as well as from holding cryptocurrencies, commodities and foreign currencies. 

Executives must give 45 days notice before buying or selling a security, which they cannot later reverse. The 12 Fed regional bank presidents will be required to publicly disclose securities transactions 30 days in advance.

The rules “aim to support public confidence in the impartiality and integrity of the Committee’s work by guarding against even the appearance of any conflict of interest,” the Fed said in a Friday statement.

The move comes months after Federal Reserve governors Robert Kaplan and Eric Rosengren left their positions in September following controversy over personal trades.

The final makeup is more extensive than officials let on in October. More securities have been banned, and Chair Jay Powell now has the power to curtail the trades of relatives, including spouses and children, of officials.

Meanwhile, the Fed continues to investigate potential use cases and risks of central bank digital currencies (CBDCs). Fed Governor Lael Brainard on Friday urged officials to take digital asset technology seriously.

“The financial system is not standing still, and neither can we,” Brainard said at the US Monetary Policy Forum in New York. “The digital financial ecosystem is evolving rapidly and becoming increasingly connected with the traditional financial system.”

Under the new rules, officials will have 12 months from when the rules go into effect, May 1, to dispose of freshly banned holdings. New personnel will be given just six months to do so.


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
  • Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
Tags

Upcoming Events

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

morpho 2 graphic.png

Research

Utilizing a ‘DeFi Mullet’ approach, Coinbase’s Bitcoin-backed loans integration with Morpho demonstrates a powerful blueprint for CEXs to monetize dormant assets by expanding adoption of wrapped products (cbBTC, USDC) while also supporting native and/or preferred DeFi ecosystems (Base) which can further lead to downstream growth in onchain liquidity and increased utilization of the related assets.

article-image

With much of the bitcoin mining supply chain based in Asia, US-based operations now face higher equipment prices

article-image

Anticipating an economic downturn, venture firms may be less likely to invest

article-image

Trump’s tariffs may have potentially significant impacts on GDP, household spending and food prices — if they hold

article-image

The Binance-affiliated stablecoin lost about $200M of market capitalization

article-image

How the Bitcoin conversation has evolved since the price was less than $1

article-image

The platform also rolled out 13 tokenized funds for institutions on the Connect platform