Relates to reporting of cryptocurrency holdings on the annual statement of financial disclosure filed with the legislative ethics commission or the joint commission on public ethics.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2873A
SPONSOR: Kelles TITLE OF BILL:
An act to amend the public officers law, in relation to reporting of
cryptocurrency holdings on the annual statement of financial disclosure
PURPOSE:
The purpose of this bill is to close the loophole on cryptocurrency,
assets on the state's financial disclosure statement and add transpar-
en-; cy regarding individuals' interest in this type of digital finan-
cial property.
SUMMARY OF PROVISIONS:
A new paragraph 16-a is added to subdivision 3 of section 73-a of the
public officers law to require the reporting of type and market value of
cryptocurrencies held by the reporting individual, in excess of $1,000
at the close of the taxable year prior to the date of filing. For
purposes of the bill, "cryptocurrency" is defined as a digital currency
in which encryption techniques are used to regulate the generation of
units and currency and verify the transfer of funds, operating. inde-
pendently of a central bank.
DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION:
Technical amendments.
JUSTIFICATION:
In 2014 the Internal Revenue Service (IRS) ruled that the first non-cen-
tral bank digital cryptocurrency, known as bitcoin, be treated as prop-
erty for tax purposes. This meant that bitcoin would, henceforth, be
subject to capital gains tax. In July 2019, the IRS started sending
letters to cryptocurrency owners warning them to amend their returns and
pay taxes,. Additionally, academic research has shown that bitcoin has
some characteristics more like the precious metals market than tradi-
tional currencies, signaling agreement with the IRS decision even if
based on different reasons.
Source: https://en.wikipedia.org/wiki/Cryptocurrency
Because cryptocurrency transactions can be made anonymously, they are
difficult to track and to regulate. They are increasingly popular tools
for cybercrimes and "ransomware," a kind of digital hijacking. The
recent shutdown of the Colonial natural gas pipeline in the US southeast
was an international cyberattack by hackers who demanded payment via
cryptocurrency. This type of digital asset is designed.to work as a
medium of exchange of units called "coins". The coins are stored in a
ledger existing in a form of a computerized database-and is called a
"blockchain". Cryptocurrency does not exist in physical form (like paper
money) and is typically not issued by a central authority. Bitcoin is
the first decentralized cryptocurrency. Since the release of bitcoin,
many other cryptocurrencies have been created.
LEGISLATIVE HISTORY:
2022: A9086 referred to governmental operations
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
January 1st after enactment.
STATE OF NEW YORK
________________________________________________________________________
2873--A
2023-2024 Regular Sessions
IN ASSEMBLY
January 27, 2023
___________
Introduced by M. of A. KELLES, SIMON -- read once and referred to the
Committee on Governmental Operations -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee
AN ACT to amend the public officers law, in relation to reporting of
cryptocurrency holdings on the annual statement of financial disclo-
sure
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 3 of section 73-a of the public officers law is
2 amended by adding a new paragraph 16-a to read as follows:
3 16-a. List below the type and market value of cryptocurrencies held by
4 the reporting individual or such individual's spouse or domestic partner
5 in EXCESS of $1,000 at the close of the taxable year last occurring
6 prior to the date of filing. Whenever an interest in cryptocurrencies
7 exists through a beneficial interest in a trust, the cryptocurrencies
8 held in such trust shall be listed ONLY IF the reporting individual has
9 knowledge thereof except where the reporting individual or the reporting
10 individual's spouse or domestic partner has transferred assets to such
11 trust for his or her benefit in which event such cryptocurrencies shall
12 be listed unless they are not ascertainable by the reporting individual
13 because the trustee is under an obligation or has been instructed in
14 writing not to disclose the contents of the trust to the reporting indi-
15 vidual. Cryptocurrencies of which the reporting individual or the
16 reporting individual's spouse or domestic partner is the owner of record
17 but in which such individual or the reporting individual's spouse or
18 domestic partner has no beneficial interest shall not be listed. Also
19 list cryptocurrencies owned for investment purposes by a corporation
20 more than fifty percent (50%) of the stock of which is owned or
21 controlled by the reporting individual or such individual's spouse or
22 domestic partner. For the purposes of this item the term "cryptocurren-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD03465-02-3
A. 2873--A 2
1 cy" shall mean a digital currency in which encryption techniques are
2 used to regulate the generation of units and currency and verify the
3 transfer of funds, operating independently from a central bank.
4 Category of
5 Market Value
6 as of the close
7 of the taxable
8 year last
9 occurring
10 prior to
11 Self/ Type of the filing of
12 Spouse or Cryptocurrency this statement
13 Domestic (In Table II)
14 Partner
15 _______________________________________________________________________
16 _______________________________________________________________________
17 _______________________________________________________________________
18 _______________________________________________________________________
19 _______________________________________________________________________
20 § 2. This act shall take effect on the first of January next succeed-
21 ing the date upon which it shall have become a law.
