# Plain Language Summary of the PORTFOLIO Act

The PORTFOLIO Act is designed to prevent federal employees, members of Congress, and the President and Vice President from trading individual stocks, cryptocurrencies, commodities, and similar investments while in office. The basic idea is to eliminate conflicts of interest where government officials might make decisions that benefit their personal investments rather than the public interest.

Here's what the bill actually requires: Starting 60 days after the law takes effect, covered federal employees and officials cannot buy any new individual stocks, crypto, or commodities. If they already own these types of investments, they have 180 days to get rid of them by selling them, donating them to charity, or placing them in a "blind trust" (a special arrangement where someone else manages the investments so the official doesn't know what's being bought or sold). The law does allow some exceptions—for example, diversified mutual funds and exchange-traded funds are permitted because they spread risk across many companies, and Treasury bonds are allowed since they're government-backed. Spouses and dependent children of covered officials can also place their investments in the same blind trust.

If someone violates these rules, they face a $1,000 fine after being notified. If they continue to hold prohibited investments for more than 30 days after being notified, they get hit with additional penalties of $1,000 plus 10 percent of the investment's value for each additional 30-day period they remain in violation. This creates a strong financial incentive to comply quickly. The law also requires ethics offices to make public any notices about blind trusts and any exemptions they grant, so there's transparency about who's getting special treatment. The rules apply broadly to all federal employees, postal workers, members of Congress, and top executive branch officials.

PORTFOLIO Act

Rep. Schweikert, David [R-AZ-1]

Preventing Opportunistic Returns on Trades and Futures by Officials, Leadership, and Individuals in Office Act or the PORTFOLIO Act This bill generally prohibits federal employees and officials from owning or trading in synthetic assets (i.e., tokenized derivatives). It also establishes financial disclosure requirements with respect to cryptocurrency. Specifically, the bill prohibits federal employees, Members of Congress, the President, and Vice President from owning or trading investments in a security, a commodity, a future, cryptocurrency, or any comparable economic interest acquired through synthetic means, such as through a derivative. Such investments must be divested through gift or donation, cashing out, or a qualified blind trust. The appropriate ethics office may grant temporary exemptions in certain situations, such as for preexisting complex financial arrangements from which investments cannot be withdrawn, and may assess fees for violations. The Department of Justice may also bring civil actions for violations. The bill also (1) incorporates cryptocurrency and other digital assets into current financial disclosure requirements; (2) modifies the categories and timelines for financial disclosures; and (3) requires agencies, ethics offices, and the Department of Justice to regularly report on violations of this bill and other related requirements.