Cryptocurrency is one of the emerging phenomenon that typically operates in a policy gray area for some time before security clearance holders get any idea of what they should do with it beyond exercising their best judgment – which isn’t terrible advise for a cohort who has already been vetted for reliability and trustworthiness. The rise of bitcoin and crypto over the past several years prompted a 2018 email from the Personnel Security Management Office for Industry (PSMO-I) said bitcoin and other cryptocurrencies should be reported to a security officer. The Defense Security Service (DSS) later clarified that was not policy, however, and the world of crypto reverted back to its policy ambiguity.

Since then our general advice when it comes to cryptocurrencies is to ‘proceed with caution.’ Without an outright prohibition or reporting requirements, security clearance holders are free to play in the world of emerging financial markets – assuming they can do so without causing other financial issues, like significant debt.

NISPOM Crypto Update

But an update to the National Industrial Security Program Operating Manual (NISPOM) released on August 12 finally provides some policy clarification around the world of crypto. The NISPOM notes that foreign cryptocurrency investments, including wallets hosted by foreign exchanges, should be reported to a security officer. If the security clearance holder is unaware that the cryptocurrency is foreign-backed, it doesn’t need to be reported.

It’s a policy, but still with enough gray area that the average crypto investor can continue to operate as they were – without fear of security clearance repercussions. Like all areas, an individual needs to decide if the financial opportunity is worth the career risk. Because of the use of cryptocurrencies across the dark web, it’s worth more than an ounce of caution to ensure any investments are on the up-and-up. If you can’t verify it, you don’t have to report it – but that probably doesn’t mean it couldn’t pose a problem down the line.

Like most issues, crypto by itself is highly unlikely to be the issue that tanks your clearance. But if it becomes a part of a pattern of risky financial investments, attempts to hide money from the government or a spouse, or otherwise puts your reliability and trustworthiness in jeopardy, yes, that cryptocurrency investment could be a clearance killer.

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Lindy Kyzer is the director of content at ClearanceJobs.com. Have a conference, tip, or story idea to share? Email lindy.kyzer@clearancejobs.com. Interested in writing for ClearanceJobs.com? Learn more here.. @LindyKyzer

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