FBI Director Kash Patel failed to timely disclose a six-figure purchase of stock in Strategy (MSTR), the world’s largest publicly-listed bitcoin holder, according to a report by nonpartisan news outlet NOTUS.
Patel reportedly purchased between $100,001 and $250,000 worth of MSTR on Nov. 21, but did not report the trade to regulators until May 26.
A miscommunication
Patel informed the Office of Government Ethics that he “inadvertently omitted” the transaction due to an unspecified “miscommunication.”
Under the Stop Trading on Congressional Knowledge (STOCK) Act, high-ranking executive branch officials must publicly disclose individual stock trades over $1,000 within 45 days of the transaction.
The trade drew intense scrutiny because of Strategy’s bitcoin accumulation strategy and its prior dealings with federal agencies.
Strategy’s federal ties
Strategy, which NOTUS says has done millions of dollars in business over the years with the Justice Department, brands itself a “Bitcoin Treasury Company” and aggressively accumulates BTC as its primary reserve asset.
Since 2020, the company has built a stash of 847,363 BTC, worth over $50 billion as of this writing.
The FBI actively probes cryptocurrency scams, and Patel has previously praised his agency’s track record in the space.
Watchdogs push back
In a May 28 letter, Deputy Assistant Attorney General William Taylor stated the purchase did not represent a conflict of interest. Government watchdogs strongly disagreed.
Dylan Hedtler-Gaudette of the Project on Government Oversight told NOTUS that the delayed filing was:
“Violating the law — no other way to put it.”
While first-time STOCK Act violations carry a $200 fine, an FBI official noted the DOJ has not penalized Patel, and his disclosure has since been amended and approved.
Strategy’s stock has lost roughly half its value since Patel’s purchase.
