FEC Approves Bitcoin In-Kind Donations for US Political Campaigns
Published on May 8, 2014 at 16:35 BST
The US Federal Election Commission (FEC) has determined that political campaigns and political action committees (PACs) may accept bitcoin as a form of in-kind donation under current federal election laws.
The FEC previously delayed a decision on a request for clarification from Make Your Laws (MYL) – an organisation that facilitates political contributions – which sought guidance on how it could go about accepting and using bitcoin donations, as well as general rules for handling digital currencies.
In its draft report, the FEC tracks closely with comments made previously by the commission's leadership regarding the potential for bitcoin to be qualified as a type of in-kind donation.
The decision mirrors a proposal dating from November 2013, when the FEC explored the idea of treating bitcoin donations as in-kind contributions.
In the report, the commission wrote:
“The initial receipt of bitcoins as contributions, regardless of subsequent disposition, should be reported like in-kind contributions.”
Bitcoins use for campaigns
Under US law, most campaign contributions must be deposited into a campaign bank depository 10 days after receipt.
In the case of stocks, bonds or pieces of artwork, however, a campaign or action committee may hold that asset for longer than 10 days. Once that asset is liquidated, the proceeds must then be placed into a campaign depository. The same applies for digital currency:
“Like securities that a political committee may receive into and hold in a brokerage account, bitcoins may be received into and held in a bitcoin wallet until the committee liquidates them.”
The FEC also determined that campaigns are required to adhere to existing guidelines for reporting the receipt or sale of bitcoins. This includes collecting personal information from any donor.
MYL also sought guidance on the sale and disbursements of bitcoins. The FEC concluded that, according to US federal election laws, a campaign or PAC may purchase bitcoins for the purpose of investment, but that they cannot be disbursed from the organization. Disbursement can only take place if the bitcoins are sold and the proceeds are placed in a campaign depository.
Bitcoin donations increasing
The FEC decision was not unexpected, as several political campaigns in the US have moved to accept bitcoin contributions.
Texas Attorney General Greg Abbott started taking bitcoin donations in April and his campaign has been treating these contributions as in-kind, according to state and federal law.
Other federal lawmakers, such as Representative Steve Stockman, have also welcomed bitcoin donations.
Uncertainty prior to the FEC’s release has resulted in some state-based election regulators to postpone their own decisions on bitcoin donations.
Earlier this week, a Wisconsin alderman running for state office returned a $100 bitcoin donation after the Government Accountability Board opted to not set a policy on the matter before the FEC could weigh in.
Capitol Hill image via Shutterstock
CoinJar Abandons Bank Transfers for Bill-Payments Service...
US Government Taps Nonprofit to Research Digital Currency...