Bitcoin donations approved by Federal Exchange Commission
After months of delay, the US Federal Exchange Commission (FEC) has ruled that political campaigns and political action committees (PACs) can accept bitcoin donations. The FEC’s draft advisory opinion originated from a request from Make Your Laws PAC, Inc. (MYL), and treats bitcoin donations as in-kind donations rather than cash donations. Under the ruling, bitcoin donations would not need to be liquidated or deposited in dollars within the 10-day window required of cash donations.
The advisory opinion, written by FEC Chairman Lee E. Goodman, explains the committee’s view of bitcoin contributions, noting both the similarities and differences to other financial instruments and foreign currency donations:
The Commission concludes that contributions of bitcoins … need not be deposited in a campaign depository within 10 days of receipt. 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.
Under the ruling, bitcoin donations will still be subject to the same reporting guidelines as other donations.
Holding bitcoins in a bitcoin wallet does not relieve MYL of its obligations to return or refund a bitcoin contribution that is from a prohibited source, that exceeds the contributor’s annual contribution limit, or that is otherwise not legal.
Although the opinion still technically a draft, its guidance is clear enough to allow campaigns and PACs to begin experimenting with their bitcoin-donation systems. Given the massive media interest in bitcoin, and the unique legal and regulatory status of virtual currencies, the impact of cryptocurrency donations in coming elections could be significant.
