Last updated on May 9th, 2014 at 05:28 am
The United States Federal Election Commission on Thursday unanimously voted that political committees can accept bitcoins if they adhere to specific guidelines.
Responding to an advisory opinion request made by Make Your Laws (MYL), a non-partisan political action committee who focuses on campaign finance reform, the Federal Election Commision (FEC) said the committee can accept up to $100 worth of bitcoin per contributor per election.
The FEC also decided that MYL can use funds in its campaign depository to purchase bitcoins for investment purposes, but must convert them back into dollars before being spent.
The FEC was split three-to-three over whether they will allow MYL to purchase goods and services with bitcoin, which is a type of in-kind transaction.
Because transparency and accountability are key issues concerning campaign finance and the anonymity that Bitcoin allows only complicates the issue, the FEC agreed to allow bitcoin donations as long as MYL adheres to its proposed framework which is designed to maintain transparency and accountability.
“A committee treasurer is responsible for examining all contributions received for evidence of illegality and for ascertaining whether contributions received, when aggregated with other contributions from the same contributor, exceed the contribution limitations,” read the proposal.
It continued by saying that if the “contribution cannot be determined to be from a legal source, the treasurer must refund the contribution within 30 days of the receipt of the deposit or the discovery of the illegality.”
MYL has proposed several bitcoin-specific methods that are designed to remove potential anonymity surrounding bitcoin transactions, allowing them to determine if contributors are eligible and legally allowed to donate.
One of these methods involves the potential contributor first providing a name, physical address, and employer. They will also be required to affirm that the contributed bitcoins are owned by the contributor and not a foreign national before MYL will issue a donation address.
FEC commissioners seem to have their own interpretations of what Thursday’s advisory opinion means for the future of Bitcoin political campaign donations.
As the Wall Street Journal reported, FEC Chairman Lee Goodman said in a separate statement that Thursday’s advisory opinion doesn’t set the outer boundary regarding bitcoin contributions.
“He argued that the ruling effectively recognized incoming bitcoins as ‘in-kind’ donations and not as cash, which implied that bitcoins are exempt from laws limiting cash-only contributions to $100,” reported the Wall Street Journal.
From the Wall Street Journal:
“As with ‘bonds, securities, barter credit units…and works of art,’ it means that bitcoin contributions are now ‘by default’ permitted for up to $2,600 per campaign per year, $5,000 per PAC, $10,000 for state or local committees and $97,200 for national party committees, so long as recipients comply with disclosure and identification rules.”
However, Vice Chairwoman Ann M. Ravel rejected the statement made by Goodman, saying, “There was never any understanding that this would be treated as either cash or in-kind,” before stating that an additional rule-making session would be necessary to establish clearer guidelines.