Dialing for Bitcoin? Federal Election Commission Approves Bitcoin Political Donations.

The Slatest
Your News Companion by Ben Mathis-Lilley
May 8 2014 8:53 PM

Dialing for Bitcoin? Federal Election Commission Approves Bitcoin Political Donations.

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Your latest campaign contribution?

Photo by KAREN BLEIER/AFP/Getty Images

The Federal Election Commission on Thursday voted unanimously to allow political donors to contribute using Bitcoin. The decision cracked open the door of legitimacy in the American political system to the virtual currency, but only slightly. The ruling acknowledged, essentially, that Bitcoin is actually a thing, and much like “money or anything of value,” can be used for political contributions—but only to federally regulated political action committees, not candidates or parties.

Here’s more on the new set of dos and don’ts when it comes to the new form of political contributions from the New York Times.

They also imposed some restrictions, ruling that Bitcoin donations will be capped at a cash equivalent of $100 per person per cycle, with the value determined at the time of the donation, and that a complete accounting of name, address and employer must accompany the donation. Committees can liquidate a Bitcoin contribution immediately, or they can choose to keep it as an investment, in the same way they do with stocks and bonds. Since the value of the virtual currency can fluctuate suddenly, the opportunity for a windfall is real, but is growing rarer as it stabilizes. The opinion also allows committees to buy Bitcoins on the open market, but prohibits them from using the coins to pay for goods or services. They must be liquidated into United States currency before being spent.
The ruling is both an acknowledgment of the currency’s growing popularity and a move to protect against efforts to circumvent campaign finance laws. Bitcoins can be difficult to trace, potentially opening the gates to both illegal and foreign money… Bitcoin had occupied a gray area in campaign finance after the commission deadlocked on a ruling in November. No current federal law or regulation prohibits virtual currencies in campaigns.

Elliot Hannon is a writer in Washington, D.C. Follow him on Twitter.