- Cryptocurrency accounts for a fraction of the billions of dollars flowing into federal elections.
- But candidates and political committees are increasingly open to accepting bitcoin and altcoins.
- Advocates offer several reasons for going politi-crypto: convenience, inclusion, privacy.
Are you a political candidate or lead a political committee and accept cryptocurrency? We want to hear from you. Email the authors of this article.https://products.gobankingrates.com/pub/4676bc08-11ad-4872-8fef-ffbda36ebb37?targeting[keyword]=news-tech
As candidates begin campaigning ahead of the 2022 midterm elections, credit cards, debit cards, and old-fashioned paper checks remain the coin of the realm for fueling their political efforts.
But a growing number are accepting cryptocurrencies, citing various reasons – inclusion, convenience, tax benefits, privacy – for doing so.
At best, rules for raising and spending cryptocurrency in federal elections are iffy. Congress has passed no law directly addressing the matter.
Guidelines that do exist, such as they are, largely stem from a 2014 advisory opinion by the Federal Election Commission that, most notably, established that political committees had the right to accept bitcoin.
The FEC likewise ruled that committees “should value that contribution based on the market value of bitcoins at the time the contribution is received.” If the price of bitcoin goes up while a political committee is in possession of it, the committee may legally profit.
The FEC’s ruling, however, is also rife with unanswered questions:
- Commissioners couldn’t agree on whether political committees might directly “purchase goods and services with bitcoins it has received as contributions.”
- The ruling specifically addresses bitcoin, the predominant cryptocurrency used in political elections, but doesn’t address by name various altcoins that have proliferated during the past seven years.
- While the FEC expressly says political committees may accept up to $100 worth of bitcoin, it’s silent on whether it’s legal for committees to accept more. (Several have done so without ramification or otherwise found work-arounds. More about that soon.)
- Can super PACs, which may legally accept unlimited amounts of money to advocate or oppose politicians, accept unlimited amounts of cryptocurrency? The FEC didn’t say.
- While the FEC provides guidelines for publicly reporting cryptocurrency contributions, an Insider review of federal records and data provided by the nonpartisan research organizationOpenSecrets indicates political committees have not consistently followed them.
“Now is probably a good time for the government to start thinking about the most effective way to regulate cryptocurrency in our political campaigns,” said Austin Graham, an attorney at the nonpartisan Campaign Legal Center.
Here are 21 federal political candidates and political committees that have, of late, led the way into the uncertain realm of cryptocurrency and elections.Andrew Yang, former candidate for US president and New York City mayor© Provided by Business Insider After unsuccessfully running for president and mayor of New York City, Yang is starting his own political party. AP Photo/Mark Lennihan, File
The former technology entrepreneur, who announced in October that he was leaving the Democratic Party, is starting a new political party, the Forward Party — which will accept donations in cryptocurrency.
“Yes! We will have a BitPay page for accepting donations soon,” the party website’s FAQ says.
Yang touted a universal basic income as his signature policy during his 2020 Democratic presidential primary campaign, and he tweeted in August that cryptocurrency was “one path” to the policy. During that campaign, FEC records show that he accepted bitcoin and ethereum contributions but did not liquidate all of them.
Yang was asked on Twitter whether he’d make advancing bitcoin and the free market a primary part of his Forward Party campaign.
“Big proponent of Bitcoin and cryptocurrencies generally — and want to allow fiat prices to go down as they should as things get more efficient instead of assuming the inflation model,” Yang responded.Chamber of Digital Commerce PAC© Provided by Business Insider Perianne Boring, center, the founder and president of the Chamber of Digital Commerce, at the Yahoo Finance All Markets Summit: Crypto on February 7, 2018, in New York City. Eugene Gologursky/Getty Images for Yahoo Finance/Oath
In October 2020, the Chamber of Digital Commerce’s political action committee wanted to make a pro-cryptocurrency statement.
So it contributed $50 worth of bitcoin to every member of Congressregardless of their politics — from ultraliberal Democratic Rep. Alexandria Ocasio-Cortez in New York to archconservative Republican Rep. Matt Gaetz in Florida.
“There’s a very large education gap in Congress involving bitcoin, and we wanted to give members a hands-on experience with the technology,” the Chamber of Digital Commerce’s president, Perianne Boring, told Insider.
About a dozen political campaigns have recently asked the Chamber of Digital Commerce about how to best accept cryptocurrency payments, Boring said, adding that her organization had a website,Crypto for Congress, that provides details. It also published a 20-page“Crypto for Congress Toolkit.”
“This is the future — it’s where politics are going,” Boring said. “People should have options to donate, and campaigns should have options to reach different kinds of people.”
Boring declined to say whether the Chamber of Digital Commerce’s PAC would again donate cryptocurrency to members of Congress running for reelection in 2022.Aarika Rhodes, a Democratic congressional candidate in California© Provided by Business Insider Aarika Rhodes is a Democratic congressional candidate in California. Courtesy of Aarika Rhodes
Rhodes told Insider she’s against banning bitcoin and cryptocurrency because people should be able to invest as they choose and “because I do believe that this is going to be, like, the next big thing like the internet.”
“And so as a science teacher, I want to be at the forefront of those kinds of things but I also want people to be aware of what these investments are,” said Rhodes, who is also calling for financial literacy courses in schools.
Rhodes said she was initially concerned about complying with federal rules when young campaign staffers suggested she should accept cryptocurrency donations. But as Sherman pressed the issue of banning it, she did more research and became excited about it as an innovation and a job creator.
The cryptocurrency community gave her campaign a “really big boost” in donations when she added a way to donate on her website, she said. She expects more candidates to warm up to the bitcoin in 2024.
“I think what you’re seeing with the emerging of Bitcoin is innovation at its finest,” she said. “And it’s kind of like the internet. Everyone’s like, ‘Oh, this is weird’ or it’s kind of like, ‘We don’t know what to do with it,’ and then it blows up to be this transformative thing.”National Republican Congressional Committee© Provided by Business Insider The National Republican Congressional Committee announced it would be the first national party committee to start accepting cryptocurrency campaign contributions. NRCC
House Republicans’ campaign arm announced in June that it would be the first national party committee to start accepting cryptocurrency campaign contributions.
The committee is accepting the currency using BitPay, the same cryptocurrency payment service mentioned by Andrew Yang’s new party, and crypto donations are converted into dollars before landing in its account. That allows the committee to accept individual donations of up to $10,000 a year instead of the $100 value for transfers of cryptocurrency, Axios reported.
The NRCC is led by Rep. Tom Emmer, a Minnesota Republican who is a cryptocurrency advocate and cochairman of the Congressional Blockchain Caucus, which promotes a “hands-off regulatory approach” to blockchain technology.
Announcing the decision, Emmer said, “We are focused on pursuing every avenue possible to further our mission of stopping Nancy Pelosi’s socialist agenda and retaking the House majority, and this innovative technology will help provide Republicans the resources we need to succeed.”Rep. Eric Swalwell, a Democrat from California© Provided by Business Insider Swalwell. JACQUELYN MARTIN/POOL/AFP via Getty Images
Swalwell, a California Democrat who mounted a short-lived 2020 presidential campaign, has not been shy about his crypto cravings.
While vying for the Democratic presidential nomination, Swalwell said he would accept campaign contributions in the form of half a dozen cryptocurrencies, including bitcoin, ether, and stellar.
A blockchain firm, The White Company, made the announcement on Swalwell’s behalf and provided the tech support for donations to his campaign.
As CoinDesk reported, Swalwell has spoken in support of cryptocurrency in the past.
“Blockchain can change the world, if we let it,” he said in 2019. “So much of our public life now exists online, and there’s no reason to believe we can’t extend this further into our democracy and our economy — from exercising our right to vote, to how we look at cryptocurrency.”Laura Loomer, a former Republican congressional candidate© Provided by Business Insider Loomer was a 2020 Republican congressional candidate in Florida. Stephanie Keith/Getty Images
Loomer, a far-right, anti-Muslim political activist, offered options to donate with cryptocurrency on her congressional campaign website. She was defeated last year in her bid to unseat Democratic Rep. Lois Frankel of Florida.
“Bitcoin promotes financial freedom,” Loomer told the publication Government Technology last year. “We are telling the old power structure that we don’t need them anymore.
During the Bitcoin 2021 conference, she heckled Twitter CEO Jack Dorsey over “censorship” and “interfering in elections” as he delivered a speech.Blake Masters, a Republican US Senate candidate in Arizona© Provided by Business Insider Masters is the chief operating officer of Thiel Capital and president of the Thiel Foundation. Gage Skidmore via Creative Commons/Wikimedia Commons
Masters, who is angling to challenge Democratic US Sen. Mark Kelly of Arizona in 2022, told supporters in September that his campaign had started accepting bitcoin — and invited them to Twitter direct-message or email him directly “for info & to donate.”
Masters himself is a major cryptocurrency investor, with seven-figure holdings in bitcoin, litecoin, dogecoin, filecoin, ethereum, bitcoin cash, Zcash, and tezos combined, according to a personal-financial disclosure he filed October 7 with the US Senate.Matthew Diemer, a Democratic congressional candidate from Ohio© Provided by Business Insider Matthew Diemer is a congressional candidate from Ohio. Courtesy of Mark Van Horn/MVHVideo
Diemer said his campaign was accepting cryptocurrency donations to support the community, the technology, and innovation in general.
“It’s kind of like, why drive an electric car if there’s more gas stations?” he told Insider. “Because you want to support the green environment, you want to support the electric-car companies.”
He accepts the currency using the company BitPay, so all such contributions land in his account as converted dollars. This year he has raised about $900 from donations that were converted from cryptocurrency, according to his own records. (He donated $50 to try out the system.)
Diemer said he and other Democratic candidates were asking the online fundraising platform ActBlue to accept cryptocurrency so “people can go to one link and donate the way that they want to donate.”
To date, ActBlue, and its Republican analog WinRed, do not facilitate donations via cryptocurrency.Libertarian National Committee© Provided by Business Insider Jo Jorgensen was the 2020 presidential nominee of the Libertarian Party. Paul Hennessy/SOPA Images/LightRocket via Getty Images
The Libertarian Party ranks among the first federal-level political committees to go crypto, having accepted bitcoin contributions since 2013.
Nevertheless, most all of the Libertarian Party’s contributions still come in a form other than bitcoin — credit card payments, for example.
It’s last cryptocurrency contribution came in June 2021, when it accepted $2,500 in cash from the conversion of a bitcoin contribution from a Libertarian National Committee donor to dollars, via payment service provider BitPay. Overall, the committee raised about $158,000that month.
Bitcoin “isn’t a large portion of what we take in by any stretch, but we feel it is important to give those in the cryptocurrency community and those who want to embrace a monetary alternative to fiat currency a direct way to support the political party that most represents them,” Tyler Harris, executive director for the Libertarian National Committee, told Insider. “The Libertarian Party embraces values of personal freedom and individual choice, so giving our supporters a wider range of options to support us in their preferred way just naturally reinforces how thoroughly we live the same values we espouse.”
Is there any downside to accepting bitcoin?
“I can’t really think of one,” Harris said. “We’ve been doing this for so long now, any upfront effort required to implement it operationally is now a distant memory. It’s become a routine part of the myriad ways that the growing ranks of Libertarians around the country are able to contribute to our cause.”Florida Conservative Fund© Provided by Business Insider Florida Conservative Fund’s disclosure of bitcoin contributions. Federal Election Commission
The Florida Conservative Fund, a super PAC, reported receiving a contribution — “3.0485 Bitcoins received, not liquidated” — in May 2018, according to a disclosure with the Federal Election Commission. In the disclosure, it valued the contribution at $25,000.
The fund did not hold onto the cryptocurrency for long. Within three months, in early August 2018, the Florida Conservative Fund liquidated the bitcoin and paid a $332 exchange fee to the cryptocurrency exchange Coinbase.
The contribution came from Castar Capital, a firm linked to Chuck Johnson, whom Gaetz, the embattled congressman from Florida, invited to the State of the Union address earlier that year. As Open Secrets reported, Gaetz had previously distanced himself from Johnson after the Republican Jewish Coalition and the Anti-Defamation League labeled him a Holocaust denier.
Three years later, Gaetz is facing a federal sex-trafficking investigation. A one-time associate of his, Joel Greenberg, has pleaded guilty to sex trafficking a 17-year-old girl and told prosecutors he witnessed the Republican lawmaker having sex with her. Gaetz has denied having sex with a 17-year-old and said he has never paid for sex.
The fund’s treasurer, Nancy Watkins, did not respond to repeated requests for comment.Rep. Tom Emmer, a Republican from Minnesota© Provided by Business Insider Emmer is chairman of the National Republican Congressional Committee. Bill Clark/CQ Roll Call
Emmer, the chairman of the National Republican Congressional Committee, read “The Age of Cryptocurrency” in 2015 and quickly became smitten with the stuff.
In recent years, Emmer has emerged as a vocal defender of cryptocurrency. Just last week, he pushed back against the Securities and Exchange Commission’s effort to expand the regulation of bitcoin and other digital tokens.
Emmer is also inviting cryptocurrency into his campaign coffers. The Minnesota Republican said last year that he would accept crypto-donations.
In an interview, an Emmer spokeswoman, Abby Rime, said the campaign liquidated cryptocurrency donations upon receipt and reported their cash value, explaining why bitcoin and other currencies didn’t appear in the Republican’s financial disclosures.
Rime said cryptocurrency donations amounted to a minimal portion of the overall contributions to the Republican’s reelection efforts.
Rime said the call for cryptocurrency donations was intended, in part, to “generate some conversations with his colleagues so that he can educate them about what the potential benefits are to not overregulating.”Rep. Darren Soto, a Democrat from Florida© Provided by Business Insider Soto. Darren Soto
Soto found legislative success this year with a pair of cryptocurrency-related bills. In June, the Florida Democrat applauded the passage of legislation directing federal agencies to submit reports on blockchain technology and deceptive practices involving digital tokens.
His embrace of cryptocurrency has extended to the campaign trail.
Soto, a cochairman of the Congressional Blockchain Caucus, reported receiving two donations — one worth $10, another $70 at the time of receipt — in the form of “Bitcoins not liquidated,” according to disclosures filed with the FEC.
In an interview, Soto told Insider that he expects cryptocurrency to figure prominently in the future of political fundraising. Last year, he said, the Chamber of Digital Commerce held a fundraising event that netted almost $2,900 in cryptocurrency donations.
“I anticipate, as so many young people are investing in or utilizing cryptocurrency, that it will become a bigger share of small-dollar donations over time,” he said.
“Right now, they’re definitely event-centric for the most part for us.”3.14 Action Fund© Provided by Business Insider The 3.14 Action Fund is a federal political action committee. Sale of its swag benefits its political efforts. 314action.org
During the 2018 election cycle, the 3.14 Action Fund — its mission is to “elect more scientists to Congress, state legislatures, and local offices” — reported accepting more than $187,000 in bitcoin and ethereum in total from seven donors, according to FEC records.
“That cycle, we had donors who wanted to contribute using cryptocurrency, so we made a decision to accept it. It’s not really different from accepting stock, which groups do regularly,” a 3.14 Action Fund representative, Alexandra De Luca, told Insider.
Since then, however, no donor has asked to contribute to the 3.14 Action Fund using cryptocurrency, and the group does not “currently retain assets in cryptocurrency,” De Luca said.Matt West, Democratic candidate for Oregon’s 6th Congressional District© Provided by Business Insider Matt West, a Democrat running for Oregon’s 6th Congressional District Courtesy of Matt West
When Matt West announced his run for Congress on October 12, he prominently mentioned his doctorate degree in chemical engineering and said he was “running to be among the few scientists in the US House.” But the Democrat campaigning in Oregon’s newly created 6th Congressional District said his expertise didn’t end there.
West said his experience in cryptocurrency development would “position him as the first member of Congress with the experience needed to make informed policy decisions around cryptocurrency regulation.” He told Insider that he was bringing his embrace of cryptocurrency to his campaign contributions and accepting donations in the form of bitcoin, ethereum, and other well-known digital tokens.
“The reason I’m accepting cryptocurrency and why it’s so important to me to accept it — it’s not just like a hook,” West told Insider. “This is an area that I’ve been involved with for quite some time, and this is my way of just showing the people that I work with that I truly do take it seriously, that this is, in many ways, part of the future of our financial system.”
West did acknowledge one downside of accepting crypto-donations: “My compliance firm is charging me more money because there are a lot more hoops to jump through.”
He added: “People know how to handle ActBlue and the other, more traditional methods of fundraising. This is newer. There’s a little bit more red tape, so that is one of the downfalls right now, is just making sure that we do stay compliant.” Sen. Rand Paul, a Republican of Kentucky© Provided by Business Insider Sen. Rand Paul, a Republican from Kentucky Tasos Katopodis/Getty Images
Paul accepted bitcoin during his 2016 presidential run, becoming the first presidential candidate during that election to do so.
“Senator Paul will run the most tech-innovative campaign in 2016,” then-spokesman Sergio Gor told the New York Times when asked about Paul’s decision to accept the digital currency. “From Snapchat to bitcoin, we’ll engage in various forums before anyone else.”
But it appears Paul has since disengaged from accepting bitcoin to help fund his political ambitions. Neither his Senate re-election campaign committee, nor his leadership political action committee, RANDPAC, allow donors to contribute bitcoin via their websites.
Paul’s Senate and campaign offices did not respond to Insider’s requests for comment.Brian Forde, a former Democratic congressional candidate in California© Provided by Business Insider Forde was a Democratic candidate in 2018 for California’s 45th Congressional District. Leonard Ortiz/Orange County Register via Getty Images
Forde, who unsuccessfully ran for California’s 45th Congressional District seat in 2018, to this day ranks as one of the most successful crypto-candidates in US history, raising just short of $200,000 in bitcoin.
The independent 2020 presidential candidate Brock Pierce, a billionaire, was among several dozen people who donated bitcoin to Forde’s campaign.
Forde did not respond to Insider’s requests for comment, but he told Politico in 2018 that he’d accept contributions most any way his supporters wanted to make them.
“We’ll take contributions via check, we’ll take contributions via credit card, we’ll take donations via cryptocurrency,” said Forde, who worked as a White House technology advisor during President Barack Obama’s administration. “There are people in the cryptocurrency community who come to our fundraisers, and we welcome them.”Kelli Ward, a former US Senate candidate in Arizona© Provided by Business Insider Ward, a former US Senate candidate who is chairwoman of the Arizona Republican Party. Photo by Ralph Freso/Getty Images
In her unsuccessful Senate run, Ward opened a portal for supporters to make contributions in the form of cryptocurrency.
Through a spokesman, Ward, now the chairwoman of the Arizona Republican Party, recalled that her campaign set up a mechanism for accepting cryptocurrency but wasn’t familiar with how it worked.
On the lack of crypto support, Ward said, “I guess I was ahead of my time,” the spokesman relayed to Insider.Eric Brakey, a Republican 2020 US House candidate from Maine© Provided by Business Insider Brakey during a radio forum in 2018 when he was running for US Senate in Maine. Derek Davis/Portland Portland Press Herald via Getty Images
But it was as a successful candidate for the Maine Senate in 2014 when Brakey became a political innovator, accepting cryptocurrency at a time when many politicians had little idea what cryptocurrency even was.
“The Maine Ethics Commission has to invent a whole new procedure because nobody has really tried this,” Brakey told Insider.
Brakey said a few of his donors while he was running for Congress wanted to specifically contribute in cryptocurrency, and he was happy to oblige. One advantage for political donors contributing to candidates in cryptocurrency, Brakey noted, is that they may do so without converting the asset into cash, thereby avoiding capital-gains taxes.
“To some degree, it’s still a novelty,” Brakey said. “But I think it’ll become more and more common in campaigns.”Former Rep. Dana Rohrabacher, a Republican from California© Provided by Business Insider Rohrabacher. Ivan Sekretarev/AP
Rohrabacher, whose pro-Russia politics helped precipitate the end of his career in elected politics, received several bitcoin contributions during his failed 2018 reelection campaign, together valued at more than $10,000, according to FEC records.Austin Petersen, a 2018 US Senate candidate in Missouri© Provided by Business Insider Petersen was a 2018 GOP primary candidate for Senate in Missouri. Gage Skimore
The former GOP candidate experienced the other side of the bitcoin when he had to turn down a $130,276 donation in 2018.
“To whoever tried to give us $130,276 in #Bitcoin on Saturday, we had to refuse your donation,” he wrote on Facebook. “Please donate $5400 to http://austinpetersen.com/bitcoin in order to comply with FEC regulations. Also, start a PAC or something mate!”
Petersen, who founded the website The Libertarian Republic, lost his GOP Senate primary bid to Josh Hawley, who now represents Missouri. He also tried but failed to win the Libertarian Party’s 2016 presidential nomination.
“I am a big fan of the digital currency community because of what it represents, which is ultimately decentralization,” he told the St. Louis Post-Dispatch in 2017.Adam Kokesh, 2018 Libertarian US Senate candidate and 2020 Libertarian presidential candidate© Provided by Business Insider Kokesh, center, demonstrating near the US Capitol in 2007. Joshua Roberts/Getty Images
Kokesh ran for president as a Libertarian in 2020 and, before that, as a Libertarian write-in candidate for US Senate in Arizona.
He personally made a series of three- and four-figure cryptocurrency contributions to his campaign committee in 2018, federal records indicate.