Should Campaigns Accept Bitcoin?

From the MIT Review Chain Letter on 10/31/2017:

Should politicians accept Bitcoin contributions?

State and local political campaigns should not accept Bitcoin contributions because it is too difficult to trace payments, according to new guidance from the Kansas Governmental Ethics Commission. That’s interesting because it’s at odds with the view of the Federal Election Commission, which said (PDF) in 2014 that it was fine for federal campaigns to buy bitcoins and accept them as contributions under certain conditions.

According to the FEC, campaigns can accept individual Bitcoin contributions of up to $100, determined by the market value at the time of the contribution. It also says that campaigns have “obligations to return or refund a Bitcoin contribution that is from a prohibited source, exceeds the contributor’s contribution limit, or is otherwise not legal.”

At this point, the issue of Bitcoin campaign contributions still raises more questions than answers. Who determines the authoritative market value? Why the $100 limit? How should candidates report gains or losses? Should they be required to use software tools like those used by Bitcoin exchanges to comply with anti-money-laundering laws? (As I recently reported, these tools are making it easier to track criminal activity. Check out “Criminals Thought Bitcoin Was the Perfect Hiding Place, but They Thought Wrong”)

There’s a chance we’ll get some answers soon. Last November, the FEC said (PDF) it was considering updating the way it regulates contributions “made by electronic means,” including Bitcoin.

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