More Corruption in US Election Campaign Finance With Legalization of Bit-Coin Donations, May 9, 2014

More Corruption in US Election Campaign Finance With Legalization of Bit-Coin Donations

May 9, 2014

U.S. election panel approves bitcoin donations to political committees

WASHINGTON, Thursday, May 8, 2014, 11:21pm EDT

(Reuters) -

The U.S. Federal Election Committee said on Thursday that the virtual currency, bitcoin, could be used for donations to political action committees under certain conditions.

In a unanimous vote, the FEC, which enforces U.S. campaign finance laws, said a political committee could accept donations in bitcoins up to an individual limit of $100 for each election cycle and could also purchase bitcoins.

But the advisory opinion, issued in response to a request for guidance by the Make Your Laws political action committee, said the committee "must sell the bitcoins it purchases and deposit the proceeds into its campaign depository before spending those funds."

The FEC did not approve the use of bitcoins to purchase campaign goods and services.

The agency approved the request by the Make Your Law committee to accept individual bitcoin donations to $100 for each electoral cycle, require contributors to list their names, addresses, occupations and employers, and affirm they own the bitcoins they are contributing.

Bitcoin, the most popular digital currency, is not backed by any government or central bank, and its value can swing dramatically based on demand. Users can transfer bitcoins to each other online and store the currency in digital "wallets."

The FEC said it concluded that bitcoins were "money or anything of value" under federal election law.

But it acknowledged that "government agencies, courts and others are grappling" with whether virtual currencies should be treated as money.

The U.S. Justice Department warned last year that many virtual currency services did not have the proper controls in place to prevent money laundering and could be used to dodge U.S. laws.

(Reporting by Peter Cooney; Editing by Mohammad Zargham)

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