The US Federal Election Commission has said that it is ‘permissible’ for individuals to raise funds for political candidates by mining cryptocurrencies like bitcoin, in a draft opinion published by the commission this week.
Attorneys for the FEC issued the opinion in a memorandum in response to a proposal previously submitted by OsiaNetwork LLC, which was based on a system of allowing individuals to share computer processing power in order to fund political campaigns.
Money raised could be used to fund political committees, and was deemed by the FEC to be acceptable both under its own laws and the campaign act.
However, the FEC dismissed the suggestion this could be deemed a form of volunteering, saying “it does not fall within the volunteer internet activities exception, and would result in contributions from both the individuals and the OsiaNetwork to the participating political committees”.
The memorandum says that because there is no communication involved, this type of funding would not fall within the exemption for volunteering.
“Because participation in OsiaNetwork’s cryptocurrency mining pool does not constitute an ‘internet activity’ as defined in the regulation due to the lack of a communicative element, the use of an individual’s computer and internet access to participate in the mining pool would not fall within the exemption regardless of the fact that computers and means of internet access are included in the definition of ‘equipment and services.’”
The opinion goes on to state that OsiaNetwork would be treated like a third-party fundraiser, and any contributions beyond the pooled computing power would be regarded as donations through a partnership, within the scope of the current funding rules.
The development is potentially significant in its implications for future campaign funding, where cryptomining could be used to harvest excess processing power from supporters to generate campaign funds.
The resource-intensive process for mining cryptocurrencies like bitcoin can run as a background application across millions of computers, with the potential to raise significant revenues for political campaigns.
With the FEC seemingly on board, it remains to be seen whether campaigns deploy this type of funding in the near future.