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US Elections Watchdog Might Change Bitcoin Rules

October 20, 2016 at 6:05 PM | By Jit Sutradhar News

us, politics, washington

Amidst the backdrop of a chaotic presidential election between Democrat Hillary Clinton and Republican Donald Trump, the US Federal Election Commission is quietly debating whether to reclassify how it treats bitcoin donations.

In May 2014, the FEC greenlit bitcoin donations to political campaigns, classifying them as an “in-kind” contribution in response to a request by a Make Your Laws PAC, a North Carolina organization. At the time, the agency put a cap of $100 per contributor, an amount that corresponds to whatever the current market price is at the time of the donation.

By ruling that bitcoin donations are in-kind contributions, the FEC placed the digital currency in the same category of stocks or other kinds of valuable assets. This was largely driven by the fact that bitcoins can’t be deposited into a bank account. Instead, a campaign can hold on to any bitcoins received until it decide to sell them, at which time a 10-day deadline for depositing the funds kicks in.

Public records, however, show that the FEC is rethinking this approach, at least in part.

According to a draft agenda from 15th September, the FEC is in the earliest stages of considering whether to continue that “in-kind” classification or align the digital currency with its rules on cash.

The agency wrote:

“Should the Commission revise its regulations to treat contributions of bitcoin and other Internet-based alternative mediums of exchange as cash contributions or…as in-kind contributions?”

The process was approved by the agency late last month. Once the planned rulemaking is outlined and published in the Federal Register, the FEC will open the floor to public comment. The agency said it was particularly interested in comment from those who operate payment platforms and wallet services.

The fact that in-kind contributions can’t be deposited by campaigns into their official bank accounts could lead the agency to stick with the current rules. Still, the FEC is seeking comment on how any new rules might conflict with stipulations in the Federal Election Campaign Act of 1971 regarding deposit requirements for donations.

Broader scope

The discussions at the FEC aren’t happening in a vacuum, however.

The potential change comes amid a broader conversation within the FEC about how to oversee elections in an era of digitization, which could also result in modernized requirements for electronic recordkeeping.

According to the agenda document, the FEC wants to update how it classifies electronic donations as a whole. It cites one study that showed roughly half of all campaign contributions during the 2012 election were sent either online or by way of email.

As a result, the rulemaking process will also encompass other electronic means of payment like prepaid cards and platforms like PayPal. At issue, the FEC said, is that the laws it is required to enforce “largely predate this technological evolution, as do many of the Commission’s regulations”.

 

Article Source: http://www.coindesk.com

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