By Julian Hattem - 04/23/14 12:47 PM EDT
The Federal Election Commission (FEC) on Wednesday indicated support for a request to allow campaigns to accept bitcoins ahead of the 2014 midterm elections.
The commission delayed a formal vote on a petition to be able to accept up to $100 worth of the money, but commissioners seemed optimistic that they could draft a compromise to allow a limited amount of contributions in the virtual currency.
The money, she added, “allows for anonymous and untraceable transactions, which would clearly undermine what is the most important, in my mind, purpose of campaign finance laws, and that is transparency and the disclosure of political spending. I am definitely unwilling to go that far.”
However, she said that bitcoins are “most analogous, for the purposes that we have before us today ... to cash,” and she “would support here today” a draft response to limit contributions to $100.
Political contributions in cash are capped at $100 under FEC rules.
Ravel, a Democrat, had previously opposed allowing the currency to be used for political contributions, because of the lack of transparency.
Commissioner Ellen Weintraub, another Democrat who had been skeptical of bitcoins, added that the request to limit contributions to $100 “has tried to make it easy for us.” The petition, she added, “sounds like [something] a majority of commissioners would be prepared to say yes to.”
Wednesday’s request came from the Make Your Laws PAC, which asked the commission to be able to accept up to $100 worth of bitcoin from contributors who provide their name and addresses, among other details. The petition came just months after the FEC deadlocked on a similar request last year, and could pave the way for future regulations of the virtual money.
Bitcoins only exist online but can be traded for cash and used to buy goods and services at some stores.
Bitcoin users are relatively anonymous, making it attractive to money launderers, and critics have also raised concerns about the currency’s volatility. Attorney General Eric HolderEric H. HolderLawyer claims death threats after anti-Black Lives Matter lawsuit Adviser: Obama can’t ‘erase decades’ of racism Airbnb enlists civil rights leaders in discrimination fight MORE this month said it can “conceal illegal activity,” and Sen. Joe ManchinJoe ManchinSenate Dems shun GOP vulnerables Mylan CEO should be ashamed of EpiPen prices Overnight Finance: Senate rejects funding bill as shutdown looms | Labor Dept. to probe Wells Fargo | Fed to ease stress test rules for small banks MORE (D-W.Va.) has called for regulators to ban it.
Supporters counter that the money is no more conducive to illicit activity than cash, and say it has the potential to revolutionize the way people spend money.
Guidance released by the IRS last month calls for bitcoin owners to treat the money like a property, not a currency, which could complicate the FEC’s decision-making.
Last November, the FEC heard a similar proposal from the Conservative Action Fund PAC, but stalled in a 3-3 split. A majority of the commissioners on the six-member panel need to be in favor of an advisory opinion for it to be approved.
That deadlock left the issue in legal limbo, but did not stop candidates from accepting the money anyway.
Rep. Steve StockmanSteve StockmanCruz will skip State of the Union Ethics: Lawmakers didn’t ‘knowingly’ break rules with Azerbaijan gifts Lawmakers deny knowledge of secret funding for 2013 trip MORE (R-Texas) accepted bitcoins as part of his unsuccessful primary bid to unseat Sen. John CornynJohn CornynSenate Dems shun GOP vulnerables Congress steamrolls Obama's veto 78 lawmakers vote to sustain Obama veto MORE (R-Texas), and Texas Attorney General Greg Abbott (R) is also accepting bitcoin contributions in his campaign for governor.