By Julian Hattem - 05/08/14 01:18 PM EDT
Political action committees can begin to accept the virtual currency bitcoin, according to the Federal Election Commission (FEC).
In a 6-0 decision on Thursday, the commission allowed a committee to accept up to $100 worth of bitcoins, in a step that will provide some regulatory certainty for political groups looking to take advantage of the money. The move comes months after the FEC first deadlocked on the issue in November.
Bitcoin contributions “should be reported like in-kind contributions,” the commission said in its 20-page memorandum.
According to FEC Chairman Lee Goodman, the commission “had time to become more familiar and comfortable with bitcoins, and the notion of an alternative medium of exchange.”
The move also falls in line with the IRS, he suggested, which in March declared that bitcoins should be treated as a property for tax purposes.
“The Federal Election Commission opined today that bitcoins will be regulated like in-kind contributions,” he said. “So the commission effectively took the same position that the IRS has taken, that bitcoins are in kind property; they are not U.S. currency.”
In the past, Democrats on the six-member commission have expressed concern that the relatively anonymous nature of bitcoins, which only exist online, could lead to untraceable political contributions.
Make Your Laws PAC requested to accept just $100 worth of the money, however, which is the same as the maximum donation in cash under FEC rules. The group also said that it would only take bitcoin contributions from people who gave their name, address and other details.
Goodman, a Republican, told The Hill that he would endorse allowing an individual to give up to $2,600 worth of bitcoins to a campaign, which is the legal maximum for checks or in-kind donations like computers, office supplies or bonds.
“The only statutory [authority] that I have as a commissioner to limit contributions to $100 is currency of the United States, and a bitcoin is not currency,” he said. “There is no legal authority to limit bitcoin contributions to the $100 that this requester volunteered to do.”
Under the Federal Election Campaign Act, committees can accept contributions of “any gift, subscription, loan advance, or deposit of money or anything of value.”
In the memorandum, the FEC “concludes that bitcoins are ‘money or anything of value’ within the meaning of the Act" and should be treated as such.
In addition to accepting bitcoins from contributors, the FEC also allowed the PAC to buy bitcoins with its own money for investments but not for spending.
Despite the FEC’s previous inability to determine whether committees could accept bitcoins, some campaigns have gone ahead anyway.
Rep. Steve Stockman (R-Texas) accepted the money in his failed bid to unseat Sen. John Cornyn (R-Texas), and Texas Attorney General Greg Abbott (R) is also accepting bitcoins for his gubernatorial campaign.
“They did not have to wait for the Federal Election Commission to make up its mind,” Goodman said. “But I am happy today that the Federal Election Commission came to some degree of consensus on this new technology.”
This story was updated at 3:10 p.m.