Policy: Technology

FEC approves Bitcoins for political donations

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Campaign Finance,PennAve,Sean Lengell,FEC,Elections,Technology,Bitcoin

The Federal Election Commission on Thursday unanimously approved Bitcoins to be used for small political donations, one of its first rulings on the digital currency.

The commissioners' 6-0 decision to allow political action committees to accept Bitcoins came with conditions. Only donations of up to $100 will be accepted. And donors can't be anonymous.

The panel's move came in the form of guidance -- not a law -- to a request from Make Your Laws PAC, which asked permission to accept Bitcoin donations in small amounts. But the decision effectively has opened the door for the decentralized currency -- which is not controlled by any government or bank like the U.S. Treasury -- for use in political campaigns.

The FEC deadlocked on the issue late last year. FEC Chairwoman Ellen Weintraub at the time said she was concerned about the prospect of anonymous or foreign Bitcoin donations — both prohibited under federal law — flowing into campaigns and outside groups.

But by placing strict rules on donations, commissioners were satisfied the nascent currency is safe to use in political campaigns.

The move comes after the Internal Revenue Service in March also recognized Bitcoins, saying it will begin taxing them like property, not currency. That means that wages paid in Bitcoin will be taxed at their fair market value at the time an employee was paid.

Rep. Jared Polis, D-Colo., posted on Twitter Thursday that he was proud to be the first member of Congress to accept Bitcoin donations for his 2014 re-election campaign.

"I am thrilled that the FEC has chosen to take a forward looking stance on digital currencies, recognizing the rights of individuals seeking alternatives to government backed currencies to participate in our democratic political process," said Polis in a prepared statement released by his campaign. "Bitcoin, and other digital currencies, are just beginning to show the world what a tremendous tool they can be."

A campaign official said late Thursday that Polis received some bitcoin donations since the FEC's decision earlier in the day, though a tally wasn't known.

The campaign added it will still accept old-fashioned hard cash.

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