US Federal Election Commission Approves Crypto Mining For Political Campaigns

News | November 20, 2018 By:

The US Federal Election Commission (FEC) has approved political campaign donations via crypto mining.

In September of this year, OsiaNetwork, a limited liability company in Delaware, asked the FEC whether it’s legal for people to support federal political committees by volunteering the processing power of their Internet-enabled devices to mine cryptocurrencies.

Under OsiaNetwork’s proposal, if a federal political committee would like to allow their individual supporters to volunteer the processing power of their Internet-enabled devices, OsiaNetwork will provide the tools necessary to create a webpage on that committee’s website that provides the methodology to pool the processing power of these volunteers’ Internet-enabled devices. Once a political committee has set up such a webpage, an individual who wants to participate in a mining pool would visit the page and allow the political committee to use the processing power of the individual’s device by accepting the terms of service, designating the percentage of their device’s processing power they wish to use for the cryptocurrency mining pool, and keeping that webpage open for as long as they would like to continue using their device’s processing power as part of the cryptocurrency mining pool.

In its November 13 memorandum, the FEC said contributing one’s processing power to mine cryptocurrency to raise funds for political campaigns “is permissible,” but will still be classified as a contribution rather than an act of volunteering.

“Although the proposal is permissible under the Act and Commission regulations, it does not fall within the volunteer Internet activities exception, and would result in contributions from both the individuals and OsiaNetwork to the participating political committees.,” the FEC said.

According to the FEC, the regulation defines Internet activities as including, but not limited to, “sending or forwarding electronic messages; providing a hyperlink or other direct access to another person’s web site, creating, maintaining, or hosting a web site, paying a nominal fee for the use of another person’s web site, and any other form of communication distributed over the Internet.” The FEC said OsiaNetwork’s proposal is not one of the types of activities or services explicitly mentioned in either the regulation or the commission’s explanation of the regulation upon its adoption.

The FEC also said that the proposed cryptocurrency mining pool does not fall within the volunteer Internet activities exception to the definition of a contribution because an individual will be providing something of value to a political committee.

The FEC’s response constitutes an advisory opinion and is available for public comment. OsiaNetwork will be submitting its comments on the draft advisory opinion on December 19.