The U.S. Federal Election Commission appears to be warming to the idea of political donations in bitcoin, but has left the larger question of the upper value limit of such donations unresolved.
The commission issued on Thursday an advisory opinion on bitcoin usage for a political action committee called Make Your Laws. The group asked the FEC if, in a given election cycle, properly identified contributors could each donate bitcoin worth up to $100, a limit set by that group.
The six-member FEC, which is equally composed of Democrats and Republicans, advised that was fine. The commission determined in a vote that the group could also buy bitcoins from its donated funds for investment purposes but the bitcoins would have to be converted to cash before paying suppliers.
In a separate vote, however, the commission did not approve using bitcoins to directly purchase goods and services.
The FEC has yet to make rules around bitcoin, and it is clear its commissioners are divided over the virtual currency.
The advisory opinion for Make Your Laws was just based on the circumstances of that group, according to a statement from Ann M. Ravel, a Democrat who is vice chair of the commission. The release was also signed by commissioners Steven T. Walther and Ellen L. Weintraub.
Ravel's statement said that the FEC did not approve a request in August 2013 from the Conservative Action Fund, another political action committee, to accept bitcoin donations worth more than $100. That group had also asked for an advisory opinion.
A statement from the FEC's Chairman, Republican Lee E. Goodman, suggested that situation was more nuanced. Three months after the group asked for the opinion, the commission "lacked four votes to provide advice regarding how to use bitcoins," his release said.
In the absence of clarity, several political action committees then said they would begin accepting bitcoin. Goodman's release cited the Libertarian National Committee, which said it accepted $6,000 worth of bitcoin in October and November 2013.
"In short, new technology has moved forward without the commission," he wrote.
The greater question is whether bitcoin should be considered like cash, which has a $100 limit under federal election rules, or an in-kind contribution. The rules have higher value limits for in-kind contributions, such as works of art, securities and silver.
Goodman favors classifying bitcoin as an in-kind contribution. Ravel's camp views bitcoin as most like cash. "For this reason, the $100 limitation on MYL's acceptance of bitcoins was a material aspect of the proposed transaction upon which we relied when joining our colleagues in approving MYL's request," her release said.
Ravel's release went on to say that the FEC should address bitcoin contributions in rulemaking.