Trump campaign starts taking cryptocurrency donations, vows to build a 'crypto army'
Trump's Crypto Army: Campaign or Controversy?
The Trump campaign has announced that it will start accepting cryptocurrency donations, positioning itself alongside those opposing "socialistic government control" of U.S. financial markets. This move is part of Trump's broader strategy to appeal to the crypto community, which includes younger and male demographics. The campaign's use of crypto, which will be handled through Coinbase Commerce, aligns with federal regulations on in-kind contributions. This initiative contrasts with the Biden campaign's skepticism towards cryptocurrency.
What are the Federal Election Commission regulations regarding cryptocurrency donations?
The Federal Election Commission (FEC) treats cryptocurrency donations similarly to other forms of "anything of value" under the Federal Election Campaign Act2. This classification includes assets like stocks or bonds, which are not directly liquid but can be converted into money later. According to FEC regulations, cryptocurrency donations are allowed and must be reported as in-kind contributions. The value of these contributions is determined based on the market value of the cryptocurrency on the day the donation is received.
For reporting purposes, political campaigns must adhere to specific FEC guidelines that dictate how these contributions are handled and documented. Contributions in cryptocurrencies like Bitcoin must be disclosed with detailed donor information, including full name, mailing address, employment details, and the date of receipt5. Additionally, donors are required to affirm that they are not foreign nationals and that they personally own the cryptocurrency they are donating, ensuring it is not a "straw-man" contribution made on behalf of another individual5.
The FEC's stance on cryptocurrency contributions has evolved over time, with a notable advisory opinion issued in 2014 allowing political action committees to accept Bitcoin contributions25. This advisory, however, specifically applied to Bitcoin and did not explicitly address other cryptocurrencies, leaving some ambiguity in the regulations. Nonetheless, the FEC has provided a framework for how cryptocurrencies should be treated in the context of campaign finance, emphasizing transparency and adherence to existing legal standards for political donations2.
How will the Trump campaign handle the cryptocurrency donations in terms of reporting and utilization?
The Trump campaign has outlined specific plans for handling cryptocurrency donations in terms of reporting and utilization. All crypto contributions will be reported as in-kind contributions, similar to how gifts of stock are treated. This approach allows the campaign to maintain transparency and adhere to Federal Election Commission (FEC) regulations. Additionally, the campaign retains the flexibility to either liquidate the received digital currencies or retain them, depending on their strategy and financial considerations. This dual option provides the campaign with the ability to manage these assets in a way that could potentially benefit their financial resources, depending on market conditions and campaign needs.