US Election Authority Set to Approve Congressional Candidate’s Plan to Issue Ethereum Token
A candidate for Congress in Florida wants to give ethereum-based tokens to campaign volunteers in an experimental effort to incentivize their work — and federal officials appear poised to give their approval.
In late May, the campaign for Omar Reyes, who is running for office in Florida’s 22nd Congressional District as an independent candidate, sent a letter to the Federal Election Commission (FEC) seeking permission for the “distribution to potential volunteers and any voters interested in participating in our cryptocurrency experiment.”
The idea is this: the “Omar2020” token is based on the ERC-20 standard, which allows for the creation of tokens on the ethereum network. According to the Reyes campaign’s letter, the kinds of activities they’d want to reward include registering to volunteer, signing up for a mailing list, or hosting official campaign events.
Further, the campaign’s letter stresses that the tokens “have no monetary value,” and that the tokens would essentially serve as a digital scoreboard for volunteers. As the campaign draws to a close, “our committee would like to reward our volunteers with the highest amount of (OMR) tokens with the choice of one of three gifts of our appreciation, paid for by the Omar2020 committee.”
A draft advisory opinion published July 5 and attributed to FEC chair Ellen Weintraub indicates that officials will give their blessing to the experiment, noting that the tokens themselves are “analogous to more traditional types of campaign souvenirs, such as bumper stickers, yard signs or buttons” and wouldn’t run afoul of federal statutes.
As the draft opinion notes:
“The Commission concludes that the Committee may distribute OMR Tokens to volunteers and supporters as an incentive to engage in volunteer activities as described in the request because OMR Tokens do not constitute compensation; rather, OMR Tokens are materially indistinguishable from traditional forms of campaign souvenirs and nothing in the Act or Commission regulations prohibits a campaign committee from distributing free campaign souvenirs to volunteers or supporters.”
In the opinion, Weintraub stated it expects the Reyes campaign to report any transaction fees accrued from the token transfers will be reported as expenditures per regulations.
The draft opinion’s public comment period ended at noontime EST on Wednesday, according to the FEC document. Now, the draft opinion will be considered by commission members at a forthcoming meeting. The next meeting is scheduled for July 25, but its agenda has yet to be published.
A representative for the Reyes campaign did not respond to a request for comment by press time.
The FEC and cryptocurrency
This month’s request isn’t the first time that FEC officials have considered opinion requests that center in some way around cryptocurrencies.
For example, the FEC recently considered whether a campaign could accept contributions in the form of cryptocurrency mining rewards. The FEC gave its final approval this past April with a caveats that such activities don’t amount to a form of volunteering as originally proposed.
The most impactful decision to date was the 2014 opinion that opened the door to cryptocurrency donations to campaigns. At the time, the FEC said that it would consider a bitcoin contribution as an in-kind donation.
That move set the stage for a number of political campaigns in the U.S. to solicit crypto-donations, including Kentucky Senator Rand Paul’s 2016 presidential bid.
Most recently, U.S. Representative Eric Swalwell announced that his now-defunct presidential effort would accept crypto contributions.
Andrew Yang, another 2020 presidential hopeful, is also accepting crypto contributions. His campaign published a policy statement on blockchain and digital assets this spring, and during a May appearance at CoinDesk’s Consensus 2019 conference in New York, Yang pledged to provide greater regulatory clarity for the industry.
By Stan Higgins