Today, Free Speech For People asked the Federal Election Commission to reject a request for an advisory opinion from a company called OsiaNetwork LLC that would allow unlimited campaign contributions in Bitcoin and other cryptocurrency. OsiaNetwork is proposing that donors could lend unlimited amounts of computer processing power to the company for “mining” cryptocurrency, which could then be donated to political committees without counting as a contribution. Under the company’s theory, nobody has made a contribution; rather, they have simply “volunteered” their computer processing power.
As our comment letter argues:
This twists the “volunteer” exception beyond all recognition. To use the mining analogy, if individuals volunteer to mine precious metals or gems (e.g., diamonds) from the ground, and then contribute the resulting precious diamonds (or sell them for dollars, and then contribute the dollars) to a political campaign, that does not fall under the “volunteer” exception—it is a contribution. The point is not that the individual was not compensated for their mining work; the point is that they contributed money or its equivalent to the committee.
The “volunteer” exception is for volunteer services provided to the campaign, such as making phone calls, communicating with voters, and so forth—not “volunteering” to obtain economically valuable commodities, cash-equivalent resources, or currency, and then donate them to the campaign without being subject to any contribution limits.
The danger of OsiaNetwork’s proposal is clear. There is no limit on the extent of an individual’s computing processing power. A wealthy donor might have access (including temporary, leased access) to vast amounts of computing power capable of generating millions of dollars’ worth of cryptocurrency. This could result in contributions substantially exceeding the federal contribution limits. Allowing OsiaNetwork’s request would create an enormous loophole by which wealthy donors (not even necessarily based in the U.S.) could circumvent all contribution limits and contribute large amounts of money directly to political committees, simply by doing it with a computer.
If OsiaNetwork simply sought to act as a commercial vendor processing cryptocurrency contributions from donors and transferring them to recipient political committees, there would be far fewer problems with its proposal. But apparently its business plan rests on providing a complete exemption from all federal limits on campaign contributions, and this the FEC cannot permit.
Read our full comment letter here.