No Coins for You! North Carolina Rejects Bitcoin Campaign Donations
North Carolina has barred electoral candidates in the state from accepting campaign donations made in bitcoin and other cryptocurrencies. This declaration is contained in a response from the North Carolina State Board of Elections Campaign Finance Office to Emmanuel Wilder, a Republican candidate running for a seat in the state’s legislature.
Regulatory Snafu
Earlier in the year, Emmanuel Wilder had asked the State Board if he could accept campaign donations in bitcoin and other digital currencies. In his submission, the candidate also suggested a framework for the Board to use in ascribing value to the volatile asset class.
The Board communicated its refusal of his request in a letter from its executive director, Kim Westbrooks Strach. The refusal is hinged on the fact that the state’s campaign finance regulations set monetary limits in U.S. dollars. The Board is also of the opinion that cryptocurrencies cannot be reliably valued.
An excerpt from the letter reads:
“We do not have the confidence that we could adequately regulate contributions to a political campaign in North Carolina in the form of cryptocurrency.”
In his reaction, a disappointed but optimistic Wilder said:
“Blockchain and other technologies hold the ability to improve how business and public institutions operate day to day…Although it might not be today, there will be a day when this technology will have a place in the political process.”
Anonymity Concerns
A number of political commentators believe that the perceived anonymity afforded by bitcoin and other cryptocurrencies is a big consideration and an issue that could potentially undermine campaign finance rules. Jen Jones, a spokesperson for Democracy North Carolina, a campaign finance watchdog earlier advised the Board to take this issue into consideration.
She said:
“[The board should consider] whether it’s possible for candidates to receive campaign donations via cryptocurrency while also complying with state disclosure requirements.”
North Carolina is not the only U.S. state to prohibit cryptocurrency campaign donations. In 2017, the Kansas Governmental Ethics Commission ruled that candidates running in state and local elections are not allowed to accept bitcoin campaign donations.
In June, Austin Petersen, a U.S. candidate from Missouri was forced to return a $130,000 bitcoin donation because it was over the FEC-mandated individual contribution limit of $5,400.
It will be noted, however, that the Federal Election Commission (FEC) ruled in 2014 that federal election candidates are allowed to collect contributions in bitcoin and gave guidelines for such collections. Under American law, though, states are at liberty to set their own rules for state election candidates.
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