The US Federal Election Commission (FEC) issued an advisory opinion that would allow individuals to contribute to political campaigns by donating their computer power to mine crypto for their favorite candidates.
The decision comes as American politicians are gearing up for the 2020 US presidential election, which quietly kicked off after the November 2018 midterm elections concluded.
In its November 13 memorandum, the FEC said that it’s permissible for an individual to lend his computer processing power to a crypto mining pool to benefit his preferred political candidate.
However, the commission underscored that the act counts as a campaign “contribution” — and is not considered “volunteering.”
Politics and Crypto Converge
The FEC was responding to a request by OsiaNetwork LLC, an obscure Delaware corporation that wants to serve as a platform through which people can donate their computing power to mine cryptocurrencies for political committees.
Basically, OsiaNetwork is trying to monetize the political fundraising process by charging campaigns to act as a platform for crypto mining pools.
“OsiaNetwork will allocate the mining rewards it receives among its clients ‘proportionately to the number of hashes that each committee’s volunteers generate in order to solve the block that generates the mining reward,” according to the FEC memo.
And here’s how it gets paid: “OsiaNetwork will then subtract its processing fee and transfer to each political committee funds in United States currency equivalent to the cryptocurrency value allocated to that committee.”
While OsiaNetwork had asked that the activity be considered “volunteering,” the FEC ruled that donating your computer power for crypto mining is a political “contribution” — it is not “volunteering.”
“It does not fall within the volunteer internet activities exception, and would result in contributions from both the individuals and OsiaNetwork to the participating political committees,” the FEC wrote.
Logically, this makes sense because it costs money to mine crypto, as CCN reported.
Activist: FEC May Be ‘Bamboozled’
The FEC memorandum has already fueled some backlash. The Center for Public Integrity, a liberal watchdog, said allowing crypto mining in political fundraising raises transparency issues.
Ronald Fein, the legal director for Free Speech For People (whose goal is to limit campaign spending), is worried that FEC officials are clueless about crypto.