In the midwest state of Illinois, Lake County Treasurer has become one of the first political candidates to accept digital currency, according to the local publication.
Holly Kim, a Democrat running for reelection next year, received a $3 donation in Litecoin (LTC), with a promise of more to come later.
Kim also accepts the popular meme coin, Dogecoin, which has surged 4,717% YTD in value and is currently trading at $0.273.
After consulting with the election board to include an option for crypto donations, Kim has started accepting Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), and stablecoin DAI besides Dogecoin (DOGE) and Litecoin (LTC).
“I believe you’ll probably find crypto enthusiasts will support candidacies of government officials who see the potential of blockchain technology as something that’s moving forward,” said Mark Tan, founder of Lake Forest-based investment management firm T Capital Coin, who sent a fraction of a single LTC, to test the donation system works as planned. “(Crypto donors) are more supportive and open-minded,” he added.
FTX CEO Sam Bankman Fried actually made the second-biggest contribution of $5.2 million to the Biden campaign. After the recent debacle with the controversial infrastructure bill containing a crypto tax provision in the Senate, the crypto community is further motivated to spend their riches on supporting those political candidates who support the crypto industry.
Getting Things Right
The election board is treating crypto donations like in-kind donations of corporate stock instead of cash.
Kim, who is also a crypto believer, plans to hold onto the donations in expectation of a rise in their value, and “if worse comes to worst, we can always convert it (to dollars),” she said.
The value of crypto assets is established in USD on the day they’re donated for the purpose of staying within campaign contribution limits, said Matt Dietrich, spokesman for the Illinois State Board of Elections.
In order to make crypto donations, the donor has to provide their name, address, and occupation, just as with traditional contributions.
“Since we’re trailblazing here, I want to be sure we’re good ambassadors.”
“This could reflect how crypto donations are received in the future, so we want to be sure we do everything right.”
The election board can also investigate if it believes crypto donations are being used to subvert reporting requirements, Dietrich said. But Kent Redfield, a campaign finance expert and professor emeritus of political science at the University of Illinois at Springfield, said the rules already allow a level of opaqueness. People can shield their identities by donating to nonprofits then contributing to political action committees (PACs).
A New Frontier
By accepting cryptocurrency for campaign donations, Kim said it is a way to connect with tech-savvy people who might be new to political donations.
“It seems to be how people want to give,” she said. “I feel like it’s a new frontier.”
Crypto donations have been allowed by the Federal Election Commission since 2014, but few politicians have taken advantage of that so far.
A couple of months back in June, the campaign arm of the Republican House reportedly started accepting contributions in crypto in collaboration with crypto payment processor BitPay.
Andrew Yang, the entrepreneur, and Democratic presidential candidate, actually made digital currencies an important part of the campaign last year and shared his plans to make New York a hub for Bitcoin and cryptocurrencies.
Aaron Merreighn, a Conservative Party candidate for lieutenant governor, might be the first one in Illinois to receive a Bitcoin contribution in 2018, which was never spent, and was returned to the donor at the campaign’s conclusion, said Rick Crosley, a DuPage County-based political consultant who was the treasurer on that campaign and believes crypto has several advantages that will bring it in the political mainstream.
“The speed and efficiency of this financial instrument will allow a candidate to do much more.”