FEC deadlocks, for now, on whether political committees can accept bitcoin

Political donors, put away those bitcoin wallets for now.

The Federal Election Commission on Thursday deadlocked on the question of whether federal candidates and political action committees can accept the virtual currency, with the three Democratic appointees saying they want the agency to take more time to study the issue and develop a formal policy to govern the use of bitcoins in campaigns.

Chair Ellen Weintraub stressed that the lack of action did not mean the panel would not approve bitcoin donations at some point, but said that the Internet cash raised many complicated questions – particularly about disclosure and whether bitcoins constitute money – that required more examination.

“We have not seen the last of bitcoin at the FEC,” she said.

Created by a still-unknown developer in 2009, the Bitcoin network allows people to make nearly instantaneous online payments without going through a bank or a third party. The transactions are public, although the parties involved are identified only by their bitcoin addresses.

Senate committee hearings held this week exploring the banking and law enforcement implications of virtual currencies such as bitcoin appeared to have given the Democratic commissioners pause.

“I’d feel more comfortable if we took this a little more slowly,” said Commissioner Ann Ravel.

The three Republicans on the panel were in favor of issuing an advisory opinion Thursday that would have allowed candidates and PACs to accept the electronic currency in the same way they handle donations of stock.

“I think we’ve been a little bit distracted by the novelty of bitcoins,” said Vice Chairman Lee Goodman. “Although they represent a unique and new type of asset, they are an asset.”

“I think the legal question for the FEC is quite vanilla,” he added.

Matea Gold is a national political reporter for The Washington Post, covering money and influence.

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