US Election Commission Allows NFTs to Be Used in Fundraising

DataVault provides NFT for Campaign funds. (photo: Twitter @datavault)

JAKARTA - The United States Federal Election Commission (FEC) has issued its opinion stating that DataVault Holdings can use non-fungible tokens (NFT) for fundraising efforts.

In a December 15 announcement, the FEC said that it is "permitted" for DataVault holders to send non-fungible tokens, or NFTs, to political campaign contributors without violating rules on corporate contributions.

According to the voting agency, DataVault will receive "reasonable compensation" for any NFT issued to contributors, as well as track all issued tokens on its own records.

"The Commission concluded that DataVault's proposal to provide political committees with NFTs on the same terms that are regularly offered to its non-political clients would be an extension of credit DataVault allows in the ordinary course of business," said FEC Chair Allen Dickerson.

“Under the Act and Commission regulations, incorporated commercial vendors can provide credit to political committees on substantially similar terms to those offered by vendors to non-political debtors. DataVault is a 'commercial vendor' because its ordinary, normal business involves providing the same services it proposes to provide to political committees,” said Dickerson.

“We are excited about the unanimous approval from the FEC of our patented DataVault platform for use by political campaigns in the US. In a broader view, we believe Blockchain technology represents the future for elections that seek to be trusted and transparent in their future outcomes,” DataVault CEO Nathaniel Bradley told Cointelegraph.

In September, DataVault's legal team proposed that their company be allowed to send NFTs as souvenirs – “in a manner similar to campaign hats” – to individuals who contribute to political committees.

According to DataVault, the token will also give token holders the option to use it to promote campaigns "voluntarily and without any compensation." Any fees from issuing NFTs or transactions will be reported as "fundraising expenses".

The FEC issued a similar opinion in 2019 regarding blockchain tokens, saying that certain tokens are “materially indistinguishable from traditional forms of campaign souvenirs.”

In that case, congressional candidate Omar Reyes' token has “no monetary value” and is used as an incentive to engage in volunteer activities for the campaign.

NFTs are sometimes associated with global political campaigns. In South Korea, the campaign behind Democratic Party candidate Lee Jae-myung said in January it would issue an NFT showing pictures of the politician and his campaign promises to those who make donations.