DataVault Holdings, a nonfungible token company, has asked for an advisory opinion from the United States Federal Election Commission regarding using NFTs in fundraising efforts.
DataVault’s lawyers suggested that the FEC acting general counsel Lisa Stevenson send NFTs as “souvenirs,” to individuals who had contributed to political groups. The token holders could also use the token to promote a campaign, “strictly on an individual basis and without any compensation.”
Elliot Berke, DataVault’s counsel, stated that DataVault’s activities with political committees would be strictly commercial and DataVault would not attempt to influence the nomination or election for any Federal office candidate. “DataVault will provide NFTs to political Committees in the same way and normal business process as non-political clients.
DataVault claims that the firm wanted to market NFTs in a similar way to campaign hats or souvenirs, and to have political committees offer them low-volume donors. These tokens could be used to gain VIP access to campaign events or contain literature or artwork related directly to candidate policies. According to DataVault’s example scenario, any fees or transactions from NFTs would be considered a “fundraising expense.”
DataVault provides an NFT at $10.00 to a campaign committee. Campaign committees offer the NFT to donors who contribute $10.00. After collecting a $10.00 contribution, the campaign committee records it and pays DataVault $3.00 as an usual and normal fundraising expense.
DataVault’s legal department requested clarification from the FEC on whether DataVault could market NFTs to political bodies and provide tokens to encourage contributors. The 2019 advisory opinion of the FEC on NFTs stated that tokens could not be distinguished from buttons and other traditional campaign souvenirs.
The FEC stated that the distribution of tokens of no value is not an act of compensation for volunteers, but rather a new way for supporters and volunteers to show support for the campaign. “The Commission concluded that the valueless tokens were analogous to traditional campaign souvenirs and that neither the Act nor Commission regulations would restrict or prohibit their distribution.
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Similar initiatives have been taken by political figures who are not under the FEC’s jurisdiction. In an attempt to appeal to the younger generation, the Democratic Party candidate Lee Jaemyung announced that it would issue NFTs with images of the politician and pledges to donors to show them. NFTs in California were the subject of discussion between members of California’s Fair Political Practices Commission. This discussion led to an independent body reversed a 2018 ban on crypto donations by candidates for state and local office.