The U.S. Federal Election Commission(FEC) granted permission for mining pools to come forward and donate to political campaigns. The advisory opinion would allow crypto-users to support political campaigns by mining cryptocurrencies for their preferred candidates.
The FEC had released a memorandum on their website on November 13, to a proposal submitted to them by OsiaNetwork LLC in September. The request filed by them was for asking the confirmation on the “permissibility of OsiaNetwork’s business plan.
The funds that will be raised through this method would be used to back their political committees. However, OsiaNetwork states this activity as a form of volunteering – although the FEC isn’t looking to sign off on this particular “activity” at the moment.
OsiaNetwork had simply stated its business model with a request to “enable individuals to support federal political committees by volunteering the processing power of their internet-enabled devices to mine cryptocurrencies.”
The move might prove to be a game changer for OsiaNetwork and the whole community as well; the FEC settled that, OsiaNetwork’s campaign does not fall under the volunteer internet activities exception, which would predominantly result in contributions coming from both OsiaNetwork and individuals.
As of now, there is not much contribution from OsiaNetwork’s side and may deter the long-term relationship it set up with its pool. The request clearly mentioned a few obligations to their ideal donations, as it was quoted saying “as long as each of those political committees is a client of OsiaNetwork.”
OsiaNetwork is on the verge of monetizing the fundraising process of politics by charging campaigns, thereby acting as a platform for cryptocurrency mining pools.
As per a memorandum released by FEC,
“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.”
The FEC further described its payment strategy by saying, “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.”
Meanwhile, FEC received some criticism with regards to their judgment on this issue. A liberal watchdog went on to say that allowing cryptocurrency mining in political fundraising can raise transparency issues.
Ronald Fein, the legal director of Free Speech for People, had this to say on FEC’s verdict, “We worry that some members of the FEC may not have technical backgrounds and be bamboozled by this,”
On December 19, the commissioners of FEC will cast their vote on the opinion.