Candidates for Congress are starting to break into the cryptocurrency world by selling non-fungible tokens (NFTs) to help fund their campaigns in the midterm elections. Democrat Shrina Kurani, an engineer candidate for a House seat in California, and Republican Blake Masters, who is running for the Senate in Arizona, have offered NFTs as incentives to donors, with varying degrees of success.

But these are still only the first days of crypto’s push into politics. Few of the contenders took advantage of its hike, which includes a 60% gain in Bitcoin’s value in 2021 and an NFT artwork that sold for $ 69.3 million at a Christie’s auction.

An NFT is “made” with a unique digital certificate of authenticity using the same blockchain technology that creates Bitcoin and other cryptocurrencies. But it’s meant to be held, sold, or traded as an asset, rather than being used as currency, and its production costs money, just like campaign T-shirts and other promotional items.

“NFTs are our campaign merchandise,” Kurani said in an interview.

Kurani, who said she was the first to distribute NFTs to campaign donors through a digital marketplace called SolSea, said she offered NFTs to seek support from a younger generation, much like the old one did. President Donald Trump used MAGA hats to raise millions of dollars from his supporters. .

She only raised $ 6,610 and handed out less than a dozen tokens when the offer expired in late December.

Masters said he raised nearly $ 575,000 by the end of December by promising to give donors tokens with a cover for a book about startups he wrote with the Silicon Valley billionaire and Trump’s great ally, Peter Thiel.

Fundraising consultants say crypto is still a long way from becoming a regular source of contributions, and questions remain about how easily campaign finance regulations could be bypassed.

Since the Federal Election Commission first approved cryptocurrency contributions almost eight years ago, only a dozen campaign committees have received money via digital currency, according to an FEC analysis disclosure reports mentioning crypto that was shared with the Bloomberg government.

These committees totaled roughly $ 1 million in crypto transactions during a period in which thousands of campaign committees raised tens of billions of dollars.

Senator Cynthia Lummis (R-Wyo.), A leading crypto supporter in Congress, is soliciting campaign contributions through Bitcoin and pushing legislatively to create rules and guidelines for the industry.

“Financial innovation is a good thing, including in politics,” Lummis said in a statement. “Digital assets are secure and easy to use, and although only a few members of Congress are currently accepting digital asset campaign donations, I know that number will increase. We are at the start of the digital asset revolution, and I hope my fellow senators will join me in championing financial innovation, as it will be a key factor in maintaining America’s global financial leadership.

Still a mystery

Veteran Democratic fundraising consultant Mike Fraioli said he doesn’t understand much about crypto and doesn’t know of any candidate to raise big money with it, although others seem to be trying.

“It’s still a mystery to most people,” he said.

Campaign committees and donors tend to be wary of new technology due to strict campaign fundraising rules and other factors, according to Fraioli and other fundraising experts. Online credit card contributions to a presidential campaign were first approved by the FEC in 1999, but weren’t widely publicized until after Barack Obama’s success in raising millions of dollars online during the campaign. the 2008 campaign.

Critics have expressed concerns that cryptocurrency donations could easily avoid the donor disclosure required by federal campaign finance laws. FEC Democrats said during discussion of a 2014 advisory opinion that contributions to the Bitcoin campaign should be capped at $ 100 each, similar to the legal limit for cash contributions, as they are difficult to trace. FEC Republicans disagreed, and the decision was approved without the $ 100 limit. Under the ruling, the crypto simply had to meet the same disclosure requirements and limits as other contributions.

But more and more political committees are trying to get into the crypto craze. Rep. Tom Emmer (R-Minn.), Chairman of the Republican National Congressional Committee, announced in June that he would be the party’s first national committee to accept contributions in cryptocurrency. He then said that “this innovative technology will help provide Republicans with the resources we need to be successful.”

The NRCC did not respond to questions about the amount generated by the crypto contributions.

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