The U.S. Federal Election Commission (FEC) has given tacit permission for mining pools to donate to political campaigns.
The FEC released a memo on their website on November 13, 2018, to provide background information to a formal meeting that would take place on November 15. In it, they addressed a recent request filed by OsiaNetwork LLC for the FEC’s advisory opinion.
OsiaNetwork filed this request on September 10, 2018, asking for confirmation on the “permissibility of OsiaNetwork’s business plan.” With little other information publicly available about this startup, it seems as if this decision may have been the dealbreaker for the whole company’s existence.
This business model is stated quite simply in OsiaNetwork’s request to “enable individuals to support federal political committees by volunteering the processing power of their internet enabled devices to mine cryptocurrencies.” And now, the FEC has responded.
In a move that may spell trouble for OsiaNetwork, but ultimately might add more dynamism to the space as a whole, the FEC decided that “although the proposed cryptocurrency mining pool as described in the request is itself permissible under the Act and Commission regulations, the activities of the individuals do not fall within the volunteer internet activities exception, and would therefore result in contributions from them and from OsiaNetwork to the participating political committees.”
In other words, it seems permissible for mining pools themselves to undertake the effort to donate to political campaigns, and it is still possible for OsiaNetwork to set up these mining pools, but they are not able to enter any kind of extended relationship wherein they act as a sort of middleman.
OsiaNetwork is not able to contribute to the campaigns itself, and this may preclude a more long-term relationship with the pool it sets up. The request specifically mentioned stipulations to their ideal donations, such as “as long as each of those political committees is a client of OsiaNetwork.”
The FEC’s decision to ban this kind of relationship and uphold private donations themselves may ultimately provide more flexibility for those interested in donating cryptocurrency via mining pools. OsiaNetwork’s plan to make a profit from this scheme was apparently centered around establishing themselves as an institutionalized actor for mining pools of this nature, but it’s possible that the transactions would work just as fine in a decentralized fashion.
