The United States Federal Election Commission (FEC) has issued an advisory opinion stating that DataVault Holdings may use non-fungible tokens (NFTs) for fundraising purposes.
In a December 15 notice, the FEC said it was “permissible” for DataVault Holdings to send NFTs to political campaign contributors without violating rules on corporate contributions.
The election agency also noted that DataVault will receive “reasonable compensation” for each NFT issued to contributors, and will track all tokens issued for its own records.
FEC Chair Allen Dickerson stated that the commission concludes that DataVault’s proposals to provide political committees with NFTs on the same terms that it regularly offers to non-political clients would be a permissible extension of credit by DataVault in the ordinary course of business, as an incorporated commercial vendor may extend credit to political committees under terms similar to those offered to non-political debtors.
Speaking to Cointelegraph, DataVault CEO Nathaniel Bradley said:
“We are very pleased by the unanimous approval by the FEC of our patented DataVault platform for use by political campaigns here 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 outcomes in the future.”
It is important to note that in September, DataVault’s legal team proposed that the company be allowed to send NFTs as souvenirs, similar to a campaign hat, to individuals who contributed to political committees.
The tokens would also give token holders the option to use them for promoting a campaign on a voluntary basis without compensation. Any fees from issuing NFTs or transactions would be reported as a “fundraising expenditure,” according to DataVault.
The FEC issued a similar advisory opinion in 2019 on blockchain tokens, stating that certain ones were “materially indistinguishable from traditional forms of campaign souvenirs.” In that case, congressional candidate Omar Reyes’ tokens had “no monetary value” and were used as an incentive for volunteers to engage in activities for the campaign.
NFTs have been used in connection with political campaigns around the world. In January, the campaign for Democratic Party candidate Lee Jae-myung in South Korea announced that it would issue NFTs featuring images of the candidate and his campaign pledges to donors.