The legal team behind nonfungible token firm DataVault Holdings has requested an advisory opinion from the United States Federal Election Commission on using NFTs for fundraising efforts.<\/p>\n
In a Sept. 21 letter to FEC acting general counsel Lisa Stevenson, DataVault\u2019s lawyers proposed sending NFTs as \u201csouvenirs\u201d to individuals who contributed to political committees, as well as giving the token holder the option to use it for promoting a campaign \u201cstrictly on a volunteer basis and without any compensation.\u201d The NFT firm requested the FEC provide guidance on how it may operate as a commercial vendor \u2014 issuing the tokens to political committee members seemingly without violating federal campaign finance laws. <\/p>\n
\u201cDataVault\u2019s activities to political committees will be conducted on a strictly commercial basis and DataVault will not seek to influence, affirmatively or negatively, the nomination or election of any candidate to Federal office,\u201d said DataVault\u2019s counsel Elliot Berke. \u201cDataVault would provide the NFTs to political committees in the same manner and normal course of business as other non-political committee clients.\u201d<\/p>\n
According to DataVault\u2019s proposals, the firm planned to market NFTs \u201cin a manner akin to a campaign hat or souvenirs,\u201d intending to have political committees offer them to high-volume low-dollar donors. The tokens could be used for VIP access at different campaign events, or contain artwork or literature related to a candidate\u2019s policies. Any fees from issuing NFTs or transactions would be reported as a \u201cfundraising expenditure,\u201d according to DataVault’s example scenario:<\/p>\n
\u201cAn NFT is priced at $10.00 and is provided by DataVault to a campaign committee. The NFT is offered by the campaign committee to contributors who make a $10.00 contribution. Once the campaign committee collects a contribution connected with the NFT, it records the $10.00 contribution and pays DataVault a fee of $3.00 as a usual and normal fundraising expenditure.\u201d<\/p><\/blockquote>\n
DataVault\u2019s legal team requested the FEC provide clarification on whether the firm could \u201cdesign and market NFTs to political committees\u201d as well as provide the tokens to incentivize contributors. In a 2019 advisory opinion on NFTs, the commission determined tokens were \u201cmaterially indistinguishable from traditional forms of campaign souvenirs\u201d such as buttons.<\/p>\n
\u201cThe distribution of valueless blockchain tokens is not a form of compensation for volunteers’ services but rather a novel means for volunteers and supporters to show their support for the campaign,\u201d said the FEC at the time. \u201cThe Commission found the valueless tokens to be analogous to more traditional forms of campaign souvenirs, and concluded that nothing in the Act or Commission regulations would limit or prohibit their distribution.\u201d<\/p>\n