Cryptocurrency expands into Illinois politics as candidate accepts Bitcoin donations
Cryptocurrency’s march towards mainstream has already captured software developers, online retailers, and coffee shops. But this week, it ventured into new territory: campaign contributions.
Holly Kim, a Lake County Treasurer, is a Democrat and is running for reelection next. A supporter gave Holly Kim a $3 donation in Litecoin with the promise that more would come.
It’s a promising and new fundraising method – Dogecoin (one form of crypto Kim accepts) has seen its value rise 100-fold in the past year. Kim stated that it was a way to connect to tech-savvy people, who may be new to political donations.
She said, “It seems like people want to give.” It’s like a new frontier.
Although crypto donations are allowed by the Federal Election Commission since 2014, few politicians have yet to take advantage of it (and Andrew Yang, an entrepreneur and Democratic presidential candidate has been a notable exception).
Even though Illinois has a growing crypto scene, the candidates have been as reserved as anyone. Matt Dietrich, spokesperson for the Illinois State Board of Elections said that no one had received such a donation until now.
“Before it, it had come up (in speculation scenarios), but not seriously in terms of someone calling me and saying, “I’m going to take funds,” he stated. “This is the first solid case in which we know that the candidate plans to report cryptocurrency as campaign contributions.
Kim, 40, is a long-time cryptocurrency enthusiast. She said that she was a trustee at Mundelein and tried to persuade her fellow board members to find a payment processor to accept Bitcoin or PayPal, along with Mastercard or Visa. They declined.
She said, “At that point I accepted it might not be too futur-minded.”
She said that she had a new vision of the potential for the currency in recent months, as the number of businesses accepting the currencies increased to include United Wholesale Mortgage and AMC movie theater chain. After consulting with the election board, she created a website which includes a section for crypto donations.
Her campaign accepts most popular cybercurrencies such as Bitcoin, Dogecoin Litecoin, Ethereum and Litecoin. She also accepts more obscure forms like Bitcoin Cash and Dai. They are being treated by the election board as cash donations, and not in-kind contributions of corporate stock.
For the purposes of campaign contribution limits being maintained, their value is determined in dollars the day they are donated. However, cryptocurrencies are notoriously volatile financial instruments that can quickly go up or down like a sparrow.
Kim stated that she, like many crypto believers, plans to keep the donations she receives in the hope they will increase in value. However, she said that she can always convert them (to dollars) if things get worse.
Mark Tan, the founder of Lake Forest-based investment firm T Capital Coin, made her initial cryptocurrency donation. He explained that his tiny contribution, which was a fraction of a single Litecoin, was intended to test the system and ensure it works as planned.
He suggested that cryptocurrencies could be accepted by political campaigns and attract a new group of donors.
Tan stated that he believes crypto enthusiasts will support candidates for government officials who see blockchain technology’s potential as something moving forward. “Those donors are more open-minded and supportive.
Given its anonymity, which has made crypto popular with hackers as well as drug dealers, some campaign finance watchdogs are concerned by the rise of crypto in politics. The lauded secrecy surrounding the currencies may not be as secure as it once was. In fact, the FBI was able earlier this summer to recover $2.3 Million in Bitcoin that had been stolen in the Colonial Pipeline ransomware attacks.
Cryptodonors to candidates will need to identify themselves, list their address, and indicate their occupation just like traditional contributions. Kim suggested that this level of transparency might prove to be a challenge for Bitcoin enthusiasts who are used to anonymous transactions.
She said, “Since you’re pioneering here, I want us to be good ambassadors.” “This could be how crypto donations will be received in the future. We want to make sure that we do everything right.”
Dietrich stated that the election board could investigate whether it believes crypto donations were being used to circumvent reporting requirements. Kent Redfield, a professor emeritus of politics at the University of Illinois at Springfield and a campaign finance expert, does not believe cryptocurrency will change much about the state’s political donations. He said that the rules allow for some degree of transparency.
He stated that people can protect their identity by donating to non-profit organizations, which then contribute to political actions committees or ‘independent spending committees’ better known as superPACs.
“Does cryptocurrency add an additional layer of uncertainty about the source of money?” Redfield stated that he believed this was probably fair. “But it joins a lot other dark money and semidark cash that flows into this system.