Donations

Who has returned donations or contributions from FTX amid the firm’s reputational risks?

Politicians and news organizations have reportedly planned to return roughly $6.6 million in donations from FTX — a mere fraction of the crypto exchange’s estimated contributions.

Before its downfall, crypto exchange FTX and its then-CEO Sam Bankman-Fried had been some of the most prolific spenders in the space, bailing out crypto firms and donating to political campaigns and media outlets. With more than 1 million FTX creditors looking to be made whole, what’s happening with these funds?

Bankman-Fried said in May he had been willing to donate between $100 million and $1 billion to lawmakers as part of elections in 2024. Bloomberg reported on Dec. 12 — hours before SBF’s arrest in the Bahamas — that his total donations could be at least $73 million, given directly to candidates or through political action committees (PACs).

Though many of Bankman-Fried’s and FTX’s donations to Democrats were noted with the Federal Election Commission as part of the public record, the former CEO implied in a December interview that Republicans had received roughly the same amount in “dark” donations. North Dakota Senator John Hoeven, a Republican, reportedly donated to the Salvation Army the $11,600 he received from SBF and former FTX Digital Markets co-CEO Ryan Salame.

The Democratic National Committee, Democratic Senatorial Campaign Committee and the Democratic Congressional Campaign Committee all reportedly pledged to return more than $1 million in donations from SBF they had collectively received since 2020. CNBC reported on Dec. 20 that the Senate Majority PAC — supporting Democratic candidates — planned to return the roughly $1 million received from Bankman-Fried and $2 million from former FTX engineer Nishad Singh.

U.S. President Joe Biden, whose 2020 presidential campaign accepted $5.2 million in donations from Bankman-Fried, has not commented on what he intends to do with the funds. Texas gubernatorial candidate Beto O’Rourke — a Democrat who lost his race against incumbent Greg Abbott — reportedly returned a $1 million donation from SBF prior to the 2022 election. New York Representative Hakeem Jeffries and Illinois Senator Dick Durbin have also reportedly donated funds they received to unnamed charities.

These estimates suggest roughly an additional $5 million available to creditors following bankruptcy proceedings, solely from FTX’s political contributions.

Along with lobbying politicians, FTX and SBF were directly responsible for loans and grants to news organizations in and out of the crypto space. On Dec. 9, the CEO of crypto news site The Block resigned after accepting and failing to disclose two loans totaling $27 million from Alameda Research, as well as a reported $16 million loan used to purchase property in the Bahamas.

It’s unclear whether The Block or its former CEO is willing to make some FTX investors whole by restructuring. However, Axios reported on Dec. 20 that nonprofit news organization ProPublica planned to return $1.6 million it had received from Bankman-Fried’s family foundation as part of a grant, with the funds sent to a separate account until authorities determine the best course of action.

Total estimated returns? $6.6 million.

On Dec. 19, FTX announced a “voluntary return” plan for recipients of contributions from the crypto exchange or its executives, hinting at legal action if the funds were not returned. It’s unclear whether all funds will be required to be returned to FTX debtors handling the bankruptcy and reimbursing creditors, or if third parties have the option of sending funds directly to the latter.

Related: FTX exec revealed as big donor to Oregon Democrats following misidentification

Bankman-Fried’s legal team reportedly said on Dec. 19 that the former CEO would not fight extradition proceedings to the United States, where he would face charges related to violations of campaign finance laws, wire fraud and securities fraud. He could be looking at a 115-year sentence if convicted.

SBF prosecutors reportedly dig into donations made to top US Democrats

Democratic members from the DNC, the DCCC and Congressman Hakeem Jeffries were contacted by SBF prosecutors for information to aid their ongoing investigations.

The prosecutors investigating former FTX CEO Sam Bankman-Fried (SBF) have reportedly reached out to top members of the Democratic Party demanding information about the political donations made by the entrepreneur.

Democratic members from the United States Democratic National Committee (DNC), the Democratic Congressional Campaign Committee (DCCC) and Congressman Hakeem Jeffries were contacted by SBF prosecutors for information to aid their ongoing investigations, according to a New York Times report.

The United States attorney’s office for the Southern District of New York sent an email to the Democratic Party elections lawyer Marc Elias, asking for details on donations made by SBF. Similar emails were sent over to other members of the Democratic and Republican parties.

The Royal Bahamas police arrested SBF on Dec. 12 based on a request of the U.S. government, just a day before the accused was supposed to testify before Congress. The entrepreneur was charged with eight counts of financial and elections fraud, circling around the alleged siphoning of $1.8 billion in customer funds.

The ongoing investigations around SBF’s political donations gained attention as he was the Democrats’ second-largest individual donor, who shelled out $39.8 million.

Related: Sam Bankman-Fried seeks to reverse decision on contesting extradition: Report

On Dec. 17, three prominent Democratic groups — the DNC, the Democratic Senatorial Campaign Committee and the DCCC — have reportedly decided to return SBF-linked donations to FTX investors, which together exceed $1 million.

As previously reported by Cointelegraph, a DNC spokesperson confirmed the decision:

“Given the allegations around potential campaign finance violations by Bankman-Fried, we are setting aside funds in order to return the $815,000 in contributions since 2020. We will return as soon as we receive proper direction in the legal proceedings.”

The other two Committees, DSCC and DCCC, have also reportedly pledged to set aside $103,000 and $250,000 for reimbursement, respectively.

White House silent on whether it will return $5.2M in donations from SBF

A White House spokesperson dodged point-blank questioning on whether President Joe Biden is planning to return the political donations from Sam Bankman-Fried.

White House press secretary Karine Jean-Pierre has declined to answer questions from a reporter on whether United States President Joe Biden will return the $5.2 million in campaign donations previously given by FTX founder Sam Bankman-Fried.

“Will the president return that donation?” Associated Press reporter Zeke Miller asked in a Dec. 13 press briefing. “Does he call on all politicians who got campaign donations that may have come from customer money to return those funds?”

“I’m covered here by the Hatch Act,” Jean-Pierre responded, adding she was “limited on what I can say.”

”Anything that’s connected to political contributions, from here I would have to refer you to the DNC,” she said, referring to the Democratic National Committee, the governing body of the U.S. Democratic Party.

The Hatch Act is a federal law prohibiting those employed in the executive branch of government from being involved in political campaign activities.

“I’m asking the president’s opinion though,” Miller pressed. Jean-Pierre repeated that she was “covered by the Hatch Act,” adding:

“I just can’t talk to political contributions or anything related to that I cannot speak about it from here.”

Miller again pushed for Jean-Pierre’s response on Biden’s opinion, bushe said she couldn’t speak about “even his opinion, even his thoughts about the contributions, donations — I cannot speak […] about that from here.”

Bankman-Fried was charged with violations of campaign finance laws on Dec. 13, including  contribution violations and obstructing the Federal Election Commission’s functions, along with making contributions in the name of others.

He was the second-largest “CEO-contributor” to Biden’s 2020 presidential campaign, with his $5.2 million in donations behind only the $56 million of contributions from media mogul Michael Bloomberg.

Related: ‘You can commit fraud in shorts and T-shirts in the sun,’ says SDNY attorney on SBF indictment

The FTX founder was also a top individual donor in the 2022 mid-term elections, again the second-largest Democratic Party contributor in the cycle,with $36.8 million funneled to its candidates.

Public records show Bankman-Fried sent just over $240,000 to Republicans during the mid-terms, but he admitted to so-called dark money donations in a Nov. 16 interview with cryptocurrency vlogger Tiffany Fong, saying he “donated about the same to both parties.”

Politicians on the receiving end of Bankman-Fried’s and other FTX executives’ political donations may be forced to return them to the bankruptcy trustee in any case, due to bankruptcy proceedings. Up $73 million in donations could be recalled to repay the failed exchange’s creditors.

Some politicians have already resorted to giving away their cash to charity in an attempt to distance themselves from the company and its donations.

Elon Musk alleges SBF donated over $1B to Democrats: “Where did it go?”

SBF made the “highest ROI trade of all time” by donating $40 million to the right people for getting away with stealing over $10 billion, said Will Manidis, the CEO of ScienceIO.

The attempts of mainstream media to water down the frauds committed by FTX CEO Sam Bankman-Fried (SBF) did not fare well in convincing the crypto community and entrepreneurs. Instead, the misinformation campaign collided with Tesla CEO Elon Musk’s drive to position Twitter as “the most accurate source of information.”

The world is yet to overcome the shock after witnessing the legal leniency awarded to SBF for misappropriating users’ funds and shady investment practices via trading firms Alameda Research and FTX. Will Manidis, the CEO of ScienceIO, a healthcare data platform, pointed out that SBF made the “highest ROI trade of all time” by donating $40 million to the right people for getting away with stealing over $10 billion.

On the other hand, Musk alleged that SBF donated over $1 billion to Democratic candidates, which is way more than the publicly disclosed amount of $40 million. SBF previously admitted to making backdoor donations to the Democratic Party. Musk asked:

“His actual support of Dem elections is probably over $1B. The money went somewhere, so where did it go?”

The United States House Financial Services Committee chair Maxine Waters, a Democrat, and ranking member Patrick McHenry, a Republican, have requested SBF to appear in an investigative hearing scheduled for Dec. 13.

To this request, prominent entrepreneurs, including Polygon CEO Ryan Wyatt, informed Waters that “he’s (SBF) a criminal” after being shocked at the leniency shown by the people in power to the fugitive.

Related: FTX collapse drives curiosity around Sam Bankman-Fried, Google data shows

The crypto community openly criticizes paid narratives that try to show SBF in good light. The latest backlash is related to SBF’s interviews in New York Times DealBook Summit and Good Morning America interviews.

Speaking to the news outlets during the ‘apology tour,’ SBF portrayed himself as a victim and got applauded at the end. “Watching SBF’s interview is kind of like watching Casey Anthony’s documentary. They’re so mechanical, they’re so inauthentic in their delivery. If you feel any emotion, at all, it slows people down. The way it is expressed is a separate subjective matter,” said Twitter user and developer Naom.

Elon Musk alleges SBF donated over $1B to Democrats: ‘Where did it go?’

Some online are floating around theories that SBF will get away with misappropriating and losing user funds because of his large donations to politicians.

Many in the crypto space have accused mainstream media of intentionally trying to water down the actions of FTX CEO Sam “SBF” Bankman-Fried, including Tesla CEO Elon Musk, who is on a self-proclaimed mission to position Twitter as “the most accurate source of information.”

While the world still overcomes the shock of FTX’s collapse and the realization that SBF had been misappropriating users’ funds and engaging in shady investment practices via its sister trading firm, Will Manidis, CEO of ScienceIO — a healthcare data platform — tweeted that SBF made one of the “highest ROI trades of all time” by donating $40 million to the right politicians, who he claims have allowed him to get away with stealing over $10 billion.

Musk responded to the tweet, alleging that the amount of money SBF actually donated to Democratic candidates was over $1 billion, which would be way more than the publicly disclosed amount of $40 million. SBF previously admitted to making “dark” donations to the Republican Party. Musk asked:

“His actual support of Dem elections is probably over $1B. The money went somewhere, so where did it go?”

Meanwhile, United States House Financial Services Committee Chair Maxine Waters, a Democrat, and ranking member Patrick McHenry, a Republican, have requested that SBF appear in an investigative hearing scheduled for Dec. 13.

Polygon CEO Ryan Wyatt responded to Waters’ request by stating that “he’s [SBF] a criminal. What is happening.”

Related: FTX collapse drives curiosity around Sam Bankman-Fried, Google data shows

This latest round of backlash against SBF comes shortly after he gave interviews during The New York Times‘ DealBook Summit and to Good Morning America.

During his so-called “apology tour,” SBF has been portraying himself as a victim and even received a round of applause at the end of his DealBook Summit appearance. According to Twitter user and developer Naomi, “Watching SBF’s interview is kind of like watching Casey Anthony’s documentary. They’re so mechanical, they’re so inauthentic in their delivery. If you feel any emotion, at all, it slows people down. The way it is expressed is a separate subjective matter.”

Update (Dec. 5, 10:10 pm UTC): This article previously stated that Bankman-Fried admitted to giving backdoor donations to the Democratic Party. It has been updated to reflect that his dark donations went to the Republican Party.

Ukraine-based blockchain firm blasts ‘fake news’ for crypto donation rumors amid FTX collapse

Sergey Vasylchuk, the CEO of Everstake, said individuals behind Russian propaganda used the fall of FTX “to spin yet another tale about money laundering.”

A blockchain firm that partnered with the Ukrainian government to launch a donation website amid the country’s war with Russia has pushed back against online rumors and conspiracy theories that its platform was used for politically motivated money laundering.

Ukrainian government officials partnered with Everstake, Kuna and the now infamous crypto exchange FTX to launch Aid for Ukraine in March, following the Russian invasion. According to Everstake, crypto users and Ukraine supporters sent roughly $60 million in crypto and fiat aimed at supporting Ukraine’s armed forces and other humanitarian causes. However, with FTX’s liquidity issues and bankruptcy, Sam Bankman-Fried falling from grace, and legal action against the firm and its executives, social media users have taken many liberties with the truth over the final destination of the crypto donations.

The conspiracy theories promulgated online falsely claim that due to its association with FTX and Bankman-Fried’s previous political donations, Aid for Ukraine’s funds ended up being funneled to the United States Democratic Party. Among those spreading the rumors is U.S. Representative Madison Cawthorn of North Carolina. An Everstake spokesperson branded the claims “Russian propaganda,” spread by “biased media, like Fox News and Russia Today.”

According to Everstake, the false claims do not “correspond with reality” given that the majority of the funds already went toward helmets, bulletproof vests and night vision technology for Ukraine’s military, as the country’s Deputy Prime Minister Mykhailo Fedorov reported in August. The spokesperson added that the situation with FTX “does not affect the operation of Aid For Ukraine,” as the platform only used the exchange “a few times” to convert crypto donations to fiat in March and had no funds stored on FTX at the time of its collapse.

“Every time Russia is defeated on the battlefield, it starts looking for another way to cover up its military failures in the media by spreading fake news based on made-up assumptions,” said Everstake CEO Sergey Vasylchuk. “This time, they decided to use the collapse of FTX to spin yet another tale about money laundering. It is obvious that Western support of Ukraine hurts Russia as it leads to its losses on the battlefield. We know for a fact that every donation was spent for the benefit of Ukraine.”

One of the kernels of truth within the rumor surrounds Bankman-Fried admitting to being a “significant donor” to political candidates in the U.S. 2022 midterm elections, with the majority of his contributions going toward Democrats. On Nov. 29, the Texas Tribune reported that Texas gubernatorial candidate Beto O’Rourke — a Democrat who lost his race against incumbent Greg Abbott — returned a $1 million donation from SBF prior to election day.

But SBF has scoffed at claims he was helping the Democrats launder money via Ukraine. “I wish I could have pulled that off,” Bankman-Fried jokingly said in a Nov. 16 interview with Tiffany Fong addressing the rumors. “I was helping Ukraine launder funds for the Democratic Party? […] I wished I was part of an international conspiracy that interesting.”

Speaking to Cointelegraph, Vasylchuk said that Ukrainian government officials had been forced to respond to “serious people” inquiring about the online rumors. The Everstake CEO speculated that the recent shakeup at Twitter amid Elon Musk taking over as CEO had further opened the doors for conspiracy theories to run amok on the platform, like the one related to FTX and Ukraine’s crypto donations.

Related: Ukraine-based blockchain firm announces ‘we’re still hiring’ amid market downturn, war

“Society is blind to stop the spread of lying and propaganda,” said Vasylchuk. “We see how propaganda can influence like in Russia — [they fooled] millions of people. At the same time, I see them turn to [fooling] Americans, and social media can do the same. So, I’m really scared. I’m scared for the information and scared how it’s easy to manipulate or to force people to believe some type of this information.”

He added:

“This information was similar to information like ‘Ukraine developed battle mosquitoes which will bite Russians.’ […] I was thinking that American society is much more mature than it is in [Europe], and the people are actually able to feel the reality, the obvious bullshit, but unfortunately not.”

Vasylchuk reported that crypto donations through Aid for Ukraine had tapered off in recent months. Many crypto users are expected to send cash and tokens to various organizations as part of Giving Tuesday, or Bitcoin Tuesday, on Nov. 29.

NFTs and crypto provide fundraising options for breast cancer awareness

Organizations are partnering with NFT projects and accepting crypto donations to draw attention to Breast Cancer Awareness Month.

The hype around nonfungible tokens (NFTs) may be fading, yet a number of organizations continue to implement Web3 initiatives. Nonprofit organizations and activists, in particular, have begun implementing nonfungible token projects to help fundraise and generate awareness for certain causes. 

While these methods are still new, NFT projects for philanthropy have been met with relative success. A recent report from crypto donation platform The Giving Block found that nonprofits using The Giving Block received more than $12.3 million dollars in cryptocurrency donations from NFT-related charitable giving initiatives in 2021. The report further noted that charitable organizations using NFTs are presented with the opportunity to connect with younger donor demographics while diversifying donation methods.

NFT projects for Breast Cancer Awareness Month 

Benefits such as these can be especially helpful for raising awareness around life-threatening diseases. number of breast cancer-focused organizations have started implementing NFTs this October to highlight Breast Cancer Awareness Month. 

For example, Shaney jo Darden, founder of the Keep A Breast Foundation (KAB) — a California-based nonprofit that aims to reduce breast cancer risk — told Cointelegraph that KAB focuses on engaging with younger generations to bring attention to breast cancer. She said:

“Even though women over the age of 40 are typically diagnosed with breast cancer, early detection can result in a 98% survival rate. Given this, KAB aims to generate awareness about breast cancer through encouraging and fun ways, like using NFTs to educate young women.” 

Darden said that last year, KAB hosted an exhibition in the CryptoVoxels metaverse to raise money for breast cancer research. “We wanted to do an event in the Metaverse as opposed to conducting a membership drive or gala, since this opens access globally,” she noted. Based on the success of this, Darden explained that she wanted to continue to implement Web3 initiatives — especially those involving artwork created by women — to generate awareness around breast cancer. Most recently, Darden partnered with the NFT project NFTitties to raise funds for KAB’s breast cancer prevention and educational initiatives. 

Carlota Dochao Naveira, founder of NFTitties, told Cointelegraph that the women-led project celebrates women, art and breasts to raise funds to fight breast cancer. “Emerging artists and activists were invited to submit an artwork representing breasts, following a set of visual guidelines. The artworks were then vetted and, if selected, included in the first release of NFTitties,” she said.

NFTitties #1.14 by Medici_Labs. Source: OpenSea

According to Dochao Naveira, almost 30 NFTs were sold during the first week the project launched on Oct.1. She further pointed out that NFTitties has helped onboard more women into the Web3 ecosystem since the initiative encourages women artists, activists and others to submit their artwork to be presented as nonfungible tokens. 

Other organizations are implementing different forms of NFTs to educate individuals on this type of cancer that affects one in eight women. For example, the women’s handbag designer Vera Bradley announced on Oct. 3 that it will be donating almost 100% of the proceeds generated from its fashion NFT drops to The Vera Bradley Foundation for Breast Cancer.

Jennifer Bova, vice president of marketing at Vera Bradley, told Cointelegraph that to date, the foundation has raised and donated more than $38 million to support critical advancements in breast cancer research. Yet, Bova noted that Vera Bradley has started focusing on marketing in the Metaverse to attract new users by attaching philanthropic utility to its digital and physical fashion NFTs. “Through its NFT PFP backgrounds, Vera Bradley hopes to drive awareness for fundraising, as well as female-led conversations and initiatives in Web3,” she said.

It’s also notable that Susan G. Komen, a leading breast cancer research foundation, recently began accepting crypto donations to enable cryptocurrency holders to give back. Michelle Strong, vice president of marketing strategy at Susan G. Komen, told Cointelegraph that about a year and a half ago, the organization began receiving requests from individuals interested in donating cryptocurrency:

“We implemented this feature nearly a year ago with the help of The Giving Block. This has driven interest from both current and new donors, as crypto donations have opened doors to those who haven’t been able to give before but were interested in being charitable.” 

Based on the successful implementation of crypto donations over the past year, Strong mentioned that Susan G. Komen will be incorporating crypto donations, along with other digital donations received during the week of Oct. 9–15, to fund the organization’s metastatic breast cancer excellence in research award. 

“Oct. 13 this year is ‘metastatic breast cancer’ day, which is the most advanced stage of the disease. Susan G. Komen is giving out the excellence in research award to bolster investment around this specific area of research and cryptocurrency is another great way to support this,” she remarked.

Web3 initiatives are helpful, but not necessarily better

While the use of NFTs and crypto donations to support breast cancer is innovative, these initiatives are still only helpful ways to bring attention to certain causes. For instance, Bova pointed out that driving awareness and funds for breast cancer research in the Metaverse is not necessarily better but rather an additive resource to tap into new donors and volunteers. Echoing this, Darden mentioned that incorporating NFT projects with KAB enables the organization to diversify its funding, yet it hasn’t proven to be a better solution in comparison to traditional fundraising mechanisms:

“Many NFT projects die out over time, so KAB is taking a risk by being a part of certain projects. However, NFTitties has a clear goal and beautiful art that resonates with the KAB community.”

Indeed, even though there are a number of risks associated with NFT projects, nonfungible tokens remain appealing when it comes to increasing user engagement and interest. 

“Susan G. Komen is happy to benefit from NFT projects that others are able to pull together. We are currently in conversation with an NFT project that aims to benefit our organization,” Strong noted.

Yet, it’s also important to point out that, in addition to risks, there are challenges associated with implementing such projects.

According to Dochao Naveira, targeting traditional NFT investors can be difficult when it comes to women-led initiatives “There tends to be a bro-culture in the Web3 space that doesn’t care as much about certain projects. There can also be difficulties with helping mainstream users set up a MetaMask wallet,” she said.

But, as time progresses, Web3 projects aim to incorporate new features to help ease onboarding and educate new users. For example, Carmen Toal, CEO and co-founder of Sprkl NFT Studios — a platform working with nonprofits and individuals to implement NFT technologies — told Cointelegraph that mainstream users typically need more guidance when it comes to participating in NFT projects.

As such, she mentioned that Sparkl NFT Studios incorporates familiarities with charitable NFT initiatives. “We sometimes include a ‘donate now’ button that is not directly attached to an NFT,” she said.

Most recently, Sprkl NFT Studios partnered with the National Breast Cancer Foundation, Inc. (NBCF) on an NFT artwork fundraising campaign for Breast Cancer Awareness Month. Candice Hensley, senior manager of strategic partnerships at NBCF, further told Cointelegraph that working with Sprkl NFT Studios is part of the organization’s strategic plan to diversify its funds.

Sprkl NFT Studios commissioned artist Pola a Yim to create and draw an original flower bouquet for a digital NFT to support Breast Cancer Awareness. Source: Sprkl NFT Studios

DataVault requests US election agency’s advice to send NFTs as a campaign fundraising incentive

The firm planned to market NFTs “in a manner akin to a campaign hat or souvenirs,” intending to have political committees offer them to high-volume low-dollar donors.

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.

In a Sept. 21 letter to FEC acting general counsel Lisa Stevenson, DataVault’s lawyers proposed sending NFTs as “souvenirs” to individuals who contributed to political committees, as well as giving the token holder the option to use it for promoting a campaign “strictly on a volunteer basis and without any compensation.” The NFT firm requested the FEC provide guidance on how it may operate as a commercial vendor — issuing the tokens to political committee members seemingly without violating federal campaign finance laws.

“DataVault’s 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,” said DataVault’s counsel Elliot Berke. “DataVault would provide the NFTs to political committees in the same manner and normal course of business as other non-political committee clients.”

According to DataVault’s proposals, the firm planned to market NFTs “in a manner akin to a campaign hat or souvenirs,” 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’s policies. Any fees from issuing NFTs or transactions would be reported as a “fundraising expenditure,” according to DataVault’s example scenario:

“An 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.”

DataVault’s legal team requested the FEC provide clarification on whether the firm could “design and market NFTs to political committees” as well as provide the tokens to incentivize contributors. In a 2019 advisory opinion on NFTs, the commission determined tokens were “materially indistinguishable from traditional forms of campaign souvenirs” such as buttons.

“The 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,” said the FEC at the time. “The 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.”

Related: Crypto and decentralization could influence voters in 2022 US midterm elections: Report

Political figures outside the FEC’s purview have taken similar initiatives. Prior to South Korea’s presidential election in March, Democratic Party candidate Lee Jae-myung’s campaign said it would issue NFTs showing images of the politician and his campaign pledges to those who donated money, in an effort to appeal to the younger generation. In California, NFTs were at the center of a discussion among members of the state’s Fair Political Practices Commission in March, later leading to the independent body reversing a 2018 ban on crypto donations for candidates for state and local offices.

DataVault requests US election agency’s advice to send NFTs as a campaign fundraising incentive

The firm planned to market NFTs “in a manner akin to a campaign hat or souvenirs,” intending to have political committees offer them to high-volume low-dollar donors.

The legal team behind nonfungible token (NFT) firm DataVault Holdings has requested an advisory opinion from the United States Federal Election Commission on using NFTs for fundraising efforts.

In a Sept. 21 letter to FEC Acting General Counsel Lisa Stevenson, DataVault’s lawyers proposed sending NFTs as “souvenirs” to individuals who contributed to political committees, as well as giving the tokenholder the option to use it for promoting a campaign “strictly on a volunteer basis and without any compensation.” The NFT firm requested the FEC provide guidance on how it may operate as a commercial vendor — issuing the tokens to political committee members seemingly without violating federal campaign finance laws.

“DataVault’s 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,” said DataVault counsel Elliot Berke. “DataVault would provide the NFTs to political committees in the same manner and normal course of business as other non-political committee clients.”

According to DataVault’s proposals, the firm planned to market NFTs “in a manner akin to a campaign hat or souvenirs,” 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’s policies. Any fees from issuing NFTs or transactions would be reported as a “fundraising expenditure,” according to DataVault’s example scenario:

“An 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.”

DataVault’s legal team requested the FEC provide clarification on whether the firm could “design and market NFTs to political committees” as well as provide the tokens to incentivize contributors. In a 2019 advisory opinion on NFTs, the commission determined tokens were “materially indistinguishable from traditional forms of campaign souvenirs” such as buttons.

“The 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,” said the FEC at the time. “The 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.”

Related: Crypto and decentralization could influence voters in 2022 US midterm elections: Report

Political figures outside the FEC’s purview have taken similar initiatives. Prior to South Korea’s presidential election in March, Democratic Party candidate Lee Jae-myung’s campaign said it would issue NFTs showing images of the politician and his campaign pledges to those who donated money in an effort to appeal to the younger generation. In California, NFTs were at the center of a discussion among members of the state’s Fair Political Practices Commission in March, later leading to the independent body reversing a 2018 ban on crypto donations for candidates for state and local offices.

Roman Catholic Archdiocese of Washington, DC will accept crypto donations

Crypto donations platform Engiven’s page for the archdiocese includes the option to send funds anonymously using many tokens, from Ether to ZRX.

The Archdiocese of Washington, D.C. of the Roman Catholic Church will begin accepting donations in cryptocurrency as part of an effort to grow its ministries.

In a Tuesday announcement, crypto platform Engiven said it would facilitate donations to the Roman Catholic Archdiocese of Washington, D.C. for fundraising efforts and to increase the church’s “digital stewardship initiatives.” According to the archdiocese’s website, the funds will be used to directly support 139 D.C.-area parishes as well as local programs, including providing food to those in need.

“The Roman Catholic Archdiocese of Washington, D.C. seeks to leverage technology to engage parishioners in new and exciting ways, making it easier for the faithful to fulfill the mission of the Church,” said Joseph Gillmer, executive director of development for the archdiocese.

Engiven’s page for the archdiocese included the option to send donations anonymously in many cryptocurrencies, from Bitcoin (BTC) to 0x’s ZRX. According to the platform, funds designated for individual parishes receive 100% of the net proceeds of donations.

Cointelegraph reported in November that Engiven had facilitated crypto donations for more than 400 faith-based organizations, including processing a single BTC donation for $10 million. Founder James Lawrence said at the time that “no faith-based organization, church or non-profit can afford to neglect its online audience, donors and seekers” with crypto becoming a part of that ecosystem.

Related: Pro-Russian groups raised only 4% of crypto donations sent to Ukraine

While certain dioceses within the Roman Catholic Church seem to be open to using the latest technology, the Russian Orthodox Church said in February 2021 that it was not planning to accept cryptocurrency for donations, nor create its own digital currency. A spokesperson suggested at the time that church members send money over the phone rather than crypto. Russian President Vladimir Putin has since signed a bill into law prohibiting digital financial assets as payments in the country.