Liquidating bitcoins
In Advisory Opinion 2014-02, the Commission concluded that committees can purchase bitcoins and receive bitcoins as a contribution. However, committees cannot use bitcoins to purchase goods or services. Committees must sell the bitcoins and deposit the proceeds into the committee depository before using the funds to make disbursements for goods and services.
Reporting on Form 3X
Political action committees and party committees report selling bitcoins on Form 3X and itemize the transaction on Schedule A when necessary. The line number used to report a bitcoin contribution depends on who is buying the bitcoins. Reporting for liquidating bitcoins depends on whether the committee sells to a known purchaser or to an unknown purchaser. If the purchaser is known, use Line 11(a) if the buyer is an individual, Line 11(b) if the buyer is a party committee, and Line 11(c) if if the buyer is another type of political committee. If the committee sells the bitcoins through an established market mechanism where the purchaser is not known, use Line 17 for "Other Federal Receipts."
Selling to a known purchaser
If the committee sells the bitcoins directly to a purchaser, and therefore knows the identity of the purchaser, the purchaser is considered to have made a contribution to the committee.
The committee will report the purchaser's name, address, and employer/occupation information as well as the date of the purchase, the value of the bitcoins purchased and the number of bitcoins purchased as a receipt on the committee's report. The committee will also report a memo entry disclosing the original contributor's information, date of contribution, original value of the bitcoins, and the number of bitcoins originally given to the committee.
Jane Purchaser buys 0.2 bitcoins from the committee for $2,500. The committee reports her name, mailing address, employer and occupation on Schedule A, supporting Line 11(a). It also reports the date Jane bought the bitcoins, amount they were sold for, aggregate year-to-date total for Jane, and includes the notation “Purchase of 0.2 Bitcoins.”
The committee also reports information about the original receipt of the bitcoins as a memo entry. This memo discloses the original contributor’s information, date of the original bitcoin contribution, the original value of the bitcoins ($100), and the number of bitcoins originally given to the committee (0.2). This notation links the original bitcoins contribution and the selling of the bitcoins together.
Selling to an unknown purchaser
If the committee sells the bitcoins through an established market mechanism where the purchaser is not known, the purchaser is not considered to have made a contribution to the committee.
The committee will report the market or exchange's name, and address information, as well as the date of the purchase and the value of the bitcoins purchased. The committee should include a notation stating how many bitcoins were purchased and that the purchaser is unknown. The committee will also report a memo entry disclosing the original contributor's information, date of contribution, original value of the bitcoins and the number of bitcoins originally given to the committee.
The committee sells the 0.2 bitcoins on the ABC Bitcoin Exchange and doesn’t know the purchaser. It reports the exchange’s name on Schedule A, supporting Line 17. The committee reports address information for the exchange, as well as the date that the purchase took place, the amount the bitcoins were sold for, and the aggregate election cycle-to-date total for the exchange. The committee includes how many bitcoins were sold, where they were sold, and that the purchaser is unknown by including the notation “0.2 Bitcoins sold via ABC Exchange - purchaser unknown.”
The committee also reports information about the original receipt of the bitcoins as a memo entry. This memo discloses the original contributor’s information, date of the original bitcoin contribution, the original value of the bitcoins ($100), and the number of bitcoins originally given to the committee (0.2). This notation links the original bitcoin contribution and the selling of the bitcoins together.
Learn more about reporting
Reporting with FECFile
To enter the sale of bitcoins that were given to the committee as a contribution, go to the Summary Page tab, right click on the category that describes the bitcoin purchaser - Line 11(a), 11(b), 11(c), or 17 (for unknown purchasers) - and select “new.”
