DataVault Holdings, Inc. (DataVault) may create and sell nonfungible tokens (NFTs) to political committees for use in fundraising in the ordinary course of its business, at the usual and normal charge, and under the same terms and conditions as its non-political clients, without making a prohibited in-kind contribution.
DataVault is a for-profit corporation whose business includes the creation and sale of digital tokens known as NFTs. DataVault asks if it may sell NFTs to political committees. It represents that it would do so in the ordinary course of its business, at the usual and normal charge, and under the same terms and conditions as its non-political clients. Committees would then provide NFTs to their contributors as souvenirs in a manner akin to a campaign hat.
The Federal Election Campaign Act (the Act) and Commission regulations prohibit corporations from making contributions to federal candidates and to committees that contribute to federal candidates. A contribution is a gift of cash, services, or anything of value intended to influence a federal election. This definition includes the provision of goods and services without charge or at less than the usual and normal charge.
DataVault will create and transfer NFTs to political committee clients before receiving payment; however, they expect to recoup their costs and make a reasonable profit once the committees pay the fees for the NFTs given to contributors, and to employ various safeguards to avoid providing political committees with NFTs for which it does not receive reasonable compensation. Because DataVault’s transfers of NFTs will be extensions of credit under 11 CFR part 116 and are otherwise consistent with prior Commission interpretations of the Act, DataVault's proposed transactions, when performed in the ordinary course of business, at the usual and normal charge, and under the same terms and conditions as DataVault applies to its non-political clients, would not result in prohibited corporate contributions.
Date Issued: December 15, 2022; Length: 6 pages