CHEYENNE — There could be a pathway for Wyoming politicians to be formally cleared to accept campaign contributions in the form of virtual currency – at least possibly if state officials go along with this suggestion.
During a hearing Tuesday morning of the Legislature’s Select Committee on Blockchain, Financial Technology and Digital Innovation, several lawmakers suggested that Wyoming approve crypto campaign contributions.
Sens. Chris Rothfuss, D-Laramie, and Tara Nethercott, R-Cheyenne, noted that one approach could be for the value of a cryptocurrency political contribution to be pegged to the worth of the crypto at the time of the donation.
In comments to the livestreamed meeting in Sheridan of the panel, which is made up of members from both chambers of the Legislature, a witness from the Legislative Service Office summarized legislative efforts on crypto in states across the country.
LSO’s Emily Wangen described this as “one interesting trend that I noticed” in her research. She went on to say that some states have taken steps to authorize such political contributions, while others are headed in the opposite direction.
Here in Wyoming, legislators from both political parties said that one question would be how to value such crypto contributions. There seemed to be a general consensus, at least at this point in such considerations, around the current value at the time of the political donation.
Rothfuss wondered aloud whether there has been an analysis of how to govern or deal with such contributions in Wyoming.
“There should be no problem receiving cryptocurrency or virtual currency as a campaign contribution, in my expectation.”
His co-chairman of the blockchain panel, Rep. Jared Olsen, R-Cheyenne, responded that “value is probably the only question.”
Asked by Rothfuss for her opinion, Nethercott said “I think we should refrain from creating any legislation about it, at this point in time, and allow that to be managed with rules and regs.”
“How to value it is probably the question at hand, and probably likely at the time of receipt,” she said.
Rothfuss then suggested the Secretary of State’s Office could look into the issue.
“I’d expect the Secretary of State’s Elections Division to be responsible for this and to already have sufficient statutory authority – but maybe not the actual rules/ decisions in place,” the lawmaker later wrote in an email to the Wyoming Tribune Eagle.
A representative for that office was not available to comment when the WTE called.
Other states that have already cleared the way for crypto campaign donations appear to mostly stick with a currentvaluation approach, two experts told the WTE.
One of the experts noted that even before states had weighed in, the Federal Election Commission in 2014 issued a sort of advisory opinion.
Attorney Chris White from the Wiley law firm in Washington explained that the FEC guidance suggested that crypto contributions were allowed as a contribution in kind, and at the virtual currency’s current value.
The FEC “was somewhat way ahead of the curve,” White said by phone. “It’s only very recently that state regulators and state legislators have gotten into this.”
Some states that have allowed crypto political donations did so via regulators and without taking formal actions, White said.
Elsewhere, there have been regulatory proceedings or formal rulings, and in still other states, lawmakers are enacting new laws and not leaving it to government agencies to sort out.
An academic who studies the issue agreed that the current-valuation approach could make sense here in Wyoming.
“I believe the only practical approach is to value the donation at the time of the donation,” Professor Steven Lupien, of the University of Wyoming’s College of Business, wrote in an email to the WTE. “Otherwise, an appreciating asset may run afoul of election contribution limits.”
While crypto donations appear to be a small portion of overall campaign finance, it is a growing area of interest. A very low portion of donations to campaigns for federal office have been via virtual currencies, White said.
It is a “field of growing interest both for regulators and for campaigns,” he added.
The donations are “growing in size” with each election cycle, he noted. “But it’s definitely a minority of contributions.”