How do I liquidate Bitcoin?

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 campaign depository before using the funds to make disbursements for goods and services.

Reporting on candidate forms

House and Senate committees report selling bitcoins on Form 3 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. Use Line 11(a) if the buyer is an individual or market, Line 11(b) if the buyer is a party committee, and Line 11(c) if if the buyer is another type of political committee.

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Reporting for liquidating bitcoins depends on whether the committee sells to a known purchaser or to an unknown purchaser.

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.

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.