Announcement Regarding State Rep Mark Warden's Bitcoin Strategy

[ben-abuya]

Mark Warden, who is running for re-election as a New Hampshire State Representative, has been having strategy meetings about the Bitcoin contributions together with his team. I’m posting this here on behalf of his campaign.

Thanks to the enthusiastic support of the Bitcoin community, the campaign has received over 100 BTC in contributions. This has now become an issue of public interest that the New Hampshire authorities will have to address. We think that's a good thing for Bitcoin.

That being said, as etotheipi and others have pointed out, there are very strict State and Federal campaign finance laws that we must follow. The relevant laws here prohibit the following:

1. Contributing to the campaign on behalf of another individual.
2. Accepting an anonymous contribution of any amount.
3. Accepting any foreign contribution. Contributor must be a US citizen or a US resident.
4. Accepting contributions exceeding 1,000 USD, in aggregate, from any individual.

In order to fully comply with these laws, pending advice from the New Hampshire authorities, Mark has decided on the following course of action:

1. Since most of the contributions to date have been anonymous, all previous contributions will be returned to the original contributing address on Monday, August 20th (today). Important: If you have contributed to the campaign and would not like us to send the funds back to the originating address (for instance, if you have a web wallet), please write us immediately at mark@markwarden.com.

2. If you are a US citizen or resident and would like to contribute no more than 1,000 USD of Bitcoins, we would be honored to accept your contribution. To comply with State and Federal laws, we will have to ask you for your full name and address. For now, please write the campaign at mark@markwarden.com. If you are contributing more than $100 of Bitcoins at current market price, please include your employer name and address and your job title. We hope to get the automated system up soon.

We see this as a small but significant step, establishing the legality of accepting Bitcoins as political contributions. In doing so, we believe it is in everybody's best interest if we go above and beyond the call of duty and ensure that no one can question our transparency and adherence to the letter and spirit of the law.

We apologize for the intrusion into your privacy, but this is the only way we can legally accept contributions. If you wish to not disclose your name and address, there are many other worthy causes, one of which is the New Hampshire Liberty Alliance which will use your contributions to fight for freedom of money in New Hampshire. If you have any questions, please PM me or contact the Mark Warden campaign.

[FreeMoney]

It's not cool to return to sending address without stating you might do it upfront.

These people didn't want to donate to a random Gox address.

[ben-abuya]

Thanks, FreeMoney. I was hoping for this kind of feedback.

We haven't sent any money back yet, and that's why we're posting here in order to try and get all the coins back to the right people. We're certainly open to other solutions, but we have to send the money back somehow.

[Tuxavant]

Can you post all the donation addresses used so I can search my transaction history? There was only one or two, right?

[BitPay Business Solutions]

They should consider using the service from BitPay.

At the time we collect the donation, we can also collect any Name, Address, email address, phone number, etc that the donor requires.  That information is provided on the receipt to the donor, and on the Account Summary for the recipient.  We have been doing this for about a year now.

https://bit-pay.com/charities.html

[ben-abuya]

Can you post all the donation addresses used so I can search my transaction history? There was only one or two, right?

Great question! There were two donation addresses. They are:

1B39L3wqnbVpRa9oHMWY2F6FsZJJAgJQX6
1GYKza1DDdBFTwHD1Hr1hYLd5csRGDvqVZ

They should consider using the service from BitPay.

I'm not the web master, but this was definitely brought up as an option, and I'll bring it up again.

[Coinabul]

May I suggest that the money donated thus far sits for a week and allows people to reclaim their balances to a BTC address they specified, with the remaining sum going towards advertising Bitcoin through a trusted third party.

[Herodes]

The rules regarding campaign donation was established before you started accepting bitcoins.

Bitcoins cannot always just be easily returned, the sender may have used a one-time address ?

The problem is easily solved though.

1. Write on your web page that all donations will be forwarded to the Bitcoin 100 (http://bitcoin100.org/) unless the donator e-mails you stating the details of the transaction and giving his/her private details.

That way you'd comply with the current law AND contribute to charity.

Can companies contribute more than 1000 USD, is that limit only for individuals ?

[Stephen Gornick]

We haven't sent any money back yet, and that's why we're posting here in order to try and get all the coins back to the right people. We're certainly open to other solutions, but we have to send the money back somehow.

Probably the approach necessary will be to have anyone that wishes to have the funds refunded send to you a signed message proving they truly are the owner of that address.  The bitcoin-qt client suports this -- you simply pick one of the adresses that the transaction was from and do Sign Message.  Anyone can then verify.  And if they do that, you might as well just ask them for identity and just keep the payment if that's provided.

For any donations you do not get a refund requrest from then should NOT be returned, as is described above -- many refunds will not likely go back to the intended recipient (the person that sent the funds in the first place).

The options for those unclaimed funds might include donating them to some charitable or apolitical purpose then.  But returning them to the sender's address, without that sender verifying ownership, will cause a number of people to become surprised with the free bitcoins that land in their wallet, and the rest of the coins will be commandeered by the EWallet operators as they have no intended recipient.

[niko]

Just a thought - at this moment bitcoins are not recognized and regulated by the government as a currency. Unless the campaign fund converts them to USD, no laws can be violated. It's just digitally signed messages stored in a public ledger. If anyone claims laws have been violated, they are recognizing bitcoins as currency, or at least a commodity. On a related note, how are non-monetary donations treated by the state and federal authorities? Can I donate an oil painting? Can Mark Warden sell it afterwards and use the proceeds in the campaign fund? Whose name, address, and citizenship are then taken into account - mine, yours, or the buyer's?

[ben-abuya]

Probably the approach necessary will be to have anyone that wishes to have the funds refunded send to you a signed message proving they truly are the owner of that address.  The bitcoin-qt client suports this -- you simply pick one of the adresses that the transaction was from and do Sign Message.  Anyone can then verify.  And if they do that, you might as well just ask them for identity and just keep the payment if that's provided.

For any donations you do not get a refund requrest from then should NOT be returned, as is described above -- many refunds will not likely go back to the intended recipient.

The options for those funds might include donating them to some charitable or apolitical purpose then.  But returning them to the sender's address, without that sender verifying ownership, a number of people will be surprised with the free bitcoins that land in their wallet, and the rest will be commandeered by the EWallet operators as they have no intended recipient.

Good points, Stephen. I'm going to talk with Mark, as it's now apparent that the coins can't just be returned the originating addresses. The signing is a great idea, too.

Just a thought - at this moment bitcoins are not recognized and regulated by the government as a currency. Unless the campaign fund converts them to USD, no laws can be violated. It's just digitally signed messages stored in a public ledger. If anyone claims laws have been violated, they are recognizing bitcoins as currency, or at least a commodity. On a related note, how are non-monetary donations treated by the state and federal authorities? Can I donate an oil painting? Can Mark Warden sell it afterwards and use the proceeds in the campaign fund? Whose name, address, and citizenship are then taken into account - mine, yours, or the buyer's?

The rules apply to anything of value that is contributed to the campaign, so I think it's pretty clear that they apply to the Bitcoins received.

[dissipate]

Just a thought - at this moment bitcoins are not recognized and regulated by the government as a currency. Unless the campaign fund converts them to USD, no laws can be violated. It's just digitally signed messages stored in a public ledger. If anyone claims laws have been violated, they are recognizing bitcoins as currency, or at least a commodity. On a related note, how are non-monetary donations treated by the state and federal authorities? Can I donate an oil painting? Can Mark Warden sell it afterwards and use the proceeds in the campaign fund? Whose name, address, and citizenship are then taken into account - mine, yours, or the buyer's?

I'm no lawyer but I would be shocked if non-monetary donations weren't regulated in the same way as monetary ones. Otherwise, someone could donate a yacht or heck even gold bars to a campaign.

[ErebusBat]

Unless the campaign fund converts them to USD, no laws can be violated.

What good are they to him if they don't convert USD?

VOTE FOR MEEE I HAZ BITCOINZ!

[bg002h]

Just because you send the coins back to the address they came from is not equivalent to returning them to their owner...as others have pointed out, if you withdrew from your brokerage to the campaign address, sending it back to the broker doesn't truly reverse the transaction.

[FreeMoney]

I think you should ask Mark what he would do if the law commanded him to fly to Jupiter every morning. Sometimes laws make no sense or are impossible or silly or wrong to follow. You can either keep your head down or fight it and he doesn't seem inclined to keep his head down. So (and it doesn't impact me at all so take it for what it is worth) it's time to fight, leave the address, people will broadcast whatever tx they want to the network and there is nothing you can do about it. A fight about this would be great imo, finally politicians talking (probably nonsensically still) about something interesting.

If the law really commands that you can't accept bitcoin donations without gathering identity data then you have to be careful never to associate yourself with a bitcoin address or else risk being donated to against your will and have no ability to return or decline them.

[Stephen Gornick]

Incidentally, the original thread with the notice that donations were being accepted:

 - http://bitcointalk.org/index.php?topic=99968.0

[Mike Hearn]

I would suggest just returning to a sender address. It's not a good idea for people to be using large shared wallets longer term, not only for these reasons.

[etotheipi]

Guys,

I just want to repeat the advice that I gave Mark via email, because it appears that there is a disconnect about returning funds.  I believe it is absolutely critical that:

(1) Funds be returned to exactly one of the addresses it was received from
(2) A large warning is posted on the donation page, notifying that that is the policy and no exceptions will be made

This is in Mark's best interest.  There are two serious issues with returning to different addresses:

(1) With addresses being semi-anonymous, returning to a different address looks suspicious.  It could have been Mark claiming to return the funds to someone, but actually siphoning them off to a secret address he created for himself.  I'm not, in any way, accusing Mark of doing this.  But there's no way to prove that he didn't do that.  The only way for an oversight committee to know for sure that the coins were actually returned is if it goes back to the same address

(2) There's all sorts of money-laundering issues with returning to a different address.  I know it doesn't make much sense for someone to do it, but theoretically someone wants to pay their drug dealer $10k BTC, so they make an invalid donation to Mark's campaign, then has Mark return it to his drug dealer's address.  Mark was now unknowingly an accomplice.  While the possibility of that happening is pretty low, I think there's actually a greater risk of someone setting up something like this in order to blackmail and/or discredit Mark.  

It's just not worth the risk.

If someone donates from an online service, then I still recommend it be returned to the sender, and Mark can send that person the TxID of the return transaction.  Then the user/donor can go sort it out with the online service, on their own time.  They will recover the funds, it just might take some work. EDIT:  Mark's campaign can even provide a signed message to be given to the service that says "Transaction with ID: ... is a return transaction for the following user: ...".   This will make it much easier for the user to recover their funds.

[ben-abuya]

Guys,

I just want to repeat the advice that I gave Mark via email...

Thanks for all the help, etotheipi, it's been invaluable. My understanding is that all funds have been returned to the originating addresses. We're still working on integrating a better system into the contribution page, but that should be up very soon.

[etotheipi]

Guys,

I just want to repeat the advice that I gave Mark via email...

Thanks for all the help, etotheipi, it's been invaluable. My understanding is that all funds have been returned to the originating addresses. We're still working on integrating a better system into the contribution page, but that should be up very soon.

It seemed there was a lot of dissent in this thread about that advice.  I wanted to make sure that dissenters understood the basis of that advice, and either confirm it or make further recommendations about how to address the concerns I put forward.  These are legitimate concerns, and I think it's critical that it's done 100% right, for this first swing into the open political scene ("right", from a legal and accountability standpoint).  I'd rather some Bitcoiners be inconvenienced, than have Mark accused of shady campaign financing practices.  Obviously we'd like to avoid both, if possible