Oops, Did I Do That? Uncovering Apparent Mishandling, Tax Fraud, and Illegal Contributions via a Systematic Study of Cryptocurrency Donations to US Political Campaigns

Some US political candidates have begun to accept Bitcoin and other cryptocurrencies for donations to their campaigns.Because of the difference between cryptocurrencies and federally-backed currencies, more work is required for a candidate to follow federal finance reporting guidelines.We analyze the current state of cryptocurrencies in campaign donations across the US, gathering datasets for candidate political websites, cryptocurrency addresses, and reports of donations sent to federal regulatory bodies.By examining transactions involving a candidate's cryptocurrency address and comparing the receipts from the Federal Election Commission, we observe that many candidates do not report their cryptocurrency donations, and of the candidates who do, many make mistakes.We also find many of these candidates have transactions reported for receiving donations, but none for liquidating, showing many candidates choose to never convert their donations out of the cryptocurrency.We observe one candidate who shows signs of severely underreporting the value of donations received, while accurately reporting the amount liquidated.Lastly, we present recommendations for creating a system where the benefits of cryptocurrencies can be utilized in collecting political donations without mishandling the funds and avoiding federal reporting guidelines.By providing a central platform for donors to register their cryptocurrency addresses, candidates can reference each donation to a trusted source to ensure the identity of the donor is known.