Electronic Frontiers Foundation (EFF) Now Accepts Bitcoin

The EFF just announced that it will accept bitcoin as a donation option. This decision shows just how how significant the latest FinCEN guidance was. It provided sufficient clarity that anyone accepting the virtual currency will not be subject to regulations unless they are acting as a currency exchanger. The EFF is a donor-funded organization that describes itself as:

When our freedoms in the networked world come under attack, the Electronic Frontier Foundation (EFF) is the first line of defense. EFF broke new ground when it was founded in 1990—well before the Internet was on most people’s radar—and continues to confront cutting-edge issues defending free speech, privacy, innovation, and consumer rights today.

EFF fights for freedom primarily in the courts, bringing and defending lawsuits even when that means taking on the US government or large corporations. By mobilizing more than 140,000 concerned citizens through our Action Center, EFF beats back bad legislation. In addition to advising policymakers, EFF educates the press and public.

EFF is a donor-funded nonprofit and depends on your support to continue successfully defending your digital rights. Litigation is particularly expensive; because two-thirds of our budget comes from individual donors, every contribution is critical to helping EFF fight—and win—more cases.

The EFF had accepted bitcoin as a payment option in the past, however two years ago stopped accepting the currency for three reasons:

1. We don’t fully understand the complex legal issues involved with creating a new currency system. Bitcoin raises untested legal concerns related to securities law, the Stamp Payments Act, tax evasion, consumer protection and money laundering, among others. And that’s just in the U.S. While EFF is often the defender of people ensnared in legal issues arising from new technologies, we try very hard to keep EFF from becoming the actual subject of those fights or issues. Since there is no caselaw on this topic, and the legal implications are still very unclear, we worry that our acceptance of Bitcoins may move us into the possible subject role.

2. We don’t want to mislead our donors. When people make a donation to a nonprofit like EFF, they expect us to use their donation to support our work. Because the legal territory around exchanging Bitcoins into cash is still uncertain, we are not comfortable spending the many Bitcoins we have accumulated. Because of this, we’re giving the Bitcoins that have been accumulated, or that may accumulate in the future, in the account set up in our name to theBitcoin faucet, so that they can continue to circulate in the community.¹

3. People were misconstruing our acceptance of Bitcoins as an endorsement of Bitcoin. We were concerned that some people may have participated in the Bitcoin project specifically because EFF accepted Bitcoins, and perhaps they therefore believed the investment in Bitcoins was secure and risk-free. While we’ve been following the Bitcoin movement with a great degree of interest, EFF has never endorsed Bitcoin. In fact, we generally don’t endorse any type of product or service – and Bitcoin is no exception.

It appears all three of these concerns have been addressed:

1. The bitcoin ecosystem has matured significantly over the last two years, and FinCEN’s guidance that accepting virtual currencies does not require any additional certification added enough clarity that they do not fear legal recourse.
2. They have chosen to use BitPay as their payment processor. The EFF can utilize BitPay’s ability to convert directly to USD without having to worry about fluctuations in exchange rates.
3. They are very clear in their wording of this press release that they do not endorse bitcoin. They even go so far as to say this is only the first step in a series of crypto-currencies, and that new currencies will address some of bitcoin’s shorcomings.

One significant reason for reinstating bitcoin as a donation option is their concern with payment censorship recently. Credit card companies and PayPal shutting off accounts has interfered with free speech. Additionally, the rampant enthusiasm of the bitcoin community has made the need for bitcoin donations clear, “we’re pleased to be able to provide our members with something they have asked for—repeatedly and passionately.“

This is a mutually beneficial relationship for bitcoin enthusiasts, as the EFF’s main responsibility is defending electronic freedom. It seems logical that if there is irrational legal actions taken against bitcoin as a currency, the EFF would be one of the prime candidates to defend it. Considering the EFF is donor-funded, it does not seem likely that significant bitcoin contributions would go unnoticed.