Forget T-shirts and tote bags. NFTs are the hot new campaign swag.

“If you use NFTs to recognize donors or volunteers, it’s a much more impactful way to identify supporters than a tote bag or T-shirt,” said Tomicah Tillemann, global head of policy at the crypto investment arm of venture capital giant Andreessen. Horowitz, a heavy supporter of blockchain startups.

The campaign move to lure donors of digital booty is the latest example of the crypto-mania pervasive in politics, with a growing list of candidates on both sides of the aisle promoting pro-crypto platforms as they look to depose incumbents. Like the broader explosion of digital currency, NFTs are beginning to raise a range of political and legal concerns, from their potential use in money laundering to how candidates can avoid conflict with campaign finance rules and protect investors as they sell them.

As with all things crypto, proponents say the possibilities are endless.

“NFTs can emerge as a leading technology in the political space for campaigns in the 22nd cycle simply because they are a more powerful mechanism for showing support for a candidate than most are available today,” said Tillman, who was at the State Department. official during the Obama administration.

NFTs – unique digital tokens that can represent images, videos, virtual properties and more on a decentralized ledger – have been around for less than a decade. they have saw an increase in popularity during A pandemic, with little-known artist Beeple selling NFT of his work for $69 million in early 2021. By the end of last year, sales had swelled to more than $40 billion, according to crypto data firm Chainalysis.

The political world is now in control. Roger Stone, a Republican activist and aide to former President Donald Trump, is selling a digital copy of a Trump-signed real estate magazine to help pay his legal bills. Melania Trump recently released a series of NFTs on the Solana blockchain that display a “message of hope” playing over a watercolor image of her eyes.

Masters, who is looking to impeach Senator Mark Kelly (D-Arizona), introduced campaign supporters to NFTs that granted access to a party that Till co-hosted. (Masters is an executive at investment firm Thiel.) The tokens also gave supporters access to the candidate through a private channel on the Discord messaging platform.

“We’ve seen how a lot of the politician’s supporters are actually first-time donors, people who haven’t necessarily voted Republican in their entire lives, but who want younger, more efficient and more tech-savvy leadership,” Masters said in an email. interview. “It interferes a little bit with people who are dealing with cryptocurrency in one way or another.”

Tyler Werty, founder of PAC, said HODLpac, a nonpartisan political action committee focused on crypto interests, is planning a series of NFTs that would function like membership cards or campaign pins depending on the level of donors.

Political advisors and campaign-focused tech startups are helping drive this trend.

Democratic fundraising software company Numero recently launched Electables.com, a platform for campaigns to submit NFTs and for supporters to view. Brian Forde, co-founder and CEO of Numero, a former Obama administration official and one-time congressional candidate, said his service allows campaigns to give grassroots donors a unique, hand-drawn template that can be customized when purchasing T-shirts, hats and other digital goods.

Front Row is an NFT marketplace that caters to progressive causes and campaigns. Parker Butterworth, a Democratic strategist and co-founder of Front Row, said NFTs could serve as permits for augmented reality campaign gatherings or events in “digital living rooms.”

“It’s really early stages, and I think everyone comes up with it together,” Butterworth said in an interview. “I would have [to have] Too much arrogance to say where exactly it is heading.”

Selling NFTs will force campaigns to address a number of legal and regulatory issues, which some policy makers are still excluding themselves as they try to monitor the cryptocurrency market.

The Federal Election Commission, which regulates campaign finance, has issued guidelines for accepting cryptocurrency contributions. But some lawyers argue that there is a risk that selling NFTs could trigger regulations targeting investment products, especially if individuals start buying and selling parts of individual NFTs.

The Securities and Exchange Commission has stepped up enforcement action against players in the cryptocurrency market amid concerns that consumers face increased financial risks as they flock to digital assets. Securities and Exchange Commission Commissioner Hester Pierce warned last year that the “fragmentation” of individual non-financial task forces could prompt the agency to crack down.

“The FEC will not be concerned about the aftermarket in NFTs as long as any increased value does not find its way back into the campaign,” said Brett Capel, campaign finance attorney at law firm Harmon Curran. “However, the Securities and Exchange Commission may have some questions about whether NFTs are really just a new type of security — investments that are held in anticipation of an increase in value that are being traded in the market.”

It remains to be seen to what extent donors at the grassroots level will adopt the new technology.

Kourani, who is vying for a chance to run against Representative Ken Calvert (California), said she plans to sell more NFTs after donors bought only 21 of the 2022 tokens available in her campaign during a 72-hour auction in December. Kourani is vice president of financial technology company Republic, which provides investors with access to VC-backed startups, including virtual real estate deals in the metaverse.

“This was honestly just the beginning,” she said in an interview. “It’s an opportunity to educate people and get involved in a way they might not necessarily be aware of.”

Hailey Fox and Zach Warmbrot contributed to this report.