Political campaigns

California Ends Ban on Bitcoin and Other Crypto Donations to Political Campaigns

Golden state lawmakers have voted to end the ban on cryptocurrency donations to state and municipal political candidates.

The Fair Political Practices Commission (FPPC) ruled Thursday that California residents can donate any amount (within California contribution limits) into cryptocurrencies such as Bitcoin.

But don’t get too excited, anon. While accepting crypto donations may feel like California is embracing the permissionless, global, and pseudonymous nature of crypto, there is a catch.

Political campaigns must immediately convert all crypto donations to US dollars, and only payment processors registered with the US Treasury Department can be used.

Additionally, all national and local campaigns must have “adequate KYC procedures that allow it to reasonably believe that it knows the true identity of each contributor,” according to the settlement approved, which first launched in May. Anyone donating cryptocurrency must also provide their name, address, occupation, and employer for the donation to be considered legal and valid.

“In writing these regulations, we had to address the inherent concern about cryptocurrency and the opportunity it presents for illegal contributions, because it is inherently – intentionally, in certain circumstances – anonymous, and in many circumstances it is untraceable,” said David Bainbridge, general counsel. for the FPPC, Thursday approval meeting.

“So when drafting these regulations, we were aware of these very legitimate concerns, which is why the Commission banned cryptocurrency contributions four years ago,” he added.

Under the new rules, no crypto donations can come from an anonymous or outside source, presumably for the purpose of preventing foreign interference.

And while it may seem like California is “going crypto” with this new policy, the fact remains that all collected crypto must be immediately converted into USD. In other words, the state of California will take your crypto, but they don’t seem to see any potential benefit or utility in holding onto it for the long term.

Either way, the approved rules were the most crypto-friendly of the other options offered, which included maintaining the ban or capping crypto donations at $100.

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