Campaigners in California can now accept cryptocurrency donations

Campaigns in California can now receive donations through Bitcoin (BTC) and other cryptocurrencies.

The candidates for both local and statewide offices in the state can now breathe a sigh of relief as the state’s campaign regulator has lifted a four-year ban on crypto donations and contributions.

According to the regulatory document, there must be plans to receive any such donations through a payment processor. This will be registered with the US Department of the Treasury under the Financial Crimes Enforcement Network (FinCEN).

The members of the California Fair Political Practices Commission voted unanimously to repeal the ban that had been active for years. Instead, they voted to develop new regulation that will monitor the activities of crypto-donations. During the July meeting held by the commission, David Bainbridge, the general counsel of the legal department, mentioned that this is a new and ever-changing era for the western US state.

In addition, Bainbridge explained that a need to adjust the regulation may occur soon when the development comes to the industry. Meanwhile, he believes that the current regulation will do justice to the influx of crypto contributions without breaking any law.

Receive crypto donations via the payment processor

The payment processor will be used to perform know-your-customer (KYC) verification to establish the identity of each donor. To function optimally, the payment processor must retrieve personal contributors’ data such as name, addressemployer and profession.

The regulations state that “A person may make, and a committee may request, a contribution of cryptocurrency as an in-kind contribution if the cryptocurrency is converted into dollars at the time of the contribution”.

Contributions are not expected to exceed an already stated limit. Each donation, when converted to US dollars, shall be transferred to the recipient’s campaign bank account within 24 hours of the contribution being made. The conversion will be made based on the current exchange rate at that time.

When reporting the crypto contributions, the amount reported will be the fair market value of the cryptocurrency at the time the donation was made to the payment processor.

Finally, the California Commission’s regulation will take full effect within the next 60 days.

Image source: Shutterstock