California lifts ban on political crypto donations

California’s political campaign finance watchdog on Thursday approved measures giving state and local offices the right to raise money using crypto once again.

A vote by the state’s Fair Political Practices Commission (FPPC) on “Regulation 18421.2 Cryptocurrency Contributions,” tabled last month, reverses a nearly four-year ban implemented during crypto’s previous bear market in November 2018.

An unrelated financial limit on how much a campaign can receive in contributions remains in place for California, which along with 12 other states and the District of Colombia now approves crypto donations.

Previous regulation had denied political campaigns the right to raise or receive funds via crypto. The decision has since been overturned and those running for election can now receive funding in the nascent asset class provided it is converted to fiat immediately.

Concerns about how crypto could interfere with campaign transparency led the FPPC to deny its use to political campaigns, although the digital asset industry has since matured significantly since the nearly four-year ban.

“In crafting this legislation, we had to address the inherent concerns with cryptocurrency and the opportunity it presents for illicit contributions,” FPPC General Counsel David Bainbridge said in a live commission meeting Thursday.

Political donations made using crypto must be made through a US-based crypto payment processor or “other service” with strict know-your-customer measures and liable for subpoena requests for records.

Anonymous crypto donations to political committees will be barred, and those individuals who contribute will be subject to identification restrictions, including the collection of names, addresses, occupations and employers of each contributor at the time the donation is made.

It is not clear whether anonymous political donations to individual campaigns will be affected. Blockworks attempted to contact the FPPC on that point, but has yet to receive a response.

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