FPPC restricted political crypto donations in California way back in 2018.
Big news came from California with reversal of political crypto donations’ ban. This came in the wake of the authority to watch over political financing to reverse its decision. The golden state had put a ban on making political donations in cryptocurrencies. However, after almost four years, state and local offices are allowed once again to receive crypto funds.
On Thursday, 21st July, 2022, Fair Political Practices Commission of California walked back from its decision of keeping abn on crypto donations for political campaigns. This means that now the California residents can make political donations in cryptocurrencies. However, this liberty comes with its own restrictions.
The political financial watchdog has outlined that the crypto donations would still have contribution limits. Moreover, the crypto donations could be made only using United States based crypto platforms. This is to ensure the platform must have been registered with the United States Treasury Department.
Meanwhile, the only relaxation over this is that crypto donation must be ensured or made on the platform with strict know-your-customer (KYC) obligations. This also brings the next important factor that crypto funds would not be hidden under anonymity.
As per FPPC, it will be important for all those who donate cryptocurrency to reveal their personal identification—including their name, residential address, occupation and even employer. All this would be necessary to make sure the legitimacy and validation of crypto donation.
For recipients of political crypto donations, they would need to convert their crypto donations into fiat currency—USD, as soon as they receive the donations. This obligation refrains from political committees to keep hold of crypto assets for long. Additionally, no crypto will be accepted for donations from overseas, to ensure the absence of any foreign interference.
General counsel at the FPPC—David Brainbridge—said during the approval meeting that during outlining of this regulation the authority had to look after the concerns that are innate with crypto assets. Brainbridge further outlined the nature of cryptocurrencies—anonymity and being undetectable—that makes them easy bait to be used by illicit actors for making illegal donations.
In 2018, crypto donations for political campaigns were put under the ban in California. The reason was anonymity and untraceability of crypto payments made it a threat to keep transparency during the campaign.
Source: https://www.thecoinrepublic.com/2022/07/25/california-retreated-from-ban-on-political-donations-in-crypto/