California Lifts Ban On Crypto Donations To Political Candidates
- As per reports, California has lifted the ban on donations to municipal and state politicians using cryptocurrencies
- The Fair Political Practices Commission (FPPC) said Thursday that Californians can make donations of any amount in cryptocurrencies
Residents of California can now once again donate cryptocurrencies to the state and municipal politicians as the ban on these blockchain-based digital assets being used in politics has been lifted. Additionally, the residents of the country were banned from making such donations in September 2018.
According to a September 2018 report from the Associated Press, the Fair Political Practices Commission (FPPC) had considered the possibility of accepting crypto for donations but ruled out the decision because of the lack of regulations and Know Your Customer (KYC) rules. Including California, there were a total of nine states that banned crypto for political donations.
Now, residents of the Western US state can donate cryptocurrencies, but they have to keep in mind the contribution limit as well. However, while it might seem that the authorities in California are ready to accept the permissionless, global, and pseudonymous nature of crypto, there is a huge catch here.
The cryptocurrencies donated to the state and municipal politcians must be instantly converted to fiat, states the ruling from the FPPC. Furthermore, only the payment processors approved and listed by the U.S. Department of Treasury can be used for the same.
The rule implemented by the FPPC also stated that every local and state compaign should have documents to verify that they have completed “adequate KYC procedures that enable it to form a reasonable belief that it knows the true identity of each contributor.”
To confirm that the donation is legal, valid, and recognized by the authorities, each donor must provide their name, address, occupation, and employer as well.
“In drafting this regulation, we had to address the inherent concern with cryptocurrency and the opportunity it presents for illegal contributions because it is inherently—intentionally, in some circumstances—anonymous, and in many circumstances it’s untraceable,”said David Bainbridge, general counsel for the FPPC, in Thursday’s approval meeting.
Bainbridge also added that while drafting the regulation, the FPPC was aware of “these very legitimate concerns which was the reason the Commission four years ago prohibited contributions by cryptocurrency.”
Thus, no new donations can come anonymously from outside sources to candidates in California, which seems to be an attempt to prevent outside interference in the interal elects of the state.