California’s campaign regulator lifted a years-long ban on cryptocurrency donations this week. Campaigns will soon be able to accept cryptocurrency through a payment processor, in accordance with a regulation approved by the State Commission on Fair Political Practices.
California campaigns may soon accept crypto donations after the state’s campaign regulator lifted a four-year ban on crypto donations on Thursday.
The California Commission on Fair Political Practices voted unanimously to lift the state’s ban on cryptocurrency donations and adopt new rules for accepting funds. The new regulation will come into force within the next 60 days.
“This is a new and ever-changing field,” said David Bainbridge, General Counsel of the Legal Department, at the July meeting of the commission. We may have to adjust this as the industry evolves, it’s a fairly new industry,” Bainbridge added. But I’m quite confident that for now, this regulation does a good job of allowing crypto contributions while ensuring that it doesn’t become an easy way to break the law.”
Donations must be made by a third-party payment processor located in the United States and registered with the Treasury Department’s Financial Crime Enforcement Network and must not exceed donation limits. In addition, the identity of the donor must be verified and the donation must be immediately converted into US dollars and transferred to the campaign’s bank account.
The commission banned crypto donations in 2018, citing concerns that crypto could be used to circumvent contribution limits and rules against accepting cash from foreign donors, according to a commission memo. California was one of nine states that banned crypto donations, while a dozen states explicitly allowed some forms of crypto donations.