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Usha Yadav
Jul 22, 2022
by Usha Yadav

California New Law Allows Donating In Cryptocurrencies

California New Law

Table of contents

  1. New Law Focuses on the KYC
  2. Guidelines On Crypto Donation By FEC
California has introduced a new law that allows state and local office political candidates to receive donations in cryptocurrency. The newly passed bill will come into effect in 60 days. The state's Fair Political Practices Commission approved the new requirement, the LA Times reported on July 21. Additionally, as per the new law norms, the candidates can only accept the crypto donation when they can immediately convert the digital assets into fiat.

New Law Focuses on the KYC

The new law specifies that candidates must work with authorized and registered cryptocurrency processors to complete the transaction. And for the processor part, they must perform the Know Your Customer (KYC) practices like submitting the contributor's name, address, occupation, employer, and other relevant details.

Guidelines On Crypto Donation By FEC

According to some of the communication, committees are eligible to receive Bitcoin as long as they sell the asset. However, the FEC clarified that possessing Bitcoin does not absolve political organizations of their duty to return a donation that comes from an illegal source or exceeds the contributor's contribution cap. The FEC states that since 2014, donations made using cryptocurrencies have been permitted in federal elections. Some state governments, however, are opposed to the idea and have passed legislation outlawing contributions.

The panel also stated that political committees should value donations given in digital currency according to their market value at the time of the gift. Despite the regulatory uncertainties, donations for cryptocurrency-related causes other than politics have increased recently.

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California New Law Allows Donating In Cryptocurrencies
Usha Yadav
Usha is a diehard crypto enthusiast and has been actively writing on different facets of the blockchain and crypto world. She has authored many research articles on cryptocurrency and aims to provide informational and quality content to readers. She firmly believes that crypto has a great potential to redefine the world of finance and blockchain.

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