Politicians running for public offices in California, will not be able to receive crypto donations, due to the new ruling by the state‘s political watchdog, the Fair Political Practices Commission (FPPC). The five member independent commission voted 3-1 in favour of prohibiting campaign donations in virtual currencies. FPPC based their decision on a number of concerns, such as tracking the origin of crypto donations and political transparency issues.
The decision stems from earlier FPPC discussions, held last month. Back then, the commission discussed numerous election issues, including the acceptance of crypto donations for political campaigns. However, the regulators admitted of not fully understanding the issue and postponed adopting any of the proposed amendments.
Earlier this month, a staff report was submitted to the commission, providing an overview of the other states’ approaches towards crypto donations. Also, the staff has prepared four scenarios for the regulation of crypto donations.
Option one – prohibit all crypto donations. Option two – permit crypto donations up to $100 and require crypto to be converted to cash and deposited into campaign bank account. Option three – permit crypto donations as ‘in-kind’ contributions that have to be converted into cash. Option four – permit crypto donations as in-kind contributions without the requirement of converting them to cash.
According to the report, the first option is consistent with the campaign activity FAQs from 2014, which said that, “staff has done extensive research on the topic and recommends that committees not accept bitcoins or other digital currency as campaign contributions at this time.“
However, since 2014 the US Federal Election Commission allows crypto contributions as in-kind donations. Speaking to Coindesk, the FPPC representative reaffirmed there will be additional analysis on the topic in the immediate future, as, “There was extensive research by staff, input from stakeholders that was publicly displayed on our website and public debate among the Commission today and that is the decision rendered. As was publicly stated by many if not all of the Commissioners, there will be further debate and analysis in the coming months and years.“
Even though most states are yet to announce their formal position on the issue, some have, with Colorado, Montana, Oregon and Tennessee allowing crypto contributions. On the other side of the fence, Kansas, South Carolina, North Carolina and now California have prohibited them.
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I have been following the crypto markets since mid 2017, just in time to witness the incredible surge of the digital asset industry. Fascinated by the potential of blockchain technology I’ve started to dig deeper and that’s how I ended up meeting the Toshi Times team. I hold a Political Science degree, therefore the crypto regulation development is particularly interesting for me. I’m also heavily involved with music, running my own label, a YouTube channel and working with distribution. People call blockchain the ‘Fourth Industrial Revolution’ and I believe it will change our daily lives in the coming years and we will have the front row seats to witness it.