California politicians may no longer accept donations in the form of cryptocurrencies. This has been decided by the Fair Political Practices Commission (FPPC), a Commission responsible for equitable political action.
Campaign donations in Bitcoin and other cryptocurrencies are problematic, since it is hardly possible to trace the funds back and at the same time the transparency of political campaigns is not given.
Since last year campaign donations with cryptocurrencies like Bitcoin are becoming increasingly popular. Since September 20, at least for Californian politicians it is over, since Bitcoin and other cryptocurrencies make the detection of violations of campaign financing considerably more difficult. As Crypto Daily reported, the FPPC has banned any crypto donations for Californian politicians.
Cash or Else?
The FCPP is an independent body that regulates “campaign financing, conflicts of interest, lobbying, and government ethics.” A staff report told the Commission that donations in cryptocurrencies are hard to trace and, accordingly, would not detect any campaign funding violations. Therefore, the FPPC should develop a regulation of cryptos. This should coincide with the previous rules for campaign donations. Any contribution over 100 USD may therefore only be made by check or by some other traceable method. Cash donations over 100 USD are not allowed.
The Commission’s report provided several options for regulation. In addition to the total ban, the employee report proposed treating cryptocurrencies as cash or treating them as some sort of benefites. In addition, the Commission would have to decide whether the crypto donations must be exchanged for US dollars or held. At the same time, the report recommended that the holding of cryptocurrencies should be allowed.
In addition, the traceability of accounts that are not in California or even the United States, additionally made much more difficult. In the end, the commission decided on the simplest, if most radical, solution. With a majority of 3 to 1 she has voted for a total ban on any kind crypto donations or holdings for Californian politicians.