A recent law in California allows candidates for state and local government to accept cryptocurrency donations. According to a July 21 article in the LA Times, the new requirement was approved by the state’s Fair Political Practices Commission, which led to the passage of the new law, which will go into effect in 60 days.
According to the law, California’s candidate must conduct the transaction in cooperation with a licensed cryptocurrency processor. Other crucial Know Your Customer (KYC) procedures that the processor must carry out include gathering the contributor’s name, address, occupation, and employer.
The state formerly banned cryptocurrency contributions, along with eight other states. Washington D.C. is one of the notable states that permits political cryptocurrency donations.
Notably, crypto donations are currently permitted for candidates for federal seats. The majority of states have generally been split on whether to permit crypto donations for political campaigns, citing issues such market volatility, transparency, and a lack of laws.
The U.S. Federal Election Commission previously published a warning against Bitcoin political contributions.
According to some of the communication, committees are eligible to receive Bitcoin as long as they sell the asset. The FEC clarified, however, that possessing Bitcoin does not absolve political organizations of their duty to return a donation that comes from an illegal source or that exceeds the contributor’s contribution cap.
The FEC states that since 2014, donations made using cryptocurrencies are permitted in federal elections. Some state governments, however, are opposed to the idea and have passed legislation outlawing contributions.
The commission also stated that donations given in digital currency should be valued by political committees according to their market value at the time of donation.
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