California authorities allowed politicians to accept donations in cryptocurrencies

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Members of the California Fair Political Practices Commission voted unanimously to lift a four-year ban on accepting donations in cryptocurrencies.

According to the updated commission regulations(FPPC), crypto asset donations must be made through a third party payment processor headquartered in the United States and registered with the Financial Crimes Enforcement Network (FinCEN). This operator must follow a KYC (Know Your Customer) procedure to verify the identity of sponsors. Cryptocurrency donations must be immediately converted into US dollars and transferred to a bank account within two days. The new regulation will come into force within 60 days.

“Cryptocurrencies are new and constantly changingindustry. As it develops, we need to adjust the regulations. I am confident that at this time it is properly regulating cryptocurrency contributions while preventing potential violations of the law,”
said FPPC General Counsel David Bainbridge.

The Commission has banned cryptocurrencydonations in 2018 due to concerns that it was difficult to trace the origin of crypto assets. California was not the only US state to ban the use of digital assets to finance political campaigns. In 2018, the state of Michigan also implemented a similar ban, despite the fact that many states, including Colorado, have legalized fundraising in Bitcoin.

In March, Louisiana lawmakers introduced a bill that would allow officials and political parties to accept cryptocurrencies and then exchange them for regular money.