California to Allow Crypto Campaign Contributions

State and local political campaigns in California soon will be allowed to receive donations made with cryptocurrency.

The new policy was promulgated by a state body called the Fair Political Practices Commission and will take effect in 60 days or less, the Associated Press (AP) reported. The change brings California in line with the rules governing many statewide campaigns in the United States and with campaigns for federal office.

To allow cryptocurrency donations, the Fair Political Practices Commission adopted a new regulation and nullified a previous one.

The regulations require that as soon as campaigns receive cryptocurrency, they convert it into cash. Additionally, according to the AP, campaigns must use a “registered cryptocurrency processor” to collect the usual information that campaigns must provide for contributors. State and federal laws require the capturing of donors’ names, addresses, occupations and employers.

A staff report prepared for the commission stated that specific regulations were needed to prevent money laundering or circumvention of limits on the amount parties can give to campaigns.

“Requiring committees to use a payment processor that collects the name, address, occupation and employer of each contributor … will help to ensure the true identity of the contributor is disclosed, and that committees are in possession of contributor information so that this information may be fully and truthfully disclosed in a timely manner,” the staff report stated. “A committee may not accept any contributions from a contributor where the payment processor has not verified the identity of the contributor and provided the required contributor information to the committee.”

Last week, the California Department of Financial Protection and Innovation (DFPI), which looks into operations of state-licensed financial institutions, announced it would be investigating whether crypto asset companies that suspended withdrawals and transfers have broken the law.

Read more: California Regulator Probes Crypto Lenders Over Withdrawal Suspensions

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