The Centennial State might just get an upgrade in its campaign financing policy as its legislature discusses a proposal to add cryptocurrencies to the list of possible vehicles with which a campaign could accept political donations.
Currently, the proposal is a working draft, which secretary of state Wayne W. Williams opened to the public for commentary. It hasn’t yet entered the Colorado house as a bill.
The new rule (10.7) reads as follows:
“A committee may accept contributions in cryptocurrency, up to the acceptable limit for a cash or coin contribution. The amount of the contribution is the value of the cryptocurrency at the time of the contribution. The committee must report any gain or loss after the contribution as other income or receipts.”
Because of the anonymous nature of some cryptocurrencies and transactions made on blockchain platforms, this might make crypto-based campaign financing in Colorado a bit more complicated than it should be.
Immediately after rule 10.7 is rule 10.8, which says that “a committee may not keep anonymous contributions of $20 or more.”
So, if someone sends 0.02 XMR (which is around $40 today), they would be in violation of the law, if they do so anonymously.
The politician receiving the XMR donation would have to declare the identity of the sender. But how does the politician prove this transaction happened at all?
In the XMR blockchain, it’s not uncommon to see transactions registered in the form of, “X masked address sent an undisclosed amount to an undisclosed recipient.”
While it’s entirely possible and not exceedingly difficult for the recipient to prove elements of the transaction through a little bit of private key and blockchain magic, it would be a daunting task for anyone with more than 100 donations a day.
Worst of all, automating this process for every single privacy coin, and then automating the identity discovery of individuals of several other cryptocurrencies, makes “daunting” seem like an ill-fitting word to use in this situation.
The easiest thing a politician receiving many of these crypto donations to do is refund them if the transaction isn’t “claimed” by a real live donor within a certain period of time.
These kinds of complications wouldn’t exist in a scenario without floor limits. Such is the case in Florida, where the Seminole County government recently began allowing citizens to pay for public services using .
The same can’t realistically be done with campaign financing simply because of the way it works. Perhaps Colorado’s government will provide better explanations on protocol if these rule changes start gaining traction.
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