Texas Ethics Commission wants to regulate political donations with cryptocurrencies

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If accepted by Texas Ethics Commision, gifts and contributions made in cryptocurrencies must be represented as investments or in-kind contributions rather than cash.

Government representatives and politicians are now allowed to take Bitcoin (BTC) and other cryptocurrencies thanks to a new law that was suggested by the Texas Ethics Commission.

The proposal, which aimed to address and clarify the reporting obligations of political contributions made with cryptocurrency, was submitted to the Texas Secretary of State. As stated in the filing:

The new rule permits candidates, officeholders, and political committees to accept cryptocurrency. It does not distinguish between any types of cryptocurrencies, like Bitcoin

If accepted, gifts and contributions made in cryptocurrencies must be represented as investments or in-kind contributions rather than cash. The Federal Election Commission (FEC), Internal Revenue Service (IRS), and Securities and Exchange Commission (SEC) all regard bitcoin contributions differently, therefore the commission claims that this action “mirrors” their approaches.

The plan makes it clear that political and governmental campaigns will not be allowed to directly spend cryptocurrency and will instead need to sell them first and then spend the revenues. The panel did note, though:

The rule would not require filers to liquidate their cryptocurrency holdings within any particular timeframe.

Additionally, the proposal directs filers to record the value of any accepted cryptocurrency as the fair market value at the time of receipt in order to mitigate the extreme volatility of cryptocurrencies.

An assurance that the contributor is not a foreign national will be used to determine the legality of each cryptocurrency contribution. The proposed new rule, according to the filing, is made in accordance with Texas Government Code 571.062, which grants the commission the authority to adopt rules for the administration of Title 15 of the Election Code.

Two House legislation that encourage the adoption of cryptocurrencies and blockchain technology were recently adopted by Texas.

According to Cointelegraph, Texas House Bills 1576 and 4474, which permit the formation of a blockchain working group and change the state’s Uniform Commercial Code to recognize cryptocurrencies under commercial law, were both signed into law by Governor Greg Abbott.

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