Charity Commission Advises Nonprofits on Accepting Crypto Donations
The Charity Commission, responsible for registering and monitoring nonprofits in England and Wales, has issued guidance for English and Welsh charities that are considering accepting cryptocurrency donations. The guidance stresses the importance of keeping accurate records and complying with tax and money-laundering rules.
Risks Involved in Accepting Crypto Donations
The Commission warns that assets such as bitcoin (BTC) or non-fungible tokens (NFT) can be volatile, prone to hacks, and hard to trace. As a result, nonprofits need to weigh up the risks involved in accepting these donations.
The Charity Commission’s CEO, Helen Stephenson, stated in a speech on Wednesday, “Our guidance stresses the risks involved in the use of cryptocurrency, and advises trustees to exercise caution.”
In a blog post from July 2022, the Commission’s Assistant Director of Policy, Sam Jackson, noted that cryptocurrency could become a “more mainstream route to investing, trading, and moving assets.” Jackson cited fundraising successes using digital assets in Ukraine and the U.K.’s own goal of becoming a crypto hub.
Compliance with Regulations
The Charity Commission emphasizes the importance of complying with tax and money-laundering regulations when accepting crypto donations. Charities must keep accurate records of these transactions to ensure compliance with regulations.
Effective Ventures Foundation Investigation
In January, the Charity Commission announced that it was investigating the Effective Ventures Foundation, a nonprofit that had received significant backing from Sam Bankman-Fried and his exchange, FTX. FTX filed for bankruptcy in November, and the investigation aims to determine whether any wrongdoing occurred.
Conclusion
While cryptocurrency donations offer potential fundraising opportunities for nonprofits, the risks involved must be carefully weighed. The Charity Commission’s guidance emphasizes the importance of compliance with regulations and accurate record-keeping.
Key Takeaways
- The Charity Commission has issued guidance for English and Welsh charities considering accepting cryptocurrency donations.
- The Commission warns that cryptocurrency donations can be volatile, prone to hacks, and hard to trace.
- Nonprofits need to weigh up the risks involved in accepting cryptocurrency donations.
- Charities must comply with tax and money-laundering regulations when accepting cryptocurrency donations.
- The Charity Commission is investigating the Effective Ventures Foundation to determine whether any wrongdoing occurred.
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