Crypto donations area fairly new advent as political parties aim to increase their sources of funding. However with the new technology come new challenges including promoting safe and legal donations. Due to the passive nature of crypto donations, a party can’t realistically refuse a donation once its made its way into a wallet as many wallets do not associate a specific address to users where refunds can be sent to. This in turn prompted the Elections Canada to release a interpretation note to clarify the conditions which should be fulfilled to allow crypto donations to be eligible.
With interest in cryptocurrencies on the rise, political entities have requested guidance on accepting contributions and conducting other transactions in bitcoin or altcoins. This interpretation note seeks to answer the following questions: Are cryptocurrencies monetary or non-monetary for the purpose of the Canada Elections Act (“CEA”)? How do the contribution rules apply?
On the other hand the note also stipulates that for donations over 200$ made using crypto, the party or political group is required to remit information regarding the donors name and address to the state authorities. This remains in place to combat money laundering and other malicious practices associated with crypto donations which may come from unscrupulous sources.
Donations made which are below the value of $20 however can remain anonymous and the donor or political entity is not required to release personally identifiable information. Anonymous donations over $20 can still be made but the political entity is required to remit a cheque to Elections Canada.
Overall, legally allowing crypto donations to help in the funding of political campaigns has opened up a new source of funding as studies have shown as much as 5% of the entire Canadian population are in possession of crypto.