Canadian Lawmakers Advance Proposed Ban on Crypto Donations

The Canadian government's proposed ban on cryptocurrency donations has taken a significant step towards becoming law, gaining cross-party support in the House of Commons. The bill, known as the Strong and Free Elections Act, has passed its second reading and will now be reviewed by a committee. The proposed legislation would make it illegal for political parties, candidates, and other entities to accept donations in the form of cryptocurrency, citing concerns over the difficulty in tracing the origin of such funds. This ban would apply to all federal political entities, including registered parties, electoral district associations, and third-party advertisers. If the ban becomes law, recipients of crypto donations would have 30 days to return the funds or forward them to the Receiver General. The bill's progression comes despite initial concerns from some Conservative lawmakers, who had previously expressed support for cryptocurrency. However, the issue of crypto donations did not become a major point of contention during the debate. The lack of resistance may be attributed to the fact that crypto donations have been rarely used in Canadian politics. In fact, since 2019, when crypto donations were first permitted, no major federal party has publicly accepted such donations, and none have been disclosed in recent elections. The Chief Electoral Officer had initially recommended stricter regulations on crypto donations in 2022 but later shifted towards advocating for an outright ban, citing concerns over the pseudo-anonymity of crypto transactions and the difficulty in verifying the identities of contributors. This move is in contrast to the United States, where crypto donations have been permitted since 2014. Meanwhile, the UK has also recently passed a law banning crypto donations, citing similar concerns over the potential use of digital assets to conceal the origins of foreign funds in politics.