Do Bitcoin donations hold the risk for the United States?


The United States semesters are approaching and the threat of digital interference in the US elections remains an important concern. Should potentially anonymous donations be allowed to electoral candidates in crypts?

The US Federal Electoral Commission has decided to authorize Bitcoin (BTC) 00 and other cryptocurrency donations in 2014. In the individual states, the rules can be very different. Eight states allow cryptocurrency contributions, while seven have banned them entirely according to Politic. Other states are undecided, leaving federal law to reign.

California, home of Silicon Valley and a state where cryptocurrency donations could be expected to be heavier, last month banned any donation in digital currencies.

California Commissioner Frank Cardenas, speaking at the hearing that issued the ban, said:

Hardly a day passes that there are no other indications that there is someone out there who wants us sick, foreign or domestic.

The risk with cryptocurrencies – sometimes anonymous, and sometimes transacted through platforms that do not require customer control (KYC) or anti-money laundering (AML) – is that donations may not be exactly as they seem. It would certainly not be impossible for a foreign entity to secretly fund a successful midterm candidate from the United States.

Cardenas says that, although the day may come when the cryptocurrency is accepted in the California elections:

For now, it is not worth the risk.

Are privacy coins more of a problem?

The risk varies from one currency to another, Bitcoin can be more easily tracked and a sender identified with Monero, for example.

Scott Duekeke, director of the cyber threat analysis company DarkTower testified in a June Senate hearing titled "Protecting Our Elections: Reviewing Production Companies and Virtual Currencies as Way Out for Interference foreign. " Duekeke said:

The biggest emerging threat of foreign funds reaching the coffers of political candidates, or to be used to finance other operations of influence, is the growing number and liquidity of private currencies.

An analyst of ICO Alert's cryptocurrency, Joseph Argiro, believes that if lawmakers do not decide which cryptocurrencies politicians may or may not accept, it may be difficult to ensure that bad actors are not funding electoral candidates. Argiro says that Monero, an anonymous coin, should never present a donation and that political surveillance is required for the contributions of the cryptocurrency campaigns. He also noted:

The industry is so new that the tools are still under development to facilitate such surveillance. And that's why people are scared.

An Onus to the Candidate or regulators?

The problem is not only the monitoring of the source of donations upon their arrival, but also the reporting of donations by candidates. The Center for Public Integrity has found identification of cryptocurrency contributions in some reports on electoral campaign electoral finances is almost impossible. So there is also the potential risk that an unethical candidate can declare a suspicious donation in a sufficiently transparent way to reveal a problem.

Republican Austin Petersen of Missouri received the largest Bitcoin donation to date, but had to return the donation in June 2018 because it exceeded the limits of the federal grant.

In 2012 a Republican candidate from New Hampshire, Mark Warden, got back his cryptocurrency donations that came from Europe and South Africa. Some of these donations came from members of the Bitcoin community, outside the United States, hoping to encourage wider adoption for Bitcoin.

With the approach of the midterms, where cryptocurrency donations are allowed, almost certainly there have been at least some cryptocurrency donations. If any of those who carry risks may or may not be identified later, reports and audits are conducted.

With over three billion global cryptocurrency users, these donations are a natural progression. This leads back to the old problem of cryptocurrency: how do traditional infrastructures evolve to accommodate this new digital money, without stifling its benefits?

Are cryptocurrency donations a risk? Does the risk apply to candidates, however ethical and moral they may be? Tell us your thoughts in the comments below.

Images courtesy of Shutterstock.

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