UK Charities Go Digital: Accept Crypto Donations For Better Reach!
- English and Welsh charities accepting crypto donations should keep accurate records and comply with tax and money-laundering rules.
- Regulator warns charities about the risks involved in accepting assets such as bitcoin or non-fungible tokens.
- Charity Commission examines the use of crypto, citing the UK’s goal to become a crypto hub.
Charity Commission, charities in UK and Wales that accept cryptocurrency donations are required to maintain accurate records and adhere to tax and money-laundering regulations.
Charities were warned by the regulator that digital assets such as bitcoin (BTC) or non-fungible tokens (NFT) can be volatile, easily hacked, and difficult to track, and that they must carefully consider whether it is worthwhile to accept them at all.
In a speech given on the same day, Helen Stephenson, the Commission’s Chief Executive Officer, emphasized that the guidance highlights the risks associated with cryptocurrency use and advises trustees to exercise caution. The Assistant Director of Policy Sam Jackson, in a blog post in July 2022, stated that crypto could become a more common method for investing, trading, and moving assets, citing successful fundraising campaigns that used digital assets in Ukraine and the UK’s aspiration to become a hub for cryptocurrency.
Despite the potential benefits, the Commission is closely monitoring charities that accept crypto donations. In January, it announced that it was investigating the Effective Ventures Foundation, which had received substantial support from Sam Bankman-Fried and his exchange, FTX, which filed for bankruptcy in November. Therefore, charities should consider the risks associated with accepting cryptocurrency and weigh the pros and cons before accepting them as donations.
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