Charities in England and Wales have been given guidance by the Charity Commission on accepting cryptocurrency donations.
The regulator has advised that charities must comply with tax and money-laundering rules and maintain accurate records when accepting digital assets like Bitcoin or non-fungible tokens (NFTs).
However, the Charity Commission has also warned charities of the potential risks associated with accepting cryptocurrency donations, such as volatility, hacking and the difficulty in tracing transactions.
Charities have been urged to weigh up the potential benefits of accepting cryptocurrency donations against these risks.
Helen Stephenson, CEO of the Charity Commission, stressed the importance of caution when dealing with cryptocurrency donations.
She said in a speech, “Our guidance stresses the risks involved in the use of cryptocurrency, and advises trustees to exercise caution”.
The Charity Commission has acknowledged that cryptocurrency is becoming a more mainstream way of investing and moving assets, but has still called for charities to proceed with caution.
In a blog post last year, the Commission’s Assistant Director of Policy, Sam Jackson, cited fundraising successes using digital assets in Ukraine, as well as the UK’s own ambitions to become a hub for cryptocurrency.
The Charity Commission is responsible for registering and monitoring nonprofits in England and Wales. Earlier this year, the Commission launched an investigation into the Effective Ventures Foundation, which had received significant backing from Sam Bankman-Fried and his exchange, FTX. FTX filed for bankruptcy in November 2022.
