Canada’s federal government has proposed a blanket ban on cryptocurrency donations to political parties, citing concerns that foreign entities could utilize the technology to interfere in elections.
This bill, known as the Strong and Free Elections Act, stated introduced on Thursday and proposed amending Canada’s Elections Act to prohibit political parties and third parties involved in the electoral process from accepting donations in cryptocurrency, money orders and prepaid cards to prevent anonymous and “hard to track” contributions.
The originator of the project, Steven MacKinnon, leader of the government in the House of Commons, he said X said in a statement on Thursday that the measures were aimed at blocking foreign interference and other threats to the elections.
“By introducing the Strong and Free Elections Act, new investments to counter foreign threats, and stronger government coordination, we are acting to ensure that our elections are free, fair and secure at all times,” he said.
Canada is not alone in its concerns. The UK government also announced plans on Thursday for a moratorium on cryptocurrency donations, following an independent review and pressure from senior politicians.
The first attempt to ban cryptocurrency donations failed
On Thursday, the first reading of the current Act on Strong and Free Elections took place in the House of Commons. To become law it must progress through several readings and committee stage in this house, then passes through the Senate before reaching the Royal Assent of the Governor General of Canada.
There was a similar bill proposed in 2024 by Dominic LeBlanc, then Minister of Public Safety, but yes lost passed second reading in the House of Commons and ultimately died.
Crypto political donations have been allowed in Canada since 2019 and are treated similarly to real estate donations.
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However, a report by Stéphane Perrault, the 2024 chief electoral officer, recommended a total ban on cryptocurrency donations on the grounds that it “creates difficulties in identifying the donor.”
Penalties can be up to twice the amount deposited
If the proposed regulations become law, contributions made using any of the prohibited payment methods must be returned, destroyed or delivered to the chief election official.
Penalties for violations can be up to twice the amount paid, plus $25,000 for individuals and $100,000 for corporations.
The bill also proposes expanding existing bans on realistic deepfakes, which impersonate candidates in order to mislead voters. This issue gained attention in the run-up to the 2024 US elections – one of the reported cases involved a false statement by then-President Biden calling on voters not to participate in the elections.
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