Should charities be accepting donations in the form of NFT's and Cryptocurrency? – Today's Wills & Probate

Charities may wish to consider whether and how they accept donations in the form of digital assets, as such donations can present unfamiliar challenges and risks which many charities don’t yet to know how to navigate.
Traditionally, if an individual wants to give £100 to a charity, that charity may check to ensure that the individual is a person of good repute and look to trace the history of the money being donated. However, tracing “traditional” money is, ultimately, a very difficult task. The charity may rely on its own due diligence to ensure it knows the identity of the donor and to some extent guard themselves against receiving any illegitimate funds or the proceeds of crime.
Establishing provenance is one of the many difficulties posed by digital currencies, which are often considered to represent “dirty” money, whether that be through obscure trade, criminal enterprise, or money laundering.
If an individual can donate £100 then that person should, following the same logic, be able to donate using digital currencies such as Bitcoin (BTC) or Ethereum (ETH).
The issue is that it is impossible to trace digital currencies back to the time that they were minted or acquired, therefore placing a far greater burden of identification on digital transfers when compared to traditional transfers. This is why the use of NFTs is arguably becoming more appealing.
Under English law, NFTs (non-fungible tokens) are considered to be property in the same way works of art and other valuable assets are regarded.
A NFT is a digital asset linked to the ownership of unique physical or digital items which cannot be replicated or substituted in any way. The authenticity and ownership of NFTs is verified using blockchain technology, which allows for them to be traded.
Most cryptocurrencies, however, are fungible. The Cambridge dictionary describes “fungible” as something that is easy to exchange or trade for something else of the same type and value.
Bitcoin and Ethereum, for example, are fungible. A fungible token can be exchanged for any other token of the same kind. These tokens are identical to one another. Therefore, they are interchangeable and not unique. They are easily traded, meaning that their ownership can change constantly, and they are not easily traceable.
These key differences make the NFT market much more appealing, but it is still evolving; and so are the legal and regulatory issues tied to digital assets.
Many owners and creators of these digital assets have considered donating large proportions of their profits to favoured charities, where donations can be made from NFT sales or auction proceeds. This makes it easier to verify the identities of the donors, as the assets are tangible and can be traced back to the donors. However, the lines become less clear when it comes to fungible cryptocurrency donations, where it is often not easy to identify the donors nor trace any trading activity.
The Charity Commission has published guidance[1] in which trustees are urged to think carefully before investing in cryptocurrency or accepting donations.
Whilst acknowledging the real risks in engaging with crypto assets, as it isn’t yet fully clear what challenges and opportunities digital currencies may provide, the Commission pointed out that it wishes to help promote innovation in the sector by encouraging trustees to consider how they might change and improve how they operate, to better deliver on their charitable purpose.
The Commission noted that several charities already accept cryptocurrencies or assets as donations, and where they do, they generally convert them immediately into regulated assets or traditional currencies.
We would always advise trustees to carefully consider the due diligence they undertake before investing in or trading cryptocurrency, by evaluating the benefits and risks as they would do with regards to any important decisions. This should also include taking appropriate professional and legal advice.
Join nearly 5,000 other practitioners – sign up to our newsletter

https://www.blandy.co.uk/about/find-a-solicitor/jeanne-koua

Your email address will not be published.




Founded in 2014, Today’s Wills & Probate is the leading news publication for wills and probate professionals.
0330 1000 839
[email protected]

Unleash your brand and boost exposure to thousands of wills and probate professionals daily by securing an advertising space on the Today’s Wills & Probate website and weekly newsletter.
Today’s Media
Today’s Conveyancer
Today’s Family Lawyer
Today’s Training
The British Wills and Probate Awards
The British Conveyancing Awards
Today’s Wills & Probate was launched in October 2014 with the intention of informing will writers, probate practitioners and estate planners about the changes that are happening in their market. It is now one of the leading sources of information for wills and probate professionals in England and Wales.
[email protected]
0330 1000 839

© 2022 Today’s Wills & Probate Sitemap Privacy Policy Terms of Use Cookie Policy Acceptable Use

If you receive an email purporting to come from Today’s Wills & Probate or a Firm member, or if you are directed to a website which purports to be Today’s Wills and Probate website, and you have doubts or concerns about the provenance of the email or website, before taking any action please either contact the Firm member you normally deal with or email David Opie on [email protected] and they will tell you whether the email came from us or whether it is our website.
We are using cookies to give you the best experience on our website.
You can find out more about which cookies we are using or switch them off in settings.
This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.
Cookies Used
PHPSESSID
__cfduid
moove_gdpr_plugin
If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.
This website uses Google Analytics to collect anonymous information such as the number of visitors to the site, and the most popular pages.
Keeping this cookie enabled helps us to improve our website.
Cookies Used
Google Analytics
Twitter
Facebook
LinkedIn
Please enable Strictly Necessary Cookies first so that we can save your preferences!
For more information about our Cookie Policy please click here.

source

Post expires at 11:27pm on Thursday March 23rd, 2023

Leave a Reply

Next Post

Alex Jones shamelessly asks for Infowars cryptocurrency donations during Sandy Hook trial testimony - The Independent

Fri Sep 23 , 2022
‘We’re fighting the deep state, we need money,’ Jones says on the stand Find your bookmarks in your Independent Premium section, under my profileAlex Jones set to testify in trial over Sandy Hook hoax liesAlex Jones shamelessly asked people to donate cryptocurrency to Infowars as he took the stand and […]
%d bloggers like this: