Crypto fundraising platform “The Giving Block” sent a letter to Sens. Ron Wyden (D-OR) and Mike Crapo (R-ID) on Friday urging them to eliminate appraisal requirements on crypto donations.
The company, which helps nonprofits accept crypto donations, said the current requirements make such contributions “overly burdensome to donors.” Specifically, donations exceeding $5,000 in value require donors to hire a qualified appraiser to provide written approval of the transaction for accounting purposes.
“Donors are often unaware of or confused about these requirements, and finding qualified appraisers familiar with digital assets can be difficult and costly,” wrote the firm. Depending on the appraiser, charges for such services can range from 4% to 40% of the donation itself.
This issue impacts both the crypto community and the nonprofit sector, the two groups most essential to our company’s mission. ⤵️ pic.twitter.com/UCiK8DP6PC
— The Giving Block (@TheGivingBlock) September 8, 2023
Such appraisal services are even required for stablecoins like Tether (USDT) and USD Coin (USDC)—stablecoins specifically designed to be interchangeable 1:1 for U.S. dollars. Given the self-evident values for these assets, the letter argues that appraising them “provides no value to the donor, charity, or the U.S. Treasury.”
“We speak with donors and charities daily and hear confusion and concern about meeting these requirements,” David Johnson, General Counsel for The Giving Block, told Decrypt via DM. “We help donors obtain appraisals to meet these requirements, but as we explained in the letter, there is no public policy justification for this requirement in the first place.”
The letter comes in response to a Senate Finance Committee request in July seeking input from industry experts on how to best quell uncertainties and fix the “novel regulatory issues” surrounding the taxation of crypto assets.
Its recommendation echoes those from crypto policy think tank Coin Center last month, which also called for appraisal requirements on crypto donations to be scrapped. Instead, it claimed crypto is similar to “readily valued property” like cash and stocks, for which exchange price data is widely available.
Johnson said The GIving Block is “aligned with Coin Center on this issue,” and that they expect many crypto and nonprofit groups will support the change.
Crypto transactions are global, peer-to-peer, and virtually impossible to reverse— all reasons proponents have said they’re ideal for supporting humanitarian and political causes when traditional financial rails may be closed. In 2022, the crypto community rallied to directly send Ukraine hundreds of millions of dollars worth of crypto at the call of the nation’s Vice PM.
“It’s fast, easy, verifiable,” said Johnson. “Combine that with the great wealth transfer, where young tech-savvy potential donors hold increasingly more wealth, much of that in crypto, and it’s clear that this community is the future of philanthropy.”