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 do not yet 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.

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