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Open Source Collective Is Disabling Contributions in Cryptocurrencies
Published on May 19, 2023 by Benjamin Nickolls

Open Source Collective is disabling crypto contributions for member projects with immediate effect.

Eighteen months ago, Open Collective announced that they were offering limited support for cryptocurrencies on the Open Collective platform. Open Source Collective was the first host on Open Collective to offer crypto fundraising tools to its member projects. Today we are disabling them.

Crypto was and continues to be a polarising subject for our users and our member projects. We chose to accept crypto as some of our projects were telling us they needed it. We accepted the justified criticism about crypto's effect on our planet, and we continued to monitor contributors' use of crypto'.

Today's decision comes as a practical and pragmatic one, but it is also justified by data. Our provider's account was closed due to a transaction from a nation sanctioned by OFAC, rendering the service unavailable, and we're choosing not to (immediately) fix it.

Since September '21 Open Source Collective has accepted nearly $19m in financial support for our projects. In that time we have accepted $272k, or 1.4% of those contributions in various crypto assets — assets that are liquidated and attributed in USD to the projects that accepted them. Given the administrative and technical cost required to reimplement the feature, and the risk that this could happen again, we are choosing to disable support for crypto indefinitely.

Users who need to accept donations in crypto should contact [email protected] to make alternative arrangements. 

Thanks

Ben

Executive Director 
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Riccardo Balbo

Posted on May 19, 2023

Kudos to Open Source Collective for the effort that was put in trying to support crypto donations, but sadly the implementation always fell short in several ways.

While i understand that there was the intention to make everyone happy by supporting a vast list of cryptocurrencies, the reality is that only a handful of them truly made sense for practical use. Issues like high transaction fees, limited adoption, and some of them being actually disguised wrapped tokens on Ethereum resulted in a less-than-ideal experience. Furthermore, some cryptocurrencies or layers with greater potential were not supported.

I believe an implementation of an actual payment layer such as the Bitcoin Lightning Network with a specialized partner, that settles in usd, like OpenNode or Strike, would have been much easier to develop and maintain and you could have avoided the need to deal with regulations on your own. 

There are several decentralized exchanges that people can use to convert from their favorite crypto to bitcoin lightning, and while some might disagree with its design and compromises, it has proven to be quite reliable as a way to transit value.

Benjamin Nickolls

Posted on May 22, 2023

> implementation of an actual payment layer [...] with a specialized partner, that settles in usd, like OpenNode or Strike

this is, in fact, the approach we took, but we are still exposed to the risk. 

Nora Puchreiner

Posted on May 23, 2023

> Our provider's account was closed due to a transaction from a nation sanctioned by OFAC, rendering the service unavailable, and we're choosing not to (immediately) fix it

Could you elaborate how it is related to crypto? It leaves big room for possible interpretations.
Was it a crypto transaction from a suspicious wallet? Or was it a non-crypto transaction exposing the info that using crypto would hide? If the latter, and the crypto is the workaround, why stop accepting crypto? If the former, could you share more info to warn the public?
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ArmchairShaman

Posted on December 15, 2023

Why not use a service integrated with blockchain analytics companies like Chainalysis or Elliptic. These companies provide blockchain forensic and cryptocurrency compliance solutions, which could help OSC ensure that they are not receiving funds from OFAC sanctioned individuals or entities.

Coinbase Commerce, BitPay, Binance Pay, and Gemini Pay here's four options that have robust Know Your Customer (KYC), Anti-Money Laundering (AML), and Office of Foreign Assets Control (OFAC) compliance measures in place.