The California Fair Political Practices Commission has released disclosure requirements for cryptocurrency contributions to political candidates and committees.
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The California Fair Political Practices Commission (FPPC) has updated its campaign disclosure manuals, with revisions including detailed rules for cryptocurrency contributions declarations.
An agenda released for an upcoming commission meeting includes a discussion of updated campaign disclosure manuals, which have been reworked to reflect recent changes to legislation and commission regulations.
The updates include campaign contribution limits, limited liability companies disclosure requirements, behested payment reporting, cryptocurrency contributions, excessive contributions, advertising disclosure requirements and other non-substantive technical changes.
Related: Consumer Federation of California reattempts to regulate crypto companies
Also included are guidelines for reporting cryptocurrency contributions.
According to the guidelines, a political committee may solicit a crypto contribution as a non-monetary contribution subject to specific requirements. Cryptocurrency contributions are subject to applicable limits and may not be accepted from foreign principals, lobbyists or anonymous sources.
Committees are also barred from receiving cryptocurrency contributions directly in peer-to-peer transactions. Cryptocurrency contributions can be received through payment processors selected to act as a vendor on behalf of the committee.
An example outlines how a political party would disclose the amount of a cryptocurrency contribution. Source: FPPC campaign manual.
The commission also requires cryptocurrency donations to be made and received through United States-based payment processors registered with the U.S. Department of Treasury and the Financial Crimes Enforcement Network, which use Know Your Customer (KYC) protocols to verify the identities of contributors.
Committees thatopt to solicit contributions in cryptocurrencies are expected to confirm that respective cryptocurrency payment processors use KYC procedures to verify contributors’ identities.
The payment processors also need to collect the name, address, occupation and employer of respective contributors and share this with committees within 24 hours of a contribution being made.
Payment processors are also expected to immediately convert cryptocurrency contributions to U.S. dollars upon receipt at current exchange rates and deposit funds into the committee’s campaign bank account within two business days of receipt.
Cryptocurrency contributions are labeled as non-monetary contributions under the commission guidelines. Any processing fee paid to the processor is not deducted from the reported amount, and the entire contribution must be reported by committees as a “miscellaneous increase to cash.”
