The California Fair Political Practices Commission (FPPC) has introduced comprehensive rules for disclosing cryptocurrency contributions to political candidates and committees. These guidelines are part of the FPPC’s updated campaign disclosure manuals, which encompass a range of modifications reflecting recent legislative and regulatory shifts.
An example outlines how a political party would disclose the amount of a cryptocurrency contribution. Source: FPPC campaign manual.
Key Guidelines for Cryptocurrency Contributions:
The updated manuals now include specific regulations for reporting cryptocurrency donations:
- Solicitation and Limits: Political committees can seek cryptocurrency contributions as non-monetary donations, subject to defined conditions. Such contributions are subject to applicable contribution limits and are prohibited from foreign principals, lobbyists, or anonymous sources.
- Payment Processors: Cryptocurrency donations must not be accepted through peer-to-peer transactions. Instead, they can be received through chosen payment processors acting as vendors for the committee.
- Identity Verification: Contributions are required to go through U.S.-based payment processors registered with the U.S. Department of Treasury and the Financial Crimes Enforcement Network. These processors should follow Know Your Customer (KYC) protocols to validate contributor identities.
- Contributor Information: Payment processors must collect contributor details, including name, address, occupation, and employer. This information must be shared with committees within 24 hours of a donation.
- Conversion and Deposit: Cryptocurrency donations need to be swiftly converted to U.S. dollars based on current exchange rates upon receipt. The converted funds should be deposited into the committee’s campaign bank account within two business days.
- Reporting: Cryptocurrency contributions are classified as non-monetary and need to be reported in their entirety. Processing fees paid to the payment processor are not subtracted from the reported amount.
The FPPC’s decision outlines a comprehensive framework for accepting and reporting cryptocurrency contributions, with an emphasis on transparency, accountability, and adherence to established financial regulations.
These guidelines reflect California’s proactive approach to incorporating digital currencies into its political landscape, as cryptocurrencies continue to influence various sectors of the economy.