California's Fair Political Practices Commission (FPPC) has taken steps to address the inclusion of cryptocurrency donations in its campaign disclosure guidelines. The FPPC has recently updated its campaign disclosure handbook to provide comprehensive rules and regulations for the declaration of cryptocurrency donations.
The agenda for upcoming committee meetings reveals that the revised campaign disclosure handbook has been reconstructed to align with recent legislative changes and committee regulations. The updates encompass a range of areas, including campaign contribution limits, LLC disclosure mandates, delegated payment reporting, cryptocurrency contributions, excess donations, advertising disclosure requisites, and minor technical modifications. The new guidelines specifically address the reporting of cryptocurrency contributions.
According to these guidelines, political committees are allowed to seek donations in the form of cryptocurrency, considering them as non-monetary contributions subject to specific conditions. Cryptocurrency donations must adhere to relevant restrictions and should not originate from foreign contributors, lobbyists, or anonymous sources .
The FPPC strictly prohibits direct receipt of cryptocurrency donations through peer-to-peer transactions. Instead, such donations are to be routed through payment processors designated by the Commission. These processors should be registered with the US Department of the Treasury and the Financial Crimes Enforcement Network, and they must utilize know-your-customer (KYC) protocols to verify the identities of donors.
Committees intending to solicit cryptocurrency contributions are required to confirm that their chosen cryptocurrency payment processors adhere to KYC procedures for contributor identification. Payment processors are also mandated to gather contributors' personal details, such as names, addresses, occupations, and employers, and share this information with the respective committee within 24 hours of donation receipt.
Moreover, payment processors are expected to promptly convert cryptocurrency donations into US dollars at prevailing exchange rates upon receipt and deposit the funds into the committee's campaign bank account within two business days. The campaign guidelines classify c cryptocurrency donations as non-monetary contributions, with any processing fees not deducted from the reported amount. Committees must list the entire contribution as a "miscellaneous increase in cash."
In essence, the FPPC's updated guidelines aim to provide a structured framework for political committees in California that wish to engage with cryptocurrency donations while ensuring transparency, compliance, and adherence to established financial protocols.
