The California Fair Political Practices Commission (FPPC) has recently updated its campaign disclosure manuals, including an extensive set of rules related to the declaration of cryptocurrency contributions.
These updates align with recent changes in legislation and commission regulations, reflecting modern financial practices and covering a wide variety of topics.
Among the updates are rules about campaign contribution limits, limited liability company disclosure requirements, behested payment reporting, and cryptocurrency contributions.
Specific provisions regarding excessive contributions, advertising disclosure requirements, and other non-substantive technical changes are also part of the revisions.
Within these guidelines, political committees are allowed to solicit cryptocurrency as a non-monetary contribution, with specific requirements.
Notably, such contributions must comply with applicable limits and cannot be accepted from foreign principals, lobbyists, or anonymous sources.
Also, committees cannot receive cryptocurrency contributions directly through peer-to-peer transactions.
Instead, they must be processed through selected payment processors acting on behalf of the committee.
The commission requires that cryptocurrency donations be made and received through U.S.-based payment processors registered with the U.S. Department of Treasury and Financial Crimes Enforcement Network (FinCEN).
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These processors must use Know Your Customer (KYC) protocols, ensuring the verification of contributor identities.
Committees accepting cryptocurrencies must confirm that their payment processors use KYC procedures and collect relevant information such as name, address, occupation, and employer of contributors.
This information must be shared with the committee within 24 hours of a contribution being made.
Additionally, the payment processors must promptly convert cryptocurrency contributions to U.S. dollars at current exchange rates and deposit the funds into the committee’s campaign bank account within two business days of receipt.
These contributions are considered non-monetary, and any processing fee paid to the processor is not deducted from the reported amount.
The entire contribution must be reported by committees as a “miscellaneous increase to cash.”
In summary, the California FPPC’s updates demonstrate a thoughtful and detailed approach to regulating political contributions, particularly those made via cryptocurrencies.
It aligns political campaign financing with modern technological advancements, ensuring transparency, accountability, and adherence to existing regulations.
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