Entities that want to send California regulators crypto donations will have to follow a long list of rules.
The California Fair Political Practices Commission (FPPC) has taken steps to modernize its campaign disclosure protocols. The primary focus of the update revolves around clarifying rules and guidelines for cryptocurrency donations.
The recently updated campaign disclosure manuals highlight not just crypto contribution rules but also span other areas like behested payment reporting, advertising disclosures, and campaign contribution limits.
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As per the newly instated guidelines, political committees can receive cryptocurrency contributions, but there are conditions. The donations must adhere to established regulations and can't be sourced from foreign entities, anonymous donors, or lobbyists.
Political committees are also instructed against receiving cryptocurrency donations through direct peer-to-peer methods. They are instead directed to use payment processing entities, which will act on behalf of the committees.
These payment processors should be based within the US and registered with the US Department of Treasury and the Financial Crimes Enforcement Network. Emphasis is also placed on Know Your Customer (KYC) adoption for contributor identification.
Payment processors play a pivotal role under the new guidelines. They are responsible for acquiring detailed information about the contributors, including their name, address, occupation, and employer. This information must be forwarded to committees within a 24-hours after the contribution.
Furthermore, cryptocurrency donations must be converted to US dollars immediately, using the prevailing exchange rate. The converted funds should then be transferred to the committee's campaign bank account within two days.
For clarity in financial records, cryptocurrency contributions are earmarked as non-monetary. The full donation should be registered by committees as a "miscellaneous increase to cash."
With the updated guidelines, California demonstrates its commitment to adapting to the evolving financial landscape while emphasizing transparency and adherence to regulations. The move also underscores the growing significance of cryptocurrencies in various sectors, including the political domain.
Several US Presidential candidates sent shockwaves through the industry by announcing that they will accept Bitcoin (BTC) donations.
