California commission outlines campaign disclosure requirements for crypto
California’s commision for fair political practices 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 in legislation and commission regulations.
These updates include campaign contribution limits, limited liability companies (LLC) 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
Of specific interest are sections of the manuals that now include guidelines for reporting cryptocurrency contributions.
According to the guidelines, a politicial comittee may solicit a contribution of cryptocurrency as a nonmonetary contribution, which is subject to specific requirements. Cryptocurrency contributions are set to be 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 that are selected to act as a vendor on behalf of the committee.
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 Financial Crimes Enforcement Network which uses KYC protocols to verify identities of contributors.
Committees that opt to solicit contributions made 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 cryptocurrency 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 nonmonetary contributions under the Commission guidelines. Any processing fee paid to the processor is not deducted from the reported amount and the entire contribution is set to be reported by committees as a ‘miscellaneous increase to cash”.