California Sets Rules for Crypto Contributions to Political Campaigns

• The California Fair Political Practices Commission (FPPC) has released updated campaign disclosure manuals with detailed rules for cryptocurrency contributions declarations.
• Cryptocurrency contributions are subject to applicable limits and may not be accepted from foreign principals, lobbyists or anonymous sources.
• Payment processors must use Know Your Customer protocols to verify the identities of contributors in order for political committees to accept crypto donations.

California Campaign Disclosure Requirements for Cryptocurrency Contributions

The California Fair Political Practices Commission (FPPC) has released updated campaign disclosure manuals that contain detailed rules for cryptocurrency contribution declarations. These updates include information on campaign contribution limits, limited liability companies disclosure requirements, behested payment reporting, cryptocurrency contributions, excessive contributions, advertising disclosure requirements and other non-substantive technical changes.

Crypto Contributions Subject to Specific Requirements

Political committees can solicit a crypto contribution as a non-monetary contribution but it is subject to specific requirements. Cryptocurrency contributions are 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 and must receive them through payment processors selected as vendors on behalf of the committee.

Know Your Customer Protocols Required

In order for political committees to accept crypto donations, they must use United States-based payment processors registered with the U.S. Department of Treasury and the Financial Crimes Enforcement Network that employ Know Your Customer (KYC) protocols to verify the identities of contributors. Payment processors must also collect the name, address, occupation and employer of respective contributors and share this information with committees within 24 hours of accepting a donation in cryptocurrencies.

Example Outline For Disclosure Of Crypto Contributions

An example outlines how a political party would disclose the amount of a cryptocurrency contribution: Source: FPPC campaign manual

Conclusion

These regulations provide clear guidance on how political campaigns should report cryptocurrency contributions accurately so that such donations can be legally accepted by campaigns in California without running afoul of any laws or regulations related to election finance disclosures