The Fair Political Practises Commission (FPPC) of California has announced major revisions to its handbook on campaign disclosure, including the addition of specific guidelines for contributions made via cryptocurrencies. The FPPC’s August 2023 agenda contained these new regulations.
The new regulations stipulate that bitcoin contributions are subject to applicable caps and must meet certain criteria. Cryptocurrency contributions from lobbyists, anonymous sources, or foreign principals may not be accepted. They must be obtained through American payment processors that have registered with the Financial Crimes Enforcement Network and the U.S. Department of Treasury.
Payment processors shall within two business days convert cryptocurrency contributions to U.S. dollars at the applicable spot rate and deposit such money into the campaign bank account of the Committee. A processing charge paid to the processor is not subtracted from the reported amount when donations made in cryptocurrency are designated as non-monetary contributions.
In previous cases handled by the FPPC, it was determined that the ACLU of Northern California had broken Government Code Sections, which resulted in a proposed $6,500 fine. Infractions included failing to disclose reportable behaviour and making inaccurate disclosures in an advertising.
The Commission also put up Proposed Regulation 18318, which gives the Executive Director the power to settle financial penalties for a lower amount. Also provided were guidelines for the situations that call for a settlement.
In addition, it was considered how to deal with the return, transfer, or carry-over of campaign contributions in the event that a candidate drops out of the race or does not run.
The Commission’s continued commitment to openness and accountability in political practises was reflected in the FPPC’s final update on audit requirements, the audit process, FY 2022/23 audits, and common audit results.
With these revisions, California has taken a big step towards regulating political donations, including the burgeoning cryptocurrency industry, and assuring a more open and accountable system of political financing.