Legislation was enacted that prohibited public officials from issuing memecoins and imposed restrictions on specific official coins. Another law will expand anti-money laundering laws and reg
New legislation in California has been signed to increase restrictions related to the operations of cryptocurrencies by public officials. The bill, known as Assembly Bill 2409, was signed by Governor Gavin Newsom on September 27. The law aims to impose restrictions on memecoins issued by public officials in California.
They will apply to any qualifying memecoins issued on or after January 1, 2027. The bill includes provisions that will add to California’s already extant laws prohibiting state officers and employees from conducting any businesses conflicting with their official duties. AB 2409 introduces the issuance of cryptocurrency as an additional restriction on such outside business activities. The bill also gives provisions for enforcement through civil action. The California Attorney General, District Attorneys, City Attorneys, and County Counsel may pursue violations.
In addition to passing AB 2409, California has passed SB 1208. This bill is more concerned with digital assets than AB 2409. It will amend the existing law related to money laundering to cover any illegal transactions involving digital assets. It will also provide ways to recover money for victims of crypto scams and frauds. In addition, the bill will include provisions that enable the government to seize digital assets associated with transnational criminal organizations. The measures will give law enforcement the means to freeze, seize, and forfeit any crypto assets used in committing crimes.
These new laws are in addition to the existing disclosure obligations with respect to cryptocurrencies and other digital financial assets applicable to California public officials. Currently, California mandates disclosure of cryptocurrencies and other digital financial assets that may give rise to any disqualifying financial interest.
The new laws further restrict memecoins for public officials in California and also increase the enforcement mechanism with respect to financial crimes involving cryptocurrencies. This will give rise to new compliance obligations for public officials, digital asset businesses, and crypto users in California. The memecoin prohibitions will come into effect for qualifying coins issued after January 1, 2027.
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