Key facts
- California Governor Gavin Newsom signed AB 2409 into law.
- The law prohibits California public officers and employees from issuing meme coins.
- Digital asset platforms cannot list meme coins tied to public officials after January 1, 2027.
- Enforcement can be pursued by California's attorney general, district attorneys, city attorneys, and county counsels.
- The legislation is seen as a response to politicians profiting from crypto tokens, including Donald Trump's meme coin ventures.
- Senate Bill 1208 expands California's money-laundering laws to include digital assets and allows for seizure and forfeiture of such assets.
California Governor Gavin Newsom has signed a new law, Assembly Bill 2409, that prohibits public officials and employees in the state from issuing meme coins. The legislation also bars digital asset service providers from listing certain meme coins that are offered by or in partnership with federal, state, or local public officials, starting January 1, 2027.
The law grants California's attorney general, district attorneys, city attorneys, and county counsels the authority to pursue civil actions, including injunctions and disgorgement of funds, to enforce these restrictions.
This move comes amid increasing scrutiny of politicians engaging with or profiting from cryptocurrency tokens. Newsom's office explicitly linked the legislation to the crypto activities of US President Donald Trump and his family, citing "an unprecedented level of corruption" and stating that "No official should profit off their office."
AB 2409 defines a meme coin as a digital asset marketed based on internet memes, characters, current events, or trends, with its value derived primarily from public interest, speculation, or community engagement. The law specifically targets tokens connected to public officials and places obligations on digital asset platforms serving California residents, rather than imposing a blanket ban on meme coins.
Federal lawmakers are also debating similar restrictions, with Senator Kirsten Gillibrand having renewed calls for legislation to prohibit politicians and their spouses from issuing or promoting digital assets. A proposed federal Clarity Act included provisions for state attorneys general to enforce restrictions on covered officials issuing or sponsoring digital assets, but it failed to advance in the Senate.
In addition to the meme coin ban, Governor Newsom also signed Senate Bill 1208, which expands California's money-laundering laws to encompass digital asset transactions. This bill establishes procedures for law enforcement to seize and forfeit digital assets linked to specified crimes, with provisions for distributing forfeited assets to victims. These expanded digital-asset provisions are set to expire on January 1, 2032.