Key Insights:
- California signs bill barring government officials from issuing memecoins
- Governor Gavin Newsom criticized Trump’s crypto ventures
- This aligns with the current political landscape, which has stalled the progress of the CLARITY Act
A new law prohibiting government officials from issuing memecoins has been enacted in California. On Sunday, California Governor Gavin Newsom approved Assembly Bill 2409.
The measure formed part of a package of cryptocurrency-related bills signed by the governor on that same day. Newsom additionally approved Senate Bill 1208, which targets cryptocurrency money laundering and the confiscation of proceeds from crypto crimes, alongside several other legislative acts.
California Governor Slams Trump Crypto Ventures
The California legislation additionally reads as a critique of President Trump and his cryptocurrency projects. Within his signing statement, Newsom explicitly referenced Trump, stating that California is taking a course opposite to his actions.
The statement referenced the TRUMP memecoin, alleging that nearly one million individuals have suffered losses exceeding $3 billion because of the token, whereas the president earned roughly $636 million in profits.
Newsom stated: “While the scam that is Donald Trump continues to hurt American families, California is fighting to make our economy work for people, not the powerful. No official should profit off their office.”
Alongside barring public officials from creating memecoins, the statute additionally forbids exchanges from listing any memecoins created by or associated with a government official at any level, with the restriction taking effect in January 2027. This prohibition will affect the TRUMP memecoin.
Enforcement of the law can be pursued through civil actions initiated by the state attorney general, district attorneys, county attorneys, and city attorneys.
This measure is not California’s inaugural legislation concerning digital assets and public officials. In 2019, the state introduced a mandate requiring government officials to report digital asset holdings capable of generating conflicts of interest.
Lummis Criticizes Democrats Over Clarity Act Decision
In the meantime, California’s fresh memecoin legislation echoes the broader perspective held by Democrats, who have advocated for prohibiting political officeholders from capitalizing on cryptocurrency.
This matter gained prominence after President Trump launched a memecoin prior to taking the presidential oath. A number of Democratic legislators in Congress have demanded a probe into the TRUMP memecoin.
Discussions surrounding the Clarity Act also centered on this topic, with Democratic lawmakers insisting on rigorous ethics provisions to stop Trump and his relatives from financial gains through crypto. The breakdown of these discussions ultimately resulted in the Clarity Act failing a procedural vote in the Senate.
Notably, Republican Senator Cynthia Lummis has voiced criticism against Democrats for their opposition to the Clarity Act. Through a sequence of posts on X published since September 17, she has drawn attention to various Democratic stipulations incorporated into the proposed measure.
Lummis asserted that the Clarity Act incorporated a federally mandated study on cryptocurrency mixers aimed at safeguarding consumers, yet Democrats voted against it. She further cited additional modifications introduced to the legislation at Democratic behest.
This article is for informational purposes only. Political claims and disputed interpretations are attributed to the officials and sources making them.