California Bans Public Officials From Launching Memecoins Under New Crypto Law
California Governor Gavin Newsom signed AB 2409, a state law that prohibits some state and local government officials from creating memecoins and places other limitations on political... The post California Bans Public Officials From Launching Memecoins Under New Crypto Law appeared first on Bitcoin Foundation.
California Governor Gavin Newsom signed AB 2409, a state law that prohibits some state and local government officials from creating memecoins and places other limitations on political tokens marketed to California residents.
The measure was enacted Sept. 27 as part of legislation on other topics, including ethics and consumer protection for cryptocurrency users and criminals.
Introduced by Assemblymember Avelino Valencia in February, AB 2409 passed the Legislature without a recorded vote against the bill. It applies to state and local elected or appointed officials, legislators, and board, commission, and committee members. It also applies to public agency employees with decision-making responsibilities related to public contracting.
According to the law, covered government officials and employees may not issue a memecoin. “Issue” means offering a token to the public for sale or gift or other exchange of value, even if active marketing efforts are not used to encourage such exchanges.
The statute provides that memecoins are digital assets whose primary characteristics and values are associated with celebrities, current events, jokes, other forms of internet content, and other social influences.
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The statute imposes a future limitation on digital asset service providers. Digital asset service providers will not be able to offer memecoins to California residents starting Jan. 1, 2027, if those memecoins were issued on or after that date and involve a federal public official or a public officer at the state and local levels of government in California.
The provision doesn’t prevent people from buying memecoins statewide. It doesn’t require exchanges to remove all preexisting political tokens from their platforms.
Enforcement will be civil, not by creating a new criminal penalty. The California attorney general has civil remedies, including injunctive relief and disgorgement. District attorneys and city and county counsels have authority to take similar civil actions against California government officials and employees who violate the prohibition.
Newsom described the initiative as a way to combat corruption, arguing that government officials should not have financial interests. Officials in Newsom’s administration tied the bill to issues involving President Donald Trump’s cryptocurrency businesses, including the Official Trump memecoin. The White House has denied claims of conflicts of interest related to Trump’s businesses.
AB 2409 is introduced as the federal government has not yet announced any regulations for memecoins. A February 2025 staff statement from the SEC’s Division of Corporation Finance stated that transactions with memecoins meeting the SEC’s definition are not securities transactions subject to federal securities laws and that purchasers of memecoins do not have the protections of federal securities laws.
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Newsom also signed SB 1208, which enacted other legal protections related to digital assets seized in criminal investigations. Among other things, SB 1208 amended California anti-money laundering laws to apply to certain crypto-related activities and authorized provisional and final seizure of digital assets, as well as a process for approved claimants to seek recovery from seized digital assets.
