California Signs Bill Banning Memecoins by Public Officials

California has passed a new law banning public officials from issuing memecoins. California Governor Gavin Newsom signed Assembly Bill 2409 into law on Sunday.

It was part of a series of bills focused on crypto assets that the governor signed on the same date. Newsom also signed Senate Bill 1208, which addresses crypto-related money laundering and the seizure of proceeds of crypto crime. Several other pieces of legislation were signed.

California Governor Slams Trump Crypto Ventures

The California Bill also appears to be a dig at President Trump and his crypto ventures. In the statement about signing the legislation, Newsom specifically mentioned Trump, noting that California is doing the opposite of what he did.

It mentioned TRUMP memecoin, claiming that almost a million people have lost more than $3 billion from the token, while the president made around $636 million in profit.

Newsom said: “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.”

Beyond banning memecoins for public officials, the law also prohibits exchanges from listing memecoins issued by or in partnership with a public official at all levels of government, starting in January 2027. This will impact TRUMP memecoin.

The state attorney general, the district attorney, the county attorney, and the city attorney will be able to institute civil action to enforce the legislation.

This is not the first time California has enacted legislation addressing public officials and crypto. In 2019, the state also passed a law that requires public officials to disclose digital asset holdings that could create a conflict of interest.

Lummis Criticizes Democrats Over Clarity Act Decision

Meanwhile, the new California law on memecoins aligns with the general view of Democrats, who have been calling for a ban on political officeholders profiting from crypto.

This issue has been at the forefront since President Trump issued a memecoin before his swearing in as president. Several Democratic lawmakers in Congress have called for an investigation into Trump memecoin.

The issue was also central to the negotiations over the Clarity Act, with democrats demanding stricter ethics rules to prevent Trump and his family from profiting from crypto. The failure of the negotiations eventually led to the Clarity Act failing to clear the procedural vote in the Senate.

Interestingly, Republican Senator Cynthia Lummis has been criticizing Democrats for voting against the clarity act. In a series of posts on X since September 17, she has been highlighting several Democratic demands included in the proposed legislation.

Lummis claimed that the Clarity Act mandated a government study on crypto mixers to protect consumers, but Democrats voted no. She also mentioned other amendments made to the bill at the request of Democrats.

This article is for informational purposes only. Political claims and disputed interpretations are attributed to the officials and sources making them.