California bars public officials from issuing meme coins

California Governor Gavin Newsom signed Assembly Bill 2409, which bars California public officers and employees from issuing meme coins. The law bars digital asset service providers from listing covered meme coins issued on or after January 1, 2027, if a federal public official or a state or local public officer offers them or partners in offering them. California's attorney general, district attorneys, city attorneys and county counsels can bring civil actions to enforce the restrictions. They can seek injunctions and disgorgement of funds. The bill defines a meme coin as a digital asset whose value primarily derives from public interest, speculation or community engagement. Its definition also covers assets marketed based on their association with internet memes, characters, current events or trends. The law does not ban all meme coins in California. It targets tokens connected to public officials and imposes obligations on digital asset platforms serving California residents. Newsom's press office linked the legislation to Trump's meme coin efforts and accused the administration of “an unprecedented level of corruption.” Newsom said, “No official should profit off their office,” in a follow-up post that called Trump a “scam.” Senator Kirsten Gillibrand renewed calls in July for legislation barring politicians and their spouses from issuing or promoting digital assets, including meme coins. Trump disclosed more than $1.2 billion in crypto-related earnings for the previous year. More than $635 million was attributed to his Solana-based TRUMP meme coin. A September version of the federal Clarity Act included provisions that would allow state attorneys general to enforce restrictions on covered officials issuing or sponsoring digital assets. That version also included provisions requiring covered officials to divest certain crypto interests or place them in qualified blind trusts. The Senate failed to advance the Clarity Act through a key procedural vote. The federal ethics provisions remained unresolved. In March, Newsom signed an executive order barring California public officials and appointees from using inside information to profit on prediction markets or helping others do so. Newsom also signed Senate Bill 1208, authored by Senator Tim Grayson, which expands California's money-laundering laws to cover digital-asset transactions. The measure establishes procedures for law enforcement to seize and forfeit digital assets connected to specified crimes. It provides for distributing forfeited assets to victims. Law enforcement can seek warrants to seize digital assets, wallets or accounts when probable cause indicates that the assets are criminal proceeds or were used to facilitate specified crimes. The measure also provides procedures for freezing assets and resolving claims to seized property. The expanded digital-asset provisions are scheduled to sunset on January 1, 2032.