California Governor Gavin Newsom has signed Assembly Bill 2409, legislation that prohibits public officials and employees in the state from issuing meme coins. The law also bars digital asset service providers from listing certain meme coins tied to federal, state or local public officials.
Authored by Assemblymember Avelino Valencia (D-Anaheim), the bill defines a meme coin as a digital asset marketed based on its association with internet memes, characters, current events or trends, and whose value is primarily derived from public interest, speculation or community engagement.
The restrictions on digital asset platforms apply to meme coins issued on or after January 1, 2027, when the token is offered by or in partnership with a public official. The law does not amount to a blanket ban on meme coins in California but instead targets tokens connected to public officials and establishes obligations for digital asset platforms serving state residents.
Enforcement and Legal Action
California's attorney general, district attorneys, city attorneys and county counsels are given the ability to bring civil actions to enforce the restrictions, including seeking injunctions and disgorgement of funds.
Federal Context
The California legislation arrives as federal lawmakers debate whether public officials should be allowed to launch or profit from crypto assets while holding office. In July, Senator Kirsten Gillibrand (D-NY) renewed calls for federal legislation prohibiting politicians and their spouses from issuing or promoting digital assets, including meme coins.
The issue has also become part of negotiations over the federal Clarity Act. A September version of the bill included provisions that would allow state attorneys general to enforce restrictions on covered officials issuing or sponsoring digital assets, while also requiring covered officials to divest certain crypto interests or place them in qualified blind trusts. The Senate subsequently failed to advance the Clarity Act through a key procedural vote.
Broader Crypto Enforcement Measures
Newsom also signed Senate Bill 1208, which expands California's money-laundering laws to cover transactions involving digital assets. The measure establishes procedures for law enforcement to seize and forfeit digital assets connected to specified crimes, with provisions for distributing forfeited assets to victims. The expanded digital-asset provisions are scheduled to sunset on January 1, 2032.
Under the law, law enforcement can seek warrants to seize digital assets, wallets or accounts when there is probable cause that the assets represent criminal proceeds or were used to facilitate specified crimes.
