New Bill Seeks to Regulate Crypto Industry in California

The Consumer Federation of California (CFC), a nonprofit organization dedicated to advocating for consumer rights, has backed a bill that seeks to license and regulate cryptocurrency exchanges. Assemblymember Timothy Grayson, who introduced the legislation, called the Digital Financial Assets Law, believes that licensing is essential to protect Californians from financial scams and promote responsible innovation in the crypto industry.

This marks the second attempt by the CFC to regulate digital assets and cryptocurrency companies, as a similar bill (AB 39) was introduced in 2022 but was later vetoed by California Governor Gavin Newsom. If the current bill is passed, it will become law on January 1st, 2025, prohibiting citizens from engaging with unlicensed crypto businesses. The bill will be implemented and regulated by the California Department of Financial Protection and Innovation, ensuring regulatory clarity and investor protection.

The CFC’s executive director, Robert Herrell, highlighted the need for consumer protections in the crypto industry, citing several bankruptcies and scams in the past year. The first hearing of the bill is expected to take place in April.

While Californian politicians strive to regulate the crypto industry, the California Department of Motor Vehicles (DMV) is testing the digitization of car titles and title transfers through a private Tezos blockchain. The California DMV’s chief digital officer, Ajay Gupta, aims to have the shadow ledger completed within the next three months.