California Bans Politicians From Launching Memecoins Under New Law
Newsom signs law blocking officials from crypto projects
California Governor Gavin Newsom signed a new law on Sunday that bans state public officials from issuing memecoins. The legislation, known as AB 2409, was enacted as part of a larger package of 11 bills focused on corruption and consumer protection.
The move comes after high-profile controversies involving politicians launching digital tokens. Newsom's office described the action as a direct contrast to recent federal events, specifically citing the performance of a token associated with President Donald Trump.
Details of the new regulations
- The law prohibits public officials from creating cryptocurrencies based on internet jokes, viral trends, or famous personalities.
- AB 2409 was signed alongside 10 other bills addressing crypto scams and criminal networks.
- Other measures in the package establish rules for compensating victims of crypto fraud and seizing assets from transnational criminals.
- Newsom stated that no official should profit from their position and emphasized stronger state protections.
Context regarding federal actions
The governor framed the ban as a response to the launch of the $TRUMP token by President Donald Trump. That token saw its price rise rapidly before crashing, resulting in significant financial losses for many buyers. Data indicates that nearly one million buyers lost a combined $3.81 billion on the project.
According to financial disclosures, Trump's organization affiliates held about 80% of the token supply, and Trump personally listed $636 million in royalties from the coin. Newsom's press release accused the Trump administration of self-dealing while California aims to protect its economy.
Scope and remaining questions
The new law targets future actions by state officials, but it is currently unclear if the ban applies to memecoins that were already created before the legislation took effect. This includes uncertainty around existing tokens like $TRUMP.
Background on the governor
Gavin Newsom is serving his second and final term, which concludes in January. He is frequently mentioned as a potential candidate for the 2028 presidential election.
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.