California Bans Public Officials From Launching Memecoins Under New Crypto Law

California Governor Gavin Newsom signed AB 2409, a state law that prohibits some state and local government officials from creating memecoins and places other limitations on political tokens marketed to California residents.

The measure was enacted Sept. 27 as part of legislation on other topics, including ethics and consumer protection for cryptocurrency users and criminals.

Introduced by Assemblymember Avelino Valencia in February, AB 2409 passed the Legislature without a recorded vote against the bill. It applies to state and local elected or appointed officials, legislators, and board, commission, and committee members. It also applies to public agency employees with decision-making responsibilities related to public contracting.

According to the law, covered government officials and employees may not issue a memecoin. “Issue” means offering a token to the public for sale or gift or other exchange of value, even if active marketing efforts are not used to encourage such exchanges.

The statute provides that memecoins are digital assets whose primary characteristics and values are associated with celebrities, current events, jokes, other forms of internet content, and other social influences.