California governor to sign new crypto bill into law

Updated: 17 June 2023

Disclosure

Don’t invest unless prepared to lose all the money you invest. This is a high-risk investment, you shouldn’t expect to be protected if something goes wrong.

Join Our Telegram channel to stay up to date on breaking news coverage

Barring any last-minute changes, California’s governor, Gavin Newsom, will assent to a new crypto regulation bill. The bill, known as Digital Financial Assets Law or AB 2269, was passed by the state assembly after several assessments by lawmakers.

With this development, California joins the growing list of the American States that are moving to regulate the crypto industry. New York had also, in 2015, implemented a BitLicense law to regulate its crypto space. Also, California attempted to initiate this regulatory framework the same year. The move ended in futility as the state assembly decided to suspend its consideration owing to numerous objections by lawmakers.

The new bill will mandate crypto service providers and virtual asset exchanges to register with California’s Financial Protection and Innovation Department. Similarly, these providers must obtain a license before offering their services. As enshrined in the bill, providers who fail to adhere to the rule will incur $1,000 fines every day till they do the needful. According to reports, California intends to implement the bill by January 2025.

Timothy Grayson, a lawmaker at the California assembly, drummed support for the bill. According to Grayson, despite the excitement of the emergence of cryptos, its regulation is necessary. He admitted that the crypto sphere helps to avail investors of numerous financial investment opportunities. The lawmaker, however, maintained that with the new bill, investors are guaranteed safety while subscribing to the digital trends.

Grayson is optimistic that the bill “will provide consumers basic but necessary protections and promote a healthy crypto market by making it safer for everyone.” The lawmaker added that the implementation of the provisions of the bill would give stability and directness to the state’s crypto industry, urging the governor to assent to it as soon as possible.

Cease and Refrain Order on Celsius by California Authorities

This development comes a few weeks after the state issued a cease and refrain directive to Celsius, a crypto lender. According to the California authorities, the decision manifested as part of its plans to deal with crypto service providers who allegedly chose not to adhere to the state laws.

With the directive, Celsius is compelled to stop selling and marketing securities in California. According to the Department of Financial Protection and Innovation, the crypto lender misled investors about the risks of depositing virtual assets.

The regulator said Celsius failed to register the deposited digital assets as securities. This, according to DFPI, amounts to a violation of corporations code section 25110 of the California legislation. The section mandates that every firm intending to sell securities must secure a license from DFPI. Celsius allegedly defiled the section, prompting the agency to stop its market and selling securities within the country.

Join Our Telegram channel to stay up to date on breaking news coverage