California Regulates Crypto Business With The Release Of Digital Financial Assets Act

California Governor Gavin Newsom once rejected the Crypto Law. (photo: Twitter @katieporteroc)

JAKARTA - The Consumer Federation of California (CFC), a non-profit advocacy organization working for consumer rights, is sponsoring a law seeking permits and regulating the activity of cryptocurrency exchanges.

Legislation seeking regulatory oversight of crypto businesses, the Digital Finance Assets Act, was put forward by Assemblymember Timothy Grayson with the goal of protecting Californians from financial hardship and fostering responsible innovation. Grayson believes that issuing permits is the next step for the crypto industry.

"And clearly until we do that, Californians will continue to be vulnerable to both common and avoidable financial fraud," Grayson said.

This is CFC's second attempt to license and regulate digital asset and cryptocurrency companies. The bill (AB 39) was first filed in 2022, but was rejected by California Governor Gavin Newsom.

If approved, the bill will become law on January 1, 2025, prohibiting citizens from dealing with crypto businesses until "certain criteria are met". AB 39 will allow crypto companies under the California Department of Financial Protection and Innovation, to ensure regulatory clarity and investor protection.

“The past year of bankruptcy and fraud only strengthened our collective interest in ensuring basic and basic consumer protection in this market, which until now seemed like the Wild West in terms of 'anything can' behavior by major players in the cryptocurrency industry,” added Robert Herrell, Executive Director CFC, while disclosing the intent behind the action, as reported by Cointelegraph.

The CFC believes that the first hearing of this bill will be discussed in April. While Californian politicians try to introduce crypto regulations, the California Department of Motor Vehicles (DMV) is testing the digitization of vehicle numbers and the transfer of numbers through the private Tezos blockchain.

According to Ajay Gupta, as reported by Cointelegraph, the agency wants the shadow ledger to be completed within the next three months.