California governor Gavin Newsom signs ban on officials issuing memecoins
California Governor Gavin Newsom signed Assembly Bill 2409 on September 27, establishing a legal prohibition against state and local officials issuing memecoins.
Effective January 1, 2027, the measure targets public officials from profiting off their positions and includes restrictions on digital asset trading platforms offering certain tokens to California residents.
Details of Assembly Bill 2409
The legislation stems from a package of anti-corruption laws signed by Governor Gavin Newsom. Authored by Assemblymember Avelino Valencia, a Democrat from Anaheim, the law applies to state and local public officers and public employees, including elected and appointed officials as well as those with decision-making authority over bids and contracts.
Section 7599.211 of the California Government Code establishes two main restrictions. First, it explicitly mandates that A public officer or public employee shall not issue a meme coin.
Second, it prohibits digital asset platforms from offering Californians any memecoin issued on or after January 1, 2027, by a federal, state, or local official, either alone or with partners. The state Attorney General can enforce the ban through civil lawsuits for injunctions and disgorgement of profits, with district and city attorneys also permitted to sue officials.
Impact on Existing Tokens and the TRUMP Memecoin
The new regulations include specific cut-off dates that exempt existing digital assets. The listing restriction does not apply to President Donald Trump’s existing token, allowing the TRUMP memecoin to remain tradeable for customers in California because it was issued before 2027.
Newsom used the TRUMP token as a prominent example while discussing the financial interests of public officials. Meanwhile, automated tools used by sophisticated traders yielded profits of about 4 billion dollars.