Assemblymember Timothy Grayson proposed the Digital Financial Assets Law to shield Californians from financial hardship while also encouraging responsible innovation.
The Consumer Federation of California (CFC), a non-profit advocacy group dedicated to consumer rights, has introduced legislation to license and regulate cryptocurrency exchanges.
The Digital Financial Assets Law, which requires regulatory control of crypto firms, was presented by Assemblymember Timothy Grayson with the goal of safeguarding Californians from financial hardship and supporting responsible innovation. Grayson feels that licensing is the next logical step for the crypto business, adding, “It is also evident that until we take that step, Californians will remain exposed to widespread and avoidable financial frauds.”
The CFC is making its second effort to license and regulate digital assets and cryptocurrency firms. The law (AB 39) was initially submitted in 2022, however it was vetoed by California Governor Gavin Newsom.
If enacted, the measure would go into effect on January 1, 2025, preventing people from participating in crypto-related activities unless “certain requirements are satisfied.” AB 39 creates the California Department of Financial Protection and Innovation to license cryptocurrency enterprises, offering regulatory certainty and investor protection.
“The bankruptcies and scams of the past year only bolster our collective interest in ensuring basic and foundational consumer protections in this marketplace, which has up to now looked like the Wild West in terms of ‘anything goes’ behavior by key players in the cryptocurrency industry,” said Robert Herrell, executive director of the CFC, while revealing the move’s intent.
The CFC anticipates that the first hearing on this measure in the Assembly will take place in April.