California is one step closer to passing a crypto regulation law.
California State Assembly, the lower house of the California State Legislature, has unanimously agreed upon Digital Asset Financial Law.
On August 30th, the Digital Asset Financial Law, also known as AB 2269, was sent to state governor Gavin Newsom, who will decide what to do with this law.
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The bill notes that every crypto exchange that wants to operate in the state would have to gain California’s Department of Financial Protection and Innovation approval. If the company fails to comply with regulations, it could receive a penalty of up to $100,000 “for each day of violation.”
If the bill gets approved by the state’s governor, it will go into effect on January 1st, 2025.
Tim Grayson, California’s States Assembly member who introduced the bill, shared his excitement on Twitter.
On June 7th, Grayson shared a press release summarizing why this law is necessary for the Californian crypto market.
At that time, Tim Grayson noted that new crypto regulations create a safe environment for all investors.
While the newness of cryptocurrency is part of what makes investing exciting, it also makes it riskier for consumers because cryptocurrency businesses are not adequately regulated and do not have to follow many of the same rules that apply to everyone else. This bill will provide consumers basic but necessary protections and will promote a healthy cryptocurrency market by making it safer for everyone.
However, some crypto industry advocates are not happy about this bill. The Blockchain Association said that the bill “creates shortsighted and unhelpful restrictions that would impede crypto innovators’ ability to operate and push many out of the state.”
Currently, the crypto industry in California is regulated by the Money Transmission Act. According to this act, businesses involved with money transmissions cannot operate if they do not have a license from the Commissioner of Financial Protection and Innovation.