The state of California is taking steps to regulate the booming cryptocurrency market with the signing of two bills, Assembly Bill 39 and Senate Bill 401. These bills aim to establish a licensing process for crypto exchanges, provide consumer protections, and set regulatory frameworks for crypto kiosks.
Assembly Bill 39, authored by Assembly Banking and Finance Chair Timothy Grayson, establishes a licensing program for crypto assets within the Department of Financial Protection and Innovation (DFPI). The goal is to protect Californians from bad actors and foster responsible innovation in the cryptocurrency industry. With this bill, crypto businesses will be required to follow reasonable rules that protect consumers and their money. Grayson highlights that this action will help ensure that California leads in fostering responsible innovation.
Senate Bill 401, authored by Monique Limón and co-authored by Senate President pro Tempore Toni G. Atkins, focuses on regulating crypto kiosks. These ATM-like machines allow consumers to purchase cryptocurrencies such as Bitcoin. However, they often charge exorbitant fees and are hotspots for criminal activity, scams, and consumer fraud. SB 401 aims to establish a regulatory framework for crypto kiosks to protect consumers from fraud, unnecessary risk, and potential criminal activities.
California Senate President pro Tempore Toni G. Atkins emphasizes the need for regulatory frameworks that have the backs of consumers. Recent failures in crypto markets have highlighted the importance of protecting consumers, and these bills aim to do just that.
Both Assembly Bill 39 and Senate Bill 401 were signed into law by Governor Gavin Newsom. The Consumer Federation of California expressed gratitude for these bills, stating that consumers will be better protected in the crypto market thanks to these new laws.
With the signing of these measures, crypto companies and crypto kiosk operators will need to obtain or apply for a license by July 1, 2025, to continue doing business in California. This move by the state sets a precedent for responsible regulation of the cryptocurrency industry and provides consumers with much-needed protections.
California’s actions in regulating cryptocurrencies will likely shape the conversations and regulations around cryptocurrencies on a national and global scale. As the crypto market continues to evolve and gain popularity, responsible regulation will be crucial in protecting consumers and fostering innovation in this rapidly expanding industry.