California has become the first state in the U.S. to ban politicians from issuing and promoting meme coins.
On September 27, California Governor Gavin Newsom signed into law a groundbreaking bill (AB 2409) that prohibits public officials from issuing meme coins.
This legislation prevents California public officials from leveraging their positions to issue or promote meme coins for personal gain. It also restricts companies from listing meme coins that feature the names or likenesses of public officials.
Governor Newsom emphasized that no public official should profit from their position, adding that they’re bolstering safeguards to ensure this doesn’t happen in California.
The bill aims to prevent conflicts of interest for politicians and protect investors from the volatile meme coin market. Meme coins, often inspired by internet trends or celebrities, typically see price fluctuations based more on hype and speculative demand than actual utility.
The California government cited the case of former President Donald Trump, who launched his own meme coin last year. Recent reports suggest that approximately 1 million investors who purchased the Trump meme coin suffered collective losses exceeding 3 billion USD, while Trump himself allegedly profited around 636 million USD.
In a related move, Governor Newsom also signed bill SB 1208, designed to combat virtual asset fraud and money laundering. This legislation establishes guidelines for compensating victims of virtual asset crimes and outlines legal procedures for seizing virtual assets held by transnational criminal organizations.