California Senate unanimously tells memecoins: you can't sit with us 🪑

The California Senate voted 40-0 on Wednesday to pass Assembly Bill 2409, a measure that would bar digital asset service providers from offering California residents memecoins issued by or in partnership with federal, state or local public officers on or after Jan. 1, 2027. The Assembly followed with a 78-0 vote to concur in the Senate's amendments, sending the bill to the enrolled stage where it awaits the governor's signature, according to Legiscan data.

The bill defines memecoins as digital assets whose value is derived primarily from public interest, speculation or community engagement. Lawmakers cited concerns around conflicts of interest and "pay-to-play arrangements" as motivation for the restrictions.

The legislation lands amid heightened scrutiny of politically affiliated tokens. Investors in the Official Trump (TRUMP) memecoin are an estimated $3.2 billion underwater, with most of those losses unrealized, according to a Thursday report from nonprofit consumer advocacy organization Public Citizen. The TRUMP token ranks as the fifth-largest memecoin with a $688 million market capitalization. The token rose 53% during the past week, recouping some of the losses from its 67% decline over the past year, according to CoinMarketCap.

The Trump family's crypto ventures have also complicated efforts to pass the federal Digital Asset Market Clarity (CLARITY) Act, a crypto market structure bill. A bipartisan ethics addendum, which has not been made public, would reportedly allow Trump to defer capital gains taxes on any required divestitures, potentially leading to tax savings in the millions.