California legislators have approved a bill restricting public officials' involvement in memecoin operations, citing concerns over conflicts of interest and "quid pro quo arrangements."
On Wednesday, the California Senate passed Assembly Bill No. 2409 by a vote of 40-0, according to Legiscan data. The Assembly subsequently voted 78-0 to concur with the Senate's amendments. The bill has moved to the final stage of processing and awaits the governor's signature.
The bill would prohibit digital asset service providers from offering California residents memecoins issued on or after January 1, 2027, that are offered by federal public officials, or state or local officials, or jointly with them. The bill defines memecoins as digital assets whose value primarily depends on public interest, speculation, or community engagement.
According to a report released Thursday by the consumer advocacy non-profit Public Citizen, investors in the President-linked memecoin Official Trump ($TRUMP) are estimated to have incurred aggregate losses of $3.2 billion, with the majority of these losses remaining unrealized.
The $TRUMP token is the fifth-largest memecoin with a market capitalization of $688 million. The token has gained 53% over the past week, partially recouping losses after a 67% drop over the past year, according to CoinMarketCap.
Trump family crypto projects have also complicated the passage of the U.S. cryptocurrency market structure bill, known as the Clarity for Digital Tokens Act.
A bipartisan ethics rider, the text of which has not been made public, reportedly would allow Trump to defer capital gains taxes on any mandatory asset sales, potentially saving millions in taxes.
Related: Majority of Americans View Trump Family Crypto Investments as ‘Inappropriate’: Poll
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