In a dramatic about-face, Governor Newsom has come out in support of crypto regulatory legislation.
As a result of Governor Gavin Newsom’s signature of a revolutionary regulatory measure, the digital asset environment in California is preparing for major changes.
The Digital Financial Assets Law, a recently passed measure, is expected to go into effect in July 2025, imposing strict controls on residents and companies alike that deal in cryptocurrency.
All crypto companies will need a license from the Department of Financial Protection and Innovation (DFPI) under the new law to operate lawfully under the state’s extensive regulatory framework. It’s an effort to make the crypto industry a safer and more responsible place to innovate, and it also strives to safeguard consumers.
In an official statement released on October 13, Governor Newsom said that the new crypto bill gives the DFPI the power to police crypto-related activities in the region. The law will go into effect in 18 months to give the new regulatory framework time to be carefully tailored to meet industry trends and protect consumers.
According to the bill’s official text, the new legislation also requires crypto businesses to keep detailed financial records and gives the DFPI the authority to require audits of such data. The text says:
“This bill says that a licensee must keep certain records for five years after the activity took place. These records must include a general ledger that is kept at least once a month and lists all of the licensee’s assets, debts, capital, income, and expenses.”
This is an enhancement of the state’s money transmission regulations, which presently prohibit money transmitters like banks and money transfer firms from operating without a license from the DFPI commissioner.
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