California Governor Gavin Newsom signed legislation on September 27 barring covered state and local public officials from issuing meme coins, adding new restrictions on certain politician-linked tokens and expanding enforcement tools for crypto-related crimes.
The measure, Assembly Bill 2409, prohibits California public officers and certain government employees with authority over contracts and bids from issuing meme coins. Starting January 1, 2027, digital asset service providers will also be barred from listing newly issued meme coins offered by or in partnership with covered federal, state, or local public officials.
In its official announcement, Newsom’s office linked the legislation to concerns over public officials profiting from crypto and specifically pointed to President Donald Trump’s Official Trump meme coin, launched in January 2025.
The governor’s office said the law would help ensure that “No official should profit off their office,” while describing the broader package as an effort to “combat corruption by public officials, protect consumers, and hold crypto fraudsters accountable.”
California targets official-linked meme coins
AB 2409 covers state and local elected and appointed officials, legislators, and members of government boards, commissions and committees. It also applies to certain state and local employees who have decision-making authority over government bids and contracts.
The law defines issuance broadly, covering making a token available for public purchase, donation, or exchange of value, regardless of whether the official promotes the token. The legislation does not amount to a blanket ban on meme coins in California. It also does not automatically require existing politician-linked tokens to be removed from trading platforms.
Instead, beginning January 1, 2027, digital asset service providers serving California residents will be prohibited from listing a meme coin issued on or after that date when it is offered by or in partnership with a covered federal, state, or local public official.
That distinction is significant because earlier versions of the legislation focused more broadly on meme coins using the likeness or image of public officials. The final version instead uses the relationship between the token and the covered official as the key test.
Bill passed without recorded opposition
California lawmakers approved AB 2409 with no recorded opposition on the final legislative votes.
The Assembly initially passed the measure 77-0 in May, while the Senate approved the final version 40-0 in August. The Assembly later concurred with Senate amendments on August 26 before sending the legislation to Newsom.
The law relies on civil enforcement rather than creating a new criminal offense for issuing a prohibited meme coin. California’s attorney general can bring a civil action seeking an injunction and may seek disgorgement. District attorneys, city attorneys, and county counsel can also enforce the restrictions involving California public officers and covered employees.
Newsom puts Trump’s meme coin in focus
Trump launched the Official Trump ($TRUMP) meme coin on the Solana blockchain in January 2025, just days before his second inauguration. The token quickly attracted significant market attention, with its market capitalization rising into the billions within hours of its launch.
“As Donald Trump enriches himself at the American people’s expense, Governor Gavin Newsom today signed legislation to combat corruption by public officials, protect consumers, and hold crypto fraudsters accountable,” the governor’s office said. Newsom also described the broader policy goal in sharper terms, saying California was “fighting to make our economy work for people, not the powerful.”
The governor’s office cited The New York Times’ estimates that nearly 1 million people who bought Trump’s meme coin had collectively lost more than $3 billion, while Trump earned roughly $636 million connected to the token.
Trump’s 2025 financial disclosure provides a separate documented figure. The filing lists $635.1 million in royalties from a Celebration Coins licensing agreement involving CIC Digital LLC. The amount has been linked to the business surrounding Trump’s crypto and meme coin activities and should not be interpreted as the current value of tokens held by Trump.
The White House has previously rejected allegations that Trump’s business interests create conflicts of interest.
California expands crypto crime enforcement
Newsom also signed Senate Bill 1208, expanding California’s money-laundering framework to certain digital-asset transactions and establishing procedures for seizing crypto connected to criminal activity. The law allows prosecutors and law enforcement agencies to seek warrants covering digital assets held by exchanges, issuers, custodians or other locations.
Authorities can also request that identified assets be temporarily frozen while seeking a warrant. Under the new framework, qualifying exchanges and other digital-asset businesses receiving a freeze request must hold the identified assets for 10 calendar days.
The legislation also establishes a process for victims to make claims against forfeited digital assets. The move comes after the U.S. Securities and Exchange Commission (SEC) said in February 2025 that certain meme coins generally do not qualify as securities transactions under federal law.
Broader consumer protection push
AB 2409 and SB 1208 were part of a wider package of legislation Newsom signed on September 27 covering public ethics, consumer protection, privacy, ticket sales and online reservation practices.
For the crypto industry, the two digital-asset measures create separate tracks: AB 2409 focuses on the relationship between public officials and meme coins, while SB 1208 gives California authorities additional tools to pursue crypto tied to money laundering and other crimes.
The meme coin restrictions take effect as specified in the legislation, including the January 1, 2027 provision governing certain newly issued official-linked tokens.
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