A recently passed bill passed by California State Assembly is set to be signed by Gov. Gavin Newsom, requiring licenses for digital asset exchanges and other crypto companies. As soon as it is enacted into law, unlicensed businesses would be prohibited after Jan. 1, 2025. In the case of lawbreakers, a civil penalty of $100,000 per day may be imposed.
In a 71-0 vote, the California State Assembly mandated that digital asset exchanges and crypto firms receive a license from the Department of Financial Protection and Innovation. The bill must now be signed or rejected by Governor Gavin Newsom.
How Does the Bill Read?
The bill authorizes the department to conduct examinations on licensees as prescribed and requires licensees to maintain certain records. Several general ledgers are maintained that are updated at least monthly, listing all income, expenses, and liabilities over a five-year period.
For the fifth time since June 2022, California Senators have amended their proposed “Digital Financial Assets Law,” signaling a genuine desire to pass the bill as the Senate inches toward workable legislation. https://t.co/3gzgdKUAjR
— Patachumon ⚡ (@patachumon) August 31, 2022
Despite the potential that cryptos have to enable consumers to invest and become part of a system that has, in many cases, resonated with them, Assemblyman Timothy Grayson (D-Concord) wants to ensure that the appropriate protections are provided to ensure that consumers have the opportunity to feel empowered.
“This measure will increase the safety of bitcoin for everyone and encourage a thriving bitcoin industry,” Grayson said. The government of Paraguay has vetoed a crypto mining law, while the government of Japan keeps crypto earnings at home. Some fear in the crypto sector that California might follow the path of New York’s “BitLicense,” which many believe prohibits blockchain innovation.
The governor signed a California executive order unifying state and federal blockchain regulations in May. The collapse of the Voyager and Celsius crypto-assets in 2022 has also prompted state legislators to warn people about interest-bearing crypto-asset accounts.