Consumer Federation of California Again Regulates Digital Assets Firms

The Digital Financial Assets Law was presented by Assemblyman 

Timothy Grayson to safeguard Californians from financial hardship and promote responsible innovation.

A bill that aims to authorize and oversee the operations of cryptocurrency exchanges was sponsored by the Consumer Federation of California (CFC), a nonprofit advocacy group campaigning for consumer rights.

Assemblymember Timothy Grayson sponsored the Digital Financial Assets Law, a bill requiring governmental control of cryptocurrency enterprises, in an effort to shield Californians from financial hardship and promote responsible innovation. The next logical step for the cryptocurrency business, according to Grayson, is licensing. He continues, "And it is equally evident that until we take that step, Californians will continue to be subject to prevalent and preventable financial scams."

This is the CFC's second attempt to authorise and regulate companies dealing in bitcoin and other digital assets. California's governor, Gavin Newsom, vetoed AB 39 when it was first introduced in 2022.

The bill, if passed, will prohibit anyone from collaborating with bitcoin businesses until "certain conditions are achieved" and take effect on January 1, 2025. AB 39 will issue licences to cryptocurrency businesses under the control of the California Department of Financial Protection and Innovation, ensuring regulatory clarity and investor safety.

The bankruptcies and scams of the past year only strengthen our collective interest in ensuring fundamental and foundational consumer protections in this market, which has up to now resembled the Wild West in terms of "anything goes" behaviour by key players in the cryptocurrency industry, said Robert Herrell, executive director of the CFC.

The CFC anticipates that the Assembly will take up this bill's first hearing in April.

The California Department of Motor Vehicles (DMV) is testing the digitization of automobile titles and title transfers via a private Tezos blockchain while Californian politicians work to enact crypto legislation.

According to Ajay Gupta, the California DMV's chief digital officer, the organization hopes to resolve the shadow ledger within the following three months, as CoinGabbar previously reported.