California Fingers Digital Financial Asset Firms for Licensing – Financial Services

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Last week, Assemblyman Grayson gutted and amended AB 2269 to create a “Digital Financial Assets Act.” This law would require individuals engaged in digital financial asset business to be licensed or registered with the California Department of Financial Protection & Innovation. Subject to certain exclusions, a “digital financial asset” would be defined as a digital representation of value used as a medium of exchange, unit of account or store of value, and which is not legal tender, whether or not denominated in legal tender. The bill would authorize the DFPI to conduct examinations of licensees under the law and impose book and record requirements on licensees. Licensees would also be required to make certain disclosures and maintain policies and procedures for securities information and operation programs.

This legislative proposal follows Governor Newsom’s recent executive order requiring the DFPI “[i]take enforcement action, where appropriate, to end violations of the CCFPL and other financial laws relevant to consumers” (discussed in this article).

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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