New California Crypto Bill: Stricter Regulations Coming in 2025

California Takes the Lead in Crypto Regulation

In a significant move for the crypto community, California Governor Gavin Newsom has given the green light to a new cryptocurrency bill. The Digital Financial Assets Law aims to implement stricter regulations on crypto operations in the state, kicking off in July 2025.

Who Needs a License? Everyone!

Under the new legislation, both businesses and individuals involved in digital asset transactions must obtain a license from the Department of Financial Protection and Innovation (DFPI). This means that if you’re planning to trade virtual currency or provide related services, get ready to fill out some paperwork and pay your dues!

Audit, Audit, and More Audit

For companies operating in the crypto space, it’s not just about getting a license; the bill introduces rigorous audit requirements. According to the law, licensees must maintain records for five years that include the crucial nitty-gritty of their financial activities. How about a monthly general ledger, listing all assets, liabilities, capital, income, and expenses? Looks like someone’s about to have a love affair with spreadsheets!

What Happens If You Don’t Comply?

Ignore these regulations or try to skip out on that license, and you could be facing some serious enforcement measures. Nobody likes a rebel without a cause, especially when it comes to money. The DFPI isn’t messing around!

Why the Change of Heart?

Interestingly, just last year, Governor Newsom turned down a similar bill, claiming it wasn’t adaptable enough to keep pace with the rapidly evolving world of crypto. Thankfully, he’s had a change of heart, and it appears he’s ready to work with the legislature now—perhaps after a little nudge from some rising crypto demands and the federal landscape shifting underfoot.

A National Perspective

In broader news, there are discussions at the federal level regarding the application of the Electronic Fund Transfer Act to cryptocurrency, aiming to curb fraudulent activities. One can only hope that these regulations help the digital asset sector mature, offering both protection for consumers and stability in the ever-turbulent world of crypto.