California bans public officials from issuing memecoins under new law

California public officials will no longer be allowed to issue memecoins under a new law signed by Governor Gavin Newsom on Sunday.

The legislation, AB 2409, prohibits state public officials from issuing memecoins, a category of cryptocurrencies typically associated with famous personalities, internet jokes or viral trends rather than a specific use case.

Newsom signed the measure alongside 10 other bills focused on corruption and consumer protection. The legislation also includes measures establishing rules for compensating victims of cryptocurrency scams and creating a legal process for seizing crypto assets linked to transnational criminal networks.

Newsom’s office announced the legislation under the headline “THE OPPOSITE OF TRUMP,” while accusing the Trump administration of corruption and self-dealing in connection with the $TRUMP memecoin.

“While the scam that is Donald Trump continues to hurt American families, California is fighting to make our economy work for people, not the powerful. No official should profit off their office — and we’re putting stronger protections in place to ensure it doesn’t happen in our state,” Newsom said in the press release.

Trump’s office did not immediately respond to CoinDesk’s request for comment.

The legislation’s effect on memecoins that already exist, including $TRUMP, remains unclear.

Trump launched the $TRUMP token three days before his early 2025 inauguration. Its price surged from below $1 to $75 within a day or two as demand intensified, briefly pushing its market capitalization to $14 billion.

The token subsequently suffered a sharp decline, resulting in substantial losses for smaller holders.

According to data tracked by Nansen, 988,905 buyers collectively lost $3.81 billion. At the same time, Trump’s financial disclosure reports $636 million in royalties from the token, while affiliates of the Trump Organization own approximately 80% of its supply.

The token was trading at $2.03 at the time of publication.

Newsom is serving his second and final term as California governor, which ends in January, and is widely viewed as a potential contender for the 2028 presidential race.