The Blockchain Association posted a series of tweets last week critizing pending legislation they believe will undermine the digital asset ecosystem in California.
The Association claims that State Assembly Bill A.B. 2269 is “shortsighted” creating “unhelpful restrictions that would impede crypto innovators’ ability to operate.” The end effect would be to push crypto innovators out of California (perhaps to Florida? Where everyone else is?). The association call the legislation “inconsistent with the Governor’s (Newsome) vision for crypto in California.
6/ We urge all Assembly Members to reject this bill & engage with the Executive Order process as laid out by Governor Newsom. https://t.co/UWuITsKEra
— Blockchain Association (@BlockchainAssn) August 29, 2022
A.B. 2269 seeks to require an individual or entity to be approved for a money transmission license prior to providing services.
To quote the current language of the bill:
“This bill would, among other things, authorize the department [Department of Financial Protection and Innovation] to conduct examinations of a licensee, as prescribed, and would require a licensee to maintain, for all digital financial asset business activity with, or on behalf of, a resident for 5 years after the date of the activity, certain records, including a general ledger posted at least monthly that lists all assets, liabilities, capital, income, and expenses of the licensee.
This bill would authorize the department to take an enforcement measure against a licensee or person that is not a licensee but is engaging in digital financial asset business activity with, or on behalf of, a resident in any of certain instances, including the licensee or person materially violates the provisions of the bill, a rule adopted or order issued under the bill, or a law of this state other than the bill that applies to digital financial asset business activity of the violator with, or on behalf of, a resident. The bill would prescribe certain civil penalties for violations of its provisions.”
The legislation has been described as similar to New York’s Bitlicense, which has been criticized, yet many crypto firms choose to apply and adhere to the requirements – largely due to New York being the center of much financial services activity. California has also seen robust activity within the crypto sector of Fintech.
The Blockchain Association has posted a “Dear Members of the California Assembly Senate…” letter telling the legislators;
“Since the days of the Gold Rush, California has been a fertile ground for big dreams and history-changing innovations. The growing crypto rush will continue this legacy in a way that equitably creates jobs, protects consumers, and redefines the future of innovation. A.B. 2269, while well-intentioned, would stymie California’s potential, which is why we urge you to reconsider this bill and work concurrently with the California Executive Order to craft a regulatory environment that ensures consumers are protected while innovation can thrive.”
It is not immediately clear as to whether or not the legislation (in its current form) has sufficient support to be signed into law.