Digital assets: meme coins., the official text

An act to add Chapter 37 (commencing with Section 7599.210) to Division 7 of Title 1 of the Government Code, relating to digital assets.

LEGISLATIVE COUNSEL'S DIGEST

Existing law prohibits a state officer or employee from engaging in any employment, activity, or enterprise that is clearly inconsistent, incompatible, in conflict with, or inimical to their duties. Existing law also prohibits specified local agency officers or employees from engaging in any employment, activity, or enterprise for compensation that is inconsistent, incompatible, or in conflict with, or inimical to, their duties, as specified.
This bill would prohibit a public officer or public employee, as those terms are defined, from issuing a meme coin. The bill would prohibit a digital asset service provider, as defined, from listing for sale on behalf of, or for purchase by, a California resident a meme coin issued on or after January 1, 2027, that is offered by, or in partnership with, a federal public official or a state or local public officer.
This bill would authorize the Attorney General, a district attorney, city attorney, or county counsel to enforce these prohibitions by filing a civil action, as specified.

The people of the State of California do enact as follows:

SECTION 1.
The Legislature finds and declares all of the following:
(a) Public officials must not use the authority entrusted to them for private financial gain.
(b) When public officials issue or promote financial instruments, it undermines public confidence in government, creates opportunities for conflicts of interest and pay-to-play arrangements, and risks exploitation and corrupt foreign influence.
(c) Public office is a public trust that must be exercised solely for the benefit of the people of California.

SEC. 2.
Chapter 37 (commencing with Section 7599.210) is added to Division 7 of Title 1 of the Government Code, to read:
37.
Prohibited Digital Financial Transactions7599.210.
For purposes of this chapter, the following definitions apply:
(a) “Digital asset” means a digital representation of value recorded on a cryptographically secured, distributed ledger, including a blockchain or similar technology, including, but not limited to, a digital financial asset, a stablecoin, or a token, including a fungible or nonfungible token.
(b) “Digital asset service provider” has the same meaning as set forth in Section 5901 of Title 12 of the United States Code.
(c) “Digital financial asset” has the same meaning as defined in paragraph (1) of subdivision (g) of Section 3102 of the Financial Code.
(d) “Issue” means to make available for public purchase, donation, or exchange of any value, whether promoted or not.
(e) “Meme coin” means a type of digital asset inspired by internet memes, characters, current events, shared humor, celebrities, noteworthy people or events, or trends, for which the promoter seeks to attract an enthusiastic online community to purchase the meme coin and engage in its trading.
(f) “Nonfungible token” means a unique digital representation of an asset, an object, the rights of the holder, or any other item, whether tangible or not, that is built on an existing blockchain.
(g) “Public employee” means an employee of a state or a local government entity who has decisionmaking authority over bids and contracts for that entity.
(h) “Public officer” includes, but is not limited to, both of the following:
(1) A state or local elected or appointed officer, including a Member of the Legislature.
(2) An elected or appointed member of a governmental board, commission, committee, or other body, including a governmental body that has only advisory powers.
(i) “Stablecoin” has the same meaning as defined in paragraph (3) of subdivision (b) of Section 3601 of the Financial Code.
(j) “Token” means a digital representation of an asset, object, rights of the holder, or any other item, whether tangible or not, that is built on an existing blockchain.

7599.211.
(a) A public officer or public employee shall not issue a meme coin.
(b) A digital asset service provider shall not list for sale on behalf of, or for purchase by, a California resident a meme coin issued on or after January 1, 2027, that is offered by, or in partnership with, a federal public official or a state or local public officer.
(c) (1) This section may be enforced through a civil action brought by the Attorney General for injunctive relief. The Attorney General may also include a claim for disgorgement and the court shall have jurisdiction to grant that relief.
(2) A district attorney, city attorney, or county counsel may bring a civil action to enforce subdivision (a) and shall have the same rights as an Attorney General to seek an injunction and include a claim for disgorgement.