California Governor Signs Law Bringing State 'New Tools' to Regulate Crypto

The now-renamed California department responsible for the regulation of financial services will soon have more powers to supervise the cryptocurrency industry.

AccessTimeIconSep 29, 2020 at 9:19 a.m. UTC
Updated Sep 14, 2021 at 10:01 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

The California department responsible for the regulation of financial services will soon have more powers to supervise the cryptocurrency industry.

  • California Gov. Gavin Newsom signed a bill into law Friday to rename the California Department of Business Oversight as the Department of Financial Protection and Innovation.
  • The bill (AB 1864), introduced by lead author Assemblywoman Monique Limón (D-Santa Barbara) on Jan. 7, will go into effect on Jan. 1, 2021.
  • The changes will equip the regulator with "new tools to shape the regulation of virtual currency," the department's commissioner, Manuel P. Alvarez, told CoinDesk via email.
  • The new California Consumer Financial Protection Law will, among other things, provide the department with greater enforcement powers designed to protect Californians from "pandemic-inspired scams," per a Friday press release.
  • The move means the department will have new regulatory authority to begin cracking down on deceptive or abusive practices undertaken by unlicensed financial services or products.
  • But the new law will also see the creation of an Office of Financial Technology Innovation designed to engage with new industries and consumer advocates to encourage consumer-friendly innovation and job creation within the state.
  • In addition, a new Division of Consumer Financial Protection will be created to monitor markets, with a research arm that will keep up with emerging financial products such as cryptocurrencies.
  • With the expansion of the department, 90 additional employees will be added to the government payroll representing a 13% increase in staffing.
  • The legislation would allow his department to increase consumer protections without hamstringing "honest and fair operations," Alvarez said.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.