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California Governor Approves ‘Digital Financial Assets Law’ For Crypto Regulations

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In a significant development for the crypto world, California Governor Gavin Newsom has given the green light to a cryptocurrency bill that ushers in more stringent regulations for businesses involved in crypto operations. This legislative move, titled the ‘Digital Financial Assets Law,’ has a clear message: crypto in the Golden State is about to transform.

In a recent crypto announcement released on October 13, Newsom proclaimed that the legislation, known as the ‘Digital Financial Assets Law,’ will compel both individuals and businesses to secure a Department of Financial Protection and Innovation (DFPI) license for involvement in digital asset business activities. This game-changing legislation is slated to take effect on July 1, 2025, giving entities 18 months to prepare for compliance.

This new crypto bill introduces even more rigor by drawing parallels to California’s money transmission laws, prohibiting banking and transfer services from operating without a DFPI Commissioner-granted license. The DFPI will be able to impose rigorous audit requirements on crypto firms and obligate them to maintain meticulous records. The statement explicitly stipulates:

“[This bill] would require a licensee to maintain […] for 5 years after the date of the activity, certain records, including a general ledger maintained at least monthly that lists all assets, liabilities, capital, income, and expenses of the licensee.”

California’s Crypto Regulatory Shift

It’s worth noting that roughly a year ago, Governor Newsom rejected a similar bill to establish a licensing and regulatory framework for digital assets in California. His primary objection then was its inflexibility in adapting to the rapidly evolving crypto landscape. Newsom preferred to wait for federal regulations to take shape before collaborating with the legislature on crypto licensing initiatives.

In a broader national context, the United States is also contemplating extending the reach of the Electronic Fund Transfer Act (ETFA) to cryptocurrencies. This move is designed to combat fraudulent transfers and bolster consumer protection. Rohit Chopra, Director of the Consumer Financial Protection Bureau (CFPB), has voiced his support for this initiative, highlighting its potential to “reduce the harm caused by errors, hacks, and unauthorized transfers.”

As California pioneers more stringent crypto regulations, the industry’s landscape is set for a significant transformation. With these changes, crypto businesses must adapt to a new era of compliance and oversight. In contrast, the broader crypto community keeps a watchful eye on developments at both state and federal levels.

California Release Warning of 17 Fraudulent Crypto Websites

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Over the course of two days, the California Department of Financial Protection and Innovation (DFPI) has issued 17 different warnings to cryptocurrency brokers and websites it believes to be fraudulent.

Among the companies on California’s list are, to name a few, Tahoe Digital Exchange, TeleTrade Options, Tony Alin Trading Firm, Hekamenltd/Tosal Markets Limited, Trade 1960, Yong Ying Global Investment Company Limited, Unison FX, VoyanX.com, ZC Exchange.

Additionally, eth-Wintermute.net and UniSwap LLC are two imitation websites impersonating two well-known names in the cryptocurrency industry.

California is looking out for its crypto community

The DFPI’s consumer alert page currently lists 17 alerts from the days of December 27 and 28 warning that these businesses “appear to be engaged in fraud against California consumers.”

The DFPI rarely posts so many alerts at once, indicating that the number of reports of cryptocurrency scams may have increased in the final months of the year. Occasionally, the DFPI will post alerts about company investigations or alerts about specific incidents.

The DFPI last issued such a significant number of crypto scam alerts on June 15, when it raised the red flag over 26 suspect crypto platforms.

The warnings were issued in response to citizen complaints about the brokers and websites; according to the DFPI, the complainants claimed to have lost anywhere from $2,000 to as much as $1.2 million in some instances. However, the DFPI only claims that these websites “appears to be engaged in fraud.”

The majority of these alerts claim that pig-slaughtering scams, in which a person or group creates a false online identity to forge relationships or friendships on social media, messaging services, and dating apps, are a common occurrence.

In a romance or pig slaughter scam, the con artist would typically spend weeks or months cultivating the fictitious family to win the victim’s trust before gradually changing the subject to investments and luring them in with investment “opportunities” that are frequently too good to be true.

The ultimate goal is to convince the victim to invest in cryptocurrency either by sending money to a dubious wallet address or through a copycat website, like UniSwap LLC and eth-Wintermute.net in this case.

Here’s the most Ethereum enthusiastic US state

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Someone said that the cat dies of curiosity. Well, this US state is far from being the cat, let alone dying, but with it’s interest in Ethereum, the world’s second largest crypto currency does seem to be reaching for the stars.

People all across the world have become increasingly curious as crypto has progressively become popular. Californians are the top state residents in the United States. According to a recent CoinGecko analysis, 43% of all Bitcoin and Ethereum web traffic queries on the cryptocurrency tracking website were made by internet users in California. But just about 12% of Americans live in the entire state, as measured by population.

Due to the presence of Silicon Valley, Northern California is recognised as a hub for technology and innovation on a global scale. The fact that California came in first place as a result did not come as a surprise to Bobby Ong, chief operating officer and co-founder of CoinGecko.

Other states with significant interest in Bitcoin and Ethereum include Illinois, New York, Florida, and Washington, as shown below. Pennsylvania, Texas, Virginia, Georgia, and Arizona follow the set.

Source: CoinGecko

Ethereum, other crypto and the world

Since the April slump, Nigeria in Africa has shown greater interest in cryptocurrencies than any other nation in the rest of the world. Nigeria received a score of 371 in the study that examined Google Trends data for six queries, including “purchase cryptocurrency” and “invest in cryptocurrency,” which were added together to give each English-speaking country a total search rating.

The United Arab Emirates, Singapore, Australia, the United Kingdom, and Canada were listed after Nigeria.

Source: CoinGecko

It is noteworthy that the Nigerian stock exchange said in June that it intended to launch a blockchain-enabled platform the following year in order to expand trade and draw in new investors.

According to our most recent publications, Nigeria has been advancing quickly in terms of BTC usage. One of the crypto markets with the quickest growth, its peer-to-peer Bitcoin trading volume exceeded $1 billion between January 2022 and June 2022.

California’s new bill proposes to make Bitcoin a legal tender

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Political advisors in California are working on a new bill that aims to make Bitcoin a legal tender in the state. Former Majority Leader of the California State Assembly who is now a Political advisor Ian C. Calderon tweeted that he is working in collaboration with Bitcoin expert Dennis Porter to draft the new proposal.

The news comes close on the heels of previously reported Arizona and the Island of Tonga expressing similar intentions to legalize the king coin. Looks like the California bill is set to disrupt the legal tender race once again.

The U.S state recently hit the headlines when at a Congressional hearing politician Brad Sherman compared crypto to sub-prime mortgages and asked a Treasury Department official if “those of color will be left holding the bag if we see a collapse in cryptocurrency or stablecoins?”

His comments invited a barrage of tweets including Ryan Selkis of Messari who accused Sherman of making it a racial issue while refusing to debate his pro-crypto primary challenger Aarika Rhodes, who happens to be Black.

Aarika Rhodes, the U.S. congressional candidate for California’s 32nd District is looking to unseat Congressman Brad Sherman [D-Calif.], who termed bitcoin as “a way for economic justice.” “Do I love the Lightning Network? Absolutely, I think it is the future,” Rhodes said.

What’s next for California ?

Last year, according to industry research from the review site Crypto Head, California was ranked the top position emerging as the most crypto-ready jurisdiction in the United States thanks to the mushrooming of cryptocurrency ATMs and the growing interest in digital assets among the state’s citizens.

Scoring 5.72 out of 10, California surpassed New Jersey [5.44], Texas [5.28], Florida [5.03], and New York [4.29] in the crypto-ready index. To top that, the state’s point total was 2.54 points higher than the national average.

California is considered a tech powerhouse, with a bustling economy, a center of innovation and education. Apart from that, the western U.S state enjoys a worldwide reputation of being the pinnacle for life quality and prosperity by leaders and nations around the world.

With respect to BTC adoption in the state, crypto advocates believe that it would most likely catapult straight into hyperbitcoinization.

FTX.US partners with the University of California to Boost Student Athletics and Local Bodies

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The advent of the cryptocurrency market allowed a slew of new developments and capital to enter the financial ecosystem. FTX.US, one of the most talked-about crypto exchanges of recent times took collaborations to another level with its new University of California, Berkeley partnership. According to reports, the latest deal would involve FTX.US paying the college $17.5 million over a period of 10 years.

FTX is also expected to support Cal’s Cameron Institute for Student-Athlete Development for creating an endemic system of athletes. In addition to this, the cryptocurrency exchange will contribute $200,000 to help underrepresented students as well as the local population. The Cal Golden Bears, the team representing the college, will play all their home matches in the newly rebranded FTX stadium.

FTX’s latest move comes after its tie-up with the Miami Heats. The exchange also expanded into Major League Baseball [MLB] where the umpires will wear FTX logos on their uniform. Sina Nader, the Chief Operating Officer of FTX stated post the announcement:

“We’re excited to partner with one of the world’s great universities and expand crypto’s presence into the collegiate athletics landscape. This historic partnership will also allow us to collaborate on charitable initiatives that align with our organization’s core values. Personally, I am excited to work alongside my alma mater to collaborate with local communities around a variety of causes.”

FTX hopes that the cryptocurrency investment into the university would boost positive sentiment for the digital asset world. The exchange was ecstatic about the event with the company raising more than $900 million last month. This elevated the company’s valuation to a whopping $18 billion.