California Assemblyman Proposes Licensing for Cryptocurrency Companies to Combat Fraud and Protect Consumers


The California Consumer Federation (CFC), a non-profit advocacy group, supported a bill by a member of the California Assembly to license cryptocurrency companies..

The updated bill was introduced by Timothy Grayson at the end of January. The project establishes a new licensing regime for virtual asset service providers (VASPs) operating in the state. Companies dealing with digital assets will be required to obtain a license from the California Department of Financial Protection and Innovation (DFPI).

“Licensing is a completely natural step. Until we introduce this option, Californians will continue to be vulnerable to financial and cryptocurrency scammers, ”explains the parliamentarian.

The first reading of the bill will take place in April, and if it can get enough votes, it will come into force on January 1, 2025.. The bill is already the second attempt to introduce a licensing regime for cryptocurrency companies. Last year, California Gov. Gavin Newsom vetoed a similar bill.. However, the current version of the document contains significant clarifications regarding the powers of the DFPI. The leadership of the human rights group hopes that the bill will not suffer the same fate as its predecessor.

“Last year’s bankruptcies and scams only reinforced our interest in protecting the rights of users in a cryptocurrency market that still looks like the Wild West due to the unethical behavior of some key players,” said CFC CEO Robert Herrel (Robert Herrel).

California Leads U.S. States in Crypto Adoption According to Crypto Head. However, last year, local authorities launched an investigation into 11 cryptocurrency organizations operating on the principle of a financial pyramid.