California Bans Officials From Issuing Memecoins After TRUMP Saga
California Governor Gavin Newsom has signed Assembly Bill 2409 (AB 2409) into law, prohibiting public officials and certain state employees from issuing memecoins. The law also bars digital asset service providers from offering California residents memecoins issued with the involvement of federal, state, or local officials.
The move was prompted by the TRUMP memecoin saga, where President Donald Trump's launch of his own memecoin in January 2025 resulted in significant losses for its buyers. The market capitalization of TRUMP exceeded $10 billion in the first days after its launch, but it fell sharply from its all-time high.
According to estimates, nearly 1 million TRUMP investors suffered combined losses of $3.81 billion by June 2026. Public Citizen's research put the total loss at least $4.7 billion, with the top 1% most profitable wallets capturing about $2.7 billion or 80% of all profits from TRUMP trading.
Newsom's administration framed the measure as part of a broader effort to fight corruption and conflicts of interest, saying public officials should not profit from their office. The law provides for civil enforcement for violations of these requirements, with digital asset service providers barred from offering California residents memecoins issued from January 1, 2027.