California Soliciting Comments on Potential Regulation of Crypto Products and Services

By Jeremy McLaughlin and Christian A. Zazzali

On May 4, 2022, California Governor Gavin Newsom issued an executive order on digital assets, which seeks sensible, transparent regulation through engagement with developers of digital asset-related products and services. For a detailed discussion on the executive order, see our prior blog here. In response, California’s financial regulator, the Department of Financial Protection and Innovation (DFPI), issued an invitation to submit comments on crypto-asset related products and services under the California Consumer Financial Protection Law (CCFPL).  The deadline for submission is August 5, 2022.

This is a critical opportunity for the industry to inform a major state regulator on appropriate levels of regulation to help ensure industry growth. The request seeks comments on particular areas. Specifically, DFPI is seeking input regarding:

  1. Regulatory priorities – consumer protection, education, regulatory harmonization with federal regulation, and driving innovation into the state.
  2. CCFPL Regulation and Supervision – identify the scope of CCFPL oversight, both to bring crypto asset-related products and services within already existing regulations, and seeking comment on whether a new regulatory regime is necessary.
  3. Market-Monitoring – assessing which companies, products, services and information should be collected and published by the DFPI.

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