Newsom signs companion bill giving California broad crypto seizure powers

Governor Gavin Newsom signed a California bill on Sunday, Sept. 27 that extends the state’s money laundering statutes to digital assets and authorizes law enforcement to freeze, seize and forfeit crime-linked cryptocurrency.

The measure, Senate Bill 1208, was signed alongside Assembly Bill 2409, the better-known ban that bars state and local public officials from issuing memecoins. Both landed as part of an 11-bill package on corruption and consumer protection that the governor’s office titled “THE OPPOSITE OF TRUMP.”

For the crypto industry, SB 1208 may be the more consequential of the two. It covers illicit transactions made using digital assets and broadly authorizes law enforcement to freeze, seize and forfeit digital assets linked to crimes, a power that until now sat largely outside California’s money laundering framework.

Other bills in the package address crypto-specific harm as well. One reportedly sets rules for paying back victims of crypto scams, and another reportedly creates a process for seizing cryptocurrency from transnational criminal networks.

AB 2409 itself reaches beyond state officials: it prohibits digital asset service providers from offering memecoins issued by or in partnership with federal, state or local public officials to California residents. It applies to tokens issued on or after Jan. 1, 2027, and the state attorney general, a district attorney, a city attorney or county counsel can enforce it through civil action. Whether the ban covers tokens that already exist, such as $TRUMP, is unclear.

Newsom’s office framed the package as a rebuke of the president’s crypto ventures, accusing the Trump administration of self-dealing, including through the $TRUMP memecoin. In the announcement, Newsom said no official should profit off their office, and that California is putting stronger protections in place to ensure it does not happen in the state.