California Governor Gavin Newsom has enacted a law prohibiting public officials in the state from creating memecoins, a move that is part of a broader anti-corruption initiative consisting of 11 bills. This legislation is seen as a direct response to the financial fallout from President Donald Trump's $TRUMP token, which resulted in significant losses for many investors.
On Sunday, Newsom officially signed AB 2409, which bans the issuance of memecoins—cryptocurrencies that often embody internet jokes or viral trends without a substantial use case—by state officials. This law was included in a package that also addresses consumer protection and cryptocurrency-related crimes, with additional measures aimed at compensating victims of crypto scams and providing legal avenues to confiscate digital assets linked to international criminal activities.
The announcement from Newsom's office was titled "THE OPPOSITE OF TRUMP," highlighting accusations of corruption and self-serving behavior associated with the Trump administration, particularly regarding the $TRUMP token. Newsom stated, "While the scam that is Donald Trump continues to hurt American families, California is fighting to make our economy work for people, not the powerful. No official should profit off their office — and we're putting stronger protections in place to ensure it doesn't happen in our state."
There has been no immediate response from Trump's office regarding the new law.
It remains uncertain whether the ban will affect existing memecoins like $TRUMP. Launched just three days before Trump's planned inauguration in early 2025, $TRUMP experienced a rapid surge in price from under $1 to $75, resulting in a market cap of $14 billion before it plummeted, causing substantial financial losses for many small investors.
According to data from Nansen, nearly 989,000 buyers of the token collectively lost around $3.81 billion. Meanwhile, Trump's financial disclosures indicate he earned $636 million in royalties from this memecoin, with Trump Organization affiliates reportedly controlling about 80% of its total supply. Currently, $TRUMP is trading at $2.03.
As Newsom approaches the end of his second and final term in January, he is widely regarded as a potential candidate for the 2028 presidential election.