California Gov. Gavin Newsom has signed AB 2409, prohibiting the state’s public officials from launching memecoins as part of a wider set of laws targeting corruption and protecting consumers.

The legislation applies to cryptocurrencies based on a public figure, internet joke or viral phenomenon when the token does not serve a specific use case.

AB 2409 was signed Sunday alongside 10 other bills. The measures include provisions to compensate victims of crypto scams and establish a legal procedure for confiscating digital assets tied to transnational criminal organizations.

Newsom Frames Measure as Contrast to Trump

Newsom’s office unveiled the law under the headline “THE OPPOSITE OF TRUMP,” linking the legislation to concerns surrounding Trump’s $TRUMP memecoin and allegations of corruption and self-dealing involving the Trump administration.

“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,” Newsom said in the release.

Trump’s office had not responded immediately to CoinDesk’s request for comment.

It remains uncertain whether AB 2409 applies retroactively to tokens that were already launched, including $TRUMP.

$TRUMP Rally Was Followed by Sharp Decline

Trump launched $TRUMP three days before his early 2025 inauguration. The token quickly climbed from below $1 to about $75 within a day or two, pushing its market capitalization to roughly $14 billion.

The rally was followed by a rapid collapse, resulting in significant losses for many retail buyers.

Nansen data shows that 988,905 buyers collectively lost about $3.81 billion. Trump’s financial disclosure lists $636 million in royalties from the token, while Trump Organization affiliates control roughly 80% of its supply.

$TRUMP was trading at approximately $2.03 at the time of writing.

Newsom’s second and final term as governor ends in January. He is widely viewed as a possible contender in the 2028 presidential election.