California Gov. Gavin Newsom on Sept. 27, 2026, signed Assembly Bill 2409, which restricts public officials and certain state employees from issuing memecoins. The law also bars digital asset service providers from offering California residents certain memecoins issued from Jan. 1, 2027, imposing civil enforcement for violations.

AB 2409 applies when a memecoin is created by a federal, state or local official, or in partnership with one. California Assemblymember Avelino Valencia introduced the legislation.

The measure was part of an 11-bill package intended to regulate public servants’ conduct, protect consumers and combat crimes involving digital assets. Newsom’s administration framed the legislation as part of a broader effort to address corruption and conflicts of interest.

The governor’s office directly referenced U.S. President Donald Trump’s launch of his own memecoin and the losses suffered by its buyers. Newsom said public officials should not profit from the offices they hold.

The package also included Senate Bill 1208, which addresses money laundering involving digital assets. According to Newsom’s administration, the measures are also intended to simplify the recovery of funds for crypto fraud victims and establish a legal mechanism for seizing digital assets from transnational criminal networks.

Donald and Melania Trump’s memecoins

Donald Trump announced the TRUMP memecoin on the Solana network in January 2025, shortly before his inauguration. Melania Trump unveiled the MELANIA token the following day.

TRUMP’s market capitalization exceeded $10 billion in its first days, while MELANIA’s reached $1.8 billion. Both assets subsequently fell sharply from their all-time highs.

As of publication, TRUMP was trading at about $2.13, down 97.1% from its record of $73.43. MELANIA was priced at around $0.107, about 99.2% below its $13.05 peak.

Several estimates of losses among TRUMP buyers emerged in 2026. By the end of June, nearly 1 million investors in the memecoin had recorded combined losses of $3.81 billion, according to an estimate covering 988,905 addresses.

Public Citizen later estimated that investors in crypto projects linked to Donald Trump had suffered at least $4.7 billion in realized and unrealized losses. The organization attributed about $3.2 billion of that amount directly to TRUMP.

Public Citizen said the most profitable 1% of wallets captured about $2.7 billion, representing 80% of all profits from TRUMP trading. Meanwhile, the U.S. president’s financial disclosure reported roughly $635 million in licensing revenue from the memecoin for 2025.

Nansen’s and Public Citizen’s estimates differ because of their methodologies and analysis periods. Both, however, indicated multibillion-dollar losses for some TRUMP buyers after the token’s steep decline.

MELANIA also fell sharply following its initial surge. Its market capitalization reached $1.8 billion during its first 24 hours, when the number of holders approached 500,000. Its market value was about $107 million as of publication.

AB 2409’s restriction on offering political memecoins to California residents applies to assets issued from Jan. 1, 2027. That provision therefore does not apply to the previously launched TRUMP and MELANIA tokens.

Source: Incrypted