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California Hits Unlicensed Crypto Firms With $100,000 Daily Penalties
California's Digital Financial Assets Law took effect July 1, exposing unlicensed crypto firms to $100,000 daily civil penalties. The rules cover exchanges, custodians, stablecoin issuers and Bitcoin ATM operators serving state residents.
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California started enforcing its Digital Financial Assets Law on July 1, exposing unlicensed digital asset businesses to civil penalties of up to $100,000 per day. The law, administered by the California Department of Financial Protection and Innovation, requires any company doing digital financial asset business with California residents to hold a state license or have submitted a complete application before the deadline.
The legislation is California's answer to New York's BitLicense, and because California is the largest state economy in the US and one of its biggest crypto markets, the rules will affect exchanges, custodians, stablecoin issuers and other service providers nationwide.
The $100,000 figure is the maximum civil penalty regulators can impose for each day a firm remains in violation. Actual fines depend on the facts of each enforcement action and are subject to regulatory discretion.
The DFAL covers businesses that exchange, transfer, store or administer digital financial assets for California residents. That includes centralized crypto exchanges, custodians, payment providers, stablecoin issuers, crypto lending platforms and Bitcoin ATM operators, no matter where the company is headquartered.
Holding a license from another state does not get a company off the hook. A New York BitLicense or a California money transmitter license does not satisfy the DFAL's standalone requirements.