California Governor Orders Agencies To Create Transparent Regulatory Framework For Blockchain And Digital Assets

On May 4, 2022, California's governor issued Executive Order N-9-22 ("California EO"), requiring California's Department of Financial Protection and Innovation ("DFPI") "to develop a comprehensive regulatory approach to crypto assets harmonized with the direction of federal regulations and guidance." The order frames California's goal for this regulatory framework as "creat[ing] a transparent and consistent business environment for companies operating in blockchain . that harmonizes federal and California laws, balances the benefits and risks of consumers, and incorporates California's values, such as equity, inclusivity, and environmental protection." The order also acknowledges California's goal of "remaining the premiere global location for responsible crypto asset companies to start and grow" as a priority. At the same time, the order's emphasis on consumer protection demonstrates California's concern that digital assets pose unique risks to consumers and require