California regulators oppose SEC crypto plan, warn of weaker investor protections

Huo Xing Finance reports that the California Department of Financial Protection and Innovation (DFPI) has filed a comment letter opposing the SEC's "Regulation Crypto Assets" proposal, saying the plan would erode investor protections and curb state-level oversight of token offerings. DFPI Commissioner KC Mohseni said California rejects any effort by federal regulators to weaken state regulatory authority and consumer safeguards. Under the proposal, eligible issuers could raise up to $5 million over four years through a startup exemption. A separate crypto financing exemption would allow issuers to raise up to $75 million within 12 months. Issuers would be required to disclose project details, risks and other information investors need to assess an offering, and certain financings would also require financial statements and ongoing reporting. Federal securities laws would leave states' authority intact to investigate securities fraud, deceptive practices and illegal broker-dealer activity. Blockchain payments company Ripple, crypto exchange Coinbase and exchange operator Nasdaq all support the revised proposal. The DFPI said nearly 200 new crypto-related scams have been added to its fraud tracking list, a 30% rise from a year earlier.