California regulators oppose the SEC's crypto proposal, warning of weaker investor protections.

Huo Xing Finance reports that the California Department of Financial Protection and Innovation (DFPI) has submitted a comment letter to the U.S. Securities and Exchange Commission (SEC) opposing its “Regulation Crypto Assets” proposal, arguing that the plan could undermine investor protections and restrict state-level oversight of token offerings. DFPI Commissioner KC Mohseni stated that California opposes federal regulators weakening state regulatory authority and protective measures. The proposal would allow eligible issuers to raise up to $5 million over four years under a startup exemption, and another crypto financing exemption would permit issuers to raise up to $75 million within 12 months. Issuers would be required to disclose project details, risks, and other information necessary for investor evaluation, with certain financings also requiring financial statements and ongoing reporting. Federal securities laws would retain states’ authority to investigate securities fraud, deceptive practices, and illegal broker-dealer activities. Blockchain payment company Ripple, cryptocurrency exchange Coinbase, and exchange operator Nasdaq all support the revised proposal; DFPI noted that its fraud tracking list has added nearly 200 new cryptocurrency-related scams, a 30% increase from the previous year.