California Opposes SEC Crypto Rule, Says It Strips States of Oversight

California's Department of Financial Protection and Innovation (DFPI) has told the SEC it opposes the agency's Regulation Crypto Assets proposal, arguing the fundraising exemptions would strip states of oversight and invite more scams. The comment letter is dated Oct. 21, 2026, and was reported on Oct. 25.

Details

According to the DFPI announcement, the SEC proposal includes exemptions of up to $5 million over four years for startups and up to $75 million per 12-month period for crypto fundraising. California argues these could supersede state registration requirements and limit how states apply their own securities laws (Bloomberg Law, TokenPost).

DFPI Commissioner KC Mohseni said: "California champions innovation and the entrepreneurs who drive it. What we will not accept is a coordinated attempt by federal regulators to override state authority and protections while stepping back from the oversight they are supposed to provide" (quoted by Bitcoin.com). The department also pointed to its own data: its crypto scam tracker added nearly 200 entries, a 30% increase.

We covered the wave of comments on this proposal earlier. The filings are listed on the SEC's page.

What it means for the market

The split between federal and state oversight matters for projects planning to raise money in the US: if the exemptions are adopted as drafted, issuers would not have to clear registration in each state. California's position gives more weight to those pushing to narrow the exemptions or keep a role for the states.

The SEC has not issued a final rule, and no timeline has been given. For the current market picture, see the daily brief.