Assembly subcommittee advances AB 2285 to regulate crypto 'staking' amid consumer-protection concerns

At a California State Assembly subcommittee hearing, members voted 7–1 to advance AB 2285, a bill the author said would provide state guidance for "staking as a service" on blockchain networks and preserve consumer disclosure requirements while removing a proposed fee cap on staking commissions.

The bill’s author, Assemblymember Valencia, told the panel the measure ‘‘provides the state with clear guidelines about how to create staking as a service’’ and said, "Californians should not be left out of this opportunity." Valencia said the text is not final and she is open to further amendments to address concerns raised at the hearing.

Opponents — including the California Bankers Association and the Consumer Federation of California — argued the bill would lower consumer protections and could undermine enforcement by the Department of Financial Protection and Innovation (DFPI). "This essentially overrules them," said Robert Harel, executive director of the Consumer Federation of California, adding that the measure could place Californians at risk by limiting the DFPI’s role in evaluating whether staking products should be treated like securities. Harel also said large platforms that the opponents view as likely beneficiaries of the bill have declined to register certain offerings with the state.

Chris Schultz of the California Bankers Association said the bill’s language is unclear about whether it covers staking of native cryptocurrencies or stablecoin rewards and warned that state-chartered banks could be left with a narrower set of permissible crypto activities than federally chartered competitors. "This creates an unlevel playing field for state charter banks," he said, recommending either waiting for the pending Federal Clarity Act or amending AB 2285 to provide parity with federal charters.

Industry witnesses who testified in support argued AB 2285 would bring clarity and consumer access. Kelly LaRue of Resilient Advocacy, speaking on behalf of the Crypto Council for Innovation, and Jamie Minor of the California Blockchain Adipacy Coalition registered support. Deanna Latorrekeen of the Satoshi Action Fund also registered support, asking the committee to continue the conversation.

During questioning, committee members pressed the author on fraud risks, whether staking resembles a security, and how the state bill would interact with federal legislation and pending litigation. The author said the staking component is distinct from traditional investment securities, argued that blockchain’s immutable ledger can aid fraud detection, and reiterated willingness to incorporate amendments to address concerns.

The committee then moved a "do pass as amended" recommendation. The roll call recorded votes as follows: Valencia — yes; Chin — not voting; Dixon — aye; Fong — aye; Krell — aye; Michelle Rodriguez — aye; Blanca Rubio — aye; Schiavo — no; Soria — aye. The motion carried 7–1 and AB 2285 was reported out of the subcommittee.

What comes next: The subcommittee’s recommendation advances the bill in the Assembly process, but authors and members said they expect additional amendments and negotiations — including attention to whether federal action (the so-called "Clarity Act") or ongoing litigation between DFPI and a major crypto platform will affect the bill’s final form.