Statements of financial interest: digital financial assets.

Assembly Member Valencia's legislation to modernize California's financial disclosure requirements would expand the definition of reportable investments to include digital financial assets starting January 1, 2027. The bill modifies the Political Reform Act of 1974 to require public officials and designated employees to disclose their holdings in cryptocurrencies and other digital assets valued at $2,000 or more.

Under the proposed changes, officials must report the commonly known names of their digital financial assets and their approximate value using the same monetary ranges that apply to traditional investments - from $2,000-$10,000 up to over $1 million. The disclosure requirements extend to both direct and indirect interests in digital assets that could be materially affected by the official's governmental decisions.

The bill maintains existing exemptions for certain financial holdings, including bank accounts, insurance policies, mutual funds, and government-issued bonds. It also preserves the option for officials serving multiple agencies to file a single consolidated statement. Local agencies must update their conflict of interest codes to incorporate the new digital asset provisions, though the bill specifies that no state reimbursement is required for associated costs.

The changes aim to adapt California's ethics laws to evolving financial markets while preserving the core transparency framework established by the Political Reform Act. Violations of the expanded disclosure requirements would remain subject to existing criminal penalties as misdemeanors under the Act.