On August 30, the Superior Court for the State of California dismissed a lawsuit challenging the California Digital Financial Asset Law’s (DFAL) $1,000 daily transaction limit. The plaintiff, an alliance for cryptocurrency terminals, argued that the daily transaction limit was unreasonable and exceeded legislative authority, but the court found it to be a reasonable measure to prevent fraud.

The DFAL, signed into law by the Governor on October 13, 2023, requires companies to be licensed by the California DFPI to engage in digital financial asset business activity in California and is effective starting July 1, 2025. Besides the daily transaction limit, the DFAL imposes several other requirements on kiosk operators. From January 1, kiosk operators had to provide the DFPI with a list of all kiosk locations and adhere to a $1,000 daily transaction limit per customer. By January 1, 2025, kiosk operators must also provide pre-transaction disclosures to customers and limit fees based on the transaction’s dollar equivalent.

The court’s decision reinforced the DFPI’s authority to implement and enforce the DFAL, ensuring that the regulatory framework is in place to protect consumers from fraudulent transactions and illicit activities.