CA AB2285

Establishes the Digital Financial Asset Banking Act to regulate banks and credit unions under the Department of Financial Protection and Innovation when they provide digital asset custody services, staking services, and digital asset transaction services

Requires financial institutions to maintain at least a one-to-one full reserve of digital assets owed to passive staking customers and to keep customer assets segregated from institutional assets

Mandates annual audits of custodial activities, either by independent auditors or by the board of directors signing under penalty of perjury, and requires detailed written disclosure agreements with customers before providing services

Caps staking service fees at $5 for rewards under $100 or 5% for rewards over $100, and requires staking rewards to be credited to customers within two business days

Authorizes the department to enforce violations through corrective orders, cease and desist orders, civil penalties up to $5,000 for first violations and $10,000 for subsequent offenses, and suspension or revocation of digital asset service authority