The California Department of Financial Protection and Innovation (DFPI) has submitted a formal comment letter to the U.S. Securities and Exchange Commission opposing its proposed "Crypto Asset Regulation Rules," warning the plan could weaken investor protections and limit state-level review of issuance projects. The SEC proposal includes two key exemptions: a startup exemption allowing qualifying issuers to raise up to $5 million over four years, and a separate crypto funding exemption permitting issuers to raise up to $75 million within 12 months. The DFPI argues these provisions may undermine state authority to scrutinize offerings that affect California residents.