The governor of the U.S. state of Illinois, JB Pritzker, signed two bills on Monday aimed at creating “first-of-their-kind safeguards in the Midwest for cryptocurrency and other digital assets.” The leading Democrat also took the opportunity to criticize President Donald Trump for allowing “crypto bros” to guide policy.
The two bills in question were the Digital Assets and Consumer Protection Act (SB1797), which establishes regulatory oversight of digital assets by granting the Illinois Department of Financial and Professional Regulation (IDFPR) authority to oversee digital asset exchanges and businesses, and the Digital Asset Kiosk Act (SB2319), which creates specific protections against scams and fraud for consumers who utilize digital asset kiosks.
According to the governor’s press release, “both measures are needed to protect consumers in Illinois, as more people are falling victim to scams involving cryptocurrency.”
The new legislation is, in part, a response to a recent Federal Bureau of Investigation (FBI) Crime Report that revealed Illinois consumers lost $272 million to cryptocurrency fraud in 2024, the most common type of financial fraud in the past year.
While announcing the two bills, Pritzker, who has been touted by some as a potential presidential candidate, took the opportunity to have a dig at the current occupant of the White House.
“While the Trump Administration is letting crypto bros write federal policy, Illinois is implementing common-sense protections for investors and consumers,” said Prtizker, who has been a vocal critic of President Trump. “At a time when fraudsters continue to evolve and consumer protections are being eroded at the federal level, Illinois is sending a clear message that we won’t tolerate taking advantage of our people and their hard-earned assets.”
The bills
The Digital Assets and Consumer Protection Act was introduced by State Senator Mark Walker (Democrat) in February and was passed by the Illinois Senate in April. It aims to curb digital asset fraud and protect investors from scams.
“It aims to keep bad actors out of the market and ensure that Illinois remains a leader in high-tech innovation,” said Walker. “By protecting consumers, we will also help foster growth for these entrepreneurs by building public confidence in the legitimacy of cryptocurrencies.”
As well as granting the Illinois Department of Financial & Professional Regulation (IDFPR) authority to regulate and supervise digital asset firms, the legislation creates strong customer protections in line with those that currently apply to traditional financial services, including ensuring plans and procedures for addressing critical risks related to cybersecurity, fraud, and money laundering.
Companies engaging in digital asset business with Illinois residents must be registered with the state’s financial regulator, must offer full disclosure of user fees and charges, maintain adequate financial resources, implement cybersecurity and anti-fraud measures, provide investment disclosures and comply with customer service standards.
“A person shall not engage in digital asset business activity, or hold itself out as being able to engage in digital asset business activity, with or on behalf of a resident unless the person is registered in this State by the Department under this Article,” reads the bill.
IDFPR Secretary Mario Treto, Jr. described the legislation as “a monumental victory that prioritizes the safety and security of the people of Illinois, while also paving the way for a more transparent and accessible marketplace.”
He added that “these initiatives modernize consumer protection and implement safeguards for all Illinoisans who choose digital asset services.”
The second piece of legislation signed into law by Pritzker this week was the Digital Asset Kiosk Act, which places new requirements on digital asset kiosk operators.
Now, operators must register with the IDFPR, provide reports detailing all kiosk locations, and offer full refunds to new customers who are victims of kiosk scams. The law also caps kiosks’ transaction fees at 18% and imposes a daily transaction limit of $2,500 for new customers.
The measures are not dissimilar to those proposed in a federal bill introduced by Senator Dick Durbin (D-IL) in February, the Crypto ATM Fraud Prevention Act.
Critique of Trump
Governor Pritzker’s press release announcing the signing of the two Illinois bills summed up the intention as “rooted in protecting consumers from harmful practices and bankruptcies seen in the digital asset industry.”
However, it was keen to also note its support for market innovation, adding that the legislation “puts consumers first, while allowing responsible businesses to continue to operate in Illinois and offer innovative financial products with clear guardrails.”
This “commonsense” approach was contrasted with the actions of the Trump administration, with the governor’s office criticizing the president for having “actively deregulated the crypto industry at a time when consumers are increasingly at risk of fraud.”
By way of example, it pointed to Trump signing into law, in April, a bill to overturn a revised rule from the Internal Revenue Service (IRS) that expanded the definition of a broker to include decentralized cryptocurrency exchanges, otherwise known as the “DeFi Broker Rule.”
The DeFi Broker Rule, which required self-custodial digital asset wallet providers and other developers of noncustodial software to submit information reports to the IRS, was finalized at the end of 2024. It was much criticized by digital asset sector proponents, thus reversing it was high on Trump’s to-do list after taking office again in January.
According to Pritzker, removing this rule stripped the IRS of its ability to regulate decentralized digital asset brokers.
“Federal legislation on digital assets has largely been driven by industry lobbying efforts and prioritizes industry preferences for limited regulatory oversight over consumer protections and prohibitions against conflicts of interest in the industry,” said the governor’s press release.
It argued that the two bills signed into law by Pritzker on Monday represented a more responsible approach that puts consumers first.
This was echoed by Illinoisan State Senator Laura Ellman (another Democrat), who said on Monday that the legislation “addresses areas in the virtual currency market vulnerable to fraud and empowers Illinois consumers to make informed investments.”
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Source: https://coingeek.com/illinois-sets-new-rules-as-governor-blasts-trump-crypto-bros/
