Illinois Passes Dual Crypto Laws to Boost Oversight and Consumer Protection

Illinois Governor JB Pritzker signed two new laws on Monday aimed at strengthening oversight and consumer protection in the cryptocurrency sector, reflecting a broader trend of regulatory tightening in U.S. states [1]. The Digital Assets and Consumer Protection Act (SB 1797) grants the Illinois Department of Financial and Professional Regulation direct authority over cryptocurrency companies and exchanges, while the Digital Asset Kiosk Act (SB 2319) imposes new requirements on cryptocurrency kiosk and ATM operators [1].

Under SB 1797, cryptocurrency firms must maintain sufficient financial resources and implement robust cybersecurity and anti-fraud measures. They are also required to ensure transparency in investor disclosures and customer service standards, aligning with those of traditional financial institutions [1]. This law shifts regulatory responsibility to the state department, aiming to enhance corporate transparency and accountability.

The second law, SB 2319, mandates that kiosk operators register with state regulators, provide live customer service, and establish fraud prevention policies. Each operator must appoint a compliance officer and a consumer protection officer [1]. Additionally, new customers are limited to $2,500 in daily transactions, and fees are capped at 18%, measures intended to manage risk and ensure fair access for users.

Governor Pritzker criticized the federal government's approach, stating that the state is stepping in to provide “sensible protections” for investors and consumers. He noted that fraudsters have increasingly exploited gaps in federal oversight, resulting in significant losses. According to FBI data, Illinois reported over $272 million in cryptocurrency-related fraud losses in 2024, ranking it fifth among U.S. states [1].

The new laws aim to create a clearer regulatory environment for cryptocurrency businesses while safeguarding consumers from potential abuses. While some industry observers have expressed concerns that the requirements could raise compliance costs for smaller firms, the state’s approach emphasizes a balance between innovation and responsibility [1]. Illinois’ actions align with broader efforts across the U.S. to regulate digital assets in response to growing concerns over financial stability and fraud.

The cryptocurrency market has shown little immediate reaction to the developments, with analysts suggesting that the impact of the laws will likely unfold over time as compliance mechanisms are implemented. Illinois' dual regulatory strategy highlights its intent to lead in shaping a responsible and sustainable digital asset ecosystem [1].

Source: [1] Tightening Control: Illinois Implements Dual Cryptocurrency Laws, https://coinmarketcap.com/community/articles/68a44090fdcb3c46187f8db7/