Illinois Stands Up for Consumers as Crypto Chaos Grows

Illinois Governor JB Pritzker signed two landmark pieces of legislation on August 18, 2025, to strengthen consumer protections in the digital asset space. The measures—named the Digital Assets and Consumer Protection Act (SB1797) and the Digital Asset Kiosk Act (SB2319)—establish Illinois as a leader in state-level crypto regulation. The new laws aim to address growing concerns over scams and fraud, with Illinois residents losing $272 million to cryptocurrency-related fraud in 2024, according to the FBI. These bills grant the Illinois Department of Financial and Professional Regulation (IDFPR) expanded authority to oversee digital asset exchanges and businesses, requiring them to maintain adequate financial resources, implement cybersecurity and anti-fraud measures, and adhere to customer service standards akin to traditional financial services. The legislation also mandates that companies provide investment disclosures to ensure transparency for consumers [1].

Under the Digital Assets and Consumer Protection Act, digital asset exchanges must meet standards comparable to those for traditional financial institutions. These include asset safeguards and plans to mitigate critical risks like money laundering and cybersecurity threats. The legislation includes exemptions for technology development to promote innovation while still ensuring consumer safety. The governor emphasized that these protections are necessary as federal oversight of digital assets has weakened, with the Trump Administration rolling back key regulatory measures such as the IRS’s authority to regulate decentralized brokers [1].

The Digital Asset Kiosk Act introduces targeted measures for cryptocurrency kiosks, including caps on transaction fees and daily transaction limits for new customers. Kiosk operators are now required to register with the IDFPR, provide reports on kiosk locations, and offer full refunds to consumers who become victims of scams. Transaction fees at kiosks are limited to 18%, and new users may not exceed $2,500 in daily transactions. These provisions are designed to prevent losses from fraudulent activities and to increase transparency for kiosk users [1].

Legislators and regulators highlighted the need for these laws to address the unique vulnerabilities of the digital asset market. Rep. Edgar Gonzalez, Jr. stressed the importance of consistent safeguards across financial services, stating that Illinois residents deserve reliable protections regardless of the platform they use. Similarly, Sen. Laura Ellman emphasized the legislation’s role in preventing new users from losing significant sums due to scams, noting that many current protections in the crypto space are insufficient. The legislation aims to foster public confidence in digital assets by enforcing accountability and providing clear guardrails for operators [1].

The new laws reflect Illinois’ broader stance on crypto regulation, contrasting with the Trump Administration’s approach, which has been criticized for favoring deregulation. Governor Pritzker noted that federal policy is being shaped increasingly by industry interests rather than consumer protections. The state is also taking a cautious approach to other crypto-related proposals, such as the failed House Bill 1844, which would have created a strategic Bitcoin reserve. The rejection of this initiative underscores Illinois’ focus on consumer safety over speculative financial strategies [2].

Digital asset businesses in Illinois now have until July 1, 2027, to comply with the new regulatory requirements. Immediate implementation of key consumer protections, such as refunds for scam victims, has already taken effect. The legislation’s passage is seen as a significant step toward building a more secure and transparent digital asset market in the state while supporting responsible innovation and entrepreneurship [1].

Source:

[1] Gov. Pritzker Signs Historic Legislation to Protect Consumers From Cryptocurrency Scams (https://gov-pritzker-newsroom.prezly.com/gov-pritzker-signs-historic-legislation-to-protect-consumers-from-cryptocurrency-scams)

[2] Illinois Governor Slams Trump's 'Crypto Bros' in New Bill (https://cointelegraph.com/news/illinois-governor-slams-trump-crypto-bros-signs-two-new-crypto-bills)