Illinois Stands Up for Crypto Consumers as Trump Era Falters

Illinois has become the first state in the Midwest to implement comprehensive consumer protections for cryptocurrency transactions, as Governor JB Pritzker signed two landmark pieces of legislation on August 18, 2025. The Digital Assets and Consumer Protection Act (SB1797) and the Digital Asset Kiosk Act (SB2319) aim to address the growing risks of fraud and financial loss in the digital asset space. These laws come amid rising concerns over federal deregulation and the increasing vulnerability of consumers to scams involving cryptocurrency. According to the FBI, Illinois residents lost $272 million to crypto-related fraud in 2024, making it one of the top five states for such losses [1].

Under the Digital Assets and Consumer Protection Act, the Illinois Department of Financial and Professional Regulation (IDFPR) will now have the authority to regulate digital asset exchanges and businesses. The legislation mandates that these firms maintain sufficient financial resources, implement robust cybersecurity measures, and adhere to anti-fraud and anti-money laundering procedures. These requirements mirror standards already in place for traditional financial services, such as investment disclosures and customer asset safeguards. This regulatory approach is intended to increase transparency and accountability in the digital asset industry while fostering trust among Illinois consumers [2].

The second law, the Digital Asset Kiosk Act, imposes specific protections for users of cryptocurrency kiosks. Kiosk operators must register with IDFPR, provide detailed location reports, and offer full refunds to new customers who fall victim to scams. Additionally, the legislation caps transaction fees at 18% and daily transaction limits at $2,500 for new users. These measures aim to mitigate the risk of fraud and overexposure, particularly for inexperienced users. The law also requires kiosks to include clear disclosures about transaction risks, further empowering consumers to make informed decisions [3].

Governor Pritzker criticized the Trump administration for its hands-off approach to crypto regulation, stating that federal policies have favored industry interests over consumer protection. Notably, the administration recently removed the IRS’s ability to regulate decentralized crypto brokers, a move that Illinois officials argue has left consumers more exposed to fraudulent activity. In contrast, Illinois’s legislative approach emphasizes oversight and accountability, with officials noting that the state will maintain a balance between innovation and security. The state has also signaled that it will support responsible businesses by providing clear regulatory guardrails, ensuring the continued growth of the digital asset market [4].

The new laws received bipartisan support from state legislators. Senator Mark Walker emphasized that the legislation supports innovation while preventing bad actors from exploiting the market. Representative Edgar Gonzalez, Jr. noted that the measures will foster public confidence in digital assets, which in turn could benefit start-ups and entrepreneurs in the high-tech sector. The Illinois government has given digital asset businesses until July 1, 2027, to comply with the new regulatory requirements. Meanwhile, certain protections, such as refund provisions for scam victims, will take effect immediately [5].

Source: [1] Gov. Pritzker Signs Historic Legislation to Protect Consumers ... (https://gov-pritzker-newsroom.prezly.com/gov-pritzker-signs-historic-legislation-to-protect-consumers-from-cryptocurrency-scams) [2] Illinoi... (https://gov-pritzker-newsroom.prezly.com/gov-pritzker-signs-historic-legislation-to-protect-consumers-from-cryptocurrency-scams) [3] Illinoi... (https://gov-pritzker-newsroom.prezly.com/gov-pritzker-signs-historic-legislation-to-protect-consumers-from-cryptocurrency-scams) [4] Illinois governor blasts Trump's 'crypto bros' in new bill ... (https://cointelegraph.com/news/illinois-governor-slams-trump-crypto-bros-signs-two-new-crypto-bills) [5] Illinois governor blasts Trump's 'crypto bros' in new bill ... (https://cointelegraph.com/news/illinois-governor-slams-trump-crypto-bros-signs-two-new-crypto-bills)