Illinois Takes Aim at "Crypto Bros" with Consumer-Centric Crypto Rules

Illinois Governor JB Pritzker signed two new pieces of legislation to regulate the cryptocurrency industry, marking a direct critique of the Trump administration’s approach. The Digital Assets and Consumer Protection Act (SB1797) grants the Illinois Department of Financial and Professional Regulation (IDFPR) the authority to supervise digital asset exchanges and businesses. This law mandates that crypto firms maintain sufficient financial resources, implement cybersecurity and anti-fraud measures, provide investment disclosures, and adhere to customer service standards akin to traditional financial services. The governor emphasized that the Trump administration has allowed "crypto bros" to dominate federal policy discussions, while Illinois is enacting "common-sense protections" for investors and consumers.

The second law, the Digital Asset Kiosk Act (SB2319), targets crypto ATMs and kiosks. It requires operators to register with IDFPR, provide full refunds to scam victims, cap transaction fees at 18%, and limit daily transactions for new users to $2,500. These measures aim to curb fraud and money laundering, which have become widespread concerns. According to the FBI, Illinois residents lost $272 million to crypto-related fraud in 2024, making it one of the most affected states in the country. The law also mandates that kiosk operators report locations and provide clear disclosures to users.

Governor Pritzker’s administration has criticized the Trump administration for rolling back federal regulations on the industry. A key example cited is the April signing of a bill that overturned an IRS rule expanding the definition of a broker to include decentralized exchanges. This move, the governor’s office argues, has left consumers more vulnerable to exploitation. In contrast, Illinois has taken a more proactive approach by setting clear boundaries for crypto businesses while promoting innovation in a controlled environment.

The legislation has received bipartisan support, with lawmakers like Sen. Mark Walker and Rep. Edgar Gonzalez Jr. highlighting its importance in protecting consumers and fostering trust in the market. Sen. Laura Ellman underscored that the digital asset market lacks basic consumer protections, making regulatory frameworks essential to holding operators accountable and securing users' funds. Meanwhile, Rep. Curtis J. Tarver noted that the new laws will provide peace of mind to consumers who are increasingly engaging with digital currencies.

While Illinois has taken a cautious stance, other states such as Texas and Arizona have adopted more industry-friendly approaches, reflecting the growing divide in crypto policy across the U.S. This shift is partly influenced by the broader national debate over the role of government in regulating emerging financial technologies. Illinois’s new laws position the state as a leader in consumer-centric digital asset regulation, a move that could influence similar efforts in other states and potentially pressure federal lawmakers to adopt a more balanced approach.

Source: [1] Illinois quick hits: Pritzker signs crypto regulations (https://www.thecentersquare.com/illinois/article_efb65ab5-d433-4cd1-93de-7cdcabdf5b3b.html) [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) [3] 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) [4] Pritzker, taking aim at Trump, crypto 'bros,' signs laws to ... (https://chicago.suntimes.com/2025/08/18/crypto-jb-pritzker-donald-trump-digital-currency-cryptocurrency-scam-illinois)