Illinois Governor Pritzker Signs Landmark Cryptocurrency Consumer Protection Bills

CHICAGO, August 18, 2025 — In a significant development for the rapidly evolving cryptocurrency sector, Illinois Governor JB Pritzker has signed two pioneering bills aimed at enhancing consumer protections and regulatory oversight for digital asset businesses. The legislation, described by Pritzker as “first-of-their-kind safeguards in the Midwest,” introduces comprehensive measures designed to reduce fraud and bolster transparency in the state’s cryptocurrency market, sparking discussions about balancing protection with innovation.

New Laws Address Growing Crypto Fraud

With digital assets gaining mainstream adoption but also attracting scams, Illinois has stepped in decisively. According to FBI data cited during the bill introduction, Illinois consumers suffered losses amounting to approximately $272 million in cryptocurrency fraud in 2024, making it the most common form of financial fraud in the state last year. Responding to this alarming trend, the new legislation enforces stringent requirements to better shield investors and users.

Key Provisions of the Legislation

The bills encompass two major laws with distinct but complementary objectives:

• Digital Assets and Consumer Protection Act (SB1797): This act establishes a robust regulatory framework for digital asset businesses and exchanges operating in Illinois. Key elements include mandatory registration with the Illinois Department of Financial and Professional Regulation (IDFPR) by July 1, 2027, financial safeguards requiring businesses to maintain sufficient capital and risk management strategies, comprehensive cybersecurity protocols, and fraud prevention mechanisms. It also mandates customer service standards and disclosures on investments and asset protection akin to traditional financial services.
• Digital Asset Kiosk Act (SB2319): This law specifically targets the growing use of digital asset kiosks — physical machines that facilitate crypto transactions — by establishing consumer protections to reduce fraud and money laundering. Among its provisions are a daily transaction limit, mandatory refunds for fraudulent activity, capped customer charges, and required detailed transaction disclosures to users, including fees and asset values.

Governor Pritzker’s Stance: Protecting Consumers Amid Federal Inaction

Governor Pritzker criticized the federal government’s hands-off approach to crypto regulation, stating, “While the Trump Administration is letting crypto bros write federal policy, Illinois is implementing common-sense protections for investors and consumers.” He emphasized that at a time when fraudsters continually innovate and federal consumer safeguards diminish, Illinois is sending a decisive signal against exploitation of its residents’ financial assets.

Broader Impact and Industry Reaction

The new laws mark Illinois as one of the leading states to formalize oversight of digital assets, giving regulators unprecedented authority over cryptocurrency businesses and exchanges. By extending traditional financial consumer protections to these emerging markets, Illinois aims to provide consumers with transparency and recourse options previously unavailable in the largely unregulated crypto space.

Nonetheless, some industry observers warn that overly stringent regulations could impede innovation and drive crypto businesses to more permissive states. The definition of “digital asset business activity” in the laws excludes certain decentralized finance (DeFi) and blockchain operations, signaling a nuanced approach that seeks to regulate entities directly interacting with consumers while not stifling technological development in blockchain protocols.

Legal and Regulatory Details

The Digital Assets and Consumer Protection Act tasks the IDFPR with supervisory duties, registering relevant crypto firms and enforcing compliance with customer asset safeguarding, investment disclosures, cybersecurity, and anti-fraud practices. It deliberately excludes certain activities like software development, non-fungible token issuance, peer-to-peer blockchain transactions, and blockchain maintenance from its scope, reflecting an effort to focus on consumer-facing transactional business models.

Meanwhile, the Digital Asset Kiosk Act aims to regulate emerging transaction channels to prevent scams and money laundering, requiring kiosks to provide clear transaction records and refund mechanisms to protect consumers interacting with physical digital asset terminals.

Conclusion

Illinois has set a precedent with these bills to foster a safer environment for digital asset users and investors against the backdrop of increasing fraud and limited federal regulation. Governor Pritzker’s actions highlight the urgent need for states to fill regulatory voids and protect consumers in the fast-changing crypto economy, balancing innovation with necessary oversight.

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