Illinois Governor JB Pritzker has enacted pioneering legislation aimed at robustly regulating digital assets within the state, simultaneously taking a pointed swipe at former President Donald Trump’s perceived leniency towards the cryptocurrency industry. Pritzker asserts that while federal policy under Trump risks being shaped by "crypto bros," Illinois is committed to implementing "common-sense protections" for investors and consumers, setting a new standard for digital asset oversight in the Midwest.
Illinois' Landmark Crypto Legislation
The new framework comprises two significant laws designed to bring clarity and security to the digital asset space. The Digital Assets and Consumer Protection Act (SB1797) empowers the Department of Financial and Professional Regulation (DFPR) to supervise digital asset businesses, establishing clear operational standards. These standards encompass crucial areas such as customer protections, digital asset custody, registration requirements, compliance, supervision, and enforcement procedures, granting the DFPR essential rulemaking authority to address violations effectively. Complementing this, the Digital Asset Kiosk Act (SB2319) specifically targets cryptocurrency ATMs. This legislation mandates that operators provide detailed transaction receipts, disclose terms, offer live customer service, and implement stringent anti-fraud measures. It also requires enhanced due diligence, robust compliance policies, the use of blockchain analytics to prevent illicit transactions, and the designation of compliance and consumer protection officers, along with quarterly reporting of kiosk locations and the necessity of a money transmitter license.
Industry Pushback and Broader Implications
Despite the governor's proclaimed regulatory success, his commentary on Trump's influence drew swift criticism from prominent figures in the crypto industry. Faryar Shirzad, Chief Policy Officer at Coinbase, challenged Pritzker's "crypto bro" characterization, pointing out that numerous House and Senate Democrats have actively supported bipartisan crypto legislation, such as the GENIUS and CLARITY Acts. He argued that adopting an approach akin to SEC Chair Gary Gensler's—which many in the industry view as overly restrictive—is "bad policy and bad politics." Paul Grewal, Coinbase Chief Legal Officer, echoed this sentiment, labeling the governor's remarks as "uninformed" and highlighting the contributions of respected Democratic lawmakers to the very legislation Pritzker seemed to criticize. Furthermore, Austin Campbell of Zero Knowledge Group underscored that federal initiatives like the GENIUS Act are rooted in long-term financial reforms initiated post-2008, suggesting a strategic regulatory evolution rather than mere insider influence.
