Illinois Enacts Crypto Consumer Protection Laws to Combat $272 Million in Fraud
Illinois Governor Pritzker signed two bills creating new crypto consumer protection rules after state residents lost $272 million to cryptocurrency fraud last year.
Governor JB Pritzker signed two landmark bills into law on Wednesday that establish some of the first comprehensive regulatory frameworks for digital assets in the Midwest. The Digital Assets and Consumer Protection Act and the Digital Asset Kiosk Act together create new rules aimed at protecting Illinois residents from cryptocurrency scams.
Illinois consumers lost $272 million to cryptocurrency fraud in 2024, according to FBI data. This makes Illinois the fifth largest victim of crypto fraud in the country.
The new laws give the Illinois Department of Financial and Professional Regulation broad authority to oversee digital asset exchanges and businesses. Companies must now follow consumer protection protocols similar to traditional finance.
These include investment disclosures, safeguarding customer assets, and strict customer service standards. Digital asset companies must also demonstrate financial viability and implement risk management plans covering cybersecurity, fraud, and anti-money laundering efforts.
The Digital Asset Kiosk Act targets digital asset kiosks as a vulnerable entry point for the crypto industry. Operators of these kiosks must now register with the IDFPR and provide detailed reports of kiosk locations.
Transaction fees at crypto kiosks are capped at 18 percent. Daily transaction limits for new users are set at $2,500.
Crucially, the law requires kiosks to offer full refunds to new customers who fall prey to scams. This protection is designed to restore consumer confidence in the digital asset sector.
Governor Pritzker called the legislative measures common-sense protections for Illinois residents. The state is sending a clear message that it will not tolerate taking advantage of people and their hard-earned assets.
The laws balance consumer protection with technological innovation. Digital asset businesses have until mid-2027 to register with the IDFPR. This gives the industry a reasonable window to comply with the new standards.
Illinois is taking action to protect its residents from one of the fastest growing sources of financial fraud in the modern economy.