Illinois Passes Bill to Regulate Digital Asset Firms

The Illinois Senate has passed a bill to regulate digital assets firms operating in the state. The new law responds to a rise in scams and fraud cases

The Illinois Senate has passed a bill to regulate digital assets firms operating in the state.

Senate Bill 1797 to Establish Crypto Rules

The senators voted 39 to 17 in favor of Senate Bill 1797, also known as the Digital Assets and Consumer Protection Act.

The bill, which was introduced by Senator Mark Walker in February, will give the Illinois Department of Financial and Professional Regulation the authority to oversee digital asset businesses serving residents of the state.

Any company or individual rendering digital assets services in Illinois will be required to register with the department, including organizations involved in cryptocurrency exchange services, trading, or storage.

No individual or company can offer crypto services to Illinois residents without registration. Even advertising services without approval would be a violation.

Businesses must also disclose all user fees before providing any service. The report’s goal is to create transparency and stop misleading users with hidden charges.

Senator Walker said the bill was necessary due to the rise in scams in the crypto space. There has recently been a case of the Gotbit founder pleading guilty to crypto-related fraud.

While crypto innovations provide some financial opportunities, the Senator noted that they also come with risks, such as deception and sudden collapse. The bill has the prerogative to set clear standards and protect everyday people from scam tokens.

The legislation has now been moved to the Illinois House for further discussion. If passed by the House, it will then be sent to the governor for final approval.

Meme Coin Scandals Spark Demand for Oversight

This legislative push follows a series of scandals involving meme coins.

These are digital tokens often driven by internet trends and are sometimes promoted by public figures. While they tend to attract quick attention and hype, they are just as likely to crash suddenly, leaving investors with heavy losses.

One recent case involved the controversial meme coin known as the Libra token, which was linked to Argentine President Javier Milei.

In March, insiders reportedly pulled out over $100 million in liquidity, triggering a 94% crash and wiping out an estimated $4.5 billion in market value.

Another figure, Hayden Davis, was behind both the Libra token and a token called WOLF.

Reports show over 80% of WOLF’s supply remained under the control of one entity. When it was sold off, the token dropped by 99%.

These cases have led to calls for stronger oversight, with one Argentine lawyer asking Interpol to issue a Red Notice for Davis.

Lawmakers in Illinois are hoping the new bill will help to protect residents and create rules in an industry that has grown with little control.