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The Illinois House is set to debate legislation that the state
Senate already approved. Senate Bill 1797 provides that the
Illinois Department of Financial and Professional Regulation
regulate digital asset business activity.
State Sen. Mark Walker, D-Arlington Heights, said his approach
is to use IDFPR’s capabilities in the area of financial
institutions.
“They know how to build anti-fraud programs, money-laundering
programs, identity protection programs, security programs and
use that expertise to build into this industry,” Walker said.
State Sen. Sue Rezin, R-Morris, said the bill framework mirrors
current laws applied to banks and credit unions.
“It’s counterintuitive, as the cryptocurrency industry was
specifically set up to provide consumers with alternative
financial options that aren’t as regulated or as centralized,”
Rezin said. “There are already numerous regulations at the
federal and state level which protect consumers participating in
the cryptocurrency market.”
State Sen. Jason Plummer, R-Edwardsville, said putting IDFPR in
charge of licensing could slow the process for small businesses.
Plummer told Walker on the Senate floor that similar legislation
crushed growth in New York’s crypto industry.
“Do you have concerns as to this legislation, as well-intended
as it may be, putting a brick on the industry’s growth here in
the state of Illinois?” Plummer asked Walker.
Walker said less than 25% of potential adult investors trust
cryptocurrency businesses.
“I think that, if they don’t fix their fraud problem in the
public’s mind, this industry will not grow,” Walker answered.
According to SB 1797’s second Senate floor amendment, ”digital
asset business activity" does not include peer-to-peer exchanges
or transfers of digital assets.
The chief House sponsor of the bill is state Rep. Edgar González,
Jr., D-Chicago. The measure is now in the House Financial
Institutions and Licensing Committee.
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