Illinois Proposes Stricter Rules for Crypto Industry

• The Illinois Senate votes to send SB1797 to tighten crypto company rules and punish fraud.
• SB1797 allows IDFPR to regulate and to punish noncompliant crypto businesses.
• HB1844, which aims to create a reserve of Bitcoins controlled by the state, is passed by Illinois that allows donations to be held for five years.

The Illinois Senate moved a bill forward that aims to regulate all cryptocurrency businesses within the state and stop digital asset fraud that is rising across the state. Senate Executive Committee approved the law on Thursday as a defense measure against cryptocurrency scams that stole $163 million from Illinois residents in 2023.

State Senator Mark Walker introduced SB 1797, or the Digital Assets and Consumer Protection Act, during February 2023. It strives to fortify state rules for digital platforms, which have become easy targets of fraud because of fast digital growth. Many Illinois legislators, including Karina Villa, Rachel Ventura, and Mike Porfirio, stand behind this bill.

Senator Walker shows how cryptocurrencies create wealth but let people go bankrupt through deceptive activities. He explained that this law needs rules that help crypto businesses run their activities openly and reliably. Walker wants to establish rules for crypto business adults to prove they do business fairly and honestly.

Bill Advances To Full Illinois Senate Review

The Illinois Department of Financial and Professional Regulation (IDFPR) would regulate all crypto businesses in the state based on new legislation. Under SB1797, the IDFPR will get full authority to maintain business regulation from start to finish and issue financial penalties to businesses that break the rules.

The legislation aims to protect consumers and promote responsible innovation in the crypto industry. It requires businesses to register with the IDFPR, provide financial disclosures, ensure customer payouts, and notify consumers about charges or transfers. Companies have until January 2027 to comply with all provisions.

The legislation demands crypto companies set up measures to prevent fraud in their operations. The law works to defend buyers by stopping digital asset swindlers who are becoming more active in crimes.

Following its approval by the Senate Executive Committee, the bill advances to the entire Senate for formal evaluation. SB1797 can show other states how to best handle the growing cryptocurrency market.

Illinois Moves to Establish Bitcoin Reserve

During the same period, Illinois advanced its efforts to include Bitcoin into its financial sector. On January 1, State Representative John Cabello presented House Bill 1844 to the Illinois state legislature for establishing a Bitcoin reserve under state control. The Illinois treasurer’s office would oversee this special financial fund that stores Bitcoin assets.

The legislation provides ways for both citizens and government bodies in Illinois to donate Bitcoin to a special fund. The fund will not allow Bitcoin withdrawals until the Bitcoin remains held for five years. The law requires state officials to submit reports every two years about Bitcoin assets in the fund and all activity related to the cryptocurrency.

The progress of HB1844 stopped soon after its debut in January 2019 while it waits for the House Rules Committee to assess the proposal.

The Illinois government works to legislate Bitcoin while setting up reserve funds because of its growing understanding that crypto needs regulatory controls in light of its fast development and widespread fraud. These legislation results will create a valuable example for other states working with digital assets.

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