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Illinois Senate approves crypto fraud prevention bill

Illinois Senate approves crypto fraud prevention bill

GrafaGrafa2025/04/11 16:20
By:Mahathir Bayena

The Illinois Senate has passed Senate Bill 1797, also known as the Digital Assets and Consumer Protection Act, to address cryptocurrency fraud and protect investors from deceptive practices.

The bill, introduced by Senator Mark Walker in February, was approved on April 10 with a vote of 39 to 17.

Under the legislation, the Illinois Department of Financial and Professional Regulation (IDFPR) will oversee digital asset business activity within the state.

Entities engaging in crypto-related activities with Illinois residents must register with the IDFPR and provide full disclosure of fees and charges.

“A person shall not engage in digital asset business activity, or hold itself out as being able to engage in digital asset business activity, with or on behalf of a resident unless the person is registered in this State by the Department,” the bill states.

Senator Walker emphasised the need for regulatory standards to curb fraudulent activities and ensure credible actors operate within the crypto industry.

“The rise of digital assets has opened the door for financial opportunity, but also for bankruptcy, fraud, and deceptive practices,” Walker said.

Illinois’ move follows a wave of high-profile memecoin scams that have caused significant financial losses for investors.

One notable case involved the collapse of the Libra token, which insiders allegedly drained of $107 million in liquidity, leading to a 94% price crash.

The legislation aims to promote responsible innovation while protecting consumers from scams like rug pulls and misleading fee structures.

If signed into law, SB1797 could serve as a model for other states seeking to regulate the growing cryptocurrency market effectively.

The bill now moves to the Illinois House of Representatives for further consideration before potentially reaching Governor J.B. Pritzker for final approval.

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