The Prairie State has stepped up its game in the battle against digital currency scams with two groundbreaking laws aimed at protecting consumers from cryptocurrency fraud. The Digital Assets and Consumer Protection Act (SB1797) and Digital Asset Kiosk Act (SB2319) establish thorough frameworks to regulate cryptocurrency businesses and kiosks throughout Illinois, with implementation required by July 1, 2027.
These legislative measures come in response to alarming fraud statistics. Illinois consumers reported a staggering $272 million in cryptocurrency fraud losses in 2024—making it the most common type of financial fraud in the state, according to FBI data. It’s like Illinois discovered its financial house was built on quicksand and decided to pour some concrete.
Under the new regulations, all digital asset businesses must register with the Illinois Department of Financial and Professional Regulation (IDFPR), which will serve as the primary enforcement authority. Companies must maintain adequate financial resources and implement cybersecurity protocols that would make even the most determined hackers think twice. Remaining vigilant against scams is crucial for consumers even with these protections in place.
The Digital Asset Kiosk Act specifically targets those Bitcoin ATMs you might spot at gas stations and convenience stores. The law imposes a 18% fee cap on transactions to prevent excessive charges that often target vulnerable consumers.
Operators must implement fraud prevention protocols, post clear warning signs (think cigarette-style health warnings, but for your wallet), and maintain toll-free customer service hotlines.
They’ll also need to provide refunds for fraudulent transactions—full refunds for new customers and transaction fee refunds for existing ones.
Consumer protection measures include mandatory investment disclosures and asset segregation requirements. Businesses must explain risks in plain language—no more burying the “you might lose everything” disclaimer in microscopic font on page 42.
The IDFPR now has the power to conduct audits, supervise operations, and even revoke registrations for non-compliance. Violations come with penalties that can quickly turn a profit-focused operation into a cautionary tale.
For everyday Illinoisans, these laws represent a significant step toward making the wild west of cryptocurrency a bit less wild and a lot more secure. Governor JB Pritzker signed these bills on August 18, 2025, marking the first comprehensive cryptocurrency consumer protections in the Midwest.
