SPRINGFIELD, IL — April 12, 2025 — A new bill that would create strict rules for businesses handling digital assets like cryptocurrency has passed the Illinois Senate and is now moving through the House. The bill, called the Digital Assets and Consumer Protection Act (SB1797), aims to make sure people in Illinois are safer when using digital financial tools.
The bill is being led by Senator Mark L. Walker, with strong support from several other senators including Laura Ellman, Cristina Castro, and Graciela Guzmán. In the House, Representative Jennifer Gong-Gershowitz is the chief sponsor.
What the Bill Does
The bill gives power to the Illinois Department of Financial and Professional Regulation (IDFPR) to oversee and manage companies that do business with digital assets—things like Bitcoin, other cryptocurrencies, digital wallets, and related services.
If the bill becomes law, any company working in this space will need to register with the state and follow certain consumer protection rules. These rules include:
- Protecting customer funds and keeping them separate from company funds
- Reporting how they handle digital assets
- Following security, privacy, and anti-fraud rules
- Being monitored by the state through inspections and record-keeping
There will also be penalties if companies break these rules.
🔍 What SB1797 Means for Crypto Firms
- Registration Requirements: All digital asset businesses offering services to Illinois residents—regardless of location—must register with the Illinois Department of Financial and Professional Regulation (IDFPR).
- Transparency Mandates: Firms must disclose fees, risks, and whether customer assets are insured.
- Customer Protection: SB1797 requires segregation of user funds, meaning companies can’t use customer assets for lending without clear consent.
- Token Listing Oversight: Exchanges must evaluate risks before listing tokens and report prevention measures for market manipulation to the IDFPR.
- Bankruptcy Safeguards: In case of collapse, user assets would be protected as trust property, not company assets.
- Support Systems: Toll-free helplines and formal complaint procedures are now mandatory.
Special Companies for Digital Trust
The bill also creates a new kind of business called a Special Purpose Trust Company. These are companies that would be allowed to handle digital assets in Illinois under strict rules.
They will need certificates of authority and may also have to meet requirements if they are based in other states or countries.
What’s Not Covered in SB1797 Bill
Senate leaders made it clear that this law won’t apply to everything in the digital world. Changes added to the bill on the Senate floor explain that:
- It does not apply to peer-to-peer transactions (for example, if you send crypto to a friend)
- It does not apply to decentralized exchanges that only run through computer programs
- Simply creating or sharing software is not considered a digital asset business
- Creating and selling NFTs (non-fungible tokens) by itself is also not covered
These changes were made in Senate Floor Amendment No. 2, which passed just before the full bill was approved.
Status of SB1797 Bill
The bill has already passed several steps in the Senate:
- First filed on February 6
- Sent to the Executive Committee, which reviewed and approved it with changes
- Passed the full Senate on April 10 with a vote of 39-17
It is now in the House, where it was read for the first time on April 11 and sent to the Rules Committee for further review.
Why SB1797 Matters
As more people in Illinois and across the U.S. use cryptocurrency and digital financial services, lawmakers want to make sure there are clear protections in place. There have been many scams and cases where people lost money due to unsafe or dishonest crypto businesses.
This bill would give Illinois a strong legal framework to make digital asset businesses follow the law—just like banks or insurance companies do.
If approved in the House and signed by the Governor, the law would take effect immediately.
For those interested in tracking the bill’s progress, full details, including the text, amendments, and vote records, are available on the Illinois General Assembly website under SB1797.
Further Reading:
AB Token Price Surges Over 28% in 24 Hours: What It Means for New Crypto Investors
How to Spot a Crypto Scam in 10 Seconds: Your Foolproof Guide
