The Illinois Senate has passed a new bill aimed at combating cryptocurrency fraud and reinforcing consumer protection in the digital assets market.
SB1797: Digital Assets and Consumer Protection Act
On April 10, the Illinois Senate voted 39-17 to pass Senate Bill 1797 (SB1797), officially the Digital Assets and Consumer Protection Act. Sponsored by Senator Mark Walker, the bill seeks to stem illegal practices like rug pulls and hidden fees in Illinois’ cryptocurrency market.
SB1797 grants regulatory authority over the operations of digital asset businesses to the Illinois Department of Financial and Professional Regulation. Any company or entity selling crypto to Illinois residents is now obliged to register with the department.
The bill also puts stringent disclosure requirements, forcing crypto firms to openly disclose all fees and charges paid by users before they happen.
Senator Walker: “We Must Set Standards”
Senator Walker, bill sponsor, filed the bill last February, stressed its importance on April 4 in a tweet on X (formerly Twitter):
“Digital asset rise opened door to economic opportunity, yet to bankruptcy, fraud and unethical practices.”
Walker argues that all players in crypto must meet standards to become “credible, honest actors.”
Increasing Pressure After Memecoin Collapses
The legislation is a response to a string of high-profile memecoin scams that have financially devastated backers. Last month, Libra token, which was bogus speculated to be backed by Argentine President Javier Milei, fell by 94% after insiders withdrew $107 million of liquidity—erasing $4 billion in market cap.
Subsequently, on March 16, Hayden Davis—who is linked to the Libra token and co-creator of the Official Melania Meme (MELANIA)—introduced yet another token called WOLF. The token’s price plummeted by 99% after it was revealed that over 82% of its supply was controlled by one entity.
Attempts to establish Davis’s culpability in the courts are being made now. Argentine attorney Gregorio Dalbon requested Interpol to issue a Red Notice for Davis on the basis of a risk he might be fugitive.
National Trend Towards Regulation of Crypto
Illinois joins other states, such as New York—where it tabled Bill A06515 in March—to reinforce crypto regulation. This is a demonstration of a growing belief that crypto scams must be brought to book ahead of law enforcement. This is as more and more investors continue to fall prey to scams.
According to Anastasija Plotnikova, CEO of regulatory firm Fideum:
“These activities are not only unethical but also unequivocally illegal, with case law to support enforcement.”
What’s Next?
If enacted into law, SB1797 would be a significant step towards governing the crypto industry in the state. By enacting registration and disclosure, Illinois hopes to restore public confidence and reduce investor exposure to crypto scams.
With the crypto world continuously evolving, politicians all over the nation are taking notice—suggesting more rules are on their way.
