Illinois Senate Approves Bill to Regulate Digital Asset Firms
The Illinois Senate has passed Senate Bill 1797, the Digital Assets and Consumer Protection Act. The bill aims to regulate digital asset firms amid rising scams, particularly involving meme coins.
Key Provisions of Senate Bill 1797
- Passed with a vote of 39 to 17.
- Authorizes the Illinois Department of Financial and Professional Regulation to oversee digital asset businesses.
- Requires registration for any entity offering digital asset services in Illinois.
- Prohibits unregistered companies from providing crypto services or advertising them.
- Mandates disclosure of all user fees prior to service provision.
Senator Mark Walker emphasized the need for consumer protection due to increased fraud in the crypto space. This includes notable cases like the Gotbit founder's guilty plea for crypto fraud.
Background on Meme Coin Scandals
The legislation responds to scandals involving meme coins, which are susceptible to rapid value changes. Notably, the Libra token linked to Argentine President Javier Milei lost $4.5 billion after insiders withdrew over $100 million in liquidity, causing a 94% crash. Similar issues occurred with the WOLF token, controlled largely by one entity, leading to a 99% decline.
If approved by the Illinois House, the bill will proceed to the governor for final approval, aiming to enhance protections for investors in an inadequately regulated industry.