Law would drive crypto business out of state

If you’re not paying attention to the blockchain and cryptocurrency industries in Illinois, let me tell you they are thriving. More than 300 blockchain startups call Illinois home and the state has secured over $1.5 billion in VC investments since the technology arrived on the scene.

So why are Illinois lawmakers bent on driving this innovation out of the state? Because that’s exactly what they will do with Senate Bill 1797 — the Digital Assets and Consumer Protection Act.

DACPA doesn’t regulate bad actors using cryptocurrency or add any meaningful protections against the most prevalent types of fraud. What it does do is regulate entrepreneurs innovating in blockchain — the technology that powers cryptocurrency. It’s a one-size-fits-all measure that would require Illinois companies large and small to apply for a license to do business in the state. Based on New York’s infamous BitLicense, which is widely considered an innovation killer, the license could cost years and $100,000 or more to secure, favoring wealthy, legacy companies at the expense of emerging startups. That’s not what Illinois stands for.

More concerning, the agency expected to implement this framework Illinois Department of Financial and Professional Regulation — has demonstrated it is not ready to manage this license. Despite efforts to modernize, IDFPR still processes almost all of the 300-plus licenses it manages through paper applications, contributing to delays and backlogs that put jobs at risk. IDFPR is not yet ready for high-tech prime time; at minimum, the agency needs more time and a longer runway to prepare for this type of undertaking.

Illinois lawmakers should reject SB 1797 and instead work with our state’s blockchain community to craft narrow, targeted regulations that protect consumers without handcuffing innovation.

Olta Andoni

Naperville