Illinois Senate passes Digital Assets and Consumer Protection Act targeting crypto crime

A bill targeting cryptographic fraud and misleading practices was adopted by the Senate of Illinois.

Nicknamed the law on digital assets and consumer protection, Senate bill 1797Presented by Senator Mark Walker, erased the room with a 39-17 vote on April 10.

The bill aims to bring cryptographic companies under a stricter examination by obliging them to register with the Illinois financial and professional regulation department before operating in the state.

Some of the main SB1797 provisions include compulsory registration for any business offering digital asset services to Illinois residents, even if based outside the state.

SB1797 obliges cryptographic companies to have their full cost structure, informs users if their assets are insured and explain key risks, including the possibility of losing access to funds due to fraud, breakdowns or security violations.

In addition, the bill withdraws from shaded exchange practices. The platforms listing cryptographic tokens must assess security risks, disclose conflicts of potential interests and carry out regular examinations to determine if the token remains fit for the list.

Before registering a token, the platforms must report to the Ministry of Financial and Professional Regulation concerning the measures they take to prevent manipulation, price rigging and initiates focused.

In addition to this, companies would be required to store user assets separately and it is prohibited to use customer funds for loans or other purposes without consent.

In the case of a bankrupt business, these assets would be legally protected and treated as trust goods, not assets of the company.

SB1797 also sets up a framework for complaint management and customer service. Covered companies must offer lines of assistance at no cost and clearly defined processes for the resolution of disputes and fraud reports.

The bill intervenes in the midst of increasing concerns concerning scams linked to crypto in Illinois. In an accompanying press releaseWalker highlighted the need for “directives and responsibility” to rebuild the public’s confidence in space.

Illinois ranked sixth on a national scale for the losses of cryptographic fraud in 2023, accumulating more than 1,900 complaints, according to FBI data. Although scams such as carpet prints and pork butchery are not new, the anonymous nature of the crypto has made judicial notoriously difficult to translate fraudsters into justice.

With crypto Sociations and increased fraud In the cryptography sector, similar consumer protection measures have generated in a number of American states.

Last month in California, the member of the Avelino Valence assembly Modified AB 1052 To extend the protections for cryptographic payments and self-care. Meanwhile, the Northern Dakota HB 1447, adopted by the Senate on March 18, targets Fraud linked to crypto-atm Thanks to stricter licenses, daily ceilings and report rules.