All Roll Calls
Yes: 264 • No: 125
IllinoisSB1797104th General Assembly (2025–2026)Senate
DIGITAL ASSETS & CONS PROT ACT
Sponsored By: Mark L. Walker (Democratic)
Signed by Governor
Summary
Creates the Digital Assets and Consumer Protection Act. Provides that the Department of Financial and Professional Regulation shall regulate digital asset business activity in the State. Sets forth provisions concerning: applicability; the powers and duties of the Department; funds; customer protections; custody and protection of customer assets; covered exchanges; compliance; registration; supervision; records; additional procedural provisions; confidentiality; violations; enforcement; rulemaking authority; and severability. Creates the Special Purpose Trust Company Article in the Corporate Fiduciary Act. Sets forth provisions concerning certificates of authority; rulemaking and organization; certificates of authority for foreign corporate fiduciaries; eligibility; fees; and certificates of reciprocity. Makes other changes to various Acts. Effective immediately.
assignmentsexecutivefinancial institutions and licensing
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Bill Overview
Analyzed Economic Effects
20 provisions identified: 7 benefits, 4 costs, 9 mixed.
Customer digital assets get stronger safeguards
Beginning January 1, 2027, covered custodians must hold enough of each digital asset to cover customers’ total claims. They must separate customer assets from company assets and cannot use or pledge them without customers’ direction. In insolvency and creditor proceedings, the law treats customer assets as held in trust, even if improperly mixed. If custody rules are broken, customers receive proportional interests in the relevant assets rather than a guaranteed full repayment.
Digital asset customers gain legal remedies
Illinois residents can bring civil cases over violations of the law’s consumer-protection article. Residents who win may receive reasonable attorney’s fees and court costs. Those violations also count as unlawful practices under Illinois consumer-fraud law, enforceable by the Attorney General. The Department can seek restitution for economic injury caused by violations, distribute bond or trust-account proceeds, and impose operating conditions. These remedies provide recovery paths but do not guarantee repayment.
Exchanges must review assets and trades
Beginning January 1, 2027, covered exchanges must certify risk reviews before listing assets for Illinois residents. Reviews address possible securities status, conflicts, cybersecurity, code defects, fraud, and market risks; exchanges must reassess assets and remove them when needed. Assets approved by New York by this law’s effective date are exempt from certification if Illinois receives notice. Exchanges must seek prompt, full execution and favorable trade results, review execution quality at least every six months, and fix problems. They cannot improperly route trades through middlemen and must justify indirect execution; Illinois can order delisting for missing or misrepresented certifications.
Digital asset protections have phased deadlines
The law gives digital asset firms time to meet its new requirements. Covered firms are not in violation of specified disclosure, custody, trading, and exchange-listing requirements until January 1, 2027. Operating without registration does not violate the specified registration rules until July 1, 2027. These grace periods give firms preparation time but delay enforcement of related customer protections. Department rules cannot take effect before January 1, 2026.
Digital asset firms need Illinois registration
Covered digital asset firms must register to serve Illinois residents, unless exempt; federal law can limit state oversight. Exemptions cover specified securities and commodities activity, governments, financial institutions, fiduciaries, merchants, personal transfers, and software or network contributors. Applications require financial, ownership, background, and compliance information, plus a nonrefundable fee of at least $5,000 and investigation costs. Illinois can grant conditional registration to firms with qualifying New York approvals issued by this law’s effective date. Those firms must pay fees and follow Illinois law; conditional status ends with full approval, denial, or specified loss of New York approval.
Court protections for digital asset customers
Providers required to register cannot sue for payment unless they prove valid registration throughout the covered services. Exempt providers are not subject to this limit. Through the Attorney General or local State’s Attorney, the Department can sue over violations of the law, rules, final orders, or written conditions. Courts can stop violations, order compliance, appoint a receiver to oversee a business, and grant related relief. The Department can recover its costs and attorney’s fees when it wins.
Digital asset customers get clearer costs
Beginning January 1, 2027, covered providers must clearly explain fees, insurance coverage, transfer finality, unauthorized-transfer liability, and recovery procedures. Disclosures also cover debit timing, payment cancellation rights, outages during the prior 12 months, non-legal-tender status, and state non-endorsement. Providers must give 14 days’ advance notice of material fee or term changes. Transaction records must show provider contacts, dollar value, amount, date, precise time, and all fees, including conversion and indirect charges. One daily record can replace individual confirmations only if disclosed upfront; providers must also offer toll-free live assistance and dispute procedures.
Live help for digital asset customers
Covered digital asset providers must prominently show a toll-free number for live help on their websites, subject to Department rules. They must offer Illinois residents timely, effective help with disputes and mistaken or unauthorized transactions. They must handle complaints fairly and promptly, then explain the outcome and reasons to the resident.
Consumer protection rulemaking for trust companies
The Illinois Commissioner gains express authority to make consumer protection rules for corporate fiduciaries, such as trust companies. This adds to the Commissioner’s existing rulemaking powers. The provision itself sets no specific new consumer right or payment.
Digital asset firms face annual checks
Registered firms must renew annually, submit required information, and pay applicable fees. Applicable gross revenue of $2 million or less requires a reviewed annual financial statement; revenue above $2 million requires an audit. Firms that fail renewal requirements must stop serving Illinois residents and may lose registration. They must retain resident-related records for five years and provide out-of-state records within three days, unless the Department allows more time for good cause. Specified material registration, business, executive, and control-person changes must be reported within 15 days.
Digital asset firms pay oversight costs
Covered firms pay nonrefundable oversight fees, including $150 per examiner or staff member for each hour or partial hour, plus travel. Registrants also share uncovered administration costs and prior-year deficits, initially split roughly equally between transaction-volume and customer-custody-value assessments. Firms must pay necessary examination costs and can be charged reasonable, necessary emergency monitoring expenses. After one year from the law’s effective date, the Department can revise fees using transaction or custody value or volume. Fees fund regulation through the Consumer Protection Fund; providers may pass costs into customer prices.
Digital asset ownership deals need approval
Digital asset registrations cannot be transferred or assigned, and proposed new controllers must apply before taking control. At 25% voting power, control is conclusive; ownership, voting control, or proxies of at least 10% create a challengeable presumption. Mergers, consolidations, and purchases of substantially all another person’s assets also need Department approval and transaction disclosures. A denial or failure to accept conditions within 31 days requires abandoning the deal or stopping covered Illinois business. The same choice applies when an interagency conflict blocks a merger or consolidation.
Digital asset violators face steep penalties
Illegal unregistered service to Illinois residents can bring penalties up to $100,000 per day, subject to the registration grace period. Other violations carry up to $25,000 per day, act, or omission; fraud, misrepresentation, deceit, or negligence raises the maximum to $75,000. Penalties continue until violations stop and can be added to penalties under other laws. Enforcement also covers noncooperation, unpaid fees, unsafe or abusive conduct, misappropriation, and listed insolvency or regulatory events. Willful evasion remains covered; the Department can suspend or revoke registration, order conduct stopped, or seek receivership and court relief.
Public access limits for financial records
The law generally shields confidential financial oversight records and related communications from public-records requests unless made public. It also exempts digital asset information that the Digital Assets Regulation Act bars from disclosure. Listed recipients, including regulators and law enforcement with an appropriate regulatory interest, can receive protected information, as can lawful legal proceedings. The Secretary can impose confidentiality conditions. The Secretary can release information in the public interest unless another law bars release.
Illinois strengthens digital asset complaint oversight
Illinois must maintain staff and facilities to receive, record, and investigate complaints. The Department can conduct unannounced examinations, including relevant out-of-state offices, affiliates, and service providers, and coordinate with other regulators. It can subpoena records or testimony, interview people, and require reports; people addressed by covered inquiries must promptly answer in writing. People under investigation must provide access and cannot knowingly hide or destroy records; ordinary business access remains unless records risk alteration or destruction. Supervisory information receives confidentiality protections, while permitted regulator sharing supports joint oversight.
Business application fees fund financial oversight
Digital asset registration applicants must pay a nonrefundable fee of $5,000 or the Department’s determined review cost, whichever is greater. Applicants also pay the Department’s investigation costs. Money collected under the Act goes into a new Consumer Protection Fund. The fund can cover administration of this Act and other financial laws, with transfers allowed to specified Department funds. The law sets no separate appropriation or revenue amount.
Digital asset firms face safety duties
Applicants must create written compliance policies before applying, and registered firms must keep them current and enforce them. Governing bodies must approve policies covering cybersecurity, disaster recovery, business continuity, fraud, financial crime, operational security, legal compliance, and conflicts. Programs must address the risk of helping trade unregistered securities. A qualified person must oversee implementation, and cybersecurity policies need executive or governing-body approval at least annually. These duties add operating work while establishing safeguards against customer losses and service disruptions.
Digital asset firms must keep reserves
Before registration takes effect, firms must provide a surety bond or U.S.-dollar trust account to cover resident claims. The Department sets the amount and how long coverage continues after business stops; trust accounts require a qualified custodian. Firms must also maintain Department-set capital and liquidity, with required liquidity held in cash or high-quality liquid assets. After notice of an increase, firms have 15 days to provide the increase or satisfactory evidence of it. These safeguards support customer claims but tie up business funds.
Out-of-state fiduciaries gain conditional access
More out-of-state entity types, including limited liability companies, can qualify to provide fiduciary services in Illinois. They need home-state authority and reciprocal access for Illinois providers on terms the Commissioner finds are not unduly restrictive. Qualifying entities can serve in any fiduciary role permitted by the applicable Illinois rules. Representative offices may market services and provide support, but that permission does not allow fiduciary activity in Illinois. Businesses with home-state trust powers generally need a representative-office license before opening, unless another specified Illinois law permits the office.
Trust providers gain options and licensing
Illinois limited liability companies formed to carry out trusts can serve in fiduciary roles available to people or corporations. Illinois corporations and limited liability companies formed for fiduciary custody or related services can become special purpose trust companies. They need a certificate before operating unless they already hold the specified trust-company certificate. Unauthorized activity is a Class A misdemeanor and can face a court order to stop. Special purpose trust companies can also merge with or convert into Illinois state banks using established trust-company procedures and Department rules.
Sponsors & Cosponsors
Sponsor
Mark L. Walker
Democratic • Senate
Cosponsors
Adriane L. Johnson
Democratic • Senate
Camille Y. Lilly
Democratic • House
Christopher Belt
Democratic • Senate
Cristina Castro
Democratic • Senate
Edgar González, Jr.
Democratic • House
Graciela Guzmán
Democratic • Senate
Javier L. Cervantes
Democratic • Senate
Karina Villa
Democratic • Senate
Laura Ellman
Democratic • Senate
Mary Edly-Allen
Democratic • Senate
Michael E. Hastings
Democratic • Senate
Mike Porfirio
Democratic • Senate
Mike Simmons
Democratic • Senate
Paul Faraci
Democratic • Senate
Rachel Ventura
Democratic • Senate
Robert Peters
Democratic • Senate
Roll Call Votes
Senate vote • 6/1/2025
House Committee Amendment No. 1 Senate Concurs
Yes: 41 • No: 15
Senate vote • 5/31/2025
House Committee Amendment No. 1 Motion To Concur Recommended Do Adopt Executive;
Yes: 9 • No: 4
House vote • 5/30/2025
Third Reading - Short Debate - Passed
Yes: 76 • No: 38 • Other: 1
House vote • 5/28/2025
Do Pass as Amended / Short Debate Financial Institutions and Licensing Committee;
Yes: 7 • No: 4
House vote • 5/27/2025
Motion to Suspend Rule 21 - Prevailed
Yes: 75 • No: 39
Senate vote • 4/10/2025
Third Reading - Passed;
Yes: 39 • No: 17
Senate vote • 4/9/2025
Senate Floor Amendment No. 2 Recommend Do Adopt Executive;
Yes: 9 • No: 4
Senate vote • 4/3/2025
Do Pass as Amended Executive;
Yes: 8 • No: 4
Actions Timeline
Public Act . . . . . . . . . 104-0428
8/18/2025SenateEffective Date August 18, 2025
8/18/2025SenateGovernor Approved
8/18/2025SenateSent to the Governor
6/30/2025SenatePassed Both Houses
6/1/2025SenateSenate Concurs
6/1/2025SenateHouse Committee Amendment No. 1 Senate Concurs 041-015-000
6/1/2025Senate3/5 Vote Required
6/1/2025SenateHouse Committee Amendment No. 1 Motion To Concur Recommended Do Adopt Executive; 009-004-000
5/31/2025SenateHouse Committee Amendment No. 1 Motion to Concur Assignments Referred to Executive
5/31/2025SenateHouse Committee Amendment No. 1 Motion to Concur Referred to Assignments
5/31/2025SenateHouse Committee Amendment No. 1 Motion to Concur Filed with Secretary Sen. Mark L. Walker
5/31/2025SenatePlaced on Calendar Order of Concurrence House Amendment(s) 1 - May 30, 2025
5/30/2025SenateSecretary's Desk - Concurrence House Amendment(s) 1
5/30/2025SenateThird Reading - Short Debate - Passed 076-038-001
5/30/2025HousePlaced on Calendar Order of 3rd Reading - Short Debate
5/30/2025HouseAdded Alternate Co-Sponsor Rep. Camille Y. Lilly
5/29/2025HouseHeld on Calendar Order of Second Reading - Short Debate
5/28/2025HouseSecond Reading - Short Debate
5/28/2025HousePlaced on Calendar 2nd Reading - Short Debate
5/28/2025HouseDo Pass as Amended / Short Debate Financial Institutions and Licensing Committee; 007-004-000
5/28/2025HouseHouse Committee Amendment No. 1 Adopted in Financial Institutions and Licensing Committee; by Voice Vote
5/28/2025HouseHouse Committee Amendment No. 1 Rules Refers to Financial Institutions and Licensing Committee
5/28/2025HouseMotion to Suspend Rule 21 - Prevailed 075-039-000
5/27/2025HouseMotion Filed to Suspend Rule 21 Financial Institutions and Licensing Committee; Rep. Bob Morgan
5/27/2025House
Bill Text
Engrossed
Enrolled
House Amendment 1
Introduced
Senate Amendment 1
Senate Amendment 2
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