SPRINGFIELD — State Senator Mark Walker’s bill to weed out the bad actors in the digital currency industry would help protect thousands of Illinois consumers from predatory practices and expand digital coin businesses.

“The digital assets industry is an exciting economic opportunity, but it attracts many bad actors,” said Walker (D-Arlington Heights). “This bill would create reasonable guidelines for crypto companies to follow without limiting their growth and opportunity.”

Illinois had the sixth most losses from crypto fraud of any state in 2023, with over 1,900 complaints, according to the FBI. These fraud cases take various forms such as “pig butchering,” where scammers will convince consumers to invest in their coin that goes up in value until the scammer executes a “rug pull,” seizing all the money the consumer transferred to the coin. While these fraud schemes are not new practices, the anonymity of cryptocurrency makes it difficult to hold fraudsters accountable.

The Digital Assets and Consumer Protection Act aims to limit fraud cases by requiring digital currency companies to provide disclosures to consumers and demonstrate financial fitness for payouts. Additionally, it requires companies to register with the Illinois Department of Financial and Professional Regulation and create procedures to address risks of money laundering, fraud and cybersecurity.

“Illinois is a world leader in emerging technology like quantum and AI. We support innovations like crypto around the state,” said Walker. “In order for crypto to expand, it must overcome its lack of public credibility with guidelines and accountability.”

Senate Bill 1797 passed the Senate on Thursday.