Crypto Groups Seek Injunction Against Illinois Digital Asset Tax Act

Key facts

• Crypto Council for Innovation and Blockchain Association filed a motion for a preliminary injunction to block the Illinois Digital Asset Tax Act.
• The Act imposes a 0.2% tax on crypto transactions, with no de minimis exemption.
• The Digital Chamber previously filed a lawsuit against the state to halt the legislation.
• Plaintiffs argue the law is discriminatory, was rushed through the legislature, and violates federal laws.
• The law is scheduled to take effect on January 1.

The Crypto Council for Innovation and Blockchain Association have jointly filed a motion requesting a preliminary injunction to prevent the Illinois Digital Asset Tax Act from becoming effective next year. This action follows a similar lawsuit filed by the Digital Chamber in July, which also seeks to halt the legislation.

The crypto groups argue that the Act, signed into law by Governor JB Pritzker in June, is discriminatory and would impose significant compliance costs and irreparable harm on the digital asset industry. They specifically cite the 0.2% tax on crypto transactions, noting the absence of a de minimis rule or exemptions for daily transactions.

In their motion, the associations contend that the law was passed hastily by the legislature without adequate deliberation, despite concerns raised by some legislators. They also assert that the Act violates the federal Internet Tax Freedom Act by taxing internet commerce and infringes upon the dormant Commerce Clause due to its alleged discrimination against interstate commerce.

Ji Kim, CEO of the Crypto Council for Innovation, stated that the harm to the industry if the law takes effect would be irreparable, emphasizing that the motion aims to stop what they describe as a punitive law.