Mike

Chair

<p>CFTC Chair Michael Selig criticized Illinois lawmakers over a new 0.2% tax on crypto transactions, saying the state had moved against financial technology at the wrong time.&nbsp;</p>
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   <li>Illinois’ 0.2% crypto tax drew sharp CFTC criticism before its planned 2027 start date.</li>
   <li>The law requires broker registration, monthly reports, and tax collection on covered digital asset activity.</li>
   <li>Federal crypto tax and market structure talks are moving while Illinois pursues its own rule.</li>
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<p>In a July 1 <a href="https://www.cftc.gov/PressRoom/SpeechesTestimony/seligstatement070126" rel="noopener noreferrer nofollow">statement</a>, Selig said Illinois lawmakers “slammed the brakes on technological progress” when they approved the measure.</p>
<p>The tax forms part of Illinois’ fiscal 2027 budget and is set to take effect on Jan. 1, 2027. It applies to certain digital asset activity carried out by brokers, including exchange, transfer, custody, and wallet services. The rule has drawn criticism from crypto firms, policy groups, and some market figures.</p>
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<h2 class="wp-block-heading" id="strong-selig-says-state-risks-falling-behind-strong"><strong>Selig says state risks falling behind</strong></h2>
<p>Selig said blockchains could change how value moves across markets, much as the internet changed how information moves. He argued that tokenized assets may cover commodities, currencies, stocks, and bonds. His statement said Illinois could place residents and businesses at a disadvantage if the state taxes crypto transfers differently from other financial activity.</p>
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   <p>Illinois lawmakers have placed the future of Chicago as a financial market hub at risk by instituting a “sin tax” on blockchain technology. The decelerationist law goes so far as to tax transfers of crypto assets that generate no economic gain. Subjecting Illinois residents to…</p>— Mike Selig (@ChairmanSelig) <a href="https://x.com/ChairmanSelig/status/2072669349941305546?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">July 2, 2026</a>
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<p>The CFTC chair also said Illinois lawmakers “decided they know better” than federal lawmakers working on crypto market rules. His comments came as Washington continues to review market structure bills, tax proposals, and agency roles. The remarks show a growing split between state-level tax policy and federal efforts to set national digital asset rules.</p>
<h2 class="wp-block-heading" id="strong-brokers-face-new-duties-strong"><strong>Brokers face new duties</strong></h2>
<p>Illinois’ <a href="https://crypto.news/illinois-becomes-first-state-to-tax-crypto-transactions-this-way/" rel="noopener noreferrer nofollow">Digital Asset Tax Act</a> requires brokers to register with the Illinois Department of Revenue before covered activity begins. Brokers must collect the tax as a separate line item and file monthly reports on covered digital asset activity.</p>
<p>The law can also reach firms outside Illinois if they serve users in the state. Tax advisers have said customer records, mailing addresses, IP addresses, and other data may help decide whether activity falls under Illinois rules. That has raised questions about how exchanges, wallet firms, and custody providers will track and apply the tax in practice.</p>
<h2 class="wp-block-heading" id="strong-industry-criticism-grows-strong"><strong>Industry criticism grows</strong></h2>
<p>Previously, crypto.news reported that Strategy co-founder Michael Saylor called the Illinois tax a <a href="https://crypto.news/michael-saylor-blasts-illinois-crypto-tax-as-big-mistake/" rel="noopener noreferrer nofollow">“Big Mistake”</a> after Governor JB Pritzker signed the budget. Industry groups also warned that the law could raise costs for users and push crypto firms away from the state.</p>
<p>Some critics have focused on the design of the tax. They argue that it applies to activity itself, not only to profits or capital gains. Others have raised concerns about routine wallet transfers, broker reporting systems, and whether the rule treats digital assets differently from stocks, bonds, or derivatives.</p>
<h2 class="wp-block-heading" id="strong-federal-talks-add-pressure-strong"><strong>Federal talks add pressure</strong></h2>
<p>The Illinois dispute comes while Congress reviews broader crypto tax rules. As previously reported, lawmakers have split the Digital Asset PARITY Act into <a href="https://crypto.news/congress-revives-crypto-tax-reform-as-clarity-negotiations-intensify/" rel="noopener noreferrer nofollow">seven tax discussion drafts</a> covering stablecoin payments, mining, staking, lending, wash-sale rules, charitable donations, and disclosure duties.</p>
<p>Moreover, Federal agencies are also reviewing crypto market rules. The SEC and CFTC opened a <a href="https://crypto.news/sec-and-cftc-launch-crypto-rules-review-after-futures-approval/" rel="noopener noreferrer nofollow">joint rules review</a> covering derivatives, margining, and market structure questions. Against that backdrop, Selig’s criticism frames the Illinois tax as a state-level move that may clash with wider federal attempts to build clearer rules for digital assets.</p>
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CFTC chair blasts Illinois over ‘punitive’ crypto tax

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