CFTC Chair Selig Criticizes Illinois Crypto Tax

CFTC Chair Michael Selig sharply criticized Illinois' new 0.2% tax on certain cryptocurrency transactions, saying state lawmakers moved ahead of federal efforts to set crypto rules. Governor J.B. Pritzker signed the Digital Asset Tax Act as part of the state's fiscal 2027 budget; the tax takes effect January 2027.

Selig published his remarks in an op-ed and wrote that Illinois lawmakers “slammed the brakes on technological progress” and “placed their constituents at a significant disadvantage.” He also wrote, “Just as the internet revolutionized the transfer of information, blockchains will revolutionize the transfer of value.”

The measure applies a 0.2% fee to specified crypto transfers and trading activity. Industry groups described the rate as among the highest in the United States and called the law punitive. They raised questions about how the state will calculate, collect and enforce the tax on decentralized transactions, cross-border trades and custody arrangements.

Federal officials and lawmakers have been working on broader crypto market-structure legislation and regulatory guidance. Selig framed the Illinois law as diverging from that national process, writing that state lawmakers “decided they know better than the federal lawmakers who have been working on delivering clarity to crypto asset markets for years.”

Supporters in Illinois argued the tax will generate revenue for state priorities. The law's January 2027 start date gives companies and markets time to assess compliance requirements and adjust business models.

Industry representatives warned the tax could affect trading volumes and influence where exchanges, wallet providers and other crypto firms choose to operate or serve customers.