A bill aimed at crypto fraud and misleading practices has been adopted by the Senate of Illinois.
Dubbed the digital assets and consumer protection law, Senate bill 1797Introduced by Senator Mark Walker, the room knew with a vote of 39-17 on 10 April.
The bill is looking for crypto companies under tighter research by demanding them to register at the Illinois Department of Financial and Professional Regulation before working in the state.
Some of the most important provisions of SB1797 include mandatory registration for every company that offers digital assets services to residents of Illinois, even if they are located from the state.
SB1797 obliges crypto companies to prepare their full reimbursement structure, to inform users or their assets are insured and explain important risks, including the possibility of losing access to funds due to fraud, malfunctions or infringements of security.
Furthermore, the bill stands out in shady exchange practices. Platforms with crypto -tokens must assess security risks, unveil potential conflicts of interest and perform regular assessments to determine if the token remains suitable for the list.
Before listing a token, platforms must report to the Department of Financial and Professional Regulation with regard to the steps they take to prevent manipulation, price installation and insider-driven scams.
In addition, companies would be obliged to store user assets separately from their own and they are forbidden to use customer funds for loans or other purposes without permission.
In the case of a company that goes bankrupt, this assets would be legally protected and treated as trust possession, not as a company possession.
SB1797 also draws up a framework for complaint handling and customer service. Covered companies must offer free help lines and clearly defined processes for dispute resolution and fraud reporting.
The bill comes in the midst of increasing concern about crypto-related scams in Illinois. In an accompanying press releaseWalker emphasized the need for “guidelines and accountability” to rebuild the trust of the public in space.
Illinois is in sixth place in the entire country for losses due to crypto fraud in 2023, with more than 1,900 complaints, according to FBI data. Although scam, such as carpet trekkings and pig impacts are not new, the anonymous nature of Crypto has made it difficult to bring fraudsters to the dish.
With crypto -wang and fraud on the rise of the crypto sector, comparable consumer protection measures have been produced in a number of US states.
Last month in California, Avelino Valencia, Avelino Valencia, AB 1052 changed to expand the protection for crypto payments and self-coasts. In the meantime, the HB 1447 of North Dakota, adopted by the Senate on March 18, aimed at Crypto-ATM-related fraud by stricter licenses, daily caps and reports.
