Major cryptocurrency advocacy organizations have taken legal action against Illinois officials over the state's newly enacted digital asset tax, which is slated for enforcement in January 2027.
The Crypto Council for Innovation (CCI) and the Blockchain Association (BA) filed a lawsuit in the Circuit Court of the Seventh Judicial Circuit for Sangamon County. The legal challenge targets the state's 0.2% tax on cryptocurrency, which was signed into law by Illinois Governor JB Pritzker in June as a privilege tax tied to transaction volume rather than income, forming part of the fiscal year 2027 budget.
Lawyers for the two groups argue that the tax violates the US Constitution, the Illinois state constitution, federal and state due process laws, and the federal Internet Tax Freedom Act. Specifically, the due process claim asserts that the legislation is unconstitutionally vague. It places the burden on residents and brokers to determine tax application under the threat of serious civil and criminal penalties.
The organizations also based their US Constitution arguments on alleged violations of the Commerce Clause regarding interstate commerce, stating that the measure creates the risk of duplicative taxation.
Summer Mersinger, CEO of the Blockchain Association and a former commissioner at the US Commodity Futures Trading Commission, stated that while states play an important role in fostering innovation, that authority has constitutional limits. She noted that Illinois cannot impose a novel tax regime that discriminates against digital commerce, creates uncertainty, and fragments the national market.
The CCI and BA lawsuit follows a similar filing in July by the Digital Chamber, which argued that the tax discriminates against individuals transacting in digital assets.
In addition to the cryptocurrency tax opposition, Illinois has faced other legal challenges related to digital industries. Prediction market platform Kalshi previously filed a lawsuit against Illinois officials over a law enacted on July 1 that bans sports event contracts while requiring state licensing, which Kalshi argues violates federal law. Furthermore, Governor Pritzker signed an executive order in April banning state employees from betting on prediction platforms to prevent insider trading.
