Investor Protection and Crypto Regulation: Why Illinois Sets the Trend for America

In 2024, the United States is actively moving toward clearer crypto regulation. The latest significant step was taken by the state of Illinois, where the governor signed two laws—one concerning the operation of crypto exchanges and the other addressing crypto ATMs.

These initiatives were a response to a wave of fraud and the growing number of users choosing digital assets for investments and daily transactions. For the market, this means not only additional requirements but also a significant increase in the level of trust in cryptocurrencies.

Why Illinois Took on the Crypto Market

Cryptocurrencies have long ceased to be a niche tool solely for traders. They are increasingly used for money transfers, capital preservation, and even as a payment method in stores. For this reason, Illinois, where the financial sector is actively developing, decided not to leave this segment unregulated.

The reason for the strict approach is statistics. In 2024 alone, residents of the state lost $272 million to crypto scams. This is the fifth-worst result among all U.S. states.

The primary tool for fraud is crypto ATMs (Bitcoin ATMs). Although they were created as a convenient way to quickly buy or sell cryptocurrency, criminals often use them to trick citizens into sending large sums, taking advantage of weak regulation.

Law SB 1797: Control Over Crypto Exchanges

The first law, signed by the governor, is numbered SB 1797. It significantly increases the requirements for cryptocurrency companies operating in the state.

Now exchanges and service providers must:

• maintain sufficient reserves to guarantee the return of funds to users;
• implement modern cybersecurity systems;
• combat fraudulent schemes;
• disclose financial information at the same level as banks.

Thus, crypto companies are effectively moved into a regulated environment, where the main priority is investor safety and transparency.

Crypto ATMs in Illinois: Market Scale

According to 2024 data, the state has 1,626 crypto ATMs, of which 1,167 are located in Chicago. This is one of the highest figures in the U.S.

On the one hand, this number indicates the popularity of cryptocurrencies among the population. On the other hand, it makes the region vulnerable to fraudulent schemes.

The most common method of deception is the pig butchering scam, where criminals gain the trust of victims, offer “profitable investments,” and coerce them into transferring funds through crypto ATMs.

Law SB 2319: Rules for Crypto ATMs

The second document directly concerns the Bitcoin ATM market, and its
regulations appear even stricter.

Requirements for crypto ATM operators:

• mandatory registration with state authorities;
• appointment of individuals responsible for compliance with regulations;
• commission limits—no more than 18% (previously, commissions could reach exorbitant levels);
• a daily limit of $2,500 for new users.

These measures aim to restrict opportunities for fraudulent schemes and create clearer conditions for ordinary users.

How This Will Affect the Crypto Market

Illinois’ new rules do not directly impact the price of Bitcoin or Ethereum, but they lay the foundation for the long-term development of the industry.

Key consequences include:

• increased trust in cryptocurrency services;
• reduction in the number of fraudulent schemes;
• creation of safer conditions for investors and users;
• intensified competition among U.S. states to become the leading hub for the crypto industry (similar to Wyoming).

Greater transparency and control may become the “entry point” that attracts new capital from conservative investors to the market.

Conclusions

Illinois’ move toward regulating crypto exchanges and crypto ATMs can be considered a crucial moment for the industry. It signals that the U.S. is moving toward integrating cryptocurrencies into the financial system, without stifling innovation but ensuring investor safety.

In the short term, this does not mean sharp price increases or decreases for traders. However, in the long term, the new rules could become the foundation for mass adoption of cryptocurrencies, as the primary value lies in user trust and market transparency.

Thus, if you invest in cryptocurrencies or work with crypto services in the U.S., it’s worth closely monitoring developments in Illinois. It is highly likely that this state will set an example for others and usher in a new stage in crypto industry regulation.

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