Anchorage Digital Backs Lawsuit to Block Illinois Crypto Tax

Anchorage Digital, a federally chartered cryptocurrency bank, has filed a declaration in support of a lawsuit seeking to block an Illinois law that would impose a tax on cryptocurrency transactions, transfers, and storage, according to a Tuesday (Sept. 8) blog post. The lawsuit, brought by the Blockchain Association and the Crypto Council for Innovation, targets the Digital Asset Tax Act, which is set to take effect on January 1, 2027.

Anchorage Digital's declaration states that the new tax would negatively impact the company's business and its customers, charging 0.2% of the value of the cryptocurrency when it is exchanged, transferred, or stored, regardless of whether a profit is made. The company emphasizes that Illinois does not currently tax other types of assets in this manner.

Anchorage Digital also highlights the unclear application of the tax, potential felony charges for non-compliance, and the estimated costs of several hundred thousand dollars to over $1 million for compliance infrastructure, which would burden both the company and its clients. The lawsuit was filed as the law was added to the state's budget bill at the last minute and passed without prior debate.

The Blockchain Association and the Crypto Council for Innovation have requested a preliminary injunction to prevent the enforcement of the Digital Asset Tax Act before its implementation.