Crypto industry groups escalate fight against Illinois, asking court to block controversial crypto tax

The Crypto Council for Innovation (CCI) and Blockchain Association (BA) are attempting to halt Illinois' impending 0.2% crypto tax, arguing that it is unconstitutional and would impose significant compliance costs. The groups have filed a motion for a preliminary injunction in the Circuit Court of Sangamon County, Illinois. CCI CEO Ji Hun Kim expressed concern that companies would have to spend millions to create systems for a tax that violates their constitutional rights without clear answers on what is being taxed and when, all while facing the threat of criminal penalties.

This lawsuit challenges the constitutionality of Illinois' digital asset tax, which Governor JB Pritzker signed into law in June as a "privilege tax" under the state's fiscal year 2027 budget. The tax applies to transaction volume, not income, and requires crypto users to pay a 0.2% tax. Illinois is the first state to single out crypto transactions, and other trade groups, like the Digital Chamber, have also filed similar suits.

Governor Pritzker has previously signed an executive order in April banning state employees from betting on prediction markets platforms, citing the risk of insider trading.