Illinois Faces New Lawsuit Over 0.2% Crypto Tax

CCI and the Blockchain Association are challenging the new transaction tax; Illinois is the first U.S. state with such a levy on exchanges and custodians.

Key Takeaways

• The Crypto Council for Innovation and the Blockchain Association are taking Illinois back to court over a 0.2% crypto tax.
• The law applies to companies that trade or store crypto for customers and affects firms with more than $100,000 in revenue.
• The industry says the tax is unconstitutional and argues that Illinois taxes crypto more heavily than traditional assets.

The crypto industry is putting Illinois under pressure again with a new lawsuit against the newly passed 0.2% levy on companies that trade or store crypto for customers. The Crypto Council for Innovation and the Blockchain Association says the law violates the U.S. and Illinois constitutions and the Internet Tax Freedom Act. The Digital Chamber also previously went to court.

New Attack on the Law

The case was filed Friday in Sangamon County. According to the complaint, the levy affects companies based in Illinois or those providing services to state residents, as long as their total revenue is above $100,000 (€85,500).

The law applies to parties such as crypto exchanges, custodians, trading platforms, and other intermediaries. In that context, Illinois is the first U.S. state to introduce a transaction tax on digital assets.

Why the Industry Objects

Critics say the tax treats crypto differently from traditional assets. Ji Kim, who leads CCI, said in a statement that the levy treats digital assets in a uniquely harsh way based on the underlying technology, not on the nature of the transaction.

Summer Mersinger, CEO of the Blockchain Association, said Illinois cannot impose a new tax regime that hurts digital trading, creates uncertainty for consumers and businesses, and could further fragment the market. The levy could bring in an estimated $60 million (€51.3 million) for the state budget, but it would also be charged even when a taxpayer has a loss on crypto, because the measure is based on transactions.

Why This Matters for European Readers

For European crypto readers, this case is especially relevant because it shows how differently governments can tax crypto. In the U.S., that creates a patchwork of state-by-state rules, while in Europe, MiCA and national implementation are meant to bring more consistency. That makes the outcome in Illinois interesting as an example of how far tax pressure on crypto can go.

The debate also ties into broader U.S. market structure rules: the Blockchain Association has long warned that unclear laws mainly hit intermediaries like exchanges and custodians, something that comes up again in the debate around the Clarity Act criticized as a pro-middlemen bill. For companies operating in multiple states, that increases the pressure to adapt their services and compliance by jurisdiction.