A suburban man worried about an email warning he must pay a ticket for missing jury duty sends more than $15,000 to someone posing as a sheriff’s official.
A Chicago woman lured into romantic conversations with an online pen pal sends her life savings to her fictional lover.
These tragic, real-life examples, in which people have used cryptocurrency kiosks to send large payments to scammers, drove Illinois Gov. JB Pritzker to sign legislation Tuesday allowing the state to regulate the booming crypto industry.
Two measures — which have been wending their way through the General Assembly in the face of past industry opposition — reached the governor’s desk for approval.
One law gives the state broad regulatory power over the crypto industry, and the other provides specific consumer protections surrounding kiosks that handle digital currency transactions.
A Chicago Sun-Times story earlier this year reported that more than 1,000 of the kiosks operate in the city at convenience stores, gas stations and currency exchanges. They can convert cash into crypto and vice versa.
They’re crime magnets for drug dealers who launder their illegal proceeds through the machines and for scammers who steal untraceable money from their victims, officials say.
The Illinois Department of Financial and Professional Regulation, which has been given the power to regulate digital asset exchanges and businesses, will require the crypto industry to comply with protections now in place for consumers of traditional financial services, such as banks.
Crypto businesses will have to keep enough money on hand to operate effectively and have plans to target fraud and money laundering.
To prevent fraud, the state will cap daily transaction amounts at kiosks at $2,500 for new customers, limit transaction fees at kiosks to 18%, and provide full refunds to new customers who get defrauded.
Governor JB Pritzker of Illinois, speaks to the media outside of the West Wing of the White House in Washington, DC, July 14, 2021, after meeting with US President Joe Biden about the administration’s infrastructure plan. (Photo by SAUL LOEB / AFP) (Photo by SAUL LOEB/AFP via Getty Images) ORG XMIT: 0
“While the Trump administration is letting crypto ‘bros’ write federal policy, Illinois is implementing common sense protections for investors and consumers,” Pritzker said in a statement.
One sponsor of the legislation, Sen. Laura Ellman, said basic consumer protections in the cryptocurrency world are lacking.
“This measure addresses areas in the virtual currency market vulnerable to fraud and empowers Illinois consumers to make informed investments,” said Ellman, a Democrat from Naperville.
