CFTC Chair Warns Illinois Crypto Tax Could Be Chicago’s ‘Last Trade’

CFTC Chair Michael Selig criticizes Illinois’ 0.2% crypto transfer tax, saying it treats blockchain transactions differently.

CFTC Chairman Michael Selig criticized Illinois’ new crypto tax law after lawmakers approved a 0.2% levy on blockchain transfers.

Selig called the measure a “sin tax” on blockchain technology and questioned its treatment of crypto transactions.

He said the law may tax transfers that create no economic gain for users. That concern has drawn attention from the crypto market.

The comments placed Illinois’ policy inside a wider debate over digital asset taxes. They also raised questions about Chicago’s role in financial markets.

Selig Challenges Illinois Crypto Tax

Selig said Illinois lawmakers had put Chicago’s market future at risk. His comments focused on the new 0.2% tax on blockchain transfers. He argued that the measure targets technology rather than financial activity.

According to Selig, the tax may apply even when users record no gain. That point was central to his criticism of the law. He said this approach may affect basic crypto asset transfers.

Selig also said similar transactions should not receive different treatment because of technology. In his view, blockchain transfers face a separate burden under the law. His remarks added federal attention to the Illinois crypto tax debate.

Chicago’s Financial Role Enters the Debate

Chicago has long been linked to major trading and derivatives markets. Selig connected that history to the state’s new approach to crypto transfers. He said the law may affect how firms view Illinois as a market base.

Crypto companies often review rules, taxes, and operating costs before choosing locations. Therefore, state-level policies can influence where digital asset firms build services. Selig warned that the Illinois tax may work against market growth.

He also described the policy as a move against blockchain development. His comments said Illinois was choosing to tax crypto wallets instead of encouraging activity. The statement framed the law as a concern for Chicago’s financial position.

Read also: CFTC Chair Michael Selig Signals Lighter Crypto Oversight Under ‘Future Proof’ Plan

Blockchain Tax Rules Face Wider Review

The Illinois law comes as governments review how crypto activity should be taxed. Regulators and lawmakers are also studying digital asset rules across markets. The debate often centers on fairness, enforcement, and clear treatment for users.

Selig said the law treats blockchain activity differently from similar non-blockchain transactions. That concern remains important for firms using crypto payments or asset transfers. It also matters for users moving digital assets between wallets.

Illinois officials were not cited in the supplied details with a direct response. As a result, the public debate now includes Selig’s criticism and lawmaker action. The crypto industry will watch how the tax is applied in practice.

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