Illinois Picks 0.2% Pocket Lining Over CME's 24/7 Crypto Lifeline 🧾

The Commodity Futures Trading Commission has publicly opposed a new Illinois law that imposes a 0.2% tax on every crypto transaction in the state. CFTC Chair Mike Selig used an opinion piece to criticize the legislation, warning that it could drive investors and firms out of Illinois and undermine the state's role as a U.S. financial hub. Selig noted that federal lawmakers are already advancing the CLARITY Act, which is intended to provide a unified framework for crypto asset markets, and argued that Illinois' tax measure is unnecessary and punitive.

The Illinois law was passed in July as part of the state's fiscal budget and is scheduled to take effect in January 2027. It applies a blanket 0.2% levy on each crypto transaction. Selig framed the decision as a costly misstep, writing that "the choice to loot crypto wallets rather than grow the state economy with pro-innovation policies may go down in history as Chicago's last trade." Illinois is home to the Chicago Mercantile Exchange (CME), the world's largest derivatives exchange, which already offers 24/7 crypto trading.

Coinbase Chief Legal Officer Paul Grewal echoed that criticism on social media, calling the 0.2% levy one of the "dumb policies" and writing that "there is no more effective way to kill an innovation than to tax its mere use. The people of IL deserve better." Selig similarly argued that taxing the use of blockchain technology risks pushing jobs and capital to other jurisdictions.

While the CLARITY Act aims to bring regulatory clarity and onshore crypto activity, it does not address tax treatment, and the bill remains stalled in the Senate. Separately, the U.S. House of Representatives has reviewed seven crypto tax proposals addressing issues such as the double taxation of mining and staking rewards, but no legislation has been enacted. The pace of any federal crypto tax reform is expected to depend on the outcome of the November midterm elections and which party controls Congress.