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 real-life examples of people falling prey to scammers and using cryptocurrency kiosks to send them large payments prompted Gov. JB Pritzker to sign two bills into law Monday that will allow the state to regulate the booming crypto industry.
One of the new laws 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 there are more than 1,000 of the kiosks at Chicago convenience stores, gas stations and currency exchanges and that they have become magnets for drug dealers who launder their illegal proceeds through the machines and for scammers who steal untraceable money from their victims. The crypto ATMs can convert cash into crypto and vice versa.
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.
“While the Trump administration is letting crypto ‘bros’ write federal policy, Illinois is implementing common sense protections for investors and consumers,” Pritzker said.
One sponsor of the legislation, state Sen. Laura Ellman, D-Naperville, 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,” Ellman said.
