The U.S. Justice Department, the Chamber of Commerce, SIFMA, and major crypto firms filed briefs this month to strike down Illinois’ Digital Asset Tax Act. The law imposes a 0.2% levy on the full value of a digital asset every time an Illinois customer trades, transfers, or stores it through a broker, even when there is no sale, gain, or change in ownership. This treatment singles out crypto for a burden that dollars, gold, stocks, or any other asset does not face in the state or anywhere else.
A Broad Legal Front
The challenge dates to August, with the Crypto Council for Innovation and the Blockchain Association asking a judge to permanently block enforcement. On Nov. 6, the Justice Department filed a statement of interest arguing the tax undermines federal policy and U.S. leadership in digital assets, calling it "vague and discriminatory." The U.S. Chamber of Commerce and the Securities Industry and Financial Markets Association, which represents hundreds of broker-dealers, banks, and asset managers, filed an amicus brief warning the tax reaches well beyond crypto-native platforms to traditional banks, custodians, and advisers increasingly offering digital asset products. Their concern is that the levy applies regardless of whether a transaction generates profit, creating a compliance nightmare for institutions handling diverse client portfolios across multiple jurisdictions.
Crypto Firms Join the Fight
A separate brief filed Nov. 11 brought together crypto’s heavy hitters, led by the DeFi Education Fund, Andreessen Horowitz, Paradigm, and Uniswap, alongside Aave Labs, Chainlink Labs, Solana Policy Institute, Phantom, Jito Labs, Multicoin Capital, and Stand With Crypto. Their filing argues the law’s definitions are so vague they could stretch to software developers and decentralized protocols that hold no customer funds and have no way to identify users or know where a transaction occurred. The brief noted an estimated 2.64 million Illinoisans hold digital assets, the fifth-highest total of any state. CCI CEO Ji Hun Kim and Blockchain Association executive Ashok Pinto said in a joint statement, "This tax is unclear, discriminatory, unconstitutional, and harmful to the future of finance." Illinois agreed in October to pause the tax until July 1, 2027, buying time for the court fight now underway.
