Illinois Regulation Of Digital Asset Kiosks

In addition to the recent Illinois Digital Assets and Consumer Protection Act, covered in a previous article, Illinois recently passed digital asset legislation aimed at protecting consumers against scams and fraud when utilizing digital asset kiosks. Specifically, the Illinois Digital Asset Kiosks Act was signed into law by Illinois Governor JB Pritzker on August 18, 2025.

Overview of the Digital Asset Kiosks Act

The Illinois Digital Asset Kiosks Act purports to protect Illinois consumers in the digital asset space.

The Act requires registration with the Illinois Department of Financial and Professional Regulation (Department) before operating digital asset kiosks in the state. The registration application process requires, among other things, extensive background reviews of company officers, filings with the government, maintenance of sufficient net worth and surety bonds, a compliant anti-money laundering program, and a non-refundable application fee of $5,000.

Once registered, the Act requires ongoing compliance with several policies and procedures, including:

• Customer Charges. A digital asset kiosk operator may not, directly or indirectly, collect charges from a customer related to a single digital asset kiosk transaction that exceeds the greater of $5 or 18% of the digital assets involved in the transaction (according to the market price of the digital asset at the time the customer initiates the transaction).
• Customer Disclosures. Extensive disclosures are required, including but by no means limited to the amounts of digital or fiat currency involved in the transaction, any fees charged by the kiosk operator, the U.S. dollar price charged to the customer, and the U.S. dollar market price of the digital asset, refund procedures, specific risks associated with digital assets, and a warning related to potential losses due to fraud or accidents.
• Reporting Physical Addresses. Digital asset kiosk operators must provide the Department a list of all physical addresses of digital asset kiosks that the operator owns, operates, or manages and must notify the Department of any changes to the list. The Department must make this list available to the public on its website.
• Customer Service. Digital asset kiosk operators are required to provide live customer service during kiosk operating hours via a toll-free number that must be displayed on the kiosk or kiosk screen.
• Prevention of Fraudulent Activity. All digital asset kiosk operators must take reasonable steps to detect and prevent fraud, including establishing and maintaining a written anti-fraud policy.
• Blockchain Analytics. All digital asset kiosk operators are required to use blockchain analytics software to help prevent transactions to wallets known to be affiliated with fraudulent activity and to detect transaction patterns of fraud or other illicit activities.
• Law Enforcement Access. All digital asset kiosk operators must provide a dedicated communications line for relevant government agencies through a posted U.S. phone number or email address to facilitate law enforcement and regulatory agency communications with the operator in the event of a fraud report from a customer. The operator must frequently monitor the communications line.
• Refunds. A digital asset kiosk operator must issue refunds to new customers and existing customers for fraudulent digital asset transactions based on specified triggering events (e.g., the new customer properly notifies the kiosk operator and files a police report).

The Act permits the Department to adopt rules to implement the provisions of the Digital Asset Kiosks Act. Also, the Act empowers the Department to enforce compliance and to assess civil money penalties up to US$25,000 for each general violation of the Act and up to US$75,000 for each violation related to fraud, misrepresentation or unfair, deceptive, or abusive business practice.

Registration with the Department will not be required until July 1, 2027. That said, the Act became effective once signed into law, meaning the requirements to provide refunds to customers who are victims of fraud are immediately effective.