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Illinois Proposed Bill to Criminalize Unlicensed Digital Asset Business Activities

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On March 9, the Alliance DAO, a decentralized autonomous organization created by the Web3 entrepreneurship accelerator DeFi Alliance, tweeted that last night i…

Illinois Proposed Bill to Criminalize Unlicensed Digital Asset Business Activities

On March 9, the Alliance DAO, a decentralized autonomous organization created by the Web3 entrepreneurship accelerator DeFi Alliance, tweeted that last night in Illinois, a bill (the Digital Assets Regulation Act DARA) proposed to criminalize unlicensed digital assets business activities (i.e., most blockchain activities). If the House of Representatives passes the bill, it may become law in a few weeks.

The new law of Illinois in the United States intends to make unauthorized digital asset business activities a felony

Analysis based on this information:


The Alliance DAO, a decentralized autonomous organization that aims to drive innovation and growth in the Web3 ecosystem, recently raised an alarm about an Illinois proposed bill that could potentially criminalize most blockchain activities. The Digital Assets Regulation Act (DARA), if passed into law, could have far-reaching implications for the digital assets industry.

The proposed bill is designed to regulate digital assets, including cryptocurrencies, as well as derivatives and other financial instruments backed by or referencing digital assets. While the bill is still awaiting approval by the House of Representatives, the Alliance DAO is already warning stakeholders in the industry to take the potential ramifications seriously.

The DARA aims to require digital asset businesses operating in Illinois to be licensed and regulated by the Illinois Department of Financial and Professional Regulation. Failure to obtain the proper license could result in criminal charges, which, if implemented, could serve as a powerful deterrent against illegal or fraudulent activities in the digital assets space. However, it is the overlapping and vague language of the bill that has caused concern among various stakeholders that blockchain activity, even within the pre-ICO stage, or those in partnership with blockchain companies may fall foul of the law.

While the bill’s main intention is to protect Illinois residents from fraudulent activities, it could lead to an exodus of blockchain businesses from the state, a development that would be both negative for Illinois’s economy and potentially counterintuitive to the political objective of boosing the state’s technological infrastructure.

In conclusion, the Alliance DAO’s interpretation of the proposed Illinois DARA sends a clear message that the digital assets industry is being monitored closely by the wider system. While ensuring the security of digital assets and protecting individuals from unscrupulous activities is paramount, a clearly defined bill with distinct objectives may be the best approach. The potential passing of this bill may restrict innovation, and the urgency shown by the Alliance DAO is a warning to others in the industry to remain vigilant.

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