This isn’t really about protecting consumers; it’s about protecting the status quo. Unfortunately, the Illinois Digital Assets and Consumer Protection Act (DACPA) shows us all too well what a harsh, regressive reality looks like. That’s especially true in Senate Bill 1797 and House Bill 742. Yet this legislation, wrapped in purported safety and security concerns, would severely limit the ability to innovate. It risks stifling the creativity and innovation of both new artists and Web3 pioneers, the same future it claims to defend. And trust me, if that happens, the result will be catastrophic.

Is Illinois Building A Tech Fortress?

Think about the starving artist, finally able to bypass gatekeepers and directly connect with their audience through NFTs and decentralized platforms. Or the next developer from an opportunity-poor community, coding up a storm and creating the next wave of decentralized apps. These are the unheralded stories that should be breaking through in Illinois. Instead, DACPA now threatens to shut it in their faces.

These proposed licensing requirements aren’t just an excessive burden, they’re a de facto barrier to entry. Imagine an artist struggling to survive. Today, though, they are fronted with an avalanche of complex agreements and costly legal expenditures just to trade their artistic innovation. Or a student, experimenting with blockchain technology in their dorm room, suddenly needing to comply with regulations designed for multi-million dollar exchanges. This isn't consumer protection; it's innovation prevention.

The Illinois Department of Financial and Professional Regulation (IDFPR) is being tasked with overseeing a sector they simply aren't equipped to handle. I think we all agree that government agencies aren’t exactly cutting edge when it comes to speed and modernity. I don’t know about you, but it’s almost impossible to renew your driver’s license online today. Expecting them to be the gatekeepers to future innovations in the highly technical, fast-paced world of blockchain is shortsighted. It effectively sets them up for failure. When they do fail, it’s the little innovators, the artists, the dreamers, who will be left holding the bag.

Here's an unexpected connection: remember the early days of the internet? Just imagine if, at that time, we had put the same kind of requirements on anyone who wanted to build a website or try their hand at electronic commerce. Without DARPA funding, would Amazon, Google or Facebook even be here today? DACPA is a creativity killer. DACPA is nothing short of a creativity killer. It’s keeping the next generation of world-changing technologies from growing up right here in Illinois.

Consumer Protection Or Innovation Restriction?

The argument for DACPA hinges on consumer protection. Let's be honest: most crypto scams originate offshore, beyond the reach of Illinois regulators. The law provides an illusion of protection. It’s as absurd as putting a fence around your backyard to stop thieves. Meanwhile, you turn around and keep the front door wide open.

Meanwhile, the bill's overly broad scope ensnares not just exchanges but students, developers, and entrepreneurs who aren't even handling consumer funds. People are developing non-fungible tokens and most importantly, the next wave of decentralized applications. They are leading the way when it comes to experimenting with blockchain technology and driving innovation in this space.

  • Artists exploring NFTs
  • Developers building decentralized apps
  • Students learning about blockchain

Make no mistake—these are not the people who a sensible execution of regulatory authority should be driving into oblivion. These are the kind of folks who we need to be supportive of, encouraging and empowering.

DACPA threatens to establish a two-tiered system. It benefits big, rich firms that can afford the expensive licensing, while driving smaller startups and innovations out of Illinois. This is the poster child of regulatory capture. Regulations are routed and weaponized by the new large incumbents to crush competition in their bus and keep up their monopolistic stranglehold. Is that truly what we want for Illinois?

Consider New York's BitLicense. The original goal was to create a level playing field for all consumers. It backfired, driving thousands of companies from the state, damaging innovation and leaving residents with underwhelming choices. It is time we learned these lessons, not continued our past failures.

Illinois' Chance To Lead, Not Lag

The majority of Illinois based crypto firms are already covered by current regulations via Money Transmitter Licenses, SEC, CFTC and DOJ. DACPA only adds layers of confusion and cost, setting up a regulatory minefield that will drive off investment and talent.

With the right framework in place, Illinois can become a national leader in all things blockchain, bringing new investment into the state, creating new jobs, and fostering new innovation. We’ve got the talent, we’ve got the resources, and we’ve got the vision. Unfortunately, that’s just what DACPA threatens to do, shoving us to the rear of the field.

This bill has nothing to do with consumer protection. It’s about control. This isn’t about safety or the environment. It’s about stifling innovation and protecting the status quo. It’s the new artists and Web3 pioneers, the displaced voices, who will be left holding the bag.

I implore Illinois legislators to find a way to avoid the harm that Senate Bill 1797 and House Bill 742 would do. Let's foster innovation, not fear it. Let’s not regulate artists and creators out of existence — let’s be smart about how we empower them to thrive. Let’s create a future where Illinois is not a victim of the blockchain revolution—but a leader in it.

The fate of a generation of artists and innovators hangs in the balance. Let Illinois not be the state that shatters their aspirations.