CFTC Chair Selig Blasts Illinois 0.2% Crypto Tax as ‘Sin Tax’ on Blockchain

That structure, he argued, singles out crypto. Moving the same value in a non-crypto format would trigger no such tax, and no comparable financial transaction tax exists elsewhere in the country. Selig wrote that the law leaves residents with “property ownership by permission rather than right.”

Selig, who was sworn in as the CFTC’s 16th chairman in December and has pushed for the agency’s authority over crypto markets, tied his criticism to the federal push for clearer rules. Congress is weighing the CLARITY Act, a market structure bill that would split oversight between the SEC and CFTC and that cleared the Senate Banking Committee in a bipartisan vote in May. Selig wrote that Illinois lawmakers “decided they know better than the federal lawmakers who have been working on delivering clarity to crypto asset markets for years.”

Industry groups have blasted the measure as the “most punitive digital asset tax in the country” and questioned how it will work in practice. Selig ended the op-ed with a warning: “the choice to loot crypto wallets rather than grow the state economy with pro-innovation policies may go down in history as Chicago’s last trade.”

For traders watching the regulatory angle, the Illinois tax creates a direct state-level friction point for any crypto business or investor based in or serving Illinois residents. The 0.2% levy applies per transfer, not per realized gain, which means frequent traders and high-volume users face a compounding cost absent in traditional markets. The CLARITY Act’s progress in the Senate remains the primary federal counterweight; a delay there, as Senator Lummis recently warned, could leave state-level rules like Illinois’s as the de facto regulatory floor through 2030.