CFTC Chairman Selig Blasts Illinois’s 0.2% Crypto Tax as a ‘Sin Tax’ on Blockchain

CFTC Chairman Michael Selig has taken direct aim at Illinois over its new tax on crypto transactions. In an op-ed published July 1, Selig called the state’s 0.2% levy on digital asset transfers a sin tax on blockchain technology and warned it could drive innovation out of Chicago.

Selig wrote that Illinois lawmakers “slammed the brakes on technological progress” when they approved the measure last month. Under the Digital Asset Tax Act, signed by Governor JB Pritzker in the state’s fiscal 2027 budget, a broad range of crypto transfers by Illinois residents will be taxed at 0.2% of the asset’s value beginning in January 2027. In the op-ed, Selig wrote that the tax would apply “even when the transaction generates no realized profit or economic gain.”

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.”

The post CFTC Chairman Selig Blasts Illinois’s 0.2% Crypto Tax as a ‘Sin Tax’ on Blockchain appeared first on Unchained.