The Crypto Council for Innovation and the Blockchain Association have filed a joint motion for a preliminary injunction to block Illinois's Digital Asset Tax Act before it takes effect on January 1. The groups join the Digital Chamber, which sued the state over the law in July, and argue the tax would cause the industry irreparable harm.
The Crypto Council for Innovation and the Blockchain Association asked a court to grant a preliminary injunction barring Illinois from enforcing its new crypto tax law, arguing the move is needed to prevent irreparable harm and preserve the status quo. The two groups join the Digital Chamber, which sued the state in July over the same legislation.
Groups Call The Tax Discriminatory
The crypto associations argue the "discriminatory" tax law would force them and their members to spend millions of dollars complying on an expedited basis, without meaningful guidance and under threat of criminal penalties. According to the joint motion: "the digital-asset industry will suffer irreparable harm if the Act takes effect".
Governor JB Pritzker signed the Illinois crypto tax law in June, imposing a 0.2% tax on crypto transactions with no exemption for daily transactions and no de minimis rule. The Digital Chamber sued Illinois in July, asking the court to halt the Act before its January 1 start, arguing digital asset activities face different crypto tax treatment than similar activities in traditional finance.
Legislative Process Under Fire
The two groups say lawmakers rushed the Act "within hours," without meaningful debate, despite concerns from legislators about its lawfulness. They note the General Assembly revealed the Act only on the last day of its 2026 session, buried inside a 1,624-page bill that also imposes a 1.75% levy on sports bets placed on prediction market platforms.
It further argues the law violates the federal Internet Tax Freedom Act by taxing internet commerce, and violates the dormant Commerce Clause because it discriminates against interstate commerce. Crypto Council CEO Ji Kim said the harm to the industry would be irreparable and that the groups filed their motion to stop what they call a punitive law.
Source: CoinGape
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