IL SB1797

Creates the Digital Assets and Consumer Protection Act requiring persons engaging in digital asset business activity (exchanging, transferring, or storing digital assets) with Illinois residents to register with the Department of Financial and Professional Regulation

Establishes customer protection requirements including mandatory disclosures about fees, insurance coverage, transaction irrevocability, and service outages; requires covered persons to maintain toll-free customer service lines and dispute resolution procedures

Mandates that customer digital assets be segregated from company assets, held in trust for customers, and protected from creditor claims in bankruptcy proceedings; prohibits covered persons from selling, lending, or pledging customer assets without direction

Requires covered exchanges to certify risk assessments before listing digital assets and establishes best execution standards for customer transactions; exempts peer-to-peer exchanges, decentralized exchanges, software development, NFT issuance, and blockchain validation from registration

Sets capital, liquidity, and surety bond requirements; authorizes civil penalties up to $100,000 per day for unregistered activity and up to $75,000 per day for fraud-related violations; creates transition period with registration compliance deadline of July 1, 2027