Illinois General Assembly - 205 ILCS 731/ Digital Assets and Consumer Protection Act.

(205 ILCS 731/Art. 15 heading) Article 15. Registration (Source: P.A. 104-428, eff. 8-18-25.)

(205 ILCS 731/15-5)

Sec. 15-5. Registration required. A person shall not engage in digital asset business activity, or hold itself out as being able to engage in digital asset business activity, with or on behalf of a resident unless the person is registered in this State by the Department under this Article, or the person is exempt from registration pursuant to Section 1-10.

(Source: P.A. 104-428, eff. 8-18-25.)

(205 ILCS 731/15-10)

Sec. 15-10. Application.

(a) An application for a registration under this Act shall meet all of the following requirements:

(1) The application shall be in a form and medium prescribed by the Department. The Department may require the filing of the application through a multistate licensing system.

(2) The application shall provide all of the following information relevant to the applicant's proposed digital asset business activity:

(A) The legal name of the applicant, any current or proposed business United States Postal Service address of the applicant, and any fictitious or trade name the applicant uses or plans to use in conducting the applicant's digital asset business activity with or on behalf of a resident.

(B) The legal name, any former or fictitious name, and the residential and business United States Postal Service address of any executive officer and responsible individual of the applicant and any person that has control of the applicant.

(C) A description of the current and former business of the applicant and any affiliate of the applicant for the 5 years before the application is submitted, or, if the business has operated for less than 5 years, for the time the business has operated, including its products and services, associated internet website addresses and social media pages, principal place of business, projected user base, and specific marketing targets.

(D) A list of all of the following:

(i) Any digital asset, money service, or money transmitter registration the applicant and any affiliates hold in another state or from an agency of the United States.

(ii) The date the registrations described in subdivision (i) expire.

(iii) Any revocation, suspension, or other disciplinary action taken against the applicant and any affiliates in any state or by an agency of the United States and any applications rejected by any state or agency of the United States.

(E) A list of any criminal conviction, deferred prosecution agreement, and pending criminal proceeding in any jurisdiction against all of the following:

(i) The applicant.

(ii) Any executive officer of the applicant.

(iii) Any responsible individual of the applicant.

(iv) Any person that has control over the applicant.

(v) Any affiliate of the applicant.

(F) A list of any litigation, arbitration, or administrative proceeding in any jurisdiction in which the applicant or an executive officer, responsible individual, or affiliate of the applicant has been a party for the 10 years before the application is submitted determined to be material in accordance with generally accepted accounting principles and, to the extent the applicant or such other person would be required to disclose the litigation, arbitration, or administrative proceeding in the applicant's or such other person's audited financial statements, reports to equity owners, and similar statements or reports.

(G) A list of any bankruptcy or receivership proceeding in any jurisdiction for the 10 years before the application is submitted in which any of the following was a debtor:

(i) The applicant.

(ii) An executive officer of the applicant.

(iii) A responsible individual of the applicant.

(iv) A person that has control over the applicant.

(v) An affiliate of the applicant.

(H) The name and United States Postal Service address of any bank or credit union in which the applicant and any affiliates plan to deposit funds obtained by digital asset business activity.

(I) The source of funds and credit to be used by the applicant and any affiliate to conduct digital asset business activity with or on behalf of a resident.

(J) A current financial statement and other documentation satisfactory to the Department demonstrating that the applicant has the capital and liquidity required by Section 20-5.

(K) The United States Postal Service address and email address to which communications from the Department can be sent.

(L) The name, United States Postal Service address, and email address of the registered agent of the applicant in this State.

(M) A copy of the certificate, or a detailed summary acceptable to the Department, of coverage for any liability, casualty, business interruption, or cybersecurity insurance policy maintained by the applicant for itself, an executive officer, a responsible individual, an affiliate, or the applicant's users.

(N) If applicable, the date on which and the state in which the applicant is formed and a copy of a current certificate of good standing issued by that state.

(O) If a person has control of the applicant and the person's equity interests are publicly traded in the United States, a copy of the audited financial statement of the person for the most recent fiscal year or most recent report of the person filed under Section 13 of the Securities Exchange Act of 1934, 15 U.S.C. 78m.

(P) If a person has control of the applicant and the person's equity interests are publicly traded outside the United States, a copy of the audited financial statement of the person for the most recent fiscal year of the person or a copy of the most recent documentation similar to that required in subparagraph (O) filed with the foreign regulator in the domicile of the person.

(Q) If the applicant is a partnership or a member-managed limited liability company, the names and United States Postal Service addresses of any general partner or member.

(R) If the applicant is required to register with the Financial Crimes Enforcement Network of the United States Department of the Treasury as a money service business, evidence of the registration.

(S) A set of fingerprints for each executive officer and responsible individual of the applicant.

(T) If available, for any executive officer and responsible individual of the applicant, for the 10 years before the application is submitted, employment history and history of any investigation of the individual or legal proceeding to which the individual was a party.

(U) The plans through which the applicant will meet its obligations under Article 10.

(V) Any other information the Department requires by rule.

(3) The application shall be accompanied by a nonrefundable fee of $5,000 or the amount determined by the Department to cover the costs of application review, whichever is greater.

(b)(1) On receipt of a completed application, the Department shall investigate all of the following:

(A) The financial condition and responsibility of the applicant and any affiliate of the applicant.

(B) The relevant financial and business experience, character, and general fitness of the applicant and any affiliate of the applicant.

(C) The competence, experience, character, and general fitness of each executive officer and director, each responsible individual, and any person that has control of the applicant.

(2) On receipt of a completed application, the Department may investigate the business premises of an applicant or an affiliate of the applicant or require the submission of any other documents or information the Department deems relevant to the application.

(3) The investigation required by this subsection must allow the Secretary to issue positive findings stating that the financial condition, financial responsibility, competence, experience, character, and general fitness of the applicant, each executive officer and director, each responsible individual, any person that has control of the applicant, and any affiliate of the applicant are such as to command the confidence of the community and to warrant belief that the business will be operated honestly, fairly, and efficiently within the purpose of this Act; if the Secretary does not so find, he or she shall not issue the registration, and he or she shall notify the applicant of the denial.

(c)(1) After completing the investigation required by subsection (b), the Department shall send the applicant notice of its decision to approve, conditionally approve, or deny the application. If the Department does not receive notice from the applicant that the applicant accepts conditions specified by the Department within 31 days following the Department's notice of the conditions, the application shall be deemed withdrawn.

(2) The Secretary may impose conditions on a registration if the Secretary determines that those conditions are necessary or appropriate. These conditions shall be imposed in writing and shall continue in effect for the period prescribed by the Secretary.

(d) A registration issued pursuant to this Act shall take effect on the later of the following:

(1) The date the Department issues the registration.

(2) The date the registration provides the security required by Section 20-5.

(e) In addition to the fee required by paragraph (3) of subsection (a), an applicant shall pay the costs of the Department's investigation under subsection (b).

(f) A registration issued pursuant to this Act shall remain in full force and effect until it expires without renewal, is surrendered by the registration, or revoked or suspended as hereinafter provided.

(g)(1) The Department may issue a conditional registration to an applicant who holds or maintains a registration to conduct virtual currency business activity in the State of New York pursuant to Part 200 of Title 23 of the New York Code of Rules and Regulations, or a charter as a New York State limited purpose trust company with approval to conduct virtual currency business under the New York Banking Law, if the registration or approval was issued no later than the effective date of this Act and the applicant pays all appropriate fees and complies with the requirements of this Act.

(2) A conditional registration issued pursuant to this subsection shall expire at the earliest of the following:

(A) upon issuance of an unconditional registration;

(B) upon denial of a registration;

(C) upon revocation of a registration issued pursuant to Part 200 of Title 23 of the New York Code of Rules and Regulations or disapproval or revocation of a charter as a New York State limited purpose trust company with approval to conduct virtual currency business under the New York Banking Law.

(Source: P.A. 104-428, eff. 8-18-25.)

(205 ILCS 731/15-15)

Sec. 15-15. Renewal.

(a) Registrations shall be subject to renewal every year using a common renewal period as established by the Department by rule. A registrant may apply for renewal of the registration by submitting a renewal application under subsection (b) and paying all applicable fees due to the Department.

(b) The renewal application required by subsection (a) shall be submitted in a form and medium prescribed by the Department. The application shall contain all of the following:

(1) Either a copy of the registrant's most recent reviewed annual financial statement, if the gross revenue generated by the registrant's digital asset business activity in this State was not more than $2,000,000 for the fiscal year ending before the anniversary date of issuance of its registration under this Act, or a copy of the registrant's most recent audited annual financial statement, if the registrant's digital asset business activity in this State amounted to more than $2,000,000, for the fiscal year ending before the anniversary date.

(2) If a person other than an individual has control of the registrant, a copy of either of the following:

(A) The person's most recent reviewed annual financial statement, if the person's gross revenue was not more than $2,000,000 in the previous fiscal year measured as of the anniversary date of issuance of its registration under this Act.

(B) The person's most recent audited consolidated annual financial statement, if the person's gross revenue was more than $2,000,000 in the previous fiscal year measured as of the anniversary date of issuance of its registration under this Act.

(3) A description of any of the following:

(A) Any material change in the financial condition of the registrant and any affiliate of the registrant.

(B) Any material litigation related to the registrant's digital asset business activity and involving the registrant or an executive officer, responsible individual, or affiliate of the registrant.

(C) Any federal, state, or foreign investigation involving the registrant or an executive officer, responsible individual, or affiliate of the registrant.

(D)(i) Any data security breach or cybersecurity event involving the registrant.

(ii) A description of a data security breach pursuant to this subparagraph does not constitute disclosure or notification of a security breach for purposes of any other law.

(4) Information or records required by Section 20-25 that the registrant has not reported to the Department.

(5) The number of digital asset business activity transactions with or on behalf of residents for the period since the later of the date the registration was issued or the date the last renewal application was submitted.

(6)(A) The amount of United States dollar equivalent of digital assets in the custody or control of the registrant at the end of the last month that ends not later than 30 days before the date of the renewal application.

(B) The total number of residents for whom the registrant had custody or control of United States dollar equivalent of digital assets on that date.

(7) Evidence that the registrant is in compliance with Section 5-10.

(8) Evidence that the registrant is in compliance with Section 20-5.

(9) A list of all locations where the registrant engages in digital asset business activity.

(10) Any other information the Department requires by rule.

(c) If a registrant does not timely comply with this Section, the Department may take enforcement actions provided under Section 20-50. Notice or hearing is not required for a suspension or revocation of a registration under this Act for failure to pay a renewal fee, file a renewal application, or otherwise comply with this Section.

(d) Suspension or revocation of a registration under this Section does not invalidate a transfer or exchange of digital assets for or on behalf of a resident made during the suspension or revocation and does not insulate the registrant from liability under this Act.

(e) For good cause, the Department, in its sole discretion, may extend a period under this Section.

(f) A registrant that does not comply with this Section shall cease digital asset business activities with or on behalf of a resident. A registrant ceasing an activity or activities regulated by this Act and desiring to no longer be registered shall so inform the Department in writing and, at the same time, convey any registration issued and all other symbols or indicia of registration. The registrant shall include a plan for the withdrawal from regulated business, including a timetable for the disposition of the business, and comply with the surrender guidelines or requirements of the Department.

(Source: P.A. 104-428, eff. 8-18-25.)

(205 ILCS 731/15-20)

Sec. 15-20. Nontransferable registration. A registration under this Act is not transferable or assignable.

(Source: P.A. 104-428, eff. 8-18-25.)