TLDR
- Illinois passed a 0.2% tax on certain digital asset business activity.
- The tax covers crypto exchange, transfer and custody activity by businesses.
- Brian Armstrong said the law could hurt jobs and push innovation out of Illinois.
- Michael Saylor called the Illinois crypto tax a “₿ig Mistake.”
- The tax is scheduled to take effect on January 1, 2027.
Coinbase CEO Brian Armstrong and Strategy founder Michael Saylor criticized a new Illinois law that imposes a 0.2% tax on certain digital asset business activity, adding to industry pushback against what crypto policy groups describe as one of the most restrictive state-level digital asset tax measures in the United States.
Illinois Governor J.B. Pritzker signed the measure on June 16 as part of the state’s broader budget bill for fiscal year 2027. The provision applies a 0.2% tax on receiving digital asset business activity, including the exchange, transfer, or storage of digital assets as part of a business or on behalf of a customer.
Armstrong said the law would hurt Illinois, reduce jobs, and push innovation out of the state. He also said Coinbase has 1,517,628 customers in Illinois and encouraged residents opposed to the policy to contact their representatives through Stand With Crypto.
Illinois Crypto Tax Targets Transfers and Custody
The new tax applies to firms based in Illinois or companies that provide digital asset services to Illinois residents, provided they have total gross receipts of at least $100,000. The tax is expected to raise about $60 million, according to a person following the process.
The law defines digital asset business activity broadly, covering any single occurrence of exchanging, transferring, or storing a digital asset as part of a business or on behalf of a customer. Industry participants said that wording could capture common crypto activity, including buying Bitcoin, transferring assets, or holding assets with a custodian.
The tax is scheduled to take effect on January 1, 2027. The provision was reportedly added late to the broader state budget bill, which also included new taxes on fantasy sports, social media, and other areas.
Austin Campbell, an adjunct professor at NYU Stern School of Business, said the language may be broad enough to cover digital money beyond crypto assets, including some forms of electronic bank transfers.
Armstrong and Saylor Criticize Illinois Policy
Armstrong called the Illinois law “remarkably bad” and said it would damage the state’s business environment. His comments followed criticism from Miles Jennings, head of policy and general counsel at Andreessen Horowitz Crypto, who described the law as one of the most anti-crypto measures in the country.
This Illinois law is remarkably bad – it will end up hurting the state, kill jobs and push innovation out of the state.
Coinbase has 1,517,628 customers (aka voters!) in Illinois.
If you think this is bad policy, sign up at @standwithcrypto and let your representatives know https://t.co/Hj4PBPVTr6
— Brian Armstrong (@brian_armstrong) June 18, 2026
Jennings said the tax singles out crypto by applying to exchange, transfer, or custody activity in a way that does not apply to stocks, bonds, or derivatives. He argued that Illinois is creating a discriminatory asset-specific tax that could drive users and builders to other states.
Saylor responded to the law with a brief post calling it a “₿ig Mistake.” The Strategy founder’s reaction added visibility to the industry response, as his company remains one of the largest public Bitcoin holders and a major voice in corporate Bitcoin adoption.
Crypto policy commentator Andoni Olta said the law sends a message for companies to leave Illinois. The Crypto Council for Innovation also urged the governor to use a line-item veto, arguing that the tax would punish ordinary customer use of digital asset services.
Industry Sees Lawsuit as Possible Next Step
Changing the law before it takes effect may be difficult because the Illinois legislature is scheduled to remain out of session for the rest of the year. A fall veto session could provide one route for changes, although it remains unclear whether the governor would revisit the provision.
A person following the process said litigation may be the most likely path to challenge or limit the tax. Several entities are reportedly discussing possible lawsuits, although no case has been filed.
The dispute also comes only months after Illinois passed the Digital Assets and Consumer Protection Act, which some industry figures viewed as a more balanced regulatory framework. Jennings said the new tax marks a sharp reversal from that earlier approach.
The political backdrop has also drawn attention because crypto industry groups recently spent heavily in Illinois’ Democratic Senate primary. Stand With Crypto, which is backed by Coinbase, gave Lieutenant Governor Juliana Stratton an “F” grade on digital assets after she criticized crypto-backed spending in the race.
