CFTC Commissioner Slams Illinois Crypto Transaction Tax as ‘Sin Tax’

Michael Selig, a commissioner at the US Commodity Futures Trading Commission, sharply criticized Illinois over its move to tax cryptocurrency transactions.

Writing on X on July 2, Selig said the Illinois legislature was “jeopardizing Chicago’s future” by imposing what he called a “sin tax” on blockchain technology.

Illinois Governor JB Pritzker signed the Digital Asset Tax Act in June. The law requires crypto service providers, including exchanges, custodians and brokers, to collect taxes on user transactions and remit the proceeds to the state government. It will take effect in January 2027.

Selig called the measure “anti-growth.” He said it would impose taxes even on crypto transfers that generate no economic gain, adding that it would leave Illinois residents owning property by government permission rather than by right.

He added that if Illinois chooses to raid crypto wallets instead of fostering economic growth as blockchain technology reshapes markets, the move could one day be remembered as Chicago’s last trade.