Anchorage Digital Backs Lawsuit to Block Illinois Crypto Tax
Federally chartered cryptocurrency bank Anchorage Digital submitted a declaration to a court in support of a lawsuit that aims to block an Illinois law that will tax crypto when it is exchanged, transferred or held in storage, the company said in a Tuesday (Sept. 8) blog post.
The lawsuit was brought by the Blockchain Association and the Crypto Council for Innovation. It targets an Illinois law, the Digital Asset Tax Act, that is set to take effect Jan. 1, 2027, according to the post.
Anchorage Digital’s declaration tells the court how the new tax created by the law would hurt the company’s business and its customers, per the post.
In its blog post, Anchorage Digital said the law taxes people 0.2% of the value of their crypto when it is exchanged, transferred or held in storage, whether or not they “sell, buy or make a dime” on the crypto.
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“Illinois doesn’t tax any other kind of asset this way,” Anchorage Digital said in the post. “If you move money from your checking account to your savings account you pay nothing. Do the equivalent with crypto, and the state wants a cut.”
In addition, the law includes felony charges for companies that don’t comply, is unclear about basic questions such as when the tax applies, and is estimated by the industry to require infrastructure for compliance that would cost between several hundred thousand dollars and over $1 million, per the post.
“Those costs land directly on Anchorage Digital and our clients, but we’re not alone; many crypto firms will face the same uncertainty and the same bill,” the company said in the post.
Illinois Gov. JB Pritzker signed the bill into law in June. The tax law had been added to the state’s broader budget bill at the last minute and was passed as a provision to that bill.
The Crypto Council for Innovation and the Blockchain Association said in a Wednesday press release that they filed a motion for a preliminary injunction asking a court to bar Illinois from enforcing the Digital Asset Tax Act before it takes effect.
The Digital Chamber filed a lawsuit in July asking the court to halt Illinois’ tax on digital asset business activity, saying the tax will harm the organization’s members, who were already incurring costs as they try to comply with it before it takes effect.
On Sept. 1, The Digital Chamber said in a post on social platform X that the Illinois Blockchain Association joined its lawsuit challenging the digital asset tax.
