Crypto Executive Slams Illinois’ New Digital Asset Tax as “Most Anti-Crypto Law in the US”
Andreessen Horowitz crypto executive Miles Jennings has sharply criticized Illinois’ newly enacted Digital Asset Privilege Tax Act, labeling it “one of the most anti-crypto laws in the US” on June 17. The legislation imposes a 0.2% tax on the exchange, transfer, and custody of digital assets, with virtually no exemptions for common self-custody activities.
According to Jennings, no other U.S. state has implemented a transaction-based tax specifically on cryptocurrency. He further noted that comparable levies do not exist for traditional assets like stocks, bonds, or derivatives anywhere in the country. “That means crypto is being singled out in violation of several federal laws,” he stated.
Jennings’ remarks echoed concerns raised in a June 16 letter from the Crypto Council for Innovation (CCI) to Illinois Governor J.B. Pritzker, urging him to veto the legislation. The CCI argued that the law places unique and disproportionate burdens on individuals simply for holding digital assets, potentially driving users and entrepreneurs out of the state.
The organization expressed the view that the measure taxes blockchain-based activity based on the underlying technology rather than the nature of the transaction itself. The CCI also raised concerns about the legislative process, highlighting that affected stakeholders were not afforded an opportunity to provide input.
Jennings also criticized Governor Pritzker’s timing, pointing out that Illinois had recently adopted the Digital Asset and Consumer Protection Act, which he described as a “constructive approach to blockchain technology.”
“So, rather than embracing innovation and the cost efficiencies blockchain can deliver for ordinary people in Illinois, the state is poised to punish its entrepreneurs and citizens that want to use crypto,” Jennings argued.
The Illinois law emerges as the U.S. Congress is actively working toward establishing a national framework for crypto taxation. The CCI’s letter had advised Governor Pritzker to defer his state-level approach until federal standards were in place. The group warned that Illinois’ decision could contribute to a fragmented landscape of crypto tax laws across the remaining 49 jurisdictions, further complicating matters.
This concern is not without precedent. Earlier this month, Coinbase vice president of tax, Lawrence Zlatkin, testified before the House Ways and Means Committee, advocating for simplified federal crypto tax rules. His proposals included treating federally regulated stablecoins as equivalent to cash and establishing de minimis exemptions for small transactions.
The congressional hearing addressed six standalone bills aimed at updating the U.S. tax code’s treatment of digital assets. Jennings’ post on X underscored the broader implications: “When states adopt discriminatory, asset-specific taxes that drive builders and users elsewhere, we all lose.”
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