Eighteen crypto companies, investors and advocacy groups filed a friend-of-the-court brief on Thursday 12 November against the Illinois crypto tax, the first state levy in the US on digital asset transactions. Led by the DeFi Education Fund, Paradigm, Uniswap and Andreessen Horowitz (a16z), they argue the 0.2% tax is too vague to apply and cannot lawfully reach developers whose software never touches customer funds, according to CoinDesk and The Block, which both reported the filing.
The brief backs the lawsuits that crypto trade groups brought in the summer against Illinois officials in the Sangamon County circuit court in Springfield. Its timing matters: Illinois has agreed to push the tax back to 1 July 2027, and the plaintiffs have asked for a ruling on the merits by March.
No copy of the filing has been made public, and neither report says which of the two cases it went into. Its arguments are known through the two outlets’ quotes; the plaintiffs’ court filings and the rules drafted by the Illinois Department of Revenue (IDOR) fill in the rest.
Who signed the amicus brief against the Illinois crypto tax
CoinDesk counts 18 signers. The Block gives the fullest list: the four leaders named above, plus Aave Labs, Aptos Labs, Aztec Labs, Chainlink Labs, the Decentralization Research Center, Dromos Labs, Figment, the Hyperliquid Policy Center, Jito Labs, Multicoin Capital Management, Orca Creative, Phantom Technologies, the Solana Policy Institute and Stand With Crypto. That makes 18, the same count as CoinDesk.
The make-up of the group is the news. The two lawsuits were filed by trade associations: The Digital Chamber on one side and, separately, the Blockchain Association with the Crypto Council for Innovation. The new brief comes from the side of the industry that writes open-source code: decentralized exchange developers, a wallet maker, an oracle network, staking companies and the funds that back them. Several of them, including a16z, Uniswap Labs and the DeFi Education Fund, had already written to IDOR on 30 October about how its draft rules treat decentralized exchanges.
The 0.2% tax on value, not on fees or gains
The Digital Asset Tax Act (35 ILCS 195) was enacted as Article 3 of Public Act 104-0468, the bill that carried Illinois’s fiscal 2027 budget, and Governor JB Pritzker signed it on 16 June 2026. It taxes “the privilege of receiving any digital asset business activity” by a customer in Illinois, at 0.2% of the value of the asset involved. Business activity means exchanging, transferring or storing a digital asset for a customer through a “digital asset broker”.
The base is the point of contention. The tax is not charged on the broker’s fee, nor on a profit. In their complaint, the Blockchain Association and the Crypto Council for Innovation write that it applies “even if the customer buys nothing, sells nothing, gains nothing, and transfers no ownership”. A $10,000 purchase carries $20 of tax whatever the platform earns on it.
Their motion for a preliminary injunction gives a sharper example: a broker charging a flat fee of $1 to $10 to move $1 million of crypto would owe Illinois $2,000 on that one transaction. The same filing says a single trade can attract the tax up to three times, because buying a coin, crediting it to an account and then holding it can each count as a separate exchange, transfer and storage, and the Act does not say which applies.
Brokers must collect the tax, add it to the customer’s bill as a separate line, and remit it to IDOR. The broker is liable “whether or not the tax has been collected”, and if no broker charges it, the customer is supposed to pay IDOR directly. The collection duty appears to apply to brokers with a place of business in the state, which the Act defines to include those with $100,000 or more of Illinois receipts over 12 months; the plaintiffs say another section contradicts that limit. Violating any provision of the Act, including failing to register, is a Class 3 felony.
How the bill passed
Lawmakers had little time to read any of it. According to the plaintiffs’ court filings, SB 3019 was introduced in January 2026 as a two-page bill on loans for agricultural property. On 31 May, the last day of the session, two amendments turned it into a 1,624-page bill covering subjects from truck weights to sports betting; the crypto tax took about 20 of those pages. It went through committee and both chambers in under 24 hours, with one hour’s public notice. At the House revenue committee hearing that day, one legislator criticised the bill for “just picking on one type of asset”, the motion says.
Who counts as a crypto broker in Illinois
This is where the 18 signers come in. The Act borrows its broker definition from federal tax law: a person as defined in Section 6045(c)(1)(D) of the Internal Revenue Code “and any regulations as the Secretary of the Treasury may prescribe”, who provides digital asset business activity to Illinois customers. The federal regulation that would have extended broker reporting to some decentralized finance front ends no longer exists. Congress struck it down with a Congressional Review Act resolution that became Public Law 119-5 on 10 April 2025.
IDOR’s draft rules, posted on 28 September, write a broader definition of their own. A broker is “any person who, for consideration, is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person”. The listed examples include centralized exchanges, custodians, and “decentralized finance exchanges that collect protocol fees or other fees imposed and collected for the exchange itself”.
The same draft excludes decentralized exchanges whose swap fees go only to liquidity pools. Gas and validator fees do not count as consideration either. A protocol fee does, and that line now matters in practice: Uniswap, for one, has started directing part of its fees to a burn of its UNI token, as we reported when Uniswap v4 began routing swaps to outside venues.
The draft also asks brokers to keep “account information sufficient to show the movement of digital assets including private keys”. A private key is the secret that controls a wallet; a non-custodial developer never sees one.
In their 30 October comment letter, a16z, the DeFi Education Fund and Uniswap Labs asked IDOR to confirm that neither a decentralized exchange nor the interface people use to reach it is a broker. They also asked it to define protocol and interface fees so that neither makes anyone a broker, to drop the private key requirement, and to exempt withdrawals to a user’s own wallet and moves between blockchains. Their last request: no rules in force until an Illinois court has ruled on the tax, and in no case before 1 July 2027. IDOR has not published final rules. The comment window closed on 30 October, and when the draft was posted IDOR said it had not been filed with the Secretary of State or sent to the legislature’s rules committee.
What the amicus brief argues
The brief takes those same concerns to the judge, with a legal frame. According to CoinDesk, it says the Act’s definitions are too vague to be lawful, and that IDOR’s reading would reach developers and network participants who cannot collect the tax, have no control over users’ assets and cannot tell where a transaction takes place. Non-custodial developers “keep no accounts or customer records and have no technological ability to collect or store them”, the brief says, as quoted by CoinDesk. The tax should not reach “people who write software that others use to transact for themselves”.
The Block quotes two other passages. “The Act singles out transactions involving blockchain technology for unfavorable tax treatment,” the signers write. And: “The Act fails to establish sufficiently clear boundaries between taxable digital asset business activity” and the software and network infrastructure around it. The brief also puts a number on the people affected, an estimated 2.64 million Illinois residents holding digital assets, the fifth-highest total of any state.
Neither outlet reported a response from the state to the brief.
What an amicus brief can and cannot do
An amicus curiae, or friend of the court, is not a party to the case. It cannot ask for relief of its own, and the judge decides how much weight its arguments get. Its use is to bring facts and angles the parties did not cover. Here the trade groups’ complaints are built mainly on federal and constitutional grounds, such as the Internet Tax Freedom Act, the dormant Commerce Clause and the Illinois Constitution’s uniformity rule. The DeFi brief adds a narrower, technical claim: whatever the court thinks of the tax in general, it cannot work for software that holds nothing. For background on how US and EU law treat developers, see our guide to DeFi regulation and developer liability.
Two lawsuits, one stay and a March target
Both challenges sit in the Circuit Court of the Seventh Judicial Circuit, Sangamon County. The Blockchain Association and Crypto Council for Innovation case carries number 2026 MR 000312, according to their injunction motion. The Digital Chamber’s complaint, as published, leaves the case number blank. The parties have not announced a hearing date.
| Date | Step |
|---|---|
| 16 June 2026 | Pritzker signs the budget bill containing the Digital Asset Tax Act |
| 21 July 2026 | The Digital Chamber sues IDOR Director David Harris and Attorney General Kwame Raoul |
| 21 August 2026 | Blockchain Association and Crypto Council for Innovation file a second suit |
| 9 September 2026 | The two groups ask for a preliminary injunction before the 1 January start |
| 28 September 2026 | IDOR posts draft rules, comments due 30 October |
| 1 October 2026 | A joint motion in The Digital Chamber’s case asks to move the start to 1 July 2027 |
| October 2026 | Blockchain Association and CCI ask for a fast summary judgment schedule |
| 12 November 2026 | 18 DeFi firms and groups file their amicus brief |
| March 2027 | Possible ruling on the merits, if the court approves the fast schedule |
| 1 July 2027 | Delayed start of the tax |
The delay came from a joint motion filed in The Digital Chamber’s case, which moved the start “without prejudicing any Party’s rights, claims, or defenses on the merits”, Cointelegraph reported on 1 October. The 30 October comment letter describes the same date as part of an agreement for stay relief between the Blockchain Association, the Crypto Council for Innovation and the Illinois Attorney General. CoinDesk’s 12 November report describes the tax as on hold while the cases continue; none of these reports cites a court order. On 14 October, Cointelegraph reported that the Blockchain Association and CCI had asked for a fast summary judgment schedule which, subject to court approval, could produce a decision on the merits by March.
The money at stake for Illinois is small next to the fight. The injunction motion cites the fiscal 2027 budget summary of the legislature’s Commission on Government Forecasting and Accountability: $60 million of projected revenue from the tax against $224.6 billion of appropriations, less than 0.03%. “A ruling that arrives after the tax takes effect does not undo these harms,” Crypto Council for Innovation chief executive Ji Hun Kim said when the motion was filed.
| Figure | Value | Source |
|---|---|---|
| Tax rate | 0.2% of the asset’s value | 35 ILCS 195/3-20 |
| Collection threshold | $100,000 of Illinois receipts over 12 months | 35 ILCS 195/3-15, 3-35 |
| Projected revenue | $60 million | Illinois FY2027 budget summary (COGFA), via plaintiffs’ motion |
| State appropriations | $224.6 billion | Same |
| Illinois holders | 2.64 million | Amicus brief, via The Block |
| Signers of the 12 November brief | 18 | CoinDesk, The Block |
What the Illinois crypto tax means for users
For now, nothing is collected. If the tax starts on 1 July 2027, an Illinois customer of a centralized exchange or custodian would see 0.2% added on each covered exchange, transfer or storage event. Under the draft rules, that includes moving coins from an exchange to a self-custody wallet when the exchange charges a fee for it. The draft gives this exact case as a taxable example, and it lists moving assets from one blockchain to another as a taxable exchange. Retailers that accept crypto as payment are not brokers and would not charge it.
Users who trade directly on a decentralized exchange are in the grey zone the brief is about. If the exchange collects a protocol fee, the draft would make it a broker; the Act would then expect it to know which users are in Illinois, using home addresses, mailing addresses or IP addresses, with the burden of proof on the broker. A smart contract has none of that information. The Act’s fallback is that the customer pays IDOR directly.
Outside the US, crypto is taxed on gains, not on each movement. Greece, for instance, has just passed a 10% tax on crypto gains from 2027, while EU states are wiring in the OECD reporting framework, as France’s Senate did when it approved CARF. A levy on the value of every transfer, as Illinois wrote it, has no equivalent in those systems.
Open questions before a ruling
- The text of the brief and the case it was filed in have not been made public.
- The stay to 1 July 2027 rests on the parties’ agreement as reported; no court order on it has been made public, and no hearing date has been announced.
- IDOR has not said whether it will narrow its broker definition for decentralized exchanges or drop the private key record requirement.
- No response from the state to the 12 November brief has been reported.
- A repeal bill, HB 5798, was introduced on 22 June 2026, according to law firm Reed Smith; no later action on it has been reported.
The next date to watch is March 2027, if the court accepts the schedule the plaintiffs proposed. Carbone of The Digital Chamber put it bluntly when the delay was agreed: “[A] delay is not a repeal.”