US Crypto Industry Fights Illinois Tax as Bitcoin Holds Near $78K Ahead of CPI

The American digital asset industry intensified its legal offensive against Illinois this week, with the Blockchain Association and the Crypto Council for Innovation filing a motion for a preliminary injunction in the Circuit Court of Sangamon County on September 9. The move asks the court to block the state's Digital Asset Tax Act before it takes effect on January 1, 2027.

The law, signed by Governor JB Pritzker as part of the state's fiscal 2027 budget, imposes a 0.2% tax on digital asset transactions processed through brokers. In their 34-page brief, the plaintiffs argue the levy can apply disproportionately because it is calculated on the full value of an asset rather than on the broker's fee, and that it could tax the same transaction more than once.

The groups' core argument rests on four legal grounds: that the tax violates the Illinois Constitution by singling out digital assets from economically similar financial instruments, and that it runs afoul of the federal Internet Tax Freedom Act, which bars discriminatory taxes on e-commerce. They also warn that member companies are already facing serious and irreparable harm, having spent millions of dollars building compliance systems for a law that still lacks clear implementation guidance — while risking criminal penalties for non-compliance.

This is the second wave of litigation against the statute. The Blockchain Association and Crypto Council for Innovation first sued Illinois on August 21, joined shortly after by the Illinois Blockchain Association, while the Digital Chamber filed a separate challenge back in July. A legislative repeal effort, House Bill 5798, has been introduced but has not advanced. With the January 2027 effective date approaching, the outcome of the injunction request will set an early precedent for how other states may attempt to tax digital assets.

Bitcoin Holds Near $78K as Markets Await Key US Inflation Data

While the regulatory battle plays out in Illinois, the broader crypto market is trading cautiously ahead of the latest US Consumer Price Index release. Bitcoin has been holding in a range roughly between $77,600 and $79,200, consolidating just above the $78,000 level as traders position for the inflation print and its implications for Federal Reserve policy.

Global crypto market capitalization slipped about 0.9% to roughly $2.76 trillion, with both Bitcoin and Ethereum edging lower. Ethereum was changing hands near $2,458, down about 1.5% over 24 hours, with daily trading volume around $13.6 billion and a market capitalization near $300.6 billion. Bitcoin's dominance remained strong at roughly 56.9% of the total crypto market, with Ethereum holding close to 10.9%.

Sentiment, however, has not turned negative. The Crypto Fear and Greed Index climbed to 69 — firmly in Greed territory — up from 66 the previous day, reflecting resilient risk appetite even as macro headwinds build. Stablecoin market capitalization held steady at approximately $291.2 billion, with roughly $76.3 billion in stablecoin trading volume over the past day, underscoring continued liquidity in dollar-pegged assets even amid the broader pullback.

What This Means for the Broader Market

Together, these two developments capture the dual pressures shaping the US crypto landscape heading into the fall: a market still digesting macroeconomic signals from the Federal Reserve, and an industry fighting state-by-state to prevent a patchwork of taxation that executives say could undermine the sector's growth. If the Illinois injunction is granted, it would offer digital asset firms a measure of near-term relief and could discourage similar tax proposals in other states. If it fails, market participants may need to price in a new layer of compliance costs just as they navigate a delicate macro environment around Bitcoin's current consolidation near $78,000.