On Feb. 19, Drew Hinkes, an adjunct professor at NYU Stern, tweeted that the blockchain community has been very divided over Illinois Senate Bill SB1887. He pointed out that the measure would force miners, validators, and owners of blockchain nodes to leave the state.
Consequently, it makes it challenging to understand existing regulations and consumes valuable resources.
According to Drew Hinkes, the legislation’s primary goal is to protect consumers in Illinois. However, it is designed in such a way that node operators, miners, and validators may be forced to perform impossible tasks. Alternatively, additional criminal and civil responsibilities could be imposed with the fear of fines.
Crypto Firms Struggles Under SB1887
The Illinois Senate Bill SB1877 mandates blockchain node operators, miners, and validators to have state-issued licenses. Unfortunately, this license would come with a steep price tag and numerous burdensome rules, making it challenging for many businesses to remain in Illinois.
Furthermore, the legislation states that if the Attorney General or a State’s Attorney petitions the court, it must impose a penalty of $5,000 to $10,000 per day for each day that the blockchain network refuses to comply with the order.
The bill also permits service on a blockchain network by delivering a duplicate of the petition, document, lawsuit, or directive with a miner, validator, or node operator who has participated in the blockchain network after the Act’s effective date.
Legal Uncertainty Looms with Senate Bill
In conclusion, the Senate bill has caused anxiety in the tech sector since it may result in legal disputes and make enforcement more difficult.
According to Drew Hinkes, courts may need to debate claims of impossibility and deal with appeals of fines, which could lead to miners fleeing the state. In addition, the service statute could be contested by additional states, and any court proceedings could raise constitutional questions.
It also prompts questions about the blockchain network’s security and privacy. For instance, every miner, validator, or node operator might become a potential target for unscrupulous actors looking to disrupt the network or steal sensitive data if legal documents can be issued by leaving a duplicate with them.
Thus, even though this rule may have had noble intentions, its implementation could have adversely affected Illinois’s blockchain and cryptocurrency businesses.
The Chicago and Illinois tech scenes are expected to closely monitor this situation, as it could impact the growth and development of the industry in the state. However, it remains to be seen how this law will be enforced and how it will affect blockchain innovation in Illinois.
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