Illinois § 5-10

§ 5-10.

Custody and protection of customer assets. (a) A covered person that stores, holds, or maintains custody or control of a digital asset for one or more persons shall: (1) at all times maintain an amount of each type of digital asset sufficient to satisfy the aggregate entitlements of the persons to the type of digital asset; (2) segregate such digital assets from the other assets of the covered person; and (3) not sell, transfer, assign, lend, hypothecate, pledge, or otherwise use or encumber such digital assets, except for the sale, transfer, or assignment of such digital assets at the direction of such other persons. (b) If a covered person violates subsection (a), then the property interests of the persons in the digital asset are pro rata property interests in the type of digital asset to which the persons are entitled without regard to the time the persons became entitled to the digital asset or the covered person obtained control of the digital asset. (c) A digital asset subject to this Section is: (1) held for the persons entitled to the digital asset under subsection (a); (2) not the property of the covered person; and (3) not subject to the claims of creditors of the covered person. (d) Digital assets subject to this Section, even if commingled with other assets of the covered person, are held in trust for the benefit of the persons entitled to the digital assets under subsection (a), in the event of insolvency, the filing of a petition by or against the covered person under the United States Bankruptcy Code (11 U.S.C. 101 et seq.) for bankruptcy or reorganization, the filing of a petition by or against the covered person for receivership, the commencement of any other judicial or administrative proceeding for its dissolution or reorganization, or an action by a creditor against the covered person who is not a beneficiary of this statutory trust. No digital asset impressed with a trust pursuant to this subsection shall be subject to attachment, levy of execution, or sequestration by order of any court, except for a beneficiary of this statutory trust. (e) The Department may adopt rules applicable to covered persons related to additional protections of customer assets, including, but not limited to: (1) rules requiring that digital assets and funds controlled by the covered person on behalf of residents be held in accounts segregated from the covered person's own digital assets and funds; (2) rules related to qualified custodians that may hold such segregated accounts; (3) rules related to titling of such segregated accounts; (4) rules related to audit requirements for customer assets; (5) rules requiring compliance with specific provisions of the Uniform Commercial Code applicable to digital assets; (6) rules restricting selling, transferring, assigning, lending, hypothecating, pledging, or otherwise using or encumbering customer assets; and (7) any rules as may be as may be necessary and appropriate for the protection of residents or necessary to effectuate the purposes of this Section. (Source: P.A. 104-428, eff. 8-18-25.)