Where to Buy Bitcoin Illinois

In Illinois it is legal for 18 years and older to buy and sell bitcoin. The State has a wide range of licensed cryptocurrency exchanges to choose from.

A snapshot of Illinois Cryptocurrency Market:

  • Buying, selling and exchaning bitcoin is legal for residents of Illinois
  • Federal law requires buyers of bitcoin to be at least 18 years old
  • Nearly every cryptocurrency exchange is licensed that accepts residents from Illinois
  • There is no need to look for offshore exchanges to buy bitcoin for Illinois residents

In this article, we discuss the different exchanges that residents of Illinois can use to buy and sell bitcoin, the legislation and tax laws, bitcoin wallets and other useful information to help you get started.

If you intend to trade and invest in Bitcoin in Illinois, we recommend the following exchanges:


Top 5 Illinois Bitcoin Exchanges






Overview of Illinois Bitcoin Exchanges

Illinois is certainly at the forefront of opening up the cryptocurrency exchange market, through ease of licensing and kind regulatory terms and conditions. Therefore, there are many cryptocurrency exchanges to choose from for residents of Illinois.

Choosing a method of buying bitcoin can be both easy and hard. Easy, in that, there are many options (unlike other US States, whom have very little choice and need to find various avenues to buy bitcoin). In Illinois, the breadth of exchanges can cater from the beginner who are starting out with buying, to the sophisticated who are large volume traders and are setting the market with taking and making, and those who are in between whom have a strategy of holding and diversifying.

The number of Illinois Bitcoin Exchanges to choose from are numerious. Whether you are a beginner or not, it’s important to consider the following factors when choosing a cryptocurrency exchange to buy bitcoin.

🔒 Safety and Security

There is so much choice for residents of Illinois. And with that comes caution in regards to security. Security has been a big issue in the cryptocurrency industry. Exchanges were (and still to this day), a risk of getting hacked, defrauded, and manipulated through pump and dump schemes. Hence, one of the most important aspects to consider when selecting an exchange is to understand their safety and security measures.

The good exchanges will offer:

  • Two-factor authentication (2FA) – a way of confirming your identity through two different methods, for example using both email and mobile text.
  • Cold Storage – the exchange holds customer funds offline to limit the risk of a hack.
  • Audited IT platorm – open it’s IT platform system to be audited for controls and validity.
  • Licensed – Licensed in Illinois provides regulatory protection of customers by the state through compliance of liquidity, controls and systems.

📞 Customer Support

Customer Support is vital when selecting a crptocurrency exchange. This is precisely why many customers will not subscribe to Binance.US for business accounts because their customer support has been known to be appalling (Note: this is different to personal accounts which have less onerous KYC requirements). Knowing that you have selected an exchange with good Customer Support, will give you comfort that there is help at hand if you need it. The good exchanges will also have a comprehensive FAQ that is not vague and answers the questions that the majority of customers are asking.

💳 Payment Methods

Today’s cryptocurrency exchanges can accept a wide variety of deposit and withdrawal methods. Some will require deposits by bank transfer, some use PayPal, Google Pay and Apple Pay, and some accept both credit and debit cards. Make sure you choose an exchange that accepts the deposit and withdrawal methods that you intend to use.

Also take note that the speed of processing a deposit or withdrawal will differ between the payment methods.

🪙 Cryptocurrency Selection

Buying and selling cryptocurrency need not be limited to Bitcoin. Though it is the most traded cryptocurrency and therefore offers the highest liquidity, diversificatioin of exposure to virtual currencies should always be part of an investors strategy. It is important to consider exchanges that offer a variety of cryptocurrencies to trade with. To a lesser degree fiat currencies would also be beneficial, but not as important as the cryptocurrency offerings which is the primary purpose.

⚙️ Ease of Use

Very important for the beginners for buying bitcoin. You want to start off with an exchange with an easy-to-use, intuitive and fast user interface. This factor is also dependent on the device you intend to use. If you are searching for convenience, and want to trade on the go, then make sure you select an exchange that has a mobile app that is compatible with iOS or Andriod.

Having a good user experience will help you make better decisions and make quicker your trades.

💰 Fees

There are two types of fees (normally) to consider, Transaction Fees – which are applied when a buy or a sell is implemented. And a Taker or Maker Fee, which is the commission charged by the exchange based on the dollar value of the trade. Often it is difficult to compare cryptocurrency exchanges with their fees. This is because the fee structure can be quite complicated. Many will have a tiered structure for Taker and Maker fees. The higher the volume and dollar value the lower the percentage charged. Some will discard completely the Transaction fee but build it into the Taker and Maker Fee. The transparency becomes blurred and because it’s not a fixed rate, make comparing near impossible.

Knowing the volumes and dollar amounts you intend to buy and sell bitcoin with, select an exchange that is at least middle of the road for fees.

🏷 Promotions

Some exchanges have great promotions, but be careful because sometimes these are purely to attract new customers with no real benefits. In some cases, the promotions will lead customers to using riskier investment products which provides greater revenue to the exchange, but more losses to the customer.

Select an exchange that has genuine promotions, and is not pushing you into riskier products such as margin lending.


Illinois Bitcoin Exchange Reviews

Considering the above criteria, following is a review of several bitcoin exchanges for Illinois.

Coinbase

Coinbase

This exchange is one of the most popular in the world, alongside Binance. It not only supports the buying of bitcoin, but includes all the other major altcoins such as Bitcoin Cash (BCH), Litecoin (LTC), and Ethereum (ETH). In regards to fiat currencies, it extends to U.S. dollar (USD), the Euro (EURO), and the British pound (GBP). Coinbase has obtained a license with the Illinois Department of Financial and Professional Regulation. This exchange is an excellent all rounder, good for both starters and experienced crypto investors.

  • Money Transmitter License: MT.0000350
  • Card: Coinbase VISA Debit Card and can link to Google Pay and Apple Pay.
  • Mobile App: Available on iOS and Android.
  • Wallet: Coinbase Wallet
coinmama cryptocurrency exchange

Coinmama

Coinmama is a simple no frill cryptocurrency platform that is great for beginners. The range of trading options is limited to 10 cryptocurrencies, but the good thing is that there are no deposit or withdrawal fees. Coinmama is one of the best exchanges for bitcoin buyers who are just starting out.

  • Money Transmitter License: Not Active but accepts Illinois residents
  • Card: None
  • Mobile App: None
  • Wallet: None
etoro cryptocurrency exchange

eToro

eToro is perhaps more well known as a foreign currency exchange, but has naturally expanded to support cryptocurrencies. Leveraging from its existing FX platform, it has features that not many other cryptocurrency exchanges offer. A great exchange for the sophiscated trader, but at the same time also caters for the newbies. Customer Support is very good, which includes a library of content that is helpful and practical.

  • Money Transmitter License: MT.0000380
  • Card: eToro Money Card linked to eToro Money Account
  • Mobile App: Available on iOS and Android
  • Wallet: eToro Wallet
CEX io cryptocurrency exchange

CEX.IO

A beast of a cryptocurrency exchange that truly is a powerhouse for the sophisticated traders. Lots of features that will help analyze market trends, trading patterns and other important bitcoin signals. CEX.IO offers well over 100 cryptocurrencies to choose from. The fees are relatively low, and they accept several deposit and withdrawal options that are common for Illinois residents. Their platform is reliable and stable, even though it is function heavy. A good cryptocurrency exchange for the experienced bitcoin trader.

  • Money Transmitter License: MT.000035
  • Card: VISA Card holding Bitcoin
  • Mobile App: Available on iOS and Android
  • Wallet: CEX.IO Wallet
kraken cryptocurrency exchange

Kraken

One of the pioneers of cryptocurrency exchanges, launched in 2011 and first began trading of bitcoin in 2013. During the early years, Kraken was the target of several publicized hacks, resulting in the theft of bitcoin. Since, these early days, Kraken has strengthened its safety and security to become compliant with US Federal regulations.

Platform reliability has been average, with 48 hours of down time on the January 10, 2018 for an upgrade that was originally for 2 hours.

Though there have been some issues during Kraken’s history, this platform is highly regarded and is backed by many institutions. Valued at approximately $5 billion, Kraken is one of the largest global bitcoin exchanges to trade with.

  • Money Transmitter License: None- Self Regulated and accepts Illinois residents
  • Card: None
  • Mobile App: Available on iOS and Android
  • Wallet: Kraken Online Wallet (not a personal storage wallet)

Illinois Cryptocurrency Tax Ruling and Rates

In the eyes of the IRS, bitcoin is a financial instrument that is an asset. Specifically defined as a digital currency, bitcoin is to be tax treated in the same manner as buying, selling or exchanging foreign currency. Commonly, only realized capital gains and losses impact the tax result for the financial year, while unrealized capital gains and losses remained noted.

The IRS requires bitcoin investors and users to submitt a detailed buy, sell and exchanging of bitcoin via 1099 forms. Due to the tax obligations by the IRS, several bitcoin exchanges now provide 1099 forms for their customers to aid with tax submissions. Others will provide a detailed transaction listing that shows the date, cryptocurrency, units and value of every transaction.

The above is general information only. Please seek a professional tax account for tax advice.


Bitcoin Cryptocurrency Laws and Legislation

In 2017, the Illinois State laws do not explicitly address the treatment of cryptocurrency. However the State’s Department of Financial and Professional Regulation gave guidance through the Illinois Transmitters of Money Act on how to treat bitcoin. Falling in the banner of “virtual currencies”, bitcoin is not defined as legal tender or “money”, and therefore licensing would not be required for the purposes of trading bitcoin. The open treatment of bitcoin, was also promoted through a “Blockchain initiative” which aimed to explore further potential of blockchain.

In 2018, the House introduced HB 5553. This bill proposed local government taxes for using blockchain technology. In addition HB2540 was put forward, which expanded further on the States goals for exploring blockchain technology further. These goals included: a regulation framework for users of bitcoin, cryptocurrency exchanges, the use of blockchain for records and the use of blockchain for finance and insurance.


Bitcoin and Cryptocurrency Wallets

Some exchanges also offer wallets. It’s not necessary for a good exchange to offer a wallet to their clients, though it can be a nice to have for new investors. However, be aware that online wallets offered by exchanges are normally hot wallets. That is, these wallets are connected permanently to the internet. This can be quite risky to use a wallet that is controlled by the exchange and not by yourself.

Hence it’s not necessarily a good thing if an exchange offers a wallet, but it’s a nice to have, if you are looking for an exchange with their own wallet.

  • Online Wallets: Every crypto-exchange has their own wallet where traders can store their coins or cryptocurrencies for as long as they want. However, there are two types of these wallets that traders have to decide about which wallet they want to use for their trading.
  • Illinois Hot Wallets: Since the inception of bitcoins and other cryptocurrencies, wallets have been transformed and divided into two forms- desktop and online. Digital wallets are free and can hold any cryptocurrency that traders want. They enable them to get easy access to their cryptocurrencies via mobile devices. They are perfect for beginners who want something easy to start with.
  • Illinois Cold Wallets: These specifically designed devices work as physical cryptocurrency storage that allow traders to bring their cryptos with them, no matter where they are going. Though, the only considerable thing is their expensive nature with limitations of storing certain cryptocurrencies for future use.

The minimum legal age to buy and sell bitcoin in Illinois is 18 years old.


Summary

Residents of Illinois have a good selection of cryptocurrency exchanges to choose from. The majority of exchanges have obtained a Money Transmitter License with the State which provides assurance to Illinois residents of safety and security. When choosing an exchange, take in account your investor profile, beginner /experienced, buy and hold or daily trading. Some exchanges will be more suited to you than others. Take into account fees, mobile app, features, trading pairs and customer support.

When buying bitcoin in Illinois, you will be required to provide KYC information. The lenght of time for verification will vary, depending on whether you are creatina personal or a business account. A business account will generally take longer to process and there may be a need to seek customer support due to complexity.

Bitcoin in the eyes of the IRS is a taxable financial instrument. Captial gains and losses are to be calculated with details submitted via the 1099 forms. Seek a profession tax accountant for advice if you are unsure.

Buying and selling bitcoin in Illinois is legal if you are 18 years or olders. Store bitcoin safely on a secure wallet. Good luck and happy investing in Bitcoin.


How to Lodge a Cryptocurrency Customer Complaint

If you have a customer complaint at a cryptocurrency exchange, please raise the issue with them first.

If unresolved, please contact the State Finance Department.

Illinois Department of Financial and Professional Regulation
Chicago Office

555 West Monroe Street, 5th Floor
Chicago, IL 60661
Springfield Office
320 West Washington Street, 3rd Floor
Springfield, IL 62786

https://www.idfpr.com/admin/DFI/DFIcomplaint.asp


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