- US Senate Finance Committee considered new crypto tax policies, including exemptions for small transactions and defining staking income.
- Coinbase argued for tax exemptions on cryptocurrency transactions under $300 to encourage domestic innovation.
- Lawmakers examined tightening reporting rules and possibly treating staking revenue as regular income for tax purposes.
- Senator Elizabeth Warren opposed special exemptions, warning they could help tax evasion and money laundering.
- The crypto industry faces uncertainty about tax obligations as Congress debates changes to current rules.
US lawmakers reviewed possible changes to cryptocurrency tax regulations at a Senate Finance Committee hearing on Wednesday. The discussion focused on tax exemptions for smaller crypto transactions and how to classify income from services such as staking.
Lawrence Zlatkin, the vice president of tax at Coinbase, urged the committee to adopt a tax exemption for cryptocurrency payments under $300. Zlatkin stated that this change would support the use of digital assets in everyday payments and promote technological growth in the United States.
He told the committee, “The guiding principle is simple parity with traditional finance. The same tax rules should apply to the same economic activity, whether it involves commodities, stocks, or tokens on a blockchain. Right now, that parity does not exist. The lack of tailored rules has real consequences.”
Lawmakers also addressed the annual tax gap of about $700 billion. They discussed more strict reporting requirements for cryptocurrency transactions, limiting tax exemptions, and classifying revenue from staking—when users help verify blockchain transactions in exchange for rewards—as regular taxable income.
Senator Elizabeth Warren of Massachusetts expressed strong opposition to crypto-specific exemptions. She said, “Crypto holders aren’t paying at least $50 billion per year in taxes that they owe.” Warren warned that easing requirements could shift investment away from other assets, referencing a Joint Committee on Taxation estimate that the proposed exemption could provide a $5.8 billion benefit to crypto investors.
She linked special exemptions to increased risks of money laundering, arguing they might help individuals hide funds or avoid oversight from agencies like the Financial Crimes Enforcement Network (FinCEN). Warren concluded that all profits from crypto should be taxed under current rules for securities and commodities.
The ongoing discussion highlights continuing uncertainty for crypto companies and users, who remain unclear how the Internal Revenue Service (IRS) may enforce tax requirements as digital assets gain popularity. For more details, visit the official hearing record here.
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