Crypto Lobbyists Tell Lawmakers: Take the Crypto Tax Bill, Please—No Substitutions, No Amendments, No August Recess 🪙

Three of the largest U.S. crypto advocacy groups urged the House Ways and Means Committee this week to pass the Tax Clarity for Mining and Staking Act "as introduced," warning that reopening the compromise would risk stalling a bipartisan result. The Blockchain Association, the Crypto Council for Innovation, and The Digital Chamber sent a joint letter on Sunday to committee Chair Jason Smith and its top Democrat, Richard Neal, calling the bill a "balanced" and "durable" fix to years of uncertainty over how mining and staking rewards are taxed. The bill, numbered H.R. 9175 and introduced by Rep. Mike Carey, would let miners and stakers elect to defer taxes on newly created tokens until the assets are sold; current IRS guidance treats rewards as income when received.

Industry groups framed the proposal as a long-negotiated middle ground, arguing that current rules create "phantom income" by forcing taxpayers to recognize value before they can monetize rewards. Under the bill, newly minted digital assets would not be included in gross income at receipt if the taxpayer makes the election, and gains would be recognized at disposition. The letter cites IRS Notice 2014-21, which treats mined $BTC as taxable income upon receipt, and Revenue Ruling 2023-14, which holds that staking rewards are immediately taxable when received. The measure also includes a provision stating that a trust would not lose its tax status solely because it stakes digital assets held on behalf of investors, provided it is not actively engaged in the business of validating transactions.

That framing has done little to erase Democratic concerns. During a Ways and Means committee hearing earlier this month on six GOP-written crypto tax bills, the panel's top Democrats said they do not foresee a bipartisan deal on crypto tax policy until after November's midterms. Rep. Richard Neal (D-MA) told reporters he is "aligned with that goal—eventually," according to Punchbowl News. Rep. John Larson (D-CT) asked at the hearing, "Are we acting too quick without knowing what we're doing? There's far more questions than there seem to be answers." Rep. Mike Thompson (D-CA), who voted for the GENIUS Act and the Clarity Act, said the staking and mining question is "a real sticking point in all this, and it seems that maybe we're at an impasse." Democrats have warned that letting taxes on rewards be deferred could make crypto more attractive than traditional investments like corporate stocks and bonds and significantly reshape financial markets.

Industry executives pressed lawmakers to expand other parts of the package, including a $10 de minimis tax exemption for crypto network transaction fees, also known as gas fees, on up to 5,000 transactions a year, and language that would treat stablecoins as effectively equivalent to dollars for tax purposes. Witnesses at the hearing included tax and policy officials from Fidelity, Coinbase, Coin Center, and NYU Law's Tax Law Center. Lawrence Zlatkin, Coinbase's vice president of tax, told the committee it should expand the de minimis threshold. Markus Levin, co-founder of decentralized data provider XRPL, said in a statement that "staking and mining rewards have sat in an awkward grey area for years, and the absence of clear rules has made compliance a guessing game for anyone actively participating in these networks."

Democrats on the panel have begun coalescing around the message that crypto legislation is important, but not necessarily urgent. Republicans in both chambers are racing to move bills while their party still controls Congress and the White House. The mining and staking bill has drawn opposition from the American Bankers Association, which said it would give crypto "a significant advantage over nearly every other way Americans save, invest and earn returns today." Rep. Steven Horsford (D-NV) filed an amendment to limit deferral of crypto reward taxes to five years; Crypto Council for Innovation CEO Ji Hun Kim posted on X on Monday that the amendment would "break" the bill and raise "negligible revenue." The bill has not advanced past the Ways and Means Committee, and it remains unclear whether the panel will mark up any crypto tax legislation before the August recess.