Crypto Tax Chaos: Senators Demand Reform – But Will Washington Wake Up?

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  • Senators push Treasury to exclude unrealized crypto gains from CAMT tax calculations.
  • The CAMT and new accounting rules threaten to push U.S. crypto firms overseas.

A chasm is widening, not between nations, but between the relentless march of crypto innovation and the ponderous, bureaucratic behemoth of federal tax policy. It’s as though one side is galloping ahead, and the other is still figuring out how to catch up with the advent of the steam engine. In this case, it’s pro-crypto lawmakers shouting at the storm to reform or risk sinking the ship.

“Failure to provide this clarity on unrealized gains in digital assets might require corporations to sell assets just to pay the tax, and it would disincentivize entities from maintaining large holdings of digital assets.”

And so, there it is: the most classic of all government-induced dilemmas – forcing firms to liquidate their hard-earned digital assets simply to appease the taxman. How quaint.

What is this new tax proposal anyway?

Now, let’s talk about the real star of the show: the CAMT rule. It imposes a 15% minimum tax on corporations with an average Adjusted Financial Statement Income (AFSI) of $1 billion or more, calculated over three years. In layman’s terms: if you’re holding onto some hefty crypto, you’re in for a rough ride.

Naturally, Lummis chimed in with this gem:

“Our edge in digital finance is at risk if U.S. companies are taxed more than foreign competitors. @berniemoreno & I urged the @USTreasury to lift an unintended tax burden on U.S. digital asset companies.”

Ah yes, because nothing says “progress” like a good old-fashioned tax loophole for your countrymen. Lummis went on, further charming the crowd with this line:

“To lead the world in digital assets, we need a level playing field.”

Of course, the playing field here is more like a treacherous jungle where the taxman is the giant, sleeping snake waiting to strike at any unsuspecting crypto venture.

despite the fanfare, there’s still the nagging issue of how tax policy and accounting rules are inflating taxable income with unrealized crypto gains. Lawmakers fear this could place an unbearable tax burden on U.S. firms, making them pack their bags and head overseas to friendlier shores where taxation isn’t quite so… creatively applied.

To put it mildly, the senators had this to say:

“Neither Congress nor FASB planned this outcome. It’s the unintended result of basing tax liability on decisions by a private organization… not principles of taxation.”

In the world of politics, there’s no better way to express your dissatisfaction than a passive-aggressive jab at a private organization. Well played, senators.

As usual, market sentiment is far less optimistic than the echo chamber of political talk. According to Polymarket data, there’s only a 1% chance that President Donald Trump will eliminate capital gains taxes on crypto before June. Someone get this man a crystal ball.

But hope isn’t entirely lost. Lummis, ever the brave crusader, recently reintroduced the BITCOIN Act, which proposes the creation of a national Bitcoin reserve and tasks the Treasury with hoarding up to a million BTC over five years. Because who doesn’t want a nation-state casually hoarding Bitcoin like it’s the last golden ticket to a Willy Wonka factory?

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2025-05-14 18:38