Senate Aims to End Crypto Double Taxation with Lummis’ Reform Push

The U.S. Senate Finance Committee, chaired by Senator Mike Crapo (R-Idaho), has scheduled a pivotal hearing on October 1, 2025, at 10:00 AM ET in the Dirksen Senate Office Building. Titled “Examining the Taxation of Digital Assets,” the session will feature testimony from key industry stakeholders, including Lawrence Zlatkin (Vice President of Tax, Coinbase Global), Jason Somensatto (Director of Policy, Coin Center), Andrea Kramer (ASKramer Law), and Annette Nellen (Chair, Digital Assets Tax Task Force, AICPA). The hearing aims to address gaps in current tax frameworks for cryptocurrencies and explore legislative modernization to align with the evolving digital asset landscape.

The session follows the Trump administration’s July 2025 policy report, which recommended classifying digital assets as a distinct asset class with tailored tax rules. This aligns with broader efforts to reduce regulatory uncertainty, particularly after the passage of the in July 2025. The law, signed by President Donald Trump, assigns the CFTC and SEC oversight roles and introduces a $600 de minimis exemption for small crypto transactions, aiming to simplify compliance for everyday users.

A central focus of the hearing will be Senator Cynthia Lummis’s (R-WY) proposed legislation to reform crypto taxation. Her bill seeks to eliminate double taxation on mining and staking rewards by deferring income recognition until assets are sold, along with a $300 threshold for small transactions. Proponents argue such measures would foster innovation and reduce compliance burdens for users and institutions.

The hearing also reflects ongoing IRS scrutiny of digital assets. Under current rules, cryptocurrencies are treated as property, subjecting transactions to capital gains taxes. However, the IRS faces criticism for outdated guidance, particularly in areas like staking rewards and airdrops. The Senate’s deliberations may influence whether Congress mandates clearer tax reporting standards or delegates further responsibility to the Treasury and IRS.

Market participants view the hearing as a potential catalyst for regulatory clarity. Historical precedents, such as the 2021 Infrastructure Bill debates, saw increased institutional adoption of crypto assets following tax rule adjustments. For instance, a proposed Ethereum ETF and Avalanche’s treasury expansion highlight growing institutional interest, which could be further incentivized by streamlined tax policies.

The session’s timing, however, remains contingent on congressional funding. With a government shutdown deadline looming on September 30, delays are possible, though the hearing’s announcement signals bipartisan momentum. Lawmakers’ ability to balance innovation-friendly policies with investor protection will be critical in shaping the U.S. crypto ecosystem.

[1] Crapo Announces Hearing on Taxation of Digital Assets (https://www.finance.senate.gov/chairmans-news/crapo-announces-hearing-on-taxation-of-digital-assets)

[2] Senate Finance Committee to Hear Crypto Tax Plans on October 1 (https://www.cryptotimes.io/2025/09/25/senate-finance-committee-to-hear-crypto-tax-plans-on-october-1/)

[3] U.S. Senate to Examine Crypto Taxation October 1, 2025 (https://coinlineup.com/us-senate-crypto-tax-hearing-2025/)

[4] U.S. Senate Schedules Crypto Tax Hearing, Industry Leaders (https://coinpedia.org/news/u-s-senate-schedules-crypto-tax-hearing-industry-leaders-to-testify/)

[5] US Senate schedules hearing on crypto taxation with testimony … (https://www.theblock.co/post/372244/us-senate-schedules-hearing-crypto-taxation)

[13] Crypto Bill News 2025: Latest U.S. Legislation, Impact, and What It ... (https://www.btcc.com/en-US/academy/guide/crypto-bill-news-2025-latest-u-s-legislation-impact-and-what-it-means-for-investors)