Senator Lummis Pushes for Tax Reform to Ease Crypto Industry Burden

Senator Cynthia Lummis has expressed her belief that the reconciliation process is the most effective strategy to address and rectify the unfair double taxation on digital assets. She argues that the current US tax system is outdated and stifles growth in the crypto industry, particularly affecting Bitcoin miners who face double taxation on block rewards and when they sell their coins. Additionally, DeFi users may encounter multiple taxable events without realizing any profits, a situation analysts attribute to the 2021 Infrastructure Investment and Jobs Act, which categorizes all crypto miners and developers as “brokers.” This classification requires them to report details they often don’t have, such as user identities and transaction data, and subjects them to more taxation.

Lummis has called on Congress to use the reconciliation process to pass tax changes with a simple majority, aiming to adjust the “broker” term to alleviate the burden on digital asset miners and developers. She suggests that changes could include exemptions for non-custodial actors like developers and protocol operators. Some miners have also voiced concerns about the broker definition, arguing that it inaccurately portrays their role since they neither manage user transactions nor control customer funds.

In addition to her stance on reconciliation, Lummis has shown support for the Guiding and Establishing National Innovation for US Stablecoin or GENIUS Act, which recently passed a key vote in the Senate. The bill is moving to the next stage after a 68-30 vote. Lummis praised Majority Leader John Thune for his visionary leadership in understanding the importance of crypto regulation and for his efforts to grow crypto adoption in the country. However, Massachusetts Senator Elizabeth Warren criticized the GENIUS Act, stating that key issues remained unresolved due to the chamber’s failure to consider several bipartisan amendments.

Meanwhile, the CLARITY Act, which aims to define the market structure for crypto assets, is still under discussion. Thune believes that more can be done for the crypto industry and has thrown his weight behind the bill. The House Financial Services lawmakers voted 32 to 19 to send the CLARITY Act to a full floor vote shortly after the Agriculture Committee approved it with a 47–6 vote.