White House Proposes Crypto Reporting Framework to Curb Offshore Tax Evasion

The White House has unveiled a proposed framework for crypto-asset reporting, aiming to strengthen U.S. oversight of digital assets and curb offshore tax evasion. The report recommends that U.S. taxpayers be required to disclose foreign digital asset accounts, a move designed to ensure compliance and promote domestic crypto market growth. The policy is part of a broader effort to level the playing field for U.S.-based crypto exchanges, which have faced structural disadvantages due to unreported offshore holdings [1].

The proposal does not extend to decentralized finance (DeFi) transactions, as the White House acknowledges the inherent privacy and operational differences of DeFi platforms. These transactions occur directly on blockchain networks without intermediaries, making new reporting requirements impractical. This exemption reflects the administration’s attempt to balance regulatory oversight with the innovative potential of decentralized systems [1].

In addition to reporting mandates, the report urges banking regulators to clarify the rules for crypto banks. It calls on the Federal Reserve and other agencies to avoid denying master accounts or bank charters solely based on a financial institution’s involvement in crypto-related activities. The proposal also suggests that regulatory timelines should not be used as a barrier to entry for crypto banks, with automatic approvals recommended in cases of missed deadlines [1].

A key focus of the report is the modernization of anti-money laundering (AML) laws to better address the unique characteristics of digital assets. The Treasury Department is asked to evaluate potential amendments to the Bank Secrecy Act with crypto-specific language. This initiative aims to enhance the U.S.’s ability to prevent illicit finance without stifling the innovation that digital assets can bring [1].

The report, led by White House crypto and AI czar David Sacks, has been endorsed by senior officials, including Treasury Secretary Scott Bessent and SEC Chair Paul Atkins. They view the policy as essential for securing the United States’ position as a global leader in crypto innovation. The document references President Trump’s recent re-election as a “hard fork,” symbolizing a policy reset aimed at fostering a new era of digital asset development in the U.S. [1].

The proposal highlights three main policy updates: mandatory reporting of foreign digital asset accounts, clear regulatory pathways for crypto banks, and a review of AML laws tailored to the crypto industry. These steps aim to create a more transparent and secure digital asset ecosystem while supporting innovation and domestic economic growth [1].

The White House’s strategy reflects a broader trend of increased regulatory attention to digital assets. By introducing these measures, the U.S. is positioning itself to lead in the global crypto space while maintaining strong compliance and security standards. The report underscores the administration’s commitment to fostering a favorable environment for digital asset investment and business, while ensuring that regulatory frameworks evolve alongside technological advancements [1].

Sources:

[1] White House Report Suggests Possible Crypto-Asset Reporting Framework to Address Bitcoin Offshore Accounts

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