Crypto industry urges Congress to exempt mining, staking tax

Leaders of the Blockchain Association, the Crypto Council for Innovation and the Digital Chamber this week sent a letter to the top Republicans and Democrats on the House Ways and Means Committee urging passage of the Tax Clarity for Mining and Staking Act. The bill would exclude rewards from crypto mining and staking from reportable income. Under current law, newly mined coins and staking payouts are treated as income when received, even if holders do not sell the assets.

The trade groups wrote that exempting those rewards would clarify tax treatment and avoid what they described as double taxation when assets are later sold. The letter warned that reopening the bill’s language could derail the bipartisan compromise: “Reopening the compromise already struck in this legislation would risk reviving the very problems the bill resolves and stalling a bipartisan result that is finally within reach,” the groups wrote.

The bill was one of six crypto tax proposals discussed at a recent Ways and Means Committee hearing and drew the most contention. Committee Democrats raised objections, arguing the proposed exemption could make crypto more attractive than stocks, bonds and other taxable investments and could alter investor incentives. Top House Democrats signaled during the hearing that they expect to delay any crypto tax legislation until after the November midterm elections.

A representative for the Digital Chamber confirmed plans to bring nearly a dozen member companies to the Hill for meetings with lawmakers to press for passage and described the flyout as likely to give them “a good feel for the level of motivation” among lawmakers.

Timing is a constraint for both chambers. With the midterm elections in November, committee schedules and floor time are limited. Backers of a separate Senate measure known as the Clarity Act have argued it will be difficult to advance if it cannot clear Congress by August.

Whether the Tax Clarity for Mining and Staking Act moves forward will depend on lawmakers’ assessment of the bill’s bipartisan support and on congressional scheduling before the elections. Committee action and floor availability will determine if the bill can advance this year.