The crypto industry has received bullish updates this week, with significant developments regarding U.S. crypto taxes and regulatory changes.
Eric Trump Confirms Zero Capital Gains Tax for U.S.-Based Projects
Eric Trump has announced that prominent U.S.-based crypto projects, including XRP and HBAR, will soon benefit from a zero capital gains tax, providing a competitive edge over international projects. In contrast, non-U.S.-based crypto projects will face a steep 30% capital gains tax, potentially reshaping the global crypto landscape.
Coingecko has already responded by adding a dedicated category to track U.S.-based crypto projects, highlighting the growing focus on domestic initiatives within the sector.
Senator Ted Cruz Moves to Overturn IRS DeFi Reporting Rule
In another significant development, Senator Ted Cruz is preparing to introduce a Congressional Review Act (CRA) resolution aimed at overturning a controversial IRS rule targeting the DeFi industry. The rule, finalized in December, requires certain DeFi brokers to report gross proceeds and provide detailed user data, including names and addresses, via Form 1099, akin to traditional securities brokers.
Critics argue the rule is impractical and stifles innovation due to DeFi’s decentralized nature, where platforms often lack centralized entities capable of collecting and reporting user data. The IRS’s broad definition of “brokers” includes non-custodial entities with access to user information, further complicating compliance.
Cruz has been a vocal advocate for crypto, emphasizing its role in fostering innovation. He has expressed concerns that the IRS rule unfairly targets the DeFi sector, which he considers vital for the U.S. crypto industry. Cruz also remains a strong opponent of Central Bank Digital Currencies (CBDCs), advocating for decentralized alternatives like Bitcoin.
Path Forward
The Congressional Review Act allows Congress to overturn new regulations within 60 days of their issuance. With a Republican-dominated Congress, Cruz’s resolution is likely to gain traction, strengthening his reputation as a pro-crypto lawmaker.
These developments signal a significant shift in the regulatory environment for crypto in the U.S., potentially positioning the nation as a leader in fostering blockchain innovation.
