The crypto industry is urging the U.S. Congress to leave the tax bill for miners and stakers untouched.
On June 21, three leading crypto associations — the Blockchain Association, the Crypto Council for Innovation, and The Digital Chamber — sent a joint letter to the U.S. House Committee on Ways and Means. The main goal: to protect the Tax Clarity for Mining and Staking Act (H.R. 9175) from harmful amendments.
What is at stake
Bill H.R. 9175, introduced by Congressman Mike Carey on June 8, aims to clarify the taxation of mining and staking rewards. Currently, the IRS treats the receipt of new digital assets as ordinary income at their fair market value at the time of receipt. This creates the risk of so-called "phantom income": tax is levied on the value of an asset that the miner or staker has not yet sold and may not be able to sell at a favorable price.
H.R. 9175 proposes an alternative regime: the taxpayer could account for such assets under a model similar to self-created property, deferring taxation until actual realization. This is critically important for liquidity and reducing the tax burden in the early stages.
The Horsford Amendment — a threat to compromise
However, Congressman Steven Horsford proposed an amendment limiting the tax deferral to five years. If the asset is not sold by the end of the fourth tax year after receipt, the taxpayer must recognize a gain or loss under a deemed sale mechanism. Crypto Council for Innovation CEO Ji Hun Kim called this a "break" of the bill, turning it into a mandatory five-year timer.
In the letter, the associations emphasize that the amendment would create a huge administrative burden: taxpayers would have to track cost basis and calculate gains on a mandatory cycle, even in the absence of an actual sale. Meanwhile, the Joint Committee on Taxation estimated the budget impact of the amendment at just $101 million over 10 years — a negligible amount compared to the potential damage to the industry.
Banking lobby vs. crypto innovation
Interestingly, the American Bankers Association (ABA) also opposed the bill. They argue that H.R. 9175 creates "clear favoritism" for crypto assets, encouraging a shift of funds from bank deposits to crypto products. However, in my view, this more likely reflects traditional finance's fear of losing market share than genuine concern for taxpayers.
My analysis
The situation demonstrates a classic confrontation: innovation requires flexible regulation, but the bureaucratic machine and traditional players resist. The Horsford amendment is an attempt to maintain control, but it strips the bill of its core purpose: protection from taxation until actual monetization. If Congress adopts this amendment, H.R. 9175 will lose its value for the industry, and we risk seeing capital flight from the U.S. crypto sector.
In my view, a reasonable compromise would be to keep the indefinite deferral but strengthen reporting and transparency requirements. This would satisfy both regulators and market participants.