The crypto industry vs. the tax trap: lobbyists block a harmful amendment to the law on mining and staking
On June 21, three leading crypto organizations — the Blockchain Association, the Crypto Council for Innovation, and The Digital Chamber — jointly appealed to the U.S. House Committee on Ways and Means. Their goal: to secure the passage of H.R. 9175 (Tax Clarity for Mining and Staking Act) in its original version and prevent the inclusion of a destructive amendment proposed by Congressman Steven Horsford.
The Essence of the Bill: Clarity Instead of Uncertainty
H.R. 9175, introduced by Congressman Mike Carey on June 8, aims to resolve the long-standing issue of taxing rewards from mining and staking. The document recognizes that newly obtained digital assets through these methods constitute ordinary income but grants taxpayers the option to choose a special tax regime. This regime allows assets to be accounted for under a model similar to self-created property, which is critically important to prevent the taxation of "phantom income."
The Problem of "Phantom Income": When Tax is Levied on Air
The lobbyists' main argument is the inadmissibility of a situation where tax is charged on income that a market participant has not yet been able to monetize. The current IRS position requires miners to include the fair market value of mined bitcoin in gross income on the date of receipt. Similar rules apply to staking rewards. This creates serious liquidity problems: if the asset's price falls after receipt, the taxpayer is forced to pay tax on a higher value, effectively without having any real cash proceeds.
The Horsford Amendment: A Five-Year Timer That Would "Break" the Law
Steven Horsford proposed limiting the tax deferral to five years. His amendment stipulates that if a taxpayer who has chosen the special regime does not sell the asset by the end of the fourth tax year following the year of receipt, they will be required to recognize a gain or loss through a deemed sale mechanism. Essentially, this is a forced five-year cycle for realizing gains, even if no actual sale occurred.
Ji Hun Kim, head of the Crypto Council for Innovation, called this amendment destructive, stating it turns H.R. 9175 into a "five-year forced timer." Lobbyists emphasize that such an approach would create a colossal additional burden on market participants, advisors, and the IRS itself, forcing them to track cost basis and calculate gains on a mandatory cycle.
Notably, the Joint Committee on Taxation estimated the budgetary effect of the amendment at just $101 million over 2026–2036. Against the backdrop of administrative costs, this amount appears negligible, making the amendment unjustifiably burdensome.
Conflict with the Banking Lobby
The bill has faced criticism from the American Bankers Association (ABA). Bankers argue that H.R. 9175 creates "clear favoritism" for crypto assets, granting them a tax advantage over traditional savings methods such as bank deposits. The ABA fears this could trigger an outflow of funds from the banking system into crypto products, negatively impacting small business lending.
My Expert Commentary: The banking lobby, as always, is trying to protect its monopoly on financial flows. Their arguments about "favoritism" seem hypocritical, given that banks themselves have enjoyed tax breaks and government support for decades. The real problem is not the tax advantage of crypto assets, but an outdated tax system that fails to account for the realities of decentralized finance. Passing H.R. 9175 in its original version is not a privilege, but a necessary adjustment of tax legislation to technological innovation. Otherwise, we risk stifling the industry with an administrative burden that will not bring significant revenue to the budget but will create chaos for thousands of market participants.