In brief:
₿- Senator Cynthia Lummis urges urgent reform of U.S. crypto tax laws, highlighting unfair double taxation of Bitcoin miners and excessive taxable events for DeFi users.
₿- She calls for narrowing the broad “broker” definition from the 2021 Infrastructure Act to reduce reporting burdens and support crypto innovation amid growing market optimism.
U.S. Senator Cynthia Lummis is raising alarm over outdated tax regulations that she says unfairly target Bitcoin miners and DeFi participants. In a recent statement on X, Lummis criticised the current framework for treating crypto innovation as a liability, not an asset, and called for immediate legislative reform.
Miners hit with double taxation
According to Lummis, Bitcoin miners are facing double taxation—first on the block rewards they earn and again when they sell their coins. It’s not only penalizes those who help secure the Bitcoin network but also discourages further investment in mining infrastructure across the U.S. For an industry that thrives on decentralization and transparency, punishing miners with excessive taxes is a move in the wrong direction.
DeFi users face multiple taxable events
DeFi users are also caught in the crossfire. Lummis warned that under the current tax setup, individuals interacting with decentralised applications could trigger multiple taxable events—even without making any profit. Such treatment stifles innovation and pushes blockchain development overseas, where regulations are more crypto-friendly.
Flawed broker definition hurting developers
The rules Lummis is challenging stem from the 2021 Infrastructure Investment and Jobs Act, which broadly defined crypto miners and developers as “brokers.” The label forces them to report user data they often do not have, such as names and transaction histories—creating a regulatory nightmare that simply doesn’t fit the nature of blockchain technology.
A call for smarter crypto tax policy
Lummis is now calling on Congress to use the reconciliation process to amend the law with a simple majority vote. Her goal is to narrow the definition of “broker,” remove unrealistic reporting obligations, and give the crypto industry room to grow.
Reform momentum builds as Bitcoin soars
The timing couldn’t be more significant. Bitcoin just hit an all-time high of $111,600, and pro-crypto legislation like the GENIUS and CLARITY Acts is gaining momentum. There’s even a new proposal for a Strategic Bitcoin Reserve, signaling growing political interest in treating Bitcoin as a national asset.
Potential benefits for the Bitcoin ecosystem
If these reforms succeed, the impact on Bitcoin could be massive. Reduced tax burdens would support miners, promote innovation, and encourage wider adoption. Clarity in the law could bring more institutional investors into the space, driving long-term demand.
Senator Lummis’s push is more than a policy tweak—it’s a turning point. The future of Bitcoin globally might depend on how quickly lawmakers embrace fair and forward-thinking tax reform.
Stay informed,
Rodcas Consulting Group