The US Senate Finance Committee held a key hearing this week to address ongoing confusion surrounding the taxation of digital assets, as crypto industry leaders urged lawmakers to modernize outdated tax frameworks. The discussion, highlighted in a JD Supra report titled “Crypto Industry to Senate: Trick or Treat, Any Tax Cuts to Eat?”, reflected growing frustration among blockchain companies, investors, and tax professionals.
Industry representatives, including executives from Coinbase, Coin Center, and several tax advocacy groups, emphasized that current tax laws—originally designed for traditional assets—fail to account for the unique characteristics of blockchain transactions. They called for clearer definitions and updated guidance on how to treat staking rewards, mining income, and decentralized finance (DeFi) activities.
One of the main proposals was to introduce a “de minimis” exemption, which would exclude small crypto transactions (such as everyday payments or micro-trades) from capital gains reporting. Advocates argued that such a measure would simplify compliance for millions of retail users and promote broader crypto adoption.
The committee also reviewed suggestions to streamline disclosure requirements, making it easier for taxpayers to report digital asset activities without excessive administrative burden. Lawmakers expressed interest in collaborating with the IRS to refine the reporting framework introduced under the 2025 Infrastructure Act.
While no immediate legislative decisions were made, the hearing signals growing bipartisan recognition that crypto taxation requires modernization. As digital assets continue to integrate into mainstream finance, regulators and industry participants alike are pushing for a tax system that balances transparency, innovation, and practicality.
