Blockchain Association Urges Congress to Address Crypto Taxation Amid

On Thursday, the Blockchain Association addressed a letter to the leadership of both the Senate and House, urging Congress to prioritize bipartisan digital asset tax legislation. This initiative represents the organization’s inaugural comprehensive appeal concerning tax regulations following the recent failure of the Clarity Act in the Senate.

This correspondence, which was co-signed by Chief Policy Officer Lindsay Fraser, was directed to influential leaders including Majority Leader John Thune, Minority Leader Chuck Schumer, Speaker Mike Johnson, and Minority Leader Hakeem Jeffries. The letter articulates that the existing regulations governing the 67 million Americans who possess digital assets “were written for a different era.”

Accompanying the letter was the launch of a dedicated website, TaxClarityforAmerica.com, designed to facilitate communication between constituents and their representatives.

The proposals outlined in the letter may resonate with those acquainted with the ongoing discourse surrounding taxation: a de minimis exemption for small transactions, cash treatment for stablecoins, taxation on mining and staking rewards at the point of sale rather than receipt, limitations on broker reporting to firms managing customer assets, and adjustments to wash sale rules to prevent unintended consequences on routine transactions.

Furthermore, the letter proposes a safe harbor for foreign traders on U.S. exchanges, the option for mark-to-market elections, and eligibility for research and development credits related to blockchain development. Notably, the letter refrains from endorsing any specific legislation, despite two bills being in discussion.

Current Status of Tax Legislation

The House of Representatives took the initiative, advancing the Digital Asset Tax Certainty Act, H.R. 10357, with the Ways and Means Committee approving the 114-page proposal shortly after the Clarity Act’s failure in the Senate. The legislation exempts network fees below $10 from capital gains reporting, includes a provision for taxpayers who conducted over 5,000 transfers in the preceding year, and seeks to apply wash sale rules to digital assets, with exceptions for dollar-backed stablecoins.

However, the legislation notably omitted a provision highly sought by industry stakeholders. Rep. Mike Carey’s Tax Clarity for Mining and Staking Act, H.R. 9175, which would have allowed for tax deferral until sale for miners and stakers, was included in preliminary drafts but subsequently excluded from the committee’s released text on September 14. The proposal instead categorizes validation rewards as ordinary income, taxable upon receipt. Rep. Steven Horsford (D-NV), who had initially suggested capping tax deferral at five years, supported the package while indicating that the matter remains open for future negotiations.

In contrast, the Senate has introduced its own proposed legislation. Senator Steve Daines (R-MT) presented the ADAPT Act on September 30, with co-sponsorship from Senators Cynthia Lummis, Bernie Moreno, and Tim Scott. This act aims to exempt purchases made with GENIUS Act stablecoins from gain or loss, establishes the same $10 fee threshold, and extends wash sale rules with provisions for existing holdings and exceptions for mining and staking rewards. This bill is currently pending in committee.

Senator Lummis’s earlier proposal, S. 2207, which includes a de minimis exemption of $300 per transaction capped at $5,000 annually, has been under the purview of the Finance Committee since June 2025.

The legislation proposed in neither the House nor the Senate encompasses the industry’s proposed exemption for small Bitcoin purchases, which was emphasized during Bitcoin 2026. While the House bill allows for a $10 threshold covering fees, it does not address small purchase transactions. Conversely, the Senate bill’s exemption pertains solely to stablecoins rather than Bitcoin.

Advocates from the Bitcoin Policy Institute and other organizations have posited that any de minimis rule ought to encompass Bitcoin. Furthermore, the letter sent on Thursday advocates for a “meaningful” exemption, although it does not stipulate a specific figure.

Challenging Timing

Congress is currently in recess until after the midterm elections set for November 3. Upon their return, lawmakers will face a limited timeframe for a lame-duck session, where priority will be given to government funding and other pressing issues that leadership deems urgent before the end of the 119th Congress.

Senator Lummis, a prominent advocate for digital asset taxation reforms, is set to retire in January 2027.

The collapse of the Clarity Act has significant implications for the current landscape. This market structure bill previously garnered passage in the House with a 294-134 vote in July 2025; however, it encountered stall tactics in the Senate for over a year. This delay was largely attributed to opposition from the banking sector regarding issues of stablecoin yield and demands from Democratic lawmakers for ethics language pertaining to the Trump family’s crypto dealings.

The cloture vote on September 15 ultimately failed with a narrow margin of 49-50, with not a single Democrat crossing party lines and three Republicans—Susan Collins, Josh Hawley, and Jerry Moran—voting against the bill. Senator Thom Tillis changed his vote to allow for a reconsideration motion, which technically keeps the bill alive in a procedural sense but offers little chance for progress.

With market structure deliberations currently sidelined, the industry has redirected its lobbying efforts toward more feasible legislative outcomes. Tax legislation appears to be a promising avenue, as demonstrated by the House package’s successful committee passage with bipartisan support. Additionally, the wash sale provisions present potential revenue-raising opportunities, which could incentivize tax writers to incorporate them into broader legislation. Recent reports suggest that the Blockchain Association’s non-endorsement of either tax bill indicates a desire for more substantial reforms from Congress.

In the meantime, regulators continue to fill the legislative void. The Office of the Comptroller of the Currency (OCC) has recently announced its final rules regarding the GENIUS Act, while the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have actively shaped market structure through rulemaking and enforcement actions in the absence of comprehensive statutory frameworks.

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