US Senators Push Treasury to Correct Crypto Tax on Unrealized Gains

Crypto Reporter

Shalini Nagarajan

Crypto Reporter

Shalini Nagarajan

About Author

Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

Author Profile

Share

Copied

Last updated: 

May 14, 2025

Why Trust Cryptonews

Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews

Senators Cynthia Lummis and Bernie Moreno have urged the US Treasury to address an unintended tax burden caused by a Joe Biden-era tax on corporations, which could hurt digital asset companies.

In a letter sent to Treasury Secretary Scott Bessent, the senators wrote that this tax could make American businesses less competitive than foreign companies.

The corporate alternative minimum tax (CAMT), which Biden signed into law as part of the Inflation Reduction Act, imposes a 15% minimum tax on corporate profits.

Current Tax Structure Could Stifle US Growth In Digital Asset Industry, Senators Warn

The tax is based on adjusted financial statement income (AFSI). This includes the fair value of digital assets. As a result, corporations with large digital asset holdings could be taxed on asset appreciation. This applies even if they haven’t sold the assets.

While this accounting method may apply to certain assets, it creates a challenge for companies in the digital asset sector.

The senators explained that the new rule could harm the US digital asset industry, as it creates an unfair tax burden on American companies.

Senators Push Treasury To Protect US Digital Asset Industry From Unfair Taxes

Under the new standard, entities holding appreciated digital assets would pay taxes on unrealized gains. This could force companies to sell assets just to cover tax liabilities. As a result, their ability to grow and innovate would be limited.

Lummis and Moreno proposed that the Treasury use its regulatory authority to adjust the tax code to exclude unrealized digital asset gains from the AFSI calculation.

By doing so, the senators believe it will help ensure that US digital asset firms remain competitive. Foreign competitors are not subject to the same accounting rules. Additionally, this adjustment would allow US companies to retain their digital asset investments. They would no longer be forced to sell them just to pay taxes.

The proposed adjustments would align U.S. tax policy with the reality of digital asset valuation. Gains are often only realized upon sale. Without these adjustments, American firms may be forced to pay taxes on theoretical profits.