Biden Admin Proposes 30% Tax on Crypto Mining, Closing Washout Trade Loopholes

[ad_1]

The administration of US President Joe Biden has proposed an excise tax on cryptocurrency miners equal to 30% of the cost of the electricity they use, and plans to eliminate tax-deductible losses related to mining. washing crypto tokens, according to a US department. of the Treasury document released Thursday.

See related article: CFTC Chairman Calls Ethereum a Commodity, Contrary to Position of SEC Chairman Genslers

Fast facts

The Treasury Department said any business using owned or borrowed computing resources to operate digital assets will be subject to the 30% tax, which is expected to be introduced over three years in annual increments of 10% beginning Dec. 31, 2023.

The increase in energy consumption attributable to the growth of digital asset mining has negative effects on the environment and may have implications for environmental justice as well as increased energy prices for those who share a power grid, the Treasury Department said.

According to the White House, estimated global electricity consumption for crypto assets is between 120 and 240 billion kilowatt hours per year, a range that exceeds Australia’s annual electricity consumption.

President Bidens’ fiscal year 2024 budget also included a proposal to apply wash sale rules to digital assets to close tax loopholes. Tax fictitious trading refers to investors who sell a financial instrument for a loss in order to claim the deductible and then immediately buy it back.

Crypto traders can claim tax-deductible losses on losses and then immediately redeem tokens, as digital assets are not classified as securities, while stock and bond traders do not have the right to redeem the same securities for 30 days.

The United States plans to apply the same restrictions on crypto from December 31, 2023, where the country could raise $24 billion by fixing the loophole, according to the White House.

See related article: Why Global Coordination on Crypto Regulation is Paramount

[ad_2]