Democratic Lawmakers Aim to End Crypto Tax Breaks in Puerto Rico

Democratic lawmakers have introduced legislation to eliminate Puerto Rico’s status as a crypto tax haven. Representative Nydia Velázquez of New York proposed the Fair Taxation of Digital Assets in Puerto Rico Act of 2025, which seeks to close a loophole allowing crypto investors to avoid federal taxes by relocating to the island. Currently, Puerto Rico residents can pay little or no taxes on their capital gains, including crypto profits, under Act 60. This policy has attracted numerous wealthy investors over the past decade. The new measure would require digital asset income earned by Puerto Rico residents to be taxed under the same federal rules as other income. The catch? The proposed law could significantly impact the island’s economy, which has relied on these tax incentives to attract investment. Ironically, Puerto Rico’s crypto-friendly policies were once hailed as a way to revitalize its economy. Will the end of these tax breaks spell the end of the island’s crypto boom?