Senator Lummis Champions Groundbreaking Crypto Tax Overhaul in Senate’s Landmark Bill

Washington shakes as crypto gets a tax break—Wall Street brokers clutch their pearls.

Senator Cynthia Lummis just dropped a legislative bombshell that could rewrite the rules for digital asset taxation. The Wyoming Republican's latest push targets outdated crypto tax policies buried in the Senate's sprawling new bill—and she's not taking 'no' for an answer.

Why this matters now:

The bill's crypto provisions arrive as institutional investors flood the space. Lummis argues current tax treatment stifles innovation while letting traditional finance off easy—a classic Washington double standard.

Key takeaways:

- De minimis exemption for small crypto transactions
- Clearer reporting requirements for institutions
- Wash sale rule parity with traditional securities

Behind the scenes: Banking lobbyists are already circling like vultures. One anonymous hedge fund manager quipped, 'We'll just repackage the same products under a new name—works every time.'

The bottom line: This could be crypto's first real tax win—or another case of DC promising disruption while maintaining the status quo. Either way, grab your popcorn.

TLDR

• Lummis moves to end double taxation on crypto mining and staking rewards.
• New proposal would tax Bitcoin block rewards only when sold, not when earned.
• Staking rewards may get fairer tax treatment under sweeping Senate amendment.
• $300 crypto purchase exemption could simplify small transaction reporting.
• Crypto-friendly tax reform gains momentum in Senate’s reconciliation bill talks.

Senator Cynthia Lummis is leading a renewed push to revise U.S. tax laws on digital assets within the Senate’s sweeping reconciliation bill. The Wyoming Republican has proposed an amendment that targets longstanding issues in the taxation of cryptocurrency mining and staking rewards. Her effort has gained coordinated support from advocacy groups aiming to shift digital asset taxation practices.

The amendment seeks to fix what supporters call “double taxation” on block rewards earned through mining and staking. Currently, U.S. tax rules classify rewards as income upon receipt and again as capital gains at the time of sale. Lummis’s plan WOULD change this by applying taxation only when the assets are sold.

Fair tax treatment for staking is critical for US crypto leadership. Congress can unlock domestic growth & create jobs with common-sense staking tax clarifications.@mikecrapo, please include this provision in the OBBB.

Thanks @SenLummis for driving a sensible update on this… https://t.co/jmui6R4Rhm

— Kristin Smith (@KMSmithDC) June 30, 2025

Supporters argue that taxing unrealized gains creates unnecessary compliance burdens and discourages blockchain innovation. They emphasize that many digital asset holders owe taxes before selling tokens, creating cash FLOW challenges. The proposal aims to align taxation with economic benefit, similar to how self-produced goods are treated.

Bitcoin Block m Face Critical Tax Update

The proposal includes a provision to tax Bitcoin block rewards only at the time of sale rather than when received. This change would remove the obligation for miners to pay taxes based on unpredictable market values at the time of reward. Industry representatives believe this approach could support Bitcoin infrastructure within the United States.

Dennis Porter of the Satoshi Action Fund has led public outreach efforts to advocate for the change. He argues that taxing bitcoin rewards at creation imposes unfair burdens on miners with no realized income. Porter has encouraged citizens to contact their lawmakers and express support for the amendment.

Cody Carbone, head of the Digital Chamber, stated that treating block rewards as “created property” would promote economic fairness. His group joined other policy advocates calling for a rule that reflects how traditional property income is handled. This backing strengthens a growing coalition behind Lummis’s amendment as the Senate negotiates the bill.

Staking Rewards Highlight Proof-of-Stake Concerns

The amendment also addresses proof-of-stake systems by aligning their tax treatment with that of miners. Stakeholders currently face the same issue of being taxed on tokens at the time they are received. Many see this as a barrier to expanding staking activity within the U.S.

Colin McLaren from the solana Policy Institute called for immediate clarity on staking-related tax rules. He believes a single taxation point would eliminate confusion and reduce users’ reporting complexity. His organization supports Lummis’s language as essential for unlocking blockchain innovation and job creation.

Kristin Smith, also representing Solana interests, emphasized that fair staking tax treatment is vital for American competitiveness. She warned that unclear rules could shift growth overseas and weaken domestic technology leadership. Clear guidelines in the reconciliation bill could support broader blockchain development.

$300 de Minimis Exemption Aims to Ease Small Transaction Reporting

A second key piece of the amendment introduces a $300 de minimis exemption for minor digital asset transactions. This would remove the requirement for users to report small purchases as taxable events. Advocates argue the current rule deters everyday crypto use due to complex tracking.

Matthew Pines from the Bitcoin Policy Institute urged supporters to contact key senators, including Senate Finance Committee members. He called the exemption a practical fix that would reduce burdens on users and enhance adoption. His message focuses on easing compliance rather than creating new loopholes.

Senate offices have yet to confirm whether the amendment will be accepted in full or in part. The Senate Finance Committee continues to debate the reconciliation package, known as the “One Big Beautiful Bill.” Timing remains critical as the bill heads toward final votes and negotiations with the House.