Game-Changer: Senator Lummis Drops Crypto Tax Overhaul with $300 Break & Miner Protections

Crypto just scored a legislative touchdown. Senator Cynthia Lummis just fired a shot across the IRS's bow with a radical new tax bill—and Bitcoin miners are popping champagne.

The $300 Loophole You'll Actually Use

Forget tracking every coffee purchase paid in crypto. The bill carves out a de minimis exemption for transactions under $300—finally aligning digital assets with your grandma's garage sale tax rules.

Miners Strike Regulatory Gold

Proof-of-work operations get reclassified as 'ancillary service providers,' effectively neutering the SEC's favorite enforcement angle. The move could trigger a new mining rush in Wyoming—and send Gary Gensler scrambling for his highlighters.

The Fine Print That'll Make Traders Sweat

While the bill offers breathing room for small transactions, algorithmic stablecoins get dragged into the CFTC's jurisdiction. Because nothing says 'financial innovation' like adding another layer of bureaucracy.

Wall Street analysts are already gaming out how to repackage the $300 exemption into a structured product with 300% fees. Some things never change.

TLDR

• Lummis Crypto Tax Bill Offers $300 Exemption, Mining Relief, and More

• Crypto Users Get Tax Breaks: $300 Rule, Mining Relief, Trader Reforms

• New Bill Cuts Crypto Tax Hassles With $300 Exemption and Sale Deferral

• Lummis Pushes Crypto Tax Overhaul With Key Breaks for Users and Traders

• Senate Bill Eases Crypto Taxes: Spend, Mine, Donate With Less Burden

Senator Cynthia Lummis has introduced a new crypto tax reform bill aimed at easing digital asset taxation for U.S. users. The bill includes a $300 de minimis exemption, relief for mining and staking and fairer rules for traders. Lummis intends to bring this legislation to President Trump’s desk before the September deadline.

$300 De Minimis Exemption Targets Day-to-Day Crypto Transactions

The bill proposes excluding crypto transactions under $300 from capital gains taxes, making everyday use more practical for Americans. Taxpayers can claim up to $5,000 annually through this exemption to reduce reporting burdens on small purchases. This approach aims to align digital assets with foreign currency rules already in the tax code.

🚨 BREAKING:

SENATOR CYNTHIA LUMMIS HAS INTRODUCED A NEW LEGISLATION AIMED AT REDUCING TAXES ON CRYPTOCURRENCIES! 📝

„LEVEL PLAYING FIELD“ 😌 #XRP pic.twitter.com/zlf0X9yBqA

— 𝓐𝓶𝓮𝓵𝓲𝓮 (@_Crypto_Barbie) July 3, 2025

The legislation adjusts for inflation beginning in 2026 and aggregates related transactions to avoid misuse. It mirrors how the IRS treats minor foreign exchange gains to simplify compliance for digital payments. The goal is to promote crypto as a medium of exchange without huge users with paperwork.

Digital asset users often face difficulty when calculating small gains from frequent transactions. The exemption ensures smoother adoption of digital currencies for everyday use and maintains fairness in tax reporting.

Mining, Staking and Airdrop Gains Deferred Until Sale

The bill aims to change how mining, staking and airdrop rewards are taxed, shifting the taxable event to the point of sale. Currently, rewards are taxed when received, even without conversion to cash, creating liquidity issues. The proposal aligns income recognition with actual economic benefit.

The updated rule helps miners and stakers avoid premature tax bills on unsold or illiquid digital assets. Under the bill’s new Section 451(l), ordinary income WOULD be recognized only when assets are sold. This structure eliminates the double taxation that miners and stakers currently face under the outdated tax framework.

This reform addresses concerns about crypto tax enforcement being overly punitive for non-cash earnings. It ensures that taxation is tied to realized gains, not fluctuating market prices at the time of reward. The bill reflects a more balanced approach to taxing blockchain-based income.

Traders and Donors Gain New Crypto Tax Options

The bill introduces a mark-to-market election for crypto traders and dealers, similar to rules for securities and commodities. Dealers must apply this rule mandatorily, while traders may choose it voluntarily for actively traded digital assets. This change improves tax consistency across financial sectors.

The bill applies similar rules to securities lending under Section 1058 for those lending digital assets. Lending transactions would not trigger immediate tax consequences but would follow adjusted basis and income rules. The provision supports a more efficient crypto market structure.

Charitable donations of crypto also benefit under this bill, as actively traded digital assets will not require a qualified appraisal. This change encourages digital asset donations by treating them like publicly traded securities. Simplifying donation rules supports broader philanthropic use of crypto without bureaucratic delays.

The Senate Banking Committee is focusing on market structure and stablecoin regulation ahead of the September deadline. Lummis must navigate limited floor time and procedural hurdles to advance her proposal. According to the Joint Committee on Taxation, the reforms could raise approximately $600 million between 2025 and 2034. Lummis has also called for public feedback to refine the bill further.