TLDR
- Senator Cynthia Lummis is advocating for changes to U.S. crypto tax laws to protect the Bitcoin industry.
- She argues that the current tax framework unfairly burdens Bitcoin miners and software developers.
- The 2021 Infrastructure Act expanded the definition of broker to include miners and developers.
- Miners are being taxed on both block rewards and capital gains which creates a risk of double taxation.
- Lummis supports using the reconciliation process to pass revisions with a simple majority in Congress.
Senator Cynthia Lummis has called for urgent amendments to current crypto tax laws. She claims the existing framework unfairly targets Bitcoin and burdens its ecosystem. Her proposal aims to revise definitions and reduce the impact on miners and developers.
The senator expressed concern over excessive compliance demands created by the 2021 Infrastructure Investment and Jobs Act. The law expanded the definition of “broker” to include miners and software developers. This move sparked industry backlash due to operational challenges and reporting limitations.
Senator Lummis is pushing for rule changes using reconciliation to bypass partisan gridlock. The process allows tax law revisions with a simple majority vote. She believes this route could quickly adjust definitions and relieve pressure on crypto stakeholders.
Bitcoin Miners Face Disproportionate Tax Impact
Bitcoin miners continue to experience complex and costly tax requirements under current regulations. They are subject to taxation on both mined rewards and capital gains upon selling holdings. This results in potential double taxation despite limited cash realization.
The rules require miners to report data they often cannot access, such as user identities and transaction values. This has created barriers that hinder business operations and compliance capabilities. Several mining companies have expressed concern about the law’s long-term viability.
Miners argue that being treated as brokers misrepresents their function within the network. They do not handle customer funds or manage user transactions directly. The industry seeks a legal framework that reflects these operational distinctions.
DeFi and Broader Crypto Ecosystem Also Affected
Under current IRS guidelines, decentralized finance platforms are also exposed to excessive tax burdens. Users can trigger multiple taxable events without realizing actual gains, which discourages participation and complicates transaction tracking.
Senator Lummis has aligned with industry calls to narrow the broker definition. She wants exemptions for non-custodial actors like developers and protocol operators. These changes could reduce friction and increase transparency in tax reporting.
Bitcoin and digital assets are being unfairly targeted because of flawed tax rules. We need crypto revisions in reconciliation.
— Senator Cynthia Lummis (@SenLummis) June 10, 2025
New crypto legislation, including the GENIUS and CLARITY Acts, is under debate in Congress. Lummis’s push aligns with broader momentum toward regulatory modernization. Lawmakers continue to evaluate crypto’s role in the financial system.
