Just a few weeks ago, the Biden administration was floating a 30% tax on energy costs incurred by crypto miners. This was met with a lot of opposition from the crypto community, as it would have a huge impact on the industry. However, several days ago, Biden made a statement on the debt ceiling, saying he would not agree to a deal that benefits wealthy tax sheets and crypto traders.
We’ve also seen some shady moves and statements by the FDIC, Treasury, and Federal Reserve that seemed to be anti-crypto in nature earlier this year. Whether these were intentional or not, they still created a lot of uncertainty in the crypto space.
Despite Biden’s prior statements, the current Bill to raise the debt ceiling does not include the Digital Assets Mining Energy (DAME) tax, which was to implement the aforementioned 30% tax on crypto miners. Although much of the content of this Bill has already been pre-approved by the leadership of both parties, this obviously stands in contrast to what Biden said previously.
For all the talk and bluster by the Biden administration about coming for those who use crypto to evade taxes, they have done very little to actually implement measures to prevent this supposed tax evasion. This is likely because the reality is that crypto is such a small part of the overall tax evasion landscape that they would probably spend more money implementing these anti-evasion systems than they would recover from using them. As the IRS Chief has said, the total tax losses from evasion is around $1 trillion, while the total crypto market cap is barely a fraction of that.
The lack of any real action from the Biden administration has been a huge relief for the crypto community, as they can continue to operate without the worry of a burdensome tax. However, it’s still unclear if this will be the status quo for the foreseeable future, or if Biden will eventually make good on his promise to come for those who evade taxes using crypto.