US Senators Urge Treasury to Fix Unfair Crypto Tax Rules

U.S. Senators Cynthia Lummis and Bernie Moreno are calling on the Treasury Department to address what they describe as an “unfair tax burden” on crypto companies. In a letter to Treasury Secretary Scott Bessart, the senators warned that the current tax framework could harm American digital asset firms and weaken the country’s global competitiveness.

At the heart of the issue is the Corporate Alternative Minimum Tax (CAMT), introduced in 2022 under the Inflation Reduction Act. CAMT imposes a 15% minimum tax on corporations with annual profits exceeding $1 billion. The calculation is based on financial statement income—not taxable income—which recently began affecting crypto firms due to a change in accounting standards.

Under the updated rule (ASU 2023-08), companies must report crypto holdings using mark-to-market accounting. This means firms owe taxes on unrealized gains even if no assets are sold, though losses can be deducted. Senators Lummis and Moreno argue this places U.S.-based crypto firms at a disadvantage, as international competitors aren’t required to follow the same standard.

The senators warned that the policy could discourage American companies from holding digital assets long-term, or force them to liquidate prematurely to meet tax obligations. They urged the Treasury to exclude unrealized crypto gains and losses from CAMT calculations or to exempt digital assets entirely.

Senator Lummis, a longtime advocate for crypto regulation reform, emphasized that clear and fair tax policies are essential for maintaining U.S. leadership in the digital asset space. As of now, the Treasury has not responded publicly to the letter.

This development comes amid rising institutional interest in crypto and ongoing debates about how digital assets should be taxed and regulated in the U.S.