Cryptocurrency assets to be defined as securities to pay for $12.7 billion conservation bill


  • Cryptocurrency assets’ tax loophole is being targeted by US senators working on a $12.7 billion wildlife conservation bill.
  • Three people familiar with the negotiations told E&E News that senators propose clarity on the “wash sale rule.”
  • Cryptocurrencies would be defined as securities to apply the US Internal Revenue Service’s “wash sale rule” and raise up to $12.5 billion in a decade. 

Cryptocurrency assets, if treated like securities, can help pay $12.5 billion over the next ten years and fund the historic “Recovering America’s Wildlife Act.” If applied to cryptocurrencies as well, the US Internal Revenue Service’s “wash sale rule” could close the loophole in crypto taxation. 

Also read: Sam Bankman-Fried says FTX US is fully solvent, withdrawals could open today

Cryptocurrency assets treated as securities in final RAWA negotiations

Cryptocurrency taxation has a loophole that can be closed by defining the asset class as securities. US Senators are closing in on negotiations on the bipartisan Recovering America’s Wildlife Act (RAWA). 

For months the bipartisan bill was stalled over how it would be paid for, sources close to the matter told E&E News about a breakthrough in negotiations. Senators are considering closing a tax loophole and creating a funding mechanism that generates up to $12.5 billion in the next ten years to pay for RAWA. 

Such a mechanism would require clarity on the definition of digital assets. Three anonymous sources told E&E News that the US Internal Revenue Service’s wash sale rules that apply to securities could be applied to cryptocurrencies. 

The US Senate Finance Committee, a body that has jurisdiction over the funding, confirmed the application of the “wash sale rule” to crypto is an option in the ongoing discussion. 

Virtual asset taxation could raise up to $12.5 billion in ten years

RAWA would provide $1.3 billion per year to states and territories and $97.5 million per year for indigenous tribes, to assist in their efforts to conserve, restore and protect wildlife and habitat. A bipartisan coalition in the House and Senate support the objectives of the legislation and view it as transformative. 

RAWA is looked at as a natural successor to the Great American Outdoors Act of 2020 that fully and permanently reauthorized the Land and Water Conservation Fund for the first time since the program’s creation in the 1960s. 

The Senate’s initial plan was to collect fees and fines paid by polluters. However, lawmakers in both parties were concerned that it would fail to sufficiently address the ballooning federal deficit.

The new cryptocurrency taxation rule would prohibit investors from claiming losses on securities sold at a loss and then reacquiring the same or similar asset within 30 days. The wash sale rule offset would achieve either $11.2 billion or $12.5 billion over 10 years, according to a source close to the matter. 


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Bitcoin Price Forecast: Analysts anticipate increased volatility as the US presidential election looms

Bitcoin Price Forecast: Analysts anticipate increased volatility as the US presidential election looms

Bitcoin price teased its all-time high of $73,777 last week but declined to trade below $69,000 on Monday. Analysts suggest that market volatility is expected to rise as the US presidential election approaches.

More Bitcoin News
Litecoin poised for double-digit decline after breaking ascending trendline

Litecoin poised for double-digit decline after breaking ascending trendline

Litecoin breaks and closes below an ascending trendline, signaling a change in market structure. On-chain metrics paint a bearish picture, as LTC’s dormant wallets are active, and the NPL indicator shows a negative spike.

More Litecoin News
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC, ETH and XRP decline ahead of US elections

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC, ETH and XRP decline ahead of US elections

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) all faced resistance at crucial levels ahead of the US Elections, leading to a price decline. As of Monday, they neared key support levels, and a firm close below these marks could signal further declines.

More Cryptocurrencies News
21Shares files S-1 for XRP ETF amid ongoing tension between Ripple and SEC

21Shares files S-1 for XRP ETF amid ongoing tension between Ripple and SEC

21Shares filed an S-1 registration with the Securities and Exchange Commission (SEC) on Friday for an XRP exchange-traded fund (ETF). While the chance of approval is slim with the current SEC administration, the landscape could change after the upcoming elections.

More Cryptocurrencies News
Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP