U.S. Senator Cynthia Lummis has reignited the debate over cryptocurrency legislation — this time fiercely criticizing tax rules that she claims unfairly target Bitcoin and the broader digital asset sector. She warns that miners are especially at risk of being crushed by double taxation, which could seriously damage their operations.
⚒️ Bitcoin Miners at Risk: Laws Could Break Them
Lummis argues that the current tax framework is so flawed that it could bury miners in bureaucracy — and tax them both when mining and again when selling their rewards. In reality, that means miners may have to pay taxes even on income they haven’t yet liquidated.
She expressed her concerns in a post on X, where she pointed out that U.S. tax law disproportionately affects Bitcoin and other decentralized technologies. She called for changes during the legislative reconciliation process, warning that the current approach could destabilize the entire crypto market.
🧾 IRS and the 2021 Law: The “Broker” Problem
Although Lummis didn’t name specific laws, her remarks likely referred to the IRS tax rules stemming from the 2021 Bipartisan Infrastructure Law, which significantly broadened the definition of “broker” to include miners and software developers.
This led to an absurd outcome — coders and validators were expected to report information they couldn’t possibly access, like user identities, transaction amounts, or wallet addresses — an impossible ask for decentralized protocols.
⚖️ Reconciliation as the Way Forward? Lummis Presses Congress
The senator is urging Congress to use the budget reconciliation process — a special legislative procedure that allows tax-related changes to pass with a simple majority, bypassing bipartisan negotiations.
Lummis's main goal is to redefine “broker” in a way that excludes miners, developers, and DeFi participants from impossible tax reporting duties that make no legal or technical sense.
📉 Double Taxation and DeFi Confusion: A Threat to Innovation
Lummis warns that the current rules set a dangerous precedent:
🔹 Miners could be taxed on block rewards and again on capital gains when they sell those coins.
🔹 DeFi users risk multiple tax liabilities even when they gain no real profits — for example, in simple swaps or moving tokens between wallets.
She says all this is stifling innovation and creating legal uncertainty that could undermine the U.S.’s global competitiveness in the tech race.
📈 Bitcoin Surges Despite Uncertainty – Breaks $111,970
Despite unclear regulations, crypto markets surged — Bitcoin reached a new all-time high of $111,970, while Ethereum and other altcoins also gained after a weekend of sideways movement. The crypto market is sending a clear message: despite legal chaos, investors still believe in the long-term potential of digital assets.
📜 New Laws on the Horizon: A Turning Point for Crypto?
There’s hope for change with several proposed bills in the pipeline:
🔹 The GENIUS Act, which could soon pass in Congress,
🔹 The CLARITY Act, continuing to make progress through legislation,
🔹 And even a proposal that would codify Trump’s executive order on creating a Bitcoin strategic reserve.
If Lummis succeeds in pushing through her reforms, the resulting tax overhaul could completely rewrite the rules of the crypto game.
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