The crypto industry has expressed immediate criticism of the US Treasury Department’s new proposal on how to handle digital assets taxes. X, the site formerly known as Twitter, quickly filled with complaints about the proposal’s scope, particularly how it may capture decentralized crypto operations that the industry would argue are impossible to bring into compliance. Miller Whitehouse-Levine, the CEO of a decentralized finance (DeFi) lobbying group, said on the social media platform that the proposal as written is overbroad, with provisions allowing it to capture all sorts of entities. Kristin Smith, CEO of the Blockchain Association, noted that the future rules will potentially give the masses of crypto investors a clear path to file their taxes, eliminating what’s been a major roadblock for easy involvement in digital assets. The industry will have until October 30 to make their objections clear to the Treasury and Internal Revenue Service, followed by public hearings on November 7 and 8. One immediate bright side about the proposal’s scope was that it generally excluded crypto mining operations.
The crypto ecosystem is very different from that of traditional assets, so the rules must be tailored accordingly and not capture ecosystem participants that don’t have a pathway to compliance, said Smith. If done correctly, these rules could help provide everyday crypto users with the necessary information to accurately comply with tax laws.