US lawmakers grapple with crypto tax policy amid government shutdown

During a Senate Committee on Finance hearing, US lawmakers discussed the potential for special tax exemptions for cryptocurrency transactions to stimulate everyday use and industry growth. Lawrence Zlatkin from Coinbase advocated for a tax exemption on crypto transactions under $300 to promote innovation and parity with traditional finance. The proposed exemption aims to encourage commercial use while addressing the $700 billion annual tax gap through tighter reporting requirements and classification of staking income as earned income. Massachusetts Senator Elizabeth Warren opposed the special exemptions, arguing they could facilitate money laundering and result in significant tax losses for the government. She noted that estimates suggest crypto holders are not paying around $50 billion annually in taxes owed and emphasized that all crypto earnings should be taxed similarly to traditional financial assets. The debate continues amid uncertainty in the crypto sector regarding regulations and tax implications.

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