Source: FinTax
News Overview
News 1: On April 10, 2025, US President Trump signed a joint congressional resolution that overturned a regulation during the Biden administration that required decentralized finance (DeFi) protocols to report relevant information to the US tax authority, the Internal Revenue Service. Under the original regulations, DeFi platforms, such as decentralized exchanges, are required to submit the total proceeds of their cryptocurrency sales and provide detailed information on participating traders.
News 2: Eric Trump recently (January 2025) mentioned that US crypto projects such as XRP and HBAR will soon be exempt from capital gains tax. This means that investors in these projects can spend less money when cashing out cryptocurrencies for profits. However, crypto projects located outside the United States will face a high capital gains tax of 30%. This move could help bring more crypto innovation to the United States and provide domestic projects with a huge comparative advantage.
FinTax Views
Before 2022, Trump had been a critic of cryptocurrencies. In 2019, Trump called Bitcoin a "scam" and expressed his skepticism of crypto assets by calling cryptocurrencies "money created out of thin air." However, in 2022, Trump's stance on cryptocurrencies took a radical turn. In December of that year, he launched an NFT themed aftermath of the bull market and NFT craze, earning millions of dollars in gains. Since then, Trump has transformed from an open critic of cryptocurrencies to an active participant. By 2024, he became the first US presidential candidate to accept cryptocurrency donations and listed a series of promises to promote the growth of the cryptocurrency industry, playing the "crypto card" in his campaign. A few days ago, Trump signed the first cryptocurrency bill into law in the United States, officially repealing the DeFi broker tax reporting rules previously issued by the IRS. At the beginning of the release of the rules, the crypto industry generally believed that this would bring heavy damage to the DeFi ecosystem and even the entire crypto industry. In fact, as early as during the campaign for this presidential term, Trump promised to make drastic reforms to the cryptocurrency-related system. After the start of this term, whether it is personnel changes in regulatory departments, the gradual introduction of relevant regulations, or the authorization of the issuance of $Trump, it shows that Trump is fulfilling his campaign promises and showing a positive embrace and willingness to promote cryptocurrencies. Currently, cryptocurrency investors in the United States are facing great tax pressure. In the United States, short-term holdings (less than 1 year) of cryptocurrencies are subject to capital gains tax of up to 37%, while mining income, staking income, and airdrop income are all taxed as ordinary income by the IRS. At the same time, the cryptocurrency tax system in the United States is relatively complicated, and individuals and companies need to spend more time and resources to complete tax declarations, and the tax compliance costs are high. Since the beginning of 2025, there have been constant rumors that Trump will reduce the tax rate on cryptocurrencies. As reported in the news, Trump's son Eric Trump has loudly declared that "US domestic projects" such as XRP and HBAR will be subject to zero capital gains tax, while non-US domestic projects will face a 30% capital gains tax. However, for months, facing the public opinion and industry expectations, the relevant rumors have not come true. In particular, at the White House Cryptocurrency Summit on March 7, Trump still did not announce a large-scale reform of the cryptocurrency tax system as expected by the outside world. Even in terms of the cryptocurrency regulatory system, Trump's related measures are considered insufficient, and more just illustrate the change in regulatory attitudes. Even though the abolition of the DeFi broker tax reporting rules is of great significance to the continued development of the crypto industry, it is essentially a passive and negative measure, mainly involving tax procedures, and it is not an active tax reduction and exemption policy itself. Trump's "silence" reflects multiple realistic factors. First, although the relevant crypto tax reform promises have triggered a short-term carnival in the market, its policy implementation faces fundamental legal obstacles. Article 1, Section 8 of the U.S. Constitution clearly stipulates that "the power to levy taxes belongs exclusively to Congress" and the president has no right to unilaterally adjust tax rates. Adam Cochran, partner of Cinneamhain Ventures, pointed out directly and sharply: "... This (referring to Trump's announcement of adjustment of cryptocurrency-related tax rates) is no more effective than my claiming that I am a cupcake." Second, the game between the Democratic and Republican parties extends from the federal government to the states and localities. Any reform of Trump needs to overcome the interference and obstacles of the Democratic Party, especially in major issues such as taxation. The relevant tax reduction and exemption bills may face a long tug-of-war. Third, at the current stage, the Trump administration is mainly focused on overturning the Biden administration's series of suppressive policies on the crypto industry, especially explicitly supporting Congress to pass legislation to provide regulatory certainty for the cryptocurrency industry. This shows that the Trump administration is more inclined to express its support for the crypto industry through overall policies (such as regulatory relaxation) rather than touching legal taboos (such as tax exemption legislation). This strategy can not only avoid direct conflict with Congress, but also strengthen the crypto-friendly image with an "anti-establishment" narrative. In short, as a politician, Trump needs to fulfill his campaign promises to maintain his credibility and consolidate his voter base, and he also needs to ensure the legitimacy and rationality of his actions to avoid unnecessary troubles. How to mediate between the two is a test of Trump's political wisdom. Trump once announced plans to build the United States into the world's cryptocurrency capital. Although he has made many attempts and efforts in related policies, as the US reciprocal tariffs have caused turmoil in the global financial market, cryptocurrencies have almost wiped out all the gains since Trump's victory at the end of last year. CoinGecko data shows that before Trump announced the suspension of reciprocal tariffs, the total market value of cryptocurrencies fell by about 12% to $2.47 trillion, almost back to the level before Trump's victory. American cryptocurrency investors are looking forward to a brave new world of zero capital gains tax, but what is presented before them is the chaos caused by the impact of tariff policies, which can't help but confuse people: Where is Trump's crypto tax reform going?
Alex
