Trump Crypto Tax Reform: Where to Go From Here?

Trump's Crypto Tax Reform: Where Is the Path? News Summary News One: On April 10, 2025, US President Trump signed a joint congressional resolution overturning a regulation from the Biden administration that required Decentralized Finance (DeFi) protocols to report information to the US tax authority, the IRS. According to the original regulation, DeFi platforms, such as decentralized exchanges, needed to submit total revenues from crypto sales and provide detailed information about transaction participants. News Source: https://www.coindesk.com/policy/2025/04/07/president-trump-signs-resolution-erasing-irs-crypto-rule-targeting-defi News Two: Eric Trump recently mentioned (January 2025) that US crypto projects like XRP and HBAR will soon be exempt from capital gains tax. This means investors in these projects can spend less money when converting cryptocurrencies for profit. However, crypto projects located outside the US will face a high 30% capital gains tax. This move could help bring more crypto innovation to the US and provide a significant comparative advantage for domestic projects. News Source: https://www.ifcreview.com/news/2025/january/us-eric-trump-announces-zero-tax-for-us-crypto-investors/ FinTax Perspective Before 2022, Trump was a critic of cryptocurrencies. In 2019, he called Bitcoin a "scam" and expressed skepticism about crypto assets by describing them as "money created out of thin air". However, Trump's stance on cryptocurrencies underwent a complete transformation in 2022. In December, he launched an NFT themed after himself, capitalizing on the bull market and Non-Fungible Token wave, earning millions of dollars. Since then, Trump transformed from an open critic to an active participant. By 2024, he became the first US presidential candidate to accept crypto donations and listed a series of promises to promote crypto industry growth, playing the "crypto card" in his campaign. Recently, Trump signed the first crypto law in the US, officially abolishing the IRS's DeFi broker tax reporting rule, which the crypto industry initially believed would severely impact the DeFi ecosystem and the entire crypto industry. Currently, US crypto investors face significant tax pressures. In the US, short-term held (less than 1 year) cryptocurrencies are taxed up to 37% in capital gains, while mining, staking, and airdrop earnings are treated as ordinary income by the IRS. The US crypto tax system is relatively complex, with high compliance costs for individuals and businesses.

Trump's "silence" reflects multiple realistic factors. First, although the related crypto tax reform promises triggered short-term market euphoria, the policy faces fundamental legal obstacles. The eighth clause of the first article of the US Constitution clearly stipulates that "the power of taxation is exclusively held by Congress," and the president has no right to unilaterally adjust tax rates. Cinneamhain Ventures partner Adam Cochran directly and sharply pointed out: "...this (referring to Trump's announcement to adjust cryptocurrency-related tax rates) is no more effective than me claiming to be a cupcake." Second, the game between the Democratic and Republican parties extends from the federal level to various states and localities. Any reform by Trump would need to overcome multiple obstacles and interference from the Democratic Party, especially on major issues like taxation, where related tax exemption bills may face a prolonged tug-of-war. Third, at the current stage, the Trump administration is primarily focused on overturning the Biden administration's series of suppressive policies on the crypto industry, particularly by explicitly supporting congressional legislation to provide regulatory certainty for the cryptocurrency industry. This indicates that the Trump administration is more inclined to show support for the crypto industry through overall policies (such as regulatory relaxation) rather than touching legal forbidden zones (like tax exemption legislation). This strategy can both avoid direct conflicts with Congress and strengthen the crypto-friendly image through an "anti-establishment" narrative. In summary, as a politician, Trump needs to fulfill campaign promises to maintain credibility and consolidate his voter base while ensuring the legality and reasonableness of his actions to avoid unnecessary trouble. How to navigate this is a test of Trump's political wisdom.

Trump once announced plans to build the United States into the world's cryptocurrency capital. Despite making many attempts and efforts in related policies, as the US reciprocal tariffs triggered global financial market turbulence, cryptocurrencies have almost erased all gains since Trump's victory last year. CoinGecko data shows that before Trump announced the suspension of reciprocal tariff measures, the total cryptocurrency market value had dropped by about 12%, to $2.47 trillion, almost returning to the level before Trump's election. US cryptocurrency investors are eagerly anticipating a beautiful new world with zero capital gains tax, but what is presented before their eyes is the chaos caused by tariff policy impacts, which cannot help but make one wonder: Where is Trump's cryptocurrency tax system reform heading?

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