The US crypto tax reform bill is out! Tax exemption up to 5,000 Mg, charitable donations can be tax deductible

Crypto-friendly Senator Cynthia Lummis submitted the latest draft of "Cryptocurrency Tax Reform" on 7/4, attempting to promote standalone legislation after existing budget proposals excluded crypto provisions. She aims to clarify the taxation timing for activities like mining, staking rewards, and lending, and proposes specific measures such as tax exemptions for small daily transactions and charitable donations. After crypto-related provisions were not included in the latest Trump administration's "big and beautiful" tax reform bill, Lummis subsequently submitted a tax reform draft covering digital asset transactions, mining, staking, and lending. She stated: "This draft has comprehensively allocated funding, simplified government processes, and created tax laws that align with the digital age logic. We cannot let outdated tax laws stifle American innovation." She added that the draft ensures Americans can confidently participate in the digital economy without unknowingly violating regulations. According to the draft, each crypto asset transaction profit under $300 is tax-exempt, with a maximum annual exemption of $5,000. Previously, miners and stakers had to recognize and pay taxes on tokens immediately upon receipt, causing cash flow pressure. If assets depreciated later, they would suffer losses. The draft clearly proposes a deferred taxation mechanism: "Taxes will only be levied when the asset is actually sold, and such income will be classified as ordinary income." Regarding airdrops and forks, the tax authority will establish specific implementation details. For crypto lending, the draft indicates that if lending occurs through qualified DeFi or CeFi protocols, the process of lending or returning assets will not be considered a taxable transaction. However, interest earned from lending is taxable, but only when the user actually receives it. Forks and airdrop rewards will be included in subsequent regulations. The draft also strengthens existing tax loopholes by extending the "wash sale loss non-deductibility" clause to crypto assets and derivatives. However, stablecoins like USDC and USDT with payment functions and stable prices will not be subject to this restriction and can recognize losses. In terms of definition, the draft clearly defines the scope of "Digital Assets": - Crypto assets, stablecoins, futures, options, and other derivative products are digital assets. - Tokenized financial products will continue to use existing financial tax laws and are not included in crypto tax regulations. The draft allows active market traders (businesses or individuals) to choose a "market price valuation method": "At the end of each year, calculate the value and gains/losses of crypto assets using the market price at that time, without waiting for actual transactions to be taxed." This helps align with traditional financial tax reporting and allows timely reflection of asset value changes in tax processing. The draft also adds that if users donate "highly liquid" crypto assets to compliant charitable organizations, they can receive tax deductions based on the market price at the time of donation. TON was initially rumored to allow users to stake for a 10-year UAE gold card, causing a 10% price surge. However, UAE officials quickly clarified it as a "rumor" and stated that TON has not received permission from the Dubai Virtual Asset Regulatory Authority (VARA), causing market fluctuations and a subsequent 7% price drop.

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Staking TON Coins to Obtain a 10-Year UAE Golden Visa

On 7/6, TON officially announced that users can obtain a 10-year UAE Golden Visa by staking TON worth $100,000 for 3 years, plus paying a $35,000 processing fee.

Telegram founder Pavel Durov also reshared the related post that day.

As a result, the TON coin price briefly rose to $3.05, surging 12% in a single day.

UAE Refutes TON, No Relation to Golden Visa and No Official Certification

The day after TON's announcement (7/7), the Emirates News Agency released a joint statement from three official agencies, including:

• Federal Authority for Identity, Citizenship, Customs and Port Security (ICP)

• Securities and Commodities Authority

• Virtual Asset Regulatory Authority (VARA)

The three agencies unanimously refuted TON's claims, emphasizing:

"The UAE Golden Visa application conditions do not include any digital asset or cryptocurrency-related investment projects. Moreover, TON company has neither obtained VARA's permission nor is it regulated by VARA."

They further pointed out that all digital asset investment activities are subject to specific regulatory conditions and are completely unrelated to Golden Visa qualifications, and urged investors:

"To obtain information from reliable and official sources to avoid being misled or scammed."

Actual Application Conditions for UAE Golden Visa

The UAE introduced the Golden Visa system in 2019 to attract real estate professionals, doctors, researchers, entrepreneurs, and other talented individuals with professional skills or significant contributions to long-term residency. Official regulations require a legitimate business plan with a company established in the UAE and meeting one of the following conditions:

1. Provide a letter from a UAE-approved investment fund proving a deposit of 2 million dirhams (approximately $544,000).

2. Hold a compliant business or industrial license with a company establishment contract, with company capital reaching 2 million dirhams.

3. Invest in a company as a partner, holding at least 2 million dirhams in shares, not obtained through loans.

4. Provide a certificate from the Federal Tax Authority, with the company paying at least 250,000 dirhams (approximately $68,000) in annual taxes.

TON Coin Price Drops 6%, TON Official Still Not Responding

After the news broke, TON's price fell from its highest of $3.05 on 7/6 to $2.83, a decline of about 7%. Regarding this controversy, the TON Foundation and CEO Max Crown have yet to respond.