Community Trust ScoreVerified
Two U.S. senators are calling on the Department of the Treasury to revise a tax policy they say is unfairly burdening American cryptocurrency companies. Senators Cynthia Lummis (R-WY) and Bernie Moreno (R-OH) have sent a formal letter to Treasury Secretary Scott Bessart, urging the administration to provide regulatory clarity and adjust tax guidelines that could put domestic crypto businesses at a competitive disadvantage.
The lawmakers argue that recent changes to how companies must report their digital asset holdings under federal tax rules could discourage investment in the U.S. crypto sector. In their joint letter, shared by Senator Lummis on social media platform X (formerly Twitter), the senators warn that without changes, American crypto firms risk losing ground to international competitors operating under more favorable accounting standards.
At the heart of the issue is the Corporate Alternative Minimum Tax (CAMT), introduced as part of the Inflation Reduction Act of 2022. The CAMT imposes a 15% minimum tax on corporations earning more than $1 billion in annual profits, calculated based on financial statement income rather than taxable income. While initially this rule did not affect crypto companies directly, recent updates to accounting practices have changed that.
Specifically, the Financial Accounting Standards Board (FASB) introduced ASU 2023-08, a rule that requires companies to report digital assets like Bitcoin at their fair market value—an approach commonly known as mark-to-market accounting. This means companies are required to record unrealized gains or losses on crypto holdings in their financial statements.
Under CAMT, these unrealized gains can trigger real tax liabilities—even if the assets haven’t been sold. In other words, if a company’s cryptocurrency holdings increase in value, it may be required to pay taxes on those gains, regardless of whether the profits have been realized. Conversely, if the asset value declines, companies can deduct losses, but the net effect can lead to higher tax burdens and volatile financial planning.
Senators Lummis and Moreno warn that this policy could discourage companies from holding crypto long-term. Instead, they may be forced to sell digital assets prematurely to cover their tax liabilities, thereby stifling innovation and impeding the growth of the U.S. blockchain sector.
“The application of mark-to-market accounting to digital assets in CAMT calculations creates an uneven playing field,” the senators wrote. “Firms operating in jurisdictions without such requirements face a far more favorable tax environment.”
The letter calls on the Treasury to remove digital asset-related unrealized gains and losses from the CAMT formula or provide an exemption for crypto holdings altogether. Such a change, they argue, would support the long-term viability of American crypto businesses and strengthen the country’s position as a leader in blockchain innovation.
This latest advocacy effort is part of a broader campaign led by Senator Lummis, who has been a vocal proponent of clear and fair crypto regulations. She has introduced and supported several bills aimed at creating a comprehensive regulatory framework for digital assets.
So far, the Treasury Department has not responded publicly to the senators’ request. However, the issue is gaining traction within the crypto community and financial industry, as more firms confront the tax implications of the updated rules.
Many industry leaders agree that the current approach fails to reflect the unique characteristics of digital assets, particularly their high volatility and long-term investment potential. Without reform, stakeholders fear that regulatory uncertainty could drive innovation and capital offshore, costing the U.S. economy in the long run.
As the Treasury considers its options, pressure continues to mount for a clearer, more equitable approach to digital asset taxation. With Congress increasingly involved in shaping crypto policy, the response to this latest request could set a critical precedent for how the U.S. government treats the emerging industry in years to come.
