The Biden administration is proposing a tax on cryptocurrency miners, with the White House’s Council of Economic Advisers campaigning for a tax equal to 30% of the cost of the power used by crypto miners.
The proposed tax, known as the “Digital Asset Mining Energy excise tax,” would be effective for taxable years beginning after December 31, 2023, and would be phased in over three years.
The tax is aimed at offsetting the “negative spillovers” of crypto mining, such as the high energy consumption, impact on the environment, quality of life, and electricity grids.
However, some states like Arkansas, Montana, and Texas are rolling out legislation to regulate Bitcoin mining and offer legal protection to mining firms.
Meanwhile, the Securities and Exchange Commission (SEC) is cracking down on crypto trading platforms and has fined and shut down the staking program of U.S. crypto exchange Kraken, issued a Wells notice to Coinbase and charged Seattle-based Bittrex for operating an unregistered exchange.