Blockchain Association Demands Crypto Tax Clarity as Big Bill Stalls
The Blockchain Association sent a formal letter to the four top Congressional leaders on 22 October 2026, calling on lawmakers to prioritise crypto tax reform before the legislative window closes. The letter is blunt: current rules are unworkable, ordinary holders are trying to comply but can't, and broader digital asset legislation can't succeed without a coherent tax layer underneath it. If you've ever wondered how crypto is taxed in the US and why the answer always feels frustratingly vague, this letter explains exactly why that is and what the industry wants done about it.
Why the Blockchain Association Wrote to Congress Now
The group represents more than 100 firms across the crypto ecosystem. Its chief policy officer, Lindsay Fraser, addressed the letter directly to Senate Majority Leader John Thune, Senate Minority Leader Chuck Schumer, Speaker of the House Mike Johnson, and House Minority Leader Hakeem Jeffries. Targeting all four leaders simultaneously is a deliberate signal: this isn't a partisan ask, and the group wants action regardless of which chamber moves first.
The timing reflects genuine legislative pressure. Broader crypto legislation has stalled in the Senate after passing earlier stages. On the House side, the Digital Asset Tax Certainty Act cleared the Ways and Means Committee last month but isn't expected to come back to the floor until after the November elections. The Blockchain Association's letter is, in part, an attempt to keep tax provisions alive even if the bigger bill continues to flounder.
The core argument: rules exist but can't be followed
Fraser's letter doesn't claim the IRS has ignored crypto. It argues that existing rules, applied mechanically to how digital assets actually work, produce absurd compliance burdens. "Americans who use digital assets aren't asking for special treatment," she wrote. "They want to follow the law and pay the taxes they owe, but today's rules are often unclear and unworkable."
That framing matters. The association is positioning its members, and by extension individual holders, as willing compliers stuck with rules that don't match reality. It's a political argument as much as a technical one, designed to make legislators more comfortable backing reform without looking like they're giving crypto a free pass.
The Three Core Tax Reforms the Association Wants
The letter sets out several principles for what good crypto tax legislation should look like. Three stand out as most immediately relevant to individual filers trying to figure out how to file crypto taxes today.
A de minimis exemption for small transactions
Under current law, every taxable disposal, including using crypto to buy a cup of coffee, is a reportable event that could trigger a capital gain or loss. The Digital Asset Tax Certainty Act already includes a threshold: transactions where the fee is $10 or less would not trigger a tax event. The Blockchain Association wants any future legislation to include a proper de minimis exemption, meaning small everyday transactions below a set dollar value would be excluded from capital gains reporting entirely.
This is the rule change that would have the most visible day-to-day effect for ordinary holders. Right now, if you spend crypto on goods or services, you're technically required to calculate and report the gain on every single purchase. Almost nobody does, partly because the amounts are tiny and partly because tracking cost basis across hundreds of micro-transactions is genuinely impractical. A de minimis threshold would bring the rules in line with how people actually use digital assets.
Extending wash sale rules to crypto
This one is less obviously a relief and more about parity. Wash sale rules prevent investors from selling a security at a loss and immediately buying it back just to claim the loss for tax purposes. Those rules apply to stocks but not, currently, to crypto. That gap lets crypto holders harvest losses in ways equity investors cannot, which the association says it wants to close.
This is a notable position: the industry group is voluntarily asking for a rule that would restrict a current tax advantage. The rationale is credibility. By accepting wash sale parity, the industry signals it's pursuing a level playing field rather than loopholes, which strengthens the case for the other reforms it wants.
Taxpayer privacy protections
The letter also asks that any new crypto tax framework include explicit privacy safeguards. The source doesn't detail exactly what form these would take, but the principle is that increased reporting requirements should be balanced against protections for the personal data of individual filers.
How Is Crypto Taxed in the US Right Now?
Understanding what the Blockchain Association is pushing against requires a quick grounding in the current framework. The IRS treats digital assets as property, not currency. That means every disposal, whether you sell, swap, spend, or gift crypto, is a taxable event where you must calculate the difference between your cost basis and the fair market value at the time of disposal.
Short-term versus long-term rates
If you've held an asset for a year or less before disposing of it, any gain is taxed at your ordinary income rate, which can reach 37% at the top bracket. Hold for more than a year and the gain qualifies for long-term capital gains rates of 0%, 15%, or 20% depending on your income. Losses can offset gains, and net losses up to $3,000 per year can offset ordinary income, with the remainder carried forward.
Mining, staking, and airdrops are generally treated as ordinary income at the fair market value on the date of receipt. That income is then subject to capital gains rules on any subsequent disposal. Understanding this two-step treatment is essential when you calculate crypto taxes, because getting the income recognition date wrong can shift significant amounts between tax years.
You can find a detailed breakdown of how these rules interact with staking in particular in our piece on what the Digital Asset Tax Certainty Act means for staking, and background on the Senate-side push in our coverage of how the Senate Finance crypto tax bill could reshape US reporting.
What Stalling Legislation Means for You Right Now
None of the reforms the Blockchain Association is asking for are law yet. The Digital Asset Tax Certainty Act is waiting on post-election floor time. The broader bill that was supposed to carry digital asset provisions through the Senate has stalled. That means the current rules, unclear and impractical as the industry says they are, remain in force for your 2026 tax year.
Practical steps while you wait for reform
The uncertainty doesn't mean you can pause record-keeping. A few things you can do right now will make your position much cleaner whenever legislation does pass, and they'll make any retrospective adjustments far easier.
First, keep a complete transaction log. Every acquisition date, cost basis, disposal date, and proceeds figure needs to be captured. Exchange statements help but rarely cover the full picture, especially if you use multiple wallets or engage with decentralised protocols. Second, don't assume that because a transaction is small it doesn't count. Until a de minimis exemption exists in law, every disposal is technically reportable. Third, if you've been staking or receiving airdrops, make sure you've recorded the fair market value on the receipt date, not the date you eventually sell. That's the figure that sets your income inclusion and your new cost basis.
Using a crypto tax calculator that can ingest your full transaction history, apply the correct accounting method (FIFO is the IRS default unless you've specifically identified lots), and generate a crypto tax report in a format your accountant can work with is the most reliable way to stay on top of this. The rules may change, but your historical data won't, and having clean records now means you can apply any new exemptions retrospectively if the legislation allows it.
What Could Change and When
The Blockchain Association's letter is advocacy, not legislation. But it does reflect a genuine convergence of industry and, to a degree, bipartisan political will. The Digital Asset Tax Certainty Act passed Ways and Means 38 to 5, which is a strong signal of support. The question is whether leadership prioritises a floor vote after November.
If a de minimis exemption does become law, it's likely to apply from a future effective date rather than retroactively, so prior years would still be calculated under today's rules. Wash sale parity, if enacted, would eliminate the current loss-harvesting flexibility many holders use, potentially increasing taxable income in years where crypto prices fall and then recover quickly. Holders who've relied on that strategy should model the impact now, while they still have flexibility to act.
The broader message from the Blockchain Association is that the US risks losing financial innovation to jurisdictions with clearer rules. That argument has been made before, but the letter's unusually direct focus on individual taxpayer experience, rather than just institutional compliance costs, gives it a different political texture. Whether that's enough to move Congress before the end of the session remains to be seen.
Source: The Block
Frequently Asked Questions
Does the Blockchain Association's letter change how I should file my crypto taxes this year?
No. The letter is advocacy addressed to Congressional leaders, not a change in law or IRS guidance. You're still required to report every taxable disposal under the current rules for your 2026 return. The proposals it outlines, particularly the de minimis exemption, are not yet in force.
What is the de minimis exemption the letter is asking for, and how would it help me?
A de minimis exemption would mean that disposals below a certain dollar threshold, such as spending a small amount of crypto on everyday purchases, wouldn't trigger a reportable capital gains event. Right now every disposal is technically taxable, regardless of size. An exemption would eliminate the need to track and report hundreds of micro-transactions.
Why would the industry voluntarily ask for wash sale rules to apply to crypto?
Extending wash sale rules to crypto removes a disparity between how crypto losses and stock losses are treated. The industry's position is that accepting this constraint, which limits rapid loss-harvest-and-rebuy strategies, demonstrates a commitment to a fair level playing field rather than special treatment, which makes the case for other reforms easier to win politically.
The Digital Asset Tax Certainty Act already includes a $10 fee threshold. Is that the same as a de minimis exemption?
Not exactly. The $10 threshold in the Act applies specifically to network fees, meaning you wouldn't owe tax on a gain attributable to a fee payment of $10 or less. A full de minimis exemption, as the Blockchain Association is calling for, would apply to the overall transaction value and cover a broader range of small everyday disposals. The fee threshold is narrower in scope.
What should I do with my crypto records while this legislation is pending?
Keep capturing every transaction: acquisition date, cost basis, disposal date, and proceeds. Don't wait for legislative clarity before organising your history, because any new rules could allow retrospective application and clean records will make that much simpler. Running your transaction history through a crypto tax calculator periodically also lets you spot gaps or errors before they become a filing problem.