Reporting from our crypto news desk, we've tracked a major setback for digital asset users. Senator Cynthia Lummis tried to fix America's confusing crypto taxes through a new amendment. Her plan would have made small crypto purchases tax-free and stopped double charges for Bitcoin miners. But senators left it out of their big new spending bill. This decision affects everyone who uses cryptocurrency – from people buying coffee with crypto to professional miners.
Crypto Tax Reform Fails in Senate
The Fixes America Won't Get (For Now)
Senator Lummis wanted to solve two big problems hurting crypto users:
- Small Purchase Headaches: Buying a $5 pizza with crypto? Right now, you must report taxes on that tiny deal. Lummis wanted transactions under $300 to be tax-free, saving regular users from paperwork nightmares.
- Double Trouble for Miners: Bitcoin miners get taxed twice today – first when they earn new coins, then again when selling them. Her fix would tax mining rewards only when sold, like regular investments.
| Tax Problem | Lummis' Solution | Status Now |
|---|---|---|
| Paying $5 for coffee with crypto | No tax under $300 | Still taxable |
| Mining new Bitcoin | Taxed only when sold | Taxed when earned AND sold |
| Crypto donations | Simplified rules | Complex reporting |
Why the Senate Said No
The "Big Beautiful Bill" barely passed by 50-50, needing the Vice President's tie-breaking vote. Experts say lawmakers "ran out of time" to include the crypto tax changes, not that they opposed them. Crypto supporters flooded social media, begging senators to add the fixes. Big names like Michael Saylor backed Lummis, arguing: "Miners shouldn't pay taxes on coins before they even sell them!"
Crypto Markets Hold Their Breath
Bitcoin's price wobbled as news spread that the tax fixes failed. Traders watch these key levels:
- Bitcoin: Testing $100,000 support level
- Mining stocks: Down 3-5% after vote
But hope remains. If these changes eventually pass, analysts predict:
- More everyday crypto spending (coffee, online tips)
- U.S. miners could expand operations
- Clearer rules for crypto donations to charities
What Happens Next?
The bill now goes to the House of Representatives, with President Trump demanding a decision by July 4th. Lummis hasn't given up: "We'll keep pushing to fix these flawed tax rules," she posted after the vote. The crypto community plans louder campaigns targeting House leaders.
For now, crypto users still face complex taxes on small purchases. Miners and stakers continue paying taxes twice on their rewards. But this fight shows how close America came to simpler crypto rules – and where the next battle lines form.
