Proposed 30% Crypto Mining Tax Dropped in US Debt Ceiling Deal

Republican congressman Warren Davidson highlighted the blockage of proposed taxes in the US debt ceiling deal

article-image

Phonlamai Photo/Shutterstock, modified by Blockworks

share

In a favorable turn of events for cryptocurrency miners in the US, the proposed tax on their electricity usage has been dropped according to Republican congressman Warren Davidson.

After lengthy negotiations, an agreement was reached between President Joe Biden and House Speaker Kevin McCarthy to raise the country’s debt ceiling until January 2025, extending past the next presidential election.

The debt ceiling represents the maximum amount of debt the government is allowed to issue. By increasing the debt ceiling, the government can borrow more money to meet its financial obligations and prevent a potential default.

Rep. Davidson (R-Ohio) confirmed the development about the proposed crypto tax via Twitter on Monday.

“Yes, one of the victories is blocking proposed taxes,” he said in response to crypto miner Riot Platform’s VP of Research Pierre Rochard, who noted the absence of bitcoin mining in the new bill outlining the terms to raise the debt ceiling.

Loading Tweet..

In early May, the White House suggested a tax on electricity used by cryptocurrency miners called the Digital Assets Mining Energy (DAME) excise act. The proposal aimed to impose a 10% tax on miners’ electricity usage from 2024, gradually escalating to 30% by 2026.

The White House pointed out the significant energy consumption by miners and criticized its negative impact on the environment. It also estimated that the DAME act would bring in $3.5 billion in revenue over 10 years.

The move sparked backlash from many crypto miners, who criticized it as an obvious attempt to sideline and marginalize the crypto community.

Meanwhile, New York-based Bit Digital said it would safeguard its operations by expanding to Iceland as a proactive measure against the proposed crypto mining tax.

It’s important to note that neither the White House nor the US Treasury has confirmed that the mining tax has been scrapped. Blockworks has reached out for comment.

The White House’s plan to tax crypto mining is currently on hold, while the debt ceiling deal awaits approval from both the House and Senate to become law.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2023

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research Report Cover Vertex.jpg

Research

The proliferation of new perp DEXs has led to fragmented liquidity across various DEXs and chains. Vertex, known for its vertically-integrated DEX that includes spot, perpetual, and integrated money markets, is now tackling cross-chain liquidity fragmentation through horizontal integration with the launch of new Edge instances. Vertex's integrated offerings and cross-margined account structure amplify the benefits of new instances: native cross-chain spot trading, optimized cross-chain basis trading, consistent interest rates, reduced bridging friction, and more.

article-image

Partnering with EtherFi and Angle, the fully on-chain perp DEX features bespoke collateral

article-image

Sponsored

Gavin Wood introduced the next evolutionary step for the Polkadot network: the Join-Accumulate Machine, or JAM

article-image

The side events were the places to be at Consensus 2024, according to attendees

article-image

Also, who’s come out swinging in the spot ether ETF fee war — and who could undercut them

article-image

I know it is not in their nature, but US regulators could learn a lot by researching the digital asset frameworks that overseas regulators have already gotten right

article-image

Also, the ETF hype train can count out at least one member