The US Crypto Assets tax hearing will take place next week, determining a key piece of the "long-term bull run" puzzle?

The U.S. Senate Finance Committee will hold a critical hearing to discuss digital asset tax policies, constructing a comprehensive regulatory framework for the crypto industry. (Background: Crypto taxation moves towards 'global reporting'! Switzerland approves sharing crypto revenue information among 74 countries) (Context: Taxation eating away at over half of profits? Three legal strategies of crypto whales) Next Wednesday (October 1), the Washington D.C. Senate office building will be the focus of the global crypto world holding its breath: The U.S. Senate Finance Committee will convene a critical hearing titled 'Review of Digital Asset Tax Policies'. This is not just another empty policy discussion. At this current moment, it feels more like a decisive battle. With the House of Representatives historically passing the Market Structure and Stablecoin Act, tax policy has become the last and most crucial piece in building a comprehensive regulatory framework for the $2.5 trillion global digital asset industry. The final direction of this hearing will not only clarify the tax ambiguities for 50 million American crypto investors but also determine the future position of the U.S. in the global digital economy competition, setting new courses for the flow of global capital. The last piece of the puzzle: forming a political consensus. This hearing, chaired by Senate Finance Committee Chairman Mike Crapo, did not come out of nowhere. It is built on a series of solid legislative and political foundations, marking a shift in the U.S. Congress's attitude towards cryptocurrencies from exploratory examination to decisive legislation. Its direct prelude was the hearing titled 'Making America the World Crypto Capital' held by the House's fundraising committee oversight subcommittee in July 2025. That hearing set the tone for Capitol Hill: providing a clear legal framework for the crypto industry is imperative to maintaining America's technological and financial leadership. Following closely, the House historically passed two landmark bills: The American Stablecoin Guidance and National Innovation Act (GENIUS Act) established a federal regulatory framework for stablecoins, while the Digital Asset Market Clarity Act (CLARITY Act) aims to delineate the regulatory authority of the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) over digital assets. Tax policy is precisely the missing last piece of this grand regulatory puzzle and is the most critical piece. Chairman Crapo's long-standing attention to this issue gives this hearing greater significance. As early as 2018 and 2020, he chaired hearings on cryptocurrencies. Notably, he co-signed an open letter with Democratic Senator Ron Wyden in 2023, soliciting detailed industry input on digital asset tax policy, with questions raised in the letter covering nearly all core technical issues to be discussed in this hearing. This series of actions indicates that Chairman Crapo is committed to creating a lasting and stable legal environment for this emerging industry through bipartisan cooperation. Therefore, the hearing in Room 215 has transcended technical debates. It reflects a fundamental shift in the thinking of American legislators—from 'whether' to regulate cryptocurrencies to 'how' to conduct effective and competitive regulation. It resembles a public legislative drafting meeting, with the ultimate goal of birthing a specific legislative proposal, marking the conscious end of the 'ambiguous era' of U.S. crypto regulation. Washington's dilemma: Using a sword from the previous dynasty to threaten the officials of the current dynasty? However, despite the formation of political consensus, to translate intentions into actionable laws, legislators must face a fundamental dilemma: how to regulate a digitally native new species with a tax law designed for a simulated world—a code from the 'previous dynasty'? This is precisely the core dilemma of this hearing, concentrated in two nagging 'soul-searching' questions that have the entire industry in a headache. The first is the fundamental divergence between 'creation equals income' and 'tax upon sale'. Taking staking as an example, the IRS's current vague guidance tends to view newly generated tokens as ordinary income for tax purposes the moment control is gained. The industry's complaint is vivid and illustrative: 'It's like asking a baker to pay taxes when the bread is freshly baked, rather than after the bread is sold.' The second stems from the disturbingly broad definition of 'broker' in the Infrastructure Investment and Jobs Act. Theoretically, miners, software developers, and even participants in DeFi protocols could all fall under the category of 'broker', being forced to bear user information reporting obligations that they are technically incapable of fulfilling. This is no longer regulation but a toll booth on the way to innovation. Quadrilateral game: Who will define the future at the hearing? Jason Somensatto | Advocate of Principles. As the policy director of Coin Center, a well-known nonprofit research and advocacy organization in Washington, Jason Somensatto represents a principled and rights-based policy perspective in the crypto world. His professional background spans regulatory agencies (having worked at the CFTC) and industry analysis firms (Chainalysis), which gives his viewpoint a blend of regulatory feasibility and industry insight. Coin Center's core argument is not to seek tax privileges for cryptocurrencies but to align their tax treatment with similar economic activities. They emphasize the unique nature of crypto assets as 'consumable commodity assets'—they are both assets like gold and easily tradable and divisible like dollars. Based on this, they strongly advocate for clarifying key tax issues, particularly the timing of tax on block rewards (including mining and staking rewards). Somensatto and Coin Center argue that such rewards are newly created properties and should be taxed upon disposal (i.e., sale or exchange), rather than upon receipt. This viewpoint was vividly likened during the House hearing to 'farmers should not be taxed when they harvest crops, but rather after they sell the crops', a metaphor that profoundly reveals the irrationality of viewing unrealized gains as taxable income. Andrea S. Kramer | Cartographer of Legal Mazes. Andrea S. Kramer is a recognized thought leader in the field of virtual currency law, known for her profound analysis of how digital assets adapt (or fail to adapt) to existing legal categories—such as securities, currency, or commodities. Her presence highlights a core issue: the legal classification of digital assets is the cornerstone of all tax treatments. Currently, the IRS broadly classifies cryptocurrencies as 'property', but this definition is too crude to cope with the diversity and complexity of the industry. Kramer's work delves into the nuances that determine whether traditional financial rules (such as the Wash Sale Rule) should apply to digital assets. Currently, since cryptocurrencies are not considered 'securities', the wash sale rule does not apply, providing traders with tax planning opportunities not available in traditional markets. Globally, countries vary in their legal classification methods for digital assets, with some focusing on their property attributes and others on their payment functionality, making it a complex and crucial task to develop a classification framework for the U.S. that aligns with international norms while being domestically feasible.