Senator Cynthia Lummis revealed on June 30 that she would introduce an amendment to add crypto tax language to the “One Big Beautiful Bill” (OBBB) amid pushes from crypto advocates in the same direction.

Lummis posted on X that she is drafting an OBBB amendment “to ensure Americans can use digital assets without fear of tax violations.” She added: 

“For years, miners and stakers have been taxed TWICE. Once when they receive block rewards and again when they sell it. It’s time to stop this unfair tax treatment and ensure America is the world’s Bitcoin and Crypto Superpower.” 

The proposal revives earlier bipartisan efforts to exempt small gains on everyday transactions. 

Matthew Pine, executive director of the Bitcoin Policy Institute, asked supporters to email or call senators and request “a narrowly tailored Bitcoin de minimis tax exemption.” 

According to Pine’s suggested script, the current rules require users to compute capital gains on minor purchases, a record-keeping burden that “discourages fair compliance and everyday adoption.”

Timing of taxation for block rewards

Dennis Porter, chief executive of the Satoshi Action Fund, focused his outreach on mining and proof-of-stake earnings. 

He told callers to explain that those rewards “are taxed once as ordinary income when they’re created, then again as capital gains when they’re sold.” 

Porter’s proposed fix would tax rewards only at disposition, aligning them with self-generated property such as farm produce. 

Colin McLaren of the Solana Policy Institute echoed the appeal, stating that Congress and the Senate Finance Committee “need to clarify key digital asset tax issues around staking” and should incorporate Lummis’s language to “unlock the future of innovation.”

Lobbying coordination intensifies

Cody Carbone, CEO of the Digital Chamber lobbying group, amplified the message in a post.

He said that taxes on block and staking rewards should be applied at sale instead of creation, adding that legislation should treat these rewards as “created property.”

Carbone’s call added the Digital Chamber’s membership to a coalition that now includes Bitcoin policy advocates, proof-of-stake supporters, and general crypto trade groups. All scripts emphasize courtesy and brevity when speaking with congressional offices.

Supporters view this week’s committee negotiations as a narrow window to attach digital asset provisions before the bill reaches the Senate floor. 

They argue that the combined de minimis exemption and block reward timing fix would streamline individual reporting, reduce compliance costs, and keep validation activity in the US. 

Senate staff have not released the draft text, and negotiators have not indicated whether the two issues will be advanced together or separately.

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Hassan Shittu

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Hassan Shittu

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Hassan, a Cryptonews.com journalist with 6+ years of experience in Web3 journalism, brings deep knowledge across Crypto, Web3 Gaming, NFTs, and Play-to-Earn sectors. His work has appeared in…

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June 3, 2025

Senator Elizabeth Warren is moving to tighten a provision in the bipartisan GENIUS Act that she says creates a loophole for cryptocurrency wallets, one she warns could directly benefit President Donald Trump and his family.

Warren alleges that Republicans quietly added a last-minute exemption for crypto wallet providers in the GENIUS Act, a move she claims was designed to benefit Trump’s growing involvement in the industry.

According to Warren, this loophole could allow the Trump family to bypass essential regulatory scrutiny while launching products like their planned crypto wallet tied to the USD1 stablecoin.

“The American people deserve transparency and integrity, not backroom deals to enrich former presidents,” Warren said in a social media post announcing her amendment.

She warned that she won’t support the bill unless the wallet exemption is removed and strict anti-corruption measures are added.

Trump’s Crypto Moves Spark Ethics Alarm

At the center of this political storm is World Liberty Financial (WLFI), a firm reportedly backed by the Trump family. WLFI launched the USD1 stablecoin in March and is now believed to be developing an integrated crypto wallet platform.

These developments have intensified scrutiny from Democratic lawmakers, who argue that the GENIUS Act, if passed without proper safeguards, would effectively grant a green light to Trump’s crypto ambitions.

Senator Jeff Merkley (D-Ore.), a longtime ally of Warren on financial oversight issues, has also raised concerns.

“We cannot allow legislation to open doors for influence peddling or profit schemes tied to former presidents,” Merkley said during a Senate briefing.

The controversy stems from a provision in the GENIUS Act that allegedly exempts certain crypto wallet services from oversight if they operate outside direct custody models.

Critics say this clause could shield entities like WLFI from accountability, despite managing wallets linked to high-volume stablecoin transactions.

This comes on the heels of a $2 billion stablecoin investment deal between WLFI and a sovereign wealth fund in the United Arab Emirates, further fueling accusations of international influence and profit-making tied to Trump’s political brand.

Warren’s amendment reportedly includes a prohibition on any sitting or former president and their immediate family from profiting off stablecoins, wallet infrastructure, or related services.

It would also mandate full disclosure of any financial interests in digital asset ventures by political officeholders and candidates.

Will Congress Close the Door on Political Crypto Profit?

The GENIUS Act is considered a landmark attempt at establishing comprehensive federal regulation for stablecoins.

It includes mandates for 1:1 reserves, defines payment stablecoins, and assigns oversight responsibilities; provisions welcomed by many in the crypto industry seeking regulatory clarity.

Warren and her allies argue that the bill doesn’t go far enough to prevent corruption. Without tighter restrictions, they say, it creates an opening for political elites to leverage insider access and shape crypto rules for personal gain.

“We’re not just regulating finance—we’re protecting democracy from being sold to the highest bidder,” Warren told reporters.

On May 19, the U.S. Senate took a key step toward regulating stablecoins by advancing the GENIUS Act with a bipartisan vote of 66-32. The vote followed a week of intense negotiations, with 16 Senate Democrats joining Republicans to overcome a previous deadlock.

The bill, co-sponsored by Senators Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.), would establish clear rules for stablecoin issuance and federal oversight.

It now heads to the Senate floor for debate and is expected to have enough support to proceed to the House.

However, concerns are growing over a proposed amendment from Warren, which some in the crypto industry say could jeopardize the bill’s progress.

Critics argue the amendment may discourage future public-private partnerships, while supporters insist ethical safeguards are necessary to prevent political favoritism in the growing digital finance sector.

Meanwhile, in a joint statement on June 2, four leading industry groups—the Blockchain Association, Crypto Council for Innovation, Chamber of Digital Commerce, and DeFi Education Fund—urged lawmakers to keep the bill focused, warning that unrelated amendments could derail long-overdue regulatory clarity.

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Utah’s State Senate has exited the Strategic Bitcoin Reserve (SBR) race after amending the proposed bill allowing the state treasury to invest in digital assets. The amended legislation is now headed to Utah Governor Spencer Cox’s desk to be signed into law.

Utah Passes Bitcoin Bill Without Key Clause

On March 7, Utah’s senate passed House Bill 230 (HB230), also known as the “Blockchain and Digital Innovation Amendments.” However, the state lawmakers amended the legislation to scrap the clause allowing the state to invest in digital assets.

The legislation initially authorized the state treasurer to invest up to 5% of certain public reserve funds in “qualifying digital assets” and established requirements for their custody and management.

To be considered for investment, a digital asset must have maintained a market capitalization of more than $500 billion over the past 12 months and not be a stablecoin. Bitcoin was the only cryptocurrency that met these requirements.

Utah Representative Jordan Teuscher introduced HB230 on January 21 and passed the House of Representatives vote 8-1 before proceeding to the Senate’s first reading. The bill passed the Senate Revenue and Taxation Committee reading on February 20 in a 4-2-1 vote and moved to the second and third reading in the full Senate.

After passing the second reading, the Senate dropped the Reserve clause on its third reading over “a lot of concern with those provisions and the early adoption of these types of policies,” stated Senator Kirk A. Cullimore on the March 7 floor session.

Without the Bitcoin reserve clause, the bill only establishes basic custody protections for Utahns. It also provides the right to mine Bitcoin, run a node, develop software, and participate in staking without regulatory overreach.

Amended HB230 scraps SBR clause. Source: Utah State Legislature 

According to Bitcoin Laws, “This bill establishes a comprehensive framework for digital asset regulation and blockchain technology in Utah, providing clear definitions and protections for individuals and businesses engaging with digital assets. (…) It prohibits state and local governmental entities from restricting a person’s ability to accept digital assets as payment or use self-hosted or hardware wallets.”

The bill is now headed to Utah Governor Spencer Cox’s desk to be signed into law after passing the Senate with a 19-7-3 vote.

US Strategic BTC Reserve Race Continues

Despite Utah’s Bitcoin Reserve outcome, other US states remain in the race to become the first state to establish an SBR. Bitcoin Laws data shows Arizona has two BTC reserve bills awaiting a final floor vote in the Senate.

Similarly, the Texas Strategic Bitcoin Reserve legislation, introduced in January, passed the Senate committee at the end of February and awaits its final vote. New Hampshire and Oklahoma have also advanced their proposals for an SBR at a state level.

Meanwhile, bills from Florida, Georgia, Illinois, Iowa, Kentucky, Maryland, Massachusetts, New Mexico, North Dakota, Ohio, and other states remain live but are at the early stages of the legislative process.

It’s worth noting that US President Donald Trump recently signed an executive order to officially establish a Strategic Bitcoin Reserve and a “Digital Asset Stockpile.” Last Thursday, White House AI & Crypto Czar David Sacks announced that the reserve will be “capitalized with Bitcoin owned by the federal government that was forfeited as part of criminal or civil asset forfeiture proceedings.”

The executive order followed President Trump’s Mach 2 announcement of a “US Crypto Reserve” to elevate the industry “after years of corrupt attacks by the Biden Administration.”

Bitcoin's performance in the one-week chart. Source: BTCUSDT on TradingView

Featured Image from Unsplash.com, Chart from TradingView.com

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