Tax Impacts

On July 30, President Trump’s Working Group on Digital Assets released its comprehensive “Strengthening American Leadership in Digital Financial Technology” report (the Report). The 160-plus-page report sets forth a series of recommendations seeking to “ensure crypto becomes a hallmark of the new American Golden Age” while outlining a proposed framework for regulating digital assets. A key section of the Report focuses on the taxation of digital assets and sets forth proposals on the modernization of the tax framework to better align with the realities of the digital asset ecosystem. The proposals address a range of substantive tax issues, including the classification of digital assets for tax purposes, the timing and character of income from mining and staking activities, and the tax treatment of stablecoins, and also recommends updates to taxpayer and third-party reporting requirements.

Recent legislative proposals—the CLARITY Bill and the GENIUS Act—are designed to bring more clarity to how digital assets are regulated in the United States. The Clarity Bill was passed by the House of Representatives on July 17, 2025, and is now being reviewed by the Senate.

In this installment, we highlight two recent notable court cases, cover recent developments in Washington related to enforcement efforts related to the Employee Retention Credit (ERC), and highlight recent IRS guidance as to the taxation of staking rewards within the cryptocurrency space.

On November 11, 2022, FTX filed for Chapter 11 bankruptcy protection along with over 102 other FTX-affiliated entities. The company operated as a digital asset exchange, with several subsidiaries and affiliates, which included Alameda Research, a related cryptocurrency hedge fund. The bankruptcy of the entire operational enterprise and digital asset hedge fund has been a seismic event in the digital asset community, affecting over one million customers and eliciting attention from numerous governmental and banking organizations, including the Board of Governors of the Federal Reserve System (Federal Reserve), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC), which recently issued a joint statement calling attention to certain potential risks associated with digital assets and digital asset sector participants. Notably, the SEC and CFTC are also investigating FTX and analyzing acceptable regulatory framework for the industry.