Pro-XRP lawyer John Deaton has raised critical questions regarding tax breaks for US-based cryptocurrency projects. His remarks focus on determining which projects qualify for the proposed capital gains tax and the implications for companies with global affiliations.
Crypto lawyer John Deaton raises concerns about US tax policies
in Recent tweetJohn Deaton discussed the uncertainty surrounding US-based cryptocurrency projects. He questioned whether projects with operations or foundations abroad, such as Solana and Tezos, would meet the requirements for tax breaks.
Solana Labs, headquartered in San Francisco, operates under the Solana Foundation and is headquartered in Switzerland, while Tezos was developed by Arthur and Kathleen Breitman and is based in the US, but is governed by the Tezos Foundation, headquartered in Switzerland. Deaton’s investigation focuses on whether these hybrid structures qualify as U.S.-based entities under the proposed tax policies.
John Deaton also pointed to cryptocurrencies such as XRP, XLM, HBAR, AVAX, and XCH, which may face fewer legal hurdles. These projects meet the criteria on the surface, potentially putting them to benefit from zero capital gains tax.
Furthermore, Deaton emphasized the potential for tax incentives to drive broader adoption of cryptocurrencies as corporate treasury assets. He wondered whether companies adopting digital assets such as XRP, XLM, and HBAR would gain a competitive advantage under the proposed capital gains tax policy.
It also raised concerns about the treatment of foreign entities with US operations, such as Hut 8, and their eligibility for tax benefits.
More so, lately Top PRO-XRP Lawyer Four main goals of the White House Crypto Council. It urged its members to focus on critical areas such as SAB 121, the creation of the Bitcoin Strategic Reserve, crypto tax payments, and comprehensive crypto tax policies.
US crypto companies and mining companies can reap the benefits
John Deaton also finds out how US-based companies, including Ripple, Gemini and Consensys, may benefit from the tax break if it applies to corporations. Tax breaks for these companies could incentivize them to expand their Crypto holdings and encourage other companies to adopt cryptocurrency as a reserve asset.
Deaton also addressed the case of Bitcoin miners such as Riot Platforms and Marathon Digital Holdings. These U.S. miners may qualify for the exemption, but questions remain about companies like Hut 8 Corp, a Canadian entity with expanding operations in the U.S. John Deaton highlighted the need for clarity on whether international companies with significant U.S. activities can You can also benefit from it.
Treasury reserve strategies and corporate crypto adoption
Another major issue raised by Deaton involves companies embracing cryptocurrencies like Bitcoin, XRP, and HBAR as part of their treasury reserves. He asked whether these strategies would qualify these companies for tax benefits under the new policies.
Prominent companies like MicroStrategy, known for its Bitcoin holdings, could benefit from tax relief if their Crypto reserve strategies are in line with the proposed framework. The policy may also encourage other companies to include crypto on their balance sheets.
More than that, recently, Deaton also confirmed Broader challenges facing the cryptocurrency industry. He criticized previous regulatory actions by the US Securities and Exchange Commission (SEC), which he described as resource hogging and counterproductive.
John Deaton called what he referred to as the “crypto wars,” urging a shift toward clearer regulations to support innovation.
Ronnie Mugendi
Ronny Mugendi is an experienced crypto journalist with four years of professional experience, where he has contributed significantly to various media outlets on cryptocurrency trends and technologies. With over 4,000 articles published across various media, it aims to inform and educate more people to the world of blockchain and defi. Outside of his journalism career, Ronnie enjoys the thrill of cycling, exploring new trails and landscapes.
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