The President of the United States, Joe Biden, recently declared his disapproval of a debt ceiling agreement that allegedly protects crypto traders.

It is believed that crypto trader protection relates to the phenomenon known as tax-loss harvesting. Earlier this month, Washington Post reported that the White House and Republicans have been discussing the proposal for quite some time.

Did you know?

Want to get smarter & wealthier with crypto?

Subscribe – We publish new crypto explainer videos every week!

In particular, the discussions revolve around potentially preventing crypto traders from using tax-loss harvesting.

Tax-loss harvesting is a strategy investors utilize to decrease their overall tax burden. This is achieved by selling a cryptocurrency at a loss to counterbalance gains from profitable cryptocurrency transactions. To qualify for this loss, the cryptocurrency must be sold, and the proceeds should be invested in a similar asset within 30 days before or after the sale.

Biden announced his stance regarding the matter during a press conference at the Group of Seven (G7) Summit on May 21st.

In a press conference, Joe Biden called the proposal “unacceptable.” The President of the US explained his position, stating:

I cannot agree to a deal that safeguards the wealthy, including cryptocurrency traders who evade taxes, while potentially threatening food assistance for almost a million Americans.

It is worth highlighting that during the discussions, the White House introduced a similar proposal that would prevent investors from deferring taxes on real estate transactions. 

However, Republican leaders reportedly oppose these proposals.

In March, Joe Biden’s administration proposed enforcing a 30% tax on crypto mining electricity costs. The proposal has seen a wave of opposition. However, it appears that Biden’s administration is not giving up. White House’s Council of Economic Advisers has recently advocated for the proposed Digital Asset Mining Energy (DAME) tax.

The standoff between the President and Republicans involves the national debt and cryptocurrency taxation. The outcome is uncertain, with both parties holding firm to their positions.