Today in crypto, US lawmakers weighed changes to crypto tax rules. Tornado Cash co-founder Roman Storm asked a judge to dismiss his conviction, and the White House withdrew Brian Quintenz’s nomination to chair the Commodity Futures Trading Commission (CFTC).
US lawmakers grapple with crypto tax policy amid government shutdown
US lawmakers debated crypto tax policy at Wednesday’s Senate Committee on Finance hearing, including possible tax exemptions for crypto transactions below a certain threshold and how income from staking services should be classified.
Lawrence Zlatkin, the vice president of tax at crypto exchange Coinbase, urged the Senate committee to consider a de minimis tax exemption for cryptocurrency transactions under $300 to encourage commercial use in payments and ensure innovation occurs inside the US. Zlatkin said:
“The guiding principle is simple parity with traditional finance. The same tax rules should apply to the same economic activity, whether it involves commodities, stocks, or tokens on a blockchain. Right now, that parity does not exist. The lack of tailored rules has real consequences.”
Lawmakers also grappled with how to close the annual tax gap of about $700 billion through enforcing tighter reporting requirements for cryptocurrency transactions, minimizing tax exemptions, and potentially classifying revenue from staking services as earned income subject to taxation under the tiered income tax system.
Tax policy is a major issue for cryptocurrency users, industry executives, and companies who are left uncertain about the implications of their activities and whether the Internal Revenue Service (IRS) will penalize them for engaging with the digital economy.
Roman Storm seeks acquittal of Tornado Cash money transmission charge
Roman Storm, co-founder of Tornado Cash, has asked a US federal judge to acquit him of his sole conviction for unlicensed money transmission and the jury’s hung counts for money laundering and sanctions violations, arguing prosecutors failed to prove he intended to help bad actors misuse the crypto mixer.
According to legal documents filed on Sept. 30 to the US District Court for the Southern District of New York and reviewed by Cointelegraph, Storm’s defense argued prosecutors failed to prove he intended to help bad actors use Tornado Cash. This, according to the defense, would nullify the grounds for his conviction based on negligent inaction.
“Storm and bad actors was a claim that he knew they were using Tornado Cash and failed to take sufficient measures to stop them. This is a negligence theory,” the motion states.
The defense further claims that “lacking affirmative evidence that Mr. Storm acted with the intent to assist bad actors, ”the government attempted to meet its willfulness burden by claiming that the defendant failed to prevent misuse. “It is a claim that is antithetical to the willfulness standard and unsupported by the law,” the motion states.
A motion for acquittal asks the judge to throw out charges or a verdict because the prosecution’s evidence, even if taken as true, is legally insufficient.
White House withdraws Brian Quintenz as CFTC nominee
The White House withdrew Brian Quintenz’s nomination to lead the Commodity Futures Trading Commission on Tuesday, with Quintenz telling Cointelegraph that he would return to the private sector.
“Being nominated to chair the CFTC and going through the confirmation process was the honor of my life,” Quintenz told Cointelegraph, confirming earlier reports that his nomination was pulled.
“I am grateful to the president for that opportunity and to the Senate Agriculture Committee for its consideration. I look forward to returning to my private sector endeavors during this exciting time for innovation in our country,” he added.
Quintenz is a former CFTC commissioner and the head of crypto policy at a16z. He was widely backed by the crypto industry, but his nomination faced delays in Congress and reported pushback from crypto exchange Gemini co-founders Tyler and Cameron Winklevoss.
The CFTC is set to be a key regulatory agency for crypto under the Trump administration, but has been without a chair for almost a year and is being led solely by Acting Chair Caroline Pham.