Weekly Crypto Regs Roundup: Taxes Under Fire
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Tanzil Akhtar
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The latest 2025 regulatory roundup This week's developments mark a shift in US crypto policy away from ad-hoc enforcement and toward more structured debates around taxation, banking access and investor protection.
From renewed pressure on the IRS to pay taxes to the Federal Reserve's exploration of new accounting models for payments firms, regulators are grappling with how to integrate digital assets into financial frameworks designed for a very different era.
Legislators renew pressure on Staking Tax Treatment
A bipartisan group of 18 US House lawmakers has urged the Internal Revenue Service to reexamine how crypto staking rewards are taxed, saying the current interpretation doubles taxation and encourages participation in blockchain networks.
The group, led by Rep. Mike Carey, called the guidance “draconian” in a letter to Acting IRS Commissioner Scott Besant and called for a review before 2026.
Under existing interpretations, stock awards are treated as taxable income when received, based on market value at that time, and taxed again if sold at a profit.
Lawmakers say this approach fails to reflect real economic gains, especially in volatile markets where token prices can fluctuate wildly between receipt and sale. “This letter is simply asking for fairer tax treatment for digital assets,” Carey said, adding that paying only when prizes are sold would be a meaningful step toward transparency.
The renewed push underscores a broader debate over whether equity should be equated as income or unrealistic asset appreciation—an issue that remains unresolved as it becomes central to equity assurance networks.
Fed examines new access to toll rails.
Separately, the Federal Reserve has opened a consultation that could reshape how crypto and payment-focused companies interact with the US banking system.
The Fed is seeking public comment on a proposed “payment account,” designed to sit alongside a limited-use central bank account — but not the traditional main account used by banks.
The proposal shows growing pressure on the Fed's existing framework as fintechs and cryptocurrency firms seek direct access to payment channels without the need for loans and deposits.
By creating a customized account model, the Fed appears to be weighing how to accommodate new business models while maintaining the protections associated with a full-service bank.
A 45-day comment period, after publication in the Federal Register, suggests regulators are still in the exploratory phase. But even considering such bills acknowledges that denying access may not be sustainable as digital payments and settlement systems proliferate.
The SEC has targeted fraud as a form of innovation
While the tax and banking debates focused on structural reforms, performance remained firmly in play. The U.S. Securities and Exchange Commission has charged a network of fake cryptocurrency exchanges and so-called AI investment clubs with allegedly orchestrating a $14 million retail fraud.
According to an SEC report, Morocoin Tech Corp., Berge Blockchain Technology Co. Ltd. And entities, including several AI-branded investment clubs, have used social media advertising, messaging apps and creative products to lure investors into what they described as “investment trust fraud.”
The case highlights an ongoing regulatory threat: As legitimate crypto companies push for clearer rules, bad actors continue to use hype around AI and digital assets to target retail investors. For regulators, such enforcement actions remain a key justification for maintaining a firm line on consumer protection.
Arizona State Level Crypto Tax Policy Limits Test
At the state level, Arizona lawmakers have introduced a new attempt to carve out a more permissive tax environment for digital assets. Proposals sponsored by state Sen. Wendy Rogers would exempt virtual currency from certain taxes and bar local governments from imposing fees on blockchain node operators.
One bill would remove virtual currency from state taxes, and the other would prevent cities and counties from paying for cross-border operations. A separate constitutional amendment would expressly exempt crypto from property taxes—but would require voter approval in November 2026.
The effort highlights the tension between state-level experimentation and broader fiscal realities. Arizona currently levies a flat 2.5% income tax and sales tax, which averages more than 8.5% after local rates are included.
The regulatory picture is still in motion.
This week's developments show a regulatory landscape in transition. Policymakers focus on aligning crypto with existing financial principles—fair taxation, regulation of payment systems, and investor protection—while still grappling with how far existing rules can be extended.
As structured, decentralized payments and crypto-native infrastructure develop, the pressure on regulators and regulators to move from temporary fixes to permanent frameworks will only grow.
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