The proposed crypto mining tax will be implemented in tiers. Miners consuming up to 2.25 million kilowatt-hours (kWh) annually will be exempt. However, those using between 2.26 million to 5 million kWh will face a tax of 2 cents per kWh. For miners whose consumption ranges from 5 million to 10 million kWh, the tax increases to 3 cents per kWh. The rate further escalates to 4 cents per kWh for those utilizing up to 20 million kWh. Finally, any mining operation exceeding 20 million kWh per year will incur a tax of 5 cents per kWh.

Impact of the Crypto Mining Tax on New York State

This proposed legislation is not unprecedented but could have substantial impacts on the crypto mining industry. Companies reliant on grid electricity may find their profit margins squeezed even tighter, potentially forcing them to relocate to regions without such regulatory expenses.

Interestingly, the bill exempts miners who use 100% renewable energy. These miners were permitted to remain operational under a two-year mining moratorium that began in 2022 and expired in 2024. This exemption could provide an incentive for companies to invest in renewable energy infrastructure.

Challenges for Crypto Miners

With electricity costs being a critical component of mining operations, companies that use renewable energy in remote areas may gain a competitive edge. These businesses can mitigate the fluctuating costs of energy, which is a crucial factor in the mining process.

The median cost to mine a single Bitcoin (BTC) soared to over $70,000 in the second quarter of 2025 due to increasing mining difficulty and network hashrate, as reported by TheMinerMag. Rising energy prices in early 2025, estimated at $0.08 per kWh, doubled the costs for TeraWulf, a mining firm in upstate New York. This led to a reported loss of $61.4 million during the period.

It’s clear that the proposed crypto mining tax in New York State could significantly alter the landscape for miners, especially those unable to switch to renewable energy sources.

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The new tax policy applies universally, whether the assets are on local or international exchanges, self-custody wallets, or even across decentralized finance (DeFi), non-fungible tokens (NFTs), or staking platforms. All digital asset activities are subject to taxation. Taxes are calculated quarterly, and losses can be carried forward for up to five previous quarters. However, this window will be shortened in 2026.

Prior to this change, small investors and casual traders enjoyed a generous tax exemption for trades up to 35,000 reais per month. Moreover, larger profits were taxed progressively. Once the threshold was crossed, a 15% tax was levied on gains up to 5 million reais, and a 22.5% tax on gains exceeding 30 million reais (approximately $5.4 million). This structure meant that hobbyists usually paid nothing, moderate traders paid moderately, and only the largest investors faced the highest tax rates.

The immediate impact of the new tax rules is felt by everyday users. Casual traders who previously stayed below the 35,000-real monthly cap are now fully taxed at 17.5%. For example, a modest 30,000-real profit, previously tax-free, now incurs a 5,250-real liability. This flat-rate model significantly affects small investors and gig-economy traders.

Under the new policy, medium-scale investors now face a 17.5% tax, up from the previous 15% on gains under 5 million reais. However, the new system can reduce the tax burden for high-net-worth traders. Previously, gains over 30 million reais were taxed at 22.5%. Now, that’s capped at 17.5%, leading to substantial savings on large positions.

The 17.5% flat tax now applies to digital assets held outside of centralized Brazilian exchanges, closing a major loophole that allowed tax avoidance through foreign platforms or cold storage. Furthermore, new sectors like DeFi lending, staking rewards, and NFT trades are explicitly included in the tax regime. Returns from yield farming or NFT sales are now taxed like any other crypto gain.

The introduction of Provisional Measure 1303 is a major step in Brazil’s fiscal strategy. Rather than continuing with piecemeal tax hikes, Brazil has now opted for structural change. The move to tax digital assets, fixed-income investments, and online betting revenues is part of a broader Brazilian tax reform in 2025, aimed at expanding the tax base with more permanent and enforceable policies.

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The amendment, championed by Sen. Lummis, aimed to address the “unfair tax treatment” of digital assets. Lummis stated on Tuesday that she would continue to push for her proposal, expressing optimism about the productive conversations she has had with the Senate Finance Committee Chairman, Mike Crapo, and other committee members.

The proposed amendment included a de minimis exclusion, setting a $300 threshold, and guidelines for taxing cryptocurrency miners and stakers. Crypto advocacy groups have long been lobbying for changes in how cryptocurrency is taxed, with a particular emphasis on a de minimis exemption.

The vote ended in a 50-50 tie, with Vice President JD Vance casting the deciding vote. Ahead of the vote, crypto experts encouraged the public to reach out to lawmakers, including Senate Majority Leader John Thune, to express their support.

Alexander Grieve, vice president of government affairs at Paradigm, expressed his gratitude to @SenLummis, @MikeCrapo, @SenatorTimScott, & @LeaderJohnThune for their efforts, and to the community for their support. He reassured everyone that they would find another way to get the job done.

The reconciliation bill will next proceed to the House, with President Trump’s Friday deadline fast approaching.

Disclaimer: The Block is an independent media outlet that provides news, research, and data on the crypto industry. Foresight Ventures, a majority investor of The Block, also invests in other crypto companies. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry.

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Despite President Donald Trump’s professed interest in abolishing taxes on cryptocurrencies based in the U.S., no such legislation has been introduced in Congress, Kemmerer relayed via email. Moreover, a common misconception among investors is that they are not required to declare crypto on their taxes. IRS warning letters are causing widespread anxiety, suggesting the onset of a more extensive enforcement wave. This is likely to intensify with the advent of new 1099-DA regulations, which are due to take effect next year, Kemmerer warned.

“The current climate is one of uncertainty and fear among average crypto investors, many of whom have made earnest attempts to report their taxes accurately,” Kemmerer noted. “With 1099-DA looming, enforcement is set to intensify. The IRS now has greater insight into crypto than ever before, but without precise cost basis data, even compliant investors may be wrongfully flagged. Hence, it’s crucial to maintain detailed records and be proactive in tracking taxable income.”

Starting January 1, 2026, crypto brokers are required to report both the gross proceeds and cost basis of digital asset sales on Form 1099-DA. This means the IRS will automatically receive detailed gain/loss data for users, thereby reducing underreporting and significantly enhancing compliance oversight for crypto holders. However, this April, Trump repealed a controversial IRS crypto rule finalized under Joe Biden that would have also included DeFi platforms as brokers.

The IRS has been dispatching various types of crypto-related warning letters, each with varying degrees of severity. The most prevalent is Letter 6174, which serves as a low-severity educational reminder that crypto transactions may be taxable and should be reported. This does not imply any wrongdoing and is often sent to crypto investors identified by IRS through John Doe summonses issued to exchanges such as Coinbase.

Letter 6174-A indicates suspected underreporting by the IRS, but does not necessitate a response. However, it is advisable for taxpayers to review their return carefully and file an amendment if needed. More serious notices like Letter 6173 and CP2000 are increasingly common, demanding timely responses and potentially triggering audits if ignored.

“Many users are taken aback by the IRS warning letters. These aren’t tax evaders, but ordinary investors who had Bitcoin or Ethereum for years and thought they were compliant,” remarked Ben Yoder, CoinLedger’s Customer Success Manager. “A recurring theme is their concern about honest mistakes made years ago. For instance, one customer was worried about a potential audit because they didn’t report a few hundred dollars of crypto income in 2021.”

Even if taxpayers reported their taxes accurately, they could still receive these letters, often due to challenges in tracking cost basis across wallet-to-wallet transfers. If an individual receives an IRS letter but believes their crypto taxes were filed correctly, they can respond with supporting documents like trade history or Form 1099s from exchanges.

If they failed to report crypto in a prior year, they can amend their return using Form 1040X and include a memo if significant changes are made. While less severe notices like 6174 or 6174-A can be resolved by the recipient manually or by using crypto tax software, more serious letters like CP2000 or 6173 might warrant assistance from a tax professional.

In February, CoinLedger revealed that the average crypto investor’s portfolio saw gains of $5,482 in 2024, with HYPE and BTC contributing the largest unrealized gains, while ETH, ADA, and POL led the losses.

Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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Following Tuesday’s Wall Street declines, US stock futures experienced a downturn, primarily led by the tech sector. Concurrently, the dollar’s value continued to drop due to concerns revolving around US government debt, as President Trump seeks passage for his tax bill.

On the other hand, Treasury yields saw a rise. Asian stock markets showed mixed results at the end of their trading day, while European stock markets experienced a fall at the start of their trading day.

The 30-year US Treasury yield is nearing 5% again as fiscal anxieties put pressure on the long-end US debt. According to data from LSEG, the 30-year yield has risen nearly 3 basis points to last trade at 4.993%. The two-year Treasury yield saw an increase of 1.5 basis points ending at 3.982%, and the 10-year yield rose 3 basis points to 4.512%.

With investors struggling with the uncertainty surrounding US fiscal policy, and the role of Treasuries and the dollar as portfolio diversifiers and safe havens, the dollar hit a two-week low. The DXY dollar index against a group of major currencies was recently at 99.4230.

In stock markets, Dow Jones Industrial Average futures were down 0.4%, S&P 500 futures fell 0.5%, and Nasdaq futures, which are tech-heavy, were down by 0.6%.

In Asia, Japan’s Nikkei 225 index saw a decline of 0.6% following the latest export data that showed a drop in the country’s shipments to the US for the first time in four months. Japanese government bonds also faced pressure due to weak demand following Tuesday’s poorly received 20-year bond auction. On the other hand, Hong Kong’s Hang Seng saw a gain of 0.4% as market newcomer CATL’s shares continued to rise. China’s benchmark Shanghai Composite also saw a climb of 0.2%.

In Europe, the Stoxx Europe 600 saw a drop of 0.2% in morning trading. France’s CAC 40 and Germany’s DAX both fell by 0.3%. The UK’s FTSE 100 saw a loss of 0.1% while sterling rose to a three-year high against the dollar following data that showed UK inflation accelerated more than expected in April.

Oil prices saw an increase of more than 1% in early trade following a CNN report suggesting that Israel is preparing to strike Iranian nuclear facilities. Brent crude rose 1.1% to $66.07 a barrel, and WTI increased 1.2% to $62.75 a barrel. Gold prices also saw a rise due to the weaker US dollar and renewed safe-haven demand.

Write to Barcelona Editors at barcelonaeditors@dowjones.com

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The joint resolution to repeal this IRS rule was initiated by Sen. Ted Cruz, R-Texas, and Rep. Mike Carey, R-Ohio, during the final phase of the Biden administration in late December. This rule necessitated certain actors in the decentralized finance sector to function akin to traditional securities brokers, obligating them to accumulate and report user trading data. Moreover, it required them to provide customers with Form 1099 tax returns, disclosing non-employment income like gambling winnings, rents, and royalties.

According to the U.S. Treasury Department, the finalized rule targeted “front-end service providers” that interact directly with customers, suggesting that it aimed at entities operating the primary website for accessing a decentralized protocol rather than the protocol itself.

Earlier in March, the Trump White House expressed its concerns over the regulation, criticizing it as a last-minute legislation from the previous administration that could pose privacy issues. The Senate and the House had both voted to overturn the rule earlier this month. However, because of its association with a budget stipulation, a final Senate vote was required before it could be presented to President Trump.

There has been some support from Democrats, including Senate Minority Leader Chuck Schumer, although the majority of support has come from Republicans. “Upon the bill’s passage today, it will be delivered to President Trump’s desk to be the first crypto bill signed,” stated Ron Hammond, senior director of government relations at the Blockchain Association, before the vote.

When the rule was finalized, it faced significant resistance from crypto industry leaders. Organizations like the DeFi Education Fund initiated lawsuits against the IRS shortly after the rule’s finalization, warning that these obligations could drive the entire emerging technology offshore.

The Senate’s vote was welcomed by Amanda Tuminelli, the fund’s executive director, who described the repeal as an essential step towards safeguarding U.S. innovation and enabling developers to continue producing groundbreaking technologies without the constraints of ambiguous, overreaching regulations.

However, some Democrats have opposed the resolution, accusing Republicans of attempting to undermine the IRS. “They are the party that has consistently underfunded the IRS,” said Rep. Richard Neal, D-Mass., during a hearing in February.

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Currently, India enforces a hefty 30% capital gains tax on crypto assets, without differentiating between short-term and long-term holdings. This places crypto assets in one of the highest tax brackets within the nation, comparable only to the tax on lottery and gambling winnings, which also stand at 30%. This implies that the Indian government equates crypto assets with gambling.

Moreover, a severe amendment to Section 158B of the Indian Income Tax Act has been made to incorporate Virtual Digital Assets (VDAs). If an individual is found with undisclosed crypto assets, they could face a staggering 70% penalty. Prior to this, this rule was only applicable to undisclosed cash, bullion, and jewelry.

Amit Kumar Gupta, a practitioner in the Indian Supreme Court, suggests that India perceives crypto as a vehicle for money laundering and terrorism financing. However, there seems to be a shift in India’s viewpoint on crypto.

Ajay Seth, India’s Secretary of Economic Affairs, acknowledges that digital assets transcend national borders. Consequently, the Indian government is considering revising its stance on crypto, potentially easing the strict taxes currently in place.

Analysts predicted that crypto endorsement by certain countries could set off a global trend, which seems to be materializing. As the US embraces a pro-crypto stance under Trump, other nations might follow suit and pass legislation favoring crypto. El Salvador serves as a prime example. Despite a recent $1.4B agreement with the IMF, which limits public sector involvement in crypto, the country continues to accumulate Bitcoin.

Bitcoin’s trajectory remains positive despite recent turbulence. Experts believe that short-term corrections are healthy for the market and present an opportunity for investors to expand their BTC portfolios. A significant altcoin worth considering for investment during this upswing is the Best Wallet Token ($BEST).

$BEST is the token of Best Wallet App, a decentralized, non-custodial, multi-chain crypto wallet. The app has demonstrated impressive growth, boasting a total user base of 500K. The $BEST token offers users benefits like early access to token presales and transaction fee discounts, making it a promising crypto presale investment.

With ambitious goals to capture a substantial portion of the $10B crypto wallet market by 2026, Best Wallet and, by extension, the $BEST token, forecast substantial growth. However, as with all investments, thorough research and understanding of the volatile crypto market are crucial before making any financial commitments.

The post India’s Potential Shift Towards Crypto Amid Bull Market: Will $BEST Token Presale Skyrocket by 100x in 2025? appeared first on Crypto Market Insights: Dive In with CryptoUpdate.io.

The revelation of a potential policy shift coincides with the introduction of a new tax of up to 70% on previously undisclosed crypto profits under India’s Income Tax Act. This change in the government’s approach mirrors the high-level game theory suggested by crypto enthusiasts and Bitcoin purists, who argue that the acceptance of digital currencies by one or two countries would instigate a global race to amass these assets.

The Indian government currently imposes a 30% capital gains tax on crypto assets, without any differentiation between long-term investments and short-term trading. Amit Kumar Gupta, a Supreme Court of India legal practitioner, described these taxes as excessively harsh and intended to deter the growth of permissionless blockchain technology.

Gupta further explained that the Indian authorities view cryptocurrencies as “More harmful than gambling”. He told Cointelegraph that the government’s viewpoint is essentially: “We will not use or permit the use of cryptocurrency because this technology is solely for money laundering and terrorist financing — such activities”.

Shaktikanta Das, the ex-governor of the Reserve Bank of India (RBI), lauded the central bank’s initiation of a central bank digital currency (CBDC) pilot project. In his farewell speech in December 2024, Das referred to CBDCs as “The future of currency” and stated that the country is gradually transitioning towards a CBDC-centric economy.

Just before Das’s exit, the RBI announced plans to broaden its cross-border payment platform in November 2024 by seeking more trading alliances. The bank is considering CBDCs as the chief settlement tool between countries using the cross-border payment platform, which could potentially take the form of a wholesale CBDC.

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The changes enable unreported cryptocurrency profits to undergo block assessments, thereby equating their tax treatment to conventional assets including cash, jewelry, and bullion. The new amendment categorizes cryptocurrencies as Virtual Digital Assets (VDAs).

The amendment states: “Crypto asset has been defined in section 2(47A) of the Act under the existing definition of Virtual Digital Asset… A reporting entity, as may be prescribed under section 285BAA of the Act, will be required to furnish information of crypto asset.”

Notably, the new tax stipulation will be applicable retrospectively from February 1, 2025. At the close of December 2024, Pankaj Chaudhary, India’s Minister of State for Finance, revealed that several crypto exchanges owed 824 crore Indian rupees ($97 million) in unpaid goods and service taxes (GST).

This disclosure followed demands by Indian law enforcement agencies in August for 722 crore Indian rupees ($85 million) in unpaid taxes from Binance. Indian authorities may impose a tax penalty of up to 70% on undisclosed crypto profits, potentially applying to gains kept hidden for up to 48 months post the relevant tax assessment year.

The document stated: “70% of the aggregate of tax and interest payable on additional income disclosed in the updated income tax return [ITR].”

The new tax directives arrive two weeks after Bybit exchange ceased its operations in India on January 10, attributing the suspension to regulatory pressures as they strive to secure a full operational license from India’s Financial Intelligence Unit.

Stateside, crypto tax legislation gained momentum in June 2024 when the US Internal Revenue Service (IRS) implemented a new regulation, making US cryptocurrency transactions subject to third-party tax reporting for the first time.

Beginning in 2025, centralized crypto exchanges (CEXs) and other brokers will initiate reporting of digital asset sales and exchanges, including cryptocurrencies. This move could drive crypto investors towards decentralized platforms in a “paradoxical situation”, making tax revenue tracking more challenging, suggests Anndy Lian, an author and intergovernmental blockchain expert.

Meanwhile, the Blockchain Association lodged a lawsuit against the IRS in December 2024, arguing the rules to be unconstitutional as they classify decentralized exchanges under the “broker” term, hence extending data collection requirements.

The post Severe Tax Penalties for Undeclared Crypto Profits in India: 70% Levy Looms appeared first on Crypto Market Insights: Dive In with CryptoUpdate.io.

In a significant boost for crypto in Asia, Hong Kong is ready to extend tax breaks to crypto investments and add new trading licenses for platforms by year’s end, top officials announced today.

Expanding Tax Breaks to Drive Crypto Growth

Hong Kong is set to expand its financial incentives, with a fresh push aimed at cryptocurrencies. Speaking at Hong Kong Fintech Week, Christopher Hui, Secretary for Financial Services and the Treasury, detailed the government’s plans to include digital assets in tax concessions currently available to privately offered funds and family offices. Hui emphasized that this move, anticipated to roll out by the end of 2024, is geared toward enhancing Hong Kong’s attractiveness as a leading hub for crypto investments.

“By broadening tax concessions to encompass this wider range of eligible assets under our fund and family office regime, we aim to create a stronger pull for market participants,” Hui stated.

Crypto-Friendly Licensing Continues to Grow

Building on its pro-crypto policies, Hong Kong’s Securities and Futures Commission (SFC) began licensing crypto trading platforms in June 2023, allowing licensed exchanges to offer retail trading services. To date, three major platforms—OSL Exchange, HashKey Exchange, and HKVAX—have received licenses, with more anticipated by year’s end. According to Hong Kong’s Financial Secretary Paul Chan, the SFC is actively processing additional applications and plans to issue more licenses in the coming months.

Stablecoin Legislation and OTC Regulations on the Horizon

Hong Kong’s crypto framework extends beyond just trading. The Hong Kong Monetary Authority (HKMA) aims to pass stablecoin legislation this year after launching a stablecoin regulatory sandbox in March. Over-the-counter (OTC) crypto trading regulations are also under review, with a second consultation planned for next year. The government intends to establish a licensing framework for crypto custodians to further protect investor assets.

With these initiatives, Hong Kong cements its position as a progressive, crypto-friendly jurisdiction, setting the stage for substantial growth in the digital asset market.

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