Clarity Act and Crypto Tax Loophole: White House Billions Dollar Proposal

Besides the Clarity Act, the White House’s 2026 budget proposal targets the wash sale loophole that lets crypto traders harvest losses and immediately rebuy. It’s an illegal practice for stock investors, but entirely legal under current digital asset rules.

The proposal would apply wash sale rules to crypto for the first time, treating digital assets the same as traditional securities for tax purposes. It also includes a 30% excise tax on electricity used for crypto mining via the DAME (Digital Asset Mining Energy) tax, and a FATCA reporting requirement for U.S. taxpayers holding more than $50,000 in foreign crypto accounts.

Key Takeaways

• White House Budget 2026 proposes applying wash sale rules to crypto, closing a loophole unavailable to equity traders
• Treasury estimates the change generates $5.4 billion in revenue over 10 years
• A 30% Mining Tax on electricity costs targets proof-of-work operations directly
• FATCA reporting would extend to foreign crypto accounts over $50,000
• The proposal faces a difficult legislative path in a Congress that has been moving toward pro-crypto regulation

What the Wash Sale Rule Does

Under current law, the wash sale rule blocks stock investors from claiming a tax loss if they repurchase the same or substantially identical security within 30 days. Crypto is classified as property, not a security, which means that the rule does not apply.

Traders have used this gap aggressively, selling a Bitcoin position at a loss to lock in a deduction, then rebuying immediately to maintain exposure. That is tax-loss harvesting, and for crypto holders, it has been completely legal.

The White House proposal closes this gap. If passed, crypto would be subject to the same 30-day restriction as equities.

Discover: The best crypto to diversify your portfolio with

Does This Proposal Have a Real Path Through Congress, Just Like the Clarity Act?

The political tension here is direct. The same White House that is pushing the CLARITY Act as a pro-crypto regulatory framework is simultaneously proposing crypto tax rules. That is not a contradiction to the administration; it frames the crypto tax proposal as parity, not punishment. It just lands differently on the Hill.

Congress is currently moving toward crypto-friendly legislation. The CLARITY Act debate in the Senate Banking Committee is already consuming legislative bandwidth, and a crypto tax crackdown runs against the grain of that momentum.

The SEC is simultaneously fielding major regulatory proposals, including an 85-item rule change affecting Bitcoin and XRP ETF listings, and crypto policy is being pulled in multiple directions at once.

To put this into perspective, similar wash sale proposals were floated during the Obama and Biden administrations and never cleared Congress.

Discover: The best pre-launch token sales

Follow us on Google News

Trending News RecommendedPopular Crypto TopicsPrice Predictions

• Leading AI Claude Predicts the Price of XRP, Bitcoin and Ethereum by the end of May 2026
• A Republican Senator Just Threatened to Kill the Crypto Clarity Act Unless Trump Is Banned From Promoting Crypto
• Claude and Gemini Both Just Predicted Ripple XRP Hits $5 to $8: Do the On-Chain Signals Actually Back It Up?
• Dogecoin Price Rallies Ahead of SpaceX IPO: $1 DOGE Dream Moves Closer
• XRP Price Prediction: Garlinghouse Locks In as Ripple Raises the Standard in Las Vegas

Press Releases

SwapRocket Launches Enhanced Crypto Swap Aggregator With 2,000+ Assets and Zero Registration Requirements

2026-04-13 16:21:40, by Ahmed Barakat

Industry Talk

XRP News: Ripple’s CTO Is Being Accused of a Price Promise He Made in 2017: Did He Actually Say XRP Would Hit $1 Million?

2026-04-27 13:45:00, by Ahmed Barakat

Bitcoin News

Japan Bitbank Launches Crypto-Linked Card That Settles Bills in Bitcoin

2026-04-28 14:19:36, by Ahmed Barakat

Best Crypto to Buy Now in April 2026 – Top Crypto to Invest In

2026-02-24 10:31:20, by Alan Draper

New Cryptocurrencies to Invest in Today – Top New Crypto Coins

2026-04-24 14:32:52, by Ines S. Tavares

9 Best Crypto Presales in April 2026

2026-04-27 15:59:09, by Alan Draper

7 New & Upcoming Coinbase Listings in April 2026

2026-02-24 11:25:06, by Ilija Rankovic

10 New & Upcoming Binance Listings in 2026

2026-02-24 11:07:23, by Ilija Rankovic

13 Cryptos Set to Explode in 2026 – Our Top Picks

2026-04-27 16:40:04, by Ilija Rankovic

Bitcoin (BTC) Price Prediction 2026, 2027 – 2030

2026-04-30 07:30:00, by Leon Waters

XRP (XRP) Price Prediction 2026, 2027 – 2030

2026-04-30 07:30:00, by Ihssan El Medkouri

Ethereum Price Prediction 2026, 2027 – 2030

2026-04-30 07:30:00, by Alan Draper