Crypto Tax Implications After The GENIUS Act
Crypto Tax Implications After the GENIUS Act
The crypto regulatory landscape is evolving rapidly, but one thing remains unchanged: the IRS still treats cryptocurrencies as "intangible property" for tax purposes. Despite major legislative developments like the July 2025 GENIUS Act and the House-passed CLARITY Bill (pending in the Senate), tax treatment has not shifted.
Property, Not Securities or Commodities
The IRS's classification—originally laid out in Notice 2014-21—means crypto is taxed under capital gains rules for property, not as securities (which trigger wash sale rules) or commodities (which may qualify for favorable Section 1256 treatment). For a digital asset to be taxed as a security, it generally must resemble traditional equities, such as stock or bonds. Most crypto tokens do not meet that test.
Bitcoin futures, however, are an exception. Traded on regulated futures exchanges like the CME, they qualify as Section 1256 contracts with a 60/40 capital gains split and mark-to-market (MTM) at year-end. But spot crypto holdings and most tokenized assets remain property.
GENIUS Act: Compliance Without Tax Impact
The GENIUS Act introduces robust reserve, audit, and disclosure requirements for U.S. stablecoin issuers, including 1:1 asset backing and monthly financial attestations. However, it does not reclassify stablecoins for tax purposes.
CLARITY Bill: Regulatory Structure, Not Tax Change
The CLARITY Bill provides a framework for determining whether a digital asset is a security or a commodity, largely based on decentralization. The SEC and CFTC share oversight under the proposal. But this classification does not override the IRS's existing stance—digital assets remain property unless tax law changes.
Why It Matters
Bottom Line
Until Congress amends the tax code or the IRS updates its guidance, digital assets are taxed as property. That's good news for traders looking to harvest losses—but it also means they miss out on some of the favorable treatments available to securities or commodities traders.
Disclaimer: This article is for informational purposes only and does not constitute tax advice. Please consult a qualified tax professional for guidance.
For a more in-depth analysis, see a longer-form version of this blog post on GreenTraderTax.com. Robert A. Green, CPA is CEO of GreenTraderTax and a contributor to Forbes on trader and crypto tax issues.
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