Kevin O'Leary has a warning on Washington's tax plans

Washington pushed forward two major crypto measures on Sept. 16, just one day after the Senate failed to advance the CLARITY Act.

The House Ways and Means Committee voted 38-5 to advance the Digital Asset Tax Certainty Act, which would overhaul federal tax rules for crypto, including transaction fees, wash sales, mining and staking. 

The bill would also reduce reporting burdens for some small crypto transactions.

Separately, the House Financial Services Committee advanced the American Reserve Modernization Act. The bill would establish a Strategic Bitcoin Reserve and Digital Asset Stockpile at the Treasury for federally held Bitcoin and other digital assets obtained through forfeiture, putting elements of President Donald Trump's existing reserve policy into law.

Related: Palantir, Rocket Lab among biggest climbers in power ranking

Neither measure is law yet, and their progress comes after the broader CLARITY Act failed to clear a key Senate procedural vote on Sept. 15. The bill received 49 votes in favor and 50 against, short of the 60 required to advance.

The tax bill also leaves some questions unresolved. Lawmakers dropped a proposal allowing miners and stakers to defer taxes on newly created rewards until sale, leaving a contentious part of crypto taxation for another fight.

O'Leary says market structure still matters

For investor Kevin O'Leary, piecemeal progress in Washington does not address what he has described as the biggest barrier to large-scale institutional crypto adoption: market-structure legislation.

Speaking on Fox Business on June 10, O'Leary said:

“Bitcoin’s going nowhere until the CLARITY Act becomes law.”

His argument is that pension funds, sovereign wealth funds and other large institutions need clear federal rules before making meaningful crypto allocations. 

O’Leary returned to that argument Thursday at the Avalanche Summit in New York, two days after the Senate failed to advance the CLARITY Act. He said he had expected the vote to fail, telling attendees:

“The chances of CLARITY passing, in my view, were zero, and that’s what happened.”

More news:

• Solana gets the default spot for stablecoins at FDIC-insured bank
• Ripple legal chief bullish on XRP despite CLARITY failure, here's why
• Coinbase CEO says crypto can’t wait on Congress after CLARITY vote fails

But he characterized the defeat as a delay rather than the end of the legislation. Pointing to the crypto tax bill advancing in the House, O’Leary argued that Congress cannot establish how activities such as staking are taxed without eventually defining the regulatory framework governing them.

“Once you tax, you’ve got to have policy.”

“We’re going to tax staking,” he added. “You know with certainty that policy’s coming in CLARITY, and it has to.”

O’Leary said he expects lawmakers to revisit market-structure legislation after the midterm elections, regardless of which party controls Congress.

“When will it come? Probably in the first or second quarter after the midterms,” he said.

Related: Explained: What is crypto staking?