Legal Insights on Tax Exemptions for Crypto Projects Ignite Questions

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Pro-XRP attorney John Deaton has raised significant questions regarding which US-based crypto projects would be eligible for proposed zero capital gains tax exemptions. His comments focus on how these exemptions would impact companies with global connections.

Concerns About Tax Policies

Deaton has expressed uncertainty regarding US-based crypto projects, questioning whether those with international operations, such as Solana and Tezos, would qualify for tax exemptions. Solana Labs operates out of San Francisco, while the Solana Foundation is based in Switzerland.

Tezos, developed by US-based Arthur and Kathleen Breitman, is governed by the Switzerland-based Tezos Foundation. Deaton pointed out the ambiguities around whether such hybrid structures would be recognized as US-based entities under the new tax policies.

The Impact of Tax Incentives on Crypto Adoption

Deaton emphasized that cryptocurrencies like XRP, XLM, HBAR, AVAX, and XCH could face fewer legal challenges. These projects may have the potential to benefit from zero capital gains tax exemptions by meeting surface-level criteria.

Additionally, Deaton questioned whether companies holding digital assets in their treasuries could gain a competitive edge, particularly focusing on US-based firms like Ripple , Gemini, and ConsenSys.

Deaton evaluated the potential for tax exemptions under the new policies for strategies that include cryptocurrencies like Bitcoin , XRP, and HBAR in corporate treasuries. He noted that firms like MicroStrategy could leverage these strategies for tax advantages.

He also criticized the SEC‘s past regulatory actions, highlighting the challenges the crypto industry faces and calling for clearer regulations. Deaton outlined four main objectives for the White House Crypto Council, urging members to focus on SAB 121, establishing a strategic Bitcoin reserve, crypto tax payments, and overall crypto tax policies.

In summary, Deaton’s proposals provide crucial insights into how US crypto projects can benefit from tax exemptions and the challenges they may encounter during this process.

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