President Biden in March released his budget proposal for fiscal year 2025. In it, he proposed three changes to the way federal law operates with respect to cryptocurrency. There are some good changes, such as the application of existing securities regulations to crypto. But there is also one bad change — namely, a special tax on crypto mining.

Firstly, the proposal contains two regulatory changes. First is the elimination of a tax loophole that allows cryptocurrency traders to write off losses on assets they sell and then quickly rebuy. Second is the implementation of security loan nonrecognition rules to actively-traded crypto asset loans.

The first change simply expands existing rules for stock and bond trading to cryptocurrencies. This is a great example of the government creating an even playing field for similar asset classes without creating new cumbersome and bureaucratic regimes.

Currently, stocks sold at a loss cannot be re-purchased in less than 30 days. If traders repurchase those stocks, they cannot deduct the loss on their taxes — a practice known as wash trading.

With crypto, the rule is more ambiguous. It isn’t clear under the current regulatory regime when traders can buy their crypto back, but they often do so in much less than 30 days. They realize their losses for tax purposes and then immediately buy those same crypto assets back, functionally realizing a loss without actually losing those assets. The discrepancy between stocks and crypto is a result of slow regulatory application and not because of fundamental differences between crypto and securities.

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Isaac Schick is with the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit www.TheAmericanConsumer.Org or follow us on X @ConsumerPal.