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Biden Targets ‘Crypto Loopholes’ in Speech Outlining Economic Vision

2 mins
Updated by Michael Washburn
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In Brief

  • President Joe Biden's speech in Chicago on Thursday singled out cryptocurrency traders as the beneficiaries of tax loopholes.
  • The president added his voice to the anti-cryptocurrency rhetoric that has blared nearly nonstop from the Securities and Exchange Commission.
  • Yet his comments were vague on just how he plans to bring digital asset trading in line with other regulated economic activities.
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In a speech on the economy on Thursday, President Joe Biden sounded another anti-crypto note. Discussing economic fairness, the 80-year-old president announced his plan to close loopholes for crypto traders, hedge fund managers, and Big Oil.

The speech at the Old Post Office in Chicago, which focused on so-called “Bidenomics,” aimed to provide form and substance to a hitherto vaguely articulated economic mission. During the speech, Biden framed his agenda as one that champions the little guy. “Bidenomics is about the future. Bidenomics is just another way of saying: Restore the American Dream because it worked before,” he said.

Biden: I Will Eliminate Crypto Tax Loopholes

When discussing proposed changes to the federal tax system, he described plans to “make it fair.” For Biden, this means getting rid of the loopholes that crypto traders, and hedge fund general partners, have exploited. After specifically naming those two categories of financial player, he continued:

“Big Oil made $200 billion last year and got a $30,000 tax break — $30 billion tax break… That’s the next phase of this fight: making the tax code fair for everyone, making the wealthy and the super-wealthy and big corporations begin to pay their fair share.”

Biden’s decision to portray reforms to the taxation of crypto trading as pro-American worker is revealing. It also dovetails with his previous comments on how crypto brings little benefit to the broader economy. However, Biden did not elaborate on what changes would be in order, or what the loopholes were.

Read our latest crypto tax guide for the United States: The Ultimate US Crypto Tax Guide for 2023

But, unlike traditional equities, one of the crypto “loopholes” allows traders to sell and repurchase cryptocurrency quickly without facing higher tax rates. Though he was vague, it is likely Biden will want to bring it in line with other securities.

Crypto’s Benefits “Have yet to Materialize”

The Biden White House has been on crypto’s case since he started the job back in January 2021. Last month, the administration announced a new tax for crypto miners after pointing out that the top 34 crypto mining operations used the same power as three million homes.

“Cryptominers’ high energy consumption has negative spillovers on the environment, quality of life, and electricity grids where these firms locate across the country,” read a White House press release. 

Crypto mining also has unwanted effects on consumer electricity prices and puts pressure on the electricity grid, the administration argues. Moreover, crypto mining fails to generate comparable economic benefits to other electricity-intensive businesses. Instead, it uses energy to create digital assets “whose broader social benefits have yet to materialize.”

Last month, Biden blamed containing tax loopholes for crypto traders on wealthy Republican backers. In a tweet, Biden claimed these tax loopholes were responsible for $18 billion in lost revenue.

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Josh Adams
Josh is a reporter at BeInCrypto. He first worked as a journalist over a decade ago, initially covering music before moving into politics and current affairs. Josh first owned Bitcoin in 2014 and has followed the space ever since. He is particularly interested in Web3 adoption, policy and regulation, CBDCs, privacy, and the future of the metaverse.