- John Deaton questions which U.S.-based crypto projects qualify for zero capital gains tax amid global operational complexities.
- Cryptocurrencies like XRP and HBAR may benefit more due to fewer jurisdictional hurdles under the proposed tax policy.
- Deaton calls for clearer regulations to support crypto adoption and end resource-draining regulatory conflicts.
John Deaton, a well-known pro-XRP lawyer, has sparked a debate over tax exemptions for the U.S.-based cryptocurrency projects. His focus is on determining which projects qualify for the proposed zero capital gains tax. Deaton’s inquiry highlights the complexities faced by projects with international ties.
Global Structures and Eligibility Concerns
Deaton questioned the eligibility of projects like Solana and Tezos due to their hybrid structures. Solana Labs, headquartered in San Francisco, operates under the Switzerland-based Solana Foundation.
Similarly, Tezos, founded by U.S. developers, is governed by the Switzerland-based Tezos Foundation. Deaton emphasized the need for clarity on whether such projects meet the criteria for U.S.-based entities under the proposed tax policies.
He also highlighted cryptocurrencies like XRP, XLM, HBAR, AVAX, and XCH, which face fewer jurisdictional hurdles. These projects appear to align more clearly with the proposed tax exemption criteria, potentially positioning them as key beneficiaries.
Corporate Adoption and Regulatory Challenges
Deaton explored how tax incentives could drive corporate adoption of cryptocurrencies. He questioned whether companies holding digital assets like XRP, XLM, and HBAR would gain a competitive edge.
Additionally, he raised concerns about foreign entities with U.S. operations, such as Hut 8, and their eligibility for tax benefits.
The lawyer also addressed the potential impact on Bitcoin miners like Riot Platforms and Marathon Digital Holdings. He questioned whether international companies with significant U.S. operations, such as Hut 8 Corp, would qualify for the exemption.
Calls for Clearer Regulations
Deaton recently outlined key objectives for the White House Crypto Council, including addressing SAB 121 and refining crypto taxation policies. He criticized past SEC actions, describing them as counterproductive and resource-draining. Deaton urged an end to regulatory conflicts, advocating for clearer policies to support innovation and growth in the crypto industry.
The proposed tax exemptions could play a significant role in shaping the future of cryptocurrency adoption and corporate strategies.
