President Joe Biden’s upcoming budget proposal packs a few surprises for cryptocurrency traders and investors, as he seeks to raise around $24 billion through changes to the tax treatment of cryptocurrencies. The proposal includes a crackdown on laundered sales of cryptocurrency, which is not currently subject to the same rules as stocks and bonds under current laundered sale rules, and a doubling of capital gains tax for certain investors. .

One of the proposals aims to eliminate the tax loss collection strategy used by cryptocurrency traders. This strategy allows traders to sell assets at a loss for tax purposes before immediately buying them back. The proposal seeks to put an end to this strategy, which is not allowed when it comes to stocks and bonds, by applying the same fictitious sale rules to digital assets. If implemented, this change could have significant implications for many cryptocurrency holders who entered the market during the 2021 market peaks and are currently suffering heavy losses.

Biden’s budget proposal also seeks to increase the capital gains tax rate for investors making at least $1 million to 39.6%, nearly double the current rate of 20%. This change would only apply to a certain subset of investors, according to a Bloomberg report.

These proposed changes to crypto tax treatment are part of Biden’s plan to reduce the deficit by nearly $3 trillion over the next decade. The budget proposal also includes plans to increase income taxes on corporations and wealthy Americans.

The crackdown on laundering cryptocurrency sales and the proposed doubling of the capital gains tax rate have sparked concerns among cryptocurrency traders and investors. However, some experts believe that these changes are an unavoidable consideration for the US, as it would put it on a par with other jurisdictions such as Canada and Australia, where crypto-laundered sales are enforced.

Overall, Biden’s budget proposal represents a significant shift in the government’s approach to regulating the cryptocurrency industry. If these proposals are implemented, they could have far-reaching implications for the industry and its participants.