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Senator Lummis Proposes Major Crypto Tax Relief and AI Transparency Act Amidst Market Dip for ETH, SOL, ADA | Flash News Detail | Blockchain.News
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7/1/2025 6:50:05 AM

Senator Lummis Proposes Major Crypto Tax Relief and AI Transparency Act Amidst Market Dip for ETH, SOL, ADA

Senator Lummis Proposes Major Crypto Tax Relief and AI Transparency Act Amidst Market Dip for ETH, SOL, ADA

According to @FoxNews, U.S. Senator Cynthia Lummis is advancing significant legislative proposals with major implications for the cryptocurrency and AI sectors. For crypto traders, a proposed amendment seeks to waive capital gains taxes on transactions under $300 and, critically, change the tax treatment for staking and mining rewards. This proposal would tax assets from staking, mining, airdrops, and forks only upon their sale, not upon acquisition, which could significantly alter the profitability calculations for validators and miners. The amendment also aims to close the wash-trading loophole for crypto assets. Simultaneously, Lummis introduced the RISE Act of 2025 to regulate AI, requiring developers to disclose technical details and limitations via 'model cards' to ensure professional accountability, though it stops short of mandating open-source models. These developments occur as the crypto market shows a slight downturn, with Solana (SOL) trading at $148.13, down 1.67%, Ethereum (ETH) at $2442.78, down 0.85%, and Cardano (ADA) at $0.5531, down 1.74% over the last 24 hours.

Source

Analysis

In a significant move bridging the regulatory gap for emerging technologies, U.S. Senator Cynthia Lummis has introduced two pivotal pieces of legislation. The first, the Responsible Innovation and Safe Expertise (RISE) Act of 2025, aims to bring much-needed clarity to the rapidly evolving field of artificial intelligence. Simultaneously, Lummis is championing a crucial amendment to reform the taxation of digital assets, a move that could dramatically lower the barrier to entry for mainstream crypto adoption. These dual efforts signal a maturing legislative approach, seeking to foster innovation in both AI and crypto while establishing clear guardrails for accountability and consumer protection. For traders and investors, these developments represent potential long-term bullish catalysts, even as the immediate market grapples with short-term consolidation.



The RISE Act: A New Framework for AI Accountability



The RISE Act, as outlined in a press release from the senator's office, focuses on establishing a predictable liability framework for professionals who use AI tools. The legislation clarifies that experts such as doctors, lawyers, and financial advisors remain legally responsible for their professional judgment, even when it's informed by AI. The core of the bill is the introduction of "model cards"—detailed technical documents that AI developers must publicly release to shield themselves from civil liability. These cards would disclose an AI system's training data, intended functions, performance metrics, and known limitations. According to Senator Lummis, this creates standards that “encourage safer AI development while preserving professional autonomy.”



However, the bill stops short of demanding that AI models be fully open-source, a point of contention for many in the technology space. Developers can redact proprietary information if it's unrelated to safety, a compromise that balances trade secrets with transparency. This debate echoes concerns within the crypto community about centralization. In a prior interview, Simon Kim, CEO of Hashed, highlighted the risks of closed-source, centralized AI, comparing it to a black box controlled by a select few. The RISE Act attempts to navigate this complex issue by mandating transparency without forcing a fully open-source model, a development that AI-focused crypto projects will be watching closely.



Crypto Tax Reform and Market Implications



Perhaps more immediately impactful for the crypto market is Lummis's proposed tax amendment. The measure seeks to waive capital gains taxes on crypto transactions under $300, with a yearly cap on such transactions, which would significantly reduce the tax-reporting burden for everyday users. More profoundly, it aims to overhaul the tax treatment of staking and mining rewards. Currently, these rewards are often taxed upon receipt and again upon sale. The amendment proposes taxing these assets only when they are sold, aligning their treatment with that of other produced goods. According to the Digital Chamber of Commerce, this fixes a “long overdue mistake” and would rationalize the tax code for core blockchain activities. This change could substantially boost the appeal of staking protocols for assets like Ethereum (ETH), Solana (SOL), and Cardano (ADA).



While this legislative news provides a positive long-term outlook, the current market is exhibiting signs of weakness and consolidation. Ethereum (ETH) is trading around $2,442, down approximately 0.85% in the last 24 hours. It found immediate support near its daily low of $2,436, but faces significant resistance at the daily high of $2,521. A failure to hold the $2,400 level could open the door for further downside. Similarly, Solana (SOL) has seen a pullback, trading at $148.13 after being rejected from a high near $160. Its immediate support lies at the 24-hour low of $147.64. Cardano (ADA) is also testing a key level, trading at $0.553 after a 1.74% drop, with crucial support at the $0.55 mark. Interestingly, analysis of trading pairs reveals relative strength in some altcoins versus Ethereum. The SOLETH pair is up 2.59%, and the ADAETH pair has gained 1.83%, suggesting that despite their USD value decline, Solana and Cardano are outperforming Ethereum in the very short term. This could present tactical pair trading opportunities for astute traders navigating a sideways market.

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