Koinly CEO Says CLARITY Act Alone Won’t Fix Crypto Adoption Without Tax Reform
Summary
- Koinly’s CEO said the CLARITY Act alone is not enough and that the complex crypto tax system is hindering broader industry adoption.
- The current tax regime does not adequately reflect factors such as cost basis, holding periods, DeFi, and non-custodial wallets, making it difficult to calculate investors’ actual tax liabilities.
- He said complex tax filing procedures could limit participation in the crypto market by retail investors and companies, and that discussion of tax reform should move forward in parallel.
Forecast Trend Report by Period
The US digital-asset industry needs tax reform as well as passage of the CLARITY Act to improve regulatory clarity, according to Koinly Chief Executive Officer Robin Singh. Discussion is also widening over the need to overhaul the crypto tax system.
Singh told CoinDesk on May 26 that while the CLARITY Act is viewed as a turning point for the crypto industry, the current tax regime remains complex and inefficient.
Some tax systems fail to properly account for cost basis and holding periods, making it difficult to calculate investors’ actual tax liabilities, he said. He added that the framework also does not adequately reflect activity involving decentralized finance, or DeFi, and non-custodial wallets.
That leaves users to reconstruct their transaction histories themselves, Singh said. He added that complex tax-filing procedures could limit participation in the crypto market by retail investors and companies.
Debate in the US Congress has recently centered on the CLARITY Act as lawmakers discuss crypto market-structure regulation.
Still, the market is increasingly arguing that tax reform should be discussed in parallel to support industry growth and broader integration into the mainstream financial system.
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.
