US Senators Cynthia Lummis, Bernie Moreno Propose Bill to Ease Crypto Tax, Here’s All

By: cryptosheadlines|2025/05/14 11:00:10
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Airdrop Is Live CaryptosHeadlines Media Has Launched Its Native Token CHT. Airdrop Is Live For Everyone, Claim Instant 5000 CHT Tokens Worth Of $50 USDT. Join the Airdrop at the official website, CryptosHeadlinesToken.com US Senators Cynthia Lummis and Bernie Moreno have introduced a new legislative effort aimed at easing the crypto tax treatment of digital assets. Their proposal comes amid growing concerns that current tax laws may lead to unfair burdens on companies holding cryptocurrency.Cynthia Lummis, Bernie Moreno Proposal to Ease Crypto TaxAccording to a filing by Cynthia Lummis and Bernie Moreno to the US Treasury, there is a need to address issues caused by the Corporate Alternative Minimum Tax (CAMT), which was introduced in the 2022 Inflation Reduction Act. CAMT imposes a 15% minimum tax on corporations with average adjusted financial statement income (AFSI) of at least $1 billion over a three-year period.The crypto tax proposal by Cynthia Lummis focuses on excluding unrealized gains and losses from the fair value accounting of digital assets in the calculation of AFSI. These exclusions would prevent companies from facing crypto tax based on temporary changes in market prices. Lawmakers drafted the legislation in response to a rule that the Financial Accounting Standards Board (FASB) issued, which requires companies to report digital assets at fair market value on income statements.The sponsors argue that the combination of CAMT and the new accounting rule may result in tax liabilities that exceed a firm’s actual economic gains. They believe this outcome discourages investment in digital assets and may push companies to move operations outside the United States.FASB Rule and Corporate Tax ExposureIn late 2023, FASB released Accounting Standards Update 2023-08, which mandates fair value reporting for digital assets under Generally Accepted Accounting Principles (GAAP). This move was designed to increase transparency but unintentionally subjected firms to crypto tax liabilities under CAMT for unrealized gains.Companies must now mark digital assets like Bitcoin and Ethereum to market at the end of each quarter. They report losses on the balance sheet and record gains as income, even when they do not sell the assets.US Senators Cynthia Lummis and Moreno, in their proposal on tackling crypto tax, call on the Department of the Treasury to use its authority under sections 56A(c)(2), (15), and (16) to adjust AFSI calculations. Their proposal urged the Treasury to disregard unrealized gains and losses related to digital assets when computing CAMT liability.Crypto Industry Concerns and PrecedentsAccording to US Senator Cynthia Lummis and Bernie Moreno, the lack of clear rules could force U.S.-based companies to liquidate their holdings to meet CAMT liabilities. The new requirements could cause businesses to move their activities to countries with more favorable tax systems. In addition, they underline that domestic firms face a lack of tax equality with foreign companies, since fair value accounting for crypto assets is not mandatory under international standards.In 2023, the IRS recognized these kinds of issues, responding with Notice 2023-20 that gave temporary relief to the insurance sector under CAMT. Amid these tensions, IRS Digital Asset Initiative leaders Seth Wilks and Raj Mukherjee have recently exited before 1099-DA rollout speculating fear among the crypto industry. Subsequently, the Senators suggest that this event demonstrates why Treasury should act urgently to prevent unwanted developments in the digital asset market.They urge Treasury to issue interim guidance immediately and to modify the final rule to exclude fair value adjustments for digital assets.“This would help ensure fair treatment and support innovation in digital finance,” the proposal says.Missouri State Passes Bill to Eliminate Capital Gains TaxIn a separate development from the Cynthia Lummis proposal, Missouri passed House Bill 594, which would eliminate state capital gains tax, including on crypto assets. The bill is pending the governor’s signature. If signed, Missouri would become the first state to remove capital gains tax on all asset classes, including Bitcoin and XRP.Meanwhile, federal policy changes remain uncertain. A prediction market on Kalshi gives only a 12% chance that a second Trump administration will eliminate capital gains taxes on crypto in 2025. Another market, Polymarket, shows slightly more optimism, though still below a majority.Source: KalshiDonald Trump recently suggested replacing income taxes with tariffs as a long-term reform goal, raising speculation about potential changes to crypto taxation. However, no formal policy has yet to get introduced to that effect at the federal level.✓ Share: Kelvin Munene Murithi Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates. Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.Source link

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Before using Musk's "Western WeChat" X Chat, you need to understand these three questions

The X Chat will be available for download on the App Store this Friday. The media has already covered the feature list, including self-destructing messages, screenshot prevention, 481-person group chats, Grok integration, and registration without a phone number, positioning it as the "Western WeChat." However, there are three questions that have hardly been addressed in any reports.


There is a sentence on X's official help page that is still hanging there: "If malicious insiders or X itself cause encrypted conversations to be exposed through legal processes, both the sender and receiver will be completely unaware."


Question One: Is this encryption the same as Signal's encryption?


No. The difference lies in where the keys are stored.


In Signal's end-to-end encryption, the keys never leave your device. X, the court, or any external party does not hold your keys. Signal's servers have nothing to decrypt your messages; even if they were subpoenaed, they could only provide registration timestamps and last connection times, as evidenced by past subpoena records.


X Chat uses the Juicebox protocol. This solution divides the key into three parts, each stored on three servers operated by X. When recovering the key with a PIN code, the system retrieves these three shards from X's servers and recombines them. No matter how complex the PIN code is, X is the actual custodian of the key, not the user.


This is the technical background of the "help page sentence": because the key is on X's servers, X has the ability to respond to legal processes without the user's knowledge. Signal does not have this capability, not because of policy, but because it simply does not have the key.


The following illustration compares the security mechanisms of Signal, WhatsApp, Telegram, and X Chat along six dimensions. X Chat is the only one of the four where the platform holds the key and the only one without Forward Secrecy.


The significance of Forward Secrecy is that even if a key is compromised at a certain point in time, historical messages cannot be decrypted because each message has a unique key. Signal's Double Ratchet protocol automatically updates the key after each message, a mechanism lacking in X Chat.


After analyzing the X Chat architecture in June 2025, Johns Hopkins University cryptology professor Matthew Green commented, "If we judge XChat as an end-to-end encryption scheme, this seems like a pretty game-over type of vulnerability." He later added, "I would not trust this any more than I trust current unencrypted DMs."


From a September 2025 TechCrunch report to being live in April 2026, this architecture saw no changes.


In a February 9, 2026 tweet, Musk pledged to undergo rigorous security tests of X Chat before its launch on X Chat and to open source all the code.



As of the April 17 launch date, no independent third-party audit has been completed, there is no official code repository on GitHub, the App Store's privacy label reveals X Chat collects five or more categories of data including location, contact info, and search history, directly contradicting the marketing claim of "No Ads, No Trackers."


Issue 2: Does Grok know what you're messaging in private?


Not continuous monitoring, but a clear access point.


For every message on X Chat, users can long-press and select "Ask Grok." When this button is clicked, the message is delivered to Grok in plaintext, transitioning from encrypted to unencrypted at this stage.


This design is not a vulnerability but a feature. However, X Chat's privacy policy does not state whether this plaintext data will be used for Grok's model training or if Grok will store this conversation content. By actively clicking "Ask Grok," users are voluntarily removing the encryption protection of that message.


There is also a structural issue: How quickly will this button shift from an "optional feature" to a "default habit"? The higher the quality of Grok's replies, the more frequently users will rely on it, leading to an increase in the proportion of messages flowing out of encryption protection. The actual encryption strength of X Chat, in the long run, depends not only on the design of the Juicebox protocol but also on the frequency of user clicks on "Ask Grok."


Issue 3: Why is there no Android version?


X Chat's initial release only supports iOS, with the Android version simply stating "coming soon" without a timeline.


In the global smartphone market, Android holds about 73%, while iOS holds about 27% (IDC/Statista, 2025). Of WhatsApp's 3.14 billion monthly active users, 73% are on Android (according to Demand Sage). In India, WhatsApp covers 854 million users, with over 95% Android penetration. In Brazil, there are 148 million users, with 81% on Android, and in Indonesia, there are 112 million users, with 87% on Android.



WhatsApp's dominance in the global communication market is built on Android. Signal, with a monthly active user base of around 85 million, also relies mainly on privacy-conscious users in Android-dominant countries.


X Chat circumvented this battlefield, with two possible interpretations. One is technical debt; X Chat is built with Rust, and achieving cross-platform support is not easy, so prioritizing iOS may be an engineering constraint. The other is a strategic choice; with iOS holding a market share of nearly 55% in the U.S., X's core user base being in the U.S., prioritizing iOS means focusing on their core user base rather than engaging in direct competition with Android-dominated emerging markets and WhatsApp.


These two interpretations are not mutually exclusive, leading to the same result: X Chat's debut saw it willingly forfeit 73% of the global smartphone user base.


Elon Musk's "Super App"


This matter has been described by some: X Chat, along with X Money and Grok, forms a trifecta creating a closed-loop data system parallel to the existing infrastructure, similar in concept to the WeChat ecosystem. This assessment is not new, but with X Chat's launch, it's worth revisiting the schematic.



X Chat generates communication metadata, including information on who is talking to whom, for how long, and how frequently. This data flows into X's identity system. Part of the message content goes through the Ask Grok feature and enters Grok's processing chain. Financial transactions are handled by X Money: external public testing was completed in March, opening to the public in April, enabling fiat peer-to-peer transfers via Visa Direct. A senior Fireblocks executive confirmed plans for cryptocurrency payments to go live by the end of the year, holding money transmitter licenses in over 40 U.S. states currently.


Every WeChat feature operates within China's regulatory framework. Musk's system operates within Western regulatory frameworks, but he also serves as the head of the Department of Government Efficiency (DOGE). This is not a WeChat replica; it is a reenactment of the same logic under different political conditions.


The difference is that WeChat has never explicitly claimed to be "end-to-end encrypted" on its main interface, whereas X Chat does. "End-to-end encryption" in user perception means that no one, not even the platform, can see your messages. X Chat's architectural design does not meet this user expectation, but it uses this term.


X Chat consolidates the three data lines of "who this person is, who they are talking to, and where their money comes from and goes to" in one company's hands.


The help page sentence has never been just technical instructions.


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