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    US IRS, Treasury Update Guidance for Crypto ETPs

    KryptonewsBy No Comments2 Mins Read

    The US Internal Revenue Service (IRS), the country’s tax-collection bureau under the Department of the Treasury, has updated its guidance for cryptocurrency exchange-traded products (ETPs) to include a safe harbor for trusts to stake digital assets.

    Treasury Secretary Scott Bessent wrote in a Monday X post that the agencies released guidance offering crypto ETPs “a clear path to stake digital assets and share staking rewards with their retail investors.”

    According to the guidance available on the IRS website, government agencies would allow crypto trusts to participate in staking, provided they are traded on a national securities exchange, hold only cash and “units of a single type of digital asset,” held by a custodian, and mitigate specific risks to investors.

    Source: Scott Bessent

    “The impact on staking adoption should be significant,” said Bill Hughes, senior counsel at Consensys, in a Monday X post.

    “This safe harbor provides long-awaited regulatory and tax clarity for institutional vehicles such as crypto ETFs and trusts, enabling them to participate in staking while remaining compliant, Hughes wrote. “It effectively removes a major legal barrier that had discouraged fund sponsors, custodians, and asset managers from integrating staking yield into regulated investment products.”

    The guidance followed the US Securities and Exchange Commission (SEC) in September approving generic listing standards, expecting to result in greenlighting crypto exchange-traded funds. The IRS and Treasury noted the SEC rule change as part of the updated guidance.

    Related: US lawmakers grapple with crypto tax policy amid government shutdown

    Guidance coming on the eve of the end of the government shutdown?

    After more than 40 days, reports from Sunday said that several Democratic lawmakers in the US Senate broke ranks and were willing to back Republicans in a vote to end the government shutdown by passing a continuing resolution through January.

    The Senate had not voted on the measure at the time of publication. Since the shutdown began on Oct. 1, staff at many departments and agencies, including the SEC and IRS, have been furloughed.