Why does the crypto exemption matter?

Because crypto is not subject to the wash sale rule, a holder can sell a digital asset to lock in a tax loss and immediately repurchase it while still claiming the deduction, giving them a year-end tax-management tool equity investors lack.

Has Congress tried to do this before?

Yes, earlier attempts to pull crypto under the wash sale rules did not clear Congress, making this a returning bid rather than a first effort.

No. 1030New York · London · SingaporeUpdated July 28, 2026

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NewsDigital Assets

Congress renews push to end crypto's wash sale tax break

Q: What is the wash sale rule?

It is a provision preventing investors from claiming a tax loss on a position if they repurchase the same or a substantially identical security too soon after selling it, and it applies to stocks, bonds, and most traditional securities.

A loophole shielding crypto investors from the wash sale rules applied to stocks and other traditional assets is drawing renewed attention on Capitol Hill. Lawmakers are pressing again to close that gap, a move that would put digital asset holders under the same tax constraints equity investors have operated under for decades.

By Yuki TanakaDigital Assets DeskJuly 28, 20262 min read

The rule in focus

Wash sale provisions prevent investors from claiming a tax loss on a position if they repurchase the same or a substantially identical security too soon after the sale. Stocks, bonds, and most traditional securities are subject to that rule. Crypto is not, and the difference matters. A holder can sell a digital asset, lock in a loss for tax purposes, repurchase the same position immediately, and still claim the deduction. An equity investor who tried the same sequence would lose the loss entirely.

The legislative push

Congress is working to extend the wash sale framework to cryptocurrencies, removing the timing flexibility that makes digital assets particularly useful for year-end tax management. Legislators are framing the effort as closing a loophole rather than writing new tax policy. No specific bill text, scheduled committee vote, or official revenue estimate was attached to the renewed push at the time of this report.

The word "renewed" here is the operative one. Earlier attempts to pull crypto under wash sale rules did not clear Congress. This effort is a returning bid, not a first.

What to watch

The next actionable marker is a committee markup or floor vote advancing crypto wash sale legislation through either chamber. Until that happens, the exemption holds. Crypto investors keep a tax-management tool unavailable to anyone holding equities, bonds, or other traditional securities in a standard brokerage account.

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