Biden wants to treble capital gains and stifle cryptocurrency “wash sales,” according to reports.

The wash sale rule is a policy that the Biden administration seeks to extend to digital assets.

The next budget proposal from U.S. President Joe Biden contains a few surprises for cryptocurrency traders and investors, such as a proposal to double capital gains for specific investors and to crack down on crypto wash sales.

On March 9, the Biden administration is scheduled to present its fiscal 2024 budget proposal, which is said to be intended to cut the deficit by approximately $3 trillion over the following ten years. According to reports, plan also involves adjustments to how cryptocurrency is taxed with a goal of raising about $24 billion.

According to the WSJ, one of these recommendations calls for a stop to the tax-loss harvesting tactic, in which a cryptocurrency trader sells assets at a loss for accounting purposes before buying them back right afterwards.

The present wash sale regulations prohibit such a method when stocks and bonds are involved, but they do not apply to cryptocurrencies because they have not yet been designated as securities.

But it looks that the American administration wants to change that. Danny Talwar of the cryptocurrency tax software company Koinly stated to Crypto Coffee Tales:

“The US must take this into account, and if it does, it will be on par with other countries like Canada and Australia where crypto wash sales are legal.”

He continued, “If the regulation is followed, the timing is critical since many cryptocurrency holders who entered the area during the market tops of 2021 are suffering from large losses.

Also, the Biden budget suggests nearly tripling the capital gains tax rate for those earning at least $1 million, from 20% to 39.6% on long-term investments. According to Bloomberg, it also intends to increase the income taxes paid by corporations and affluent Citizens.