Coinbase denies lobbying against Bitcoin tax exemption as policy debate heats up

Executives at Coinbase have pushed back against the rumours that the crypto exchange lobbied against a tax exemption for small Bitcoin transactions, calling the claims false as debate over crypto tax policy intensifies in Washington.

The accusations surfaced on social media after investor and podcaster Marty Bent claimed Coinbase lobbyists had privately told U.S. lawmakers that a Bitcoin de minimis tax exemption — which would remove taxes on small crypto payments — was unnecessary.

Bent said his sources on Capitol Hill suggested the Coinbase lobbyist had once claimed that Bitcoin is not widely used as a payment method and that such a proposal would be “dead on arrival.” Brent also alleged that Coinbase preferred tax exemptions to apply only to regulated dollar-pegged stablecoins, including USD Coin (USDC).

Coinbase quickly shut down these allegations, with CEO Brian Armstrong calling the allegations totally false.

"I've spent a lot of time lobbying for Bitcoin's de minimis tax exemption, and will continue doing so. It's obviously the right thing."

Other executives echoed the denial. Chief policy officer Faryar Shirzad said the allegation was “a total lie,” while chief legal officer Paul Grewal stated that the company has “never lobbied against BTC.”

Coinbase’s vice president of U.S. policy, Kara Calvert, added that the company has supported a tax exemption covering all digital assets, not just Bitcoin or stablecoins.

Bitcoin advocates remain skeptical

Despite the denials, the accusations have fueled debate among Bitcoin advocates.

Investor Pierre Rochard suggested Coinbase may not be fully transparent about its lobbying efforts, while Conner Brown said there has been a recent shift in Washington discussions toward limiting a tax exemption to stablecoins only.

The controversy comes as lawmakers continue to debate whether small crypto transactions should be exempt from capital gains taxes.

Under current U.S. tax rules, digital assets are treated as property, meaning every crypto transaction — including paying for goods or services — can trigger a taxable event. Advocates argue this makes Bitcoin impractical as a payment method.

Stablecoin economics complicate the debate

The dispute also highlights potential tensions between Bitcoin and stablecoin interests.

Coinbase has a significant business tied to stablecoins, particularly USD Coin (USDC), which generates revenue from interest on the U.S. Treasury reserves backing the token. The exchange reportedly earned about $1.3 billion from its stablecoin business in 2025.

Some critics argue that a stablecoin-only tax exemption could indirectly benefit companies involved in the sector. Coinbase, however, maintains it supports a broader tax exemption covering all digital assets.

The policy debate is ongoing in Washington. In July 2025, Cynthia Lummis introduced a bill proposing a de minimis tax exemption for crypto transactions under $300, with a $5,000 annual cap.

While the proposal has yet to gain traction, the discussion over how small crypto payments should be taxed remains a key issue for lawmakers shaping U.S. digital asset policy.