Democrats are continuing to push for a tax-loss harvesting clause aimed at the crypto industry, despite it being removed from the recently-passed debt ceiling bill after being blocked by Republicans. The clause aimed to stop wash trading in crypto, which is currently exempt from the wash sale rule as the IRS does not treat crypto as a security.
President Biden has alleged that the US is missing out on $18 billion in tax revenue due to the crypto industry abusing this loophole. However, implementing wash sale rules without defining crypto brokers and imposing reporting requirements would put all responsibility on individual taxpayers, making the process complicated.