John Deaton Highlights Cryptos Like XRP, XLM, and AVAX as Potential Beneficiaries of Tax Exemptions

In a recent tweet, pro-XRP lawyer John Deaton raised concerns over the proposed tax exemptions for U.S.-based cryptocurrency projects, particularly focusing on projects with international operations. Deaton questioned whether projects with foundations or operations abroad, like Solana and Tezos, would meet the requirements for these exemptions. He pointed out the ambiguity in the proposed rules, which could create confusion and potentially exclude U.S.-based projects with global affiliations.

However, Deaton also highlighted a group of cryptocurrencies—such as XRP, XLM, HBAR, AVAX, and XCH—that may face fewer jurisdictional hurdles. These projects, according to Deaton, seem to meet the surface-level criteria for the proposed zero capital gains tax, making them more likely to benefit from the policy.

Cryptos with Fewer Jurisdictional Hurdles

Unlike projects like Solana and Tezos, which have international operations that might complicate their eligibility, Deaton suggests that cryptocurrencies like XRP, XLM, HBAR, AVAX, and XCH could be in a stronger position to qualify for the proposed tax exemption. These projects, while they may have global users and collaborations, generally maintain strong ties to their U.S.-based foundations and operations, making them less likely to face issues with jurisdictional eligibility.

For these cryptocurrencies, meeting the eligibility criteria for the zero capital gains tax seems more straightforward. This could give them a competitive advantage in the market, especially as other jurisdictions are increasingly looking at how they will regulate and tax digital assets. With fewer complications tied to their geographic reach, these projects could be poised to benefit from the proposed tax relief, encouraging growth and investment within the U.S.

A Call for Clarity in Policy Implementation

Deaton’s concerns underscore the importance of clear and comprehensive guidelines in the crypto tax space. As the cryptocurrency industry continues to evolve, it is essential that tax policies accommodate the international nature of many projects without penalizing those that have global affiliations. While the proposed zero capital gains tax could incentivize U.S.-based crypto companies, clarity is needed on which projects qualify and how jurisdictional factors will be addressed.

: Potential Benefits for Certain Cryptos

As the debate around tax exemptions continues, John Deaton’s observations about specific cryptocurrencies like XRP, XLM, and AVAX are noteworthy. These projects could benefit from the proposed tax exemption if the rules are clarified to allow them to meet the necessary criteria. However, the broader question remains whether the policy will favor U.S.-based projects with international affiliations or create challenges for those with global reach. With more clarity, the U.S. could foster a competitive crypto environment that benefits both local and international projects.