Legislation aimed at establishing regulations for the mining and transactions of digital assets, along with their tax treatment, has been introduced by the Virginia State Senate. Senate Bill No. 339, proposed by Senator Saddam Azlan Salim, the youngest member of the legislative body at 34, was introduced on January 9. The bill is currently under discussion in the Senate, with potential passage leading to consideration by the House of Delegates and eventual signing into law.
The proposed legislation carries several key provisions. Individuals and businesses involved in digital mining activities would be exempt from the requirement to obtain a money transmitter licence. Additionally, the bill protects miners from discrimination, preventing industrial zones from banning digital assets mining or enforcing more stringent noise ordinances than those applicable in industrial zones.
“No licence under this chapter shall be required of any person engaging in home digital asset 37 mining, digital asset mining, or digital asset mining business activities, as those terms are defined in § 38 15.2-2288.9.”
The legislation explicitly states that no licence is needed for individuals engaged in home digital asset mining, digital asset mining, or digital asset mining business activities, as defined in the relevant section.
Furthermore, issuers and sellers of digital assets are exempted from securities registration requirements under specific conditions. The exemption applies if the digital asset cannot be classified as an investment contract, if the asset was not marketed as a financial investment to the initial buyer, and if reasonable precautions were taken to prevent purchasers from viewing the digital asset as a financial investment.
The bill also addresses companies providing mining or staking services, ensuring they are not categorised as a “financial investment” under its provisions. However, these companies must file a notice to qualify for the exemption.
In a move to encourage the use of cryptocurrencies for everyday transactions, the legislation proposes tax benefits. Effective January 1, 2024, individuals can exclude up to $200 per transaction from their net capital gains for tax purposes. This exclusion applies to gains resulting from the use of digital assets in the purchase of goods or services.
