Marathon CEO Says Biden’s Proposal to Tax Bitcoin Miners Will Drive Investors Abroad

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Fred Thiel, the CEO of Marathon Digital Holdings says President Biden’s tax proposal on American Bitcoin miners is set to fail. 

In an interview at the Bitcoin 2023 conference in Miami, Thiel stressed that the proposed tax would encourage mining companies to go abroad.

Biden’s 30% Tax Policy on Bitcoin Miners

Under Biden’s recent proposed budget, Bitcoin miners operating in the US could face a 30% excise tax on electricity used for crypto mining. The excise tax would rise progressively over three years, at a rate of 10% in the first year, 20% in the second year, and 30% in the third.

According to documents released by the Department of Treasury, President Biden’s proposal is expected to take effect after December 31st. Crypto mining companies would have to declare the amount, type, and value of electricity used to be taxable.

Marathon CEO Argues Against the Proposed Bitcoin Tax Policy

Meanwhile, arguments put forward by Thiel that a proposed tax on US bitcoin miners would drive the industry abroad have been raised by industry insiders in the past.

The notion is that if the tax cost on Bitcoin miners in a certain jurisdiction grows too high, it may motivate miners to transfer their operations to nations with lower tax burdens. This concern stems from the fact that Bitcoin mining is a global industry, and miners can choose to operate in jurisdictions that offer competitive advantages.

Additionally, Thiel also argued that the mining tax would not improve the availability of renewable energy. Instead, he claimed that market forces, technological advancements, and voluntary initiatives within the industry are more effective in driving the transition to renewable energy.

Previously, the CEO advocated that US regulators should incentivize Bitcoin miners to use green energy. Additionally, he mentioned that the miners should also receive disincentives for fossil fuel-based sources.

Crypto Miners Receive Less Regulatory Scrutiny

Furthermore, Thiel claimed the crypto mining industry has received less regulatory scrutiny compared to crypto exchanges like Binance and Coinbase. This distinction can be attributed to several factors including different natures in activities, difficulty in regulation, and evolving regulatory landscape.

He, however, stated that the company is encountering headwinds from other sectors of the economy. Thiel confirmed receiving a subpoena from the Securities and Exchange Commission last month but maintained it was only a request for information.

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