US lawmakers engaged in a heated debate over cryptocurrency tax policy during a Senate Committee on Finance hearing, focusing on potential tax exemptions for small crypto transactions and the classification of staking income. Lawrence Zlatkin from Coinbase advocated for a de minimis tax exemption for transactions under $300 to foster innovation and parity with traditional finance. Meanwhile, the committee also discussed closing the $700 billion annual tax gap by tightening reporting requirements and possibly taxing staking income as earned income. Senator Elizabeth Warren opposed special tax exemptions for cryptocurrencies, arguing they could facilitate money laundering and undermine other asset classes. She highlighted that such exemptions could lead to a $5.8 billion tax benefit for crypto investors, urging that all crypto transactions be taxed under existing securities and commodities frameworks.