Crypto Traders Have Short Window to Avoid House Anti-Abuse Plan

Cryptocurrency investors would have little time to plan against possible tax increases under legislation advancing in Congress to treat digital assets like stocks and other securities.

House Democrats’ proposed tax-and-spend package would subject digital assets to two anti-abuse rules that already apply to stocks and other securities. The change would restrict tools crypto investors can currently use to hedge against potential losses and lower their capital gains taxes.

A provision applying “constructive sale” rules to digital assets would take effect as soon as the bill is signed into law. The rules would kick in when investors take offsetting short and ...