Crypto Staker’s Control of Rewards Triggers Tax, Court Rules

A cryptocurrency staker’s more than $33,000 in blockchain rewards were taxable as gross income because he had dominion and control over the tokens—demonstrated by his ability to convert them to cash at any time, the US Tax Court held Thursday.

Staking is the process through which tokens are earned in exchange for validating transactions on certain blockchain networks. Despite restrictions limiting Alvie Paschall’s ability to transfer Cardano tokens received through staking to other platforms, his rewards weren’t subject to any sale restrictions once received, Judge Cary Douglas Pugh said.

The opinion cited the US Supreme Court’s ruling in Commissioner ...