Virginia State Senate Proposes Legislation Regarding Cryptocurrency

The Virginia State Senate has introduced legislation addressing the mining and transactions of digital assets, along with their tax treatment.

Senate Bill No. 339 (SB 339), proposed by 34-year-old Senator Saddam Azlan Salim on Jan. 9, is currently under discussion in the Senate.

If approved, it will proceed to the House of Delegates for consideration before potentially becoming law.

Breaking News! Virginia introduces bill (SB339) to Protect Your Fundamental #Bitcoin Rights to self-custody, mine, and run a node! https://t.co/4fnZEg6zCF

Introduced by Senator Saddam Salim this legislation will continue to help move Virginia towards innovation
and paving the…

— Virginia Blockchain Council (@VABlockCouncil) January 17, 2024

The bill carries significant provisions, including eliminating the requirement for individuals and businesses involved in crypto mining to obtain money transmitter licenses.

Additionally, it prevents discrimination against miners by prohibiting industrial zones from imposing stricter noise ordinances or banning crypto mining.

Furthermore, SB 339 exempts cryptocurrency issuers and sellers from securities registration requirements under certain conditions. The exemption applies if the crypto asset is not considered an investment contract, wasn’t marketed as a financial investment, and reasonable precautions were taken to prevent buyers from viewing it as such.

Also, while the bill does not classify mining or staking services as a “financial investment,” it requires companies to file a notice to qualify for the exemption.

Bill includes crypto workgroup

To promote the use of cryptocurrency in everyday transactions, SB 339 has also proposed tax benefits starting from Jan. 1.

Individuals can exclude up to $200 per transaction from their net capital gains for tax purposes, applicable to gains derived from cryptocurrency for purchasing goods or services.

Salim’s bill echoes similar legislative efforts in states such as Nebraska, Indiana, and Missouri, all supported by the Satoshi Action Fund.

This non-profit organization, focused on informing policymakers and regulators about the benefits of Bitcoin (BTC) and crypto mining, has developed model legislation to safeguard the rights of crypto users and miners at the state level.

What sets SB 339 apart from the bills introduced in other states is its inclusion of a workgroup dedicated to studying and providing recommendations on blockchain technology, digital asset mining, and cryptocurrency activity within the Commonwealth.

Comprising representatives from state agencies, academic institutions, industry associations, and public interest groups, the workgroup will explore the current and potential uses of blockchain and cryptocurrencies, assess their benefits and risks, and establish regulatory and legal frameworks, best practices, and standards.