Crypto software giant ConsenSys will financially support an ongoing lawsuit challenging the IRS’ ability to tax staking rewards, the company announced Tuesday.
Mid-way through the lawsuit, the IRS offered to issue the Jarretts their requested refund, but the plaintiffs refused, eager to get assurances from a court that the issue wouldn’t arise in the future. No such assurances came to pass, however: a federal judge dismissed the case in October, deeming the Jarretts' grievances moot after a tax refund was issued.
Many had hoped the case would offer legal clarity to the millions of crypto users who generate cryptocurrency daily through proof-of-stake blockchains. Such networks—including, perhaps most notably, Ethereum—operate on a mechanism that encourages users to stake cryptocurrency with the network in order to validate on-chain transactions. In return for putting up those funds for extended periods of time, users accumulate newly generated cryptocurrency.
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