A bipartisan trio of senators is trying to change a cryptocurrency provision in the infrastructure bill that the industry warns will have a “devastating” impact on the space. As it stands, the infrastructure bill aims to raise revenue by cracking down on cryptocurrency tax reporting.
The industry argues the current measure included in the bill is too broad — and would force miners, developers and other “non-financial intermediaries” to face the new reporting requirements, though they would be unable to comply.
“They’re counting people who don’t have any information about the buyers and sellers of digital assets. Miners rarely know the ultimate customer. People who write the software and the hardware for personal wallets rarely know the ultimate customer,” said Sen. Cynthia Lummis (R., Wy.) in an interview with Yahoo Finance. “What that indicates to me is there’s not only a lack of understanding, there’s an actual misunderstanding about some of the people’s roles in digital assets.”
Lummis worked with Senate Finance Committee Chairman Ron Wyden (D., Oreg.) and Sen. Pat Toomey (R., Pa.) to introduce an amendment that would clarify who is considered a “broker,” and therefore subject to the new reporting requirements. The Senate could take up the amendment as soon as Thursday, though it’s not clear if it will be approved.
“Our amendment makes clear that reporting does not apply to individuals developing blockchain technology and wallets. This will protect American innovation while at the same time ensuring those who buy and sell cryptocurrency pay the taxes they already owe,” Wyden said in a statement.
Industry advocates, like Chamber of Digital Commerce President Perianne Boring, insist the need for a clarifying amendment stems less from a position of reducing the tax burden on the crypto sector and instead more from an impossibility for some companies to comply given a lack of data. That impossibility could result in crypto businesses, like miners and node operators, leaving the U.S. to set up shop elsewhere
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