This week, the crypto industry is lobbying hard against language in the infrastructure bill proposal that could adversely affect huge amounts of funds generated in the cryptocurrency sector.
The language in the bill would require cryptocurrency brokers to report customer information to the IRS (Internal Revenue Service) government agency.
On Friday, bill broadened the definition of what is regarded as a “broker” to refer to anyone “responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person”, which doesn’t exclude miners, software developers, stakers, and other individuals in the cryptocurrency sector who don’t have customers.
Owen Lau, Executive Director and Senior Analyst at Oppenheimer &Co. Inc, talked about the development. He said that the language gives lots of power to define what should be included in the reporting requirement.
“It (the bill) says any person who is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person – which can mean anything. If I transfer bitcoin for you, then it can mean I become a broker.”
As of Monday, the language has not been finalized, and there is still time to fix it before it is.
Jerry Brito, Executive Director of the crypto industry Think Tank Coin Center, talked about the changes in the bill and stated that there is still room for improvement. He said that an amendment process will be started today. He is working with other friends and allies in the Senate and even a committed group of crypto institutions and companies to clarify the final bill’s language.
Meanwhile, Jake Chervinsky, General Counsel for Compound Finance and DeFi chair for the Blockchain Association, acknowledged that the crypto advocates had made progress with their lobbying efforts, but the language is still unacceptable. “Next, we’ll advocate for an amendment on the Senate floor. If that fails, we’ll take our fight to the House.” Chervinsky said.
What the New Bill Means for Crypto Users
The US Senate’s bipartisan infrastructure bill proposes to raise $28 billion from cryptocurrency investors by applying new information reporting requirements to crypto exchanges and other parties.
The draft bill means that any broker that transfers any digital assets would need to file a return under a modified information reporting regime. This means an individual interacting with cryptocurrency may have to begin reporting their transactions.
The bill also expects businesses to report cash payments in excess of $10,000 concerning receipt of digital assets.
To help finance legislative initiatives, lawmakers are considering enhancing IRS information reporting requirements with respect to digital assets, including cryptocurrency.
The bill’s impact would place huge reporting requirements on crypto investors, broker-dealers, and consumers that use crypto assets for the exchange of goods or other forms of payments.
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