US senator Sens. Ron Wyden, D-Ore.; Pat Toomey, R-Pa.; and Cynthia Lummis, R-Wyo introduced a crypto broker amendment to clear up confusion about cryptocurrency “brokers”. The amendment was based upon the language in the existing version that could roil the crypto markets if passed.
If included in the final bill, the amendment would be a win for the crypto industry. Crypto advocates have said that it was at risk of losing innovators and investors interested in doing crypto business in the US. The original language could also force some companies to shut down if they can’t comply or move offshore.
The initial crypto infrastructure bill included a “pay-for” provision. It would help generate revenue for the bill through increased tax compliance on crypto companies. These parties would have to file a report to the IRS.
“As those who understand crypto already know, users are pseudonymous & access is permissionless. It’s literally impossible for non-custodial actors like miners to get the information they need to do Form 1099s. In practice, this could mean a de facto ban on mining in the USA,” Chervinsky tweeted after the bill was taken up by the Senate.
Senator Pat Toomey, who was involved in filing the proposed amendment, said in a statement: “By clarifying the definition of the broker, our amendment will ensure non-financial intermediaries like miners, network validators, and other service providers — many of whom don’t even have the personal-identifying information needed to file 1099 with the IRS — are not subject to the reporting requirements specified in the bipartisan infrastructure package.”
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“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.
Toomey, who often voices support for the crypto industry, is the ranking member on the Senate Banking Committee. Wyden is the chair of the Senate Finance Committee. Lummis has emerged as one of bitcoin’s biggest advocates.
