US Senate Proposes Amendment to the Controversial Infrastructure Bill to Redefine Crypto Broker Clause
Godfrey Benjamin Aug 05, 2021 09:55
Three pro-crypto US Senators are proposing an amendment to the controversial infrastructure bill with clauses on crypto brokers redefined
Three American Senators, including Oregon Senator Ron Wyden, Wyoming Senator Cynthia Lummis, and Pennsylvania Senator Pat Toomey, have proposed an amendment to the controversial Infrastructure Bill.
The bill initially classified some crypto entities, including miners, as brokers with the need to report transactions worth $10,000 and above to the Internal Revenue Service (IRS).
However, the amended version proposes that the definition of a broker does not include anyone in the business of “validating distributed ledger transactions,” “developing digital assets or their corresponding protocols,” or dealing with mining software or hardware. This definition clarifies the bill, which many considered unhealthy for the growth of the nascent crypto ecosystem if passed.
“While Congress works to better understand and legislate on issues surrounding the development and transaction of cryptocurrencies, it should be wary of imposing burdensome regulations that may stifle innovation,” said SenatorPat Toomey commenting on the proposed amendment. “By clarifying the definition of the broker, our amendment will ensure non-financial intermediaries like miners, network validators, and other service providers are not subject to the reporting requirements specified in the bipartisan infrastructure package.”
The proposed amendment has met with much acceptance from the cryptocurrency community, notably the Blockchain Association comprising Coinbase, Coin Center, Ribbit Capital and Square. The major players in the digital currency ecosystem previously noted that the infrastructure bill “would place unworkable requirements on a nascent industry,” like that of the crypto ecosystem.
In a joint statement issued by the association, the firms said they support “sensible reporting requirements.”
“Clarifying the provision to address our concerns would not affect the reporting requirements on crypto exchanges that operate on behalf of customers,” said the companies. ”We support sensible reporting requirements that are consistent with those that apply to traditional financial services.”
With the Senate set to go on recess by Aug 9, the amendment to the bill and other amendments to the broader bill may not come into effect until September, when the lawmakers resume plenary.
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