The final vote on the $550 billion infrastructure legislation bill has been pushed to this weekend, as disagreements continued over tax-based reporting requirements for cryptocurrency transactions and other issues.
“Red Alert” Campaign
The rallying cry of the Red Alert Campaign claimed that “The Senate is about to vote on a bill that could kill crypto.” Several controversial proposals on the Senate floor would have required miners and node operators to report crypto transactions like brokerages, igniting technical and privacy concerns. Even the Electronic Frontier Foundation (EFF) warned that the proposal could destroy the decentralized nature of the system by creating surveillance requirements within the blockchain.
Coinbase CEO Brian Armstrong also weighed in, tweeting out the EFF’s warning and the Red Alert campaign,
“The infrastructure bill also imposes sweeping and unprecedented reporting requirements that will force exchanges like Coinbase and others to surveil its customer’s transactions in a way that is more intrusive than the rest of traditional finance.”
The infrastructure bill is addressing complex issues of digital privacy and cryptocurrency because the Biden administration is functioning under the belief that crypto users are engaged in mass tax avoidance. Therefore, they are hoping to see increased tax compliance from this sector to fund their infrastructure projects.
Amendment Proposed To Limit Unfair Taxation
As a result of the campaign, the general consensus was that the term’s original definition unfairly targeted the industry as a whole. Addressing these concerns, Senate Finance Committee Chairman Ron Wyden and Republican Senators Pat Toomey and Cynthia Lummis proposed a narrower approach focused on those who conduct transactions on exchanges. Under this proposed amendment, the term “broker” would apply only to the people who conduct transactions on digital trading exchanges. Non-financial intermediaries like miners, network validators, and other service providers would thus be exempt from the requirement of information reporting.
White House Supports Alternative Proposal
However, the proposed amendment faced opposition in the hearing from Senators Rep. Rob Portman and Dem. Mark Warner and Kyrsten Sinema, who submitted an 11th-hour alternative endorsed by the White House. This alternative is bound to target some software companies and crypto miners.
According to White House spokesman Andrew Bates,
“We believe that the alternative amendment put forward by Senators Warner, Portman, and Sinema strikes the right balance and makes an important step forward in promoting tax compliance.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
