Crypto Taxation

The crypto exchange boss is the latest to decry plans to enact sweeping changes to cryptocurrency tax reporting in the United States.

Coinbase CEO Brian Armstrong is the latest crypto figure to come out against the wording of the proposed changes to cryptocurrency taxation in the United States.

Tweeting on Wednesday, Armstrong stated that the provisions included in the crypto taxation proposal could have a “profound negative impact” on the U.S. crypto space and could force digital innovation to move overseas.

As previously reported by Cointelegraph, amendments to crypto taxation rules were a last-minute addition to the $1-trillion infrastructure deal currently before the United States Senate.

The Coinbase CEO, like many other opponents of the proposal, faulted the broad language of the bill’s wording. According to Armstrong, the bill extends the definition of the term “broker” to anyone who facilitates a digital asset transfer.

Indeed, this broad-based definition has seen several critics of the bill saying non-crypto brokerage entities such as miners and software developers could be brought under onerous tax obligations.

“This makes no sense,” Armstrong tweeted, referring to the broad broker definition in the bill, adding, “Smart contracts, for instance, are not companies, and cannot be modified to collect KYC info or issue 1099s. They are simply software running on the blockchain that anyone can use.”

The Coinbase CEO stated that policymakers have a responsibility not to hinder innovation in America. Earlier in August, Galaxy Digital CEO Mike Novogratz panned politicians and regulators in the U.S. for failing to do their homework on crypto before enacting laws and regulations.

Related: Mike Novogratz blasts US officials for poor grasp of crypto industry

Armstrong called on U.S. crypto proponents to get behind amendments proposed by pro-cryptocurrency Senators such as Ron Wyden, Patrick Toomey and Cynthia Lummis, calling for a narrower definition of crypto intermediaries.

Before proposing the amendment, Senator Toomey had earlier called for miners and software developers to be exempted from the crypto tax reporting requirements specified in the bill.

Armstrong also joined the chorus of crypto proponents urging Americans to contact their elected representatives to push for the aforementioned amendments.