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Unchanged crypto tax bill will be put to a vote on Tuesday

August 9, 2021 Coin Telegraph

Senate talks regarding the controversial crypto provisions to the U.S. infrastructure bill have ended without amendment, suggesting the original bill will be voted on come Tuesday.

The provisions aim to raise $28 billion for infrastructure funding through expanded digital asset taxation, and will impose broad third-party reporting requirements on any crypto firm deemed to comprise a “broker.”

On August 9, general counsel to Compound Finance, Jake Chervinsky, tweeted that the Senate had voted 68 in favor to 29 against ending debate surrounding the provisions, halting discussions until Tuesday’s final vote.

However, Chervinsky emphasized that the Senate could still pass an amendment to the bill by unanimous consent before the final vote.

Senate talks over the controversial cryptocurrency tax provisions to the U.S. infrastructure bill have stalled, with an unamended version of the bill set to be put to a vote on Tuesday.

Sunday night infrastructure bill update:

The Senate has voted 68-29 to end debate. We wanted a vote on the Wyden amendment first, or on a Wyden-Warner compromise, but no luck.

The Senate has to wait until Tuesday to do a final vote. They might still amend the bill before then. https://t.co/VFrmnZqOPQ
— Jake Chervinsky (@jchervinsky) August 9, 2021

The broad language used to define a crypto “broker” in the provision has sent shockwaves across the crypto industry, with analysts inferring that miners, stakers and other network validators, and software developers could be subjected to third-party tax reporting requirements despite failing to possess personal information on their counter-parties.

The crypto sector has thrown support behind an amendment proposed by Senators Pat Toomey, Rob Wyden, and Cynthia Lummis that would limit the definitional scope of crypto “brokers” to exempt miners, validators, and software developers from the provision. However, the majority of lawmakers are backing a competing amendment from Rob Portman, Mark Warner, and Kyrsten Sinema that would only exempt miners, proof-of-stake validators, and wallet providers from the bill.

Also Read: Treasury Secretary reportedly against amending crypto language in infrastructure bill

According to an August 8 Twitter thread from Lummis, both sides are now at an impasse over the 30-hour rule — which allows senators to consider a bill for up to 30 hours before voting on it.

Lummis asserted that while “some senators want to keep focusing on the infrastructure bill for 30 hours to raise awareness about its price tag,” Senate Majority Leader Chuck Schumer “wants to quickly vote in order to focus on other legislation, and won’t allow amendment votes unless that happens.” However, Lummis added:

“If we could vote on amendments I think the digital asset community would be pleased with the outcome.”

If passed by the Senate on Tuesday, the legislation would still need to clear the house before becoming mandated as law, giving further opportunity for the crypto provisions to be revised.

BREAKING: White House reportedly supports only minor changes to crypto tax proposal

August 6, 2021 Coin Telegraph

Coin Telegraph

The crypto community is rallying against an amendment to the U.S. infrastructure plan that would maintain strict reporting requirements for developers and validators while exempting miners.

The crypto community is pushing back against amendments to the crypto provisions of the White House’s infrastructure plan — which seeks to raise $28 billion for infrastructure funding through expanded taxation on crypto transactions and impose new reporting requirements for crypto “brokers.”

On August 6, Senators Mark Warner and Rob Portman proposed a “last-minute amendment” to the infrastructure deal to exclude proof-of-mining and sellers of hardware and software wallets from the bill. However, the amendment’s wording suggests crypto developers and proof-of-stake validators would still be subject to expanded reporting and taxation that some have described as "unworkable."

Hours later, former Washington Post reporter and founder of The Ithaca Voice, Jeff Stein, tweeted that the White House is formally supporting their amendment.

Late breaking - White House is coming out formally in support of Warner-Portman-Sinema crypto amendment, implicitly against the Toomey-Wyden-Lummis plan
— Jeff Stein (@JStein_WaPo) August 6, 2021

If accurate, that means the White House isn't supporting a rival amendment proposed by Senators Cynthia Lummis, Pat Toomey, and Ron Wyden that provided a much broader list of exemptions including for any entity “validating distributed ledger transactions,” entities “developing digital assets or their corresponding protocols,” as well as miners.

“By clarifying the definition of 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,” Toomey tweeted.

Coin Center executive director, Jerry Brito, slammed Warner and Portman's much more limited “last-minute” amendment as “disastrous,” accusing Congress of “picking winners and losers.”

If this passes this is the U.S. Congress picking winners and losers.
— Jerry Brito (@jerrybrito) August 5, 2021

The minimal amendment has received widespread condemnation from the crypto community, with many onlookers emphasizing that proof-of-work networks and software developers will be caught by the new legislation.

A petition demanding citizens push back against the amendment has already gone live on FightForTheFuture.org, with the page slamming the law for “dramatically expand[ing] financial surveillance” and harming innovation.

On August 2, the Electronic Frontier Foundation (EFF) published an article criticizing the amendment for including developers who do not control digital assets on behalf of users in its scope.

Specifically, the EFF took aim at wording contained in the amendment that defines a cryptocurrency “broker” as any individual “responsible for and regularly providing any service effectuating transfer of digital assets,” asserting that “almost any entity within the cryptocurrency ecosystem [could] be considered a ‘broker’” according to the new definition. EFF added:

“The mandate to collect names, addresses, and transactions of customers means almost every company even tangentially related to cryptocurrency may suddenly be forced to surveil their users.”

Mark Warner