- The US Treasury Department is slated to redefine the “broker” term used in the much-criticized infrastructure bill.
- Reportedly, only some select crypto firms would be defined as a broker.
- The new supervision can be announced in a matter of weeks.
The US Treasury Department is reportedly slated to redefine the “broker” term used in the original infrastructure bill that intends to bring taxation to crypto payments.
According to a Bloomberg report, the Treasury is preparing “guidance” to elucidate who, exactly, will be subject to the “broker” definition as applied to digital assets. The clarification is set to come after a number of prominent crypto veterans have shown great concern and called the language “impractical.”
Any crypto-related firms that might include validators, miners, and hardware and software developers won’t need to file with the IRS as long as they don’t act as a broker, Bloomberg cites an official from Treasury. The official stressed, however, that the guidance won’t exclude firms based on their own definition of their business — rather it will focus on a firm’s recent activities.
As per the report, the new supervision can be announced in a matter of weeks.
In late July, the US lawmakers proposed a crypto infrastructure bill projected to generate up to $28 billion from taxation on crypto transactions. In the early stages, crypto advocates called the bill “problematic” and expressed the need for an amendment.
An initial amendment, proposed by senators Ron Wyden, Cynthia Lummis, and Pat Toomey, attempted to fix the unworkable language used in the bill by excluding miners, developers, and crypto wallet makers from being described as brokers.
However, two White House senators, Mark Warner and Rob Portman, proposed a competing amendment at the last moment. The alternative amendment was not considered a liable solution as it only excluded PoW miners from being defined as brokers.
The bill, which went to a vote unamended in the Senate and passed, is very unlikely to receive any revision in the House since modifying the crypto part would open the way for revising other parts of the legislation.
Infrastructure Bill Can Harm the US Crypto Industry
From the very first moment, crypto veterans claimed that the infrastructure bill could push many crypto and blockchain projects overseas. Kristin Smith, executive director of the Blockchain Association said:
While improvements to our nation’s infrastructure are important, the hastily drafted language around revenue-raising provisions in the infrastructure package could have unintended consequences that strike at the heart of innovation in the cryptocurrency ecosystem, risk driving jobs overseas, and may jeopardize Americans’ Fourth Amendment protections.
More recently, billionaire Mark Cuban also cited concerns regarding the new bill’s impact on the crypto industry. “Shutting off this growth engine would be the equivalent of stopping e-commerce in 1995 because people were afraid of credit card fraud. Or regulating the creation of websites because some people initially thought they were complicated and didn’t understand what they would ever amount to,” he said.
