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Crypto currencies set for tax overhaul

written by Bella Palmer
digital-assets-community

The digital assets community argued that the language was too vague and would make miners subject to reporting

The US Senate approved a bipartisan $1 trillion infrastructure package on Tuesday following weeks of negotiations authorizing more than $500 billion in new funding to improve roads, bridges, and other physical infrastructure like broadband and EV charging.

Still, controversial language regarding crypto currency tax reporting remains in the bill. Lawmakers sought to set off some of the infrastructure spending by extending crypto currency tax reporting requirements, raising an estimated $28 billion in revenue.

The digital assets community and lawmakers like Sen. Ron Wyden argued that the language was too vague and would make wallet developers and miners subject to reporting. After days of negotiations, an amendment aimed at fixing that problem failed on the floor after Sen. Richard Shelby objected.

The bill’s authors focused on closing the crypto “tax gap” to pay for some of the massive spending plan, but critics say it falls short of appropriately regulating the budding industry. The bill requires any crypto “broker,” defined as anyone “responsible for and regularly providing any service effectuating transfers of digital assets on behalf of another person,” to report users’ names and addresses.

That leaves all sorts of players in the crypto space including miners and software developers on the hook—even though many of them do not currently gather or access personal information about users, many of whom are anonymous.

Now, the House is set to begin debate on the infrastructure bill before it receives final approval and heads to President Biden’s desk. It’s unclear how long the process will take before the language is finalized.

In a letter to every House lawmaker, members of the bipartisan Blockchain Caucus raised concerns over the Senate’s crypto currencies’ provision. Left unchanged, this provision will have sweeping implications for crypto investors in our country and further regulate innovation out of the United States, they wrote. The House has an opportunity to amend the bill to fix these issues before it’s moved for a floor vote.

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