Posted 3 weeks ago | by Catoshi Nakamoto
U.S. President Joe Biden has signed the controversial Infrastructure Investment Act into law which puts the power of crypto tax definitions in the hands of Treasury Department head Janet Yellen. Meanwhile, Senators are fighting back with a bill of their own to remove non-custodial crypto actors from Internal Revenue Service (IRS) reporting requirements.
Biden Signs Infrastructure Bill With Questionable Crypto Provisions
After much delay on the piece of legislation, the Infrastructure bill has finally passed and was signed into law by Biden. The law was held up by the reconciliation bill or Build Back Better Act which Democrats wanted to pass before, the Infrastructure Act. However, due to volatile elections, unseating many Democrats, the administration seems like it’s forced to pass the legislation to continue its agenda.
The infamously known infrastructure bill in the crypto sphere included new definitions for “broker,” which sparked outrage in the community.
These expanded definitions are for stronger reporting standards for the IRS. However, many dislike the language used which allows for broad rules to be created without any form of restriction from the U.S. Treasury. Many crypto enthusiasts are worried that the bill would force everyone not just custodians to file detailed reports some of which would be impossible. For example, node operators and miners would be unable to fulfill those requirements because they have no way of identifying wallet holders on the network.
Earlier this year, the issue took center stage, with a group of Senators opposing the bill with an amendment to add on as Bitboy Crypto reported. However, that amendment was denied by a single senator, Richard Shelby. This meant that the original bill was then up for a vote in the House, which Democrat Majority Leader Chuck Schumer locked down in a contentious battle in Congress forcing the House version of the legislation to pass without edit to its text.
It’s worth mentioning that at the time, Secretary Of Treasury Janet Yellen lobbied key lawmakers with concerns over the previously proposed amendment that would exempt miners, validators, and other parts of the crypto industry like hardware wallet manufacturers from new impossible tax-reporting requirements. Yellen has displayed clearly that she doesn’t understand the underlying technology that is being dealt with here and the risks of pushing fintech innovation and development overseas.
“Treasury Secretary Janet L. Yellen spoke with lawmakers Thursday to raise objections to the effort led by Senate Finance Committee Chairman Ron Wyden (D-Ore.) and two Republican senators to weakd\d legislation’s proposed cryptocurrency overhauls, according to two people who spoke on the condition of anonymity to share details of private conversations,” The Post reported at th time.
Although, Yellen eventually, caved and said that it would not look to make node operators and miners report as brokers. There is no law, however, that is preventing her from changing her mind or governing a decision.
Senators Fight Back Against Impossible Crypto Regulation
Now Senators Cynthia Lummis (R-WY), and Sen. Ron Wyden (D-OR) aim to do just that and have once again proposed a bill, this time to protect and exempt certain non-custodial crypto actors from IRS tax reporting requirements. The new Wyden/Lummis bill much like the old proposed bill would change the definition of digital asset brokers to exclude cryptocurrency miners, stakers, wallet providers, and software developers from the new IRS reporting standards.
Lummis stated in a press release that Congress was “stifling innovation” when it needs to be “fostering” it.
“We need to be fostering innovation, not stifling it, if we are going to maintain America’s position as the global financial leader,” said Sen. Lummis in a press release. “I’m proud to introduce this bipartisan bill to ensure that our tax system reflects the realities of digital assets and distributed ledger technology.”
News of the bill passing seems to have sent the crypto markets into a tailspin with Bitcoin plunging under $60K in the mid-morning only to briefly recover at the time of this report. It’s important to mention that subsequently there is also FUD about Indonesia banning crypto, but that has only been a recommendation made by a religious body in the country the National Ulema Council, or MUI, which is not a mandated law. But rather it’s a religious decree that crypto is “haram.” On the heels of fake news about Indonesia banning crypto, and the U.S. tax FUD, China has also decided that it wants to join the party announcing a further crackdown on crypto miners stating that the government would impose harsh penalties.
Bitcoin is currently trading at [FIAT: $60,728.22] DOWN -8.0% in the last 24 hours according to Coingecko at the time of this report.