Controversial new cryptocurrency tax requirements are likely to become law through the bipartisan infrastructure law. The cryptocurrency community gathered to fix the language, but the House voted to continue with the bill as it is Tuesday, moving forward with no new amendments or opportunities to change it.
On Tuesday, House Speaker Nancy Pelosi (D-CA) and a group of moderate Democrats reached a deal to pass a $3.5 trillion budget resolution, plan floor action for the bipartisan infrastructure deal by Sept. 27, and advance voting rights legislation. The agreement comes after a group of moderate Democrats pledged to vote out the multi-trillion dollar social safety net package if passed before the bipartisan infrastructure bill.
However, the deal also prohibits new amendments to the infrastructure package from being considered unless the House passes a new rule that would allow it.
The deal is a devastating blow to the cryptocurrency community that has been working in recent weeks to remove language from the infrastructure package that could extend burdensome tax reporting requirements to wallet developers and miners. Several amendments were proposed in the Senate earlier this month but ultimately failed, leaving the problematic language in the final bill.
“We are disappointed, but not surprised,” Coin Center communications director Neeraj Agrawal told: The edge. “It was always a hit. That said, we have opportunities to legislate this in the coming months.”
Several MPs, such as Deputies Ro Khanna (D-CA) and Anna Eshoo (D-CA), opposed the bill’s broad definition of “broker” and the bipartisan Congressional Blockchain Caucus sent a letter to members of Congress calling for to a solution.
Still, cryptocurrency proponents may have a chance to influence how the rules are applied. The Ministry of Finance reportedly said: that it would issue new guidelines on the rules once they are enacted, and ensure that it would provide exemptions to non-broker companies. But it’s unclear whether Treasury Secretary Janet Yellen would support more industry-friendly rules. In an interview with CNBC earlier this year, Yellen called Bitcoin an “extremely inefficient” asset.
She continued: “It’s a very speculative asset and you know I think people should be aware it can be extremely volatile and I’m concerned about potential losses investors could suffer.”
The Treasury Department has tried to calm cryptocurrency proponents and tell reporters it would not interpret “broker” language as miners or developers. Still, many cryptocurrency proponents argue that the promise isn’t enough and that future governments could interpret the bill’s underlying definition more broadly.
“I appreciate that it seems Treasury’s intent is to get this right, and we look forward to participating in any regulatory process in the years to come,” said Jerry Brito, executive director of Coin Center, in a tweet Wednesday. “But please don’t accept the story that people in crypto are overreacting to this provision.”
As the House moves forward with the infrastructure package, national security officials are sounding the alarm that the cryptocurrency language could force illegal cryptocurrency transactions underground, according to The Wall Street Journal on Wednesday. More regulation could “push illegal uses and criminal actors deeper into anonymization methods and corners of the Internet, making it harder for law enforcement,” Jeremy Sheridan, assistant director of the U.S. Secret Service’s investigative agency, told the US Secret Service. log.