August 3, 2022
WASHINGTON DC – U.S. Senators Rob Portman (R-OH), Pat Toomey (R-PA), Mark Warner (D-VA), Cynthia Lummis (R-WY) and Kyrsten Sinema (D-AZ) presented today legislation clarify digital asset reporting requirements enacted as part of last year Infrastructure Investment and Employment Act.
Last August, senators announced an agreement with the Treasury Department on an amendment to the infrastructure package that would have clarified the definition of “broker” regarding who must report information about a digital asset transaction to the government. The amendment specifically excluded from reporting requirements services such as mining and wallet service providers that do not take custody of other people’s cryptocurrency, nor are they able to comply with the reporting requirements of others. ‘a broker. While the amendment enjoyed strong bipartisan support, including from the Biden administration, the Senate never had the opportunity to vote and pass this amendment last August due to an obstacle procedural. The legislation introduced today is the exact same text introduced as a bipartisan amendment nearly a year ago.
“This legislation is designed to ensure that the digital asset reporting requirements enacted under last year’s Infrastructure Investment and Jobs Act are implemented as intended,” said Senator Portman. “I’m excited to see the Senate come together in a bipartisan way to ensure that we provide clarity in law and guidance on cryptocurrencies to maintain our edge in financial innovation.”
“While there is no doubt that digital asset exchanges behaving like brokers should be required to comply with existing reporting requirements, the bill enacted last year would impose these requirements on many people who don’t even have the information to comply,” said Senator Toomey. “By clarifying the definition of a broker, our legislation will protect innovation by exempting miners, network validators and other service providers from onerous and unworkable requirements. This amendment received strong bipartisan support last August, and there is no reason why it should not be enacted.
“There has been a lot of confusion about the reporting requirements included in the bipartisan infrastructure law,” said Senator Warner. “As a former venture capitalist and passionate about innovation, I want to maintain America’s lead in financial innovation, including distributed ledger technologies. This bipartisan bill will underscore that the reporting requirements of the IIJA do not apply to crypto validators and other actors that do not provide broker-like functions while maintaining sensible guidelines to ensure that financial networks do not enable illicit activities.
“The Infrastructure Investment and Employment Act has placed unnecessary burdens on digital asset mining and wallet providers, and we need to fix these reporting requirements,” said Senator Lummis. “I am proud to join my colleagues in introducing this important bill that will ensure our tax regime reflects the realities of the digital asset industry. »
“As more and more Arizonans use digital assets, our common-sense bipartisan legislation ensures that everyday crypto users – miners, stakers and software developers – will not be subject to the reporting requirements intended for cryptocurrency brokers. digital assets”, said Senator Sinema.
In addition to maintaining strong bipartisan support in the Senate, this legislation is widely backed by the digital asset industry.
“Coin Center supports any effort to improve the status quo created by the ill-advised crypto tax provisions in the Infrastructure Investment and Employment Act,” said Jerry Brito, executive director of Coin Center. “We commend Senator Toomey for leading a bipartisan effort to address some of these issues and appreciate the support of Senators Warner, Sinema, Lummis and Portman.”
“We thank Senators Toomey, Sinema, Portman, Lummis and Warner for their bipartisan leadership in this nuanced space,” said Sheila Warren, chief executive of the Crypto Council for Innovation. “It is important for the industry to clarify how people can use and report digital assets. We look forward to supporting the continued growth of innovation in the United States and working with policymakers on this issue. »
“The Chamber of Digital Commerce commends Senator Toomey and the co-sponsors for listening to the concerns of the digital asset community and continuing to advocate for regulatory clarity,” said Cody Carbone, Director of Policy, Chamber of Digital Commerce. “The Infrastructure Bill included onerous reporting requirements for nearly all ecosystem participants and this bipartisan bill will ensure that digital asset reporting requirements match the way technology works. We urge that this legislation is quickly passed and we look forward to working with all interested parties on a policy that provides additional certainty for the digital asset space.
“ADAM commends Senators Toomey, Sinema, Portman, Lummis and Warner for their continued bipartisan leadership in providing clarity on the definition of a broker as it relates to the 2021 Infrastructure Bill,” said Robert Baldwin, policy manager, Association for Digital Asset Markets. “Definitions are important and an overly broad interpretation of the definition of broker as adopted has the potential to stifle innovation and lead to the relocation of various digital asset projects in the rapidly growing industry. This bill settles the issue of tax definition ADAM looks forward to continued bipartisan cooperation on this bill and other policy topics so that the United States can secure a long-term leadership position in digital assets .
“Global DCA applauds the tireless efforts to clarify the definition of a broker as it relates to digital asset markets,” said Gabriella Kusz, CEO, Global Digital Asset and Cryptocurrency Association. “This common sense solution will protect innovation while ensuring that those who buy and sell cryptocurrencies pay the legitimate taxes owed to them. We look forward to continuing to work with Senator Toomey, Senator Sinema, Senator Portman, Senator Lummis and Senator Warner to ensure responsible regulation without federal excess.
“The proposed revisions to the Internal Revenue Code regarding information reporting for brokers and digital assets mark a key legislative opportunity that we believe will begin to unlock the best benefits of digital assets and blockchain,” said Ron Quaranta, chairman of the Wall Street Blockchain Alliance. “By clarifying what it means to be a broker in light of this important innovation, the bipartisan legislation paves the way for new innovations that can move markets forward and ultimately improve the overall financial lives of Americans. We are grateful for the continued efforts and thoughtful leadership of Senators Lummis, Portman, Sinema and Warner, and on behalf of our members, we look forward to continued dialogue and collaboration with policy makers in the future.
“Americans need common sense and fair guidance to engage with blockchain protocols,” said Alison Mangiero, executive director of The Proof of Stake Alliance (POSA). “POSA appreciates the leadership and efforts of Senator Toomey, Senator Sinema, Senator Warner, Senator Lummis, and Senator Portman in making it clear that validators, those who do important work to secure blockchain protocols, are recognized in a meaningful way. appropriate for tax reporting purposes. . We urge the Senate to pass and pass this simple but important bill to provide much-needed clarity and help America grow its Web3 economy.
To read the full text of the bill, Click here.