As the vote on Joe Biden’s $1 trillion infrastructure bill is delayed, the crypto community is left with the anxiety of what will happen to their information.
Vague Language on Bill Fuels Amendment Strife
Joe Biden’s $1 trillion infrastructure bill is proposing placing stricter tax reporting obligations on cryptocurrency transactions. When first proposed, the crypto community came forward critiquing the language used as vague and too broad.
The original language used only mentioned brokers of digital assets should report on crypto trading gains. The bid to narrow down on specifics yielded the ongoing crypto amendment battle between two camps on senators.
One proposal that has garnered the support of President Joe Biden states that only proof–of–work entities would be absolved from tax reporting obligations. The proof-of-work entities include players like the Bitcoin miners.
The anti-crypto amendment, on the other hand, obligated proof-of-stake entities to report their earnings for tax purposes. Tax reporting obligations mean that these entities, which include Ethereum 2.0 validators, will have to provide customer information to the tax authorities.
As expected, the crypto community is fighting this bill to the tooth. Providing customer information will be a violation of all that crypto promises its users, that fiat currency cannot provide.
Senators Mark Warner (D-VA) and Rob Portman are standing strong behind this anti-crypto amendment. The White House showed its support by stating on Thursday that the amendment was the “right balance” and was a step forward in promoting tax compliance.
The crypto community is counting on Senators Ron Wyden (D-OR), Cynthia Lummis (R-WY), and Pat Toomey (R-PA) who are opposing the amendment with a pro-crypto amendment of their own. The senator’s counter amendment is that non-custodial entities would not be required to hand over customers’ information to tax authorities.
Anti-Crypto Amendment Could Destroy Decentralized Network in the U.S.
According to Senator Toomey, people who are not running centralized exchanges should not be roped into the tax reporting business. The passing of Joe Biden’s $1 trillion infrastructure bill without amending the language would likely chase out decentralized exchanges out of the U.S. market.
Senator Wyden commented that while he wants to crack down on tax evaders, he does not wish to destroy the innovations that come with a decentralized network. Evidently, the death of decentralized network is what the White House is supporting. The community can only hope for the success of the pro-crypto amendment.