This week’s debate of the bill making up the first part of President Joe Biden’s infrastructure package that received bipartisan support led to some heated discussion on the tax and regulatory implications of the bill for the cryptocurrency industry.
Sen. Ted Cruz (R-TX) gave a speech on the Senate floor on August 9 that criticized the bill that would create a comprehensive definition of a cryptocurrency “broker” who would have to comply with significant reporting obligations to the IRS related to transactions and customer identifying information.
Cruz complained that the Senate was rushing into a regulatory scheme for something about which it knew very little. He said that no more than five out of 100 Senators could put together two sentences defining “what in the hell a cryptocurrency is.”
He argued that the definition of brokers in the bill was overly broad and would drive out innovators and would push significant parts of the industry overseas. The bill would require that software developers send in the customer information to which they did not even have access.
Cruz’s sentiments were echoed by Rep. Tom Emmer (R-MN), co-chair of the Congressional Blockchain Caucus. Emmer urged the House to consider additional amendments that would exempt persons from reporting requirements not directly involved in cryptocurrency transactions. He stated that software developers and cryptocurrency miners should not be caught up in regulations that Congress did not fully understand.
As things turned out, no amendments were added, and the bill’s original language with the broad language was passed with 19 Republican and 50 Democrat votes. Some last-minute efforts to amend the bill presented by several Senators failed. The amendment would have required unanimous consent under the Senate’s procedural rules.
Sen. Richard Shelby (R-AL) killed the amendment due to a separate battle over an amendment for military funding he had with Sen. Bernie Sanders (I-VT).
The bill now moves to the House, which will not take up the matter until it returns from its August recess. The cryptocurrency provisions are expected to face opposition from members there on both sides of the aisle. Reps. Emmer, Patrick McHenry (R-NC), Darren Soto (D-FL), Ro Khanna (D-CA), and Ted Budd (R-NC) have all expressed an interest in amending the language before they will agree to the overall bill.