Congressional Infrastructure Bill Fails to Clarify Language Regarding Crypto

Infrastructure still faces a crucial amendment period as the bill hits the Senate floor for debate.

By
Kyle Heise
on
August 3, 2021
Category:
Blockchain News

Vague and Uneducated Language

This past week, the news that emerged from Capitol Hill acknowledged that lawmakers are revenue hungry and standing strong on their uneducated crypto stance. 

The main concern out of the latest version of the $1.2 Trillion Bill is the vague, uneducated language of the bill. 

The increasing growth of cryptocurrencies has caused lawmakers to push through a bill which does not reflect the realities of the industry. The language in the bill’s final text improved from the first draft but has failed to clarify language that pertains to brokers leaving broad ramifications across crypto. 

“We didn't get the language we wanted in the final bill text,” tweeted Jerry Brito, Executive Director of CoinCenter, a DC-based crypto think tank. “It's better than where it started, but still not good enough to clearly exclude miners and similarly situated persons.”
Source

There is language in the bill which says brokers effectuate “transfers on behalf of another person.” However, crypto enthusiasts are worried the broad definition of brokers will inadvertently encompass entities that do not fit that definition as facilitators of transactions. Does Congress really want to kill crypto?


No Significant Changes

A previous draft of the bill worked on expanding the use of the term broker while the latest iteration attempted to clarify the terms following ample attention from crypto insiders. 

The bill currently defines brokers as any individual who facilitates trades for clients and receives cash for said trade, and subjects brokers to to file an information return reporting all transactions. The controversy lies in how the bill leaves too much open for interpretation.

There are no new reporting requirements for individuals or new penalties for individuals under the bill’s language. It also does not impose any new obligations on individual cryptocurrency holders at all.


Still Hope for Change

Lobbyists and crypto enthusiasts desperately seek exchanges, miners, node operators, software developers, and others not to be classified as brokers. Miners, for example, do not facilitate transactions, they only verify them. This is a crucial distinction in the crypto world and, if not clarified, could see massive implications.

The bipartisan bill––with its over 2,700 pages––is not yet finished. There remains a chance for lobbyists and crypto enthusiasts to get the change they want. 

It should be almost expected that the Federal government–– who still runs critical infrastructures through Windows XP and floppy disks––would struggle to understand the intricacies of blockchain. No one said the road to the regulation would be easy.

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Kyle Heise

Born and raised in the East Bay of California. He has studied and worked on three continents and lived in eight countries. Kyle resides in San Francisco. He holds bags mostly in Ethererum, Cake, and BSC GameFi projects.

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