“While Congress works to better understand and legislate on issues surrounding the development and transaction of cryptocurrencies, it should be wary of imposing burdensome regulations that may stifle innovation,” said Senator Pat Toomey.
Lawmakers have written an amendment to an infrastructure bill in the United States Senate which proposes excluding certain crypto companies from the reporting requirements for brokers.
In an amendment from Oregon Senator Ron Wyden on behalf of himself and Wyoming Senator Cynthia Lummis, with the support of Pennsylvania Senator Pat Toomey, the U.S. lawmakers suggested that some of the provisions in the bipartisan infrastructure deal shouldn't apply to developers, miners, or blockchain firms in the crypto space. Specifically, the amendment proposes that the definition of a broker does not include anyone in the business of “validating distributed ledger transactions,” “developing digital assets or their corresponding protocols,” or dealing with mining software or hardware.
“By clarifying the definition of broker, our amendment will ensure non-financial intermediaries like miners, network validators and other service providers are not subject to the reporting requirements specified in the bipartisan infrastructure package,” said Toomey on Twitter.
He added:
“While Congress works to better understand and legislate on issues surrounding the development and transaction of cryptocurrencies, it should be wary of imposing burdensome regulations that may stifle innovation.”
According to majority leader Chuck Schumer, the Senate is planning to vote on multiple amendments to the infrastructure bill, HR 3684, today. Among other things, the bill proposes implementing tighter rules on businesses handling cryptocurrencies and expanding reporting requirements for brokers, mandating that digital asset transactions worth more than $10,000 are reported to the Internal Revenue Service (IRS).
However, the proposed amendment from Wyden, Lummis and Toomey could potentially strike down some of the reporting requirements, should crypto firms not be considered “brokers” in the bill. According to the trio, nothing in the proposed amendment has any effect on some of the existing laws governing cryptocurrencies, including the Securities Act of 1933 and the Securities Exchange Act of 1934.
Related: Ohio senator wants clarity for crypto tax reporting in proposed bill
Ohio Senator Rob Portman, one of the lawmakers behind HR 3684, said on Twitter yesterday that the legislation “does not impose new reporting requirements on software developers, crypto miners, node operators or other non-brokers.” Calling the section on brokers as a “common-sense provision,” Portman claimed that crypto firms simply “must comply with standard information reporting obligations.”
Related: Elizabeth Warren compares 'bogus' crypto to 'legitimate' CBDCs in senate hearing
The Blockchain Association, Coinbase, Coin Center, Ribbit Capital and Square expressed their support for the proposed amendment today, releasing a joint statement that the infrastructure bill’s language on crypto “would place unworkable requirements on a nascent industry.” The companies suggested lawmakers get public feedback given the potential impact on the U.S. economy.
“Clarifying the provision to address our concerns would not affect the reporting requirements on crypto exchanges that operate on behalf of customers,” said the companies. ”We support sensible reporting requirements that are consistent with those that apply to traditional financial services.”
The U.S. Senate is scheduled to be in recess starting on Aug. 9, meaning it may be unlikely that all of the amendments to the infrastructure bill will be addressed — or the legislation itself will be passed — until it reconvenes in September.
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