Senators in the United States of America have introduced an amendment to a bill on infrastructure that would exempt certain cryptocurrency companies from broker reporting requirements.
Senator Ron Wyden of Oregon proposed an amendment on behalf of himself and Wyoming Senator Cynthia Lummis, with support from Pennsylvania Senator Pat Toomey, that certain provisions of the bipartisan infrastructure deal do not apply to cryptocurrency developers, miners, and blockchain firms.
To be precise, the amendment proposes that the term “broker” excludes anyone engaged 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,” Toomey tweeted.
Additionally, he said:
“While Congress works to gain a better understanding of and legislation on issues relating to the development and use of cryptocurrencies, it should exercise caution in imposing burdensome regulations that could stifle innovation.”
According to Senate majority leader Chuck Schumer, the Senate will vote today on a number of amendments to the infrastructure bill, HR 3684.
Among other things, the bill proposes tightening regulations on businesses that handle cryptocurrencies, expanding broker reporting requirements, and requiring the Internal Revenue Service to report digital asset transactions valued at more than $10,000.
However, if crypto firms are not considered “brokers” under the bill, the Wyden, Lummis, and Toomey amendment could potentially eliminate some of the reporting requirements.
The trio asserts that the proposed amendment has no effect on several existing laws governing cryptocurrencies, including the Securities Act of 1933 and the Securities Exchange Act of 1934.
Senator Rob Portman of Ohio, one of the sponsors of HR 3684, stated yesterday on Twitter that the bill “imposes no new reporting requirements on software developers, crypto miners, node operators, or other non-brokers.” Portman characterized the section on brokers as a “common-sense provision,” claiming that cryptocurrency firms must simply “abide by standard information reporting requirements.”
The Blockchain Association, Coinbase, Coin Center, Ribbit Capital, and Square all endorsed the proposed amendment today, stating that the infrastructure bill’s crypto language “would impose unworkable requirements on a nascent industry.” Given the potential impact on the US economy, the companies urged lawmakers to solicit public feedback.
“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 United States Senate is scheduled to go into recess on Aug. 9, which means it is unlikely that it will address all of the infrastructure bill’s amendments — or pass the legislation itself — until September.