BREAKING: White House confirms support for minor changes to crypto tax proposal
The crypto community is rallying against an amendment to the U.S. infrastructure plan that maintains strict reporting requirements for developers and validators while exempting miners.
White House formally backed the last-minute amendment to the infrastructure deal in a late Thursday statement “to clarify the measure to reduce tax evasion in the cryptocurrency market.”
The statement by White House deputy press secretary Andrew Bates says that “The Administration believes this provision will strengthen tax compliance in this emerging area of finance and ensure that high income taxpayers are contributing what they owe under the law.” He continues:
“We are grateful to Chairman Wyden for his leadership in pushing the Senate to address this issue, however we believe that the alternative amendment put forward by Senators Warner, Portman, and Sinema strikes the right balance and makes an important step forward in promoting tax compliance.”
The crypto community is pushing back against amendments to the crypto provisions of the White House’s infrastructure plan — which seeks to raise $28 billion for infrastructure funding through expanded taxation on crypto transactions and impose new reporting requirements for crypto “brokers.”
On August 6, Senators Mark Warner and Rob Portman proposed a “last-minute amendment” to the infrastructure deal to exclude proof-of-mining and sellers of hardware and software wallets from the bill. However, the amendment’s wording suggests crypto developers and proof-of-stake validators would still be subject to expanded reporting and taxation that some have described as “unworkable.”
Hours later, Washington Post economics reporter Jeff Stein tweeted that the White House is formally supporting their amendment.
Late breaking – White House is coming out formally in support of Warner-Portman-Sinema crypto amendment, implicitly against the Toomey-Wyden-Lummis plan
— Jeff Stein (@JStein_WaPo) August 6, 2021
If accurate, that means the White House isn’t supporting a rival amendment proposed by Senators Cynthia Lummis, Pat Toomey, and Ron Wyden that provided a much broader list of exemptions including for any entity “validating distributed ledger transactions,” entities “developing digital assets or their corresponding protocols,” as well as miners.
“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.
Coin Center executive director, Jerry Brito, slammed Warner and Portman’s much more limited amendment as “disastrous,” accusing Congress of “picking winners and losers.”
If this passes this is the U.S. Congress picking winners and losers.
— Jerry Brito (@jerrybrito) August 5, 2021
The minimal amendment has received widespread condemnation from the crypto community, with many onlookers emphasizing that proof-of-stake networks and software developers will be caught by the new legislation.
A petition demanding citizens push back against the amendment has already gone live on FightForTheFuture.org, with the page slamming the law for “dramatically expand[ing] financial surveillance” and harming innovation.
On August 2, the Electronic Frontier Foundation (EFF) published an article criticizing the amendment for including developers who do not control digital assets on behalf of users in its scope.
Related: Mike Novogratz blasts US officials for poor grasp of crypto industry
Specifically, the EFF took aim at wording contained in the amendment that defines a cryptocurrency “broker” as any individual “responsible for and regularly providing any service effectuating transfer of digital assets,” asserting that “almost any entity within the cryptocurrency ecosystem [could] be considered a ‘broker’” according to the new definition. EFF added:
“The mandate to collect names, addresses, and transactions of customers means almost every company even tangentially related to cryptocurrency may suddenly be forced to surveil their users.”
Disclaimer: The original story is updated to reflect the official statement of White House.