PoliticsBitcoin

Infrastructure Bill to Exclude Miners and Coders, Says Bill Co-Author

As U.S. lawmakers scramble to amend and finalize the bipartisan infrastructure bill before Senate leaves for its recess, criticism over the rushed process and vague language comes from various camps — including the Bitcoin and digital assets space.

Buried somewhere around page 2,434 of over 2,700 of the massive document are amendments to the reporting standards for digital asset service providers in the country, and that language has individuals and businesses alike worried.

The infrastructure bill addresses a large variety of American life and seeks to enable investment in sectors such as energy and transportation; among many others, it seeks allocations towards an improved electricity grid, clean buses and trains and their electric charging stations, and, yes, roads too. The cost: $1 trillion.

Lawmakers seek to repurpose around $200 billion from previous economic relief programs to pay for the package, yet that only covers a fifth of the funds needed to finance the bill. Another way the authors seek to back the budget: cryptocurrency taxation.

The infrastructure bill includes new language on the definition of brokers and their reporting standards — yet the definition of brokers has had the wider industry worried in recent days.

In the latest version of the bill, brokers are defined as "any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person."

Since the bill was initially made public, this definition has already seen an amendment; the initial version looked a little different, defining brokers as "any person who (for consideration) regularly provides any service or application (even if noncustodial) to facilitate transfers of digital assets, including any decentralized exchange or peer-to-peer marketplace."

Extensive lobbying efforts from within the industry resulted in the new definition. Perianne Boring, president of the Chamber of Digital Commerce, came out against the language, stating the broad definition could easily include industry participants such as miners and developers. “This can have a pretty significant impact on the development of some of the most important areas of innovation or will likely kill part of the industry or drive it overseas,” she was reported saying by the New York Times. "We should be embracing this technology, not regulating it out of existence.”

A spokesperson for Senator Rob Portman, one of the co-authors of the bill, has since come out against criticism that the language on digital assets would be harmful to the industry.

“This legislative language does not redefine digital assets or cryptocurrency as a ‘security’ for tax purposes, impugn on the privacy of individual crypto holders, or force nonbrokers, such as software developers and crypto miners, to comply with I.R.S. reporting obligations,” the spokesperson said. “It simply clarifies that any person or entity acting as a broker by facilitating trades for clients and receiving cash must comply with a standard information-reporting obligation.”

Yet some feel the amended definition is still vague and could be interpreted in a number of ways. Jerry Brito, Executive Director of CoinCenter, voiced his mixed feelings on Twitter on Monday, stating that the new text is "better than where it started, but still not good enough to clearly exclude miners and similarly situated persons."

The mere fact that such language was originally in the bill warrants concern, however, according to podcaster Marty Bent. "Everyone focused on the language of the bitcoin provision in the infrastructure bill and not the fact that it’s ludicrous that it was included in the bill in the first place," Bent wrote on Twitter.

Lawmakers involved in negotiations with the Treasury Department are now asking for informal guidance to clarify that developers and miners will be excluded from the bill, as reported by The Washington Post.

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Thomas is a journalist at the BTC Times. He enjoys writing about Bitcoin, learning about Bitcoin, and HODLing bitcoin.