The Senate Included Crypto Regulation in the Infrastructure Bill
Vague language in the recently passed Senate infrastructure bill has people concerned.
This past week the U.S. Senate passed an infrastructure bill that has a very controversial crypto amendment. Like most 2,700 page federal bills, this has been a bit confusing, so let’s try and hit the important parts. The amendment is meant to solidify reporting requirements for the industry. The problem here comes from the language they used, specifically the definition of a broker, who will need to report customer information to the IRS. As currently written, the definition of a broker is so broad that some are concerned it could apply to essentially anyone involved in crypto, from developers all the way up to internet providers.
Though the Senate has passed the bill, it has to have a sibling bill passed in the House---and that result isn’t clear. For exchanges, this broker requirement isn’t a big deal as they already adhere to Know Your Customer (KYC) and perform typical tax reporting that you would expect from a traditional exchange. If this bill does overreach and misattribute broker status, there will be legal cases to fight back the regulation.
Even in the worst case scenario, people aren’t expecting to see this affect the real world until 2023.
TLDR: Vague language in the recently passed Senate infrastructure bill has people concerned that the responsibility of reporting customer use to the IRS may fall to individuals such as developers of projects or internet providers. That wouldn’t take place until roughly 2023, and would likely have a lengthy legal battle if the ambiguity is abused.