As the Senate infrastructure bill inches along - clearing a procedural hurdle on Saturday to end debate - two competing cryptocurrency amendments have whipped up the crypto community into a frenzy, after a last-minute amendment to the original bill would have dramatically expanded the number of cryptocurrency users and miners required to report transactions to the IRS.
Watch for a rundown:
In response, tech advocacy group "Fight for the Future" issued a red alert on Wednesday, and were promptly joined by the likes of Twitter / Square's Jack Dorsey and other big names in crypto.
The message, from a left-leaning tech advocacy group called “Fight for the Future,” urged people to call U.S. senators to object to one provision of new rules for cryptocurrencies in the massive federal infrastructure bill. Senate offices were swamped with phone calls. Opposition to the provision came from the likes of Jack Dorsey, the head of Twitter and Square, and Brian Brooks, a top banking regulator during the Trump administration who had become a key crypto executive. -Washington Post
After the industry outcry, two competing amendments (to the amendment) emerged - the first, from Sens. Rob Portman (R-OH), Mark Warner (D-VA) and Kyrsten Sinema (D-AZ) in conjunction with the Biden administration would have exempted just one category of cryptocurrency miners.
Not good enough!
The second plan, brought by Sens. Patrick J. Toomey (R-PA.), Ron Wyden (D-OR.) and Cynthia M. Lummis (R-WY), is widely favored by the crypto community (and Senator Ted Cruz (R-TX), and Gene Simmons). It specifically exempts cryptocurrency miners and software developers from new tax reporting requirements which they say would be impossible to meet.
As TechCrunch notes, In a joint letter about the bill’s text, Square, Coinbase, Ribbit Capital and other stakeholders warned of “financial surveillance” and unintended impacts for cryptocurrency miners and developers. The Electronic Frontier Foundation and Fight for the Future, two privacy-minded digital rights organizations, also slammed the bill."
We stand with @Square, @RibbitCapital, @coincenter, and @BlockchainAssn about the digital asset provision in the infrastructure bill. And we applaud @ronWyden @senLummis @senToomey in proposing a thoughtful amendment to get the tech right.— Coinbase News (@CoinbaseNews) August 4, 2021
Read our official statement ↓ pic.twitter.com/YrkohsDny7
Right now, supporters of crypto & blockchain are LOSING this fight that will define crypto’s future.— Ted Cruz (@tedcruz) August 7, 2021
That’s why I’m proud to cosponsor the @RonWyden, @SenLummis, @SenToomey crypto amendment.
It’s a major improvement over what is in the underlying bill & a must pass amendment.
8/ The three of them, a bipartisan group of one Democrat & two Republicans, put together an amendment fixing the worst issues with the bill.— Jake Chervinsky (@jchervinsky) August 6, 2021
The Wyden-Toomey-Lummis amendment clarifies that certain non-custodial actors like miners & developers aren't covered by the broker rule: pic.twitter.com/4bfT9RmveW
Warner bends the knee.
In response to the outcry against his amendment, Sen. Warner changed his amendment to exempt slightly more people from reporting requirements. Still not good enough.
I can't think of a single credible DAO or DeFi governance system that even *allows* protocol changes with so little time for consideration.— Jake Chervinsky (@jchervinsky) August 7, 2021
Regardless of the measure’s ultimate fate, the fact that crypto regulation has become one of the biggest stumbling blocks to passage of the bill underscored how the industry has become a political force in Washington — and previewed a series of looming battles over a financial technology attracting billions of dollars of interest from Wall Street, Silicon Valley and financial players around the world, but that few still understand.
“What I think you’re seeing is the maturing of the industry — you see the crypto folks now understanding how Washington can influence their world and Washington learning a little bit about the technology,” said Mick Mulvaney, former chief of staff under President Donald Trump, one of several former officials to be recruited to the crypto industry in recent years.
And so, with the crypto community able to quickly rally to affect change within a major piece of legislation, Bitcoin, Ethereum and others are spiking into the evening.