Update (1703ET): An amendment designed to narrow the scope of who's required to report crypto tax data to the IRS has failed in the Senate, despite days of negotiations between competing amendments from Republicans and Democrats.
The failed amendment means the original language with broad oversight over tax reporting is still in the legislation set to pass the Senate, according to Bloomberg.
The amendment was designed to address concerns from the cryptocurrency industry that the original bill would require entities like, miners and software developers, to report tax data to the Internal Revenue Service that they didn’t have access to. The change was proposed after days of negotiations between three Republicans -- Pat Toomey, Cynthia Lummis, Rob Portman -- and two Democrats, Mark Warner and Kyrsten Sinema.
In a series of procedural maneuvers, Republican Senator Richard Shelby objected because the Democrats refused to take up his amendment for $50 billion in additional military construction money.
Amendment killed to get more military spending.— jack⚡️ (@jack) August 9, 2021
That said, both sides and the White House agree on the fundamentals of the amendment, giving lengthy floor speeches on its merits until Shelby threw a wrench in the gears.
Lummis: "I'm pleased to join with my colleagues in urging the Senate to allow this widely-supported bipartisan (cryptocurrency) amdt to move forward." pic.twitter.com/LeYq0Yh34D— Craig Caplan (@CraigCaplan) August 9, 2021
Portman: "I pleased with the (cryptocurrency) amendment. I would hope that we would be able to get it passed because I think it's very important to have it as part of this legislation." pic.twitter.com/AtWIxQzMpV— Craig Caplan (@CraigCaplan) August 9, 2021
Later, Portman said that there are 'other ways to clarify the bill's language,' including speeches on the Senate floor to lay out Treasury department guidance and other factors.
The failure of the amendments is a temporary blow to the crypto industry - as it appears to be only a matter of time before things are sorted out.
In the meantime, cryptos are not amused, though they appear to be rebounding after a sharp drop following the news:
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Sen. Patrick Toomey (R-PA), co-sponsor of the more popular cryptocurrency amendment to the infrastructure bill (supported by developers, Ted Cruz, and - oddly, Gene Simmons), announced on Monday that a bipartisan group of Senators has reached a compromise, and will request to pass the amendment via unanimous consent.
"I am delighted to announce we have reached a bipartisan agreement that includes Democrats, Republicans, members of the Senate and the Treasury Dept on a issue that had been vexing us for a while," said Toomey, adding "We came together to provide greater clarity on who are the actual brokers of a cryptocurrency.We're not proposing anything sweeping or anything radical."
Toomey added that Sen. Majority Leader Chuck Schumer says he won't block the request, while Schumer said later in the morning that the overall infrastructure bill 'on a path to pass Tuesday morning.'
"There's still time to adopt this amdt before final passage of this (infrastructure) bill and I'll be urging my colleagues to join in this bipartisan effort to fix this error," said Toomey.
Toomey on revised cryptocurrency amdt: "I think it's fair to say that none of us think this is an absolutely, perfect solution, but it is much better than the underlying text (of the bipartisan infrastructure bill).— Craig Caplan (@CraigCaplan) August 9, 2021
Co-sponsor Cynthia M. Lummis (R-WY) said "It's been a long process with a lot of back and forth..The Senate has the opportunity to set the stage for successful implementation of digit assets into our financial system."
More details via Jerry Brito, executive director of DC-based crypto think tank, Coin Center.
2/ It tightens the expanded definition of “broker” sufficiently that it would be difficult to argue it covers protocol devs who only write and publish code. pic.twitter.com/xv0vzyezDe— Jerry Brito (@jerrybrito) August 9, 2021
3/ It then also has exemptions for validators and hardware/software wallet makers. pic.twitter.com/b8G3mjNSoM— Jerry Brito (@jerrybrito) August 9, 2021
Oddly, Toomey and Lummis are both saying they'll oppose the overall infrastructure deal 'for unrelated reasons.'
Bitcoin remained strong on the news, much of which was undoubtedly baked in hours ago.