With the gargantuan $1 trillion U.S. infrastructure bill in parliamentary limbo, the fate of the crypto tax proposal tacked onto it remains in question. Meanwhile, the cryptocurrency industry is getting organized with a new sense of urgency to lobby and campaign.
But the fate of the infrastructure bill is tied to the U.S. House Democrats’ $3.5 trillion spending package potentially for weeks. That gives the cryptocurrency industry time to focus its efforts on educating members of Congress and lobbying against legislation that is unfair or unclear.
U.S. House Has Crypto Tax Proposal Critics
And the U.S. House may reject the crypto tax proposal in an amendment sponsored by Sens. Portman, Warner, and Sinema. It has faced some stiff opposition in the upper chamber, with blockchain knowledgeable Sens. Ron Wyden (D-OR), Pat Toomey (R-PA), and Cynthia Lummis (R-WY) attempting to get an alternative amendment passed instead.
Not all House delegates are fans of the legislation either. Ohio Republican Rep. Warren Davidson doesn’t like the legislative ambiguity in the crypto tax amendment proposed by Portman. He thinks it will lead to regulatory overreach and abuse of the businesses working in this industry. He says according to the Tampa Free Press:
“The bill will allow the Treasury Department to basically write whatever reporting requirements they want, and given that the department has been so aggressive, Congress really needs to assert its will here.”
As the Free Press reiterates, the tax amendment defines a broker as “any person who is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.” The way blockchain works, as peer-to-peer finance on a decentralized network with anonymous peers, is simply technically impracticable by the industry.
Other members of the House, including Reps. Ro Khanna (D-CA), Eric Swalwell (D-CA), Anna Eshoo (D-CA), Bill Foster (D-IL), and Darren Soto (D-FL) want to amend the crypto provisions and clarify the definition of “broker” intelligently. They’re also concerned the U.S. Treasury may say the impossibility of the tax proposal’s implementation doesn’t matter.
Blockchain Businesses Get Savvy to Law and Elections
Since the new crypto tax rule proposal hit the critical bipartisan infrastructure package in a last-minute amendment, the cryptocurrency industry has been newly alerted to avail itself of all legal avenues to protect itself from unfair taxation or poorly written rules that are impossible to practice and could create regulatory headaches and battles. These are all barriers to entry for new start-ups, most of all, in a fast-growing and promising industry.
Digital Currency Group founder and CEO Barry Silbert said in a tweet earlier this month after the crypto tax snuck its way into the infrastructure bill:
“U.S.-based crypto companies will generate ~$10 billion of revenue this year. On a related note, I’ve learned a lot about Super PACs this week.”
As he said so, “crypto PAC” began to trend in Google searches.
Messari Crypto founder Ryan Selkis wrote:
“From what I’ve gathered, a lot of really wealthy crypto entrepreneurs and investors mobilized the past few days and hired serious lobbying muscle.
Serious enough to legitimately scare some of these polls and their staffs.
Hopefully, it’s enough, and the mere tip of the spear.”
And also asked, referencing the National Rifle Association, one of the United States’ oldest and most powerful lobbyists in Washington:
“What would be a great brand name for the ‘crypto NRA.’”
The cryptocurrency industry has grown with all the suddenness of Silicon Valley tech companies since engineers demonstrated the Lightning Network with a gumball machine in Congress.