US Senate votes down compromise amendment on cryptocurrency taxation
U.S. Senators Cynthia Lummis and Pat Toomey announced a compromise among Democrats, Republicans and the Treasury Department on provisions of the infrastructure plan aimed at additional taxation of cryptocurrencies.
The compromise amendment did not receive unanimous support — it faced opposition from the 87-year-old Republican Senator Richard Shelby. He refused to back any amendments unless his defense-spending proposal is considered. This means that the infrastructure bill, containing a broadly worded definition of the term “broker” in the context of the cryptocurrency industry, will go to a vote in the House of Representatives in its original form.
1/ The bad news is that the amendment did not receive unanimous consent, so it will not make it into the bill.
The good news is we’re not giving up. Next stop is the House where we can try to get a whole new amendment from scratch that can address all our concerns.
— Jerry Brito (@jerrybrito) August 9, 2021
With the industry lobbyists having failed in the Senate, they are now aiming to push a new amendment in the House of Representatives, although there is still a chance Shelby could shift his position by Tuesday morning in Washington.
5/ However, today’s setback isn’t the end. @BlockchainAssn and our 46 member organizations look forward to engaging with members of the House of Representatives to ensure the unclear and unworkable aspects of this provision are removed once and for all.
— Blockchain Association (@BlockchainAssn) August 9, 2021
“We will also have the opportunity to modify other contested provisions. For example, the reporting requirements on transfers of digital assets from brokers to non-brokers raise serious concerns about privacy and civil liberties,” said Jerry Brito of Coin Center.
Representatives Tom Emmer, Darren Soto, Bill Foster and David Schweikert sent an open letter to their colleagues in the House of Representatives. They urge them to consider the amendments that failed in the Senate, despite support from both parties and the Biden administration. Emmer described the current language as “dangerous.”
I, along with bipartisan Blockchain Caucus co-chairs @RepDarrenSoto, @RepDavid, and @RepBillFoster sent a letter to every single Representative in the House raising concerns about the Senate infrastructure bill being paid for by our crypto industry. pic.twitter.com/MzsEmBbosr
— Tom Emmer (@RepTomEmmer) August 9, 2021
Senator Cynthia Lummis stressed that she will continue to push for changes to the bill.
We will continue to look for ways to fix the digital asset language in this bill. It might not be today, but we won’t give up.
— Senator Cynthia Lummis (@SenLummis) August 10, 2021
Without revealing the details of the deal, Toomey said that the “compromise amendment” clearly states who in the digital asset industry will be considered a “broker,” with the obligation to provide expanded reporting and comply with corresponding regulatory requirements.
This would exempt validators, node operators, and software developers.
“We are not proposing anything comprehensive or radical — [the compromise] clearly indicates that a broker means only those people who conduct transactions when consumers buy, sell and trade digital assets,” Toomey said at a press conference.
1/ There is now a compromise amendment being offered by Senators Toomey, Lummis, Warner, Portman, and Sinema that we think all senators should support.
— Jerry Brito (@jerrybrito) August 9, 2021
Brito noted that the bipartisan group’s proposal clarifies the vague definition of “broker” in the original text. Protocol developers, validators, and wallet manufacturers will not fall into this category.
On Sunday, August 9, the Senate voted to end debate on amendments to the plan.
Now, for the final vote on Tuesday, the compromise amendment must be approved unanimously.
Senator Ron Wyden expressed optimism about this possibility:
“We’ve been working hard to get a deal. I don’t believe the language in the proposed amendments is good enough to protect privacy and security in cryptocurrencies, but it’s certainly better than the underlying bill. Majority Leader Schumer says he won’t block a unanimous-consent request on it,” Wyden said.
We’ve been working hard to get a deal. I don’t believe the cryptocurrency amendment language on offer is good enough to protect privacy and security, but it’s certainly better than the underlying bill. Majority Leader Schumer says he won’t block a unanimous consent request on it
— Ron Wyden (@RonWyden) August 9, 2021
If that does not succeed, the House will move forward with the original cryptocurrency-tax provisions. In that case, the likelihood of changing the provisions of the bill that are catastrophic for the industry is regarded as unlikely by the community.
As reported, the crypto-unfriendly provisions of the bill are being lobbied by Treasury Secretary Janet Yellen are being lobbied by Treasury Secretary Janet Yellen.
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