The Republican Senator from Texas, Ted Cruz, introduced a bill aimed at scrapping a provision in the infrastructure package that seeks to tighten reporting requirements on ‘brokers’ in the digital assets sector.
The Lone Star State has quickly emerged as the main hub for the cryptocurrency industry, and that exciting industry is now in danger of being stifled and driven overseas by an overreaching provision in this newly-signed, reckless spending package. 1/3https://t.co/Qu1QR63uFp
— Senator Ted Cruz (@SenTedCruz) November 16, 2021
On November 15, President Joe Biden signed a bipartisan bill to mobilize $1.2 trillion for infrastructure upgrades, without provisions favorable to the crypto industry.
The document contains an expanded definition of the term ‘broker’. Depending on interpretation, miners and node operators in blockchains, wallet developers, liquidity providers in DeFi-protocols and other non-custodial actors could be required to report to the IRS on their users’ activities.
The bill’s provisions, in this form, are technically unworkable, and the document has repeatedly faced criticism by crypto industry representatives, including Elon Musk and Jack Dorsey.
In Cruz’s office, the provision was described as a “devastating attack” on the cryptocurrency industry. The senator says the requirements hinder innovation, threaten the privacy of American citizens, and drive industry companies overseas.
“Before risking the funds and privacy of citizens who are participants in the industry, the Senate should have done its job and held hearings to properly understand the consequences of regulating this evolving industry,” the senator stressed.
During Senate consideration of the bill, Cruz authored one of the numerous amendments. Unlike his colleagues, who proposed removing from the document non-custodial participants of the industry or at least miners and software sellers, the politician argued for a complete rejection of such formulations.
Earlier, Senators Ron Wyden and Cynthia Lummis proposed a softer approach to cap certain cryptocurrency tax-reporting rules in the infrastructure package.
We need to be fostering innovation, not stifling it, if we are going to maintain America’s position as the global financial leader. https://t.co/px84GKbA4x
— Senator Cynthia Lummis (@SenLummis) November 15, 2021
Cruz’s concern is understandable — against the backdrop of the mass exodus of miners from China prompted by repressive government policies, Texas has become one of the largest cryptocurrency hubs in the United States.
In June, publicly traded Argo Blockchain received about $20 million from crypto bank Galaxy Digital to build a Bitcoin mining pool in Texas. In October, Greenidge Generation ordered 22,500 devices for Bitcoin mining Antminer S19j Pro — most of which will also be deployed at sites in the state.
In early November, Genesis Digital Assets announced the start of construction of a new Bitcoin mining center in western Texas with a capacity of 300 MW.
Earlier, in June the state authorities allowed banks to hold cryptocurrencies, and in September a law came into force allowing local regulators to adapt commercial law to blockchain and digital assets.
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