The crypto market has been rallying over the past week. However, the market seems to be uncorrelated with the events taking place in the political arena, as cryptocurrencies, developers, and almost any entity involved in a transaction with these asset classes could be affected by the infrastructure bill currently debated in the U.S. Senate.
Estimated at around $1 trillion, the bill includes a provision that would have originally change the definition of a “broker”, Bitcoinist reported last week. Thus, the definition could expand to include the aforementioned entities (exchanges, crypto miners, smart contracts, and others) forcing them to submit information on the people using their services to comply with tax obligations.
The industry responded with full strength as lobbyists led by Jerry Brito from Coin Center and many other contributors fought back to change the provision. Senators Cynthia Lummis, Ron Wyden, and Pat Toomey drafted an amendment to exclude node validators, hardware, and software wallet makers, developers, from the bill.
This amendment faced opposition from another faction led by Senators Rob Portman and Mark Warner, with support from the White House and the U.S. Treasury. These senators drafted their own amendment to exclude only Proof-of-Work (PoW) based projects and entities from tax obligations.
Tensions grew as the decisive vote on the amendments was due on August 7th. However, the voting didn’t take place due to “partisan disagreement on spending”, Senator Ted Cruz (R) said. He blamed the opposite party for obstructing the vote:
There’s a partisan disagreement on spending, so Dems objected to ALL further amendments. That means NO vote on Wyden-Lummis to lessen the damage this bill will do to crypto, & NO vote on the Cruz amendment to repeal the new crypto rules altogether.
Like many inside the industry, Cruz highlighted that the bill would cause a massive migration from crypto projects from the U.S. to regions more friendly. Ted Cruz made further criticisms to his colleagues:
What the Senate said tonight: Let’s tax the hell out of something we know nothing about, so we can pass a giant bill we haven’t read, and spend the American people’s money on stuff we can’t afford. It’s reckless & harmful.
Crypto Industry Pushes Back, An Epic Battle For Its Future?
When all hope seems to have been lost, and the approval of the original text, the one with the most capacity to hurt the industry seemed imminent, the Senators from the different factions reached a consensus. A few hours ago, Brito reported on a compromise amendment that should receive support from most Senators in both parties, including Warner and Sinema.
The new amendment has a definition of a broker that would exclude developers, validators, and hardware/software wallet markers, Brito said. Both Lummis and Brito called on American citizens to contact their senators. This has been critical in the process. The fight for the future of cryptocurrencies will go on, Lummis added:
Unfortunately, it will likely be epic – expect 12 rounds. This amendment dustup is just a warm up. I believe we will get an acceptable result today. Will keep you updated but want to say thx for opening Senators eyes to this big, diverse and impressive community.
At the time of writing, Bitcoin trades at $45,973 with a 4.9% profit in the daily chart.