BREAKING: US lawmakers behind crypto amendments to infrastructure bill introduce compromise
United States Senators putting forth differing amendments for provisions in the infrastructure deal that apply to crypto have reached a compromise after a legislative setback.
In a press conference on Monday, Senator Pat Toomey said there was now a bipartisan agreement on an amendment to infrastructure bill HR 3684, backed by Cynthia Lummis, Rob Portman, Mark Warner, Kyrsten Sinema and Ron Wyden. The Pennsylvania lawmaker said the new amendment would exempt software developers, transaction validators and node operators, while tax reporting requirements “should only apply to the intermediaries.”
“We came together to provide greater clarity on the rules for who are the actual brokers of cryptocurrency,” said Toomey. “We’re not proposing anything sweeping or anything radical. Our solution makes clear that a broker means only those persons who conduct transactions where consumers buy, sell and trade digital assets.”
“None of us think this is an absolutely perfect solution, but it is much better than the underlying text.”
Jerry Brito, head of D.C.-based crypto think tank Coin Center, revealed some of the text of the modified amendment, showing that it would change the definition of “broker” in HR 3684 to apply to “any person who regularly effectuates transfers of digital assets on behalf of another person.”
The middle ground solution was likely an attempt to gain more political support and have at least some alternative to the language in the existing infrastructure bill before the final vote scheduled for Tuesday. The Senate voted to end debate on the infrastructure deal on Sunday, effectively stopping any additional amendments to be added to the bill before a final vote.
However, the new compromise amendment could still be added to HR 3684 through a unanimous consent request — under Senate rules, the bill could be modified if no other senator objects to the motion. Wyden claimed that Senate Majority Leader Chuck Schumer would not move to block such a request for the proposed crypto amendment, meaning it could potentially be attached to the bill later on Monday.
“This isn’t perfect, but better than the underlying bill,” said Blockchain Association executive director Kristin Smith. “The Senate should move to adopt this language today.”
The amendment originally proposed by Wyden, Lummis and Toomey suggested changing the definition of brokers, as defined in the bill, to exempt crypto miners, node validators and software developers. However, an alternative amendment from Portman, Warner and Sinema has the support of the White House, despite the proposal only excluding miners and wallet providers.
Many in the crypto space had given the amendment from Wyden, Lummis and Toomey their blessing while criticizing the one from Portman, Warner and Sinema. Some claimed the latter would essentially allow the U.S. government to pick and choose which crypto technology is acceptable for regulators, while the original wording of the bill would “put unworkable requirements on Bitcoin node runners, developers, and miners.”
“We can’t afford to get this wrong,” said Lummis during the press conference. “We need to ensure that people aren’t trying to avoid taxes by sheltering their money in digital taxes, but we have to do it in a way that doesn’t stifle innovation.”
“The silver lining behind all of this debate and discussion is that we found out who in the Senate is interested in this subject who maybe previously didn’t know anything about it. […] We finally were able to illustrate to members of the Senate that there are a lot of people that are interested in digital assets, working in some aspect of digital assets, and now have contact with their U.S. Senators.”
Should the amendment be attached to the infrastructure bill on Monday and approved in a vote on Tuesday, the legislation would still need to go through the House of Representatives before being signed into law by President Joe Biden.