An argument could be made that whenever a new technology or practice is introduced to the public and manages to grow in usage and popularity to the point that it becomes an integral part of our day-to-day activities and operations, governmental and authoritative bodies all over the world are usually forced to react. This was exactly the case with the thriving crypto industry, as the U.S government has repeatedly tried to impose strict regulations regarding cryptocurrencies, and it now looks like a new amendment to the bipartisan infrastructure bill has recently been introduced by the White House concerning the cryptocurrency tax provision which has since garnered a lot of controversies.
What the new crypto-related infrastructure bill entails is that the definition of a ‘broker’ has been expanded under the country’s official Tax Code, and this new definition essentially includes all individuals involved in the crypto space, as well as non-custodial participants such as miners. The aforementioned amendment to the bill has drawn the ire of the entire crypto community as investors are left puzzled as to why a pass is seemingly only given to those who may sell crypto hardware and software and also to PoW mining.
The crypto industry could be in trouble
The new bill and its included provision are understandably a very controversial and debated topic. It had been originally proposed by Senator Rob Portman, and it might trap everyone who is involved with crypto as abovementioned, including the non-custodial entities. Many have since argued that this new law is quite draconian in nature and outright anti-crypto.
To provide some semblance of relief to the crypto community, a few senators (Ron Wyden and Patrick Toomey in particular) had suggested a legislative exclusion, one who could protect the software developers and the miners. Alas, the White House has ultimately decided to support the amendment, as it believes that everything will be ‘in balance’ again once the bill is fully implemented. The government also claims that this is a vital step towards ensuring and improving compliance regarding the crypto community and the country’s tax laws.
While some in the government would say that this new infrastructure bill is necessary, most in the crypto community have since heavily criticized the Biden administration as it seems to have clearly chosen sides and is hence biased in its approach. Ripple’s (XRP) general counsel, Stuart Alderoty, had stated that any amendments involving cryptocurrency provisions have to be ‘agnostic in nature’ and that the authorities would do well to not pick a side but rather work with the crypto and blockchain industry so as to not dampen innovation.
Senator Wyden had specifically been targeted by crypto enthusiasts for his comments regarding PoW and how it is the one version of crypto technology that is ‘extremely climate damaging.’