TL;DR Breakdown
- A section of US congress members is pushing for a change to the infrastructure bill.
- The legislators are leading a bipartisan initiative to introduce a bill to amend sections dealing with digital assets.
A group of US legislators dissatisfied with sections of the infrastructure bill are pushing for its amendment. President Joe Biden signed the bill into law on Monday. At its core, it aims at unlocking funds to spur growth through the American economy. But some of its provisions have faced criticism from different quarters.
The congressmen object to clauses in the new law relating to crypto-assets. The legislators therefore formed a bipartisan group to push for changes in the same.
The group is led by Representatives Patrick McHenry(R) of North Carolina and Tim Ryan (D) of Ohio. They’ve prepared a bill that seeks to limit the definition of a crypto asset broker.
The bill, which they’ve christened The Keep Innovation in America Act (KIIA), is set for introduction today. It aims at clearing the ambiguity surrounding the definition of a cryptocurrency broker. That definition in Monday’s signed law has faced objection from the crypto community.
Legislators looking to fix new law
The new law describes a broker as any person in charge of a service that regularly helps another transact digital assets. Crypto lovers say this definition is too broad. They also see it as threatening the development of the crypto sector.
For its part, KIIA defines a broker as anyone willing to aid the sale of cryptos at their customers’ instruction in their regular trading or business endeavours.
While announcing the initiative, Rep McHenry said he believes they can fix the poorly crafted sections of the law. In so doing, they’ll be looking to ensure that the law conforms to the working of crypto technology.
The new law requires brokers to reveal to the IRS the identities of their clients. Again, they must provide their 1099-B forms detailing how their investments have fared.
KIIA’s push is for the protection of network users such as miners and nodes. Although these enable crypto transactions, they may not have the tax information of users behind transacting wallets. This definition, therefore, places the burden on reporting crypto exchanges.
Legislators object to Section 6050I
KIAA is also seeking to change the new law’s inclusion of digital assets to its explanation of cash. The law had done so to comply with the US tax code.
Section 6050I of the code empowers the Treasury Secretary to investigate the effects of that change.
The provision also mandates businesses to inform the IRS of transactions exceeding $10,000. Industry players have suggested that that requirement will kill the crypto sector.
House Ways and Means Committee Chair Kevin Brady has weighed in on the issue too. He avers that cryptos are there to stay. Therefore the KIIA initiative would make crypto reporting relevant and valuable.
Eight other legislators complete the caucus fronting KIIA. It also draws some of its membership from the Blockchain Caucus. The initiative is a rare closing of ranks between the republicans and democrats.
McHenry is the senior-most Republican lawmaker sitting on the House Financial Services Committee. He has been pushing pro-crypto industry bills in congress. However, analysts have cast doubts on their chances of succeeding.
