A bipartisan bill was introduced in the U.S. Senate this week that seeks to clarify the digital asset reporting requirements in the Infrastructure Investment and Jobs Act (IIJA).
Specifically, the Senate approved an amendment to the infrastructure package last August that sought to clarify the definition of “broker” in relation to the person who must report to the government information about a digital asset transaction. However, the amendment excluded from reporting requirements services like mining and wallet providers who do not take custody of other individuals’ cryptocurrency, nor are able to comply with the reporting requirements of a broker.
The Senate never had the opportunity to vote on this amendment last August due to a procedural hurdle. This new bill provides that opportunity, as it contains the exact same text introduced as a bipartisan amendment nearly one year ago.
“There’s been a lot of confusion about the reporting requirements included in the bipartisan infrastructure law,” Sen. Mark Warner (D-VA), one of the bill’s sponsors, said. “As a former venture capitalist and someone who’s enthusiastic about innovation, I want to maintain America’s lead in financial innovation, including distributed ledger technologies. This bipartisan bill will underscore that the reporting requirements in the IIJA do not apply to crypto validators and other actors not providing broker-like functions while maintaining sensible guidelines to ensure that financial networks aren’t enabling illicit activity.”
Sens. Pat Toomey (R-PA), Cynthia Lummis (R-WY), Kyrsten Sinema (D-AZ), and Rob Portman (R-OH) joined bill sponsor Warner in introducing the legislation, S. 4751.
“While there’s no question that digital asset exchanges behaving as brokers should be required to comply with existing reporting requirements, the bill signed into law last year would impose these requirements on many people who don’t even have the information needed to comply with them,” Toomey said. “By clarifying the definition of a broker, our legislation will protect innovation by exempting miners, network validators, and other service providers from onerous and unworkable requirements. This amendment had strong bipartisan support last August, and there’s no reason it shouldn’t be signed into law.”
The bill has broad support in the digital asset community. Several organizations support the measure, including the Coin Center, Crypto Council for Innovation, Chamber of Digital Commerce, Association for Digital Asset Markets, Global Digital Asset and Cryptocurrency Association, the Proof of Stake Alliance, and the Wall Street Blockchain Alliance.
“The proposed revisions to Internal Revenue Code regarding Information Reporting for Brokers and Digital Assets marks a key legislative opportunity that we believe will begin to unlock the best benefits of digital assets and blockchain,” Ron Quaranta, chairman of the Wall Street Blockchain Alliance, said. “By clarifying what it means to be a broker in light of this important innovation, the bipartisan legislation paves the way for further innovations that can evolve markets and ultimately improve the overall financial lives of Americans.”
Read more / Original news source: https://financialregnews.com/u-s-senate-bill-looks-to-clarify-digital-asset-reporting-requirements-in-infrastructure-law/