Warner, Toomey, Lummis, Sinema, Portman Drop Legislation to Address Digital Asset Reporting Requirements in Infrastructure Bill
Aug 03 2022
WASHINGTON – U.S. Sens. Mark R. Warner (D-VA), Pat Toomey (R-PA), Cynthia Lummis (R-WY), Kyrsten Sinema (D-AZ), and Rob Portman (R-OH) today introduced legislation to clarify the digital asset reporting requirements signed into law as part of last year’s Infrastructure Investment and Jobs Act.
Last August, the senators announced an agreement with the Department of the Treasury (Treasury) on an amendment to the infrastructure package that would have clarified the definition of “broker” with respect to who must report to the government information about a digital asset transaction. The amendment specifically 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. While the amendment had strong bipartisan support, including from the Biden administration, the Senate was never afforded the opportunity to vote on and pass this amendment last August due to a procedural hurdle. The legislation introduced today is 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,” said Sen. Warner. “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.”
“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,” said Sen. Toomey. “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 Infrastructure Investments and Jobs Act placed unnecessary burdens on digital asset mining and wallet providers, and we must fix these reporting requirements,” said Sen. Lummis. “I’m proud to join my colleagues in introducing this important legislation which will ensure our tax system reflects the realities of the digital asset industry.”
“As more Arizonans utilize digital assets, our commonsense, bipartisan legislation ensures that everyday users of crypto – miners, stakers, and software developers – won't be subjected to reporting requirements that are intended for brokers of digital assets,” said Sen. Sinema.
“This legislation is designed to ensure that the digital asset reporting requirements signed into law as part of last year’s Infrastructure Investment and Jobs Act are implemented as intended,” said Sen. Portman. “I am pleased to see the Senate come together in bipartisan fashion to ensure that we provide clarity in the law and guidance around cryptocurrencies to maintain our edge in financial innovation.”
In addition to maintaining strong bipartisan support in the Senate, this legislation is widely supported by the digital asset industry.
“Coin Center supports any effort to improve the status quo created by the ill-advised crypto tax provisions in the Infrastructure Investment and Jobs Act,” said Jerry Brito, Executive Director of Coin Center. “We applaud Sen. Toomey for leading a bipartisan effort to address some of these issues and appreciate the support of Senators Warner, Sinema, Lummis and Portman.”
"We thank Senators Toomey, Sinema, Portman, Lummis, and Warner for their bipartisan leadership in this nuanced space,” said Sheila Warren, Chief Executive Officer of the Crypto Council for Innovation. “Clarifying how people can use and report on digital assets is important for the industry. We look forward to supporting the continued growth of innovation in the U.S. and working with policymakers on this issue."
“The Chamber of Digital Commerce commends Senator Toomey and co-sponsors for listening to the concerns of the digital asset community and continuing to advocate for regulatory clarity,” said Cody Carbone, Director of Policy, Chamber of Digital Commerce. “The infrastructure bill included burdensome reporting requirements for nearly every participant within the ecosystem and this bipartisan bill will ensure digital asset reporting requirements match the technology’s operation. We urge that this legislation is swiftly passed into law and look forward to working with all interested parties on policy that provides additional certainty for the digital asset space.”
"ADAM applauds Senators Toomey, Sinema, Portman, Lummis, and Warner for their continued bipartisan leadership to provide clarification on the definition of a broker as it relates to the 2021 Infrastructure Bill,” said Robert Baldwin, Head of Policy, Association for Digital Asset Markets. “Definitions matter and an overly broad interpretation of the broker definition as passed has the potential to dampen innovation and lead to the offshoring of various digital assets projects in the rapidly growing sector. This bill fixes the tax definitional issue. ADAM looks forward to continued bipartisan cooperation on this bill and other policy topics so that the U.S. can ensure a long-term position of leadership in digital assets.”
“Global DCA applauds the tireless efforts to clarify the definition of a broker with respect to the digital asset markets,” said Gabriella Kusz, CEO, Global Digital Asset and Cryptocurrency Association. “This common-sense solution will protect innovation while ensuring that those who are buying and selling cryptocurrency pay legitimate taxes that are owed. We look forward to continuing to work with Senator Toomey, Senator Sinema, Senator Portman, Senator Lummis, and Senator Warner to ensure there is responsible regulation without excessive federal overreach.”
“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,” said Ron Quaranta, Chairman of the Wall Street Blockchain Alliance. “By clarifying what it means to be a broker in light of this important innovation, the bi-partisan legislation paves the way for further innovations that can evolve markets and ultimately improve the overall financial lives of Americans. We are thankful for the continued effort and thought leadership of Senators Lummis, Portman, Sinema, and Warner, and on behalf of our members look forward to continued dialogue and collaboration with policymakers in the future.”
“Americans need common sense and fair guidance for engaging with blockchain protocols,” said Alison Mangiero, the Executive Director of The Proof of Stake Alliance (POSA). “POSA appreciates Sen. Toomey, Sen. Sinema, Sen. Warner, Sen. Lummis, and Sen. Portman’s, leadership and efforts to make clear that validators, those who do important work to secure blockchain protocols, are recognized appropriately for tax reporting purposes. We urge the Senate to take up and pass this simple but important bill to provide much-needed clarity and help America grow its web3 economy.”
To read the full text of the bill click here.