The US Senate refused to support amendments that would remove from the new requirements for tax reporting of crypto industry participants who are not directly responsible for user transactions.
In the initial version of the bill, in order to attract additional $ 28 billion in taxes to the budget, a number of players were proposed to be recognized as «brokers», even if they do not have information about potential clients.
Last week, lawmakers presented two conflicting versions of the amendments, differing in the list of persons who should be removed from the broker status. On Monday, they managed to agree on a compromise version, according to which Bitcoin miners, validators in Proof-of-Stake networks, wallet providers and protocol developers would not be recognized as brokers.
Nonetheless, debate on the bill ended on Sunday, so the unanimous support of senators was required to include the new amendments .
The compromise amendment did not receive unanimous support – 87-year-old Republican Senator Richard Shelby opposed. He refused to support any amendments if his proposal to increase defense spending was not approved. This means that the infrastructure bill, containing an extremely vague definition of the concept of «broker» in the context of the cryptocurrency industry, will go to the vote in the House of Representatives in its original form.
“Senator Richard Shelby objected to the compromise amendments. His own amendments were not approved, so he objects to everyone else. If he doesn’t change his mind, that’s all. The compromise amendments are over, ”writes lawyer Jake Chervinsky.
FTX CEO Sam Bankman-Fried said:
“It was a good try! She received bipartisan support. But it should have been implemented a few days ago, when only the support of the majority was needed. It is very difficult to get unanimous support ”.
Now, industry lobbyists, having failed in the Senate, are aiming to get the new amendment through the lower house of the US Congress, although the technical possibility that Shelby will change stance remains until Tuesday morning in Washington .
“We will also get the opportunity to change other controversial provisions. For example, reporting requirements for transfers of digital assets from brokers to non-brokers raise serious concerns about privacy and civil liberties, ”summed up Jerry Brito of Coin Center.
Senators Tom Emmer, Darren Soto, Bill Foster and David Schweikert sent an open letter to all Congressmen in the House of Representatives. They urge them to consider the amendments, which failed in the Senate, despite the support of both parties and the Biden administration. Emmer called the current wording «dangerous.»
Without disclosing the details of the deal, Toomey said the «compromise amendment» clearly states who in the digital asset industry will be considered a «broker», with a duty to provide extensive reporting and comply with relevant regulatory requirements.
Validators, node operators, software developers will be exempted from this.
“We are not proposing anything comprehensive or radical – [the compromise] makes it clear that a broker only means those who transact when consumers buy, sell and trade digital assets ,” Toomey said at a news conference.
According to the head of the organization for the promotion and protection of the interests of the industry Coin Center Jerry Brito, we are talking about a compromise between two competing amendments: Wyden-Lammis-Tooney and Portman-Warner-Cinema.
Brito noted that the Senators’ joint proposal clarifies the definition of «broker», which was vague in the original text. This category does not include protocol developers, validators, crypto wallet manufacturers.
On Sunday, August 9, the Senate voted to end debate on the amendments to the plan. Now, in the final vote on Tuesday, the compromise amendment must be approved unanimously.
Senator Ron Wyden expressed optimism about this opportunity:
“We worked hard to close the deal. I do not believe the proposed wording in the amendments is good enough to protect privacy and security in cryptocurrencies, but they are definitely better than the basic ones in the draft law. Majority Leader Sumer says he will not block the request with unanimous consent. «
Previously, industry participants assumed that the approval of the law in its current form would be a «disaster» for the development of cryptocurrencies in the United States. However, the chance to correct the text will still be presented during the consideration of the document in the House of Representatives, where it will go after approval by the Senate.
Some believe that the sequence of actions was originally planned to discourage any crypto-related amendments at all.
“The political theater has worked very well. Now the establishment has an initial test, and we blame the old Alabama man who is retiring anyway and doesn’t need to be reelected. Well played, Yellen, ”writes Crypto Cobain, an active contributor to the crypto space.