The US House of Representatives passed a $1.2 trillion bipartisan infrastructure bill. Once it is signed into law by President Joe Biden, it will enforce new provisions regarding crypto tax reporting that apply to all citizens.
The proposed infrastructure bill aims to improve the national transport network and internet coverage. However, it does have strict reporting requirements for the crypto community, requiring all digital asset transactions worth more than $10,000 to be reported to the IRS.
The bill was first approved by the Senate on August 10 by a vote of 69-30, which was met with a revised compromise proposal by a group of six senators – Pat Toomey, Cynthia Lummis, Rob Portman, Mark Warner, Kyrsten Sinema and Ron Wyden.
“This act imposes a serious flaw and, in some cases, unenforceable crypto tax reporting duties, which threatens to threaten future technological innovation,” stressed Toomey.
Despite the lack of clarity in the wording, the infrastructure bill is intended to treat the crypto community’s software developers, transaction validators and node operators similar to the brokers of the traditional institutions.
The House of Representatives passed the controversial infrastructure bill after winning 228-206 votes.
In addition, the crypto community has expressed concern about the unclear description of the term ‘broker’, which in turn could impose unrealistic tax reporting requirements on subcommunities such as miners.
And as a corollary, failure to disclose crypto-related income would be considered a tax offense and a crime.
“It’s not good for all digital asset users, and it’s especially bad for Defi. The statute will not ban DeFi outright. Instead, the bill imposes reporting requirements that Defi can’t do when it comes to how the field works,” said Abraham Sutherland, a lecturer from University of Virginia School.
Coinbase CEO Brian Armstrong also took notice of the provision, noting that it “seems to be a disaster” and “could freeze a lot of healthy crypto behavior like DeFi.” Coinbase itself is a centralized exchange and is likely to be affected by the ‘broker’ provisions that many expressed concerns about in August. Coinbase does not operate or own any DeFi services on its own.
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