The U.S. House of Representatives is poised to vote on a $1 trillion bipartisan infrastructure bill, which contains a provision that would require brokers of digital assets to report on their transactions to the Internal Revenue Service, if passed.
The bill aims to raise $28 billion in a decade from the crypto industry to pay for roads, bridges, tunnels and other infrastructure.
The crypto industry has been concerned that the provision’s definition of “broker” is too broad, as it doesn’t explicitly rule out miners, node operators, stakers, software developers and wallet providers, industry participants said. Some of the entities do not have enough customer information needed to comply with such reporting requirements.
According to the provision, brokers refer to anyone “responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.”
“It is not defined how this provision can fit with the digital asset technology, potentially exposing people and entities engaging in decentralized transactions to a great difficulty in complying with it in practice,” Lucia della Ventura, a researcher on decentralized artificial intelligence at Trinity College Dublin, tole MarketWatch via email.
House Speaker Nancy Pelosi on Thursday morning said she still is planning a House vote later in the day. A House notice late Thursday said no votes were expected to occur prior to 9 p.m. Eastern.
Though Bloomberg reported in August, citing a Treasury official, that developers, miners and software providers in the crypto industry will not be targeted by the rules, the industry has been calling for an amendment of the bill. The Senate earlier rejected an amendment that clarified the definition of broker in the provision.
“The law should be written in a way that is crystal clear, rather than relying on the interpretation of different administrations down the line,” a spokesperson at the Blockchain Association, a crypto lobbying group, told MarketWatch.
“So our view is still that that provision is really poorly written and fails to understand the relationship between entities on open blockchain networks,” the spokesperson said.
If the infrastructure bill is passed by the House, the Blockchain Association will “throw our energy behind that legislative fix down the line,” the spokesperson said.
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