House Democrat Urges to Amend the “Problematic Broker Definition” in the Infrastructure Bill
River Financial CEO urges the US not to threaten the well-being of 46 million Americans owning Bitcoin by passing the bill. Amidst this, CFTC Commissioner Brian Quintenz clarified that Ether is a “non-security commodity” that comes under the purview of CFTC.
After the original bipartisan infrastructure bill with unamended crypto tax provision with its overreaching definition of ‘broker’ passed, it has now reached the House for clearance.
In response, Rep. Anna G. Eshoo (D-Palo Alto) came in support of crypto as she urged Speaker Nancy Pelosi to amend crypto reporting language.
“Wow. Here is the fourth House Democrat saying that the crypto tax reporting provision in the infrastructure bill must be amended,” noted Jerry Brito, executive director of Coin Center.
In her letter, Eshoo expressed her concern regarding the tax reporting requirement for crypto brokers by expanding the definition of “broker” to include not just those who regularly facilitate the transfer of digital assets on behalf of another person but also entities like miners, validators, and developers.
“In the decentralized system of cryptocurrencies, these individuals and entities do not know who the buyers and sellers are and would be unable to comply with the broker requirements,” she wrote last week while noting that Treasury Secretary Janet Yellen also supported the amendment.
As we reported last week, the reports came that the Treasury Department is also coming in support of the crypto community and is looking to clear up the concerns regarding the new crypto tax reporting requirement.
The guidance from the Treasury, which can be expected to be made public as early as this week, will focus on whether the activities of related entities qualify as brokers under the tax code and will provide clarity on how they would apply the definition of a broker to them.
The Senate couldn’t include the amendment due to “procedural concerns rather than substantive ones,” she said, adding: while she shares the goal of underlying provision to address tax evasion in the crypto market, it should be done without stifling innovation in a nascent industry.
“When the House takes up the Senate bill, I encourage you to amend the problematic broker definition in Section 80603 of the legislation.”
I, along with bipartisan Blockchain Caucus co-chairs @RepDarrenSoto, @RepDavid, and @RepBillFoster sent a letter to every single Representative in the House raising concerns about the Senate infrastructure bill being paid for by our crypto industry. pic.twitter.com/MzsEmBbosr
— Tom Emmer (@RepTomEmmer) August 9, 2021
Alex Leishman, CEO, and co-founder of Bitcoin financial institution River Financial also released a PR expressing his disappointment in the Senate passing the trillion-dollar infrastructure bill that could do serious harm to the cryptocurrency industry.
“With around 46 million Americans owning Bitcoin, the Senate has threatened not only the well-being of the citizens it purports to represent, but America's best chance at technological leadership in the new millennium.”
As the cryptocurrency market continues to grow, having surpassed $2 trillion in total market cap once again, everyone wants a piece of it. Recently, SEC Chair Gary Gensler also asked for greater authority and resources to regulate the industry.
Amidst this, recently, CFTC Commissioner cleared up that Ethereum falls under his jurisdiction and is not a security.
This clarification came when attorney Jeremy Hogan questioned the ambiguity of the SEC’s stance on Ethereum as a security during the US Securities & Exchange Commission (SEC) v. Ripple Labs court case. Hogan said that Gensler had previously said that US securities laws are clear, but there seems to be cloudiness around Ether’s status.
There is currently a futures contract on Ether, and therefore, it is only “under the CFTC’s purview, which makes ETH a non-security commodity,” said CFTC Commissioner Brian Quintenz, noting both the SEC and his agency share responsibility for the regulation of futures contracts on securities.