"Clarification": Broker Definition, US Infrastructure Bill Narrows Scope of Cryptocurrency Reporting Requirements

The controversial definition of "broker" for cryptocurrency transactions in the U.S. infrastructure bill recently introduced in the Senate has been narrowed down in the draft, but it does not explicitly state that only companies providing services to customers are eligible. In other words, miners or other parties not facilitating customer transactions still remain in a gray area.

Last week, in order to raise funds for the $1.2 trillion infrastructure bill, a bipartisan group in the Senate proposed strengthening regulation on cryptocurrency and imposing taxes on cryptocurrency transactions, causing a stir in the crypto community. Senators from both parties proposed specific plans regarding the details, with cryptocurrency transactions expected to contribute around $28 billion in taxes. To achieve this revenue target, the Internal Revenue Service (IRS) in the United States is expanding the definition of cryptocurrency brokers and investors to include any party involved in cryptocurrency transactions, decentralized exchanges, or other non-custodial service providers. According to a report by CoinDesk, the latest draft of the bill stipulates that only those who facilitate digital asset transfers will be considered brokers. In other words, miners, node operators, software developers, or similar parties are not explicitly excluded. As per the bill's language, "any person responsible for regularly providing any service effectuating digital asset transfers on behalf of another person" is now included in the definition. The initial version of the infrastructure bill did not propose taxing cryptocurrency transactions but suggested that exchanges or other market participants must provide transaction reports. Given that there are no clear operators who can provide such reports, compliance becomes challenging for entities like decentralized exchanges and miners. A spokesperson for Republican Senator Rob Portman, Drew Nirenberg, clarified that digital assets or cryptocurrencies would not be classified as securities for tax purposes, nor would the bill infringe on the privacy of cryptocurrency holders. It also would not require software developers and cryptocurrency miners, who are not brokers, to report, stating that it simply "clarifies that individuals or entities acting as brokers by facilitating customer transactions and accepting cash must comply with standard reporting obligations." This article is authorized and reproduced from Vision News Network.