The House of Representatives passed the bill with a 228-206 majority
The United States’ controversial bipartisan infrastructure bill was passed by the House of Representatives yesterday despite increasing opposition from cryptocurrency interest groups. The bill, which was passed by the Senate in August is now only awaiting President Joe Biden’s assent to become a law.
The $1.3 trillion bill which is primarily aimed at improving national transport network and internet coverage has been heavily criticised for imposing stringent crypto tax reporting requirements. It mandates crypto companies and brokers from reporting all digital asset transactions worth more than $10,000 to the IRS.
The bill was also condemned for the lack of public discourse before introducing the crypto tax amendment which stands to impact over 20% of the country’s population.
Following a failed attempt to reduce the severity of the hastily passed crypto provisions of the bill, more than 80,000 people contacted senators expressing their disappointment in just a few days.
Experts have highlighted how the lack of clarity in the bill’s description of the word ‘broker’ may impose unachievable tax reporting mandates and severe consequences for the industry’s sub-communities including crypto miners, validators and wallet developers.
Abraham Sutherland, a lecturer from the University of Virginia School explained how the bill is particularly harsh towards the Decentralised Finance (DeFi) industry:
“It’s bad for all users of digital assets, but it’s especially bad for decentralized finance. The statute would not ban DeFi outright. Instead, it imposes reporting requirements that, given the way DeFi works, would make it impossible to comply.”
Another critical issue with the bill is its attempt to treat the industry’s software developers, transaction validators and node operators similar to how brokers are treated under the law for traditional financial institutions.
The bill equates the inability to disclose crypto-related earnings as a tax violation and felony though many legal experts are suggesting an amendment that considers failure to report transactions as a criminal offence.