Cryptocurrency taxation voted in US Congress tomorrow

Charlie Taylor

The US Congress is expected to vote on a new bill regarding the taxation of cryptocurrencies on Saturday (7), the bitcoin price may react to the result. New regulation, followed by more taxes for investors, is coming to United States with the support of President Joe Biden. With the proposal, the Democrat intends to take US$28 billion from investors to "renovate the infrastructure of the United States".

Taxation of US cryptocurrencies

The growth of the cryptocurrency industry has pressured global watchdogs to tighten their grip on the industry, and the US has struggled to be a leader, especially since Joe Biden took over as president. Earlier this year, some CFTC proposals were dropped, but recent ones have taken their place, this time focusing on taxpayer money. With the new proposal supported by the US president, $28 billion is expected to be raised from US investors cryptocurrencies, the equivalent of 651,939.12 BTC at the current price. Under the bill, digital asset transactions worth more than $10,000 must be reported to the US Internal Revenue Service (IRS). The tax revenue discussed would be part of the funds for a $550 billion budget for improve the country's transport and electricity infrastructure. However, the tax policy for cryptocurrencies was transferred to the $1 trillion infrastructure account that is currently in the US Congress. What attracted the attention and skepticism of the crypto community was the definition of the term “broker” in the bill. The proposition described a broker as "anyone who (out of consideration) is responsible for regularly providing any service that transfers digital assets on behalf of another person." This broad definition was captured by many industry participants who voiced their concerns. Among them was Coinbase CEO Brian Armstrong, who criticized the proposal presented by senators Rob Portman and Mark Warner. For the businessman, the legislation would eventually lead innovative companies to seek other countries to settle.

Bitcoiner Senator Wants To Avoid Worst Scenario

Senator Cynthia Lummis, a Bitcoin supporter, working alongside Senators Ron Wyden and Pat Toomey, made another proposal that seemed less harsh for certain sectors of the industry. protocol of tax provisions. In addition, they asked US regulators for more clarity on what falls under the “broker” category and who should be taxed. Interestingly, Senator Portman, who led the first proposition, agreed and said that he should strive to make the project clearer. However, Portman and Warner took another step in a "last-minute amendment". In it, they basically excluded Proof-of-Work miners and hardware and software portfolio vendors from the tax provisions. However, it still suggests that Proof-of-Stake developers and validators would be subject to reporting and taxation.

Biden and Bitcoin

In a somewhat unexpected twist, the White House formally supported the Portman amendment in a statement attributed to Assistant Press Secretary Andrew Bates. He wrote that the administration “is pleased with the progress that has resulted in a commitment sponsored by Senators Warner, Portman and Sinema to advance the bipartisan infrastructure package and clarify the measure to reduce tax evasion in the cryptocurrency market.” “Management believes this provision will strengthen tax compliance in this emerging area of ​​finance and ensure that high-income taxpayers contribute what you owe under the law.We are grateful to President Wyden for his leadership in lobbying the Senate to resolve this issue, however, we believe the alternative amendment tabled by Senators Warner, Portman, and Sinema strikes the right balance and represents an important step forward in promoting tax compliance.”According to Cointimes report or earlier, US Internal Revenue Commissioner Charles Rettig suggested without providing hard data that tax evasion in the cryptocurrency market would be helping to widen the gap between what taxpayers should pay and what they are actually paying.

Cryptocurrency community reacts

It didn't take long for the cryptocurrency community to react to the “last-minute” amendment and White House support. And, somewhat expected, most criticized the developments. Kristin Smith, the executive director of the Blockchain Association, was one of the first to point out that the amendment is “anti-technology and anti-innovation”, which “would be disastrous for the US cryptographic ecosystem.” Most of the comments were somewhat identical, with Jerry Brito, executive directors of the Coin Center using the same “disastrous” rating. Also, he observed that if the US Congress actually passes the bill, it will be like “picking winners and losers.” Lark Davis, a popular commentator and YouTuber, said that, if the bill passes, “it will basically put America out of the crypto game. An economic opportunity as big as the Internet is about to be pushed abroad, and millions of Americans will be left even more behind in the cryptocurrency revolution than they already are.” Notably, the bill has yet to be passed. It was supposed to be voted on Thursday night, but it will probably happen on Saturday, August 7th. US investors may react to the result by temporarily causing market volatility.See too:Buy and sell Bitcoin and other cryptocurrencies on Coinext
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