Updated 16 Aug, 2021

US Senators and Treasury Secretary Agree on a Crypto Amendment

US-Senators-and-Treasury-Secretary-Agree-on-a-Cyrpto-Amendment

Key Takeaways:

  • A group of five Senators has proposed a solution to the controversial crypto amendment
  • Treasury Secretary Janet Yellen has expressed confidence the revised crypto legislation “provides clarity”

Five Senators Present a Reconciled Crypto Tax Provision

A compromise amendment for the largely troubling cryptocurrency tax requirement has been proposed by the US Senate Committee on Banking, Housing, and Urban Affairs. Along with the Treasury Department, five Senators who had previously presented two competing crypto amendments have reconciled their differences. Also, they have presented a revised crypto legislation.

Earlier, Senators Warner, Portman and Sinema proposed a crypto tax legislation. This legislation aimed to collect $28bn over 10 years by taxing crypto gains of a broadly defined group of crypto participants called “brokers”.

That definition included decentralized crypto exchanges, software developers, proof of stake miners and validators. However, it excluded proof of work miners.

This provision was ultimately backed by the White House and passed in the Senate as part of the $1tn infrastructure bill.

The other crypto amendment was presented by Senators Toomey and Lummis. It required payments for crypto worth more than $10,000 to be reported to the Internal Revenue Service (IRS).

After a massive wave of opposition to the crypto provision approved by the Senate, the group of five Senators has reached an agreement over a revised crypto legislation.

“We’ve worked with the Treasury Department to clarify the underlying text and ensure that those who are not acting as brokers will not be subject to the bill’s reporting requirements,” the group said in a press release.

Senator Toomey explained the main points in the compromise amendment and said that “crypto software developers, crypto transaction validators, node operators, and other non-brokers” are excluded.

“Our solution makes clear that a broker means only those persons who conduct transactions on exchanges where consumers buy, sell, and trade digital assets,” he added.

The Secretary of Treasury Approves the Compromise Amendment

The same lawmakers on Capitol Hill have discussed the collective proposal with Secretary of Treasury Janet Yellen.

“I am grateful to Senators Warner, Portman, Sinema, Toomey and Lummis for working together on this amendment to provide clarity on important provisions in the bipartisan infrastructure deal that will make meaningful progress on tax evasion in the cryptocurrency market,” said Treasury Secretary Janet Yellen in a statement.

The legislation is now waiting to be approved by House Representatives although they are in recess until Sept 20. Crypto groups are hopeful House Speaker Nancy Pelosi and other lawmakers in the lower house, would reevaluate the current crypto provision. They hope that they will vote in favor of the joint proposal that reconciles the two separate cryptocurrency amendments.