The results of the US Senate vote on the infrastructure bill amendment proposals presented by Senators Wyden-Lummis-Toomey and Senators Warner-Portman-Sinema, which seek different objectives in the infrastructure industry, are still unknown. cryptocurrencies.
At the end of June, the United States Senate presented an infrastructure bill that has a great impact on the cryptocurrency industry. Specifically, this bill seeks to raise $28.000 billion in taxes, over a decade starting in 2023, from commercial activities carried out with cryptocurrencies and digital assets.
Upon learning of the bill and its implications for the crypto industry, the crypto community began to organize to demonstrate against this new regulatory regime.
For Senators Cynthia Lummis, Ron Wyden and Pat Toomey and several leaders in the cryptocurrency industry, the Senate's original infrastructure bill could kill financial and technological innovation in the country and boost cryptocurrency companies. growing industry to seek jurisdictions that are more friendly to their activities. In the opinion of the aforementioned senators, the expulsion and migration of participants in the crypto industry from the United States would cause the country to lose its global leadership position. For this reason, Wyden-Lummis-Toomey presented a proposal to amend the law to protect innovation in the country; while Senators Warner-Portman-Sinema also presented a last-minute amendment proposal that rivals that of Wyden-Lummis-Toomey, and that risks the future of Ethereum 2.0, the DeFi and NFTs.
Lummis revealed that the Senate again delayed the vote on the proposed amendments presented to the infrastructure bill, so they would meet again on Sunday at noon. At the time of going to press, there are no known results nor is it certain whether the amendments were voted on.
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Overly broad terms and definitions
First, the US infrastructure bill introduces overly broad terms that would require any person or entity involved in cryptocurrency to file reports and file taxes.
The infrastructure bill defines a corridor as “any person who (by consideration) is responsible for regularly providing any service that carries out cryptocurrency transfers on behalf of another person.” This definition seeks to include virtually everyone who participates in the crypto industry, who would be required by law to declare taxes to the tax authorities; In addition, it would force all entities to submit reports on their clients, which would encourage excessive surveillance of this industry.
Coinbase CEO Brian Armstrong catalog this bill as intrusive and unfair, for attempting to exercise greater surveillance over cryptocurrencies, even much more than that applied to companies in the traditional financial system.
To counter the measure, Senators Cynthia Lummis, Ron Wyden and Pat Toomey presented an amendment that seeks to limit the definitions of the bill and exclude miners, node operators, software developers, providers of Wallets and other non-custodial entities within its scope. Lummis, recognized as one of the most cryptocurrency-friendly senators, defends that those who must report to the United States Internal Revenue Service (IRS) are the entities that really have the ability to report, and not non-custodial entities. In this way, the country will be able to protect innovation and continue promoting its leadership in global technological development.
Anti-innovation: against PoS, DeFi and NFT
Senator Rob Portman, after announce your support to the proposal of Senators Wyden-Lummis-Toomey on Twitter, presented a new amendment to the infrastructure law, at the last minute, with the support of Senators Mark Warner and Krysten Sinema. This new amendment also seeks to exclude cryptocurrency miners from the scope of the law, but wants to leave network validators, software developers and node operators as entities required to submit reports and file taxes, for example. which would risk the future of participation networks, such as Ethereum 2.0, Cardano, Polkadot, among others; In addition to decentralized finance (DeFi) ecosystems, DEX and NFTs.
According to Portman, the US government must guarantee tax collection to drive improvements in the country's infrastructure that will benefit all citizens, including to farmers and ranchers who need to have roads in excellent condition to transport their products. However, the presentation of a last-minute amendment that excludes miners from Bitcoin and networks Proof of WorkPoW), and includes validators, developers and node operators, caused great confusion in the crypto community.
“Senator Warner's amendment would kill Ethereum and other proof-of-stake protocols”, Coinbase wrote in its called to support the Wyden-Lummis-Toomey amendment.
The war of amendments
Ryan Selkis, founder of the company Messari, expressed concern about the “cynical” plans of the United States, which is attacking proof of stake proof of stake (PoS) under the pretext of tax and fiscal regulations through the Warner-Portman-Sinema amendment and “supporting” cryptocurrency mining currently and then banning it under the pretext of “environmental compliance.”
White House Deputy Press Secretary Andrew Bates expressed their support for the proposal presented by Senators Warner-Portman-Sinema. Also, United States Treasury Secretary Janet Yellen agrees with the implementation of the bill to reduce the tax gap that, in her opinion, grew with the arrival of cryptocurrencies. According to the Washington Post, Yellen even contacted Wyden directly to lobby against his amendment. Ironically, the crypto community is accusing Yellen of corruption, since in a partial disclosure the secretary declared having received $7,2 million in “incentives” for speaking with banks such as City and Citadel; more than 28 times her annual salary as Treasury Secretary and almost 40% of her total assets.
Crypto community leaders support Wyden-Lummis-Toomey
Jack Dorsey, Brian Armstrong, Jerry Brito, Kristin Smith, Elon Musk, and others disagree with the US infrastructure bill and support the amendment presented by Senators Wyden-Lummis-Toomey to ensure a regulatory environment adequate that allows the development and growth of innovation. First, for crypto industry leaders, there is no common sense in wanting to require reporting from software and non-custodial wallet developers if they really have no customers and no control over what people do with their products.
Jack Dorsey, CEO of Twitter and Square, recently stated that the US infrastructure bill does not make common sense and that what the Warner-Portman-Sinema amendment does is make the bill worse.
On the other hand, Jerry Brito, CEO of CoinMetrics, accused the United States of wanting to choose “winners and losers”, by supporting PoW and attacking PoS without any logical explanation. Kristin Smith, CEO of the Blockchain Association, pide I support the Wyden-Lummis-Toomey amendment, as the opposing proposal would force cryptocurrency industry participants out of the country and accidentally spur innovation overseas.
Elon Musk, CEO of Tesla and SpaceX, both companies with investments in bitcoin, also spoke out against the bill and expressed support for Lummis' amendment. Musk said to the United States that there is no crisis in the market, so it does not see the need to rush the imposition of regulation on this industry.
Likewise, Kathryn Haun, general partner at Andreessen Horowitz, said that forcing PoS participants and developers to comply with tax obligations will only reduce U.S. tax revenue by prompting mass departures from the country.
Politicians in favor of crypto innovation
In addition to the support of the leaders of the crypto community, several American politicians have spoken out in favor of the Wyden-Lummis-Toomey proposal to defend innovation and technological development in the country.
The mayor of Jackson (Tennessee) Scott Conger stated that Bitcoin is the key to the financial freedom of citizens, which is why the country's government is pursuing crypto innovation.
In general, both Senators Cynthia Lummis, Ron Wyden and Pat Toomey, as well as those who support their amendment, assure that they do not disagree with the establishment of a clearer regulatory framework for cryptocurrencies, but they point out that this must be formulated under a proactive vision. and well-formed that allows the development of the industry, without attacking innovation.
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