In August, there were serious warnings about what the proposed infrastructure law by the Biden administration could do to the crypto and blockchain sectors, expel crypto miners from the United States, paralyze the American leadership, and so on. In response, the cryptocurrency industry mustered full legal pressure. . However, it was too late to stop the alarming language of digital assets, and the Infrastructure Act was signed into law in November.
The good news is that the Infrastructure Act won’t go into effect until January 2024, giving plenty of time to rectify the deficiencies. The downside is that its troubling aspects – in particular, the expanded definition of who or what is a “broker” and some new reporting requirements for digital assets – haven’t gone away. As Charles Hoskinson, founder of Cardano, noted in mid-November, shortly after the law was signed, “bad [crypto] language” is now enshrined in law.
Kristen Smith, CEO of the Washington Blockchain Association, told Cointelegraph: “We remain concerned about the lack of clarity around the mediation provision in the signed infrastructure bill now. […] If the situation remains unchanged, it could have a detrimental effect on the growth of the mining sector in the United States. United State. ”
There have been moments in the past three months when it seemed like the sky might be falling due to pending US legislation. “This would be a huge loss for America and our ability to remain innovative in the world,” venture capital firm Andreessen Horowitz warned. But now things are not so sad.
In both the regulatory and legislative areas, there are indications that the bill’s potential negative effects may soon be mitigated. Some changes have been made in Congress, and the US Treasury appears to be listening seriously to the industry’s objections. Looking back, can any of these ominous warnings be said to have been amplified?
“Initially, there were a lot of concerns about crypto-related hardware – miners, exchanges, open source developers, wallet storage developers, etc. – that would be included in the ‘broking language’,” said Will Evans, CEO of CEX. Cointelegraph reported that the crypto exchange is IO.” But the [US Treasury] followed up by saying that this wording applies only to those “who can obey,” which excludes miners, hardware developers, and the like — although it still includes cryptocurrency exchanges. And some investors Evans added:
“While not all units in the cryptosphere are found outside the forest, it is clear that the number originally thought to be affected has decreased.”
It’s “too early to talk about potential major impacts,” Chris Debow, Senior Financial Institutions Regulation and Compliance Adviser for Elliptic, told Cointelegraph, but as with any new regulatory initiative, consideration should be given to its impact on ongoing technological innovation. “We remain cautiously optimistic that some of the more difficult parts of the coin infrastructure bill will eventually be corrected through letters of instruction and regulatory comments.”
“Concerns about the feasibility of the proposed reporting rules are fully justified,” Olia Viramchuk, director of tax solutions at Lukka, a data and crypto software provider, told Cointelegraph, adding that while the law won’t take effect until 2024, “the community has limited time to continue the conversation.” With regulators at the Ministry of Finance to develop useful and practical rules and guidelines.”
Veramchuk was asked what is the most annoying aspect of the law, and about his very broad definition of the concept of “broker”? Are you required to report 10,000 USD worth of cryptocurrency transactions? For her: “Without proper guidance from Treasury, both reporting items can override their intended use case.” “This broad definition may mean that people have to meet the reporting requirements of intermediaries, which is not a fruitful solution to the reporting problem,” she added.
Abraham Sutherland, an assistant professor at the University of Virginia School of Law, told Cointelegraph that the law’s amendment to Section 60501 of the tax code represents a “significant threat to digital assets.” Sutherland said the law would require “anyone” who receives digital assets worth more than $10,000 to verify the sender’s personal information, including their Social Security number, sign and report to authorities within 15 days. Failure to comply can be a crime.