US Senators compromise on cryptocurrency regulations ahead of bill vote

US Senators have reached a compromise on who classifies as a digital asset “broker” in the bipartisan infrastructure bill – a change that makes sure cryptocurrency miners and engineers are exempt from the proposed regulations.

Congress is introducing stricter rules to make it more difficult for crypto investors to avoid paying taxes whenever they buy or sell digital cash such as Bitcoin or Ethereum.

The new rule requires brokers, who manage transactions, to collect the personal information of the payers and payees involved in the financial settlement. The data can then be reported to America’s tax agency, the Internal Revenue Service.

However, there have been disagreements over the details of who is defined as a broker or not.

Senators Wyden, Toomey and Lummis sought to ensure that there is a precise definition so that people mining crypto, software developers processing blockchain transaction and hardware vendors selling the mining kit won’t be required to collect customers data. But Senators Warner, Sinema and Portman prefer a broader and looser definition of who should be classified as a broker. 

In a joint statement, they said “While we each would have drafted this solution differently, we all agree it’s important to ensure that these obligations are properly crafted to apply only to entities that are regularly effectuating transactions of digital assets in exchange for consideration. To best memorialize this common understanding, we propose to incorporate this important amendment into the infrastructure bill and urge our colleagues to join us in enacting this bipartisan clarification.”