US Lawmakers Uphold Proposed Crypto Tax Rules in Huge Blow to the Industry

Crypto industry advocates faced a significant setback on Aug 24 as the US House Rules Committee blocked attempts to reverse the controversial crypto tax provisions. The rules add to Biden’s $1 trillion infrastructure plan despite facing pushback from some lobbyists.

House Speaker Nancy Pelosi has now decided to take the bill to the floor for a vote by Sep 27. The committee doesn’t want any compromising alterations to the stringent crypto tax rules.

Crypto proponents oppose the passing of the massive infrastructure package without any amendments. They argue that such unwarranted crypto rules would stifle innovation in a promising sector of the US economy. House Democrats appear committed to passing the bill without alterations. They bid to raise $28 billion from the crypto sector to fund electricity and transportation infrastructure.

Crypto Industry Groups Push Back

After the senate closed the door to any crypto tax policy revisions, market participants and lobbyists are up in arms. They argue that the proposal’s loose language on crypto reporting and taxation could allow the Internal Revenue Service to target software developers and validators who lack the resources needed to comply.

If the draft will pass, the bill would mandate reports of all transfers and trades worth more than $10K to financial watchdogs. The proposal would also need brokers to report their crypto gains to authorities. Merchants remain skeptical about handing over the personal details of their customers. The action could undermine privacy in the sector.

Crypto Enthusiasts Stand Alert

Blockchain Association’s Kristin Smith has been adamantly fighting the crypto tax proposal.  Also, the director opposed it since the lawmakers sneaked it into Biden’s infrastructure package in late July.

Smith earlier dubbed the controversial crypto tax bill as “hugely problematic.” He has now come out to assure the crypto industry that she will continue to push for amendments.

“The Blockchain Association, our 46 member companies and the newly-energized, nationwide crypto community will rededicate our energy to supporting technology-neutral, pro-crypto legislation and regulation,” she noted.

Coin Center’s Jerry Brito insists on the need for revisions to the crypto tax provision. He worries the bill imposes unwarranted third-party reporting and tax obligations.

New Crypto Tax Rule Won’t Target Miners

Despite growing outrage over the proposed crypto bill, one US Treasury Department exec has come out to defend the legislation. The anonymous official told CNBC that his department has no intention of targeting non-brokers.

Bitcoin live price
price change

Despite the officials’ assurance, one industry expert sees the proposal as the Treasury’s calculated attempt to expand its surveillance and control over decentralized finance (DeFi).

Stay up to date with our latest articles