An amendment has been introduced to the US$1 trillion infrastructure bill currently before the U.S. Senate that would exempt bitcoin miners and other validators from a provision seeking to raise funds for its fulfilment, according to a report by CNBC.
Fast facts
- As Forkast.News has reported, the provision sought to raise US$28 billion over the course of a decade by raising Internal Revenue Service reporting requirements for investors and brokers. Originally, a broker was defined as any party facilitating transfers of digital assets. That was redefined on Sunday as “any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.”
- This meant that in order to meet reporting standards for the required Form 1099, non-custodial crypto industry participants, such as validators of proof-of-stake networks, would be required to collect personal information on their ‘customers,’ including names, addresses and contact details. As Compound Labs General Counsel Jake Chervinsky pointed out, that would present difficulties for miners on anonymous, permissionless blockchains.
- “As those who understand crypto already know, users are pseudonymous & access is permissionless. It’s literally impossible for non-custodial actors like miners to get the information they need to do Form 1099s. In practice, this could mean a de facto ban on mining in the USA,” Chervinsky tweeted after the bill was taken up by the Senate.
- Senator Pat Toomey, who was involved in filing the proposed amendment, said in a statement: “By clarifying the definition of broker, our amendment will ensure non-financial intermediaries like miners, network validators, and other service providers — many of whom don’t even have the personal-identifying information needed to file a 1099 with the IRS — are not subject to the reporting requirements specified in the bipartisan infrastructure package.”