Senators introduce a Bill overriding Biden’s impossible crypto provisions

Yesterday President Biden signed his Infrastructure Bill into law.

The good thing for crypto is that it includes a $1.2Tr spending, much of which will be “sponsored” by the Fed by creating new dollars, thus increasing inflation fears and demand for scarce assets like Bitcoin.

The bad news for crypto is that the Bill is imposing very strict reporting obligations on all crypto-related businesses (called “brokers”), who will have to report personal details on the senders of crypto transfers >$10k. The problem is that “broker” definition is so broad that it includes entities that cannot possibly comply with these obligations, like the DeFi companies, providers of non-custodial wallet software, blockchain developers etc. It would hurt the American crypto industry badly.

The crypto provisions of the Bill were actively fought by the crypto lobby in August, but an ironic (some would say stupid) event prevented the “broker” definition from being precised. A compromise amendment was killed by an 87-year-old Senator Richard Shelby, who decided to block every amendment as a sign of disagreement that the Bill did not include additional $50Bn in military spending ?

The second round starts now. Senators Ron Wyden (Oregon), chairman of the Senate Finance Committee, and Cynthia Lummis (Wyoming) introduced a bill seeking to override crypto provisions and “make clear that the new reporting requirements do not apply to individuals developing blockchain technology and wallets”. The Wyden-Lummis Bill includes a retroactive provision, covering the Infrastructure Bill’s quid pro quo, but it is not yet clear when it would come up for a vote.

For the sake of the US crypto industry that has nurtured some of the biggest names in crypto, let’s hope that the Senators will come to their senses and stop hindering innovation.