Some cryptocurrency brokers already report their transactions to the I.R.S., but most do not because of ambiguity in the existing law.
The cryptocurrency industry contends that it wants more regulatory clarity, but some of its members warn that the far-reaching definition of a broker could have unintended consequences.
Perianne Boring, president of the Chamber of Digital Commerce, a lobbying group, said the legislation was being drafted too quickly. She argued that by defining cryptocurrency brokers so broadly, it could impose disclosure requirements on everyone involved in the industry, from the “miners” who make digital money to technology developers and investors.
Saddling participants in the industry with regulations that they may be unable to comply with, Ms. Boring suggested, would most likely undermine the goal of the bill.
“This can have a pretty significant impact on the development of some of the most important areas of innovation or will likely kill part of the industry or drive it overseas,” she said. “We should be embracing this technology, not regulating it out of existence.”
Drew Nirenberg, a spokesman for Senator Rob Portman, the Ohio Republican who helped draft the legislation, pushed back against the idea that the proposed rules would hurt the industry.
“This legislative language does not redefine digital assets or cryptocurrency as a ‘security’ for tax purposes, impugn on the privacy of individual crypto holders, or force nonbrokers, such as software developers and crypto miners, to comply with I.R.S. reporting obligations,” he said. “It simply clarifies that any person or entity acting as a broker by facilitating trades for clients and receiving cash must comply with a standard information-reporting obligation.”
Article source: https://www.nytimes.com/2021/07/30/us/politics/infrastructure-deal-cryptocurrency.html