Key players in the cryptocurrency industry have not remained silent in the face of what they perceive to be a direct attempt to regulate the industry “to oblivion,” and have expressed their displeasure.
Cardano (ADA) Founder Charles Hoskinson went live on YouTube yesterday with a long rant about the negative consequences of the newly proposed Warner-Portman-Sinema amendment to the $1.2 trillion Bipartisan Infrastructure Bill on the crypto-industry.
The proposed bill, which seeks to raise $28 billion in funding by imposing stricter taxes on the crypto-industry, has recently been a source of contention. Fundamentally, the cryptocurrency industry does not appear to have a problem with stricter taxation, but rather with the bill’s wording.
The initial draft of the bill defined the term “brokers” in terms that the industry considers too broad and difficult to comply with. The definition required key industry players such as miners, validators, software developers, and wallets to report who they deal with to the IRS. The crypto-industry, on the other hand, has pushed back against this requirement, claiming that the bill could not be met because those parties did not necessarily deal with customers.
As a result of the kickback, two amendments to the bill were proposed. While stating that the industry, including his own Cardano, has no problem paying taxes because most of it is already regulated, Charles Hoskinson noted that the Toomey-Wyden-Lummis amendment “will not create an untenable situation for the cryptocurrencies business because it carved out exemptions for reporting for software developers, validators, and miners in a way that we could coexist.”
He, on the other hand, slammed the second proposal from Senators Rob Portman (R-Ohio), Mark Warner (D-Va), and Kyrsten Sinema (D-Arizona), which only exempted miners from the reporting exemption, leaving proof of stake (PoS) validators, software developers, and wallets in the IRS KYC reporting loop.
“In running a stake pool, nothing in the protocol has any notion of KYC, so how does a PoS operator report to the IRS on some form who the person delegating a transaction to them is as it is a pseudonymous transaction?” he asked, clarifying that the exemption of miners would imply that PoS protocols would need to conduct 100% KYC for validators and transactors to comply.
Parker Lewis, another crypto-supporter, has stated that the move by Congress will only make Bitcoin and cryptocurrencies more prominent and mainstream because it will be an unavoidable topic of discussion.
“Congress has set itself quite a trap. It’s currently in the #bitcoin vortex. Bitcoin will be at the center of the national discussion on loop, reinforcing its validity and gains in purchasing power while exposing DC’s broken politics. What a disaster.”