Over the weekend, the Internal Revenue service made a change to its definition of “broker” that creates a much broader potential for someone to be defined as a broker than before. This is significant given the language in the DNC infrastructure bill that hopes to regulate cryptocurrency regulators. With the broadening of the term broker by the IRS, the bill, in its current form, would give the IRS significant regulatory authority in how the Federal government handles cryptocurrency.
How language in the infrastructure bill could roil the crypto markets
From www.cnbc.com
2021-08-03 05:38:57
Excerpt:
The cryptocurrency industry is lobbying hard this week against language in the Senate’s bipartisan infrastructure bill proposal that could choke a vast amount of the crypto ecosystem.
Language in the bill would require crypto brokers to report customer information to the Internal Revenue Service. More importantly, over the weekend it broadened the definition of what’s considered a “broker” to anyone “responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person” which doesn’t exclude miners, software developers, stakers and other individuals in the crypto economy who don’t have customers.
“The language gives a lot of power to define what should be included in the reporting requirement,” Oppenheimer analyst Owen Lau. “It says any person who is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person – which can mean anything. If I transfer bitcoin for you, then it can mean I become a broker.
