Eshoo Fights to Fix Potentially Harmful Language on Cryptocurrency in Bipartisan Infrastructure Bill

August 12, 2021
Press Release

PALO ALTO, C.A. – Today U.S. Rep. Anna G. Eshoo (CA-18) wrote to House Speaker Nancy Pelosi to express concern regarding the tax reporting requirements for cryptocurrency brokers in the Infrastructure Investment and Jobs Act, the bipartisan infrastructure legislation recently passed by the Senate. The legislation uses a broad definition of “broker” that could encompass miners, validators, and developers of wallets who are unable to comply with reporting requirements.  

“I share the goals of the underlying provision to address tax evasion in the cryptocurrency market, but the House should amend it, as the bipartisan compromise amendment would have, to meet this goal without stifling innovation in a nascent industry by imposing unworkable regulations,” wrote Eshoo. “I stand ready to work with you to ensure the infrastructure legislation addresses tax evasion to pay for its investments without unduly threatening a growing sector of our economy.”

A bipartisan group of Senators offered an amendment backed by Secretary of the Treasury Janet Yellen to fix the cryptocurrency broker language, but it was not included in the final bill passed by the Senate.

A PDF of the letter can be found HERE and the full text of Eshoo’s letter is below:

Dear Speaker Pelosi,

I write to express concern regarding the tax reporting requirements for cryptocurrency brokers in the Infrastructure Investment and Jobs Act, the bipartisan infrastructure legislation recently passed by the Senate.

The legislation imposes new reporting requirements on the cryptocurrency industry by expanding the definition of “broker” to include anyone who regularly facilitates the transfer of digital assets on behalf of another person. Such broad language encompasses not only the exchanges that provide a marketplace for trading digital assets, but also entities like cryptocurrency miners, validators, and developers of wallets. In the decentralized system of cryptocurrencies, these individuals and entities do not know who the buyers and sellers are and would be unable to comply with the broker requirements.

When the House takes up the Senate bill, I encourage you to amend the problematic broker definition in Section 80603 of the legislation. A bipartisan group of Senators offered an amendment to this effect that Secretary of Treasury Janet Yellen supported, however, the amendment was not included due to procedural concerns rather than substantive ones.

I share the goals of the underlying provision to address tax evasion in the cryptocurrency market, but the House should amend it, as the bipartisan compromise amendment would have, to meet this goal without stifling innovation in a nascent industry by imposing unworkable regulations. I stand ready to work with you to ensure the infrastructure legislation addresses tax evasion to pay for its investments without unduly threatening a growing sector of our economy.

Most gratefully,

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