Devastating "Infrastructure" bill in US - contact your representatives

[LFC_Bitcoin]

Good News



@jerrybrito
I’m thrilled to say that @RonWyden @CynthiaMLummis and @SenToomey have introduced an amendment to explicitly exclude validators, hardware and software wallet makers, and protocol devs from the tax reporting provisions. Bravo! Now we have to get this thing passed.

https://twitter.com/jerrybrito/status/1422974253876580355?s=21

[LFC_Bitcoin]

Update:

Voting on the bill seems to be tomorrow (Saturday).



@CynthiaMLummis
We NEED you. Pls call your Senators. Pls tweet. Pls email. We are facing major headwinds on the Wyden-Lummis-Toomey amendment. Burying financial innovation in red tape & sending devs + miners on info collection wild goose chases for info they don’t know is horrible policy.
https://twitter.com/cynthiamlummis/status/1423477647288328193?s=21



When asked the day voting will take place she replies -



@CynthiaMLummis
Looks like Saturday.
https://twitter.com/cynthiamlummis/status/1423478722640834563?s=21

[BrianH]

^MAJOR UPDATE: Yes, Wyden-Lummis-Toomey amendment is being talked down in favor of amendment by the bill's sponsor, Senator Portman. The President is backing Portman's do nothing amendment. This is BAD.

How do you know a politician is lying? Their lips are moving.

Here is how you know they were planning to tax everyone all along and wreck the crypto industry:

"The [Wyden-Lummis-Toomey] amendment will needlessly tie Treasury’s hands when it comes time to develop regulation spelling out the details of how the rules would work, the person said.”

This to me is so, so suspect. This morning, the Joint Committee on Taxation said that the revenue would be reduced by $5.17 billion if the amendment passed. So, here’s the big f**king question. If for days, Rob Portman has said these miners, devs and validators weren’t the intended target, a position that this scoffing anonymous White House source reiterate, but now we have an amendment, that’s only purpose is to say officially, these are not the targets of this plan, how could there possibly be a $5 billion gap?

Portman's revision:

The [Portman] amendment ... is limited in scope, excluding only proof-of-work mining, or the selling of hardware or software that permits individuals to control private keys that provide access to digital assets.

How could this be interpreted? Well still everyone could be included. Bitcoin miners could potentially be included, because of the lightning network. Any proof of stake coin would be regulated. All crypto software is free so it could be included. Only some wallets give control of private keys. It would seem DeFi and DEX are included in all revisions.

Assume the worst!

This backs up a previous statement by a US Representative hinting that Janet Yellen was behind the original crypto bill.

“We are grateful to Chairman Wyden for his leadership in pushing the Senate to address this issue. However, we believe that the alternative amendment put forward by Senators Warner, Portman, and Sinema strikes the right balance and makes an important step forward in promoting tax compliance,” White House spokesperson Andrew Bates said

Coinbase CEO Brian Armstrong wrote on Twitter that “issuing more 1099s is a great idea” and that Coinbase is happy to do so. But, he added, the bill’s definition of brokers would appear to include miners and developers which “makes no sense” and could drive it outside of the United States.

[Senator] Wyden late Thursday bashed the competing amendment as “government-sanctioned safe harbor for the most climate-damaging form of crypto tech.”

Ryan Selkis, the founder of research firm Messari, suggested that crypto opponents in the U.S. government were pursuing an even more cynical plan. Namely, he claimed their plan is to cripple the industry by banning  proof-of-stake networks (like Ethereum will soon be) on compliance grounds, and then attack Bitcoin by means environment policy

https://deep-resonance.org/2021/08/06/biden-deals-blow-to-crypto-industry-backs-plan-to-tax-proof-of-stake/

Keep up the pressure...

[LFC_Bitcoin]

We won (I think)




@celsiusworks
Bullish news! Senator Portman said only exchanges will be seen as brokers.
Miners, operators and developers are being excluded from this definition!

https://twitter.com/celsiusworks/status/1424436878623739904?s=21

[franky1]

yawn.. obvious.
when the wording said things like
any person who (for consideration) is responsible for [custodian for a fee]
and regularly provides any service [business]
effectuating transfers of digital assets for another person.[MSB]

it was clear that it was never about software developers, node users, miners or retailers
it was always about MSB's

miners, nodes, and software developers dont take custody of peoples funds.[no responsibility]

anyway, while people think the battle is won even though the obvious was always true from the start

now all exchanges and coinjoins and MSB that only handle crypto-crypto have to KYC.
this can be avoided by just registering the business outside of the US and IP ban US usage. much like the tactics of the bitlicence era

and yes this leaves LN payment route hubs in the new MSB category..
not because of any node handling or software usage. but for regularly offering a payment routing of other peoples value for a fee

[o_e_l_e_o]

We won (I think)

Not yet.

Here is a section of what Portman said on the floor (emphasis added):

We want to be sure miners and stakers and others now or in the future who play a key role by validating transactions, or sellers of hardware or software for digital wallets, or node operators, or others who are not brokers are clearly exempted. While it's not the intent of the underlying bill to include them, I believe we can do more to make this clear, which is why I will continue to work with colleagues to clarify the intent of the information reporting language. There have been a number of amendments that have been filled to try and make this provision more clear, and I have been working with my colleagues, Senator Warner, Senator Wyden, Senator Toomey, Senator Lummis, Senator Ossoff, Senator Sinema, on a potential solution that I believe will help reassure stakeholders that these individuals will not be considered brokers while maintaining the information reporting in this bipartisan legislation.

A solution is being worked out (he says), but until it is introduced, voted on, and passed, then nothing is final. It also sounds now like everyone who wrote this bill had no idea what they were proposing, basing the entire bill on what happens for stocks, and are only now starting to realize that there is a lot more to bitcoin, due mostly to the huge numbers of calls and emails they have reportedly been receiving.

So keep up the pressure! Also, here's a site which will clearly show if your Senator is an enemy of bitcoin: https://didtheyvoteagainst.me/

[franky1]

meanwhile. whilst citizens moan to their representatives about how they feel scared and threatened as a node user and want comforting hugs from representatives telling them they aint going to be part of the group.

actual MSB that are actually going to be pushed into more paperwork and requiring KYC for just atomic swaps and routing(previously unreported). are setting their businesses up outside US jurisdiction. or changing business plan to avoid such services.

the large exchanges love more hurdles and barriers of entry. because they get to be the monopoly of compliance knowing any small business now has even more regulation, so small MSB tend to avoid getting involved and avoid expanding. and end up fizzling out of the custodian sector. meaning less competition for the big boys.

parts of it is about the fact that MSB's need to be compliant. meaning they need a employee thats trained in compliance and pass a regulatory test and also alot of other little bits of bureacratic headache, policy handbooks and licence fee's.

its not a simple 'send an email with a customers name address and value moved'..
its all licences, qualifications, audits. all of which have costs. and if you dont do it the MSB can be liable as a launderer

big business already has this stuff.. but the small businesses just doing crypto-to-crypto are going to see a steep learning curve soon.... very steep
lots of fines and court cases for MSB not walking the thin line of regulation

[o_e_l_e_o]

-snip-

Most small exchanges are scams anyway. If you are going to use a centralized exchange along with all the disadvantages it brings, complete KYC, give up your privacy, risk the security of your coins, risk having your account locked, and so on, then you might as well stick to a big name exchange who (you would hope) will have somewhat better security procedures and customer support than some tiny no-name exchange.

I'm more interested to see how they are going to apply this legislation to decentralized exchanges, specifically fiat/bitcoin DEXs. At its simplest, a decentralized exchange simply connects two parties. If you want to argue that putting a buyer and seller in contact with each other constitutes "effectuating a transfer", then you also make platforms such as Facebook, WhatsApp, and this forum in to brokers. Even if the DEX in question provides an escrow, what if they have no part in the escrow address, such as Bisq's 2-of-2 multisig escrow between buyer and seller? Regardless, Bisq will not comply with this ridiculous legislation and good luck blocking it since it runs locally over Tor.

[valentine wheeler]

Firstly the new bill may take into account the huge tax revenue .The relevant provisions in the bill may not be completely abolished. Therefore, they will focus on making small improvements as much as possible.
Secondly this bill  may push a large number of participants, companies and individuals involved in the encryption field to go overseas, which will really stifle innovation in the U.S. encryption field.

[o_e_l_e_o]

Firstly the new bill may take into account the huge tax revenue .

Huge tax revenue? Hardly. This bill would raise an estimated $28 billion in taxes from cryptocurrencies. Compare that to the $2.2 trillion COVID relief bill and the $2.3 trillion omnibus spending bill last year. Compare to the $1.2 trillion spending in this very infrastructure bill, and another $3.5 trillion in the next budget bill. And we now have a Fed balance sheet rapidly heading for $9 trillion. $28 billion in taxes is absolutely minuscule in comparison. You could gain multitudes higher than that by simply closing some (not even all!) tax loopholes that multi-national corporations use to avoid taxes. You could gain multitudes higher than that by removing the tax exempt status of religious organizations.

Secondly this bill  may push a large number of participants, companies and individuals involved in the encryption field to go overseas, which will really stifle innovation in the U.S. encryption field.

Absolutely. The statement "Land of the Free" is little more than propaganda at this point.

[DooMAD]

yawn.. obvious.

*facepalm*

So obvious that if the vote had happened to go the other way, you'd have looked like an even bigger pompous jackass than you already do?   

Maybe one day you'll climb out of your own backside and realise that not everyone shares your "unique" perception.  And what a relief that is.  I wouldn't want to live in a world where everyone was as single-minded as you.  Try to remember that these senators are not infallible.  Chances are, they haven't spent a decade or more studying this subject and probably aren't particularly knowledgeable about it.  And it's unlikely they all share the views regarding personal freedom generally espoused in this community (hell, you don't even share all of those values).  Some of them may have vested interests that would lead them to vote against something that benefits Bitcoin.  You have literally no idea what's going on in any of their heads.  There are so many influences on an individual's mindset that you can't possibly pretend you can predict them all.  There was every chance they could have got this wrong. 

Congratulations, you recognised the preferred outcome.  You happened to call it right this time.  But it wasn't a foregone conclusion.  If you think otherwise, you are delusional.  In fact, there's no "if" involved, I already know you're delusional.  I'm just hoping you'll finally recognise it.  Acceptance is the first step to recovery, after all.

The very fact that there was a vote, which you have no control over the outcome of, would suggest that you could have been wrong.  Can you comprehend this fact?



Learn to people, plz.  Unless you somehow enjoy being an unrelatable, obnoxious automaton.

[LFC_Bitcoin]

Senator Cynthia Lummis
@SenLummis
About to head down to the Senate floor to ask for unanimous consent to adopt the Toomey-Lummis-Warner amendment as part of the Bipartisan Infrastructure Framework. It’s not perfect, but it’s a big step in the right direction.
https://www.senate.gov/legislative/floor_activity_pail.htm
https://twitter.com/senlummis/status/1424818165809287179?s=21





Quite incredible, we are literally creating history. Bitcoin is only 12 years old & we are changing the world of finance in the most powerful country in the world.

[o_e_l_e_o]

Given Ted Cruz's consistent ability to be on the wrong side of almost every issue, I am amazed he is standing up for cryptocurrency right now. I'd urge people to tune in and listen. He is speaking the most sense he has spoken in his entire career. I'm sure it has a lot to do with Texas' potential position to attract huge numbers of miners, but still.

Quite incredible, we are literally creating history. Bitcoin is only 12 years old & we are changing the world of finance in the most powerful country in the world.

Don't get me wrong, this legislation is still incredibly ugly, as Senator Cruz put it. The amendment we are fighting for is simply the lesser of the two evils. The legislation will still massively affect all of cryptocurrency, and not for the better.

And let's recognize that if we gathered all 100 Senators in this chamber and asked them to stand up and articulate two sentences defining what in the hell a cryptocurrency is, that you would not get greater than 5 who could answer that question. Given that reality, the barest exercise of prudence would say we shouldn't regulate something we don't yet understand, we should actually take the time to try to understand it, we should hold some hearings, we should consider the consequences, we shouldn't destroy people's lives and livelihoods from complete ignorance.

Edit:

The amendment we are interested in is now not going to be considered due to disagreement regarding a different amendment regarding $50 billion in military funding. Our democracy is so stupid.

Edit 2:

Senator Shelby refusing to let it pass because he is hung up on his military amendment. Bitcoin in America gets destroyed by one 87 year old who says he communicates with his staff via hand written notes because he can't use email. Our democracy is so stupid.

[LFC_Bitcoin]

I’m reading that he can withdraw his refusal by tomorrow?
Surely somebody will talk sense into him. Apparently he’s 87 & retires soon, what an asshat.

[BrianH]

Senator Shelby refusing to let it pass because he is hung up on his military amendment. Bitcoin in America gets destroyed by one 87 year old who says he communicates with his staff via hand written notes because he can't use email. Our democracy is so stupid.

He definitely screwed up everything. From what I am reading, it seems like a given that the bill will be passed by the Senate with the original language that was going to kill the industry in the US. It could still be fixed later on by the House or reconciliation process, but Senate is looking lost.

This is over alot more than "$28 billion." Congress realizes this. Apparently they could have raised over $100B simply by hiring more IRS agents. They want to stop the crypto industry before it has a chance to really take off.

I’m reading that he can withdraw his refusal by tomorrow?
Surely somebody will talk sense into him. Apparently he’s 87 & retires soon, what an asshat.

Certainly hope this is true.

https://coinmarketcap.com/alexandria/article/despite-losing-crypto-tax-fight-industry-made-d-c-take-notice

The crypto industry was caught flat footed by the legislation, which would raise $28 billion in taxes with a number of proposals, including forcing all “non-custodial” brokers to collect tax information on clients — even permissionless DeFi-based decentralized exchanges (DEX) and peer-to-peer lending markets that simply cannot do it.

...plus miners. Everyone contact Senator Richard Shelby.

[Kiley33]

The US looks about to pass this infrastructure bill, which will have devastating impacts across all of crypto, if it passes:
https://www.breitbart.com/politics/2021/07/29/cryptocurrency-tax-threatens-to-put-bipartisan-infrastructure-bill-in-upheaval/

The proposal defines a digital asset as any “digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology as specified by the [Treasury] Secretary.’’.

Kristin Smith, the executive director of the Blockchain Association, said that this could significantly ramp up reporting for businesses and Americans.

“We interpret this to mean software wallet developers, hardware wallet manufacturers, multisig service providers, liquidity providers, DAO token holders and potentially even miners,” Smith said.

Contact your representatives!

For companies, he is preventing the freedom of Bitcoin,  Bitcoin taxation will really increase the amount of corporate reporting, but Bitcoin is anonymous, if every one of them is under the jurisdiction of the government. To proceed, then the anonymity of Bitcoin is broken.
This is not banning Bitcoin, nor is it blocking Bitcoin, it is changing Bitcoin.

[o_e_l_e_o]

I’m reading that he can withdraw his refusal by tomorrow?
Surely somebody will talk sense into him. Apparently he’s 87 & retires soon, what an asshat.

He won't change his mind. The whole $50 billion for the military thing is just a smokescreen. We already spend almost $800 billion on the military, more than the next 11 highest spending countries combined. He is entirely funded by banks and Wall Street, and he isn't running for re-election so he will suffer no consequences from this. He will do as he is told so he can continue to receive his fat paychecks. Apparently he is also trying to get Wall Street jobs for some of his staffers: https://twitter.com/twobitidiot/status/1424834077920747520

Cruz proposed another amendment to strike the cryptocurrency provisions altogether. Guess what? Shelby objected to that too. Welcome to our "democracy". Our country is a joke.

So now the original bill goes to a vote. If it passes, that's it.

but Bitcoin is anonymous

No it isn't.

This is not banning Bitcoin, nor is it blocking Bitcoin, it is changing Bitcoin.

The original bill, if passed without amendment, can make bitcoin impossible to legally use in the US.

[Lucius]

The original bill, if passed without amendment, can make bitcoin impossible to legally use in the US.

I honestly thought this was just another one of those stories that would end with a lot of clickbait titles, without any real effect. When you say “impossible to legally use in the US,” does that mean the entire crypto industry would simply collapse into the US if this bill passes?

What is not clear to me is that the crypto market does not react negatively to such news - maybe everyone thinks that something like this simply cannot happen?

[worle1bm]

The whole $50 billion for the military thing is just a smokescreen. We already spend almost $800 billion on the military, more than the next 11 highest spending countries combined. He is entirely funded by banks and Wall Street, and he isn't running for re-election so he will suffer no consequences from this. He will do as he is told so he can continue to receive his fat paychecks. Apparently he is also trying to get Wall Street jobs for some of his staffers: https://twitter.com/twobitidiot/status/1424834077920747520

The budget for Military is already huge for America as Air conditioner budgets for soldiers in Afghanistan is near about $20 Billion as per reports and they have been spending so much from a long time on military practices and as said by you it's just another excuse by a funded banker who hates decentralisation of payment system and they can't directly oppose them so make such bills and reject crypto amendments.He doesn't care about people and only doing as per direction to receive his payment but the world will get use to bitcoin inspite of their decisions.

[o_e_l_e_o]

When you say “impossible to legally use in the US,” does that mean the entire crypto industry would simply collapse into the US if this bill passes?

The wording of the original bill is so broad that it essentially makes everyone a broker, and all brokers are legally required to process tax forms for every single one of their customers. It makes all exchanges brokers, and so non-KYC accounts become a thing of the past. OK, fine. However, it also makes anyone who develops any cryptocurrency software, such as Bitcoin Core or any wallet a broker, so these developers would be legally required to collect the personal information of everyone who downloads their software and hand them tax forms, which is insane. It also makes all node operators and all miners in to brokers as well, so nodes in the US could only accept transactions which were accompanied by KYC information, and miners could only mine transactions which were accompanied by KYC information. Fail to collect this information and you are breaking the law.

Senator Cruz put it succinctly in the Senate yesterday when he said (paraphrased) that this bill would destroy the cryptocurrency industry in the US and force all innovators, developers, engineers, etc. overseas.

What is not clear to me is that the crypto market does not react negatively to such news - maybe everyone thinks that something like this simply cannot happen?

The bill hasn't passed yet, and if it does it will still be 18 months or so before it takes effect.

It is disappointing there is not more discussion about this on this forum. There is much more going on on Reddit and Twitter.