Devastating "Infrastructure" bill in US - contact your representatives

[Poker Player]

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

I totally agree, although I saw some discussion also in the WO thread and I would say some other thread, but I don't remember now exactly.

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.

Other than that, correct me if I am wrong, the bill could still be amended until it takes effect. It would be better if it was passed in a way favorable to the crypto industry now, because then it costs more to amend later on, but it's not like if it's passed today there's no chance of changing it.

That's what I've inferred from what I've read out there. Maybe that's why it doesn't influence the price much either, because the market thinks that if it's unfavorable there's still some chance to amend until it went into effect.

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[DooMAD]

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

How likely is it to pass, though?  If all but one octogenarian realise it needs amending, would the others be inclined let it through without that?  I don't know how practical it is to propose putting it on hold until he retires, heh.

And if it did pass unaltered, would enforcement be to the "spirit of the law", or the letter?  There are still a lot of ifs involved.

[Lucius]

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.

Thanks for the further clarification, this is really something we can put under the category of incredible nonsense that is born in the minds of some politicians.

I have warned in some of my comments before that the US has too much of a role in the world of cryptocurrencies with all that infrastructure and with its influence on the rest of the world. If such a law were passed, then it is only a matter of time before US allies would also be forced to act in the same direction, which means that the EU, Japan, Israel, the UK, India, and many other countries would do something similar.

This doesn't look good at all if it comes true, and when the mainstream media catches this, it will surely resonate strongly with the crypto world - regardless of the fact that it will take as long as 18 months to be fully implemented.

Still, there is at least one other instance where things can be fixed by what @BrianH post (House or reconciliation process), but can they just overturn the Senate's decision?

As for the discussion on the forum, people just don't understand what this is about - I haven't paid any attention to this so far. In addition, BD has recently been flooded with threads from only one user and this thread did not have much visibility.

[o_e_l_e_o]

Other than that, correct me if I am wrong, the bill could still be amended until it takes effect.

Correct. Since it has now passed the Senate, then our only hope now lies with the House. They could pass an amendment fixing the cryptocurrency provisions, which would then lead to the two bills having to be reconciled with each other, which can be a messy process. Then the final amended bill would go back to both chambers to be voted on again.

How likely is it to pass, though?

It's already passed the Senate. It's over to the House now. We will have to wait and see what amendments they propose and how they will vote.

If all but one octogenarian realise it needs amending, would the others be inclined let it through without that?

I suspect there are several Senators who only let the amendments pass because they knew Shelby would obstruct them.

And if it did pass unaltered, would enforcement be to the "spirit of the law", or the letter?  There are still a lot of ifs involved.

If there's one thing I'm certain of, it is that the government will interpret the wording in whichever way they please for their own benefit.


Here's the next fight:
https://twitter.com/RepTomEmmer/status/1424845416697323522

I, along with bipartisan Blockchain Caucus co-chairs @RepDarrenSoto, @RepDavid, and @RepBillFoster sent a letter to every single Representative in the House raising concerns about the Senate infrastructure bill being paid for by our crypto industry.

Time to start contacting your Representative in the House!
https://www.house.gov/representatives/find-your-representative

[buwaytress]

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.

To understand how this affects regular people, just think about how it's impossible to use Localbitcoins as a normal US person without being registered as a broker. And how many normies have faced enforcement just for using LBC without the "licence".

I worked with US freelancers, accepting payment in Bitcoin. The only way they could cash out was to use Bitcoin ATMs with upwards of 10% fees. I know there are better options now, but the US simply doesn't like people transacting outside of the system. If such a bill were to pass, everyone would be using Bitcoin at exorbitant tax rates and they'd only be able to "hold" "Bitcoin" on PayPal, Coinbase, etc.

[o_e_l_e_o]

To understand how this affects regular people, just think about how it's impossible to use Localbitcoins as a normal US person without being registered as a broker.

Yup. If you trade in a peer-to-peer manner, then you are effectuating a trade and therefore classed as a broker. You must therefore collect the KYC data of the person you are trading with, and if you fail to do so, you are a criminal.


Looks like Shelby is feeling the pressure now and trying to save face:

https://twitter.com/SenShelby/status/1425142857199980550

I supported @SenToomey cryptocurrency amdt. I know of its importance to innovation & job creation, but I believe it pales in comparison to the security of our nation–which is why I called for a vote on my defense infrastructure amdt. It's unfortunate that Dems blocked both amdts.

Trying to say this is the fault of the Democrats, or anybody else for that matter, is a pathetic and embarrassing lie. This was his fault, and his alone.

[Fortify]

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.

You've ultimately got to start expecting more taxes on cryptocurrency transactions in future. I find it funny that ramping up reporting of cryptocurrency transactions, which every single bank in America has to do thoroughly for their own services, is "interpreted" as a bad thing. The people who benefit most from moving large amounts of money via cryptocurrency are now the richest people in society, who love to use these "grey" areas within financial regulations to hide money. Ultimately it is the poor and middle class who end up paying more than their fair share. I don't agree with it being tied to an infrastructure bill however, that is due to the perverse way laws in America are being made these days and the sheer laziness of politicians forcing masses of unrelated new regulations together in packages in order to bargain for unpopular things - you end up with the most mediocre and generally poor outcomes. The politicians are part of the problem and rarely work for their constituents these days.

[BrianH]

This succinctly sums up what happened:
https://twitter.com/CryptoCobain/status/1424839023055495174
I don't think there is any hope House will change this, since all 50 Dems voted for this, plus 19 Republicans.

All a political charade.  This is all part of their plan to benefit those in power. The political elites will never give up their power by letting the masses gain control through what crypto has the potential to offer - usurping the banks, private transactions, universal currency, escape from rampant fiat inflation, etc.

You've ultimately got to start expecting more taxes on cryptocurrency transactions in future. I find it funny that ramping up reporting of cryptocurrency transactions, which every single bank in America has to do thoroughly for their own services, is "interpreted" as a bad thing. The people who benefit most from moving large amounts of money via cryptocurrency are now the richest people in society, who love to use these "grey" areas within financial regulations to hide money. Ultimately it is the poor and middle class who end up paying more than their fair share.

I certainly expect government to tax everything they can that isn't nailed down - that doesn't mean they should. Why should people pay taxes on income they were already taxed on? Double-taxation. They added 87k new IRS agents that will go towards policing the poor and the middle class, while the elites use Monero and offshore accounts to ensure they never pay a dime in taxes and get even richer. This will also kill off mining and developer jobs in the US, weakening us against countries that allow it. Most people invested in crypto were willing to sacrifice taxation at the exchanges. This bill kills the entire industry in the US.

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.

I have warned in some of my comments before that the US has too much of a role in the world of cryptocurrencies with all that infrastructure and with its influence on the rest of the world. If such a law were passed, then it is only a matter of time before US allies would also be forced to act in the same direction, which means that the EU, Japan, Israel, the UK, India, and many other countries would do something similar.

Interesting point. Well said.

[o_e_l_e_o]

This succinctly sums up what happened:
https://twitter.com/CryptoCobain/status/1424839023055495174

I really hope this isn't the case. I'd like to think our democracy hasn't devolved this far just yet. There are also better ways to get these provisions through Congress than this, if this was their ultimate end goal. The language of the initial bill is utterly terrible, and pretty much reads like it was written by someone who knows nothing about crypto and thinks it is just the same as buying and selling stocks through a broker. They could have written something much more subtle but achieving the same end goal if that was their underlying desire.

I don't think there is any hope House will change this, since all 50 Dems voted for this, plus 19 Republicans.

I'm not giving up hope yet. At least on paper, we had 99 out of 100 Senators agreeing to the crypto amendment (although I've explained above how I suspect that wasn't really the case, and others did not object simply because they knew Shelby would). Any Democrat not voting for the bill would have been hung out to dry, regardless of their feelings on the crypto language.

In any case, we'll have to wait and see what happens in the House.

[Srikanth Varma]

The US senate debate on crypto rages on. Can you understand this sentence? 'The Biden administration is pushing back against a last-minute effort by a bipartisan group of senators to limit a proposal in the infrastructure bill to increase federal regulation of cryptocurrencies'.

Lobbying against lobbying against lobbying? Maybe we need a blockchain to record and verify opinions of lawmakers on crypto. Today let's try and make sense at least of how many sides to this debate there are, even if we can't understand who is on which side!

Side 1 is easy: The Biden administration wants to tax crypto to fund an infrastructure bill.

Side 2 is easy: crypto investors think this will cripple growth.

Side 3: Some senators want an amendment that limits the authority of the executive over crypto.

Side 4: 2 senators propose a compromise, that exempts some crypto actors from regulation, seen as too few exemptions by Side 3 and too many by Side 1.

Side 5 now just wants to break this impasse and get the infrastructure bill passed.

Side 6 takes specific issue with the definition of a crypto miner, that they think will drive miners out of the US.

Side 7 takes issue with crypto mining and the energy footprint it causes.

Side 8 is the news media that writes confusing narratives, and Side 9 is people like us trying desperately to count how many sides there are!

[Lucius]

All a political charade.  This is all part of their plan to benefit those in power. The political elites will never give up their power by letting the masses gain control through what crypto has the potential to offer - usurping the banks, private transactions, universal currency, escape from rampant fiat inflation, etc.

If you remember what happened when FB Libra was on the agenda in US politics, you could see what attitude US politics took and cut it at the root - while Congressman Sherman called Bitcoin just a little baby - which was obviously starting to be a growing threat. At that time, the former Treasury Secretary Mnuchin gave a speech in which he only reiterated that the US would defend its currency in all possible ways.

This is just a continuation of a policy that was obviously quietly being prepared during the Trump presidency - only it was not clear to the public, as was the case in China when in 2019 they clearly said that they would ban crypto mining which was preceded by the banning of everything else related to cryptocurrencies.

I agree that politics will never allow the people to be too independent of a system that favors the rich and successful - and they need people who work 8 hours a day, have mortgages, and are afraid of the system. I dare say that little has changed since the time of slavery, the common man is more or less just a modern slave who gets just enough to survive - the goal of politics is to keep it that way.

[buwaytress]

I have warned in some of my comments before that the US has too much of a role in the world of cryptocurrencies with all that infrastructure and with its influence on the rest of the world. If such a law were passed, then it is only a matter of time before US allies would also be forced to act in the same direction, which means that the EU, Japan, Israel, the UK, India, and many other countries would do something similar.

Somehow missed this point yesterday, and it's more valid by the day.

Ask anyone anywhere in the world working in finance/banking. When it comes to compliance, they can find wiggle room for EU laws, even for OECD but if it just breathes on OFAC and the US, everything else is put on the back burner.

"US nexus" is the kill-all in compliance. And if this bill passes, which it looks like it will, it's going to force the EU and others to change the way they view crypto dealings with individuals/p2p.

[Poker Player]

I have warned in some of my comments before that the US has too much of a role in the world of cryptocurrencies with all that infrastructure and with its influence on the rest of the world. If such a law were passed, then it is only a matter of time before US allies would also be forced to act in the same direction, which means that the EU, Japan, Israel, the UK, India, and many other countries would do something similar.

Somehow missed this point yesterday, and it's more valid by the day.

Ask anyone anywhere in the world working in finance/banking. When it comes to compliance, they can find wiggle room for EU laws, even for OECD but if it just breathes on OFAC and the US, everything else is put on the back burner.

"US nexus" is the kill-all in compliance. And if this bill passes, which it looks like it will, it's going to force the EU and others to change the way they view crypto dealings with individuals/p2p.

It's not going to "force" anything, the EU is already taking steps in that direction as I was saying in a previous comment:

EU wants to ban crypto anonymous transactions and wallets

The rest of the countries, maybe they have not started with legislative initiatives like that but that is what they want. They don't need much persuasion to take steps in that direction.

Another problem I see is that large institutional buyers, that could influence politicians, won't care that you can't do anonymous P2P transactions. The only thing they will care about is if it affects the price, but I think that influence will be short term only. Saylor, Musk etc, buy fully KYC. That we individuals can have a privacy space on the blockchain I think they don't really care.

[o_e_l_e_o]

Side 1 is easy: The Biden administration wants to tax crypto to fund an infrastructure bill.

Incorrect. The estimated crypto tax revenues would account for about 2% of the spending in this bill.

Side 2 is easy: crypto investors think this will cripple growth.

It's not the tax which will cripple growth, it's the definition of miners, nodes, and developers as "brokers".

Side 3: Some senators want an amendment that limits the authority of the executive over crypto.

No, they want to clarify the language so that only actual brokers are classified as brokers.

Side 4: 2 senators propose a compromise, that exempts some crypto actors from regulation, seen as too few exemptions by Side 3 and too many by Side 1.

The proposed amendment didn't exempt them from regulation, but simply define broker properly.

Your video and transcript is badly inaccurate.

And if this bill passes, which it looks like it will, it's going to force the EU and others to change the way they view crypto dealings with individuals/p2p.

There might be a small sliver of hope for other countries. If this bill does pass unchanged, and forces miners, nodes, developers, indeed the entire cryptocurrency industry out of the US, then other developed nations will see a big boost to their own industries, along with the growth, profit and taxable revenue that this brings. They might decide it is in their best interests to legislate more cautiously/cleverly, and attract as much of this their country as possible. Imagine the advantage, for example, if one country had attracted the majority of early internet developers. They may view bitcoin and cryptocurrency in the same way.

[franky1]

no where in the bill does it mention that nodes, devs or miners will be brokers

and there is too much crying in this topic from people that cant understand anything beyond ELI-5 to understand what the wording actually does say

its almost as stupid as hinting that uber drivers are brokers because they take custody and move around assets(people and packages)
(now await the FUD to start of parcel companies needing to inspect all packages incase they contain private keys. because in these fantasists minds parcel companies and delivery guys should be brokers too(facepalm))

people really need to read proper terminology and stop crying because they dont understand the wording
no bill has ever been wrote in ELI-5. so it needs people to stop crying thats its not wrote eli-5. and put some effort into understanding legalese and actually learn what financial terminology is


its not about random people just seeing accounts/transactions(nodes)
its not about random people just collating accounts/transactions(miners)
its definetly not about random people making software for it(developers)

yes its not about mining pools because mining pools dont actually get deposits or do withdrawals.

its about regularly offering a service to take responsibility of someones funds(custodian)and for a fee administer it to someone else.. its the definition of a MSB
Money Service Business

think more.. western union. and less about your grandma putting money in your birthday card..

..
also lets say in some 5yo's nightmare where their nightmare came true. its not like users are suppose to by law just email the SEC with any transaction they spot over $10k

its actually a case still where businesses offering regular services of deposits and withdrawals on behalf of other people for a fee. where those businesses have to register as a MSB. take some financial qualification, and have a employee that is a compliance guy, create their own policy handbook of how their business will operate to remain compliant.
have that policy handbook approved as meeting the standards of regulation. get licenced
and such.... and then as part of it. report any large movements they handle

once people actually read what it takes to be a broker. they will realise that their nightmares about nodes. miners. devs are just dreams.. .. fantasies in their head. and not what is actually being proposed. because their role/job/hobby/life has nothing to do with that kind of 'handling' of funds

alot of people in this topic spreading fear dont even know what a MSB is and always evade the discussion about MSB's, and try to poke into the fear that every human has to report on each other..

if only they learn about what the requirements are to be an MSB..  they might learn what brokers really are and why their fears are so irrational. and missing the real discussion that should be happening about the bill.

develops node users and miners were never in the red zone of risk..
if people realise that sooner they could ask their senators for actual amendments that would impact those who are at risk even less.
EG. ensuring it only applies to US registered MSB serving only US residents. and not stretching to other country MSB serving US residents. or US MSB serving other countries residents
as not ensuring that can expand US jurisdiction too far outside its borders

..
its like people are crying if this is said
"any person running in the olympics has to have a mandatory drug test every 6 years"
the crying is about the "any person" where now its spreading fud that any runner has to have drug tests..
WRONG
they miss out the crucial parts .. they miss out understanding what it takes to actually qualify for the olympics.
they miss out that it involves only those on the olymplic running track

all because fud "any person" makes it sound bad for everyone (facepalm)

can people try to learn the legalese and actually learn things like MSB and brokers. and stop crying about two words taken out of context "any person"

.. then spend your time learning where this bill can actually impact people

[o_e_l_e_o]

no where in the bill does it mention that nodes, devs or miners will be brokers

I really don't want to hash this out with you for a second time. I would suggest you go and watch any of the recordings of the Senate proceedings from the last couple of days (they are all freely available on YouTube), where you can see them discussing exactly this issue. When the people whose jobs it is to interpret the bill think that the wording includes miners, nodes, and devs, then that's what is going to happen. When the people who actually wrote the cryptocurrency provision in the bill (Senators Portman and Sinema) then file an amendment to correct it because they agree the wording is too broad, then it doesn't matter what you or anybody else thinks - the government thinks that miners can now be classed as brokers, and so they will do that as and when it suits their purposes.

so it needs people to stop crying thats its not wrote eli-5. and put some effort into understanding legalese and actually learn what financial terminology is

If you think you understand the bill better than the entirety of the US Congress, then great for you. But as far as they are concerned, this wording allows miners, nodes, and devs to be classified as brokers. It doesn't matter how stupid you think that is - that is the conclusion they have reached, and so that is the conclusion that the government and IRS will work on unless we get the bill amended.

[Poker Player]

If you think you understand the bill better than the entirety of the US Congress, then great for you.

It is clear that franky1 is a peculiar guy. I put him on ignore for a while. Not only does he seem to understand it better than all the members of Congress, but also all the forum members who have commented on the thread and the other crypto news sites, Youtube videos etc. that I've seen have commented on the bill. None have the vision that franky1 has, but he has it so clear that he calls us trolls:

oh grow up you trolling drama queen

We are all mistaken and do not understand such obvious things. Lol.

[DooMAD]

no where in the bill does it mention that nodes, devs or miners will be brokers

and there is too much crying in this topic from people that cant understand anything beyond ELI-5 to understand what the wording actually does say

You need an "Explain like I'm in my thirties, but have all the social awareness of a 5-year-old".  

Your interpretation of what the bill mentions or not is irrelevant to the matter at hand.  You have no influence.  Any thoughts you may have on the subject have zero impact.  What matters is how the largely uninformed and often corrupt politicians interpret what the bill mentions or doesn't mention.  

So if you could take a break from trying to be the centre of attention and boasting "lOoK hOw SmRt I aMs", whilst simultaneously grossly missing the point, that would be great.  

[worle1bm]

If you think you understand the bill better than the entirety of the US Congress, then great for you. But as far as they are concerned, this wording allows miners, nodes, and devs to be classified as brokers. It doesn't matter how stupid you think that is - that is the conclusion they have reached, and so that is the conclusion that the government and IRS will work on unless we get the bill amended.

The bill is clearly being revoked by the crypto enthusiast in the USA because more than 46 million Americans now owns bitcoin and percentage is being grown at rapid pace but these demotivational and anti crypto bills in the name of trillion dollars infrastructure bills are clearly not good for most of us but if someone believes it then having prejudice mind of knowing everything then we can't say anything to them or make clarifications to them.These government puppets who only wants to make decisions for their bank rolls will also come to one point where inflation will end up all their bad moves because crypto is not going to be ignored now.

[buwaytress]

It's not going to "force" anything, the EU is already taking steps in that direction as I was saying in a previous comment:

That's them bending the knee to the US.

There might be a small sliver of hope for other countries. If this bill does pass unchanged, and forces miners, nodes, developers, indeed the entire cryptocurrency industry out of the US, then other developed nations will see a big boost to their own industries, along with the growth, profit and taxable revenue that this brings. They might decide it is in their best interests to legislate more cautiously/cleverly, and attract as much of this their country as possible. Imagine the advantage, for example, if one country had attracted the majority of early internet developers. They may view bitcoin and cryptocurrency in the same way.

And on a perhaps unrelated note, amazing that this few lines about crypto in a bill totally unrelated to crypto, was what held up everyone. On a big picture view, this event will be seen as a watershed moment and will do more for recognition that first thought.

Anyway, next chance up for amendment, on to the House. Will probably happen later this year on the back of another ATH ride.