Contentious debate over a pair of competing cryptocurrency-regulation amendments has slowed down the U.S. Senate’s finalization of its $1 trillion bipartisan infrastructure-spending proposal. The amendments aim to revise a controversial “pay for” provision in the bill — drafted by Republican senator Rob Portman with the support of the Biden administration — which seeks to raise an estimated $28 billion over a decade to help pay for the infrastructure package by requiring crypto brokers to report their customers’ transactions to the IRS like stockbrokers already have to do.
More specifically, the debate is over what does and does not qualify as a “broker.” Critics of the crypto provision have argued that the definition of broker is too broad and could end up applying not just to exchanges but to cryptocurrency miners, node operators, hardware firms, software developers, and others who would not be able to comply with the requirements.
The language of the provision drew pushback from Senate Finance Committee chairman Ron Wyden and Republican Senate Banking Committee members Pat Toomey and Cynthia Lummis, all of whom proposed an amendment on Thursday that would limit the reporting requirements to trading platforms and other custodial entities dealing with crypto trading. But while that amendment has drawn support from some major players in the crypto scene, Portman and the Biden administration think it goes too far. According to the Washington Post, Treasury Secretary Janet Yellen was involved in a behind-the-scenes effort opposing the proposed changes on Thursday. Then, Portman and Senator Mark Warner sought a compromise by proposing a competing amendment, excluding some but not all of the crypto-industry players that the Wyden team’s amendment had — and the compromise received a White House endorsement late on Thursday.
It’s not clear what will happen next when the Senate reconvenes on Saturday to pick up the debate again or if something so seemingly small (paying for less than 3 percent of the proposed infrastructure spending) could pose a real risk to the bill. Regardless, as the Post and others have noted, if nothing else, the episode illustrates how much influence the crypto industry has amassed in D.C.