US Infrastructure Bill: Why is it bad for cryptocurrencies?

infrastructure bill is a bill proposed by the United States Senate that aims to spend more than $ 1.2 billion on infrastructure development. This $ 1 trillion bipartisan infrastructure bill comes from years of hard work to improve America’s infrastructure systems.

Includes lump sum expenditures on the development of roads, railways, energy, the environment, drinking water, airports, and much more. main problem with this trillion dollar bill is how to finance the projects.

In a 2,700-page document, the infrastructure bill contains new regulations that will establish and raise approximately $ 28 billion in cryptocurrency revenue as part of the bill’s funding. This bill has not been well received by the crypto community. How?

Tax and reporting requirements for cryptocurrency “BROKERS”

bill mentions that cryptocurrency brokers will be subject to tax reporting obligations. In addition, the projects will report any account with transactions equal to or greater than $ 10k.

A cryptocurrency broker is any person or organization that continuously provides cryptocurrencies, related services, or completes digital asset transfers on the invoice. However, the scope of the term “BROKER” is large, including miners, validators, developers, software and hardware creators, and many more.

Lawyers and crypto enthusiasts have been looking for ways to narrow the scope of a mission to save crypto. Thanks to the efforts of crypto enthusiasts, two groups of senators introduced two amendments to narrow the scope of the term corridor. Let’s take a look at the two proposed amendments and what their impact would be on US crypto projects.

Amendment one

A group of senators, including Cynthia Lummis, Pat Toomey, and Ron Wayden, introduced this amendment on August 4, 2021, which was aimed at reducing the scope of the word corridor. This first amendment excludes many types of crypto and non-crypto service providers in the new definition of broker.

refore, miners, network developers, software and hardware designers, validators, and non-financial entities are not brokers. What impact would this amendment have on cryptocurrencies?

In general, this amendment recognizes entities that have no clients in the world of cryptocurrencies as exempt from regulation. refore, these entities will not collect or report information as they do not have commercial customers.

This amendment will mean that cryptocurrency exchanges will report your information. Cryptocurrency exchanges have many clients who continue to trade through them every day. refore, trading platforms can report information.

Amendment two

second amendment was later introduced by another group of senators, including Portman and Warner. This amendment hardly reduces the scope of the word corridor, excluding only the proof of the miners’ work. Currently, several blockchains use proof-of-work systems, such as Bitcoin. refore, bitcoin miners and mining rigs will be exempt from the new bill.

Generally, this amendment means that POS participation platforms, validators, software creators, and project developers are all crypto brokers. Even if they don’t have clients, they will need to report. Most of the upcoming blockchains prefer to use proof of stake systems, as it is more environmentally friendly.

If the second amendment passes, network validators on platforms like Cardano, Ethereum 2, Lunares, and many others will have to declare for tax purposes. In addition, developers, software and hardware creators will also need to report.

cryptocurrency community prefers the first exchange option.

Cryptocurrency enthusiasts and legal teams have approved the first exchange option over the second option. How? first modification option greatly reduces the scope of the broker’s term. Instead, it focuses on trading platforms and cryptocurrency exchanges.

However, crypto enthusiasts do not approve of the original bill or with the second amendment option. So, crypto enthusiasts participated in a campaign, telling crypto users to call their senators and inform them to “Vote Yes on the First Amendment and No on the Second Amendment.”

Why are crypto enthusiasts infuriated by this mod option? Here are two main reasons;

Could it force cryptocurrency developers and enthusiasts to leave the United States?

This second option could be harmful and could be far more expensive than productive. Passing this second amendment could lose the government rather than win because developers, miners, validators, and many other crypto service providers could turn away from the United States.

Poloniex is one of the stock exchanges that at the end of 2019 chose to close its stores in the United States and restructure itself by providing services to other countries. refore, by passing the bill without the first amendment, more encryption service providers could go out of business.

crypto community is currently very enraged by this bill and in particular by the second amendment option. Jack Dorsey, CEO of, joined the investigation of cryptocurrency enthusiasts and claimed that forcing developers, software creators, etc., could send developers out of the United States.

It is a consumer privacy issue.

requirements for collecting and reporting user information are a concern that runs counter to consumer privacy. In general, this requirement could mean that all companies, even those slightly crypto, will need to collect user details, including name, transactions, address, and many other details.

Many investors use cryptocurrencies for privacy reasons, but this bill completely goes against the fundamentals of privacy in cryptocurrencies. Crypto-related software developers and designers may also be asked to gather information on the details of their relationships.

Final word

United States is one of the largest consumers of cryptographic services globally. However, for years, regulators have tried to control the crypto world by increasing regulatory reach. infrastructure section of the bill is one of the attempts to reduce the circulation of cryptocurrencies or to gain control over the cryptocurrency space.

Particularly irritating is the reporting bill, which would force many non-crypto entities to collect data and others that do not work with clients to leave the United States. This bill will cause more losses than benefits to the United States, including the revenue it expects to earn. However, while there may be a fight in court between crypto advocates and governments, regulatory environments are expected to be more crypto-friendly.

US Infrastructure Act Post: Why is it bad for cryptocurrencies? first appeared in Crypto Adventure.

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