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• US Secretary of the Treasury Janet Yellen appears to be the reason for a sharp turnaround in the Senate debate on cryptocurrency taxes.
• Yellen reportedly lobbied key senators to withdraw an amendment to provide tax breaks.

A debate in the US Senate on taxes on the cryptocurrency industry suddenly changed course on Thursday, and now it appears that the reason is US Secretary of the Treasury Janet Yellen.

According to Washington Post, Yellen reached out to key lawmakers concerned about a proposed amendment that would exempt miners, validators and other parts of the industry from the new tax filing requirements.

Treasury Secretary Janet L. Yellen spoke with lawmakers Thursday to raise objections to the effort led by Senate Finance Committee Chairman Ron Wyden (D-Ore.) And two Republican senators to undermine cryptocurrency reviews. proposed by the legislation, according to two people who spoke. on the condition of anonymity to share the details of the private conversations, “reported the Post.

Yellen’s reported involvement is significant because he is one of the top US government officials and because his agency, the Treasury Department, attempted to impose heavy tax restrictions on the cryptocurrency industry in December. However, this effort fell short, due to industry pushback and due to staff turnover in the final days of the Trump administration.

Read also Department of Justice forms the “cryptocurrency crime enforcement team”

According to Jake Chervinsky, General Counsel for DeFi Composite Company and well-known cryptocurrency attorney, Yellen has chosen to continue the efforts of the previous administration. En, he said that a bill currently under discussion in the US Senate provides “strategic hedge to gain jurisdiction over non-custodial market players” and could allow the Treasury to achieve what it failed to achieve through regulations in December.

This is not what I feel. It is said that it comes from the Treasury. y don’t like what we are building and are using the law below as a strategic hedge to gain jurisdiction over non-custodial market players, which they wanted but failed to achieve through FinCEN’s proposed rule during the transition.

– Jake Chervinsky (@jchervinsky) August 6, 2021

bill in question proposes spending $ 1 trillion to upgrade US infrastructure, but contains a provision on taxing the cryptocurrency industry as part of a means of paying for it. Originally, the law would have defined almost every player in the industry, from wallet providers to miners — as a “broker” subject to their clients’ tax reporting obligations.

This means that miners would actually have to submit 1099 forms on behalf of the users whose transactions they validate and that those users should submit those forms as well. This would create what the EFF defines as a new “surveillance requirement” for cryptocurrency companies, as the names, addresses and transactions of these users must be collected and reported to the IRS.

After critics pointed out that this would be costly or even impossible for many cryptocurrency companies, some senators proposed exempting miners and others from the ‘middle man’ requirement.

That proposal was set to move forward until other senators produced a counterproposal that would have limited the exemption only to proof-of-work projects, such as Bitcoin – a deal that appears to have been pushed by Yellen. Critics argue that the counterproposal still begins proof-of-stake networks, such as Solana and the next Ethereum 2.0 blockchain, in its sights. matter is still under consideration in the US Senate and a final vote is expected on Saturday.

Before becoming Secretary of the Treasury, Yellen served as Chairman of the Federal Reserve. During her tenure there, she became the subject of one of the most famous moments in cryptocurrency history when an activist posed behind her during a hearing and helped raise a sign that read “Buy Bitcoin.”

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