- The White House said it supported tighter crypto regulations in a surprise statement on Thursday.
- Two camps of senators have been in a wrangle about defining who exactly must comply with the new crypto tax rules.
- The new rules, which are part of the $1 trillion infrastructure bill, have been criticized by the crypto community.
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The White House stepped into a wrangle between senators over cryptocurrency regulation in the infrastructure bill late Thursday, coming out in support of those taking a tougher stance on which companies must comply with the tax rules.
Two camps of senators have put forward competing amendments to the $1 trillion infrastructure bill, targeting its provisions for new rules on tax reporting and cryptocurrencies. The crypto-tax measures are intended to help finance the new round of spending.
In a suprise intervention, the Biden administration applauded the legislative amendment submitted Thursday by Sens. Mark Warner of Virginia, Rob Portman of Ohio and Kyrsten Sinema of Arizona.
“The Administration is pleased with the progress that has yielded a compromise sponsored by Senators Warner, Portman, and Sinema to advance the bipartisan infrastructure package and clarify the measure to reduce tax evasion in the cryptocurrency market,” the White House said in a statement attributed to Andrew Bates, its deputy press secretary.
“The Administration believes this provision will strengthen tax compliance in this emerging area of finance and ensure that high income taxpayers are contributing what they owe under the law,” it said.
Crypto miners and software developers would be excluded from the bill’s tax-reporting rules under the other amendment proposed by Sens. Ron Wyden of Oregon, Patrick J. Toomey of Pennsylvania, and Cynthia Lummis of Wyoming.
By contrast, the competing proposal excludes a very specific and much smaller group of crypto investors, extracts published on Twitter show.
Last week, the White House said in a factsheet about the infrastructure bill that it planned to raise funds for it through tighter crypto regulations. At the time, Bloomberg reported that lawmakers expected to raise as much as $28 billion through the sharper rules.
The amendment backed by the White House has prompted pushback from many in the crypto industry and community, with many arguing it will stifle developement.
“Make no mistake, this is a backdoor Bitcoin ban. Compliance is impossible. Their intent is to criminalize full nodes, lightning nodes, and most Bitcoin wallets,” crypto personality Balaji Srinivasan tweeted.
The Biden administration has previously made clear that it wants to regulate the crypto sector more strictly. The Treasury Department said recently it wants crypto transfers above $10,000 to be reported to the IRS and Treasury Secretary Yellen has called for tighter rules for stablecoins.