Infrastructure Bill, the amendment protecting crypto fails

The battle over the Infrastructure Bill and the amendments designed to save (or kill) the cryptocurrency sector continues in the US Senate. According to the latest updates, the Lummis-Toomey-Portman amendment has been shelved. 

The text of the amendment envisaged not giving tax obligations to entities such as miners, stakers, validators and so on, who do not have the potential and characteristics to report to the IRS, the tax collection agency. Specifically, these entities are required to provide data about the users making the transactions, data that miners, as well as devs, simply do not know. In practice, the law is designed for a traditional tax system, putting crypto players on an equal footing with banks. 

At the moment, however, the amendment calling for this provision to be changed has not been adopted. 

Our effort to get a vote on a digital asset fix failed because other senators refused to set aside their disagreements to support something they could actually agree on. Thanks @SenToomey for explaining this at the end of our effort on the floor.https://t.co/Lok8EWK1Eb

— Senator Cynthia Lummis (@SenLummis) August 9, 2021

But it doesn’t end there. Senator Cynthia Lummis has made it clear that the battle continues: 

We will continue to look for ways to fix the digital asset language in this bill. It might not be today, but we won’t give up.

— Senator Cynthia Lummis (@SenLummis) August 10, 2021

The amendment was defeated by Senator Richard Shelby, who blew the chance of getting the unanimous consent needed to pass the proposal.

Infrastructure Bill, the battle of the crypto sector moves to the House

What happens next? It is likely that the Senate will vote on the Infrastructure Bill today, then the battle will move to the House of Representatives. It will be sometime in September.

And even when the bill is finally passed, the debate will focus on the IRS, which will have to write the rules to enforce the law. 

However, Bloomberg notes, the crypto industry has found unexpected allies in the Senate, and were it not for arcane rules and time constraints, the Lummis-Toomey-Portman amendment might well have passed. 

That is why in the House, in September, there is a possibility that the law could be modified and made less stringent for the crypto sector. 

The House has already received a letter signed by Senators Tom Emmer, Darren Soto, David Schweikert and Bill Foster. 

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. pic.twitter.com/MzsEmBbosr

— Tom Emmer (@GOPMajorityWhip) August 9, 2021

The text reads:

“Cryptocurrency tax reporting is important but it must be done correctly. When the Infrastructure Investment and Jobs Act comes to the House, we must prioritize amending this language to clearly exempt non custodial blockchain intermediaries and ensure that civil liberties are protected”.

The battle continues, and the market doesn’t seem to care. Today Bitcoin is up 5%, ETH is doing even better. The industry seems unconcerned despite the uncertainties surrounding its future in the US.