California Rep. Anna G. Eshoo (D) has joined a protest against the proposed tax reporting requirements for bitcoin and other cryptocurrencies in the bipartisan trillion-dollar infrastructure bill.
Representative Eshoo asked House Speaker Nancy Pelosi in a letter to amend the definition of broker in the legislation along the lines of the unadopted crypto-friendly bipartisan amendment drafted by Cynthia Lummis (R-Wyo.) and Pat Toomey (R-Pa.). Her efforts follow a similar document sent to all 435 House representatives by Blockchain Caucus co-chairs Tom Emmer, Darren Soto, David Schweikert, and Bill Foster protesting the proposed new reporting requirements.
Supporters of the Lummis-Toomey amendment, like Eshoo, argue that excessive regulation of the booming crypto industry will drive innovation out of the United States. The issue is especially pressing now, as a regulatory crackdown in China has begun to drive cryptocurrency miners to the United States. Eshoo’s career has revolved around health and technology. She has also worked to wean the United States off its reliance on Chinese drug manufacturing.
As it stands, the Senate version of the bill imposes onerous, and possibly unworkable, new reporting requirements on a wide range of industry participants, including cryptocurrency brokers, miners, validators, and wallet developers. These companies provide critical infrastructure to the crypto economy, but they frequently do not know who the buyers and sellers are in transactions, leaving them unable to comply with broker requirements, such as know-your-customer rules.
The House will return to consider the plan on August 23 but has stated that it will not vote unless the Senate passes a separate bill committing $3.5 trillion to health care, child and elder care, education, and climate change.
“I support the underlying provision’s goals of combating tax evasion in the cryptocurrency market, but the House should amend it, as the bipartisan compromise amendment would have done, to achieve this goal without stifling innovation in a nascent industry by imposing unworkable regulations,” wrote Eshoo. “I am prepared to collaborate with you to ensure that infrastructure legislation addresses tax evasion in order to fund its investments without jeopardizing a growing sector of our economy.