Senators reach bipartisan deal on cryptocurrency amendment
Republican Sens. Pat Toomey (Pa.) and Cynthia Lummis (Wyo.) said an amendment to the infrastructure bill that would redefine who falls subject to cryptocurrency regulation requirements will be brought for a unanimous consent vote on Monday afternoon after a group of bipartisan senators and the Treasury Department came to an agreement.
The amendment, which will be co-sponsored by Sens. Mark Warner (D-Va.), Rob Portman (R-Ohio) and Kyrsten Sinema (D-Ariz.), seeks to amend the definition of a “broker” in the underlying infrastructure bill in a way that would keep software developers and transaction validators from being subject to the new reporting requirements.
Notably, Senate Finance Committee Chairman Ron Wyden (D-Ore.), who was a leading force in the charge to amend the definition, is not sponsoring the amendment. Wyden signaled he would not oppose the amendment, tweeting that it is “certainly better than the underlying bill.”
“We’ve been working hard to get a deal. I don’t believe the cryptocurrency amendment language on offer is good enough to protect privacy and security, but it’s certainly better than the underlying bill. Majority Leader [Charles] Schumer [D-N.Y.] says he won’t block a unanimous consent request on it,” Wyden tweeted shortly before the deal was announced.
Toomey said senators will put forward the amendment this afternoon.
It would take just one senator to block a vote on the compromised amendment, leaving the underlying infrastructure bill with the language fiercely opposed by the cryptocurrency industry based on arguments that it would call for developers and so-called miners to report information to tax collectors that they don’t have access to.
Wyden had put forward an amendment last week with Toomey and Lummis with broader exemptions laid out to limit who would be subject to the reporting requirements.
The amendment pitted the Democratic finance chair against the Biden administration.
The administration chose to back a competing bill that Warner, Portman and Sinema proposed with more narrow cryptocurrency regulation exemptions.
“While we each would have drafted this solution differently, we all agree it’s important to ensure that these obligations are properly crafted to apply only to entities that are regularly effectuating transactions of digital assets in exchange for consideration. To best memorialize this common understanding, we propose to incorporate this important amendment into the infrastructure bill and urge our colleagues to join us in enacting this bipartisan clarification,” Toomey, Warner Lummis, Sinema and Portman said in a joint statement.
A spokesperson for the Treasury Department confirmed the department was consulted and does not oppose the amendment.
A sticking point Toomey and Lummis had with the competing Warner-Portman-Sinema proposal was that the amendment had included parameters based on different technologies used to validate cryptocurrency transactions.
The compromise bill does not include language that regulates based on the technology used to validate transactions.
Cryptocurrency industry leaders had fiercely pushed back on the Warner, Portman and Sinema amendment, but on Monday said the new compromise amendment was a better fix to issues they had with the broad “broker” definition in the underlying bill and urged senators to support it.
Jerry Brito, executive director for Coin Center, said that the amendment “sufficiently” defines brokers in a way that “it would be difficult to argue it covers protocol devs who only write and publish code.”
“That all said, there is a lot of work left to be done. While this is better than the base text, the provision still has other issues besides the ‘broker’ definition,” Brito tweeted.
Kristin Smith, executive director of the Block Chain Association, similarly offered measured support for the amendment.
“This isn’t perfect, but better than the underlying bill. More work to do, but the Senate should move to adopt this language today,” Smith tweeted.
The association had urged supporters last week to call senators to oppose the Warner, Portman and Sinema amendment.
Toomey and Lummis also told reporters that their support of the amendment does not mean that they will support the underlying infrastructure bill, which they said they oppose for reasons unrelated to the cryptocurrency regulation.