Can anyone who is following this news more closely list which parts of the bill concern the cryptospace and list what these news policies are when it is signed into law?
You can view the text of the bill here:
https://www.congress.gov/bill/117th-congress/house-bill/3684/textHere is the section of the bill regarding cryptocurrencies:
SEC. 80603. INFORMATION REPORTING FOR BROKERS AND DIGITAL ASSETS.
(a) Clarification of Definition of Broker.--Section 6045(c)(1) of
the Internal Revenue Code of 1986 is amended--
(1) by striking ``and'' at the end of subparagraph (B),
(2) in subparagraph (C)--
(A) by striking ``any other person who (for a
consideration)'' and inserting ``any person who (for
consideration)'', and
(B) by striking the period at the end and inserting
``, and'', and
(3) by inserting after subparagraph (C) the following new
subparagraph:
``(D) any person who (for consideration) is
responsible for regularly providing any service
effectuating transfers of digital assets on behalf of
another person.''.
(b) Reporting of Digital Assets.--
(1) Brokers.--
(A) Treatment as specified security.--Section
6045(g)(3)(B) of the Internal Revenue Code of 1986 is
amended by striking ``and'' at the end of clause (iii),
by redesignating clause (iv) as clause (v), and by
inserting after clause (iii) the following new clause:
``(iv) any digital asset, and''.
(B) Definition of digital asset.--Section
6045(g)(3) of such Code is amended by adding at the end
the following new subparagraph:
``(D) Digital asset.--Except as otherwise provided
by the Secretary, the term `digital asset' means any
digital representation of value which is recorded on a
cryptographically secured distributed ledger or any
similar technology as specified by the Secretary.''.
(C) Applicable date.--Section 6045(g)(3)(C) of such
Code is amended--
(i) in clause (ii), by striking ``and'' at
the end,
(ii) by redesignating clause (iii) as
clause (iv), and
(iii) by inserting after clause (ii) the
following:
``(iii) January 1, 2023, in the case of any
specified security which is a digital asset,
and''.
(2) Furnishing of information.--
(A) In general.--Section 6045A of such Code is
amended--
(i) in subsection (a), by striking ``a
security which is'', and
(ii) by adding at the end the following:
``(d) Return Requirement for Certain Transfers of Digital Assets
Not Otherwise Subject to Reporting.--Any broker, with respect to any
transfer (which is not part of a sale or exchange executed by such
broker) during a calendar year of a covered security which is a digital
asset from an account maintained by such broker to an account which is
not maintained by, or an address not associated with, a person that
such broker knows or has reason to know is also a broker, shall make a
return for such calendar year, in such form as determined by the
Secretary, showing the information otherwise required to be furnished
with respect to transfers subject to subsection (a).''.
(B) Reporting penalties.--Section 6724(d)(1)(B) of
such Code is amended by striking ``or'' at the end of
clause (xxv), by striking ``and'' at the end of clause
(xxvi), and by inserting after clause (xxvi) the
following new clause:
``(xxvii) section 6045A(d) (relating to
returns for certain digital assets),''.
(3) Treatment as cash for purposes of section 6050i.--
Section 6050I(d) of such Code is amended by striking ``and'' at
the end of paragraph (1), by striking the period at the end of
paragraph (2) and inserting ``, and'', and by inserting after
paragraph (2) the following new paragraph:
``(3) any digital asset (as defined in section
6045(g)(3)(D)).''.
(c) Effective Date.--The amendments made by this section shall
apply to returns required to be filed, and statements required to be
furnished, after December 31, 2023.
(d) Rule of Construction.--Nothing in this section or the
amendments made by this section shall be construed to create any
inference, for any period prior to the effective date of such
amendments, with respect to--
(1) whether any person is a broker under section 6045(c)(1)
of the Internal Revenue Code of 1986, or
(2) whether any digital asset is property which is a
specified security under section 6045(g)(3)(B) of such Code.
The important parts are as follows:
any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.
Treatment as cash for purposes of section 6050i.
The amendments made by this section shall apply to returns required to be filed, and statements required to be furnished, after December 31, 2023.
The first line I've quoted there is too ambiguous. There have been ongoing debates in various committees and the chambers themselves about this wording, with some legislators reaching the conclusion that it includes
anyone who helps to make transactions, which would include people like node operators and miners, and make them responsible for collecting the tax information of the owners of the transactions they are processing, which would obviously be impossible. There have been multiple amendments to try to fix this, but none of them passed for various reasons.
The second line means that any time you transact over $10,000 of crypto with a single party (even over multiple trades), then it is a felony if you do not collect their personal information and social security number and report it on your tax form. This obviously has huge implications for things like peer to peer trading and DEXs, but also for things like DeFi, staking, yield farming, etc., which essentially become illegal since it would be impossible to comply with these requirements.
None of this takes effect until 2024. There are already some legislators making moves to introduce new laws to counteract all this nonsense. Let's hope they are successful.
The margins around here are 5-10% in this field, you won't go above unless you have some fairy or elf patrolling the fields at night. That's a small margin.
