McHenry Leads Bipartisan Legislative Fix to New Digital Asset Reporting Requirements
Widely Supported Bill Clarifies Crypto Provision in Infrastructure Investment and Jobs Act
November 18, 2021 -
The top Republican on the House Financial Services Committee, Patrick McHenry (NC-10), has introduced the Keep Innovation in America Act, alongside Congressman Tim Ryan (OH-13) and a bipartisan group of lawmakers. The legislation will fix the digital asset reporting provisions in the Infrastructure Investment and Jobs Act, now law (PL 117-58), and provide clarity to technology innovators and entrepreneurs.
Read more on the Keep Innovation in America Act here.
“American innovation has reached an inflection point,” said Republican Leader McHenry. “On the one hand, we have the Infrastructure Investment and Jobs Act that President Biden signed into law on Monday. It includes digital asset reporting requirements that threaten to push innovators and entrepreneurs overseas. This would leave the U.S. as a passive observer of a rapidly evolving industry. On the other hand, we can fix these poorly constructed standards and ensure they are compatible with how this new technology actually works. The Keep Innovation in America Act will address these issues and provide additional clarity on the scope of these requirements. This would signal to innovators and entrepreneurs that we are committed to growing the next generation of the internet here at home. I’m proud to work with a bipartisan group of my colleagues on this critical legislation, which has broad support from industry and market participants.”
“Blockchains, cryptocurrencies, and decentralized finance may still be relatively new and evolving, but Congress must recognize that these technologies are some of the most important innovations to come along in a generation,” said Rep. Ryan. “We have to figure out how to balance consumer protections and reasonable oversight while simultaneously providing these technologies and companies with the necessary space they need to grow, innovate and democratize the financial sector. I’m committed to finding that balance, and I believe the McHenry-Ryan legislation is the best path to get us there. This legislation, in tandem with the Chinese Government’s recent ban of cryptocurrency transactions, gives us an opening to further enhance our nation’s role in the development of innovative blockchain technologies. Providing clear rules for both consumers and developers of digital assets is essential to taking advantage of this opportunity.”
“Digital assets are here to stay, and this bill ensures that cryptocurrency reporting requirements are meaningful and effective,” said House Ways and Means Committee Republican Leader Kevin Brady (TX-08). “This common-sense update addresses the problems caused by the new requirements just signed into law by President Biden, which are untested, blunt instruments, and risk handing unnecessary information to the IRS. I’m proud to support this bipartisan bill.”
“Web 3.0 will lead to unprecedented job growth and empower Americans to have economic ownership over the internet,” said Rep. Ro Khanna (CA-17). “While we must ensure people pay their fair share of taxes from crypto earnings, Congress should not crush this emerging technology nor pick winners and losers. This bill will fix some of the issues with the provisions in the BIF and be a good starting point for thoughtful Web 3.0 legislation moving forward.”
“I’m proud to join my colleagues on both sides of the aisle to introduce the Keep Innovation in America Act,” said Rep. Tom Emmer (MN-06). “We must fix the tax provisions in the recently passed infrastructure bill that, if left intact, will certainly send innovation and opportunities overseas. This bill is comprehensive, addressing the definition of broker, the 6050i reporting requirement, and broker to non-broker transactions. I look forward to continuing to work with my colleagues in the House to swiftly fix this harmful and ill-conceived provision.”
“As the cryptocurrency industry continues to grow, I’m proud to support this bill which will ensure that the industry has appropriate regulation while still being competitive as a form of currency and being able to maintain consumer protection,” said Rep. Eric Swalwell (CA-15).
“I’m encouraged to see bipartisan support to provide legislative clarity for new tax reporting provisions in the recently passed infrastructure bill to make them workable,” said Rep. Warren Davidson (OH-08). “Understanding how blockchain and Web 3.0 fintech functions is essential, otherwise flawed tax law will change the market—perhaps killing it in the United States.”
“Blockchain technology is quickly becoming part of our daily lives and driving innovation for the 21st century economy,” said Rep. Darren Soto (FL-09). “As it continues to rapidly grow, it is important for the United States to be a responsible global leader and ensure that consumer protection is at the forefront of our efforts.”
“It is critical that the United States is the leader in the blockchain technologies that will define our economy in the coming decades,” said Rep. Anthony Gonzalez (OH-16). “The Infrastructure Investment and Jobs Act that was recently signed into law has requirements that threaten to push innovators and entrepreneurs overseas. I am pleased to join Mr. McHenry and my colleagues from both sides of the aisle in introducing this legislation that will help protect job creators in the United States.”
“The United States needs to be leading the world in the digital asset development instead of overregulating it and pushing it overseas,” said Rep. Ted Budd (NC-13). “I’m proud to join with colleagues from both sides of the aisle to remove burdensome regulations and taxes on everyday crypto investors. Our country prospers when Americans have the freedom to innovate and experiment. That’s why the federal government must do everything it can to ensure that the future of financial innovation is made in America.”
A broad coalition of industry and market participants support the bipartisan Keep Innovation in America Act:
“Cryptocurrency users are not just willing to pay their fair share of taxes, but for years we’ve been asking the Treasury Department for guidance on third-party reporting from cryptocurrency exchanges,” said Jerry Brito, Executive Director of the Coin Center. “Unfortunately, the reporting rules rushed through in the infrastructure bill massively overreach. We thank Rep. McHenry for leading this bipartisan effort to fix the law by requiring reporting from middlemen, not from miners, developers, or individuals.”
“We applaud Congressman McHenry’s bipartisan efforts to clarify the overly-broad and unclear language targeting crypto in the infrastructure bill,” said Kristin Smith, CEO of the Blockchain Association. “This bill, along with continued efforts by other Members of Congress to clarify the crypto provision language, are indicative of the need for a solution. We thank Congressman McHenry, along with his concerned colleagues, for their dedication to ensure the US remains the world-leader in crypto innovation.”
“We thank Reps. McHenry and Ryan for prioritizing innovation and clarifying digital assets language in the bipartisan infrastructure bill,” said the Crypto Council for Innovation (CCI). “The Keep Innovation in America Act is a welcomed first step towards potentially correcting faulty definitions in the infrastructure bill. We look forward to working with Reps. McHenry and Ryan to advocate for clear and fair crypto regulations that position America as a global, innovative leader.
CCI continued: “Crypto is the defining technology of the coming decades, and the U.S. has an opportunity to embrace it with smart policy. We stand united with the crypto community in helping lawmakers on both sides of the aisle see this and are confident we can work together with Congress to create common-sense rules that reflect the unique attributes of crypto and support the growth of the American economy.”
“We are supportive of this bipartisan effort,” said the Electronic Frontier Foundation. “EFF along with many in the technical and civil liberties community have strong concerns with the cryptocurrency provisions that have been recently enacted under the bipartisan infrastructure law. The brief window we have before the law is implemented and Americans may lose their financial privacy gives Congress the opportunity to refine the provisions to strike the right balance.”
“With the digital assets industry still in its early stages, it is crucial that federal policy help foster – not stifle – its potential,” said Thomas Aiello, Director of Federal Affairs for the National Taxpayers Union. “Unfortunately, overly burdensome and broad rules recently signed into law could have perverse consequences for both investors and other stakeholders in the cryptocurrency sector. Thankfully, the bipartisan Keep Innovation in America Act would provide innovators more regulatory clarity needed to usher in transformative benefits to our economy. NTU is proud to support this legislation and we call for its swift consideration.”
“The Keep Innovation in America Act acknowledges that the digital asset broker provision contained in the infrastructure bill was flawed and urgently requires amendment by Congress,” said Michelle Bond, CEO of the Association for Digital Asset Markets. “We need a balanced, thoughtful regulatory framework for digital assets and the future of finance. Our tax code should be as focused and detailed as possible and enable American innovators to easily comply with the law.”
“I am proud to support Ranking Member McHenry’s bill that will significantly improve the digital asset reporting requirements recently enacted in President Biden’s infrastructure package,” said Grover Norquist, President of Americans for Tax Reform. “The Infrastructure Investment and Jobs Act imposed burdensome reporting requirements on virtually every participant within the cryptocurrency ecosystem, including miners and software developers, and impinged on consumers’ privacy. McHenry’s bill, the Keep Innovation in America Act, strengthens privacy protections, and limits which individuals would be required to submit tax return information to the IRS. This bipartisan legislation will significantly improve the status quo and should be swiftly passed into law to preserve the United States’ position as a global leader in the innovation of digital assets and blockchain technology.”
“The Chamber of Digital Commerce commends Ranking Member McHenry for listening to the concerns of the crypto community,” said Perianne Boring, founder and CEO of the Chamber of Digital Commerce. “This legislation will protect innovation in the United States and strengthen our status as a leader in blockchain technology. The legislation takes a needed to step to protect consumer privacy by undoing a potentially intrusive part of the infrastructure bill that threatens treat crypto users like criminals and force crypto to share private information to engage in routine transactions.”
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