A New Regulator Could Lead to a Crypto Split
The Community

A New Regulator Could Lead to a Crypto Split The Community

A New Regulator Could Lead to a Crypto Split
The Community
A section in the infrastructure bill gave cryptocurrency a huge marker of prestige: a lobby. Can it maintain a single front?

Big Crypto has arrived. After days of debate and angry tweeting, crypto enthusiasts, advocates and entrepreneurs saw in horror the US Senate approve a $1 trillion infrastructure bill. It included an article many believe could threaten the entire American cryptocurrency sector. The controversial rule would require that “brokers” of transactions in digital assets–i.e., cryptocurrencies–report their customers to the Internal Revenue Service so they can be taxed.

Crypto enthusiasts complained that the definition of broker in the bill was too broad. It could include miners, validateators and developers decentralized apps. All of these people, although they play a pivotal role in the operation of the blockchain ecosystem, are not able to identify their anonymous users.

Initially, the language of the bill seemed to be modified in order to exclude these categories. However, a group of senators introduced an amendment that clarified the term “broker”. Then a White House-backed amendment appeared, pushing for a less lenient clarification, exempting proof-of-work miners–which use an energy-intensive process to secure blockchains such as Bitcoin or Ethereum–but not many other categories, such as proof-of-stake validators, which carry out the same function without the energy burning. The Senate passed the bill as it was in the midst of negotiating a compromise. A change to the bill will need to be made at a later stage. This is likely due the bill’s patent inapplicability.

It seems like a defeat for American cryptocurrency. However, the story that is being told is very different. The bill’s infrastructure is an important moment in cryptocurrency history. The technology–at its core a crypto-anarchist, anti-bank, borderline anti-government manifesto disguised as code–has finally acquired that great marker of prestige: a lobby. It seems that crypto is not just a small group of venture capitalists and Twitter users. It has influence, regardless of the reasons. And, after the scandalous infrastructure bill, it will likely be able to use it more skillfully.

Alex Brammer is vice president, business development, Luxor Tech. “We are seeing the formalization and maturing of the crypto lobby. This was the first coordinated effort to bring that to bear,” Brammer said. Luxor Tech is a Bitcoin mining company. The Chamber of Digital Commerce, Texas Blockchain Council and Blockchain Association are sure to keep up their good work.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.