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September 08, 2021

What does the Infrastructure Bill mean for Crypto?

"The Infrastructure Bill that recently passed the Senate included language to tax crypto. The provision led to a delay on the final vote for the bill as the crypto community organized and pressured Senators to amend the provision to ensure it did not stifle crypto-innovation in the US. Unfortunately, the amendment failed a key vote and the bill passed with the original language in place.

The reason for push back and concern?

Current language would identify anyone who provides "any service effectuating transfers of digital assets on behalf of another person" as a “broker” in the eyes of the IRS for tax reporting purposes. The language of the bill, if interpreted literally, is overly burdensome for developers, miners, stakers and node operators (to name a few). In essence, a miner would be on the hook to provide reporting on trades/transfers that are recorded on a block that their hardware may have “mined” which is not technologically feasible. In layman's terms, John and Susan split the dinner bill and John venmos Susan $10 – under the tax provision John would need to report venmo transactions and issue a 1099."

-Harsharn Singh, Investment Associate @ Ember Fund

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