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- Section 80603 of the infrastructure law on page 2419, has two peculiar measures that manage to flip the bitcoin sector upside down
- One can notice where things become worse if you go back a few pages. The bill also proposes to amend section 6050(d) of the Internal Revenue Code to cover digital assets
- At the first look, that does not appear to be very scary. When we look at the IRC, the significance of the change becomes vividly clear, the provision in question mandates that each cash business transaction of $10,000 or more be reported to the government, together with the payer’s name, address and contact details
Section 80603 of the infrastructure law, on page 2419, has two peculiar measures that manage to flip the bitcoin sector upside down. The first changes the Internal Revenue Code to include any person who is responsible for routinely providing any service affecting transfers of digital assets on behalf of another person, in the definition of the broker.
Cryptoworld led by Bitcoin is witnessing a bull run at the moment and anything controversial could pull back the market. Therefore the decisions that one takes at the Infrastructure Bill will be critical.
In other words, not just exchanges like Coinbase and Robinhood, but also miners and developers must submit personal information to the authorities. While such an overreach is objectionable in and of itself, it is exacerbated by the fact that it necessitates a reporting requirement that is impossible to meet.
Miners may effectuate transfers, but this is not because they have been hired to do so. Rather, they merely contribute to the blockchain’s validation, and the blockchain is open to the world. The government, like everyone else, has access to the little data that miners have. At best, this provision demonstrates Congress’s basic ignorance of the BTC sector. In the worst-case scenario, it effectively prohibits mining and other normal activity in the sector. One can notice where things get worse if you go back a few pages. The bill also proposes to amend section 6050(d) of the Internal Revenue Code to cover digital assets.
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At first look, it does not appear to be very scary. When we look at the IRC, the significance of the change becomes vividly clear, the provision in question mandates each cash business transaction of $10,000 or more to be reported to the government, together with the payer’s name, address and contact details. Fines and possibly criminal charges may be imposed if this is not done within 15 days. The infrastructure law would demand the same reporting on digital assets without even notifying the public.
Unfortunately, Congress has defended its choice to discreetly put this clause into the bill by citing the bitcoin business as a source of tax income recognised by the Joint Committee on Taxation. Over the course of a decade, the additional reporting requirements, according to the Committee, may generate 28 billion dollars.
When Senators sought to delete the provision on crypto from the bill, the 28 billion dollars caused a problem. They would have had to rush to find a new source of 28 billion dollars if the part was deleted. However, it’s unclear whether such money really exists in the first place. The Committee, unlike blockchain miners, has yet to reveal their work. They provided a table outlining projected revenue for the next ten years, however the figures are under substantiated.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
