A bipartisan group of U.S. lawmakers have introduced a bill to amend the crypto-related provisions in the bipartisan infrastructure bill signed into law earlier this week.
The “Keep Innovation in America Act,” introduced Thursday, would amend the definition of a crypto broker included in the Infrastructure Investment and Jobs Act, the bipartisan infrastructure bill passed by both the House of Representatives and Senate earlier this year before being signed into law by U.S. President Joe Biden. The bill also seeks to modify a provision of the new law that amends section 6050I in the tax code, as well as address transactions between brokers and non-brokers.
Representatives Patrick McHenry (R-N.C.), Tim Ryan (D-Ohio), Kevin Brady (R-Texas), Ro Khanna (D-Calif.), Tom Emmer (R-Minn.), Eric Swalwell (D-Calif.), Warren Davidson (R-Ohio), Anthony Gonzalez (R-Ohio) and Ted Budd (R-N.C.) introduced the bill.
McHenry, the ranking member on the House Financial Services Committee, said the bill would “provide additional clarity” on the scope of the infrastructure bill in a statement.
“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,” he said. “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 infrastructure law, first introduced by Senators Rob Portman (R-Ohio) and Kyrsten Sinema (D-Ariz.), among others, contains a provision that seeks to expand the definition of a broker for crypto tax reporting purposes. The provision drew the ire of the crypto industry amid concerns that the definition could include wallet manufacturers or software developers who would be unable to comply with the tax reporting requirements. The provision could raise nearly $30 billion in tax revenue over the next decade.
Another provision, which amends Section 6050I, would require recipients of transactions to maintain know-your-customer information from the senders.
The bill introduced Thursday would modify both of these provisions. Senators Cynthia Lummis (R-Wyo.) and Ron Wyden (D-Ore.), who both advocated for narrowing the scope of the broker definition while the Senate was evaluating the original infrastructure bill in August, introduced their own bill to exempt blockchain validators and non-custodial product vendors from the law on Monday.
On Wednesday, Lummis also tweeted a photo of what appears to be a Senate version of the “Keep Innovation in America Act.”
“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,” Ryan said in a statement.
Coin Center, the Blockchain Association, the Crypto Council for Innovation, the Electronic Frontier Foundation, the National Taxpayers Union, the Association for Digital Asset Markets, Americans for Tax Reform and the Chamber of Digital Commerce all released statements supporting Thursday’s bill.