Senator Who Wrote Controversial Crypto Tax Rule Proposes Modest Revision

The amendment excludes only proof-of-work mining, or the selling of hardware or software that gives individuals control of private keys to access digital assets.

Aug 6, 2021 at 12:47 a.m. UTC
Updated Sep 14, 2021 at 1:36 p.m. UTC

Senators Mark Warner (D-Va.) and Rob Portman (R-Ohio) submitted a competing amendment on Thursday to an earlier amendment to the Senate infrastructure bill's cryptocurrency provision.

  • The amendment, a copy of which was obtained by CoinDesk, is limited in scope, excluding only proof-of-work mining, or the selling of hardware or software that permits individuals to control private keys that provide access to digital assets.
  • In a tweet Thursday evening, Jerry Brito, the executive director of the Washington, D.C.-based think tank Coin Center, called the amendment "disastrous." He added: "And it does nothing for software devs. Ridiculous!"
  • The crypto-specific provision would raise $28 billion toward $1 trillion in infrastructure improvements but has been contentious, briefly holding up the entire infrastructure bill.
  • Senators Ron Wyden (D-Ore.), Cynthia Lummis (R-Wyo.) and Pat Toomey (R-Pa.) proposed their amendment earlier Thursday to ensure miners, node operators, developers and other non-custodial crypto industry participants are exempt from the crypto tax reporting provision.
  • The Biden administration formally supported what it called the "compromise" in a statement shared on Twitter late Thursday and attributed to White House Deputy Press Secretary Andrew Bates.
  • Wyden tweeted that the competing amendment "provides a government-sanctioned safe harbor for the most climate-damaging form of crypto tech, called proof-of-work. It would be a mistake for the climate and for innovation to advance this amendment."
  • Similarly, Lummis tweeted, "Our amendment protects miners as well as hardware and software developers. The other does not. The choice is clear."

UPDATE (Aug. 6, 2021, 02:48 UTC): Adds White House formally supporting the Warner-Portman-Sinema amendment and Wyden's response.

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.