Bitcoin and cryptocurrencies have exploded in the last few days, even after the U.S. Senate rejected a bipartisan compromise on a crypto tax regime on its $ 1 trillion infrastructure bill.
Bitcoin’s price rose nearly 20% over the past week, climbing to more than $ 45,000, its highest level since mid-May, while smaller cryptocurrencies, including Ethereum, Dogecoin, and Uniswap, rose even higher.
Before yesterday’s Senate showdown, billionaire businessman and investor Mark Cuban warned that shutting down the “growth engine” of bitcoins and cryptocurrencies would be like “stopping e-commerce in 1995”.
“Turning off this growth engine would be tantamount to stopping e-commerce in 1995 because people fear credit card fraud,” Cuban told the Washington Post over the weekend. “Regulate the creation of websites because some people initially thought they were complicated and didn’t know what would become of them”.
The provision proposes new rules for reporting crypto transactions to the IRS as part of the bill’s fundraising provisions, which could raise up to $ 28 billion by encouraging additional taxes to be paid. Broadly defined brokers would be required to provide information on bitcoin and crypto transfers, causing Chaos in the industry.
Yesterday, after weeks of bickering, a crypto compromise change in the bill was blocked. The amendment tabled by Senators Pat Toomey (RPa) and Cynthia Lummis (RWyo) aimed to clarify the wording of the bill, which broadened the definition of a “broker” and added tax requirements for software developers and those who insure blockchains, would increase newly minted tokens known as miners.
The bill’s crypto provision sent shockwaves through the U.S. cryptocurrency community in recent weeks, with crypto lobbyists planning for altering it and crypto investors, industry experts and technologists roundly mocking it.
“The bill has the potential to flood cryptocurrency transactions in the country with an invasive trawl,” said Paolo Ardoino, CEO of Bitfinex, the British Virgin Islands-based cryptocurrency exchange, comments via email.
Last week, tech investor and former Coinbase CTO Balaji Srinivasan called the latest change “a back door Bitcoin ban” while crypto lobbyist Jerry Brito, CEO of the think tank Coin Center, called it “catastrophic” and “ridiculous.” .
“Imposing reporting rules on Americans developing software and hardware, dismantling and securing the network, or running nodes to build resilience and efficiency is an impossible issue that will only fuel the development and operation of this critical technology outside of the United States.” posted the CEO of Twitter Jack Dorsey.
