Congress Passes $1.2 Trillion Infrastructure Bill, Paving Way for Extra Crypto Taxes in U.S.

The bill changes the legislative definition of a ‘broker’ to include custodial crypto services like Coinbase. Read the full article by: Tim Hakki

Key Points:

• The $1.2 trillion Infrastructure was passed by congress on Friday with a 228-206 vote. This bill is significant for crypto as it looks to change the definition of a “broker”. This bill is estimated to raise at least $28 billion from crypto taxing.

• Now the Infrastructure bill will be up to President Biden to decide if exchanges, like Coinbase and Kraken, are to be considered “brokers” under the proposed definition. The definition provided will now include “organizations that trade crypto assets”.

• This means that those exchanges would have to file a 1099 tax form disclosing information on their customers such as names and addresses. Where it became an issue for the crypto community was that this new definition of a broker could include mining companies, validators, and developers.

• A lot of those services do not hold or require their customers to provide that information and would put them in a tough position to try and collect that from people now. Many amendments were proposed to the bill but never had come to anything; however, the Treasury has said that they do not plan to interpret the definition of a “broker” to include non-custodial actors.