U.S. Sen. Ted Cruz (R-Texas) this week introduced legislation that would repeal an overly broad and poorly-crafted provision from the infrastructure package that creates new reporting requirements for many participants within the blockchain industry. This provision will stifle innovation in the industry, endanger the privacy of many Americans and cryptocurrencies, and likely push key aspects of the industry overseas to countries like China.

Upon introduction of this bill, Sen. Cruz said:

“The Lone Star State has quickly emerged as the main hub for the cryptocurrency industry, and that exciting industry is now in danger of being stifled and driven overseas by an overreaching provision in this newly-signed, reckless spending package. As a deliberative body, the Senate should have done its job and held hearings to properly understand the consequences of legislating on this emerging industry before we risked the livelihoods and privacy of participating Americans. I urge my colleagues in the Senate to repeal this harmful language that will create regulatory uncertainty and in turn an unnecessary barrier to innovation.”

In August, Sen. Cruz led his colleagues in introducing an amendment to the infrastructure package that would remove this harmful language.

As originally drafted, the infrastructure package contains a provision that expands the definition of “Broker” to nearly all participants in the cryptocurrency structure, treating them as a financial institution, which means they would have to report consumer information to the Internal Revenue Service (IRS), even if these participants do not have access to that information. This mandate to collect names, addresses, and transactions of customers means almost every company even tangentially related to cryptocurrency may suddenly be forced to surveil their users.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s