Senators Urge Treasury to Set Crypto Rules
Lawmakers who criticized the bill want to have informal guidance by the end of the year.
Key Takeaways
- Six U.S. senators have urged the Treasury to expedite rulemaking on cryptocurrencies.
- The coalition consists of senators from both sides of the political aisle.
- The controversial "broker" provision of the recent infrastructure bill is set to take effect in 2024.
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Six senators have requested that the U.S. Treasury rapidly engage in rulemaking concerning a recently passed bill.
U.S. Senators Ask for Rulemaking
In November, the Biden administration passed into law the Infrastructure Investment and Jobs Act (IIJA), a bill that imposed transaction reporting requirements on crypto companies and protocols alike. The bill attracted criticism at the time over concerns around the term “brokers” and the requirements that would pertain to them. That term was defined broadly enough within the bill that it would apply not just to crypto exchanges but also to mining firms, wallet companies, and others that do not directly handle cryptocurrency transactions.
That concern was reiterated in a letter published Tuesday by various senators. One part of that letter reads:
“Some market participants have expressed concern that an overly-broad interpretation of … ‘broker’ could capture certain individuals who are solely involved with [validating transactions] and entities solely providing software or hardware solutions enabling users to maintain custody of their digital asset wallets.”
The authors continued to insist that the law should have an appropriate scope and urged the U.S. Treasury to engage in rulemaking under the Administrative Procedure Act (APA) “in an expedited manner.” They also urged the Treasury to issue informal guidance before the end of 2021.
The letter is signed by six senators from both sides of the political aisle: Senators Rob Portman (R-OH), Mark R. Warner (D-VA), Mike Crapo (R-ID), Kyrsten Sinema (D-AZ), Pat Toomey (R-PA), and Cynthia Lummis (R-WY).
Some of those senators were originally behind attempts to modify the bill through an amendment as early as August. Those amendments would have narrowed the definition of “brokerage” to mainly include crypto exchanges and similar companies.
Is Rulemaking Good for Crypto?
The requests detailed in today’s letter should be received well by the crypto community as they show that there is still resistance to an overly broad reporting law within the U.S. government.
However, some experts have expressed concerns that the requested deadline is so short that the request could backfire. Executive Director of Coincenter Jerry Brito suggested that this could lead to “rushed guidance without public comment.” He insisted that rulemaking should strictly be carried out through APA and public comments.
Though the infrastructure bill was passed into law last month, the provision will not take effect until January 2024, and the U.S. Treasury must still determine how to enforce its contents.
Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and other cryptocurrencies.
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