A lot of people have been asking questions about this US bill that is being proposed this weekend in the US. Some have also asked for an ELI5. I took a shot at it below to explain it as simply as possible (TL;DR at bottom).
Hidden within the larger $1.2 trillion US infrastructure legation bill is a clause on crypto. This clause wants anyone who is providing any crypto service to record and report the value of the service and who received the service to the IRS (taxation institution in the US) so that they can tax them. This includes development, mining, defi, cefi, you name it.
This is obviously impossible due to the very decentralized nature of crypto, which then would make providing those crypto services illegal in the US.
On top of this the language is very confusing and makes no sense because some of it applies to Bitcoin but not ETH 2.0 for example. It just shows these US lawmakers have little understanding of crypto but are trying to regulate and tax it. There are already amendments (proposed adjustments) filed to help clear language around crypto tax up or even remove it completely.
Today, the senate debated the bill but was not able to reach a conclusion yet. On Sunday, the senate will reconvene again to resume consideration of the bill and vote. Ted Cruz said he filed a separate amendment to strike the whole thing, in the event a bipartisan deal can’t be reached.
Even if this bill passes the senate it still needs to pass the house as well, 2 separate chambers of legislation in the US, must pass both.
TL;DR: US lawmakers are trying to sneakingly pass overarching crypto taxation laws in a huge infrastructure bill but they have little idea what they are talking about and it's a mess so now a bunch of politicians are trying to debate and fix it.
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