The US Congress passed a $1.2 trillion bill to improve infrastructure through a variety of measures, including taxing cryptocurrency brokers.
The bill, passed in Congress with a final vote of 228-206, signals a historic moment for cryptocurrencies in the United States. In drafting the legislation, senators inserted a clause that changes the Internal Revenue Service's definition of "broker" to include organizations that trade in cryptographic assets.
This means that if the account is signed by President Biden, the centralized exchanges will be considered “brokers” and will have to report their transactions directly to the IRS.
Brokers will have to disclose the names and addresses of their clients. The government expects to raise an extra $28 billion in taxes through cryptocurrencies as a result of the bill's approval.
As the bill was being drafted, cryptocurrency companies expressed their concern that the new definition of “broker”, if interpreted unlawfully, could incorporate crypto miners, validators and even cryptocurrency portfolio companies and dApp developers . Given the decentralized anonymity of a large part of the public in this sector, meeting the strictest requirements could be unfeasible.
While the Treasury has made it clear that it will not interpret the new legislative definition of a “broker” to include non-custodian organizations, there is clearly still a lot for the government to clarify before cryptographic investors are satisfied with the project.