The US Senate is on the verge of passing a so-called “crypto-killer” bill that might be interpreted as a “backdoor bitcoin ban.”
According to Republican Senator Ted Cruz, the US Senate is on the approach of passing legislation that may decimate the global Bitcoin sector.
Proponents of cryptocurrencies are divided over a tax enforcement plan to pay for US President Joe Biden’s $1 trillion bipartisan Infrastructure Bill. New crypto tax reporting law, which has frightened the sector, is one piece included in the revenue dragnet. Large bitcoin transfers will be required to be disclosed to the US Internal Revenue Service under the new legislation (IRS).
Mr. Biden’s tax cuts will subsequently be used to fund his large-scale spending plans, which are expected to cost tens of millions of dollars.
The cryptocurrency reporting requirements alone, according to Washington, could yield an additional $28 billion for the US Treasury.
“Strengthening of enforcement when it comes to cryptocurrencies” will be used to collect the tax.
Senator Ted Cruz, a bitcoin supporter, tweeted yesterday: “The Senate is on the approach of approving legislation that would be TERRIBLE for cryptocurrency.”
“The infrastructure contract has DANGEROUS elements that would wreak havoc on cryptocurrency and blockchain innovation.
“Supporters of crypto need to make their voices heard,” Balaji Srinivasan, the former chief technology officer of Coinbase, said today in response to the new Bill’s cryptocurrency tax component: “Make no mistake, this is a backdoor bitcoin ban.”
“It’s impossible to comply. Their goal is to make full nodes, lightning nodes, and the majority of bitcoin wallets illegal.
“And they aren’t really in favor of proof-of-work; the very next Bill will include some ESG thing to attack that as well.” One crypto-proponent on Twitter echoed this and warned: “So basically tomorrow is our future decided for us.” On Thursday, Democratic senators Mark Warner and Kyrsten Sinema, along with Republican Senator Rob Portman, proposed a particularly restrictive amendment to the Bill.
This bill change will most likely require crypto-developers and blockchain validators who use “proof of stake” networks to file tax returns with the IRS.
This modification would be especially harmful to Ethereum, which is migrating to a less energy-intensive consensus mechanism known as “proof of stake.”
The Warner amendment would be a “shocking loss for America and our capacity to remain the world’s innovation center,” according to venture capitalist investment company Andreessen Horowitz.
Senators Ron Wyden, Cynthia Lummis, and Pat Toomey of the United States presented another amendment earlier this week.
This was considered as a positive step forward for the cryptocurrency ecosystem. “Brinkwire News in Condensed Form.”