US lawmakers push for new crypto legislation

U.S. lawmakers are pushing for the reintroduction of the bill responsible for reforming how digital assets are evaluated for tax purposes.

Lawmakers push for “Keep Innovation in America Act”

Lawmakers in the United States led by congressmen Ritchie Torres and Patrick McHenry have begun moves to revamp the premise surrounding the implementation of crypto tax provisions under the $1.2 trillion infrastructure bill signed in 2021.

According to the lawmakers behind the bill dubbed the “Keep Innovation in America Act,” its reintroduction and application in the crypto sector will promote growth in the sector and encourage more transparency in operations in the blockchain sector. 

Committee Chair Patrick McHenry and Rep. Ritchie Torres sponsored the bill in 2021 to clearly define and differentiate between a “crypto broker” and traditional brokers for tax purposes. This distinction represents an adjustment to the provisions on crypto taxation that was earlier introduced by the Infrastructure Investment and Jobs Act (IIJA).

In a draft document of the bill released to the public, it defines a crypto broker for tax purposes as any person who (for consideration) stands ready in the ordinary course of a trade or business to effect sales of digital assets at the direction of their customers.

Reforms to bolster innovation in the crypto sector

The lawmakers behind the bill believe that the current bipartisan infrastructure bill which included tax reporting provisions for digital assets like bitcoin and NFTs is “incompatible with this technology’s operation,” and could impede innovation and growth in the crypto industry. 

McHenry stated that the reintroduced bill would curb misguided policies and regulatory overreach that would otherwise hinder the country from realizing the potential of the industry.

Regulation of digital assets like cryptocurrency has been a topic of contention in the U.S. for some time now. Some observers believe that stricter regulations might scare off potential investments in the country

Others say that regulation is a necessary step in the acceptance and adoption of crypto in the SEC Chair Gary Gensler recently underlined the need for strong regulations in the area of custody of digital assets, stating that it is crucial for traditional securities and digital assets.