Tax laws

Keep Innovation In America Act Could Fix New Crypto Tax Laws

A A group of bipartisan lawmakers introduced the Keep Innovation In America law on Thursday. The bill seeks to change the definition of “crypto broker” in the Infrastructure Investment and Jobs Act, enacted earlier this year. The new bill also aims to amend the tax code as well as transactions between brokers and non-brokers.

Patrick McHenry (R-NC), a leading member of the House Financial Services Committee, said: “On the one hand, we have the Infrastructure Investments and Jobs Act that President Biden enacted on Monday. It includes digital asset reporting requirements that threaten to push innovators and entrepreneurs overseas. This would leave the United States as a passive observer of a rapidly changing industry. On the other hand, we can correct those poorly constructed standards and make sure they are compatible with how this new technology actually works. “

The infrastructure bill contains a provision that seeks to broaden the definition of a broker for crypto tax reporting purposes. The new definition could bring in nearly $ 30 billion in revenue over the next decade, but could also cripple wallet makers or software developers who lack the capacity to comply with tax reporting requirements. The other provision that worried cryptocurrency investors was a new requirement to keep receipts and ‘know your customer’ information from senders, which could be seen as anathema to the cryptocurrency-driven space. confidentiality.

The Keep Innovation in America Act would change these two elements, which is good news for funds dealing with digital infrastructure, such as the VanEck Digital Transformation ETF (DAPP). Reporting and tax requirements may have complicated matters for a number of DAPP holdings, including the wallet providers, software and hardware companies that make up the digital infrastructure of the crypto space. -cash.

One of the sponsors of the new bill, Tim Ryan (D-OH), said in a statement: “We need to strike a balance between consumer protection and reasonable oversight while simultaneously providing these technologies and businesses with l space they need to develop, innovate and democratize the financial sector.

The bill enjoys broad support from the cryptocurrency industry. After its introduction Thursday, Coin Center, the Blockchain Association, the Crypto Council for Innovation, the Electronic Frontier Foundation and other published statements supporting the bill.

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