Legislative assistant secretary of the treasury Jonathan Davidson said that, unlike exchanges, pools cannot collect complete customer information.
The US Department of the Treasury sent a letter to a group of senators proposing to exempt miners and stakers who organize the joint production of cryptocurrencies from tax reporting on their clients. The Treasury supports the crypto industry’s concerns about the Infrastructure and Jobs Investment Act.
Expanding the definition of “broker” would place an undue burden of tax reporting on mining companies and stakeholders that are not directly related to the clients. In particular, legislation requires brokers to collect detailed information about clients and their transactions.
Industry participants note that mining pools and other parties usually do not have access to information and cannot comply with this rule. The Treasury letter suggests that the expanded definition will be limited to parties that already collect this information.
“Existing regulations impose brokerage reporting obligations only on market participants engaged in entrepreneurial activities that provide them with access to information on the sale of securities by taxpayers.”
Letter author Jonathan Davidson, Assistant Secretary of the Treasury for Legislative Affairs, said “auxiliary parties that cannot access information useful to the IRS are not intended to be reflected in reporting requirements for brokers.” The ministry plans to analyze “material differences” between traditional broker-backed securities and digital assets.
Davidson said the Treasury Department plans to issue proposed rules reflecting how it defines a broker, similar to the rulemaking process the regulator follows for other rules enforced by federal agencies. According to the US Treasury, this process will provide an opportunity for the general public and industry participants to express their opinion.
Many consider the position of the US Department of the Treasury regarding the crypto industry to be too rigid. Thus, the representative from North Carolina Ted Budd (Ted Budd) said that the abolition of the rules that limit the US Treasury Department in its ability to regulate financial transactions will reduce the country’s competitiveness. At the same time, as the letter to the senators shows, the Treasury is aware that the adopted laws need to be improved.
On the other hand, the regulator continues to tighten regulations. But this is not always possible. In February, the US Treasury called for regulation of high-value art in the NFT market. Last week, the head of the Coin Center announced that he succeeded in obtaining in the US Congress an exception to the provision allowing the US Treasury to block international cryptocurrency transactions indefinitely.
