At Makara, we believe that a regulated crypto industry is a better crypto industry. We’ve spent the last four years navigating the opaque regulation of this asset class with the consistent desire of “doing the right thing” and intimately understand how much of a challenge that can be, so when there’s opportunity to create regulatory clarity, we are in full support.
The industry needs your help.
As you may have seen, the Senate’s Infrastructure Bill, which will bring trillions of dollars of needed investment to the nation’s physical infrastructure, is being held up due to the late addition of crypto-specific language focused on taxation and reporting requirements. While the industry can feel validated that United States Senators are now openly debating the merits of taxation and regulation of this asset class, the original amendment missed the mark on the breadth of its application.
The core issue is the definition of a “broker,” as it pertains to cryptocurrencies. Presently, the regulation defines a broker as a firm who facilitates the purchase and sale of digital assets. Our custodial provider Gemini meets that definition and has been operating as such.
The original Infrastructure Bill was published with language from Senator Portman that would significantly expand that definition of broker to include non-broker activities. As a result, crypto miners or software developers would be considered brokers and thus subject to licensing and tax reporting requirements that are unworkable.
In response, Senators Toomey, Lummis and Wyden put together their own amendment supported by the crypto industry to clarify the application solely to brokers and not to miners, network validators or software developers. Unfortunately, a competing amendment has also been put forward that makes even less sense than the original.
So, why does any of this matter? The United States is at a regulatory crossroads and has an opportunity to solidify its footing as an innovation hub for blockchain technology. Overbearing regulation will stifle entrepreneurial spirit and move it offshore.
Voting on these amendments is happening today and it's critical that your Senators vote for the Toomey, Lummis and Wyden amendment which clarifies the language in the bill, narrowing its scope to true brokers.
What can you do?
There’s a simple way for you to contribute. Fight For the Future has set up an automated system that will connect you directly with your Senator and provide you with talking points to communicate. The five minutes this will take can have a huge impact on the outcome of this legislation.
In closing, I want to thank Coin Center for their on-going efforts on behalf of this entire industry. As we all know, this asset class is incredibly complex and confusing, and educating our elected officials about its nuances is a thankless job. We’ve been financial supporters of Coin Center since we started this business, and we encourage you to do the same.
- Jesse Proudman
CEO, Makara Digital Corporation