Wyden & Lummis Introduce Bill to Fix Broker Definition for Digital Assets

November 15, 2021

Legislation Will Ensure U.S. Continues to Foster Innovation & Maintain Position as Global Financial Leader

WASHINGTON, D.C. – U.S. Senators Ron Wyden (D-OR) and Cynthia Lummis (R-WY) introduced legislation to clarify the definition of digital asset “broker” as included in the Infrastructure Investment and Jobs Act/Bipartisan Infrastructure Framework (HR 3684) that President Biden will sign into law later today. 

Under current law, those who are involved in digital asset mining or staking, providing digital asset hardware or software wallets, or developing digital asset protocols may fall under the definition of “broker” for tax purposes, and would be subject to certain Internal Revenue Service (IRS) reporting requirements. The senators’ bill would clarify that the “broker” definition excludes miners and stakers, as well as wallet providers and developers, and would ensure that only those digital asset intermediaries that actually have access to material customer information are required to report to the IRS. 

Senators Wyden, Lummis, and others tried to add a similar provision to the 2021 infrastructure bill as it was being considered in August. 

“With the infrastructure bill on the verge of becoming law, it’s critically important to protect innovation in the digital asset space,” Senator Wyden said. “Our bill makes clear that the new reporting requirements do not apply to individuals developing block chain technology and wallets. This will protect American innovation while at the same time ensuring those who buy and sell cryptocurrency pay the taxes they already owe.” 

“Digital assets are here to stay in our financial system and the decisions we make now will have impacts far into the future,” Senator Lummis said. “We need to be fostering innovation, not stifling it, if we are going to maintain America’s position as the global financial leader. I’m proud to introduce this bipartisan bill to ensure that our tax system reflects the realities of digital assets and distributed ledger technology. ” 

Click here to view the bill.