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Is DeFi the true cause for crypto-inclusions in US infrastructure bills?
The last-minute crypto-tax provisions introduced to the US Infrastructure Bill, which was passed earlier this month, sparked widespread fear in the Bitcoin and crypto-community. Some senators attempted to introduce amendments to expand on the language used in the bill. They did not, however, succeed due to a lack of universal consensus among Senators.
Through these new provisions, the law aimed to raise $28 billion in tax revenue. However, prominent crypto-lawyer Jake Chervinsky claims that this step was made to “capture DeFi.”
In a recent podcast, the Blockchain Association’s DeFi Chair said that these crypto-provisions were announced just 9 days before the final Senate vote in an attempt to “blindside” the crypto-industry.
Because past conversations about the law had “nothing to do with crypto,” Chervinsky believes the main culprit was the US Treasury Department.
The lawyer further revealed that he was informed about the Treasury Department’s initial opposition to exempting network validators and software developers from the broad definition of “brokers.” This was because they wanted to “adequately capture De-Fi” which would not have been possible with these amendments.
“That’s why we couldn’t get the language changed to only capture the centralized exchanges. We found out very quickly that it wasn’t just a senator’s misunderstanding… The Treasury Department had played an important role in drafting the language and also [ensuring] that any revision we proposed was going back to the Treasury Department for their approval or rejection.”
According to the lawyer, the Department feared that excluding DEXs would build an argument for other participants in the DeFi space as well. This was the motive behind the competing amendment that sought to exempt only Proof-of-Work miners and not other validators.
The same was proposed by Senator Wyden and backed by the Treasury Department and the White House, he added.
“The idea that you would carve out an exemption for what is viewed as the really bad, horrible climate change-causing, ocean-boiling Proof-of-Work mining, but then not have that exemption for Proof-of-Stake validators just made absolutely no sense.”
The lawyer also called the Department’s involvement with crypto-inclusions in the infrastructure bill “Un-American.”