The ongoing drama over a proposed law that could roil the crypto industry took a further twist on Monday morning as key Senators announced they had reached a new bipartisan agreement "to fix the digital asset reporting requirements in the infrastructure bill."
In a morning press conference, Senators Cynthia Lummis (R-Wy) and Pat Toomey (R-Pa) announced a potential breakthrough that had brought former opponents on board, and that a compromise had been developed with the Treasury Department—which has previously expressed hostility towards the crypto industry.
In the debate over the bill, Lummis and Toomey have been leading a fight to strike a measure that could designate a broad swath of crypto entities—from developers to wallet providers—as "brokers" for tax-reporting purposes.
On Thursday, Lummis and Toomey were poised to pass a key amendment that would have allayed the crypto industry's fears over the "brokers" provision. But other Senators introduced a counter-measure that would have only created an exemption for proof-of-work projects, and the process bogged down in wrangling over the weekend.
Senators Toomey and Lummis Hold Press Conference on Agreement to Fix Digital Asset Reporting Requirements in the Infrastructure Bill https://t.co/oqJLIIIQw7
— Senator Pat Toomey (@SenToomey) August 9, 2021
The announcement on Monday could reflect a last-minute compromise, but it's unclear if the Senate will have time to pass it. On Sunday night, the body invoked cloture on debate over the larger $1 trillion infrastructure bill—of which the crypto "broker" provision is one part—which means any changes will have to occur by unanimous consent before a final vote on Tuesday.
But another key ally of the crypto industry, Sen. Ron Wyden (D-Or), tweeted on Monday that unanimous consent could be possible.
We’ve been working hard to get a deal. I don’t believe the cryptocurrency amendment language on offer is good enough to protect privacy and security, but it’s certainly better than the underlying bill. Majority Leader Schumer says he won’t block a unanimous consent request on it
— Ron Wyden (@RonWyden) August 9, 2021
But unanimous consent may be hard to obtain given the objections of some Senators to the bill, which has overall bipartisan support. The final outcome of the last-minute scramble to amend the crypto provisions should be come clear later on Monday.
In response to a press conference question as to whether the amendment would obtain the requisite unanimous consent, Toomey and Lummis expressed optimism but appeared to be acknowledge passage was far from certain.
The pair also noted the U.S. has an opportunity to promote innovation in crypto on its shores at a time geo-political rival China has been cracking down on non-state crypto projects.
If the Senate fails to pass the Lummis amendment, the crypto industry is expected to shift its focus to the House of Representatives, which must pass its own version of the bill. Changes in the House are unlikely, however, which means that the industry would then have to press the Treasury Department—which would be in charge of enforcing the crypto provision—to adopt a narrow interpretation of "crypto."
Jerry Brito, the president of the crypto advocacy group Coin Center, has been tracking the twists and turns of the amendment process on Twitter. He shared the legal provisions of the last minute amendment, but noted that the objections of one Senator could tank the announced compromise:
1/ There is now a compromise amendment being offered by Senators Toomey, Lummis, Warner, Portman, and Sinema that we think all senators should support.
— Jerry Brito (@jerrybrito) August 9, 2021
An earlier version of this story incorrectly named Toomey as an Ohio Senator. He represents Pennsylvania.
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