The provision would impose more federal regulation on cryptocurrencies and dramatically expand the number of cryptocurrency users who would have to report filings to the Internal Revenue Service.
Cryptocurrency advocates believe in the need to regulate the decentralized currency, but not by rushing to pin it to an infrastructure package with language they say is far too broad for the nuanced technology.
“This is no way to make policy. There’s decisions being made that will massively influence how cryptocurrency develops in America, but it’s being done as a last-minute addition to a must pass infrastructure bill,” said Neeraj Agrawal, director of communications at Coin Center, a think tank started in 2014 that focuses on cryptocurrency policy.
“There’s been a massive mobilization in DC to try to educate senators and members of Congress about the shortcomings of this language, but we do not have that much time,” he told CNN.
This week, following calls from advocates to tighten the language around who should be legally required to report crypto transactions, Democratic Sens. Ron Wyden of Oregon, Pat Toomey of Pennsylvania and Republican Sen. Cynthia Lummis of Wyoming, introduced an updated amendment to the original legislation that would narrow the scope of who needs to report tax information.
“Investors failing to pay tax they owe through cryptocurrency is a real problem, and I strongly support third-party reporting by exchanges where cryptocurrency is bought, sold and traded. Our amendment makes clear that reporting does 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,” Wyden said in a statement released through the Senate Finance Committee.
Yet, their proposal was met with opposition from Democratic Sens. Mark Warner of Virginia, Kyrsten Sinema of Arizona and Republican Sen. Rob Portman of Ohio who also this week put forth a further amendment that crypto advocates say would regulate creators even more.
CNN has reached out to the offices of Warner, Sinema and Portman for comment.
Texas Republican Sen. Ted Cruz on Saturday announced his support for the Wyden, Toomey and Lummis amendment, calling their amendment, “a major improvement over what is in the underlying bill & a must pass amendment.”
For their part, cryptocurrency advocates this week have expressed their concern with the proposed legislation.
In response to the action on Capitol Hill, Fight for the Future — a digital rights nonprofit with a major following on social media — mobilized activists and directed more than 35,000 people to their online portal to call to senators, urging the lawmakers to scale back the proposed cryptocurrency regulations.
While the group — which for the past decade has organized large scale online protests in support of net neutrality and in opposition of internet censorship and government surveillance — is not opposed to crypto regulations altogether, it was frustrated with the way crypto was included in the legislation at the last minute.
They are calling on senators to vote yes on the amendment from Wyden, Toomey and Lummis and against the amendment from Warner, Sinema and Portman.
“We feel strongly that policies that impact people’s basic civil liberties and people’s rights in the digital age should never be tacked on to legislation like an infrastructure bill,” said Evan Greer, director of Fight for the Future.
“If we had our way, we would remove this entirely from the infrastructure bill so we could have a real debate over what types of policies are needed to ensure that vulnerable and low-income folks are protected from things like crypto scams and to make sure billionaires and big companies pay their taxes,” she said.
Butcher — a Nashville based artist originally from southwest England — said he saw Fight for the Future’s campaign online and decided to use his platform to help protect digital rights.
The proceeds from the piece, meant to raise awareness on the Senate’s attempts to regulate cryptocurrency, will benefit Coin Center.
Butcher said he believes in the power of NFTs to drive change.
“Whichever way the bill goes, this piece represents a community coming together to defend a nascent technology against hastily written legislation that would prevent an unfathomable amount of financial innovation happening in the US. But the infrastructure that makes it possible to raise money [like this] is actually part of what’s being threatened in the pieces of legislation,” he told CNN.
CNN’s Jazmin Goodwin contributed to this report.