US Treasury Informs Reporting Requirement for Crypto Wouldn’t Apply To Non-Brokers

Despite the fact that the 1.2 Trillion Dollar infrastructure bill contained a thoroughly discussed, debated, and well-thought-of “broker” definition, yet it was found to be ambiguous to a certain extent that it failed to define what is included in the “broker”, especially, crypto developers and miners. A few Senators objected to the law and presented an amendment but they too came at a settlement with the Treasury and consented to approve the law to prevail in its original form. Treasury is now clarifying that even the law would not include “crypto exchanges” in the definition of “broker”.

The Treasury Department of the US on 24th August 2021 clarified its stance over the crypto reporting requirement provision. Treasury informed that even if the amendment for amending this provision was turned down, however, the provision will not apply to “non-brokers”.

When the 1.2 Trillion Dollar infrastructure was presented, it provided for a definition of the word “broker”. However, the definition was so overstretched that it required amendment according to certain lawmakers. The objecting lawmakers were of the view that the definition is so broad that it would also include developers and miners of crypto as well. They argued that neither the developers nor the miners are in possession of any information that would be required from them. It would therefore be unnecessary to include them amongst “brokers”, otherwise they would not be able to comply with the law logically.

There was a deadlock between the Treasury and the lawmakers who moved the amendment. Later on, a settlement agreement was entered between the parties. According to this settlement agreement, all agreed to approve the law in its actual form in the meantime.

Even after approving the law, the objecting lawmakers were advocating the need to amending the definition of “broker”. Now the Treasury Department has made a statement in which it has said that there wouldn’t be any need for amending the law. Instead, the provision will not apply to “non-brokers”. This would simply mean that the law would not be applicable to the crypto miners and crypto software developers.

There were other lawmakers as well who also objected to the language used in the law. According to them, the language is not the same as it is normally used in the laws. In fact, the law seemed to be drafted by persons unfamiliar with the language and format of the bills.

Now the question is whether without amending the law, any safeguard has been provided to the developers and miners. The statement made by the Treasury can be taken as if it is done in good faith. However, an amendment is still required because the law does not work on the basis of mere statements. If there is a lacuna in the law, then it has to be eliminated by either amending or deleting the provision. But if it remains to be part of the law then it becomes the law whether it is right or wrong.