Sam Reynolds

<div id="highlights-block_612ff4cb51e05" class="highlights">
        <ul>
                <li>Two bills are currently in play: a $3.5 trillion reconciliation bill and a $1.2 trillion infrastructure bill</li>
                <li>The budget bill is currently going through a reconciliation process, a rare parliamentary procedure that makes it filibuster proof</li>
            </ul>
    
</div>



<p><a href="https://www.rollcall.com/2021/08/30/treasury-pushes-global-crypto-data-sharing-rules-in-budget-bill/" target="_blank" rel="noreferrer noopener">Reports say</a> that the White House is looking to create a framework to force US-based crypto exchanges to share information about non-US users in order to entice foreign registered crypto exchanges to share information on US-users. </p>



<p>A similar scheme already exists in the tradfi world called the <a href="https://www.oecd.org/tax/automatic-exchange/common-reporting-standard/" target="_blank" rel="noreferrer noopener">Common Reporting Standard</a>. This obliges banks in G20 member countries to collect information on foreign account holders and pass it back to tax authorities in that person’s home country. In the crypto world, US officials believe Americans are hiding their crypto gains on offshore exchanges and would like this information from the host countries and in exchange will give up information on foreign accounts operating at US exchanges. </p>



<p>Language that would allow for this type of reporting is currently not present in the $3.5 trillion budget framework that is being presented as a reconciliation bill, but the White House is pushing to add it.</p>



<p>A reconciliation bill is a rare parliamentary procedure that makes legislation filibuster proof by allowing for it to pass with only a majority. However, this can only be used for bills pertaining to taxes, spending and the debt limit with a limit of twice in a year.&nbsp;&nbsp;</p>



<p>All this is in contrast to the $1.2 trillion infrastructure bill which contained <a href="https://cms.blockworks.co/is-congresss-infrastructure-deal-a-threat-to-the-us-crypto-industry/" target="_blank" rel="noreferrer noopener">tax reporting requirements</a> that blockchain industry stakeholders said were “impossible-to-fulfill.” The Senate <a href="https://cms.blockworks.co/senate-fails-to-amend-crypto-tax-provision-in-infrastructure-bill/" target="_blank" rel="noreferrer noopener">failed to pass an amendment</a> that would narrow the scope of the blockchain component of the bill.</p>



<p>“At this point, given procedures agreed-upon in the Senate and House, it’s highly unlikely we’ll see changes to the digital asset payfor in the infrastructure bill.” Jackson Mueller, director of policy and government relations at Securrency, told Blockworks in an interview. “The big question is what, if any measures, will be included, and whether the legislative language will generate as much, if not more, uncertainty as to which entities and accounts are included in the IRS’ tax orbit compared to the controversy generated over the digital asset payfor in the infrastructure bill.”</p>



<p>Mueller expected some sort of tax compliance measures to be coming down the legislative pipe, but is not a fan surprise legislative add-ons.&nbsp;</p>



<p>“What stakeholders received from the infrastructure bill — and what they could receive, yet again, in the budget reconciliation package — is the last-minute insertion of additional tax compliance measures without providing the American public with the opportunity to respond,” Mueller said. “No matter your thoughts on what tax treatments should be applied to the crypto industry, this rushed, back-stage process is simply bad policy.”</p>



<p><br>The price of bitcoin doesn’t seem to be impacted by the coming proposed tax changes, and is currently up 2.7% during the past 24 hours according to <a href="https://www.coingecko.com/en/coins/bitcoin" target="_blank" rel="noreferrer noopener">CoinGecko</a>.</p>



<p><strong><em>Want more investor-focused content on digital assets? <a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Join us</a> September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket. <a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Buy it now</a>.</em></strong></p>


Biden Administration Pushing for Foreign Tax Reporting in Reconciliation Budget Bill

Morgan Chittum

<div id="highlights-block_60c9fc7f1690b" class="highlights">
        <ul>
                <li>Neuberger Berman, a $400 billion investment manager, is expanding its fund strategy to include exposure to bitcoin.</li>
                <li>Venmo credit cardholders can now use their monthly cashback to automatically purchase cryptocurrencies with no transaction fee, the company announced. </li>
            </ul>
    
</div>



<p>Bitcoin and ether prices rose on Wednesday, continuing the cryptos’ multi-week upward trend. </p>



<p>Bitcoin hiked 1.84% on-day while ether hiked 3.06% in the afternoon. </p>



<p>Bitcoin faces resistance at $48,000 after trading above its 200-day moving-average earlier this week. Ether faces resistance at $3,400 according to Messari. </p>



<p>Neuberger Berman, a $400 billion investment manager, is expanding its fund strategy to include exposure to bitcoin and other cryptocurrencies without directly holding the assets, according to a Wednesday SEC filing. The fund group’s Neuberger Berman Commodity Strategy Fund can now invest in bitcoin and ether futures contracts, as well as bitcoin trusts and ETFs, Blockworks&nbsp;<a target="_blank" href="https://cms.blockworks.co/neuberger-berman-begins-offering-exposure-to-crypto/" rel="noreferrer noopener">reported.</a></p>



<p>Venmo credit cardholders can now use their monthly cashback to automatically purchase cryptocurrencies with no transaction fee, the company <a href="https://cms.blockworks.co/venmo-offers-card-holders-crypto-cash-back-rewards/" target="_blank" rel="noreferrer noopener">announced</a>. PayPal, Venmo’s parent company, <a href="https://cms.blockworks.co/paypal-has-a-new-business-division-dedicated-to-crypto/" target="_blank" rel="noreferrer noopener">launched a business division</a> dedicated to cryptocurrencies in February, one of many efforts to further invest in the industry.&nbsp;&nbsp;</p>



<p>CEO of PayPal Dan Schulman said earlier this year that “with high initial expectations, the volume of crypto trading on our platform greatly exceeded our projections.”&nbsp;</p>



<p>Big winners for the day were altcoins. Cardano and XRP made significant gains on Wednesday, hiking 16.71% and 18.85% as of 4:00 pm ET.</p>



<h3 class="wp-block-heading">DeFi</h3>



<ul class="wp-block-list"><li>Uniswap is trading at $30.10 with a total value locked of $5,080,305,430 up 2.8% in 24 hours at 4:00 pm ET.&nbsp;</li><li>Chainlink is trading at $27.02, advancing 1.1% with trading volume at $1,295,616,306 in 24 hours at 4:00 pm ET.</li><li>DeFi:ETH is 30.2% at 4:00 pm ET.</li></ul>



<h3 class="wp-block-heading">Crypto</h3>



<ul class="wp-block-list" id="block-1209f037-00c3-4876-ad37-a29ab610c717"><li>Bitcoin is trading around $46,602.37, up 2.14% in 24 hours at 4:00 pm ET.</li><li>Ether is trading around $3,256.92, advancing 3.15% in 24 hours at 4:00 pm ET.</li><li>ETH:BTC is at 0.069, up 1.37% at 4:00 pm ET.</li><li>VIX fell -4.47% to 16.04 at 4:00 pm ET.</li></ul>



<h3 class="wp-block-heading">Insight</h3>



<p>&#8220;There is no putting the crypto genie back in the bottle. Reaching a $1.9T market cap through 8/9/21, crypto has reached the &#8216;&#8230;then they fight you&#8217; stage of adoption,&#8221; Alkemi Co-founder Brian Mahoney said to Blockworks. &#8220;The market&#8217;s continued expansion despite increasing regulatory headwinds is a testament to the mainstay strength of this asset class.&#8221; </p>



<figure class="wp-block-image size-large is-style-default"><img loading="lazy" decoding="async" width="1024" height="634" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/Screen-Shot-2021-08-11-at-3.36.51-PM-1024x634.png" alt="" class="wp-image-6436" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/Screen-Shot-2021-08-11-at-3.36.51-PM-1024x634.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/Screen-Shot-2021-08-11-at-3.36.51-PM-1024x634.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/Screen-Shot-2021-08-11-at-3.36.51-PM-1024x634.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/Screen-Shot-2021-08-11-at-3.36.51-PM-1024x634.png?w=415 415w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/Screen-Shot-2021-08-11-at-3.36.51-PM-1024x634.png?w=422 422w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/Screen-Shot-2021-08-11-at-3.36.51-PM-1024x634.png?w=354 354w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/Screen-Shot-2021-08-11-at-3.36.51-PM-1024x634.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/Screen-Shot-2021-08-11-at-3.36.51-PM-1024x634.png?w=1448 1448w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>                                                                                              Cardano and XRP trading over the past day. Source: TradingView</figcaption></figure>



<p>US stocks were mixed following July CPI data, which indicated consumer prices rose 5.4% last month. However, investors&#8217; eyes are on the Federal Reserve for tapering signals in the near future, Blockworks <a href="https://cms.blockworks.co/consumer-prices-rise-5-4-core-inflation-increase-less-than-expected/" target="_blank" rel="noreferrer noopener">reported</a>.</p>



<p>Coinbase Global (COIN) shares were up 5.4% following higher-than-expected <a href="https://cms.blockworks.co/coinbase-2-23b-q2-earnings-exceeds-estimates/" target="_blank" rel="noreferrer noopener">Q2 earnings</a> on Tuesday.</p>



<h3 class="wp-block-heading">Equities</h3>



<ul class="wp-block-list"><li>The Dow was up 0.62% to 35,484.</li><li>S&amp;P 500 advanced 0.1% to 4,436.</li><li>Nasdaq fell -0.16% to 14,765.</li></ul>



<h3 class="wp-block-heading">Insight</h3>



<p>“No big surprises with July’s CPI print at 5.4% yoy &#8211; it appears the spike has stalled for now,&#8221; Head of Product R&amp;D at Bybit Shane Ai said to Blockworks. &#8220;Treasury yields have dipped slightly on short unwinds, reflecting overdone Fed tightening concerns and is supportive of risk assets like crypto and equities.&#8221;</p>



<h3 class="wp-block-heading">Commodities</h3>



<ul class="wp-block-list" id="block-d64d70c9-7052-4f1a-8167-3d370fe08354"><li>Brent crude rose to $71.55 per barrel, advancing 1.30%.</li><li>Gold advanced 1.29% to $1,754.</li></ul>



<h3 class="wp-block-heading">Fixed Income</h3>



<ul class="wp-block-list"><li>US 10-year treasury yields 1.33% as of 4:00 pm ET.</li></ul>



<h3 class="wp-block-heading">Currencies</h3>



<ul class="wp-block-list"><li>The US dollar fell 0.18%, according to the Bloomberg Dollar Spot Index.</li></ul>



<h3 class="wp-block-heading">In other news&#8230;</h3>



<ul class="wp-block-list"><li>Cryptocurrency exchange CoinDCX secured its place as the first crypto unicorn in India, following a $90 million Series C funding round. Facebook co-founder Eduardo Saverin’s B Capital Group helped lead the equity round, Blockworked <a href="https://cms.blockworks.co/falconx-coindcx-hit-unicorn-status-amid-uncertain-regulatory-environment/" target="_blank" rel="noreferrer noopener">reported</a>.&nbsp;</li></ul>



<h3 class="wp-block-heading">We&#8217;re watching out for&#8230;</h3>



<ul class="wp-block-list"><li><span style="color: initial;">OPEC: Oil Market Report is due on Thursday.</span></li></ul>



<p>That&#8217;s it for today&#8217;s markets wrap. I&#8217;ll see you back here tomorrow.</p>



<p><strong><em>Want more investor-focused content on digital assets?&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Join us</a>&nbsp;September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Buy it now</a>.</em></strong></p>


Bitcoin and Ether Maintain Upward Trend: Markets Wrap

<div id="highlights-block_60c9fc7f1690b" class="highlights">
        <ul>
                <li>Poly Network was robbed over $600 million of its funds, the largest hack in decentralized finance history </li>
                <li>FalconX raised $210 million, bringing the crypto trading platform to a $3.75 billion valuation</li>
            </ul>
    
</div>



<p>Bitcoin and ethereum remain steady despite the colossal <a href="https://cms.blockworks.co/hackers-steal-over-600m-biggest-in-defi-history/" target="_blank" rel="noreferrer noopener">DeFi security breach</a> on blockchain-based platform Poly Network.&nbsp;</p>



<p>Hackers stole over $600 million in cryptocurrency tokens which some have pegged as the largest hack in decentralized finance history.&nbsp;</p>



<p>The attack fell on DeFi exchanges Polygon, Binance Smart Chain and Ethereum, Poly Network <a href="https://twitter.com/PolyNetwork2/status/1425073987164381196?s=20" target="_blank" rel="noreferrer noopener">announced</a> Tuesday. </p>



<p>After $273 million of ethereum tokens were allegedly extorted, ETH fell around 2%. BTC followed suit, shedding 1.5% in the morning. However, the day&#8217;s shallow dip did not compromise the cryptocurrencies&#8217; recent bull run.</p>



<p>In a slew of funding news, FalconX raised $210 million, bringing the popular crypto trading platform to a $3.75 billion valuation. TRON, one of the largests blockchain-based decentralized platforms, is set to launch a $300 million fund to invest in future GameFi projects, Blockworks <a href="https://cms.blockworks.co/decentralized-blockchain-tron-creates-300m-fund-to-invest-in-gamefi-space/" target="_blank" rel="noreferrer noopener">reported.</a></p>



<h3 class="wp-block-heading">Infrastructure Bill</h3>



<p>Crypto concerns continue for some after the Senate passed the bipartisan infrastructure package on Tuesday.</p>



<p><a href="https://cms.blockworks.co/is-congresss-infrastructure-deal-a-threat-to-the-us-crypto-industry/" target="_blank" rel="noreferrer noopener">Controversial language</a> around crypto-related tax reporting requirements in the bill sparked concerns in the digital asset community, resulting in bipartisan groups of Senators proposing amendments to narrow down who has to report customer information to the Internal Revenue System. However, the Senate passed the bill without any of the proposed amendments included.</p>



<h3 class="wp-block-heading">DeFi</h3>



<ul class="wp-block-list"><li>Uniswap is trading at $29.24 with a total value locked of $4,931,346,403 up 0.5% in 24 hours at 4:00 pm ET.&nbsp;</li><li>Chainlink is trading at $24.38, advancing 0.4% with trading volume at $1,109,098,980 in 24 hours at 4:00 pm ET.</li><li>DeFi:ETH is 29.8% at 4:00 pm ET.</li></ul>



<h3 class="wp-block-heading">Crypto</h3>



<ul class="wp-block-list" id="block-1209f037-00c3-4876-ad37-a29ab610c717"><li>Bitcoin is trading around $45,502.37, up 0.03% in 24 hours at 4:00 pm ET.</li><li>Ether is trading around $3,140.92, advancing 2.25% in 24 hours at 4:00 pm ET.</li><li>ETH:BTC is at 0.069, up 1.05% at 4:00 pm ET.</li><li>VIX fell -0.24% to 16.68 at 4:00 pm ET.</li></ul>



<h3 class="wp-block-heading">Insight</h3>



<p>President of FTX.US Brett Harrison weighed in on the infrastructure bill and its relationship to crypto, adding that not everyone in the industry believes regulations are a bad thing.</p>



<p>“I think perhaps there’s a misconception that all regulation is either bad or perceived as bad by actors in the crypto industry. For example, for exchanges, we want the regulation. We want the clarity on the different roles we are supposed to play,” Harrison told Blockworks. “Sure, the regulatory agencies can use post-hoc fines and enforcement actions to help enforce certain rules on actors in the industry. But it’s much better if we have a proactive approach where we can lay the ground rules on how people should act and how they [shouldn&#8217;t] act if they want to get into the industry.”</p>



<figure class="wp-block-image size-large is-style-default"><img loading="lazy" decoding="async" width="903" height="524" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/0823D7F7-684E-4FA6-8C51-577031DDA03D.jpeg" alt="" class="wp-image-6381" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/0823D7F7-684E-4FA6-8C51-577031DDA03D.jpeg?w=903 903w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/0823D7F7-684E-4FA6-8C51-577031DDA03D.jpeg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/0823D7F7-684E-4FA6-8C51-577031DDA03D.jpeg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/0823D7F7-684E-4FA6-8C51-577031DDA03D.jpeg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/0823D7F7-684E-4FA6-8C51-577031DDA03D.jpeg?w=450 450w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/0823D7F7-684E-4FA6-8C51-577031DDA03D.jpeg?w=377 377w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/0823D7F7-684E-4FA6-8C51-577031DDA03D.jpeg?w=80 80w" sizes="(max-width: 903px) 100vw, 903px" /><figcaption>                                                                                                                                    BTC and ETH trading over the past day. Source: TradingView</figcaption></figure>



<h3 class="wp-block-heading">Commodities</h3>



<ul class="wp-block-list" id="block-d64d70c9-7052-4f1a-8167-3d370fe08354"><li>Brent crude rallied to $70.74 per barrel, advancing 2.46%.</li><li>Gold advanced 0.19% to $1,729.</li></ul>



<h3 class="wp-block-heading">Equities</h3>



<ul class="wp-block-list"><li>The Dow was up 0.46% to 35,264.</li><li>S&amp;P 500 advanced 0.1% to 4,436.</li><li>Nasdaq fell -0.49% to 14,788.</li></ul>



<h3 class="wp-block-heading">Fixed Income</h3>



<ul class="wp-block-list"><li>US 10-year treasury yields 1.344% as of 4:00 pm ET.</li></ul>



<h3 class="wp-block-heading">Currencies</h3>



<ul class="wp-block-list"><li>The US dollar strengthened 0.07%, according to the Bloomberg Dollar Spot Index.</li></ul>



<h3 class="wp-block-heading">In other news&#8230;</h3>



<ul class="wp-block-list"><li>Coinbase’s second quarter<a href="https://cms.blockworks.co/?p=6400&amp;preview=true&amp;_thumbnail_id=4179" target="_blank" rel="noreferrer noopener"> earnings exceeded analysts’ expectations</a> despite months-long volatility in cryptocurrency markets. The popular trading platform reported $2.23 billion in revenue, beating Wall Street&#8217;s estimates by $380 million, after market close on Tuesday. The company’s shares were down 3.85% ahead of Q2 results, trading at $269.67.</li></ul>



<ul class="wp-block-list"><li>Financial giant VanEck filed for a <a href="https://cms.blockworks.co/vaneck-files-for-bitcoin-strategy-etf/" target="_blank" rel="noreferrer noopener">bitcoin futures exchange-traded fund</a> (ETF). It&#8217;s currently awaiting SEC approval on an ETF that would invest in bitcoin directly. The firm first sought out a BTC-based ETF with the Securities Exchange Commission (SEC) in 2017, but later withdrew. VanEck has roughly $63 billion in assets under management and over 50 <a href="https://www.etf.com/search?gq=vaneck" target="_blank" rel="noreferrer noopener">domestically-traded ETFs</a>.</li></ul>



<h3 class="wp-block-heading">We&#8217;re watching out for&#8230;</h3>



<ul class="wp-block-list"><li>US consumer price index (CPI) data will be released on Wednesday.</li><li>OPEC: Oil Market Report is due on Thursday.</li></ul>



<p>That&#8217;s it for today&#8217;s markets wrap. I&#8217;ll see you back here tomorrow.</p>



<p><strong><em>Want more investor-focused content on digital assets?&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Join us</a>&nbsp;September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Buy it now</a>.</em></strong></p>


Crypto Prices Steady After DeFi Hack: Markets Wrap

Ben Strack

<div id="highlights-block_6111a667d9b44" class="highlights">
        <ul>
                <li>Crypto tax amendment was blocked after Sen. Richard Shelby (R-Ala.) tried to add unrelated provision to raise military spending</li>
                <li>Senators Pat Toomey, Cynthia Lummis and Rob Portman joined forces with Democratic senators to agree on amendment earlier in the day</li>
            </ul>
    
</div>



<p>Despite bipartisan support of an amendment within the proposed infrastructure bill that would narrow the definition of a cryptocurrency “broker,” the Senate on Monday failed to pass its inclusion in the legislation.&nbsp;</p>



<p>Sen. Richard Shelby (R-Ala.), halted an attempt to vote on the revised language through “unanimous consent” — a procedure whereby all legislators are asked to approve rule changes and bills — as a way to get a vote on his amendment to raise military spending, <a href="https://www.washingtonpost.com/us-policy/2021/08/09/senators-reach-agreement-revamp-cryptocurrency-rules-it-may-prove-too-late-change-bill/">the <em>Was</em></a><a href="https://www.washingtonpost.com/us-policy/2021/08/09/senators-reach-agreement-revamp-cryptocurrency-rules-it-may-prove-too-late-change-bill/" target="_blank" rel="noreferrer noopener"><em>h</em></a><a href="https://www.washingtonpost.com/us-policy/2021/08/09/senators-reach-agreement-revamp-cryptocurrency-rules-it-may-prove-too-late-change-bill/"><em>ington Post</em> reported</a>.</p>



<p>Bernie Sanders (D-Vt.) blocked Shelby’s attempt to add his amendment, and when Sen. Ted Cruz (R-Tex.) tried to advance the crypto provision without Shelby’s amendment, the Alabama legislator objected, according to the <em>Washington Post</em>.</p>



<p>The Senate is expected to vote on the infrastructure bill itself on Tuesday morning.</p>



<p>The vote came after advocates of the digital asset community <a href="https://cms.blockworks.co/is-congresss-infrastructure-deal-a-threat-to-the-us-crypto-industry/">came out against</a> the crypto-related tax reporting requirements included in the proposed infrastructure deal, arguing that it put such obligations on players in the industry who have no way to comply.</p>



<p>Senators Pat Toomey (R-Pa.), Cynthia Lummis (R-Wyo.) and Rob Portman (R-Ohio) joined forces with Democratic Senators such as Mark Warner (D-Va.) and Kyrsten Sinema (D-Ariz.) <a href="https://cms.blockworks.co/senators-compromise-on-crypto-tax-provision-bull-run-continues/" target="_blank" rel="noreferrer noopener">to agree on an amendment</a> Monday that would exempt hardware wallet makers, cryptocurrency transaction validators, node operators and other non-brokers from tax regulations.</p>



<p>“I urge my colleagues to join us in enacting this bipartisan clarification,” Toomey said in a <a href="https://twitter.com/SenToomey/status/1424819615469875200?s=20" target="_blank" rel="noreferrer noopener">Twitter</a> post before heading to the Senate floor to request unanimous consent. “Let&#8217;s get this done.”</p>



<p>Kristin Smith, executive director of the <a href="https://theblockchainassociation.org" target="_blank" rel="noreferrer noopener">Blockchain Association</a>, said in a statement that the failure to reach unanimous consent on the compromise jeopardizes US leadership in financial and technological innovation.</p>



<p>“Washington politics prevailed over common sense today,” she said. “&#8230;As written, the infrastructure bill contains harmful IRS reporting requirements that many in the crypto ecosystem lack the capabilities to comply with. As a result, many crypto players will be forced to move overseas, leaving future jobs and economic growth on the table.”</p>



<p>Smith added that the Blockchain Association and its 46 member organizations plan to engage with members of the House of Representatives to ensure that “the unclear and unworkable aspects” of the provision are removed.</p>



<p>“The good news is we’re not giving up,” Jerry Brito, executive director of crypto policy nonprofit <a href="https://www.coincenter.org" target="_blank" rel="noreferrer noopener">Coin Center</a>, <a href="https://twitter.com/jerrybrito/status/1424832132204138503" target="_blank" rel="noreferrer noopener">tweeted</a> after the Senate session. “Next stop is the House where we can try to get a whole new amendment from scratch that can address all our concerns.”</p>


Senate Fails to Amend Crypto Tax Provision in Infrastructure Bill

<div id="highlights-block_60c9fc7f1690b" class="highlights">
        <ul>
                <li>Alchemy Pay is set to launch its crypto-linked banks card which will support 40 cryptocurrencies. </li>
                <li>Ether has had a return on investment of 49.04% over the past month, according to Messari.</li>
            </ul>
    
</div>



<p>Ethereum and bitcoin continued their near-term bull run on Monday afternoon after a bipartisan <a href="https://cms.blockworks.co/senators-compromise-on-crypto-tax-provision-bull-run-continues/" target="_blank" rel="noreferrer noopener">compromise</a> around a crypto-related tax provision in the infrastructure bill was blocked in the Senate.</p>



<p>Instead, the bill will proceed as originally written, likely passing the Senate with language that includes broad taxation of the digital asset space. It requires cryptocurrency ‘brokers,’ an undefined term, to disclose trader information, including gains made on investments, transfers and transactions of more than $10,000, which the <a href="https://cms.blockworks.co/us-treasury-report-crypto-transfers-of-10000/" target="_blank" rel="noreferrer noopener">IRS already</a> monitors. The provision is estimated to bring in $28 million in tax revenue, <a href="https://cms.blockworks.co/infrastructure-bill-advances-in-senate-crypto-amendments-await-vote/" target="_blank" rel="noreferrer noopener">Blockworks reported on August 7</a>.</p>



<p>Prices continued to rise but simmered down after traditional markets closed following the news.</p>



<p>In the past, regulatory scares have sparked massive sell-offs for crypto. However, bitcoin traded above its 200-day moving average line on Monday. BTC has a return on investment (ROI) of 37.1% over the past month, according to <a href="https://messari.io/asset/bitcoin" target="_blank" rel="noreferrer noopener">Messari</a><a href="https://messari.io/asset/bitcoin">.&nbsp;</a></p>



<p>The largest cryptocurrency by market value now faces resistance at $50,000. More ether continues to burn after the launch of the <a href="https://cms.blockworks.co/eip-1559-is-live-thanks-to-ethereums-london-hard-fork/" target="_blank" rel="noreferrer noopener">London hard fork</a> on Thursday. After trading above a two-month high last week, the cryptocurrency continues to shoot up. Ether has a ROI of 49.04% over the past month, according to <a href="https://messari.io/asset/ethereum" target="_blank" rel="noreferrer noopener">Messari.</a></p>



<h3 class="wp-block-heading">DeFi</h3>



<ul class="wp-block-list"><li>Uniswap is trading at $28.21 with a total value locked of $4,997,306,338 up 9.1% in 24 hours at 4:00 pm ET.&nbsp;</li><li>Chainlink is trading at $24.58, advancing 7.6% with trading volume at $996,367,778 in 24 hours at 4:00 pm ET.</li><li>DeFi:ETH is 29.2% at 4:00 pm ET.</li></ul>



<h3 class="wp-block-heading">Crypto</h3>



<ul class="wp-block-list" id="block-1209f037-00c3-4876-ad37-a29ab610c717"><li>Bitcoin is trading around $46,293.37, up 5.83% in 24 hours at 4:00 pm ET.</li><li>Ether is trading around $3,169.98, advancing 6.16% in 24 hours at 4:00 pm ET.</li><li>ETH:BTC is at 0.0684, down -0.40% at 4:00 pm ET.</li><li>VIX is up 3.53% to 16.72 at 4:00 pm ET.</li></ul>



<h3 class="wp-block-heading">Insight</h3>



<p>Clearblock Insights co-founder Cody Ryan weighed in on Monday&#8217;s crypto markets activity. </p>



<p>&#8220;The industry’s collective energy has been laser focused over the last 72 hours on the implications of the infrastructure bill. However, the market continues to push higher with BTC now flirting again with key resistance levels around $45K in the face of continued regulatory uncertainty,&#8221; Ryan said to Blockworks. &#8220;Moving our scope outside of DC and the fluid political headlines, the on-chain metrics help paint a picture of just how bullish and energized the market is. BTC reclaimed its 200-day moving average today for the first time since the epic May sell-off earlier this year.&#8221;</p>



<div class="wp-block-image is-style-default"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/844782F1-42AD-4B78-BF85-DCD97CC7662E.jpeg" alt="" class="wp-image-6306" width="873" height="501" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/844782F1-42AD-4B78-BF85-DCD97CC7662E.jpeg?w=911 911w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/844782F1-42AD-4B78-BF85-DCD97CC7662E.jpeg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/844782F1-42AD-4B78-BF85-DCD97CC7662E.jpeg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/844782F1-42AD-4B78-BF85-DCD97CC7662E.jpeg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/844782F1-42AD-4B78-BF85-DCD97CC7662E.jpeg?w=455 455w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/844782F1-42AD-4B78-BF85-DCD97CC7662E.jpeg?w=381 381w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/844782F1-42AD-4B78-BF85-DCD97CC7662E.jpeg?w=80 80w" sizes="(max-width: 873px) 100vw, 873px" /><figcaption>                                                                                                                           ETH:BTC, BTC and ETH over the past month. Source: TradingView</figcaption></figure></div>



<h3 class="wp-block-heading">Commodities</h3>



<p>Oil prices dipped on Monday amid Delta variant concerns.</p>



<p>US crude oil fell to a two-month low as it toppled to $66 per barrel. As governments react to surging Covid cases, investors worry restrictions may weaken demand for the commodity.&nbsp;This is mostly due to lack of travel as countries mandate lockdown orders.&nbsp;</p>



<ul class="wp-block-list" id="block-d64d70c9-7052-4f1a-8167-3d370fe08354"><li>Brent crude is down to $70.21 per barrel, declining -3.04%.</li><li>Gold fell -0.01% to $1,814.</li></ul>



<p>In other macro news, job openings rose with those quitting jobs, indicating a continued US labor shortage, Blockworks <a href="https://cms.blockworks.co/the-labor-shortage-rages-on-jolts-data-shows/" target="_blank" rel="noreferrer noopener">reported</a> on Monday. The number of job openings touched over 10 million,&nbsp;according to the US Bureau of Labor Statistics.</p>



<h3 class="wp-block-heading">Insight</h3>



<p>US Chief Executive Officer at Currency.com Steve Gregory weighed in on commodities and their relationship to cryptocurrencies in the markets. </p>



<p>&#8220;Meanwhile, in traditional markets, oil and gold saw sharp falls&nbsp;bringing into question whether&nbsp;gold remains a popular&nbsp;safe-haven asset or is crypto emerging as a hedge against inflation and the government&#8217;s looming threat to unwind stimulus,&#8221; Gregory said in a note to Blockworks. &#8220;It will be interesting to see how this story unfolds. In the meantime,&nbsp;we expect the continuation of the [crypto] bull market in the immediate term.&#8221;  </p>



<div class="wp-block-image is-style-default"><figure class="aligncenter size-large"><img loading="lazy" decoding="async" width="904" height="522" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/235D2B30-6C15-4CEA-AD0F-B9E7E87E93D1.jpeg" alt="" class="wp-image-6315" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/235D2B30-6C15-4CEA-AD0F-B9E7E87E93D1.jpeg?w=904 904w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/235D2B30-6C15-4CEA-AD0F-B9E7E87E93D1.jpeg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/235D2B30-6C15-4CEA-AD0F-B9E7E87E93D1.jpeg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/235D2B30-6C15-4CEA-AD0F-B9E7E87E93D1.jpeg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/235D2B30-6C15-4CEA-AD0F-B9E7E87E93D1.jpeg?w=452 452w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/235D2B30-6C15-4CEA-AD0F-B9E7E87E93D1.jpeg?w=379 379w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/235D2B30-6C15-4CEA-AD0F-B9E7E87E93D1.jpeg?w=80 80w" sizes="(max-width: 904px) 100vw, 904px" /><figcaption>                                                                               WTI Crude and Brent over the past five days. Source: TradingView</figcaption></figure></div>



<h3 class="wp-block-heading">Equities</h3>



<ul class="wp-block-list"><li>The Dow was down -0.31% to 35,099.</li><li>S&amp;P 500 declined -0.1% to 4,431.</li><li>Nasdaq had a slight uptick of 0.18% to 14,862.</li></ul>



<h3 class="wp-block-heading">Fixed Income</h3>



<ul class="wp-block-list"><li>US 10-year treasury yields 1.319% as of 4:00 pm ET.</li></ul>



<h3 class="wp-block-heading">Currencies</h3>



<ul class="wp-block-list"><li>The US dollar strengethened 0.17%, according to the Bloomberg Dollar Spot Index.</li></ul>



<h3 class="wp-block-heading">In other news&#8230;</h3>



<p>Alchemy Pay announced the launch of its crypto-linked card, Blockworks <a href="https://cms.blockworks.co/?p=6290&amp;preview=true&amp;_thumbnail_id=6314" target="_blank" rel="noreferrer noopener">reported</a>. </p>



<p>The Singapore-based company&#8217;s most recent product will support 40 cryptocurrencies, which can be linked to notable digital wallets like Paypal. Payment methods are set to be accepted by merchants across Mastercard and Visa networks.</p>



<h3 class="wp-block-heading">We&#8217;re watching out for&#8230;</h3>



<ul class="wp-block-list"><li>US consumer price index (CPI) data will be released on Wednesday </li><li>OPEC: Oil Market Report is due on Thursday</li></ul>



<p>That&#8217;s it for today&#8217;s markets wrap. I&#8217;ll see you back here tomorrow.</p>



<p><strong><em>Want more investor-focused content on digital assets?&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Join us</a>&nbsp;September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Buy it now</a>.</em></strong></p>


Cryptos Up Despite Prospect of Broad Taxation: Markets Wrap

<div id="highlights-block_61114bd260f6d" class="highlights">
        <ul>
                <li>The Senate is scheduled to do a final vote on Tuesday</li>
                <li>The bill could be put to a vote without amendments being considered due to the 30-hour rule</li>
            </ul>
    
</div>



<p>A compromise amendment on the cryptocurrency-related tax provision in the $1.3 trillion infrastructure bill was put forward by a group of US Senators on Monday.</p>



<p>In the bipartisan deal, Senators Pat Toomey (R-Pa.), Cynthia Lummis (R-Wyo.) and Rob Portman (R-Ohio) joined forces with Democratic Senators such as Mark Warner (D-Va.) and Kyrsten Sinema (D-Ariz.) to come to an agreement.  </p>



<p>”We came together to provide greater clarity on the rules for who are the actual brokers of a cryptocurrency,” Senator Toomey said during a <a href="https://www.c-span.org/video/?513996-1/senators-toomey-lummis-infrastructure-bil" target="_blank" rel="noreferrer noopener">press conference</a> early Monday morning. “We’re not proposing anything sweeping or anything radical.” </p>



<p>The new amendment narrows down the definition of a cryptocurrency “broker,” a point of contention in the original bill’s proposal, so that it would exempt hardware wallet makers, cryptocurrency transaction validators, node operators and other non-brokers from tax regulations.</p>



<p>&#8220;The amendments that have been made to the proposed legislation are common sense, and far more reasonable than the original proposal,” said Valkyrie Investments Chief Investment Officer Steven McClurg in a note to Blockworks. “We are, of course, in favor of regulation, but all we ever advocated for was fairness, and for the parties covered to be similar to those in the traditional financial markets. Now that we appear to have reached a sensible compromise, we can focus on being compliant when the rules go into effect in 2023.&#8221;</p>



<h3 class="wp-block-heading">The controversy </h3>



<p>The bi-partisan infrastructure bill proposal, revealed on July 28, sent shockwaves through the digital asset community in recent weeks.&nbsp;</p>



<p>Originally, the bill included a provision that would require cryptocurrency “brokers” to report customer information to the Internal Revenue Service (IRS). In the original proposal’s language, “broker” was broadly defined as anyone “responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.”&nbsp;</p>



<p>However, many crypto advocates wanted a more narrow and nuanced definition for the term.&nbsp;</p>



<p>In response, two separate groups of elected officials proposed last minute cryptocurrency-related <a href="https://cms.blockworks.co/us-crypto-tax-crackdown-in-congress-crosshairs/" target="_blank" rel="noreferrer noopener">amendments</a> with varying definitions of “broker.”</p>



<p>One amendment, proposed by Senator Lummis, Wyden and Toomey, clarified that blockchain developers and miners should not be included in the provision’s tax reporting requirements.&nbsp;</p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">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</p>&mdash; Ron Wyden (@RonWyden) <a href="https://twitter.com/RonWyden/status/1424731514147938304?ref_src=twsrc%5Etfw">August 9, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<p>Over the weekend, the bill passed a key hurdle in the <a href="https://cms.blockworks.co/infrastructure-bill-advances-in-senate-crypto-amendments-await-vote/" target="_blank" rel="noreferrer noopener">Senate</a>, but it’s not over yet.</p>



<p>Senators Sinema and Warner updated their amendment, (separate from Lummis’) on Saturday to exclude proof-of-stake validators and proof-of-work miners from reporting requirements to the IRS.&nbsp;</p>



<p>The Senate voted 68-29 to shut down debates Saturday afternoon.&nbsp;</p>



<h3 class="wp-block-heading">What’s next?</h3>



<p>Currently, amendments are being held up because of conflict over the 30-hour rule, Senator Lummis <a href="https://twitter.com/SenLummis/status/1424556793506635776?s=20" target="_blank" rel="noreferrer noopener">tweeted</a> on Sunday. The rule gives elected officials a 30-hour limit to consider the bill before voting on the proposal. </p>



<p>The Senate is scheduled to do a final vote on Tuesday, but they could still make amendments on the bill in the meantime. To complicate matters, due to the time-sensitive rule, the bill could be put to a vote without amendments being considered.</p>



<p>“This has been an interesting day. Here’s what is happening: First, we’ve been able to have very productive conversations with senators on all sides of this issue, and if we could vote on amendments I think the digital asset community would be pleased with the outcome,” Lummis <a href="https://twitter.com/SenLummis/status/1424556794295189505" target="_blank" rel="noreferrer noopener">tweeted</a> late Sunday night. </p>



<h3 class="wp-block-heading">The bull run continues</h3>



<p>Despite regulatory scrutiny in the Senate, the recent bull run continues for major cryptos.&nbsp;</p>



<p>Bitcoin is trading at $45,965.85, up 4.38% in the last 24 hours. Ethereum has risen 3.42%, trading at $3,137.99 in the last 24 hours. </p>



<p><strong><em>Want more investor-focused content on digital assets? <a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Join us</a> September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket. <a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Buy it now</a>.</em></strong></p>


Senators Compromise on Crypto Tax Provision; Bull Run Continues

Casey Wagner


<h2 class="wp-block-heading"></h2>


<div id="highlights-block_610f0cad09ffd" class="highlights">
        <ul>
                <li>The $1 trillion infrastructure bill crucial to Biden’s agenda passed a key hurdle in the Senate Saturday </li>
                <li>Senators need to settle the debate between two competing cryptocurrency-related amendments before a final vote is made</li>
            </ul>
    
</div>



<p>A $1 trillion bipartisan infrastructure bill has moved closer to passing after clearing a major hurdle in the Senate on Saturday. Senators voted 67-27 to end debate but will have to resolve the conflict over two competing cryptocurrency-related amendments before a final vote will be made.&nbsp;</p>



<p>The bill, a key part of President Joe Biden’s agenda, would put an unprecedented amount of federal funds into a range of programs, including education, and road, bridge, rail, port and airport improvements, among others.</p>



<p>The original proposal includes a provision which would require cryptocurrency ‘brokers,’ an undefined term, to disclose trader information, including gains made on investments, transfers and transactions of more than $10,000, which the <a href="https://cms.blockworks.co/us-treasury-report-crypto-transfers-of-10000/">IRS already</a> monitors. The provision is estimated to bring in $28 million in tax revenue.&nbsp;</p>



<h3 class="wp-block-heading"><strong>Crypto amendments</strong></h3>



<p>A series of final hour cryptocurrency-related amendments to the bill were proposed in the days leading up to Saturday’s vote. Ron Wyden (D., Ore.) Pat Toomey (R., Pa.), and Cynthia Lummis (R., Wyo.) introduced an amendment Wednesday to provide clarification into the term “broker.”&nbsp;</p>



<p>On Thursday, a competing amendment was introduced from senators Rob Portman (R., Ohio), Mark Warner (D., Va) and Kyrsten Sinema (D., Ariz.), which required proof-of-stake developers&nbsp; to report holder and trading information, but not proof-of-work.&nbsp;</p>



<p>On Saturday, Warner and colleagues updated their amendment to exempt both proof-of-work and proof-of-stake validators from reporting requirements.&nbsp;</p>



<p>Digital asset advocates appear to favor Wyden’s proposed amendment. United States Secretary of the Treasury Janet Yellen is lobbying against this amendment, according to the <a href="https://www.washingtonpost.com/politics/2021/08/06/crypto-bitcoin-infrastructure-senate/" target="_blank" rel="noreferrer noopener"><em>Washington Post</em></a>.</p>



<h3 class="wp-block-heading"><strong>White House support</strong></h3>



<p>The Biden administration has backed the original proposal and does not support Wyden’s amendment.&nbsp;</p>



<p>“I would just go back to the overarching objective here which is reducing tax evasion in the cryptocurrency market, and we feel that the compromise sponsored by Senators Warner, Portman, and Sinema is a good option,” said White House Press Secretary Jen Psaki on Friday.&nbsp;</p>



<p>Industry leaders like Sam Bankman-Fried, founder and CEO of FTX, are not debating the need for 1099 reporting requirements for exchanges like FTX and Coinbase. Rather they are <a href="https://twitter.com/SBF_FTX/status/1423529349828030467" target="_blank" rel="noreferrer noopener">fearing</a> the potential loss of innovation and technological advances for the US as miners and software developers move offshore.</p>



<p>Senator Mike Lee (R-Utah) echoed this fear while speaking on the Senate floor this afternoon. “If we pass this bill, mark my words, it’s going to have a chilling effect on innovation and what you’ll see is the flight of innovation and investment related to innovation to offshore locations around the world,” he said.&nbsp;</p>



<p>Senate Republicans have signaled that they will slow down the final voting timeline as much as possible. Eighteen Republicans sided with Democrats in shutting down debates Saturday afternoon. Bill Hagerty, a freshman Republican senator from Tennessee, said that he is “not inclined to expedite this process whatsoever.” </p>



<p><strong><em>Want more investor-focused content on digital assets? <a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Join us</a> September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket. <a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Buy it now</a>.</em></strong></p>


Infrastructure Bill Advances in Senate, Crypto Amendments Await Vote

<div id="highlights-block_610dad77086ca" class="highlights">
        <ul>
                <li> A fundamental misunderstanding of the technology behind blockchain is at the core of the issue with cryptocurrency tax language in the infrastructure bill, Sarson Funds’ Jahon Jamali told Blockworks </li>
                <li>Digital assets investors and stakeholders say the bill as it stands is simply unrealistic from a compliance perspective and will lead to an offshoring of infrastructure</li>
            </ul>
    
</div>



<p>The fight to keep key elements of blockchain infrastructure such as nodes and wallets from being considered “brokers,” and be required to engage in tax reporting, now involves Treasury Secretary Janet Yellen as the <a href="https://www.washingtonpost.com/politics/2021/08/06/crypto-bitcoin-infrastructure-senate/" target="_blank" rel="noreferrer noopener"><em>Washington Post</em></a> reported Friday.&nbsp;</p>



<p>But as Sarson Funds co-founder and fund manager Jahon Jamali explained to Blockworks, the fight is based on fundamental misunderstandings about the underlying technology that powers digital assets.</p>



<p>The <a href="https://cms.blockworks.co/senators-propose-infrastructure-bill-amendment-to-lighten-crypto-reporting-requirements/" target="_blank" rel="noreferrer noopener">amendment</a> put forward by Senators Ron Wyden (D-Ore.), Pat Toomey (R-Pa.) and Cynthia Lummis, (R-Wyo.) keeps the definition of crypto “broker” — and with that the subsequent tax implications — quite strict. Yellen is lobbying against this amendment, according to the <em>Washington Post</em>.</p>



<p>However, a rival bi-partisan camp of Senators Rob Portman (R-Ohio), Mark Warner (D-Va.) and Kyrsten Sinema, (D-Ariz.) proposed another amendment that would add a broad scope of reporting requirements to blockchain infrastructure providers, which FTX founder and CEO, Sam Bankman-Fried explained on Twitter earlier today.</p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">1) More last minute updates on the crypto tax bill!<br><br>For context: <a href="https://t.co/ABSlsX2Crd">https://t.co/ABSlsX2Crd</a></p>&mdash; SBF (@SBF_FTX) <a href="https://twitter.com/SBF_FTX/status/1423529349828030467?ref_src=twsrc%5Etfw">August 6, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<p>What has left many scratching their head is the explicit call out of proof-of-stake versus proof-of-work. While Bitcoin and Ethereum currently use proof-of-work, Ethereum is <a href="https://cms.blockworks.co/institutions-staking-eth-2-want-internet-bonds/" target="_blank" rel="noreferrer noopener">scheduled to move</a> to proof-of-stake as part of its shift to ETH2.</p>



<p>What’s more curious to many is that proof-of-work has long been criticized for its reliance on mining and miners due to the perceived carbon footprint. Now, the sudden support for proof-of-stake is a neck-snapping flip-flop.</p>



<p>“I think the pace of innovation is clearly moving faster than policymaking,” Jamali told Blockworks. “While in some ways it solidifies bitcoin as a mainstay of the US financial system, the tax-reporting requirements for proof-of-stake protocols demonstrate a clear lack of understanding on how the technology works.”</p>



<h3 class="wp-block-heading">Yellen and bankers<strong> feeling the DeFi heat</strong></h3>



<p>Jamal also pointed out that part of this is a product of incumbent financial institutions facing “clear competition” from decentralized finance (DeFi).</p>



<p>Indeed, <a href="https://cms.blockworks.co/us-cbdc-prototype-ready-soon-but-will-anyone-use-it/" target="_blank" rel="noreferrer noopener">according to lobbying disclosures</a>, the American Bankers Association (ABA) spent nearly $3 million lobbying lawmakers during the fourth quarter of the year about a range of issues, including CBDCs and cryptocurrency.&nbsp;</p>



<p>“It seems that they’ve corralled support amongst some in DC,” Jamali said.</p>



<p>Other industry stakeholders have also pointed out that the impossible compliance requirements this bill proposes would put pressure on blockchain infrastructure providers to move offshore and shop around for favorable regulation.</p>



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow"><p><strong>“There&#8217;s a reason England doesn&#8217;t have any social media companies. There&#8217;s a reason France doesn&#8217;t have much of a financial services industry,” Preston Byrne, a <a href="https://twitter.com/prestonjbyrne/status/1423637356859559945" target="_blank" rel="noreferrer noopener">Partner at Anderson Kill</a>, and well-known voice in the crypto industry tweeted, referring to the former’s restrictive laws around free speech and the latter’s high taxes. “If the White House gets its way, there will be a reason that America doesn&#8217;t have a crypto industry.”</strong></p></blockquote>



<p>“This crypto bill happened because some staffer in a back room who has no idea how the tech works thinks that some Solidity code is going to send people 1099s,” he concluded.</p>



<p><strong><em>Want more investor-focused content on digital assets?&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Join us</a>&nbsp;September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Buy it now</a>.</em></strong></p>


Blockchain Innovation is Moving Faster than Policy-Making

<div id="highlights-block_610d69ab41248" class="highlights">
        <ul>
                <li>Ron Wyden (D., Ore.) Pat Toomey (R., Pa.), and Cynthia Lummis (R., Wyo.) introduced an amendment Wednesday to provide clarification into the term ‘broker.’</li>
                <li>Some industry members fear that the language of their proposed amendment favors proof-of-work, the consensus mechanism pioneered by bitcoin, over proof-of-stake, which is employed by the ETH2 blockchain and others. </li>
            </ul>
    
</div>



<p>An unlikely trio of senators from both sides of the aisle is trying to change a key part of the $1.2 trillion infrastructure deal currently being considered by Congress. Lawmakers’ indication that cryptocurrency crackdowns are coming has the digital asset industry up in arms.&nbsp;</p>



<p>If passed, the bill will require digital asset brokers to disclose investors’ gains earned from cryptocurrency, raising an <a href="https://cms.blockworks.co/is-congresss-infrastructure-deal-a-threat-to-the-us-crypto-industry/">estimated $28 billion</a> to go toward revamping roads, bridges and&nbsp; broadband.&nbsp;</p>



<p>Ron Wyden (D., Ore.) Pat Toomey (R., Pa.), and Cynthia Lummis (R., Wyo.) introduced an amendment Wednesday to provide clarification into the term ‘broker.’ In the first signal that a compromise may eventually be reached, Sen. Rob Portman (R., Ohio), who wrote the original provision, agreed and said clarification will be needed on Thursday. The White House has come out in support of the original provision.&nbsp;</p>



<p>The proposed amendment clarifies that digital asset miners and blockchain developers should not be treated as ‘brokers’ with tax reporting requirements. These parties do not have access to, for security purposes, the necessary identifying information about crypto holders and therefore should not be required to report, the senators say.&nbsp;</p>



<p>“Our amendment makes clear that reporting does not apply to individuals developing blockchain 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.</p>



<h3 class="wp-block-heading"><strong>A lack of understanding</strong></h3>



<p>On Thursday, a competing amendment was introduced from senators Rob Portman (R., Ohio), Mark Warner (D., Va) and Kyrsten Sinema (D., Ariz.). Some industry members fear that the language of the amendment favors proof-of-work, the consensus mechanism pioneered by bitcoin, over proof-of-stake, which is employed by the ETH2 blockchain and others.&nbsp;</p>



<p>“Under this amendment, proof-of-work chains (e.g. BTC), which algorithmically validates blocks without private information wouldn&#8217;t be responsible for guessing what transactions customers are doing in crypto,” said Sam Bankman-Fried,&nbsp; founder and CEO of FTX, in a <a href="https://twitter.com/SBF_FTX/status/1423529360406061061?s=20">recent tweet</a>. “But if a blockchain uses a [proof-of-stake] protocol, then it would be.”&nbsp;</p>



<p>The amendment implies that proof-of-stake would be required to report, Bankman-Fried explained, but these miners and developers are just as in the dark about individual trades as their proof-of-work counterparts.&nbsp;</p>



<p>The bill, cryptocurrency advocates say, is only the latest example that most of Washington has a long way to go when it comes to blockchain education.&nbsp;</p>



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow"><p><strong>“I would be interested to hear if any of the senators know what a consensus mechanism is and understand the difference between proof of work and proof-of-stake,” said Andrew Keys, managing partner at DARMA Capital. “I would bet the farm that none of them understand the difference. This is not tech neutrality, this is affording one type of technology different advantages based upon how a database works, and I think that&#8217;s very reckless.”&nbsp;</strong></p></blockquote>



<p>The bill has the potential to drive blockchain miners and developers out of the US, Keys argued.&nbsp;</p>



<p>“The additional reporting requirements and the additional hurdles are just going to move crypto offshore, which is actually going to disadvantage the United States,” said Keys.&nbsp;</p>



<h3 class="wp-block-heading"><strong>Tax accountability</strong></h3>



<p>What crypto industry leaders see as an attack on innovation, some lawmakers see as a step in the right direction when it comes to holding corporations accountable.&nbsp;</p>



<p>“I support President Biden’s plans to crack down on widespread tax evasion,” Tammy Duckworth (D., Il.) wrote in a letter to a constituent. “The IRS Commissioner estimates the United States Government loses an average of $1 trillion per year in uncollected taxes that are legally owed but not paid.”&nbsp;</p>



<p>Crypto advocates largely agree: there is a tax evasion problem in the US. Bankman-Fried, who owns FTX.US, the exchange that serves customers in America, <a href="https://twitter.com/SBF_FTX/status/1423425222758178823?s=20">said</a> that he knows that crypto taxes sometimes go unreported and he is willing to work with regulators.</p>



<p>This particular bill, however, is not the most efficient way to address crypto tax issues, industry leaders insist.&nbsp;</p>



<p>“The US won the internet, FAANG, Facebook, Amazon, Apple Netflix, Google, are all US companies, they employ many US citizens and they do pay taxes in the US. Maybe not as much as they should, and that&#8217;s a separate kind of tax arbitrage conversation, but this is big,” said Keys. “This world is more global now that there is the internet, and these types of technologies will just move to different jurisdictions, and people that will benefit from that will also move, but it&#8217;s not going to stop the technology.”&nbsp;</p>


US Crypto Tax Crackdown in Congress’ Crosshairs

Liz Coyne


<p>In the latest episode of Blockworks’ podcast “<a href="https://www.youtube.com/watch?v=lKhD0hKZoW8" target="_blank" rel="noreferrer noopener">Empire</a>,” Jason Yanowitz , co-founder of Blockworks, sits down with  US Senator Cynthia Lummis (R-WY) to talk about the proposed infrastructure bill and the negative effects the bill could have for bitcoin, digital assets and innovation. </p>



<p>This is a shorter episode than usual as Senator Lummis had less than 30 minutes to record between votes.</p>



<p>Senator Lummis and Jason talk about:</p>



<ul class="wp-block-list"><li>Impact of inflation</li><li>Increasing national debt</li><li>Fiscal policy</li><li><a href="https://cms.blockworks.co/senators-propose-infrastructure-bill-amendment-to-lighten-crypto-reporting-requirements/" target="_blank" rel="noreferrer noopener">The infrastructure bill </a></li><li>Knowledge of BTC in the Senate </li><li>Regulation vs innovation</li></ul>



<p>Check out what they had to say in the video below. 👇</p>



<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="Bitcoin in the Senate: The Infrastructure Bill | Cynthia Lummis" width="1024" height="576" src="https://www.youtube.com/embed/lKhD0hKZoW8?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
</div></figure>



<p>On &#8220;Empire,&#8221; once a week, Jason interviews individuals that have built the crypto industry to talk about their struggles, bold moves and tough decisions. For any NPR or Guy Raz fans out there, you can think of &#8220;Empire&#8221; like a “How I Built This” for the bitcoin and crypto industry.</p>



<p>Episodes are released every Thursday morning.&nbsp;</p>



<p>Subscribe to Empire today on&nbsp;<a href="https://apple.co/389JSpL" target="_blank" rel="noreferrer noopener">Apple</a>&nbsp;or&nbsp;<a href="https://spoti.fi/3uVnxpC" target="_blank" rel="noreferrer noopener">Spotify</a>. Watch episodes on&nbsp;<a href="https://www.youtube.com/playlist?list=PLvER9nHSRN3wPkrDGTT5_8VC4Hjcq0f9U" target="_blank" rel="noreferrer noopener">YouTube</a>.</p>


Podcast: Senator Lummis on Why the Infrastructure Bill Kills Innovation

<div id="highlights-block_610af101d6fd5" class="highlights">
        <ul>
                <li>The White House’s $1.2 trillion infrastructure deal includes provisions for a dramatic strengthening of tax enforcement of digital assets  </li>
                <li>Digital assets brokers would have a much higher requirement for tax reporting, but the definition of what constitutes a broker has proven to be problematic</li>
            </ul>
    
</div>



<p>Three US Senators have proposed an amendment to the $1.2 trillion infrastructure deal currently before Congress which would seek to revise one of the parts of the bill previously deemed an “imminent threat” to the country’s digital asset industry.&nbsp;</p>



<p>In its current form the bill contains a provision called “Enhancement of Information Reporting for Brokers and Digital Assets,” as Blockworks has <a href="https://cms.blockworks.co/is-congresss-infrastructure-deal-a-threat-to-the-us-crypto-industry/" target="_blank" rel="noreferrer noopener">previously reported</a>, which creates extensive reporting requirements for Brokers. The problem, however, is that the definition of broker is wide enough to cover miners, lightning nodes, and the like,” Jerry Brito, executive director of Coin Center, said in a Twitter post.</p>



<p>Senators Wyden, Lummus, and Toomey instead have proposed amendments to specifically exclude validators, hardware and software makers, as well as protocol developers from these tax reporting requirements.&nbsp;</p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">I’m thrilled to say that <a href="https://twitter.com/RonWyden?ref_src=twsrc%5Etfw">@RonWyden</a> <a href="https://twitter.com/CynthiaMLummis?ref_src=twsrc%5Etfw">@CynthiaMLummis</a> and <a href="https://twitter.com/SenToomey?ref_src=twsrc%5Etfw">@SenToomey</a> have introduced an amendment to explicitly exclude validators, hardware and software wallet makers, and protocol devs from the tax reporting provisions. Bravo! Now we have to get this thing passed. <a href="https://t.co/0mpyNzxXee">pic.twitter.com/0mpyNzxXee</a></p>&mdash; Jerry Brito (@jerrybrito) <a href="https://twitter.com/jerrybrito/status/1422974253876580355?ref_src=twsrc%5Etfw">August 4, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<p>Rob Portman, one of the authors of the original bill, denies that the language is problematic and&nbsp;said on Twitter that “digital assets like bitcoin and other cryptocurrencies are a rapidly growing part of our economy.”</p>



<p>&#8220;The legislation does not impose new reporting requirements on software developers, crypto miners, node operators or other non-brokers,&#8221; <a href="https://twitter.com/senrobportman/status/1422695569382858759?ref_src=twsrc%5Etfw" target="_blank" rel="noreferrer noopener">he said on Twitter</a>.&nbsp;</p>



<p>In a prior statement, the Blockchain Association, an industry trade group, had said that the language in the bill would put many infrastructure providers in an impossible place. Bitcoin miners and software developers don’t have enough information on their users, like Social Security Numbers, to properly report tax details.&nbsp;</p>



<p>“It would create this compliance nightmare,” Kristin Smith, the association’s executive director, said in a public statement. “So then people would have no choice but to either operate illegally, leave, or shut down.”</p>



<p>“While much more work needs to be done, this amendment is a responsible step toward fully incorporating digital assets into the US financial sector,” Senator Cynthia Lumis said in a public statement. “The digital asset and financial technology space is incredibly complicated, and we have spent long hours working in the Senate, with industry stakeholders, and with the administration to find a way to effectively integrate digital assets into our tax code without harming the technology or stifling innovation.”</p>



<p>This proposed amendment <a href="https://twitter.com/coincenter/status/1422975878678597640/photo/1" target="_blank" rel="noreferrer noopener">is supported</a> by the Blockchain Association, Coinbase, Coin Center, Ribbit Capital, and Square, according to a public statement.</p>



<p><strong><em>Want more investor-focused content on digital assets? <a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Join us</a> September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket. <a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Buy it now</a>.</em></strong></p>
