Sen. Ted Cruz (R-TX) slammed his fellow colleagues for attempting to enforce “harmful regulations” on cryptocurrencies within the $1.2 trillion bipartisan infrastructure bill, an industry he argued that less than a handful have the knowledge to define “what in the hell a cryptocurrency is.”
“Let’s recognize if we gathered all 100 senators in this chamber and asked them to stand up and articulate two sentences defining what in the hell a cryptocurrency is that you would not get greater than five who could answer that question,” Cruz said on the Senate floor Monday following a failure of obtaining unanimous consent to approve the amendment.
Sen. Richard Shelby (R-AL) prevented an attempt to vote on the compromised amendment via “unanimous consent,” a procedural maneuver under Senate rules that allows one member to object to another Senator from adding the add-on amendment in the final stages of a bill consideration. The Alabama senator sought to add within the crypto provision his amendment to include $50 billion in additional military construction funding — a major poison pill for Democrats. Sen. Bernie Sanders (I-VT), the self-proclaimed democratic socialist who opposes any type of increase in military spending, raised objections to Shelby’s effort to bring both provisions into one amendment for a unanimous vote.
In a last-ditch attempt to save the compromised amendment, Cruz tried to advance the crypto provision without Shelby’s amendment, but the Alabama Senator objected.
“Billions of dollars of value are going to be destroyed,” Cruz fumed in remarks debating Shelby’s amendment on the Senate floor as the efforts officially collapsed following Sanders’s objection.
The massive $1.2 trillion bipartisan infrastructure package that is over 2,000-pages includes a new tax-reporting rule for crypto “brokers,” a move that is believed to raise about $28 billion in new tax revenue as a “pay-for” provision to help generate revenue to fund the infrastructure deal. However, the definition of “broker,” something Cruz’s fellow colleagues has also argued for days, said the language in the bill is “overly broad” and could effectively cripple the booming digital industry if they can’t comply or move offshore.
Three bipartisan lawmakers — dubbed the Crypto Senators — Ron Wyden (R- OR) and two Republicans — Cynthia Lummis of Wyoming and Pat Toomey of Pennsylvania— introduced last week a legislative amendment to better define “broker” within the infrastructure bill that would exclude certain parts of the cryptocurrency industry from a tax reporting rule. It sought to explicitly exclude “validators, hardware and software makers as well as protocol developers.” The crypto Senators argued the original bill argues reporting obligations should apply only to individuals conducting transactions on exchanges where digital assets are bought, sold, and traded.
However, the other rival anti-crypto camp sits the bipartisan negotiators — Sens. Kyrsten Sinema (D-AZ) and Rob Portman (R-OH), and Mark Warner (D-VA) countered with a rival amendment, with their own amendment that isn’t friendly to the cryptocurrency world, and also had the backing by the White House and was being heavily lobbied by Treasury Sect Janet Yellen.
Disagreement over the language of crypto in the package has caused the infrastructure debate to drag on for days, delaying the Senate from passing the infrastructure deal before moving on to the $3.5 trillion Democrats spending bill. The budget reconciliation process is seen to take days with the Senate dealing with procedural moves before they can hold a final vote as Senate Majority Leader Chuck Schumer (D-NY) has threatened to hold Senators in Washington during their August recess until both legislation are passed.
After a weekend of non-stop hectic negotiations, the bipartisan negotiators, along with the crypto Senators, finally reached a compromised agreement Monday evening, ahead of Tuesday’s final debate on amendments to be added to the package before a vote on the legislation. The compromised agreement includes changes to the original bill’s language, including a target definition of who exactly is a “broker” that would exempt miners and software developers from being included in the new tax rules.
Cruz emphasized how it was wrong for Congress to regulate and “put out a rule of massive taxes and regulation” without having any sense of knowledge of the digital innovation of virtual currencies.
“If we want to legislate on this, [let’s] actually do our jobs, be a deliberative body, hold hearings, listen to witnesses, understand the consequences, know what we’re doing. That would be the reasonable, rational thing to do. Don’t just put out a rule of massive taxes and regulations with no understanding of the consequences on jobs and real people that would be hurt. For whatever reason, the Senate doesn’t seem to want to behave reasonably or rationally. And I think the consequences are going to be long-standing of this foolish legislation.”
“We shouldn’t destroy people’s lives and livelihoods from complete ignorance,” Cruz added.
The Texas Senator also noted it will hamper new innovation and “force every single participant in the cryptocurrency structure to operate as a financial institution,” as users will be forced to provide consumer information to the Internal Revenue Service even though they “don’t have access to that information.”
Rep. Tom Emmer (R-MN), who co-chairs the Blockchain Caucus in a letter, urges House members to “consider amendments to this provision that exempt entities that don’t conduct crypto transactions and keep blockchain software development, cryptocurrency mining, and more in the United States.”
Following his remarks on the Senate floor, Cruz said that the fight to save crypto continues.
“We are gonna keep fighting,” Cruz said.
Bipartisan Infrastructure BillBipartisan Infrastructure PlanBrokersCongressCryptoCrypto BrokersCryptocurrencyInfrastructureRep. Tom EmmerSen. Cynthia LummisSen. Pat ToomeySen. Ron WydenSen. Ted CruzSenateTaxTed CruzU.S. Congress
