A bipartisan compromise that would result in an amendment to the $1 trillion infrastructure bill’s problematic language for the crypto industry failed to pass after a single senator objected.
The crypto amendment was the result of a compromise between senators Cynthia Lummis (R-Wyo.), Pat Toomey (R-Pa.), and the United States Treasury, requiring unanimous consent to pass the motion.
While it was believed that the compromise was agreed upon by all senators who would participate in the vote, this was not the case.
Senator Richard Shelby from Alabama objected to the amendment after failing to introduce its own amendment, which would result in an additional $50 billion in defense funding from the infrastructure bill.
Due to the nature of the crypto amendment, his sole objection was enough to kill the motion.
After failing to pass the original amendment, Senator Ted Cruz from Texas tried to pass a Unanimous Consent on an amendment he had previously proposed, to which Senator Shelby opposed once again.
If successful, Senator Cruz’s amendment would have removed crypto language from the bill.
The failing of both motions means that the infrastructure bill will be voted on by the senate while still containing language that is problematic from the cryptocurrency industry, which had prompted the crypto industry to lobby for the change.
The Controversy Around the Infrastructure Bill
The Infrastructure Bill introduced in the Senate caused controversy in the crypto community due to the definition of a broker, which would include miners and other types of validators, manufactures, developers, and network participants.
This definition resulted in the mobilization of the crypto community, which was able to push language changes to the bill in a last-minute lobbying effort.
While it was widely believed that this effort was successful, it is now clear it wasn’t enough against the words “I object”.
In addition to most senators, the amendment had the approval of Treasury Secretary Janet Yellen despite her vocal opposition to cryptocurrencies.
In a statement published by the Department of Treasury, she said,
“I am grateful to Senators Warner, Portman, Sinema, Toomey, and Lummis for working together on this amendment to provide clarity on important provisions in the bipartisan infrastructure deal that will make meaningful progress on tax evasion in the cryptocurrency market. I am also thankful to Chair Wyden for his leadership and engagement on these important issues.”
If approved, the amendment would define a broker as, “any person who (for consideration) regularly effectuates transfers of digital assets on behalf of another person”, effectively removing stakers, miners, and operators from being considered as brokers.
What’s Next For The Bill?
With the infrastructure bill being a bipartisan effort, it is expected for it to make it through the Senate in the near future.
Once it does, it will need to be reconciled with the House of Representative’s version before being officially signed by President Joe Biden.
Senator Toomey expressed his discontent with the failure to pass the amendment, as it would result in those affected by the loose “broker” definition being required to provide the information they couldn’t gain access to.
He also added he was committed to the changes by stating,
“We’ll be back on this because we’ll do a lot of damage. Who knows how much innovation we’re going to stifle. Who knows what kind of new apps never emerge. It’s hard to predict what kind of completely impossible mandate results in, but it’s not good, and it’s going to bring us back here trying to clean up a mess which we could have prevented.”
For now, it seems unlikely for any amendment to be done before the bill is voted by content. However, the cryptocurrency industry has continued mobilizing to push for changes, taking advantage of the Senate’s apparent sharing of the concerns.
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Author: Nicholas Say