IRS broker rule
Posted on by John Ebbert

IRS Broker Rule Befuddles Industry; Congress Wonders If Stocks, Crypto Trading Is The Same

Congress trades digital assets

A new schism may be developing along partisan lines as the House tries to hammer out a bill on rules for Members who own and trade stocks -and crypto, too.

According to Politico, Reps. Abigail Spanberger (D, VA) and Chip Roy (R, TX), who are creating the proposal, are split on crypto. Rep. Spanberger is of the view “the bill should treat crypto assets the same as stocks.” 

But, Rep. Roy tells Politico that crypto is different: “Because allowing people to hedge against the dollar that’s getting destroyed on a regular basis, I’m not sure if I want to completely preclude people’s ability to do that.” Rep. Roy appears to be making an argument commonly made by Bitcoin advocates.

The original bill was introduced in January 2023 with broad bipartisan (74 co-sponsors including 17 Republicans) support and is known as “Transparent Representation Upholding Service and Trust in Congress Act” [H.R.345] or TRUST Act.

Read the article.

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what you should know: Along with Rep. Roy (R), Rep. Spanberger (D) voted for FIT 21. But, unlike Rep. Roy, she voted against the SAB 121 resolution.

Sen. Hagerty on crypto

According to Punchbowl News’ The Vault newsletter yesterday, Sen. Bill Hagerty (R, TN) has remained close to former President Trump, even appearing with Bitcoin mining executives earlier this month in Mar-a-lago. Punchbowl’s Brendan Pedersen observes, “Whether Hagerty joins the possible second Trump administration, he’s in the room with the former president today. Hagerty’s thoughts on crypto could become Trump’s thoughts.” Hagerty suggests the need for “light touch” regulation and the end of the regulation by enforcement a distinct possibility in a Trump Administration, says Pedersen.

bipartisan mission

House Financial Services Vice Chair French Hill (R, AR) and Rep. Chrissy Houlahan, (D, PA), a member of the House Permanent Select Committee on Intelligence, made a trek to Nigeria last week and visited Binance executive and former IRS employee Tigran Gambaryan.  The U.S. lawmakers visit shed light on Gambrayan’s imprisonment in one of the country’s most notorious prisons, his deteriorating health and the money laundering accusation he’s charged with.

For more background, read this NY Times article from May.

The crux of the issue appears to begin with Nigerian citizens buying crypto via Binance which may have resulted in the collapse of Nigeria’s currency, the naira, in 2023. Thereafter, a member or members of the government are alleged to have required a bribe to clean the slate.

From Nigeria on Thursday, Reps. Hill and Houlahan posted a video which makes the case for Gambaryan’s immediate release.

View the video on X.

In an accompanying tweet, Rep. Hill said in part, “Tigran must be immediately granted a humanitarian release, the remaining charges dropped, and he must return home to America where he belongs.”

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what you should know:  Along with Rep. Hill (R), Rep. Houlahan (D) voted “for” FIT 21 and the SAB 121 resolution rescinding the SEC’s SAB 121 rule in May.

debating crypto

Stand With Crypto, a lobbying organization begun by Coinbase, is asking crypto owners to send an email to CNN producers involved in the presidential debate taking place this Thursday, June 27.

“Ask CNN to include crypto at the Debate – Crypto deserves to be a topic at the Presidential Debate. Send a note to CNN and ask them to make sure that the 52 million crypto owners in America are represented on the debate stage,” read the landing page.

See it.

tokenization

From ripples to waves: The transformational power of tokenizing assets – McKinsey & Co.

IRS broker rule – comment

On Friday, Blockchain Association (BA) counsel Marisa Tashman Coppel said on X that her organization had filed a comment letter related to the Paperwork Reduction Act (PRA) regarding the IRS’s proposed broker rule.  She summarized emphatically on X: “Bottom line: it would be a violation of the PRA to finalize a rule that would yield over 8 billion forms.”

Read BA’s formal comment (PDF).

Ms. Tashman Coppel explains further, “The IRS estimates 30 mins to fill out the form. So 8 billion forms would require 4 billion burden hours – increasing the total paperwork burden created by the entire US gov by about one-third. That doesn’t make sense for a single form.”  Read her tweet thread.

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IRS broker rule – Congress

On Friday in his mid-year recap, Cap Hill Crypto’s George Leonardo breaks down how Congress has tried to address the broker rule noting three, main initiatives:

    • The “Keep Innovation in America Act” [H.R.1414] co-sponsored by House Financial Services (HFS) Chair Patrick McHenry (R, NC) and Rep. Ritchie Torres (D, NY)
    • Senators Cynthia Lummis (R, WY) and Kirsten Gillibrand’s (D, NY) “Responsible Financial Innovation Act” [S.2281] includes “nearly identical language as the Keep Innovation in America Act,” according to Leonardo.
    • Also in the Senate, way back in the 117th Congress, Senate Finance Chair Ron Wyden (D, OR) showed he’s open to a fix when he sponsored an amendment along with Senator Lummis and former Senator Patrick Toomey (R, PA) “to limit the scope of reporting requirements.”

Leonardo thinks a legislative fix is possible this Congress.

Read more from Cap Hill Crypto.

still more tips

Why the circumstances surrounding Trump’s crypto flip seem familiar – MSNBC

Standard Chartered enters crypto trading arena – Forkast on Yahoo

Crypto’s Political War Chest Tops $100 Million – The Wall Street Journal

Swiss Push to Rewire Financial System With Blockchain in Wake of Banking Crash – Bloomberg on Yahoo

Did Barron Trump Really Launch a DJT Crypto Coin With Martin Shkreli? (subscription) – New York Magazine