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The proposed crypto tax rule doesn’t make sense: Coinbase CEO Brian Armstrong

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Coinbase CEO Brian Armstrong is opposed to the newly proposed rules for crypto taxes and reports in the United States.

Brian Armstrong criticizes the “nonsensical” proposal

Armstrong said the provisions contained in the proposal on the taxation of cryptocurrencies could have “Deep negative impact” to American cryptospace and could force digital innovation to move overseas. In these words, the head of the largest American crypto exchange, Coinbase, commented on the provision on cryptocurrencies, which appeared at the last minute in the $ 1 trillion infrastructure agreement, which is currently before the US Senate.

CEO Coinbase joined a number of other opponents of the proposal. Ten paccording to Armstrong, he extends the definition of “broker” to anyone who in any way helps to mediate the transfer of digital assets. So these are not only fiat-crypto gateways, but also all blockchain transactions.

Requests cannot be met

The broadly defined term “broker” is now also widely criticized by the cryptocurrency community. NAccording to the mentioned proposal, the demanding tax obligations would also apply to entities that do not have any information about the identity of people for reporting. In principle, the proposal shows a lack of understanding of decentralized currencies and blockchain as such, as it seeks to ensure that entities such as miners, validators and software developers are defined as brokers.

“That doesn’t make sense.”

Armstrong tweeted, referring to the broad definition of a broker in a bill, adding:

“Smart contracts, for example, are not companies and cannot be modified to collect KYC information or issue Form 1099. They are simply software running on a blockchain that can be used by anyone.”

CEO Coinbase added that policymakers have a responsibility not to hinder innovation in America. Armstrong also joined a chorus of cryptocurrents who urged Americans to contact their elected representatives to push for amendments proposed by cryptocurrency senators such as Ron Wyden, Patrick Toomey and Cynthia Lummis calling for a narrower definition of cryptocurrency mediators.

Conclusion

In the US, part of the proposed infrastructure agreement is a provision that, according to opponents, would affect the crypto industry in the US and force its members to move abroad. The result would not be higher tax collection, as regulators promise, but, on the contrary, a sharp intervention in innovation, a loss of competitiveness, the expulsion of many businesses and jobs from the country and damage to the crypto industry as such. One of the opponents is the head of the American stock exchange Coinbase, who said that the proposal does not make sense.

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