Not reporting is a felony! American investors are frying the pot. What will be the impact of the infrastructure bill?

Defi Baize Research Institute 2021-11-23 11:01:00 阅读数:388

reporting felony american investors frying

The United States House of Representatives 2021 year 11 month 5 Passed on the th 《 Infrastructure investment and Employment Act 》, The result of the vote was 228-206. President Biden is expected to complete the signing of the bill soon , And make the bill law .

about 1 The trillion dollar infrastructure plan includes 5.5 $billion in new spending , And will fund road improvement / Expressway 、 bridge 、 Public transportation 、 Clean water 、 Power grid 、 Broadband Internet development and network security . In the act H This section discusses how to fund new expenditures , Including and digital assets ( Cryptocurrency ) Relevant part .

immediately , The bill caused discussion in the encryption community on twitter , Most of them are dissatisfied with the encryption provisions in the bill .


Even in 3 Months ago “ Remove encryption regulations from the infrastructure act ” The petition of netizens has returned to the vision of the encryption community .


So what adverse measures to the encryption industry are hidden in the infrastructure Bill ? Let's explore .

“ agent ” And information reports

1. All cryptocurrency exchanges (Coinbase、Robinhood etc. ) Now they are regarded as traditional agents ( Fidelity et al ) Same “ agent ”.

To be specific , The Act provides that ,“ agent ” yes “ Anyone who is responsible for regularly providing services for the transfer of digital assets on behalf of others ”, But there is no clear scope , Application Developer 、 Wallet providers and miners may still be classified as “ agent ”.

2.“ Digital assets ” The definition of .

“ Digital assets ” Is defined as “ Any digital representation recorded in a password protected distributed ledger or any similar technology ”.‍

3. Digital assets are treated as securities , Similar to stocks 、 Bonds and certain types of commodities .

This has always been the most controversial issue in the encryption community , The bill finally gives some clear answers :  Digital assets will be like the capital gains of Securities / Treat... With loss . In the past , Digital assets are classified as property , Therefore, tax is levied on income or loss . So now the tax treatment of digital assets is basically the same as before : Capital gains must be taxed .

however , Securities also face the U.S. Securities and Exchange Commission (SEC) Supervision of , The legislation does not mention SEC.SEC Will let traditional securities companies such as stocks submit quarterly reports , Provide a prospectus detailing the risks, etc . So will cryptocurrency be required to SEC Submit similar documents ? There are no specific details yet .

4. Information report .

Encrypted exchanges must provide the IRS with customer information .  at present , Crypto exchange hasn't done that yet , Although some exchanges have sent tax returns to customers ( for example ,Coinbase send out 1099-MISC, It covers only from Coinbase The reward you get , Not capital gains ).

Now you need to report the following information to the IRS : (1) Name of each customer 、 Address and telephone number ;(2) The total proceeds from any sale of digital assets ;(3) Capital gains or losses , And the capital gain or loss is short-term ( Hold for one year or less ) Or long-term ( Hold for more than one year ).

5. Heavy penalties for non reporting .

If the encrypted exchange does not report such information , Each customer will be paid 250 US dollar fine , Up to 300 Thousands of dollars ( According to section of the United States Code 26 Chapter 6722 section ,“ Failed to provide correct payee statement ”).

exceed $ 10,000 , Everyone reports

Section of the U.S. tax code in the infrastructure act 26 Chapter 6050I Article has been changed . Will be worth more than 10,000 Dollar digital assets are classified as “ cash ”, Any person engaged in a transaction or business receives more than 10,000 People who pay US dollars must submit reports .

The IRS explained , Such information “ Help law enforcement authorities combat money laundering 、 tax evasion 、 The drug trade 、 Terrorist financing and other criminal activities .”

This point is also controversial , Let's explain in detail .

entry-into-force time

The start time required by the infrastructure act is 2023 year 1 month 1 Japan , So it will have an impact 2024 Tax returns filed in . however 2021 Years and 2022 Encrypted transactions in are not bound . This means that encrypted exchanges do not need to be in 2024 Send you a tax return years ago ( be used for 2023 Tax revenue in ), However, exchanges are expected to comply earlier .

Controversial 6050I Clause

6050I As mentioned earlier “ agent ” The terms are different . This is a separate provision , It's part of the U.S. tax code 6050I Amendment to clause , It requires something worth more than 10,000 Cash in US dollars “ The receiver ” Report to the government “ sender ” The name of 、 Address and social security number . In the infrastructure act , Attribute digital assets to “ cash ” in , In other words, both sides of encrypted transactions need to provide each other's information .

This is an unusual law , Although it is part of the tax law , But it's not really a tax rule . First , Different from other IRS information reporting requirements , The transaction report must be in 15 Within days , Violation of this provision will be a felony ; secondly , It is not limited to “ agent ” Or encrypted exchange , It applies to all enterprises , Including individuals . The only thing not affected by 6050I The terms are binding on banks and financial institutions . 

This is also the most feared place for the American encryption community , Some lawyers point out that ,NFT and DeFi, It is almost impossible to comply with the law .

The main target

The main objective of this clause is to collect information about users of encrypted assets . In short , The first 6050I This is an anti crime law , The government uses the reports received to investigate suspicious activities .

When there are the following 5 One factor , Anyone who collects money must report to the government “ Drawee ” or “ sender ” Personal information :

1. You received : You collect “ Receipt ”—— Transfer record .

2. Digital assets : Defined as using distributed ledger technology “ Any number of values indicates ”.

3.  Worth more than 10,000 dollar  

4. stay “ Trade or business ” In the process :“ transaction ” It's also a business , Even personal participation is included .

5. Unless federally regulated “ Financial institutions ” The same transactions and personal information have been reported .

Yes DeFi Controversy

6050I The terms are right for DeFi Can cause special problems , Because if you need to report , Then the report will include the name of the person who sent the digital assets 、 Address and tax number . 

Consider a simple example of an automated market maker for a decentralized exchange .( A centralized exchange belongs to “ Financial institutions ”)

Example 1:

Andy In the liquidity pool by destroying LP To extract assets . It is hard to argue that the withdrawn assets are not Andy Of “ Receipt ”. Besides , According to the law “ transaction ” The explanation of , Revenue will accumulate over time , To satisfy 10,000 The dollar threshold . 

Example 2:

Bob Use decentralized exchanges to exchange tokens A Exchange for tokens B.Bob Tokens received B It could be “ Receipt ”.

According to the current regulations , When cash is received , Reporting is required to list everyone in the transaction , Now the regulations are revised , Digital assets are also equivalent to cash . that Andy and Bob All information about the token sender needs to be reported .

But this is also controversial , Generally speaking , Tokens obtained from withdrawals from the liquidity pool cannot be traced back to one or more specific accounts , Not to mention specific people . Maybe the token doesn't come from one or more people “ received ” Of , But from smart contracts “ received ” Of . If it's a centralized exchange , Then send B The token may not be a trader on the other side , It's the exchange itself . After all , The person who put these tokens into the liquidity pool did not intend to make Bob  Take them .

that , so to speak , In the example, the... To be reported “ people ” yes DEX, Is a collection of smart contracts .

There are two situations , If you're reporting to the IRS “ sender ” yes DEX, Even without address and tax number , The report may also be considered compliance by the IRS . Or the recipient may argue , To receive digital assets “ people ” The absence of makes the transaction beyond the scope of the law .

“ This will 6050I Terms apply to digital assets , In especial DeFi The effort to make a deal is ridiculous .”

Example 3:

Charlie I fell in love with a very beautiful NFT, And send his cryptocurrency to the smart contract for exchange . When the dust has settled ,Charlie Have the NFT( because NFT Digital assets under the act , So it may also be right Chaelie Make a reporting request ). 

David Is a Creator NFT The artist of , He received Charlie Cryptocurrency as NFT Payment for .(NFT Fees received at the time of the transaction may also impose reporting obligations .)

actually ,David Received cryptocurrency from smart contract . however , Just because it involves smart contracts , The regulations exempt  David  The report  Charlie  Your personal information is incredible .

in summary , Will be the first 6050I Terms apply to digital assets , In especial DeFi The effort to make a deal is ridiculous . The old law is simply not suitable for this new technology . unimaginable 6050I How will it be applied to digital assets , This is another reason why the proposal has been criticized by the encryption community . 

According to encryption law experts in Washington, D.C Jake Chervinsky call , The new law may not bode well for the encryption industry , But he pointed out that there are still important details that have not been finalized .

“ Yes , The encryption act is as bad as it was a few months ago . Yes ,6050I The impact of the clause has not been fully explored . No , You don't need to call your representative , Because it's no longer under our control .”

It is important to , The bill won't happen right away , Need to go to 2024 It won't take effect until ( about 2023 Financial year report ). For encryption supporters , The period between now and the entry into force of the law may be a success or failure moment for the encryption industry .

The source of the point of view :

Lecturer at the University of Virginia Law School ,Abraham Sutherland.

Asset management company ,Volt.

Risk warning :

According to the central bank and other departments “ Notice on further preventing and dealing with the risk of speculation in virtual currency transactions ”, This article is for information sharing only , Do not promote or endorse any business and investment behavior , Please strictly abide by the local laws and regulations , Do not participate in any illegal financial activities .

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