8-word crypto change in the Infrastructure Act “opposes the rule of law”

Legal experts have warned that part of the Infrastructure Act to be voted on today amends part of the tax code and that companies and individuals do not report transactions. Digital assets are a criminal offense.

University of Virginia Law School lecturer Abraham Sutherland said it was a separate provision from the controversial “brokerage clause” that caught all the attention when the bill was introduced to the Senate:

“This is not good for all users of digital assets, but especially bad for decentralized finances. The regulations won’t directly ban DeFi. Instead, reporting obligations are imposed which, according to the way DeFi works, would make compliance impossible. “

Meltem Demirors, CSO at CoinShares, said on Twitter her concerns about what she believed to be unconstitutional and anti-American nature of the change.

https://twitter.com/Melt_Dem/status/1456369023667556364?ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow noopener

The amendment to Section 6050I is part of the Infrastructure Act, which is expected to be put to a vote in the House of Representatives on November 5.

Since 1984, Section 6050I of the Tax Code has required businesses and individuals receiving cash or wire transfers over $ 10,000 to submit Form 8300 and report the sender’s personal information such as name, address, and social security number to the IRS. The eight word amendment to the new bill includes “any digital asset” in the definition of “cash”.

This raises obvious privacy concerns for DeFi and cryptocurrency transactions and is not possible for many projects.

Sutherland stated in the October 26 episode of Unchained to Laura Shin that Season 6050I was rapidly becoming a crime-fighting tool in the drug war in the 1980s. He said, “It’s really not. It’s not so much about taxes. It’s about fighting crime.”

When the 6050I is applied to digital asset transactions, companies and many individuals who fail to report the digital asset sender’s information to the IRS are considered a crime. However, banks and other financial institutions are excluded. Sutherland wrote in a paragraph about DeCential, detailing the implications and concluding that the change would be costly, impractical and dangerous.

“The amendment to § 6050I is an insult to the rule of law and the standards of the democratic rule of law. It was tacitly included in a 2,700-page bill, ostensibly as a tax measure to reduce the bill’s trillion-dollar value when section 6050I was in fact an enforcement provision. The proposal now deserves attention while there is still time to stop it. “

With just a 221-213 majority in the House of Representatives and the united opposition of the Republican Party, Democrats will have to be almost unanimously on their side to pass the bill.

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