Coinbase warns crypto tax provision will affect 60 million Americans

YEREVAN (CoinChapter.com) — Lawrence Zlatkin, chief tax officer at Coinbase, criticized Congress for adding crypto tax provisions to the infrastructure bill of Congress, which can impact the life of 20% of the US population.

In a Saturday blog post at Coinbase Blog, Zlaktin railed against the rush and the need for a crypto tax provision and how it was drafted. In addition, he slammed Congress for adding what impacts the life of “60 million Americans” to the infrastructure bill of congress “at the last minute.”

Zlatkin believes the crypto society deserves the opportunity to discuss the regulation, noting that 20% of the US population has invested in cryptocurrencies. He mentioned that objection against the bill has gone beyond the digital currency ecosystem to the extent that 80,000 people from different societies contacted their senators in just a few days.

“Today, around 60 million Americans own crypto — roughly one-fifth of the entire U.S. population. Those Americans, and the entire crypto ecosystem, deserve more dialogue than midnight provisions inserted at the last minute.”

said Zlaktin.

Based on the infrastructure bill, “broker” has a wider definition, not limited to exchanges.

As the bill says, “any person who (for consideration) regularly provides any service responsible for effectuating transfers of digital assets, including any decentralized exchange or peer-to-peer marketplace” is a digital asset broker.

This broad range can include miners, software developers, node operators, or simply anyone who makes a transaction happen.

“As long as the statute says that software developers, miners, stakers must do the impossible, there is no lawyer who would advise them to risk operating in violation of laws whose penalties for non-compliance would easily bankrupt them.”

said Zlaktin

He added that this limitation will harm innovation in this financial technology which is at its first stages of development.

About the broker definition, Zlaktin suggested that Congress should consider brokers “as persons who act as middlemen for compensation, with customers as counterparties. This is a traditional definition of broker and would cover entities like Coinbase.”

As the Global VP of Tax of the largest U.S. exchange, Zlatik believes in the need for information reporting of crypto. But he also said that “We invite meaningful dialogue and discussion to set the appropriate regulatory parameters for our industry.”

In The Legislative Process, the bill returns to the House and Senate for final approval. Criticals hope that in this final stage at the House, there will be an opportunity for improving and modifying the bill.